Unpacked with Ron Harvey
People Always Matter. Join Ron as he unpacks leadership with his guests.
Unpacked with Ron Harvey
The Owner Bottleneck: How to Scale Without Doing It All Yourself
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What separates a business that's growing from one that's truly scaling? On this episode of Unpacked, host Ron Harvey sits down with Doug Levy, president of Lexington Rose Consulting and a fractional COO with two decades in the trenches, to unpack the systems, mindset shifts, and hard-won lessons that let owners step out of the day-to-day without the business falling apart. Doug spent ten years growing an insurance agency from $3.4M to $12.1M in revenue at a 40% profit margin before a record-setting sale to private equity, and he brings that operator's perspective to every answer.
In this episode:
- Why systems, not effort, are what let a business scale, and how "anything that delivers consistency is a system," whether it's software, an SOP, or your org structure
- The owner bottleneck: how "nobody can do it like I do it" quietly caps your growth, and why progress beats perfection every time
- Building a trust-first culture by trusting people by default, then confirming the decision by observing competence
- The real cost of a bad hire, and why a $60K employee who leaves inside six months can run you $55K plus lasting cultural damage
- Institutional knowledge vs. documentation, and knowing the exact moment to start writing things down: "when the pain of not doing it exceeds the pain of doing it"
- Treating workflows as an investment with a compounding ROI, not a sunk cost
- Why not every business needs to "10x," and giving yourself permission to define your own version of success
- The leadership truth business school skips: how people feel matters more than any academic framework, plus Ron's signature question, "Does your audio match your video?"
Guest: Doug Levy, President of Lexington Rose Consulting, a business operations and fractional COO consulting firm. Reach him at LexingtonRoseConsulting.com or 954-459-4052, and connect with him on LinkedIn. If your team is hiring in the next 12 to 24 months, ask about his LogicWise Hiring System.
Host: Ron Harvey, Vice President and COO of Global Core Strategies and Consulting.
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Just Make A Difference: Leading Under Pressure by Ron Harvey
“If you don’t have something to measure your growth, you won’t be self-aware or intentional about your growth.”
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Disclaimer:
The views and opinions expressed in this podcast are those of the speakers and guests and do not necessarily reflect the official policy or position of any organization or entity. The information provided in this podcast is intended for educational and informational purposes only and should not be considered as professional advice. Listeners should consult with their own professional advisors before implementing any suggestions or recommendations made in this podcast. The speakers and guests are not responsible for any actions taken by listeners based on the information presented in this podcast. The podcast is not intended to be a substitute for professional advice or services. The speakers and guests make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained in this podc...
Welcome And What Unpack Is
SPEAKER_00Welcome to Unpack Podcast with your host, Leadership Consultant, Ron Harvey of Global Core Strategies and Consulting. Ron believes that leadership is the fundamental driver towards making a difference. So now, to find out more of what it means to unpack leadership, here's your host, Ron Harvey.
SPEAKER_01Well, good afternoon, everybody. This is Ron Harvey. I'm the Vice President and Chief Operating Officer for Global Core Strategies and Consulting, a leadership firm. We're based out of Columbia, South Carolina. You can go to our website, you can find out everything about us that you you desire to find out about us, look us up, or hit us on LinkedIn. But today, I'll always, for our podcast, invite guests from around the world to do Unpack with Ron Harvey. If you've been following us, you know there are no questions that are preset. We'll talk about leadership. What else is going to happen on this show? I don't know. So hang on with us for the next 30 minutes and see where we go, what we talk about. Leadership will be a part of it. But I'm excited to bring Doug Levy on. He's from uh I'll let him tell you where he's from. We got something in common, but I won't take any of that way from him. Let me hand him the microphone. I'm excited for another phenomenal guest.
SPEAKER_04Doug, take us away, man.
Doug’s Story And Scaling Results
SPEAKER_03Sure. Thanks so much for having me, Ron. I am from sunny South Florida, which I understand you uh recently moved away from. Um, Doug Levy, I am the president of Lexington Rose Consulting. We are a business operations fractional COO consulting firm. I've spent the last 20 years uh in the property and casualty insurance industry. So I started an agency from scratch, sold that after 10 years. And then for the last 10 years, I was the chief operating officer of an insurance agency with about 45 employees. And uh, and my claim to fame is that during my tenure with that agency, we grew our um our revenue from about 3.4 million to 12.1 million with a 40% profit margin. And we sold to PE for a record uh record setting EBITA multiple. And then I uh I went on to start my consulting firm where I'm helping small businesses um establish leadership techniques, culture, and operations and workflows to break through to the next level.
SPEAKER_01Wow, duh. Appreciate it, man. They're gonna love it. I mean, we're we plan in some of the same space. Um, I do a lot of leadership development, uh, which I'm excited. I I really like to ask questions. I mean, so you've been in bigger corporations, you've watched the growth, you've watched people.
