Transcript of Interview with John Spence
Dan: Welcome to another episode of Shoulders of Titans. This is Dan Lok and I’m so thrilled and so excited and I’m pumped – you can hear from my voice. Today I have the privilege of introducing you to another business titan. An international keynote speaker, author of 5 books. Someone who is recognized as one of the top 100 business thought leaders in America, one of the top 100 small business influencers in America. And one of the top 500 leadership development experts in the world.
John, welcome to the show.
John: Thank you very much Dan it’s an honour to be here with you my friend.
Dan: John I always want to know the back story – like what shaped you into who you are today. So maybe take us back a little bit and tell us a little bit about your background and how you got into what you do today.
John: Cool. Well it’s an interesting story, but I’ll do it quickly. I grew up in Miami, Florida. A very wealthy family, my father was a malpractice attorney, went to one of the top prep schools in the country. Did well in high school, graduated, got accepted into lots of colleges, but I chose the University of Miami in Miami, Florida because it was close to my boat and my girlfriend – not exactly why you should choose a college. And then I promptly failed out with a 1.6 GPA. And I left the University of Miami and went up to the University of Florida: Gainesville, Florida where I live now. And I applied there and they literally laughed at me. When I handed the woman my transcript she looked down at me and said, “I’m sorry, we just don’t take people like you.”
And I will never forget walking down the stairs of the registrar’s office, sitting on the staircase and crying, and thinking, “I’ve really messed up my life.” I had dreams of owning companies and travelling around the world and doing all kinds of cool stuff, and at that point I sort of felt like most of my career would be saying, “Would you like fries with that today?” I won’t drag you through the whole story, but I went on to community college, did well there, got admitted into the University of Florida, graduated number 3 in the United States in my major and three years after graduation I was named CEO of an International Rockefeller Foundation.
Since that time I’ve been the owner/CEO of 8 companies, 5 of them were companies that I built, and I’ve spent the last 20 years travelling about 200 days a year all over the world helping people and businesses be more successful.
STREET SMART VERSUS BOOK SMART
Dan: Now, so John also you are not just street smart but also book smart. So here’s a question: street smart versus book smart. Academically, which one is more important?
John: Both are important. There are 5 levels to being a great strategic thinker. Level one is business acumen: you need to do your homework, you need to be a lifelong learner. You’ve got to constantly be reading, studying, watching videos, learning – like watching your videos. That’s level one. Level two then is personal experience. As a guy that reads more than 100 business books a year for the last 20 years, all of the answers aren’t in the books. So you take all those books and things you’re studying and you combine it with your personal experience: owning a company, starting a company, growing a company, meeting other business owners. Then you back up and you look for patterns. I’ve built my entire career on looking for patterns. And if you’ve studied a lot and you’ve got some experience, then you will see patterns that other people don’t see.
This is basically the fact and when you see that, that’s when you have your flash of insight: what the French would call “cudoi”. This is also when the entrepreneur figures out what they’re going to dedicate their life to. When they see that opportunity in the marketplace and they recognize a pattern that nobody else sees – a need in the marketplace that nobody else understands. And then the fifth and final one, which is critical, is you’ve got to execute on that. You’ve got to have disciplined execution. So when you ask which ones, I think it’s a combination of the two that allows you to see the patterns, that allows you to create a company that adds real value, as long as you actually go and execute on those ideas.
BUSINESS STRATEGY AND EXECUTION
Dan: Now John, you work with a lot of CEOs. Why do you think most entrepreneurs are what I consider tactical? That they focus on the more, like a band aid approach. “Okay, like I need more traffic on my website let’s run some Facebook ads, lets run some google ads.” But they’re not very strategic. Why is that?
John: Well in my opinion, and I coach a number of start-ups and a bunch of entrepreneurs heavily involved in the start-up space in my state, and my personal experience is because everybody wants to scale right now, immediately, this week. I got to do it today. And when you’re focused only on the very very short term you’re not thinking about the long game and what you need to do today to build a highly successful company 3, 5, 10, 20 years from now. Even if you plan to sell it, nobody wants to buy it if it can’t be sustainable. If it isn’t based on a good idea and a long term idea that people can make lots of money off of. So it’s that extreme sense of urgency. Literally too much urgency, that people say “I don’t have time to be strategic, I don’t have time to read a book, I don’t have time to write a strategic plan.” Well, then you need to make time for a new thing we call bankruptcy.
