At the end of the day, the one thing that any business needs to thrive and survive is innovation. The act of innovating, of creating something new with plenty of value, is what drives a company forward and up. Nick Webb, CEO of Cravve and author of The Innovation Mandate: The Growth Secrets of the Best Organizations in the World, delves into the nature and place of innovation in any business: new, old, growing, or slowing down. The world marketplace has always been driven by the consumer, so when they’re not responding to your business, that just means you’re not listening to what your consumers need.
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When Innovation Creates Growth With Nick Webb
I have an awesome guest. We’re going to keep going on this theme of entrepreneurship. This individual is someone that I wanted to get on to speak specifically about the idea of innovation as well as the customer and how the customer is changing at a rapid pace. How important it is for the entrepreneur to keep up and how to do that, more importantly. My guest is Nicholas Webb. He is the Founder and CEO of LeaderLogic. He is a world-renowned business strategist, best-selling author and futurist. As an inventor, Nicholas created one of the first wearable technologies and one of the first smallest medical implants. He is the Founder and CEO of Cravve, a top business growth consulting firm. He has been awarded over 45 patents by the US Patent and Trademark Office for a wide range of cutting-edge technologies. He is the bestselling author of several books, What Customers Crave: How to Create Relevant and Memorable Experiences at Every Touchpoint. His other book came out in September 2019, which is called The Innovation Mandate: The Growth Secrets of the Best Organizations in the World.
Nick, it’s amazing to have you on. Thank you so much for spending this time. How is everything going in your world?
It’s good. Thank you. I appreciate it.
Nick, we’ve been spending a lot of time on the show learning about many different aspects of entrepreneurship. What I love about what you write and speak about is the idea of innovation. It’s clear to everyone that we are rapidly advancing as a society. It’s like we’re being unconsciously conditioned to buy differently, to get our news differently, to be entertained, manage our money and learn. In your book, you talk all about this. You make the case for innovation and being that variable that distinguishes successful and unsuccessful companies. Can you expand on that for us?
The best way to look at the term that everybody is using is disruption. If you think about what disruption is, it’s another way of saying difference, but that difference is much bigger than it ever has been before. The speed of differentness has sped up. In a time of differentness, most organizations that are failing are those organizations that are committed to the status quo. What I found after researching a few years ago with my book, What Customers Crave and TheInnovation Mandate, I found that the best organizations without a doubt are those organizations that understood their customers better. They rapidly develop new business models, new economic models, new products and services. As a result of that, they’re absolutely growing at a rate that is hard to believe. Whereas these large established companies like Toys “R” Us, Sears and others are failing at mathematical certainty.
I come in innovation in a pretty well-rounded way. I started my career inventing medical technologies. My first technology was one of the world’s smallest micro-silicone implants for ocular surface disease. You could say innovation is about the bright shiny object. I spend 43 patents. Working with enterprise, I began to realize that some of the best innovations are going to be new ways in which I deliver more consumer value to people or in the case of a business-to-business model client value. What that looks like is the definition of innovation is pretty straight forward. It’s the new value that serves you, your organization and your customer. It can be new ways to introduce new business models that you borrow from another industry. It can be new packaging. It can be new ways in which you answer your telephone. It can be cutting-edge technologies. It’s anything that serves your organization and customer that’s new and valuable.
How often should a company be innovating?
It should be a continuous process. The best way to look at it is that innovation is like a stock portfolio. It’s comprised of incremental innovations, which is a constant way in which we get better. There are landmark innovations which are significant ways that we improve the way that we deliver value to our enterprise and our customers, then there are breakthrough and disruptive innovation. Across that continuum of those four different types of innovations, we should be doing this all the time. The problem is that client and customer value or expectation is continuing to climb. Amazon, when they first launched, you wait a week and you’ll get whatever you order. Now, most everything comes in two days. I can tell you within the next few years, the real battlegrounds with Walmart, Target and Amazon will be getting to you any product you can think of within hours.
Could a company say that they’re innovating and still fail?
I think so because the problem with innovating is the overwhelming majority of things we innovate are bad. To give you an idea, there are about 3,000 patents that are issued each year. Only about 2% of those ever reached successful commercialization. The good news is if you develop an innovation pipeline as I talk about in my book, we do what I encourage people to do with every part of their life and that is to fail fast. If you fail fast, you don’t burn through resources. You don’t take fuel up trying to take something to the market that doesn’t have a value. The good news is if you develop an innovation pipeline, you can eliminate a lot of those mistakes. People invent lame stuff all the time and it fails in the market and usually, it’s because they don’t understand their customer.
That’s where I wanted to take the conversation because there was a Utah company where I’m based that had spent $60 million in funding and laid off a huge amount, 60% or 70% of their workforce. It was a technology company in Silicon Slopes, which is a very innovative place in Salt Lake City. I went and did some research. The company is called Canopy. They were trying to create a new platform for CPAs to use. I found it fascinating because CPAs are some of the hardest customers and probably the most loyal customers because of how their mind works. Can you speak about when somebody doesn’t understand their customers? How vital is it to continue to discover better ways to meet their needs?