Growth Versus Scale Comes Down To Systems
SPEAKER_01So when you think of what's the difference between businesses that are growing and businesses that are truly scaling? Uh, and I ask that question because people get in business, but they don't like scale. They grow, but they're not necessarily scaling. What is the distinction between the two that you've noticed in your experience? Systems.
SPEAKER_03That's it. It's systems. You can grow without systems, but then you ultimately stop because attrition gets in the way. And you may not stop growing in terms of revenue, but you'll stop growing in terms of productivity and in terms of profitability and margin. So I find that businesses typically have a very similar story arc depending on the industry, but you essentially get to certain levels where you have to materially change the way that you do things in order to get to the next level. So a lot of times that first level is around one to two million dollars. The second level is around three. Sometimes it goes from one to three and then three to ten and then ten to thirty. Um, and that's really where my expertise is, is is typically in that, you know, eight hundred thousand dollar revenue to where you've got an owner that is doing well, making some decent money, but different things need to happen in order for for forward motion because those cracks start to show up when volume increases.
SPEAKER_01Yes, yes. So, Dad, I don't want to, I don't want all the recipe, um, but I do want to unpack a little bit of that. What when you say systems and people that are listening that are in business, are you saying systems for uh CRM or are you saying system for uh standard operating procedures? When you speak systems, can you unpack what do you mean? Like what are some examples of systems that you're speaking about?
SPEAKER_03Sure. It's really all of the above. So you have to have a CRM. I mean, at some point a business can't operate on a spreadsheet anymore, right? Um, so having a CRM makes sense. Standard operating procedures are important because ultimately we we as as humans rely on consistency and business is no different. I mean, you go to you go to a McDonald's anywhere in the United States, and the hamburger is done the same way, and that's on and that's on purpose. Now, there's always, you know, um different menu items in different locations based on culture and and cuisine and stuff like that. But essentially, you look at McDonald's, like they don't nobody chooses in the moment how many pickles go on a burger. Only the only the customer does. So it's anything, anything that can deliver consistency is a system, whether that's a piece of software or whether it's a way of doing things or a way of telling people what to do or organizational structure, I would say.
SPEAKER_01Wow. So when you think about it, though, you're working with entrepreneurs, um, you've you've grown companies. What stops businesses from actually putting systems in place?
SPEAKER_03There's a couple of things, but for the most part, I find that it's time um and bandwidth. Because eventually when a business grows and when you start experiencing success, most entrepreneurs are spending their time working in the business and they don't have as much time to focus on working on the business. So there becomes an imbalance where typically businesses get to the size where they need to bring somebody in, whether it's in a full-time role or in a consulting capacity, to work on the business and establish those systems so that they can that they can scale.
SPEAKER_01I've I've noticed, Doug, you know, and thanks for sharing. I've noticed people are struggling with bringing people in for a variety of reasons. Um, is it because, you know, it can be because of control, it can be because of lack of trust, it can be because of they want consistency and nobody can do it like they do it. Those things show up, and some of that there's some truth to it, but how do you get entrepreneurs to move past those things? You know, so I guess the first question what are some of the things that slow us down from bringing people in? And then how do you help get over that? Sure.
Beating The Owner Bottleneck
SPEAKER_03There's this, it's really it's called the owner bottleneck. And you're right that somebody will start a business and then they'll they'll say, Well, nobody can do it the way that I do it. And this is my commitment to quality or to my process that I follow. And that by definition can't scale. You can't scale, you can't grow if you're the only person that knows how to do things, if you're the person that does it best and you won't trust anybody else to do it. So I often teach entrepreneurs that I work with that perfection is impossible. And if you want to achieve growth goals, you can't do it by yourself. So I espouse the idea of progress over perfection. I think it's unreasonable to expect perfection. So what I always say is let's say I could do something perfectly 100% of the time. That's great, but I'm gonna reach my limit eventually. But what if I can bring on three or four or 10 or 100 or a thousand other people that can do it 90% as good. We can scale. And we have to have this, we have to have this tolerance. A business can't scale without tolerance for error. Things are gonna go, things are gonna go wrong. It's really just a matter of containing those things. The only way to prevent those things from happening is to never let anybody else do anything, and that just leaves you in the same spot.
SPEAKER_01You gave me a lot to unpack. I mean, because you know we're talking to the entrepreneurs, so now those that are listening, hang on, don't don't jump off, don't jump off the podcast, listen to us, and those painful conversation, but I want to unpack some of the things you're saying. How do you know when you start something? It's like you know, business owners look at their business sometimes as their baby, of course, and they don't want to let it go, they they want to do everything, um, and and nobody can do it perfect, easier said than done. How do you begin to get past yourself? Because I love what you said that if you want to scale it, you can't do it by yourself. Correct. Can you unpack that a little bit?