Dan: So John how do we know if we have the right strategy for our business.
John: Oh, this is – I’ve been teaching strategy as a guest lecturer at Wharton now for 18 years, and this is a subject I’ve really studied deeply. And I can boil everything I know about strategy down to one main sentence: actually just two key ideas, but here’s the first one: all effective strategy is just valued differentiation times disciplined execution. In other words, you want to have a winning company, a winning strategy. You’ve got to bring something to the marketplace that is unique, exciting and compelling – that your customers very highly value.
They have no problem reaching into their pocket and giving you fifty dollars, fifty thousand dollars, fifty million dollars, for that is difficult if not impossible for your competition to copy and that you can execute on flawlessly every day. If you can find a strategy that meets those criteria, you have found the foundation of an extremely successful business. And then I’ll add on the other one Dan, which I think you’ll appreciate, and especially as far as entrepreneurs go.
The second most important thing I’ve learned about strategy is: a big part of strategy is figuring out what to say “no” to. What you’re not going to spend time on, what customers you’re not going to serve, what products you’re not going to bring into the market. I think one of the best examples of this that a lot of your listeners probably know was Steve Jobs, who, when he came back after being at Next – they had 20 or 30 different products and he looked at them and said, “Six. That’s it. We’re going to be world class at a handful of things and we’re going to be world class at saying no to anything that doesn’t meet that strategy and truly add value to our customers.”
BUILDING A SUSTAINABLE BUSINESS
Dan: Mmm, this reminds me a lot of what I read in The Art of War – you want to pick a battle that you know you’re going to win. This kind of goes along with – so it’s your marketing, your business model, your target market, everything into one.
John: Correct. Correct. Well actually let me sort of give you what I think is the foundation of building a sustainably successful business.
John: Several years ago, when I wrote one of my books, I found this really cool software program called “Wordle.” And you could load the text of a document into Wordle and it would give you a word cloud. And the bigger the word was, the more times it showed up in the book. So basically I took my whole book, 53,518 words, and it spit out a picture of the book, and I’m a visual learner, so I’m like, “cool a picture of my book.” Then I realised that I’m not that smart, I’m just one guy, so I reached out to a whole bunch of my colleagues: Tim Sanders, Tom Peters, Jim Collins, Seth Godin and a whole bunch of people like that, and I took a whole bunch of their books: their text, their ideas, their blogs – loaded it in there. Won’t drag you through it but I put about a quarter of a million pages in there and it spit out a word cloud of just the key ideas from the smartest business people/CEOs in the world.
John: And I’ve boiled all that down to a formula. And here’s the formula: (T+C+ECF) x DE = business excellence. So let me go through that. The “t” stands for talent. For most businesses today and probably a lot of the folks listening to this podcast: people can copy your product, they can beat you on price – there’s always somebody willing to go out of business faster than you. They can copy your marketing; they can copy a lot. But what they can’t copy is the quality of the people that you can get, grow and keep on your team and the relationships they create with your customers. To me it’s one of the only sustainable, competitive advantages is: do I have top talent that are really close to the customers. So the “t” stands for talent.
The “c” stands for culture. And I’ve got a big saying: “culture = cash.” In most businesses I work with, they might be able to increase efficiency a little bit, decrease waste a little bit, maybe increase marketing, but I’ll tell you the place where they could really take their business to another level is getting a highly engaged, satisfied workforce through having a great, winning culture.
Another one of my favourite quotes is, “the customers experience will never exceed the employees experience.” But there’s two sides to the culture equation. There’s the side that the employee wants: a winning culture – some place that’s fun, engaging, I’m working with people I like, I have challenging, meaningful work, I take pride in the organisation I work for. Those are all the things that an employee looks for. The other side that the entrepreneur, the business owner looks for is employees with – and here’s another great way to look at it – employees with an ownership mentality. Employees that come to work every day and say, “how can I maximize revenues, increase market share, increase customer satisfaction, decrease waste,” and they treat the business as if it were their own. They’re entrepreneurial, they’re like entrepreneurs inside of the business. That’s what every CEO and president and entrepreneur I talk to says: I want people like that on my team.