The Innovation Mandate: The Growth Secrets of the Best Organizations in the World
In my consulting practice, we work with some of the top brands in the world. One of the big problems is you can’t deliver value to somebody you don’t understand. Most people use technologies like VoC, which stands for the Voice of the Customer or they use net promoter scores, which are fine, but in my opinion, they’re fractional and they’re non-actionable. If only it was that easy to look at a graph and a spreadsheet. Steve jobs never used those methods in any big way. He just understood his customer. In fact, he understood his customers so well that he invented products they didn’t even know they needed yet. We get there not through looking at traditional demography.
Most people use demographic market analysis. That’s the most common way combined with survey data and focus groups. Most of it is wrong because they’re looking at people and pigeonholing them into customer personas based on those old-fashioned methods. What we need to do is to look across our customers based on what they hate and what they love and develop what I talk about in What Customers Crave. I talk about hate-love personas, then in TheInnovation Mandate, I talk about how do we weaponize those understanding what customers hate and love. The one thing that we know for sure is that all customers hate friction. Right off the bat, you don’t need to do a survey to find out that customers hate friction. You can go in and look for friction, right off the bat pretty much every persona hates friction.
Across most personas, they hate the lack of relevance. It has to be relevant to them. It has to be customizable in many cases. What we do in our practice, we look at an organization and we do what’s called Customer Experience Readiness Assessment. We look at their innovation capabilities and their customer infrastructure to find out how they get information, how they deliver that information into new innovations and how did they deploy those innovations? You have to do it like a medical pathway. You start with a good diagnosis, understand where there are resources, tools and system gaps. You build out a fast and fluid agile roadmap that allows you to go in and do the stuff. You’re not going to get it through graphs, spreadsheets and the traditional things that we’ve done. Unfortunately, it doesn’t work that way.
It’s amazing where you’ve had economic law for a long time and there’s Say’s Law, which is fascinating to me because you hit the nail on the head with Steve Jobs. Customers don’t want products. They want solutions. They want to feel a certain way. If you can connect with that and always be seeking ways to do that. I think that is one of those very special variables about successful innovation.
If you look at Spotify, they didn’t re-invent the music. They invented better moments of music. Netflix didn’t re-invent video. They created better moments of movies. Amazon created better moments of merchandise. Apple created better moments of machines. I could go on and on. It’s about moments. How do we look at those five touchpoints, the pre-touch moment, the first touch moment, the core experience, the last touch and the in-touch moment? Understand that across a range of personas to invent perfect and beautiful experiences. When we can do that, the impact on the organization is incredible. In fact, 85% of the top brands in the world are using CX, customer experience innovation as their primary way that they drive sustainable growth and profitability.
This is fascinating and we’ve touched on a few of these things. It sounds like you have some tools and resources. Parts of your business revolves around helping entrepreneurs and companies to take what we’re talking about philosophically and make it a reality. Would you speak to some of the things that you’re doing to help companies?
The problem is there is this disruption evolutionary curve with both entrepreneurs and large companies. We start our businesses because we’re focused on the customers. We know those customers. In many cases, we are those customers. We’re the skateboarders that invent a new skateboard or whatever. We tend to be very customer-centric and that is what started the growth. That’s what started us on a trajectory of growth, then we realized that we need to innovate. We need to go beyond what we’d launched with. We focus on innovation and customer. During that period of time, organizations enjoy predictable growth. Then they begin to realize that, “Now, we’re a business and we need to create the infrastructures, the HR. We need to look at insurance, facilities and all of the complexities that create the substrate for running a business.”
We become operational. What happens during that period of time if we’re not careful is we take our gaze off the customer. We take our gaze off of innovation and we become hyper internally focused. We start to churn in operationalization. All of our resources, our money, our times and our meetings are all about the optimization of the machine. That’s where we start to see what we call scale fail because we lost sight of what got us there in the first place. What we like to do is to look at entrepreneurs and businesses. We primarily work with large organizations, but we do work with startups and medium-sized companies. We take a look at their current state of innovation and customer experience readiness because we are in a customer experience economy, a frictionless economy.
Business Innovation: Without a doubt, the best organizations are the ones that understand their customers better.
That’s where the differentiators are. You can buy anything you wanted anytime anywhere with a few thumb movements. You can look at the hyper influences of social ratings. Everything we need to buy anything anytime is right in front of us. How do you differentiate in a time of hyper-competition? The answer is you have to find ways to go above that customer’s baseline level of expectation across the personas and throughout those five touchpoints. We look at all the things that make that happen and then we assist them in building out the roadmap to get back to that focus of customer and innovation.
It sounds like you work with larger companies and enterprises. With regards to your book, reading or listening to your book, are there tools that you provide that would help maybe some of the smaller businesses or people that are getting started? Maybe people that are at the point where they are scaling and realizing that the lack of innovation or better marketing is starting to inhibit their overall production.
I’ve tried to write books for the muffler shop up to the multinational corporation. The truth of the matter is there are slight variations between the principles that are necessary to make one of those organizations work. You can’t be a good author without at some point being a lousy author. Early on in my writing, I was more interested in creating content without thinking about how I weaponize it with takeaways. In TheInnovation Mandate, what I do is I create takeaways at the end of each chapter that says, “Here’s your shop. We’re going to talk about insights and here’s what you do about it.” The best way for people to use the book is that they’ll find that the takeaways there are very practical. They’re not targeted to multibillion-dollar corporations. They could apply to the startup and to the entrepreneur as well.