SPEAKER_03Like, like what? Well, it's funny, it's funny that you mention a baby because that's actually a perfect metaphor. When you look at everybody's got a different parenting style, yes, but I think everybody can agree that if you do everything to protect your child and make sure that nothing ever goes wrong, your child isn't gonna grow, your child isn't going to establish resilience, your child isn't going to be able to navigate challenges. So, just like when a baby grows into a teenager or an adult and needs to learn to think on its own, operate on its own, survive without you, people should handle their businesses, I think, with the exact same objective. And part of that is letting your baby fall and scrape his knee every once in a while, or let him bang his head on the corner of the table so that he learns that he's got to be careful next time.
SPEAKER_01Yes. And I love it. So, so how do I protect my brand when I bring people in that that may not um I've heard from owners, I've heard from people, even corporations that are that that people have to put in to in secession plans in place and someone that can do your job? So let's not just just business owners, it's succession, the growth of it, the scale of your organization. So whether you're running a business or working for a corporation, it still has to scale and it still has to have people in place. Yes. What do you what do you tell the person you know that's listening to us how important it is for you to empower other people to help you be successful?
SPEAKER_03If you it's easy because the flip side is if you don't, you're gonna be doing it yourself forever and ever and ever. And the moment you stop, so will the business. Yes, yes.
SPEAKER_01Well, I'm actually being a little vulnerable. Where where did you pay this price? Like, where did you get it wrong and what did you do to get it right? Because I don't, I think everybody, I mean, I'm entrepreneur now, you know, 14 years, and I I ran into that roadblock of of doing everything, and people knew me and people liked me, and and it felt good, and and but I wasn't growing. It it was like it was nice, but can you share where did you learn it at and when did you how did you switch it?
SPEAKER_03So I to be honest, I really learned this by sitting in that coo seat for 10 years. Yeah, I helped someone else grow their business that I didn't own and had no ownership stake in. And it operated very well without them, paid them handsomely. And when we got to the end of that road, I actually didn't reap the benefit of that work to the extent that I would have hoped based on my contribution. So I learned the hard way that having a stake in something is is really, really important because you can either have a, you can have, you know, it just it really affects the
Build A Team From Day One
SPEAKER_03payout. So I think when I started my my consulting firm, I think when it comes to consultants, there are consultants and then there's entrepreneurial consultants. And there's nothing wrong with not being an entrepreneurial person. The differences that we have, I think make the world go round. So I would never discredit somebody that gets into consulting and is much more of a consultant than a business person. A lot of people are like that. I consider myself an industrial an entrepreneurial consultant. So when I started my company, I did it. One of the things that I've really been latching on to lately from Seven Habits is begin with the end in mind. So I knew going in that I didn't want this to just be Doug Levy consulting for the rest of my life. I wanted to build a team. Now I don't need to build an empire with a thousand employees, but I want to have 15, 20 people working here. And when you know that going in, you can set things up so that happens right from the beginning. You start thinking about delegating when there's nobody else in the room. Whereas I think for a lot of entrepreneurs, that happens a little too late, which just makes it a much more difficult process. It can always be done. It's just how hard is it going to be?
SPEAKER_01I love that you're talking about, you know, the entrepreneur consultant, the distinct uh being able to distinguish the difference. And there's nothing wrong with either or. So if you're on the call and you're listening, both were great. Just being clear which one, uh, which lane are you in, so you can be really effective at it. Can you can you unpack a little bit the difference between the two? So someone that's a consultant, but but but not necessarily have that entrepreneur. I want to build an empire, or whatever that may be. Can you read the two?
SPEAKER_03Absolutely. Absolutely. There's a lot of people, a lot of consultants land in a consulting role after gaining expertise over the course of a career in a specific thing, whether it's operations or marketing or or go-to-market or product development, whatever it might be, right? And not all of those people want to grow a business, deal with hiring and marketing and and payroll and all sorts of and employee relations and human resources issues and and all of those other, all you know, facility management, all those things. So there's a lot of people who, for example, may exit, you may exit a long career in marketing. You've got a lot of a lot of success, a lot of relationships, and you can make really good money for the rest of your professional career just doing work for people that you already know without having to worry about any of that. Maybe you hire an assistant and and or or two and you just kind of keep it going and you and you remain comfortable. Um, that you just have to acknowledge that that business relies solely on you. So you need to hedge against that with whether it's something like disability insurance or some other sort of contingency plan. Because if the if that stops or something happens to you, you kind of have a problem. Whereas when you build a business, it it really means stepping into all of those other things that are outside your core competency, stepping into the payroll and HR issues, stepping into the workflows and operations, stepping into the marketing, stepping into every component that it takes to run a business instead of just speaking to your specialty. And that's just not, it's not everybody's bag.
SPEAKER_01Yes, yes. I love it because you're right. When you're thinking of people that are listening that are entrepreneurs or consultants or business owners or whatever that that thing that you do really, really well, often that's why you start a business. But what I'm hearing is, you know, when you become an entrepreneur, it's probably the thing that you're going to do the least if you're going to be an entrepreneur and scale. So so help unpack that a little bit because if I'm super excited, uh, I'm a leadership expert. I and I love the opportunity to help people grow as leaders. But once you become an entrepreneur, it sounds like my role and position changes.