The next part of the equation is “ECF”. And that stands for Extreme Customer Focus, and I do mean extreme. I’m going to use a bunch of my favourite quotes here, but one of my mantras is, “whoever owns the voice of the customer owns the marketplace”. That’s whoever understands the needs, the wants, the fears, the wishes, the desires. Whoever listens to their customer the best, again, that gives them a huge market advantage. You take those first three things: super talented people, with a winning culture that delivers results, that is extremely focused on their customer and then you multiply it with your ability to execute with discipline. Disciplined execution – which happens to be the weak point in almost every company I work with around the world.
DISCIPLINED EXECUTION AND ACCOUNTABILITY
Dan: Why do you think is that. Like they have a great culture, they have a great team, why don’t they execute.
John: Two major reasons. The first one is: they don’t want to be seen as a mean person. Most people think that when you hold other people accountable you are being mean or aggressive, or, I’ve heard other people use profanity on your podcast – I’ve listened to it a few times. One of my friends came to me and he wanted me to coach him to become one of the top 5 chefs in the world. And he asked me, “if I become one of the top 5 chefs in the world will anyone who works for me like me.” I said “no, you’ll be a complete asshole.” Because if that’s what you truly want to achieve, the level of excellence you’re going to drive for will be far beyond most peoples limits. So they are going to think you are just driving them into the ground. So it’s hard to hold people accountable.
And then part two is: they don’t have a clear process for accountability, for execution. And I’ll throw this out real quick: Apple’s one of my clients, I work with the Apple specialist group and they wanted me to create a very elegant framework for how to create a culture of accountability. And I came up with these five steps. Step one: if you’re going to hold somebody accountable for a really, really important project, you’ve got to get 100% clarity plus appropriate authority and resources. In other words, you’ve got to sit down with that person face to face and say “this is exactly what success looks like, this is what I expect, this is the metrics we’re going to measure it by, this is the timeline its due, this is the budget that’s available. I’m giving you these resources and I’m giving you full authority to carry out this project.” That’s step one, so one hundred percent clarity plus appropriate authority and resources.
Step two. Big one Dan, one hundred percent agreement. The person needs to look you in the eyes and say “I understand what success looks like, I understand the metrics, I understand the budget, I understand the timeline, you’ve given me enough resources, I have the authority, I believe this is a reasonable goal, I accept 100% accountability.” As you and I both do, I travel and give speeches all over the world and in the last 3 years I’ve probably asked 50,000 business owners in my different workshops and stuff: how many of you on a scale of 1-10, with 10 being world class, are always a solid 9 or a 10 on getting 100% clarity plus appropriate authority and resources and 100% agreement on all of your most important projects. Not a single person in the world has raised their hand. Actually, a guy in Australia did, I pointed at him from the stage and said, “you’re lying,” he goes “you’re right” and he put his hand back down.
Dan: Thank you for your honesty at least right.
John: Well I had another young lady in Florida who raised her hand and I said, “are you sure,” and she said, “what was the question again, my manager told me to raise my hand.” So I haven’t found anybody yet, but now that I explain it it seems obvious. If I haven’t clearly described exactly what I want and I haven’t had the person say, “I understand that perfectly and I will deliver it,” – pretty hard to have accountability. And the key idea when you’re talking about the metrics and the measurements is they need to be binary. It’s one or zero, black or white, yes or no, no guessing. And the reason for that is when you agree on a binary goal and someone doesn’t achieve it, there’s no opinion. It’s not like “I don’t think you got that done Dan,” or “I don’t think you met your quota,” you either did or you didn’t. And I learned a phrase from a friend of mine in New Zealand a few years ago that really might be one of my very favourite ones in my business career. “Ambiguity breeds mediocrity”.
Dan: Mmm, profound.
John: So those two steps are: 100% clarity, resources and authority, 100% agreement. Step three then is track and post. And Dan, this is where I see a lot of companies just refuse to do this. But here’s the idea behind track and post. If you’re going to hold somebody accountable to a goal, you need to show them where they stand against the goal. And there’s two elements to that. Step one is it has to be super easy to understand. The person has to be able to look at their goal and within three seconds know exactly how they’re doing on their goal. My favourite way to track that is green, yellow, red: you’re doing great, you’re slipping, or you’re doing poorly.