Nick, this has been an awesome interview. Thank you so much. I know we’ve focused on these few things. I see many signs out there of industries on the brink of being disrupted. A lot of these grandfather industries know things are changing, but they still have faith that their model is going to sustain them. It’s this state of denial that are a lot of industries are in. It’s going to be an interesting 5 to 10 years. I look at the simplicity of your message, but yet how profound it is. It’s the idea of understanding the customer and always improving the ways in which we’re providing value to them. I love what you’re talking about and speaking about because, in the end, the customer is always going to win.
The customer is the one that chooses to buy and continue to buy. I love the message. Hopefully, you as an audience are realizing this as it relates to your specific business or enterprises and you use maybe some of the ideas Nick has put together in his book. We’re grateful for you in putting the effort and time to write a book on this specific subject. How could people connect with you, follow you and if they are in the right situation, potentially use your services or the services of your company?
On the speaking side, my website is simply NickWebb.com. I speak at about 70 events around the world each year. On the consulting side, the website is simply GoLeaderLogic.com. That’s where we provide a range of consulting services across innovation, strategy and customer experience.
Nick, it’s amazing to have you on. Thank you so much for your time. I would stay in touch for sure.
That sounds great. Thanks so much for having me. I appreciate it.
Nick Webb is a world-renowned Strategist, Bestselling Author and Futurist. As an Inventor, Nicholas invented one of the first wearable technologies, and one of the world’s smallest medical implants. He has been awarded over 40 Patents by the US Patent and Trademark Office for a wide range of cutting-edge technologies. Nicholas is the founding CEO of LeaderLogic, LLC, a Management Consulting Firm. Nicholas is the author of The Innovation Playbook, The Digital Innovation Playbook and his Number One Best-Selling Book on Patient Experience entitled, What Customers Crave.
His just released book, The Innovation Mandate is available in bookstores worldwide. As an Advisor, he works with some of the top brands to help them lead their market in Enterprise Strategy, Customer Experience (CX) and Innovation. Western University of Health Sciences, a Top Southern California Medical School, awarded Nicholas his Doctorate of Humane Letters. Nicholas is also an Adjunct Professor of Healthcare Innovation and the Chief Innovation Officer of the Center for Health Innovation at Western University of Health Sciences.
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When asked to open a new law firm office in a different market, business leader, problem-solver, and health care attorney Tom Donohoe shares how he was able to apply basic entrepreneurial principles to establish their business. As someone who’s not averse to doing the leg work, he was able to build a client base in a new market and entice other lawyers to join the firm by running around forming relationships and connections. Together with his brother, host Patrick Donohoe, they discuss the role of mentorship in business progression. They also talk about the qualities that effective business leaders possess and how they affect positive work culture, morale, and the overall rhythm in the workplace.
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Mentoring And Shaping Effective Business Leaders with Tom Donohoe
I am with my little brother, Tom. I wanted to have Tom on because we’re going to talk a little bit about mentorship. We’re also going to talk about business rhythm and also ways in which you can identify friction in business rhythm to capitalize on opportunities. I’m going to give you an idea about why I chose this topic for the week, especially as we’re talking about entrepreneurs. First the book, we still have our free website up. It’s FreeBook.HeadsOrTailsIWin.com. You can get a free copy. All you have to do is pay for the shipping. Also if you’ve enjoyed this season, then go head over to iTunes. They’ve changed up a bunch of stuff with the podcast. Go ahead over there and give us a review. We would appreciate that. We are in Yarmouth, Massachusetts on Cape Cod. This is where my brother and I grew up during the summers. It’s been many years that we’ve been out here with our kids. It’s an amazing place. It’s going to be important for Tom to be on this episode. He is in a different industry and not necessarily the entrepreneur type of role but definitely entrepreneurial based on what he’s done with his career in law. Why don’t you introduce yourself to the audience and tell them about your background?
I’m an attorney by trade. That’s my professional path. I was in private practice for about ten years with a couple of the country’s largest health law firms. That’s where I focused. My practice has always been representing hospitals and health systems for the most part on transactional regulatory matters. A few years ago, I went in-house to a mid-size regional health system headquartered in Denver, Colorado but it has operations in Denver, Kansas and Montana. It sounds like this is an audience of entrepreneurs. I may not make sense to be speaking to that crowd given I’ve taken a little bit more of a traditional route in my career. I would say that some of the principles that I’ve applied in the entrepreneurial space, you can also apply and be equally successful in the legal space as well and some of the more traditional settings.
On that note, I did start in the traditional law firm setting. For one of the firms that I worked for the longest, I opened their Denver office. In some cases, it’s a startup, a new market, new client base, new potential for people to come in, both to join me to practice but also to receive services in that area. In that setting as part of a larger law firm, we had to act like entrepreneurs in the way that we were trying to develop a business, bringing people along and then also refine our craft. It was a great experience in doing that. I can certainly talk a little bit about that and some of the different principles we applied in doing that.
I’ve looked at the conversations we’ve had over the years and with what you see typically in the corporate world. I would say the legal world is business that is essentially in a chokehold because of clinging to old habits, ideas, ways of doing things. I remember when you started up the Denver office, it was interesting because you hit the ground running. You did things that other attorneys weren’t willing to do. You went out and do business development and establish new relationships. What was cool is even though you were in Denver, you were in Salt Lake quite a bit. You were able to establish relationships with big hospital networks out there that already had representation. You were able to go out and sponsor dinners, go to golf tournaments and network.