SPEAKER_03Yeah, and you just have to, and you just have to, in my opinion, you just have to own what you're good at and outsource the rest and and be humble enough to know what you can't do. So I, for example, I'm an entrepreneur, and and like most entrepreneurs, I'm not the total package. I don't know how to do all that stuff.
SPEAKER_01You can say that one again. You know, there's you don't there's nothing total package either. So for those that are listening to Doug is talking, he's not the total package, and neither am I. So stop stop beating your head against the wall thinking you got to have all the answers and you can do it by yourself.
SPEAKER_03You don't, you don't. You you don't have to you don't have to have all the answers. You just need to know or find the people that do. That's what it's all about. So even in my business, I have outsourced marketing expertise, and I've outsourced strategic finance expertise. Those are two specific areas where I know that I'm terrible. I have, I also hired an employee who's great at marketing. So we were just on a call with our marketing consultant this morning. My eyes started spiraling. Like I started zoning out, and I'm like, you know what? I have no idea what you guys are talking about. And I kind of don't want to because I trust both of you to handle it. So I'm gonna leave the meeting and let you guys execute what we decided on. So having that presence of mind to say, I'm not good at this. I'm gonna link up with people that are, and I'm gonna pay them to do their job so that I can do mine is kind of the the path to to that. So you can outsource all these things. You can outsource HR, you can outsource payroll, you can outsource taxes, finance, marketing, operations, everything.
SPEAKER_01Wow,
Trust By Default Then Verify
SPEAKER_01wow. So so Doug, you gave us you know phenomenal response, but you you gave us something enough to unpack. What's that? Trust.
SPEAKER_03Oh, yeah. You can't live with you can't live without it. Can't live without it.
SPEAKER_01You like I trust you guys. Most entrepreneurs, um, or consultants, um, whatever role, or leaders in organizations, trust is at an all-time low right now. People are struggling with trust for a variety of reasons. How did how do you overcome? Like you were on that call this morning with your team. Sure. How did you get to the point where you say, hey man, I trust you? Was it because you know you couldn't do it, it's not your skill set, you're not good at it, and you were gonna get in their way, or was it that you really realized how capable they were and they can do a really, really good job? What got you to the place where you say, I trust you guys?
SPEAKER_03That's a great question. I would say at the beginning, trust needs to happen because I don't have a choice. I don't have a choice. I can either step forward into trust and grow, or I can step forward into distrust and stay. And I choose to grow and I take the risks that come along with that. Like trust is a risk. Um, so at the beginning, it really has to start somewhere, right? It has to start somewhere, and I choose to trust by default. Listen, I've learned to kind of hone my gut over the course of my life. I've done, I've done enough things where I kind of have a good, I think I can read people pretty well. So I I have chosen as my lifestyle to trust by default to make intelligent decisions, but trust by default and then confirm it by observing competence. So when I first started with the people that I work with, I I had to trust them by default, and then they showed me that I made the right decision. And if somebody shows me that I made the wrong decision, I act accordingly and I do something about that and I make changes. But I think trust, you have to have this inherent attitude toward. I don't think people really grow and prosper by distrusting the world around them, the community that they serve, and the people that they choose to associate with. I think that if you operate in a place of distrust, you're probably doing something wrong. Oh, I love it.
SPEAKER_01I I love that you you went there because I don't think I've I've had anybody explain it the way you just explained it is I choose to trust. Um I'm I'm going to give people the benefit of the doubt. Absolutely. And it's hard to be successful if if you don't. When did you ever find yourself where you where you were not um leaning forward and and giving people the benefit of the doubt, and it cost you more, you know, when you didn't trust. What did it cost you not to trust?
SPEAKER_03It's never happened to me because I've never done it.
unknownWow.
SPEAKER_03The only thing that's the only thing that's really happened to me is remember, trust is a risk. You can trust people. I can I can say I'm gonna trust you to hang on to my wallet and hope that you don't take the cash out of it. Yes. The risk that I take is you taking the cash out of it. So I've put myself in situations where I've trusted somebody before they've earned it and it's backfired. But the amount of times that that's happened is nothing in comparison to the amount of times that it's that it's worked out. So I I look at I look at everything, I you gotta look at everything as the cost of doing business. So if I say I'm gonna be a trustworthy person over the course of my life and at one point or another somebody screws me out of 500 bucks, so be it. I honestly don't care. It's it's the price of it's the price of admission. Now, if I'm putting myself in situations where somebody screwed me out of half a million dollars, I've got a different, I've got a different kind of problem. But I look at those losses as the cost of operating in in the way that I do. And the the the net is so so so so so so positive that anything bad that's ever happened to me from trusting people is just not significant.