And part two – and here’s the one that really people hate to do – is make it highly visible. Let everybody in the entire company see everybody else’s major goals, from the CEO all the way down. Cut down all the trees, no hiding. Now, what happens then is about 10% of the people in your company love it, love it! Because they’re your high performers, they’re going to be green, green, green, green. About 70 to 80% of the middle of the company freak out, look like a deer in the headlights, and about 10 fall on the ground and start crying and wailing saying “it’s not fair”. And, I just heard a Canadian CEO, I was up in Vancouver not too long ago, where you are, and the Canadians are so nice. I say you make them available to industry, but his thing was: you love them right out the door.
Dan: Just like I always say: I don’t fire people, people fire themselves.
John: Exactly. We free them up for another opportunity. So now we’ve got track and post, you know, we’ve got the clarity, agreement, track and post, everybody sees it, everybody knows, but a bunch of people are freaked out. How do you fix that: fourth step: coach, mentor, train, support. In other words, when someone slips from green to yellow, we don’t yell at them, we don’t jump up and down, we don’t threaten them, we don’t tell them they’re not going to get a bonus or a raise. We help them. People parachute in from the sky to give them assistance, training, support, resources and everybody huddles around them to get them back into green.
And eventually what happens is, most people think that tracking is punishment. You’re tracking me so that I can get in trouble. What they eventually learn is no, no, no. In this company tracking equals help. That we track and post so that when you slip from green to yellow everybody sees that, everybody is on the same team, we all know what your goal is, it’s very specific and binary. We’re all going to rush to help you. Which leads me to the fifth and final step which is celebrate success and deal decisively with mediocrity. The reason Dan that most companies don’t have disciplined execution is that they don’t have a process like that around clear goals that are agreed to, that are measured, and then people are held accountable to it.
Dan: I love it John. I love how you boil everything down to a step by step, or a very simple formula. I mean there’s genius in simplicity. It sounds simple but I know, like, as a teacher, as a mentor, how much thinking goes behind just distilling everything down to it’s essence: into three steps, into five steps, so I appreciate that.
John: My pleasure, my honour.
ATTRACTING AND KEEPING TOP TALENT
Dan: John what about attracting top talent. So now days there’s so many people out there and so many companies fighting for talent. How does someone go about attracting talent and keeping them as well?
John: Well, as it was the first thing in my equation: talent, and I’ve said it over and over again and companies agree to it all the time but few of them do it. Talent is your most valuable asset. So in my career over the last 20 years I’ve had the chance to be a mentor and a coach to some of the top people in some of the top companies in the world. I worked at Merrill Lynch doing their global leadership development programs and some stuff for other companies.
Won’t drag you through that, but about two years ago I sent a survey out to ten thousand high potential employees at top companies around the world: Google, Microsoft, Apple, everyone you can think of. And these are what I call voluntary employees. They’re so good at what they do, they are so talented, that if they decided they didn’t like the company they worked in and they quit at 9 o clock in the morning, they would have a job at the competition by noon that day. I mean, if you’re one of the top 50 at Microsoft and you’re not happy, you’re in Amazon or Google later that afternoon. So I asked these folks, “why do you work where you work? If you could work anywhere you want to work, if you could go anywhere you want to go, why specifically did you choose the company you work for?” And they gave me six reasons, here they are.
Number one is fair pay. And fair pay was defined as 10% above or below what I would make to do the same job anyplace else. As long as you get parity on pay. I look around the industry; I’m making roughly what I can make at any other company to do what I’m doing here, then pay comes off the table as a motivator. If I can go someplace else and get 30-40% more, I should go. But if I’m getting pretty close, boom, it’s off.
Number two was meaningful, challenging work. And especially folks more in your age range, millennials and Gen Z, having a purpose, being connected to something important, having meaningful work that’s challenging and engages me and pushes me – very, very critical idea. Top talent has to be challenged and feel like the work is meaningful.
Number three was cool colleagues. “A” players only want to play with other “A” players. If you are bright, sharp, smart and talented you want to be on a team with people that are bright, sharp, smart and talented too.
Dan: Not the opposite, right?
John: Exactly. Well if you take talented people and put them around a bunch of mediocre people one of two things happen: they lower their performance to meet the rest of them or they leave.