Ultimately, most business, especially when you’re doing business to business transactions, there tends to be frustration at times, whether it’s lack of experience, whether it’s timeliness, whether it’s focus, whether it’s organization. You’re able to capitalize on relationship opportunities because you had done a lot of that networking. When those frustrating things happened, they remembered you and remembered your firm and subsequently started to do more business with you. Talk about where did that come from. As you opened the Denver office, was it your idea to do the business development or was it something that the hierarchy up the chain was insistent on?
There’s a fundamental perception, particularly of lawyers, that there’s this body of legal work that sits out there waiting for some lawyer to do it. You go to a firm and there’s a pile of work on your desk and you are there for hour after hour doing it. That’s not the case. In some cases, it may be but in mine, it never was. It was, “Here’s an opportunity to develop a new office, a new service. We’ve got some work for you but you’re going to have to find that on your own.” It’s similar to any startup or any entrepreneur’s situation where you’ve got a new product or new service and you’re trying to find buyers and you’re trying to sell that to them, grow your business and all of that. That’s exactly what this was.
In my case, I had some foundational clients I developed relationships that I had some work, but it was going into those markets. I was in Denver for the most part but in that market, developing the relationships, pitching the service that we provided, why we do it differently, how we do it differently and why we could do it better and then expanding to new markets and doing that too. To your point, sometimes I drop into Salt Lake. I have a handful of lunches or dinners scheduled and no real prospects, but you have to grind and make those contacts time after time with people. When you’re given that opportunity, you can knock it out of the park.
It seems like a simple recipe, but I feel like that’s a recipe for success in any industry. It’s having a relationship. It’s building that relationship. It’s once you get a bite based on that relationship, being responsive and doing a good job. It’s not rocket science in a lot of cases. It’s astounding to me in any industry how unresponsiveness, lack of communication, apathy or something like that can be pervasive. For people that are willing to put in the work and to develop those relationships and to focus on those simple things, how much success you can yield by doing that.
Mentoring Business Leaders: Building relationships with the people in your market and other individuals working in the same field is essential in the growth of a business.
Let’s segue into a few topics. I wanted to do this podcast with my brother because as I was thinking about what to speak, we had a couple of guests and we had some travel conflict and so we’re doing this episode on the fly. Some interesting things happened to me. I had an old business coach of mine reach out and he is an incredibly successful entrepreneur. He started several businesses. He ran over a 1,000-person publishing company. He and another individual coached me for a few years. That coaching helped me understand the importance of business rhythm and organization. This business coach reached out because he’s starting a podcast and wanted to know a couple of the ways in which his coaching impacts my business, some of the things that we’re using. It caused me to reflect on a few things.
I wanted to talk about that, but I also felt it would be appropriate to run what I had learned as some of the friction points, the inefficiencies, the blind spots of my business. I wanted to know from a corporate standpoint if there were some similarities. I didn’t brief my brother in any of this stuff. It might backfire. We will see but one of the things that’s connected with me in regard to this idea of growth as well as business progression is the whole plus-minus-equal idea. I don’t know if you know about this but plus-minus-equal is essentially where you stand. There’s always somebody that you can look to as a mentor. Someone that’s doing more than you. Someone that has more experience than you. Also, you have minus, which is someone that is coming up the ranks that you can mentor and teach.
The equal is essentially having somebody that is in a very similar situation as you so that you remain competitive. You have that type of edge. I consider the mentors that I’ve had, this individual in particular, as someone that has gone down the path that I was going. Someone that could help me see some of the pitfalls, some of the things that I would be approaching and how to essentially set up my business, set up my structure in a way where I don’t necessarily avoid them. When they’re presented, I can essentially identify the opportunity and be able to proactively respond as to impulsively react. Tom, talk about the importance of mentors to you and then also your ability to mentor others. I know that you’ve had mentees and mentors throughout your career.
The whole mentorship thing, unless you’re intentional and you seek out one that fits what you’re looking forward, is a product of chance. My first partner that supervised me was very old school. It was a sink or swim. I had very little interaction with him. At the time, I didn’t think that’s what I needed. In some case, I felt I wasn’t getting what I needed. I had expressed that and I can always remember where he would be in meetings all day and would have sent me a couple of things that he needed help with or questions he needed to be answered. He gets back to his office at the end of the hall. I slowly popped my head out of my door in my office and I gave him one look. I could tell he did not want to talk to me. I go right back to my office and hold my questions until the next day.
There were also times when it was late in the day, he was in a good mood and we could talk through some things. It was a very sink or swim type of relationship as you explained it to me a few years ago when I ultimately transitioned from that firm. I came back eventually but as I was departing, he said, “That was my style and my style was to give you as much as you could handle and then see if you can survive or if you thrive.” Fortunately, I did okay. I don’t know if thrive is the right word but I certainly didn’t sink. At that moment I resented it a little bit but as I look back, it did prepare me in my career to deal with harder personalities but not the people that coddled you or protected you.