SPEAKER_01I love it. It sounds like you have a system to navigate. You have a range. I mean, you gave us $500, half a million dollars. There's a system in place of how you navigate and how you respond to that. So we'll go back to. So the thing is, you spend a lot of time helping businesses put systems in place. Sure. Is that one of the ways that you learn the price of doing business? Is that a system? Absolutely.
SPEAKER_03Because so many people get bent out of shape over things that really aren't worth their time. Everything has, and this is one of the things I've learned throughout the course of teaching others about it is that everything has a cost and a benefit. And if you're running a business, you absolutely should not devote the same amount of time and energy to a $500 decision as you would to a $100,000 decision. And some people I find honestly kind of don't they don't make that distinction until they until it's until it's called out in front of them. So I I had I had one client who would say, you know, well, these things add up. And I had to say, no, they don't, because you're operating a five million dollar organization, and the three things that we just argued about are $50 a month subscriptions or of or a $1,500 annual cost. They literally don't add up to a significant amount of money. I see you've paid me more money to discuss these things with you than if you had just gone ahead and done them.
SPEAKER_01Yeah, I think everybody needs to hear that. Sometimes the time and energy to put to something is not worth uh the time and energy. Um this costs you more to have a discussion versus just make the decision.
SPEAKER_03Yeah, it's like that old, it's like that old kind of saying where, you know, back when like when I was growing up, Bill Gates was like the billionaire. And everybody was saying, like, it costs Bill Gates more money and opportunity to lean down and pick up a hundred dollar bill off the ground than it would for him to just walk past it. So it's that it's that kind of logic that I think people forget to apply sometimes, where you really need to think about how much energy am I putting in this decision and what am I going to get back from that energy?
SPEAKER_01I love it. I love it. So let me let me shift back to the work that
Institutional Knowledge Versus Documentation
SPEAKER_01you do. If um, you know, for people that are listening, you know, which is which intrigued us to bring you onto the show. When you walk into an organization, they call you for your services, you're walking in. Is there something that you see or you're paying attention to to see if an organization is is healthy or headed towards trouble?
SPEAKER_04Yes, you know what it is.
SPEAKER_03No, what is it? Sticky notes. Really? Sticky notes and paper. The more sticky notes and paper I see, the worse things probably are. And I'm being trouble.
SPEAKER_02I'm I'm being a little yeah, there you go.
SPEAKER_03We all have listen, I have them too, but I only have I have a single pad of them, and there's two sticky notes on my desk. So I'm not saying they don't need to exist, but um, but I'm looking at a number of of different things. Um, and I'm I think the biggest thing is how much of what you do is written down versus how much of it is institutional knowledge. And the more institutional knowledge there is, the harder we have to work to write it all down so that we can grow. Because you can't because you can't grow past institutional knowledge. And for some of your listeners that may not know what that means, it's when the way of doing things lives in someone's head, and the only way for someone else to learn it is by hearing about it from that person. So, or or when people like, I'm using my air quotes for people that are listening on audio, when people just know how to do something, but it's not written down. Like you and I both know how to make a peanut butter and jelly sandwich, but we've never written it down. So the only way that we can tell our children how to make one is by showing them. We can't just hand them a piece of paper and then go walk out the door to watch a World Cup game or something. So um, but in business, you want to be able to hand somebody a piece of paper and walk out the door as much as you possibly can, right? That like not everything is based around paper over people or paper over learning, but there's a there's a specific mix that makes sense in most situations, and that mix is not somebody having everything in their head and nothing written down.
SPEAKER_01Yeah. So when do you take so when you so when you when you're working and you're looking at you know you're in you're in business and um I've been in business, when do you start putting that stuff in place? Because when you first start, you're just trying to get it up and running and get it moving. Sure. And you don't document very well. I didn't document very well when we first started, and we had to get better at the documentation of course, of course. Of course. When do you have to yeah, when do you start though? I mean, when's the good idea along the scale? Is it revenue driven or is it time driven? When should you really start documenting and putting things in place that can be washed, rinse, and repeat?
SPEAKER_03You start when the pain of not doing it exceeds the pain of doing it. So you have to constantly be measuring is it good or bad for me to have this hindrance? Because that institutional knowledge, when it's not written down, is a hindrance. And businesses that are growth-minded, businesses that say, I'm trying to grow from $1 million in revenue to $10 million in revenue, they can take that into consideration and say, I'm not gonna be able to do this without that. So I got to do it now. So I I'm not necessarily a fan of doing it like at the first second, because it doesn't make sense until it makes sense. And that depends on depends heavily on the business. But at some point, you know, I called creating workflows, I call it an investment because what's the nature of an investment? A good investment has a return, an ROI, a return on investment. So think about people often think about, well, I don't have the time to sink into that because they think about it being a sunk cost versus an investment. Whereas if I spend, if I spend 20 hours or a hundred hours doing this, I will gain back thousands and thousands of hours over a period of time. And if you can have that vision, if you can change your mind to reflect that vision, it it can motivate you a little bit more to do it. Because putting it together is kind of sucks. It's not fun. Yes. It it I mean, it is for me, but I'm a I'm a nerd. So um, it's that perspective shift of saying this is an investment and not just me sinking time into something.
