Stuck in the Mud, or Full of Fantasy

Welcome to another episode of Market Dominance Guys with Chris Beall and Corey Frank. Today, our guys continue exchanging ideas with Gregory Smith, CEO at G Group Holdings. In this third part of their discussion, they talk about the view from a CEO’s desk. Chris, who is himself a CEO, thinks that most chief executive officers’ view of their company is often skewed by the remove at which they look at its operations. As he puts it, “They tend to be either stuck in the mud or full of fantasy.” Greg and Chris then reveal that they are both true believers in C-level staff getting out on the frontline and experiencing the jobs their employees do.

“If you want to be an effective CEO or even a VP or SVP,” Greg advises, “you’ve got to get out in the field and experience it, feel it, understand it.” He encourages all CEOs to spend the day with one staff member in each division of their business once a year. Chris agrees with this plan. “When you do that,” he says, “you grow in respect for your people who are on the front lines. You see that what they do is brilliant.” Get the details on how to dominate your market by spending time with the talented people you’ve hired in today’s Market Dominance Guys’ episode, “Stuck in the Mud or Full of Fantasy.”

Announcer (00:06):
Welcome to another episode of Market Dominance Guys with Chris Beall and Corey Frank. Today, our guys continue exchanging ideas with Gregory Smith, Vice President of strategic accounts and partnerships at Sparks IQ. In this third part of their discussion, they talk about the view from a CEO’s desk. Chris, who is himself a CEO, thinks that most chief executive officer’s view of their company is often skewed … the remove at which they look at its operations. As he puts it, “They tend to be there, stuck in the mud or full of fantasy.”

(01:14):
Greg and Chris then reveal that they both are true believers in C-level staff getting out on the frontline and experiencing the jobs their employees do. If you want to be an effective CEO, or even a VP or SVP, Greg advises, you’ve got to get out in the field and experience it, feel it, understand it. He encourages all CEOs to spend the day with one staff member in each division of their business once a year. Chris agrees with this plan. “When you do that,” he says, “you grow in respect for your people who are on the front lines. You see what they do is brilliant.” Get the details on how to dominate your market by spending time with the talented people you’ve hired. In today’s Market Dominance Guys episode, Stuck in the Mud or Full of Fantasy.
Chris Beall (02:05):

I believe actually selling, not swooping, but selling regular deals and going through your own process and finding out how much friction you put in front of your sellers, is worth doing and it’s worth doing regularly. It actually keeps you in touch with the problems you’re really solving. And your job as a CEO includes detecting the tsunami when it’s an inch high. All tsunamis are an inch at some point, they’re way out there in the ocean. And if you wait until it’s this 30 foot high, basin emptying wall of water that takes out nuclear power plants and houses and whatever … I’m only bringing this up because we just talked about earthquake preparedness for our home up in Port Townsend yesterday. But you’re too late. You can cross that and figure out what to do with that one inch high tsunami when it’s going to hit 15 months from now, but you’re never going to see it unless you’re out in the front line.

Chris Beall (03:00):

So that’s where all the information is. Very little good, recent information shows up in recent reports. Great longitudinal information shows up in that five years of P & L’s, but if you want to know what’s going on, Edward Abbey said it really well a long time ago. “You want to be a good driver? Strap yourself to the bumper. Your driving habits will change instantly.” So that’s one. Two is, go out when implementation of your solution is going on and be part of the implementation team. Find out how much friction there is in the real world, because now it might not be your company providing the friction, it could be that you’re saying, “Oh yeah, nobody does this.” This is where you’re sure you’re wrong. And as soon as you’re sitting around with each other and you go, “Well, none of our customers do that.” Whatever that is, that’s what they’re all doing and that’s what they hate about what it is that you’re doing.