It helped me navigate some more difficult personalities both internally at the other firms or companies I worked with but also externally as I negotiated with other parties with difficult personalities. It helped me manage those. I was very grateful in the end for that mentorship. That’s a little bit of non-traditional path. I think those are important. You can do two things by chance. You can have the mentors that you get or assigned to you and make do what you can and try to find the best benefit that you can in those relationships. You’ve got to understand the parameters of those mentors and how they operate and try to leverage what benefit you can get from those relationships.
The other way to approach it is to seek mentors not just in your companies or in your businesses but around you or the one that Patrick suggests as these plus ones that are in the industry. They’ve been successful and that’s a path that I want to follow. You get in touch with them and establish that more informal mentorship path. That’s a little bit of a roll the dice because they may have been successful, but they don’t want to teach anyone. They don’t have the patience. That’s not their personality but that’s certainly something worth exploring. As far as the minus one, my experiences with mentors or lack thereof however you characterize it has driven me to want to go above and beyond in terms of the people that report to me and that I work with on a daily basis. I’ve done that in my current role, part of the task that I was brought in to do, I was to build an in-house department. I did it in what I would characterize as a vertical way. I’m the number two attorney in my company and I developed layers beneath me.
That’s not necessarily to have a hierarchy for having a hierarchy sake but it’s so that the people with certain skill levels could have access to people that have the higher levels, with additional skills or experience that they can leverage or go to when they have challenges. It also creates a path for those people to progress. I have a particular attorney who she worked with me at the firm and then we worked a little bit together there and she ultimately left to take in-house role. I stole her back from that role and I came in and I’ve had the opportunity to try to push her as hard as I can but also be a mentor to her. We meet on a weekly basis and go through her projects, any questions, the concerns that she has. I try to push her as much as she can and I feel like she’s progressed. She’s given the feedback to me that she’s certainly stretched the most that she can but not to a point where she’s put in a position that’s going to compromise her success or make it difficult for her to be successful in her job.
Mentoring Business Leaders: Mentorship can be very beneficial in determining the path you want to take in your career and in establishing your foothold in your chosen industry.
It’s interesting when you look at growth in general, just the principle of growth. You have an environment in which growth is taking place. The environment has to be conducive to certain variables. One of them is pressure because if you don’t have the pressure to perform, then you’re not going to be pushed. We also have this notion of a team where you can push the limits but yet the fear of failure, it’s not like you’ve burned all boats and you’re forced to do it, even though that could be a viable strategy. You still have team members. One of the things we didn’t talk about with regards to your background is you’ve been part of several hundred-million-dollar mergers, acquisitions, buy-outs.
These are big transactions, whether it’s hospitals merging, buying private practices, merging of private practices. These are very important transactions especially in the healthcare and the medical world because there’s so much regulation. The pressure is almost baked into the process. The idea of having a vertical is intriguing to me because you have an environment where you can’t make many mistakes. The mistakes have pretty big consequences and opportunity costs. You’re essentially entrusting someone to do work and be in that environment. You have parameters built-in so that they can fail but the failure is going to get caught so that there aren’t these dire consequences of not dotting the I’s and crossing the t’s and what that would do to the specific transaction details.
I have a couple of thoughts on that. First to your point, they’re trying to create failsafe within your structure so that people can be pushed and can go to a limit, yet they’re not too far out there that they’re exceeding their bounds. You’re right. In the legal industry, if you provide the wrong legal advice, it could potentially end up with pretty significant consequences. We don’t have a lot of room for error in most cases. That is certainly one. You also mentioned the concept of team and culture. Those can be buzzwords and clichés for different companies or if you’re reading inspirational books and all of that but they matter. I think about the department I came in and as we developed structure, one of the things we had to do was develop a culture where people were empowered to collaborate with each other. Where there were good communication and some people were good at it and some weren’t.
As you develop that culture, you lead in that respect and that’s how you act, people tend to fall in a lot of cases. To your point on a transaction, on a heart issue on something, if people are aligned and communicating, your ability to resolve any given issue or get through a transaction is increased significantly as opposed to if you’ve got internal dynamics or cultural barriers. The transaction itself could be hard and now you’re making it even harder because of the way that you are operating internally. That’s an incredibly important thing and sometimes very difficult based on the personalities that you have. They emphasize within an organization in order for it to be a success. It doesn’t matter how good the product is or the service or what you’re doing. If your culture isn’t good, you may have short-term success in some respects, but it certainly leads to the disadvantage to your long-term prospects.
Unconsciously, human beings make judgments about who they want to do business with. They don’t sit down and say, “Here’s how I want to do business.” The unconscious side of them is looking for what culture is, looking for what the relationship will be especially at those levels. At smaller levels, you can probably get away with it. At the same time, when you’re talking about big transactions, the big corporate world. In some cases, small business where you’re merging or doing joint ventures, understanding that there is that unconscious side that’s looking for, “What is this relationship going to be like?”
I know that it’s not necessarily with one person. It’s not with Tom but it’s with his offices and with his team. I remember the conversations we’ve had over the years is you’ve been at a couple of two different firms before you went to the in-house atthis healthcare network or hospital network.Talk about where you saw in these big organizations some of the unintended consequences of not necessarily bad culture but let’s say maybe mediocre or stagnant culture. If you’re not growing, you’re dying. There’s not this neutral place that you can stay in. The Law of Nature compels you to grow. Talk about that briefly.