John: I worked with a consultant guy years ago and we were doing some workshops for entrepreneurs and business owners and he stood up at the front of the class and he said this to all of them. “I want each one of you here right now to picture the lowest performing person in your organisation, who is the lowest performing. Everybody got it? Clear seat in your mind? Now realise that that person sets the standard of excellence for your entire company.”
Dan: Oh, that’s painful.
John: Yes. Because they come back every day, they get paid, they carry a business card, they get vacation and benefits, obviously their performance is acceptable. And then he followed it up with this: “how would you like me to bring you ten more people just like that person to put on your payroll?”
Dan: Oh my goodness.
John: Then he said, “then why do you have one?”
So let’s go back on the six things. Number one was fair pay, number two was challenging, meaningful work, number three was cool colleagues, number four was winning culture. Winning culture. And I can define winning culture in one clear idea: people smile just as much when they show up for work as when they leave. If your employees get there in the morning and they’re happy, they’re engaged, they’re having fun, they’re smiling and at the end of the day they’re still smiling and having fun, you have a winning culture. So that’s the first four.
Number five and six are especially interesting, and especially for younger folks, entrepreneurial, millennials and things like that. Number five was personal and professional growth. In other words, I need to know that personally I’m growing every month. That I’m getting coaching, training, mentoring, help, support. I’m getting exposure to new projects, I’m growing, I’m getting better and better and my company is investing in me. Personal growth.
Professional growth is: I need to look up and see that there will be a job for me 5-7 years from today. I can see myself working in this company five years from today. If you get a really talented person and you’re not investing in their growth and they can’t see that there’s a position for them 5 years out, they will leave immediately to go to someplace that will give them those two things. Which leads me to the sixth and final, which is actually number one, and a big, big reason that I teach leadership is: number six is I work for a leader that I respect and admire. If you do those six things you can absolutely attract and keep top talent.
LEADERSHIP STYLES AND BEING A GOOD LEADER
Dan: Wow, it is so, so powerful. Now John that also integrates with culture and leadership. And I mean there are many, many different leadership styles, like what do you recommend. Some leaders they lead by, you know, dictatorship: its my way or the highway. Some lead by consensus: make sure everybody’s involved, everybody listens to everybody and then we can make a decision together. What do you recommend.
John: Well, I’ve been teaching leadership now for about two decades. And when I came into the business it was all command and control. It was “do as I say not as I do,” theory x, used to call it militaristic leadership but it doesn’t even work for military anymore.
Then the pendulum swung for several years to leadership by numbers, spreadsheet. Everything was: did we make our numbers, what’s our efficiency, what’s our share price, how are we doing in the stock market.
Now I’ve seen the pendulum swing back to more round servant leadership. And the big ideas here is that now in leadership today EQ (emotional quotient) is becoming just as important as IQ. Especially with computers that are becoming very smart and can do a lot of the number crunching and the algorithms and things like that. A computer has taken over a lot of the decision making and data crunching that now means as a leader you have to be more collaborative, more inclusive, more empathetic, and be able to make a genuine connection. So when I look at some of the things around leadership today it’s leading with purpose, creating a vision that people can get excited about, authenticity, not wearing a mask, being yourself, treating people fairly, with respect. Those are the sort of things, you know – you still have to be extremely good at your job. You have to be a great strategic thinker, you have to have strong leadership skills, but I think some of those other things are changing. Dan have you read the book The Leadership Challenge by Kouzes and Posner?
Dan: Of course.
John: Yea, well then you know that they’ve got six key things in that, which is a global research study: thirty years, four continents, about 2.8 million respondents and here was the six things: I want a leader who is honest, forward looking, competent, inspiring, fair and supportive. So let me boil that four-hundred-page book down for you brother. Here’s what they say: I want a leader who will tell me the truth, who has a clear idea where we’re going, who has the skills to get us there successfully, is excited about going with me and who will treat me fairly and support me along the way. You do those things you’re building the foundation of being a very successful leader.
Dan: And do you think John, because most entrepreneurs, I think, during the first couple phases of their business careers that they are more like a manager, and sometimes it’s difficult, like, they micro manage, do everything on their own and sometimes it’s difficult to transition from being a manager to a leader. What do you think is the difference from your definition?