Chris Beall (03:54):

So you’re not going to find it unless you go out there. At Finish Line Floors, when I was CEO of Finish Line Floors, the key to understanding the business was to go out. And we generally started doing our work at about 10:00 at night in hospitals, and to go on out and roll the floor. Don’t have to do it every day, but once a month to get out there and roll a floor in a fast-moving business, this was a 30% per month compounding business. So it was like a rocket sled. You were just back at it … It had trucks and cities that we were expanding in. It’s kind of a nutty thing to do, to try to grow a business like that, that fast. I’m pretty sure it was a bad idea, given the way it ended. But the key information flow was from being out there and not being the boss. So when you do that, you have to assign yourself to a reasonably, worky kind of job.

Chris Beall (04:45):

And find out how damn clueless you are and how smart they are. The other thing I think you get is you get respect in yourself, your own self. You get respect for your people. You grow in respect for your people. You realize that what they do is brilliant, that the brains of the outfit are actually out on the front lines, that’s where they really live. All the yapping is back in the office, but the brains are out there on the front lines. Because brains were made to move bodies through the world. We’re animals, we have brains. Plants don’t seem to have very much in the way of brains. Animals have brains and animals have something in common, we all move. That’s what brains are for, is to move our bodies through the world. And when we’re out there with the people who are making it happen, moving the body through the world, so to speak and with purpose, we learn.

Chris Beall (05:38):

We learn quite quickly, and frankly, involuntarily. And the third thing about this is, CEOs have very little fundamental credibility back in the shop. That is, if you want to dismiss somebody’s opinion, the first opinion you dismiss is that of the CEO. Because the CEO is either stuck in the mud or full of fantasy. Everybody knows it. It’s just the way they are. And there’s only two kinds, the stuck in the mud type and the full of fantasy type. Except for, of course, the psychopathic asshole type who is occasionally seen in Silicon Valley here and there with certain kinds of vehicles and occasional sailboats. So this is important to recognize, you don’t actually have that much capital when you’re the CEO. You have diminished capital compared to a VP of Ops or a VP of Sales. So how do you actually have enough credibility to have some thought of yours hope to turn into organizational change in action. Well, you got to go get it somewhere. And the only place that exists is in the front line. So you better go get it there.

Gregory Smith (06:44):

I agree. I agree. Reminds me of a funny story that actually happened two days ago. I’ll leave some of the details out because I don’t want anybody to be offended, but I was on a call with a client. The CEO was there, the CFO was there, VP of Ops, and some IT folks and a couple of marketing maybe were in the room. And so we’re having this conversation about what’s going on in their business. And the CEO is spending … He’s sucking up most of the air in the room, I have to admit. So probably 80% of the conversation he was controlling. And I was watching, we were on Zoom, so I’m watching the body language of the folks around the room. And I can tell this guy has got very little credibility. And the CFO probably has, from what I could see, may have even less credibility.

Gregory Smith (07:37):

And so they ended up having to leave the room. And then what happened was, because I was recording the call, they asked me to stop recording the call and so that they could actually share the reality of the marketplace. The reality of their business. So I think it just drives home your point, Chris. There’s always that disconnect, and if you want to be an effective CEO, or even a VP or SVP, you got to get out in the field and experience it. Feel it, understand it, and frankly, some of the best ideas come from your frontline people. They’re the ones that have the interaction day in and day out with your customers. Every time we have a problem, or a customer wanted us to provide a solution, it wasn’t the VP’s or me or anybody else that was coming up with it.

Gregory Smith (08:34):

We created an action force and it would change based on the need, whether it was sales driven or delivery driven or supply chain driven, whatever the case is, the people would kind of change. But it was always made up a director levels and others, meaning drivers, counter people, whatever. And we’d figure out how everybody could participate. I’ve tasked them with coming up with a solution. And then they would report out to senior management about what the solution is, give me three options. It’s amazing what they come up with, it really is. It was awesome.

Fantastic.

Chris Beall (09:53):

… and informed. It’s a shocking fact that those of us who run businesses are fundamentally in a bad position to understand what will make the business work today. We just are. It’s a bad seat to sit in. It’s as though you’re trying to drive one of them big, big, it doesn’t matter how big it is, you’re driving a boat. You’re out there on the water, and your view forward is limited by, guess what? The boat. It’s limited by the boat. But that hand who’s up there taking care of the jib, I can see what’s going on. And somebody who is down below making sure that we’re going to have dinner, they can see what’s going on. There’s a lot of folks who can see what’s going on, but you’re in a particularly bad position to do so. I remember once, I don’t know if I ever told this story on the podcast, but I used to work for a food distributor and I was a truck loader. That was my job.