It does have consequences. The most apparent consequence is always in good people leaving. You lose good people. The firms that I’ve been, in some cases it’s to another firm. In other cases, it’s to a client. They go in-house. That’s what I did. Some of the attorneys in the firm choke that up too, that’s good. He or she went to a client and now we will get business from them. In a lot of cases, those employees are disgruntled. They don’t look at the fact that “If that person was a good person and a good asset to the firm and they left, did we do something wrong?” There’s definitely a consequence in that. That means something. If a smaller or large company has put resources and time into developing an individual and they’d become a good asset, you lose that. That’s tangible capital to the company. Maybe not in terms of dollars but that’s capital.
That’s time that’s been invested and put into that person. You now lost it and now you’re going to have to invest in someone new. The more you see movement in any industry, the more people realize that that’s certainly not a good thing all around when a person leaves. I’d say the other effect that I’ve seen or consequences of some poor cultures or some idiosyncrasies that weren’t necessarily productive in a firm or a corporation is the morale. You want people showing up. You want them making an effort. You want them engaged. You want them invested in the business. When they’re not getting the mentorship or when the culture of the department, the company or the corporation is not good, their ability to be positive and to work hard is significantly diminished. You need those people, particularly at the leadership level, to show up and influence others and to set a good tone that they can’t do that. You’re going to see some of the foundations of a company crumble because the people aren’t the foundation in a lot of cases.
Mentoring Business Leaders: Individuals in the leadership level should want their people to show up, make an effort, and be engaged and invested. This can only happen if you set the tone for them as their leader.
From the business coaches that I brought on, I have two business coaches. Both happened to be women and I did that intentionally because it has provided a different perspective for me. All my business coaches of the past had been male. I’m not going to get into that right now, but I wanted to get into some of the things I thought about when it came to this particular business coach. He’s reaching out to me and me going through our notes, going through our sessions over the last several years. I stopped coaching with him a few years ago. It caused me to reflect on some of the main things that impacted my business.
This is where we will go back to this narrative that we’ve been on with culture and team. One of the biggest things that I learned from them, it was one of the first things they told me, which is the objective of the leader is to do nothing. What that means is when he was coaching me, what he was trying to say, at least that’s how I interpreted it and thought about it over the years, is that having a good team in place allowed me to do what the leader does, which is maintain the psychology of the team. I learned that the chokehold of all business comes down to the psychology of the leader or leadership. That’s where you look at if you want growth in your business. The leadership first has to grow, expand their psychology, expand their understanding of howto take a team from one level to the next level.
It’s caused me to reflect and allowed me to restructure my role in a way where I’m performing actual leadership things. It is not something that I studied or understood because I read a few books but it’s something I had to work on, which is connecting with people, building a culture, setting principles, setting values and setting business rhythm and then continually improving it. Tom, talk about that. You’ve had some leadership role being second in command at this network. You also ran the Denver office. You were a partner at the firm, which is based out of the Midwest. Talk about the good leadership that you’ve seen, the bad leadership that you’ve seen and then how you have essentially taken that information and honed in on your leadership style and how you’re leading.
First of all, fundamental to all of this is a leader’s understanding of what leadership is. It might seem that’s intuitive, but I don’t think it is in all cases. People aspire to leadership or become leaders for various reasons. Some because they want a title and they want to tell people what to do, others because of pay. Others because they understand leadership and want to be in that role and influence people.
Are you saying there’s a difference between a leadership role and a leader?
Absolutely. There’s no doubt. If there’s something I’ve seen is many people put into leadership positions that don’t know how to lead. Fundamental to any leader being successful is understanding what their role is. You talked about and I’ve reflected on it over the years as well because as a lawyer, no one pays me to be a leader. Clients, particularly in private practice, pay you for your work so you have to work twelve hours and produce good work and be competent with that. At the same time, I had leadership roles as the managing partner of an office and all of that stuff. At some point, I had to understand that in order for the office to be successful, I was going to have to take additional time to the legal work I was doing to step back and influence people in the office and see where their gaps were, where the gaps of the office were, so that we could ultimately be successful as a team as opposed to just individuals.
That’s the plight of any law firm. You incentivize an individual, for the most part, to be successful but not necessarily for the firm to be successful in all cases. What I’ve seen and that compelled me to go into an in-house leadership role because I feel like there’s a greater appreciation in some cases in the corporate world. Generally, they pay people to be leaders. You’re putting in a leadership maybe sometimes because there are the skills that you bring but also because they’ve recognized that you have leadership skills and you should be leading a team. I struggle with that at first. I said, “Why are you paying these people money to lead? They should be doing something.” I want them drafting an agreement or I want them at the table negotiating. I’ve come to appreciate that if the company be it big or small, recognizes that someone has a skill in influencing people and bringing them together as a team and helping them function at their highest level, that is something worth paying for. That’s why you may have seen the news, the CEO of GE goes to be the CEO of Johnson & Johnson where their product lines are entirely different.
I don’t know what they do but what I’ve come to appreciate is some of these CEOs transfer industries where they have no experience. They’re not getting paid because of their knowledge of that industry and in certain cases but their ability to lead and bring a company back from a certain situation that transcends industry. I give those examples because going back to some of the points that you’re making, I do think the most effective leader recognizes what their role is and what they’re there to do. They get into the work of how they do that, how they influence people, how they create rhythm within a department, within an organization so that people are functioning at their highest level. They’re happy, they’re getting the mentorship and the tools that they need to be successful. That stuff in my career I thought was intuitive but now I’ve come to appreciate it’s not, particularly as you grow the number of people in a company and the department. That tone needs to be set by an individual and then passed down to others so that those constituencies can be successful.