John: And I just dealt with this with a CEO of a multi billion-dollar company last week. It’s understanding where only you can add value. Where you’re the only person that can truly do this and then learning to delegate away to people you trust. Most organisations – the leader, especially entrepreneurial – they don’t’ trust anybody. They think “I’m the only one that does this, or knows this, I’m the only way that can do it right it’s my baby.” Or “you didn’t do it the way I wanted you to do it.” And great leaders let go of that and they focus on vision and purpose and strategic alliances and understanding the market and do only the things that they’re the only one in the company can do and let go of everything else, and if it doesn’t go perfect or if they make a mistake every now and then, as long as it doesn’t kill the company that’s fine, that’s how people grow.
I’ll give you a real quick example of this. When I became CEO of the Rockefeller Foundation I was at I was only 26 years old, as I mentioned. I was in way over my head and I thought I had to make all the decisions. “I’m the CEO, yea, everything has to go past me.” And then one day I looked up and my entire staff were standing in the hallway in a line waiting for me to make decisions. So I called them all together and said, “from now on we have four levels of decisions in this company.”
Level one: you own it, you make the decision. That’s what I hired you for, that’s what I pay you for, that’s your area of expertise. You make that decision; you own it 100%.
Level two: get some feedback, then you make the decision and you own it but talk to the right person, and that not be me, the president, the owner, the CEO, it might be marketing, it might be finance it might be CFO – but go talk to the person who knows, get the feedback you need, then you make that decision and you own that decision. And then after you have asked for feedback 2 or 3 or 4 times it becomes a level one decision.
Level three is it’s a team decision. And I as the CEO, the leader, the entrepreneur, I will back up whatever the team says. If I think we should go left and my entire team thinks we need to go right I look at them and say, “I trust you, you’re bright people, I believe in you. We are going to go in the direction you want to go in and I will take full responsibility for the outcome.” I own that decision. Then level four is: it’s my decision. I’m the only one. I might get some feedback from you, I might not. I might have information you don’t have or I see the vision the way you don’t see it, but I’m going to make this decision and I need all of you to back me up and I will own it.
Once I taught those four levels of decision making to my staff they would come into my office and go “Hey John, I need…” and I’d go “no, no no level one. Level One. Go do it.” They’d come in and go “John I need…”, and I’d go “no no that’s level two go talk to Dan, go talk to Skip or Sally or whoever, go talk to somebody else.” We rarely made level three decisions and I almost never made a level four decision. Look at entrepreneurs, many of them, they’re the exact reverse.
Dan: That’s very true. And I love how simple it is, how you say, “No, no, no, level one, level two”. After a while they know, they don’t bother you no more.
John: Yea about 60 percent, 70 percent of my decision making went away. It was all level one and level two and I didn’t need to be involved. But it was a hard lesson. I was young and I thought, “this is my company, I’m the CEO, I’m the one who has to drive it forward so I only make all the decisions.” And I was completely wrong. That’s exactly the wrong way to do it.
COMMON MISTAKES ENTREPRENEURS MAKE
Dan: Now John you work with so many companies. We’ve talked a lot about what to do. I also want to touch on what not to do. What are some of the common mistakes that entrepreneurs make, or some of the common myths that might be holding them back?
John: A couple of things, especially when I look at entrepreneurs. I’m sure Dan, you’re a reader too, you’ve read Jenny Collins: “Good to Great”.
Dan: Good to Great, yes.
John: Of course, and there’s this thing in there called the hedgehog concept. The three circles of great companies. Circle number one is: what are you truly world class at? And when I say world class, it’s whatever world you play in: your town, your region, your country, the entire world. But what are you truly world class at? Number two is that you’re passionate about what you and your people love to do. It’s exciting for you, you’re highly engaged. And circle number three is that it has a strong economic engine in the marketplace that people willingly pay for. One of the biggest mistakes I see entrepreneurs make is they have those first two circles great. They’re really good at something, really good at it, and they’re deeply passionate, but unfortunately no-one will pay any money for it.
John: That’s called a hobby, not a business.
Dan: That’s true.