Chris Beall (10:50):

And I crushed my finger in a truck door, this finger right here. It has a nice little curve to it. And I got six beautiful little hemostat stitches across the nail bed where the nail is no longer there and the artery was no longer in one piece. And I wanted to go back to work the next day. And they said, “Well, you can’t load obviously, you’ve got an issue, but we’ll put you on the forklift.” The forklift is on the floor, but it’s up a little bit, because you stand. It’s a standing forklift. And from the standing forklift, I could see what management couldn’t see, which was the flow of the floor. And I thought, this is really weird. This place works great through one cycle through the four trucks. But as soon as we get to the fifth truck, it’s chaos, it’s craziness. Folks are cutting tuggers through each other, they’re cursing at each other, it’s not good.

Chris Beall (11:43):

So I thought about it and I watched it from my perch. And that’s the perch that management won’t ever take, the one where you can actually see. Because you’re working in the environment, but you got your head up instead of down. And I came up with a little idea, just got lucky, and I played as a mathematician at the time so I was lucky through some work. and went and did the queuing theory on this thing and came up with a solution. The solution, by the way I think you’ll laugh, Greg, this guy that knows this business. So not food, but distribution. So imagine this, it’s a mess. But only after we’ve loaded all the trucks once. So my idea was, well, some people are picking the freezer and some people are picking the deli dry combo. And those two things create a flow mismatch at some point that has to cut across each other. So how about if we all go pick the freezer and then we all go pick deli dry?

Chris Beall (12:34):

So I go to the boss and go, “Rob, how about if we all go pick the freezer and then we all go pick deli dry?” Then I drew him a picture, I had it all … not quite PowerPoint, but there it was. And then the queue’s will always form up behind the trucks, just like this. And what we’ll do is, we’ll take the entry point to come up to the truck and we’ll move it back behind these racks so there’s laminar flow and no interference. It’s always, you go down the aisle where the truck is, and the only interference is somebody picking that aisle. And there’s enough room for two tuggers, you just go by him. And he said, “Sounds good. Sounds good. Can’t do it.” I said, “Why not?” Now remember, I’m the junior guy with the crushed finger who’s dumb enough to put his finger at the truck door, close it, and get it latched with his finger still in there. Not optimum.

Chris Beall (13:21):

So I’m not exactly the guy carrying the credibility, but I’m carrying the credibility of being the guy in the forklift, watching. And I’m willing to put it forward. So I was like, “Why? Why not?” He says, “Well, they get 15 cents more an hour in the freezer. It’s freezer pay.” Intractable problem, right? You can’t pay everybody 15 cents an hour more, totally intractable. So I thought about it. I said, “Let me think about that for a little while.” So I came back to him the next day and I said, “So Rob, how do you pick people to go in the freezer?” He says, “Seniority.” I said, “How about if we call it seniority pay?” And that allowed us to do it. And we saved $325,000 in overtime in one year.

Chris Beall (14:06):

So that idea, that when you’re on the front lines but you have your head up and you can see what’s going on, but not from where you can’t see what’s going on. The CEO seat is not built to see what’s going on. It’s built to tell the world that’s what’s going on is good. That’s what the seat is built for. And then when you learn to tell the world what’s good, you start making the mistake of telling your own people that stuff that ain’t good is good. And then you’re screwed. So I think the antidote is, pick your ass up and go do those jobs. But don’t do the swoopy one. The CEO’s favorite job is this, “I’ll go save the big deal.” Really? It’s not sales.

Gregory Smith (14:50):

[inaudible 00:14:50]

Corey Frank (14:50):

Yeah. Sounds like they could have used your methodology-

Chris Beall (14:54):

And learned nothing.

Corey Frank (14:55):

… in the Suez canal. Maybe that captain who’s driving that big tanker could’ve listened to the guy that says, “Wait a minute.”