Mentoring Business Leaders: If someone has a skill in influencing people, bringing them together as a team, and helping them function at their highest level, it is something worth paying for.
What would you say are maybe the top two to three characteristics of a leader that you have tried to embody?
First of all, the biggest character is that they have the ability to be influential and I use that word, influence. I know there are plenty of literature about this because I’ve seen some leaders who say, “I’ve got a title. I’m going to tell people what to do and they’re going to do it.” If we are all robots, that would be a wonderful thing but we’re not. You need people to join your cause to be on your side, to want to achieve the same objective you are. In order to do that, that’s influencing them. It’s scoping out the personality and say, “What is it going to take for that person to get on board and to do what we need them to do?” Sometimes that’s setting an example. You do have to get your hands dirty a little bit and do that. Once they see that, they will follow you or deploy other skills. In some cases, they’re not going to get there. It comes down to that leader making the hard decision of letting that person go for the benefit of the department, the corporation or the company, whatever it is.
The ability to influence is probably a big characteristic. Humility is another big one that is huge for me. A leader who wants to put others before themselves, wants to see others succeed, wants to see the company succeed. That leader will be successful and that’s hard. I can’t say that I’m always the best at that. That is certainly something I work towards. The humble leader that we hear, the servant leader in some cases, those are the people that want to see other people succeed. They’re the ones who will put in the work and will do the things necessary to try to accomplish something bigger than themselves. There are certain charismatic leaders throughout different industries that we hear about in the news and otherwise that they get big headlines or whatnot. They might have successful companies. I go back to that. I think eventually those companies will stagnate if the ego gets too big, if that stuff gets too big because they will lose sight of who is important to make sure that enterprises are successful.
I think it’s Confucius but it’s one of those counterintuitive paradoxical ideas. If a person looks at a leader and leaders are the ones that tell everybody what to do but that’s not the case. It was Confucius that said, “Leaders who are soft are strong.” It’s the idea where they’re able to essentially take the situation at hand, take all the emotions involved and objectively or as objective as possible analyze those and determine what to do. At the end, who is the person’s best asset and the number one thing in their life, it’s them. If the leader doesn’t understand that, then it’s very difficult for them to get them to do things past a certain point. From a long-term standpoint, being able to have a lasting impact, lasting influence. You have to understand human psychology, what makes a person tick and then evaluate if they’re in the right role.
We can probably talk about that, which is people that are in roles that they have no business being in. Not necessarily based on them being incompetent. They well could be but it’s not because of them as a person. It might be because of their experience. It might be because of their conation, their natural tendencies, their strengths. One of the biggest things a leader can do is to get a team together, identify certain strengths, identify the roles where they’re going to be able to operate efficiently and make an even greater impact than if it was one or two people. This is something where this business coach made me understand. It sounds so fundamental but yet I look at human nature and without this, people get super frustrated, anxious and concerned which if you combine all of those things together, you have emotions that don’t allow people to do very good work. That’s the ability to create business rhythm.
I’ve understood there’s a brainwave pattern of your flow state. It’s right in between your Alpha and your Theta. There’s this flow state where you’re able to have complete focus. You have no distractions. It’s like you’re in that zone. I look at business rhythm. An ideal business rhythm is creating the structure in which a team operates, which has that very flow-like state. Talk about where you’ve seen clunky rhythm, maybe some of the previous firms where stuff didn’t get done. It wasn’t because people were incompetent but because this person didn’t know what that person was doing or what this step was or there wasn’t necessarily guidance by leadership. Talk about some of the clunky situations, the friction you’ve seen in the past. Also talk about some of the good business rhythms and then maybe how you’ve taken your new role in the last few years and established your team and established its rhythm.
In terms of where I’ve seen some clunkiness or some disruption in rhythm or barriers to establishing any rhythm, to begin with. It goes back to these organizations that I’ve either been involved with or they’ve been clients, whatever, where I’ve seen a fractured state of operations and leadership. There are certain functions within an organization that are dissatisfied. Maybe its marketing is always unresponsive and they don’t send the right stuff or they’re not up to par as similar competing organizations or your HR function is not helpful. There are these constituencies or services that reside within a company that seems to exist and no one seems to pay attention to them. That gets people frustrated and other things so that they can’t do their jobs or it ruins their day. You get out of the rhythm of sorts. As I’ve seen organizations overcome that, it’s been around first identifying that. You’ve got to have the appropriate feedback loops, whether it’s leadership or operators that understand how those different constituencies and the disruption that they’re causing are being disruptive.
The things we’re talking about are not intuitive for people. I keep on using that word as if everyone speaks the same language. I don’t think it is. People complain about HR and most people, leaders and otherwise saying whatever, that’s HR, marketing, “We’ll fix that, but we like our guy and that’s our guy and that’s how it is so deal with it and grow up.” That’s an antiquated philosophy. The more sophisticated leaders, the more sophisticated managers will step back and say, “As I look into different pieces within my organization, where are the barriers? What are the sources of frustration?” It’s not just identifying and say, “Go fix that.” We all have jobs. We all spend a lot of time. It’s not like you can tackle it all in the first place or one single meeting or get together and everyone’s good and you’ve re-established where you need to be.