SPEAKER_01I I love that you said that. But you talked about the you know, the sunk costs and the investment costs.
ROI Thinking And Skipping The 10x Trap
SPEAKER_01Is that a mindset shift? You know, so when you're in in an organization, so you're starting off and you're trying to get revenue, when does it shift mindset-wise, or is it a mindset decision, or is it just business best business practices?
SPEAKER_03It's best practices. You have to kind of look at everything and say, and say, what it what am I gonna get out of this? Now, not everything has to be an investment. That's why some people buy new shiny cars. We all know that you're supposed to buy a used car and pay cash. That's the best thing to do financially, but not everybody does that. And that's okay. But where does that exist in your strategy? You know, so if your strategy is to do it yourself forever, then you probably don't need to write anything down. But if that's not your strategy, you know, and that's the big thing is that I I tell my my clients or my prospects, I'm not here to help you grow and scale. I'm here to help you do whatever it is that you want to do. Some some businesses don't want to grow and scale, they just want to reduce um owner dependency. Or they just want to make it, they just want to pass the business on to their children or their key employees, or they want to sell it. It's not always about growth and scale, and it doesn't have to be. I think there's this kind of exhausting um thing going on in social media that you have to 10x everything you're doing. You don't have to. I don't feel like it half the time. You don't have like so I think I think there's this, and it's kind of this toxic positivity, right? So I think people always think like, oh, I have to do the right thing all the time. I have to 10x, I have to maybe 10x your your your level of comfort or your well-being before you worry about 10xing your revenue if that's not your your bag right now. And that's okay. So I go into it with very little judgment just to help people achieve whatever their goals are, not what I think their goals should be.
SPEAKER_01Yeah, thank I'm glad you brought that up because you know, social media will make you do stuff that that's not part of your bigger picture, your vision or what's relevant of prioritizing. So I agree, everybody doesn't have to be an enterprise, you don't have to 10x everything. You know, so I'm glad that you bring that up for those that are listening. You know, what is it? So let's shift a little bit for you.
The True Cost Of Bad Hiring
SPEAKER_01You spend a lot of time, you know, organizations and and hiring and figuring out, which you you mentioned before, you talk about how expensive it is when you get it wrong to hire people. Oh, for business owners and you're talking about entrepreneurs or even corporations, it's expensive for everybody. Can you speak to can you unpack that a little bit?
SPEAKER_03Oh, absolutely. And I I I've actually built a whole program around that, which I believe you may know about, but um, but hiring is way, way, way more expensive than people think it is. So for example, let's say you hire somebody, just quick back of the napkin math, you hire somebody for 60 grand a year, that's $5,000 a month salary, fully loaded with taxes and benefits, it may be $5,800 or $6,000 or something like that. So let's say it's $6,000. If that person doesn't work out after three to six months, it doesn't just cost you their salary. It costs you the time and energy that it takes you to manage that person before you fire them or they leave. It takes you the time and energy that their peers have to pick up their slack while they're not doing as well as they should. It costs you the emotional distress of going through that process. Your A players, your best employees are watching you hire somebody who's not a fit for your team. Um, and these cause, these can cause long-term cultural damage to to a business. And nothing is more important than culture. If you don't have culture, you don't have anything, as far as I'm concerned. So I did this math that if you hire somebody for $60,000 a year salary and they leave within the first six months, it will cost you at least $55,000 plus cultural damage and emotional distress. So it's a very, very expensive mistake. And a lot of people, there's a lot of bias in hiring. There's there's there's personal notions, there's halo effect, there's all sorts of things that that people should really, I think people should should think a little bit more deliberately about about how they hire people and should look in the mirror more than they look at applicants.
SPEAKER_01Wow. No, I I love it. You know, when you I'm glad you're sharing and having a conversation, and you do have a system in place um that people, if you're listening to the the podcast, you know, does does have a system in place and you want to get it right because it's it's really expensive. Um and that's one of those things that's called investment versus sunk sunk cost. Exactly. You know, invest early or pay later. Um, somewhere you're gonna pay the pay pay for the cost of it. Exactly. The question I have for you, and you start thinking about, you know, when you're running a company and you start because you and you love the product or the service that you're doing, when is it time to bring someone on to help you start figuring out hiring decisions? Because you may not be very good at that. And you want to hire. I made a mistake, me personally. I want I hired someone because they needed a job, not because they were right for the job. I needed to help, they needed a job. We say, let's figure it out. Sure. Mistake, it didn't work out um for either one of us.
unknownSure.
SPEAKER_01How do you get past that?