Gregory Smith (15:04):

I would have been the guy on the forklift on the deck going, “Forklift can’t pick these containers up, oh what the hell. Let’s go to the bar.”

Corey Frank (15:13):

What’s fascinating about listening to this here, and we’re getting the hook on time, is clearly kill the monsters when they’re small monsters not when they’re big monsters. Or the tsunami when it’s two inches, not 60 feet. But the way that we look at product market fit, the way that we test and get the flywheel going for product and should we even build this thing, is similar in the latter part of this chat here that we’ve had, to how both of you gentlemen look at, are we hiring the right people? Do we have the right people? Do we have the right processes in place? So the way you look outwardly to test and constantly tweak and get that information to adjust is the same way that we need to lead, it sounds like.

Corey Frank (16:02):

Also our people is to constantly get that information. And all I can say is that if anybody in an organization, if I’m part of an organization where we have to say, “Hey, would you mind not recording this?” It’s never a good thing, but it absolutely is the type of thing that clearly there’s a inherent level of fear or anxiety, because my leaders did not put that in place, that it’s comfortable to come into their office and say, “You know, we need to call it seniority pay. We need to get up in the forklift and see what’s really going around here.”

Gregory Smith (16:36):

I noticed an incredibly valuable information once that recording went off, information that we all need [crosstalk 00:16:43].

Corey Frank (16:42):

Oh, I can imagine.

Gregory Smith (16:44):

Otherwise I’d be going down the wrong road.

Corey Frank (16:46):

I can imagine, yeah. And unfortunately, when companies learn that too late, as Chris and I have talked about many times, what we’ve experienced is they do the proverbial pivot. And then it works it way back up to the CFO and CEO level. And then they figure out, okay, we’ve got a board meeting in six weeks. How do we take what our remaining cash is and try to get this five pound bunch of X into a one pound paper bag here. So that’s the proverbial pivot. Well, Greg, I tell you what, this has been, as Chris and I are apt to do, we can go hours and hours. And I think, if were to give a badge to Greg, Chris, I think it would be … I mean, he can probably wear a Market Dominance shirt. We have a kindred spirit in the distribution and manufacturing space that we didn’t know about, that clearly has a very conscious competence. You’re employing these same market dominance principles outside the SAS and software world, so it’s been a lot of fun.

Gregory Smith (17:44):

Very kind of you. Love the conversation. Again, like you, I could go on. My only problem is, I ran out of tequila a while ago. So next time I’ll bring the bottle and put it next to me and we’ll be good to go.

Corey Frank (17:58):

Duly noted. We’d love to. I think the co the topic of leadership, management, mission, alignment amongst the people, and as a … maybe something that not a lot of folks are focusing much on. Particularly in the distribution/manufacturing space, they’re looking at what kind of ball bearings do I have and what kind of trucking can I get to shave a few dollars on this or that? Not necessarily the folks, like Chris, who slammed their finger and just be in a role where they can reveal all this much more sunlight. So any final thoughts, Chris?

Chris Beall (18:30):

I’ll tell you what, Cheryl Turner is a rock star. Thank you, Greg. And talk about somebody who delivers from the front lines, not just results, but incredible insights. So she brought us together in … We’ve met before, but she brought us together here, and suggested that you be a guest on this podcast. I really, deeply appreciate you deciding to do so. I mean, it’s one thing to weather me, but to choose to endure Corey Frank, I think, is just an amazing act of courage. And I somehow feel like we might do a little bit more together someday.

Gregory Smith (19:08):

I would love to and you guys are awesome. And I learned several things today, which I always like to do. Yeah, it was wonderful. Thank you.

Corey Frank (19:16):

Absolutely. And Greg, if we wanted to get ahold of you on LinkedIn, Greg Smith, right? That’s a pretty unusual name. I’m sure there’s only one or two of those out there. So be sure to link this to the podcast episode and how to get in touch with you for the folks who would love to climb the mountain and get some more advice. So for the Market Dominance Guys, this is Corey Frank with Chris Beall. Until next time.