Mentoring Business Leaders: Feedback helps you identify the gaps that disrupt workflow.
They’re like, “We’ve got one issue. We’ve got five or six issues and five or six got pieces that maybe disruptive. Let’s take this one. Let’s look at it, let’s fix it, then we will get to the others as well.” It’s having a plan to do that. We do an example, I set this up as we have some standing meetings within our department which we call legal operations meeting and we’ve done exactly that. We’ve said, “What are the things in our day that are challenging? Is it our contracting processes? Are our IT flat boards conducive in helping us do the work that we do?” This group of us are going to be meeting to identify those particular pieces that are creating barriers within our department. We’re going to fix them, move on to the next one and then the next one so that we can create those efficiencies and create that rhythm that I think gives us the job satisfaction and gives us the tools that we need to be successful.
Most people become overstaffed because of bad rhythm.
Throw more people at it. To me, identifying what the fix is. Most people have the dumbest solution that I’ve seen as well but it’s understanding the process, thinking through it and then taking the steps to fix it.
A very well-created and then managed the business process, your start to finish whatever that flow looks like. When there are hand-offs in between these impact points of each department or business unit as you have handoff, it’s the clear understanding of both the party that’s giving and the party that’s receiving. That is typically where you find the most friction. If you don’t have a clear understanding, then it bottlenecks everything else going forward, especially if you have ten processes through your business process or your business flow. As you look at entrepreneurship, entrepreneurship interestingly enough is finding friction. All wealth and opportunity exist where there’s friction. Whether that’s making travel more convenient, whether that’s making communication more convenient, entrepreneurs are always looking for friction. What I find fascinating and it’s very ironic where most entrepreneurial-driven businesses fail because of their own friction.
That is the failure to understand what the business process is and assume that everybody else knows what it is. Properly documenting it, properly managing it, improving it, that requires a series of meetings and a series of reporting and objective measurements of what is expected, what is being handed off. The feedback loop that you mentioned, Tom, is as important in a very small two to five-person office or 5,000-firm if there’s more of it. Typically, those rhythms are very much the same. There are a few other things I wanted to get into, but I want to say that for another time. Thank you for reading. Tom, thank you. We will see you next time.
Tom Donohoe is a proven leader, problem solver and teamwork-oriented health care attorney who focuses on assisting business partners and clients in achieving their goals in a compliant manner consistent with their mission, vision and values.
Tom advises health care providers on a wide range of transactional and regulatory matters, including hospital/physician joint ventures, physician practice acquisitions, physician alignment and clinical integration. Tom also assists health care providers in complying with the Stark Law, Anti-Kickback Statute and other fraud and abuse laws and regulations.
Presently, Tom is located in Denver, Colorado where he is serving as associate general counsel for a regional health system. Tom graduated cum laude from Indiana University Robert H. McKinney School of Law in 2008 with a concentration and honors in health care law. He is admitted to the bar in Indiana and Colorado.
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Patrick is the President and CEO and started Paradigm Life in 2007 after learning from his mentor Kim Butler about financial strategies outside of Wall Street.
With a background in economics and marketing, Patrick immediately realized the opportunity to teach investors, business owners, professionals and families on a large scale using modern digital media and communication technology. Since 2007 Paradigm Life has worked with thousands of individuals in all 50 states.
Run-of-the-mill advice is everywhere. But in order to achieve different results, your strategy has to be different.
In this book, you're going to learn about a hundred year old strategy that's tried and proven to give results. Are you ready to
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Once in a great while, a person comes along who can explain financial concepts so clearlu that all of a sudden,
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that person was Patrick Donohoe when he first explained what you're about to learn in this book.
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Author of Tax-Free Wealth, of the Rich Dad Advisor Series
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Founder of Capitalism.com
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ABOUT THE AUTHOR
Patrick Donohoe is the Founder and CEO of Paradigm Life and PL Wealth Advisors. Patrick and his team teach thousands how
to build wealth, create lifetime cash flow, and leave a meaningful legacy.
Patrick was recently honored by Investopedia as one of the Nation's Top 100 Most Financial Advisors. He is a highly sought
after presenter and speaker at financial-based events around the country and is the host of The Wealth Standard podcast.
Patrick grew up in West Hartford, Connecticut, and attended the University of Utah, where he received his bachelor's degree in economics.
He lives in Salt Lake city with his wife and three children.
WHAT'S INSIDE THE BOOK?
THE CHAPTER LIST:
1. ORIGINS OF THE AMERICAN DREAM
2. THE PERPETUAL WEALTH STRATEGY™
3. QUESTION EVERYTHING
4. BREAK AWAY FROM WALL STREET
5. AVOIDING THE INVESTING AND LENDING TRAP
6. THINK FOR YOURSELF
7. A SOLID FOUNDATION
8. B ELIKE THE WEALTHY
9. MYTHS AND TRUTHS OF INSURANCE
10. SAVE, BORROW, INVEST, AND BUILD WEALTH
11. START, BUILD, AND PROSPER YOUR BUSINESS
12. YOUR FINANCIAL FUTURE
13. MAKE THE SHIFT
14. TAKE BACK CONTROL