SPEAKER_03That's it's tough, and especially when you're like a good person, you want to do things to help people. And what I always advise clients about, and what I always had to remember is when you try to do right by somebody in that way, you need to think about all of your other employees, stakeholders, and their families, and your clients who you are not doing right by. So when you try to do right by somebody that's a poor fit for your organization, you're actually doing wrong by every other employee that you have and all of your clients. So the stakes are much higher than you think they are. And ultimately, at the end of the day, a business is not a charity. A for-profit business is not a charity. There is too much at stake in terms of your team, the livelihoods of everybody on your team, and the livelihoods and and well-being of the people that you serve to stake all that on taking a chance or making a dumb decision. And and people want to do that out of the goodness of their heart, but and that's it's like it's the it's well-intentioned, but it's it's damaging to a lot of other people. So I would say if you don't know how it goes back to what I was saying before, if it's not in your lane, find somebody whose lane it's in and lean on them because that's an investment.
SPEAKER_01Yes, I love it. I love it. I want to shift back over to
Leadership Is Behavior Not Words
SPEAKER_01our leadership. You know, you look at your career, um, you're in corporations, you're running your own organization now. What is one leadership lesson you learned that you wish all entrepreneurs or corporate America leaders would learn before they were in a role of leading other people?
SPEAKER_03Leaders. Listen, I don't know everything, but I've I've learned a lot over my care the course of my career, especially from working with people that it was pretty unpleasant to work with. Um and I think it what it comes down to is actions speak louder than words. I think that's really what it comes down to, is there's there's a lot of people that think leadership is what comes out of your mouth, and it has absolutely nothing to do with that. It comes down to how you treat people, how you make them feel, and how you behave on a day-to-day basis because people, your employees are smarter than you think they are, and I think a lot of people underestimate what their employees perceive and how they feel. And um, I mean, I could go on for days. I know this isn't a marathon podcast, but but I think what it I think if I had to pick one thing, it would be leadership is how you behave, not what you say.
SPEAKER_01I love it, I love it. And and and everybody that knows, if you know me, I have a uh uh run runnisms as they call it on our team. Oh, yeah, it just pops up and like where'd you get that from? I say it just makes sense when I said it. I don't know where it came from. Um, and I I quo on the phrase that says, as leaders, that does your audio match your video.
SPEAKER_03Oh my gosh, I love that. Does your audio match your video? I love that. That's it.
SPEAKER_01It speaks to what you're saying.
SPEAKER_03I don't know where you're that's why this is your podcast, and I'm just a guest. Oh my gosh, does your audio match your video? I love that. I heard another one, I saw another one. It was uh scrolling through LinkedIn or something, and it said, if your team is relieved when you're not there, you're not a leader. Yes, you're in trouble.
SPEAKER_04If your team is relieved when you're not there, you're not in trouble. Yeah, you're in trouble. Yeah, if they're excited when you're not around, you're in trouble, you know. Oh, yeah, yeah. So I love this as your audio match. I'm stealing that one.
SPEAKER_01Please do, please do. I mean, I say it, and people will like, what do you want to say? Because it's it's exactly what you said, Doug. Yeah, what you do is louder than what you say. Yep. And I told people, I say, like, people are watch, especially in today's world of social media. I mean, people watch a video with no sound. We even if it doesn't have they just watch it, yeah. You know, sound may be an added bonus, but people literally, you watch them walking through and just looking at stuff, and and there's no sound, they're just observing the visual. So I would say that people are watching everything we do more than they ever are listening to what we say. And if those are misaligned, people are confused. Absolutely. So if you're listening, yeah, if you're in corporate America, you're an entrepreneur, does your audio match your video because that's what's going to say who you are and what you are, what your character is. Last
The Business School Myth About Emotions
SPEAKER_01question for you Hit me. What's what's the one business myth that becomes a truth that you think is holding people back from being successful as entrepreneurs? You learned it in business school, but it ain't really what what you learned in business school. This is how it really happens, and it's getting in people's way for being successful.
SPEAKER_03Oh, that's a good one. What did I learn in business school that just isn't the way it works in real life? Yes. You know what I always say? I shouldn't have gone to business. I shouldn't have gotten a I got a degree in management. I've been a manager my whole career. You know what I always say? I should have gone and gotten a psychology degree. Yes. Because I'll tell you what it is, and I'm blanding it on it right now because nobody, I haven't heard I haven't had this conversation before. The way people feel matters so much more than we were ever taught it would. We're we're we're in we're in class learning about return on ad spend and supply and demand and all that kind of stuff. The the the role of human emotion in business is far greater than anybody will ever learn in business school or any sort of academic course. Yes, yes, it is so true.
SPEAKER_01I'm glad you and I asked a question. I mean, I don't know what Christian asked, you guys know that already. I just like, what do I ask that that gives us something that's not academic and is not this kind of answer? Well, because we all if if you're in business, uh you got some level of education academically about this, sure, but but then you walk out and be like, they didn't teach me any of this in my college. No, I don't know any of this, like like and and you chase after it and it doesn't, you know, I get it, I understand it, you know. So for all my my professors that are on here, we're not knocking education. What I am saying though is what is it that's no longer true in business that you learn in school that when the rubber meets the road, it doesn't work.
SPEAKER_03Yeah, it's how people feel. Yes, that's the answer. It's how people feel. You can never account for that. And there's so many times when the rules need to get thrown out or altered or changed to reflect the reality of how they make people feel. There's there's things that are I'll give you a perfect example if we have time. Yes, we have time. Go for it. I'll give you a perfect example. One of my clients said they have a they have paid holidays, but if the holiday falls on a weekend when they don't work, they don't pay for the holiday. What that's a perfect example of something that makes all the sense in the world on paper, but doesn't make employees feel good. Because other businesses, like we just passed the 4th of July at the time of this recording. The 4th of July was on a Saturday, the federal observance was on a Friday. Many businesses were closed on Friday and paid people for a paid holiday because that's how paid of federal observance works. If you are not doing that as an organization, your employees don't feel as good about it as those that have that opportunity to take Friday off. And that's one of those things that makes perfect sense on paper and just doesn't work in the real world, it's not optimized in the real world.
SPEAKER_01Yeah, I love it. So for those of you that are that what Doug just shared with us, because it looks good on paper, be real clear about how it's going to make people feel. Bingo. Because if it's making your team feel a certain way, your profit margins will shrink, your absenteeism will rise, your culture will be changed. How people think about the organization, if they get another job offer, that'll be a decision maker for them in a job offer in the competition. So pay attention to all those things that look really good on paper, but make your people feel like crap. You got a problem. So please take a closer look and so ask the question how does it make people feel when we have to implement this? Bingo. Yes, yes. Doug, thank you for bringing that out. I mean, you know, to those that are listening, and that's in every organization across the board. Um, so whether we're not just talking to entrepreneurs, we're talking about the corporate America leaders, middle-level managers, supervisors, CEOs, which is important. So, Doug, um, last couple questions. How
How To Reach Doug And Final Question
SPEAKER_01do people get in touch with you? And and before you you give them that data, what are some reasons that they are something they may be experiencing that says they should reach out to you?
SPEAKER_03That's a great question. I and I appreciate the opportunity to talk about it. I think number one is if you are a business that does not have a formal HR department and you are hiring in the next 12 to 24 months, you should reach out to me because I have a hiring system that will help you not make a lot of the mistakes that we've talked about. And that hiring system is called logic wise, the logic wise hiring systems. You can go to www.logicwisehiring system.com. The other reason that people should reach out to me is if you are an entrepreneur and things feel heavier than they should for whatever reason, where you're just working 60 hour weeks, or you're not making enough money, or you're spinning your wheels, or you're having trouble breaking through to that next level if that's what you want to do, or you're having trouble with employee turnover or organizational culture, I can help fix those things. And you can reach out to me at www.lexingtonroseconsulting.com or 954-459-4052. Um, and those are areas where the the work that I do has a very, very high return on investment. It's uh I I say that massive transformation requires massive investment. I'll be the first to tell you that that what I do is not air quotes cheap, but um, but has an ROI of many, many, many multiples for the rest of the time that you're in business. So any any type of improvements that we make have a long-term compounding effect over a long period of time. And that's what all my clients will tell you.
SPEAKER_01Yes, love it, love it. Thank you for saying that. So Doug is giving you all the contact information, told you about a hiring system that he has in place. You know, um, so if you're following and you want to reach out, he's giving you all this contact information. Um, our goal is really to add value to what you do, um, to make a difference for what you're trying to get accomplished, and and share some real answers and information with you. You know, so if you hung in with us, thank you for joining um with Doug and I. It's it's been a pleasure to have you on the podcast. Please tell your friends, turn your tell your colleagues. Um, again, Doug and I are happy. Ron Harvey here with Unpacked, which is all about asking questions, not sure where we're gonna go, but to add value to all of our clients, all of our participants, and all of our guests. So, Doug, I always allow our guests to close out. How do you want to close it out today?
SPEAKER_03I would close out by asking a single question to your audience. Does your audio match your video?
SPEAKER_00Yes, I love it.
SPEAKER_01I love it. So, so send us an email. You know how to find me. I'm on LinkedIn. Doug's on LinkedIn as well, but you can go to his company website. Does your audio match your video? Until next time, Doug and I are signing off. Y'all have a wonderful day and thank you for joining us.
SPEAKER_00Well, we hope you enjoyed this edition of Unpack Podcast with leadership consultant Ron Harvey. Remember to join us every Monday as Ron Unpacks Sound Advice, providing real answers for real leadership challenges. Until next time, remember to add value and make a difference where you are for the people you serve. Because people always matter.