John: So that’s one of the big “don’t dos.” You’ve got to make sure that there’s a good market. If you’re going to open a restaurant you’ve got to make sure there’s a whole bunch of starving people around where you do it who like the kind of food you’re going to cook. Number two is: they don’t know what to say “no” to. They’re going a hundred million miles an hour. And then another big one I see, and I’ve seen it for years, is lack of over communicating a clear, vivid and compelling vision and strategy for growth.
When I look at companies, one of the big failures I see is the CEO, the president, the owner thinks they’ve told everybody a hundred times where they’re going, what they’re doing, what they need to focus on, and the truth of the matter is is nobody’s really heard it. So a big factor is over communicating a vivid compelling vision and strategy for growth. And those would be three of the top things that I see entrepreneurs make mistakes in.
Dan: I’m curious John, when did you know that you are a mentor?
John: When people start asking you for advice. And ask specifically: “will you mentor me.” But Dan, you will love this, we made up a phrase in my company: “when somebody asks for advice over and over again and they never take your advice we call them an askhole.”
Dan: I love it, that’s awesome.
John: That’s when as a mentor you decide not to mentor somebody. I’ll give you a real quick example. When somebody asks me to mentor them I say, “okay, let me assign you three books to read first. Read all three, write me a book report on each and then we’ll meet for breakfast and talk about your book report.” Ninety-nine people out of 100 will never read the books. And it’s a way for me to say, “I’d love to help you but you have to help yourself first.” And if they aren’t willing to do that, then it’s pretty clear to me that I don’t need to invest a bunch of my time into someone who won’t even invest their time in themselves.
Dan: That’s great. I call that the doofus test. I have something similar when someone asks me to mentor them. The first assignment I give them is to make a video of selling me why I should mentor them. And again, 90% of people don’t do it.
Dan: It saves me a whole bunch of time so that’s awesome.
John: We do the same thing with our clients. I owned a large advertising firm for a while and when someone would say, “hey will you just show me a few logo mock-ups,” or “would you give me an idea of what you might want to do for us, you know, and show me some stuff.” You know what, I’m not going to put my whole team together to create a couple of logos for you for free. So instead of saying that I would say, “I’d love to do that, absolutely love to. Here is a two-page survey you need to fill out that tells us specifically what you’re looking for, who your target market is,” boom boom boom boom boom. It had a bunch of questions. We said, “as soon as you fill this out we will have a meeting for free and we will show you a bunch of logos.” If anybody didn’t fill that out, which was about 99% of them, I never had to mess with them. But the 1% that did became good clients.
Dan: That’s amazing. That’s awesome. Now John, speaking of mentors, who are some of the mentors you have in your life that have impacted you.
John: Well probably the biggest mentor I ever had was a guy named Charlie Owen. He was Mr Rockefeller’s… I worked for Rockefeller the Third for a while, and he was Mr Rockefeller’s right hand man. He was his lawyer, he was his accountant, his strategist and his confidante all rolled up into one. At the time I worked for Mr Rockefeller he owned 23 companies. And when he made me CEO of his foundation he told Charlie, “I just hired this kid, he doesn’t even know where to sign a pay cheque, you go help him.” And Charlie did – taught me, mentored me in two of the very best ways. And you’ll like this first one cos it goes back to what we just talked about.
Every Monday he would give me a book, and every Friday he would say, “I’ll see you for lunch.” And on Friday he would grill me. I mean: what did you learn, how was this, how was that, how do you think this happened, and just really grill me. And then the last question he had every time was, “alright, John, what are three things you are going to apply from what you just learned? What specifically will you do different?” Then he would write that down and say, “you will now be held accountable for doing that in your job.” And then he’d hand me another book. So for six years every Monday I got a book, every Friday I made a book report and the next Monday I was held accountable for applying what I learned.
And then he’d do the other way, which is, he would call me and say “hey we’re going to go negotiate a 200-million-dollar deal – meet me at the airport, jump on the private jet and you’re going to sit in and take notes. You’re not allowed to talk, you’re not allowed to interact, but I want you to sit in the back and tell me what you see, tell me what you learnt.” And then after I’d watch him negotiate a couple hundred million dollar deal he and I would go to dinner and he’d say, “alright, what did you see, what did you learn, what would you have done differently.” And I’ll give you one third one too. He allowed me to make mistakes. Once or twice I blew projects or deals that cost more than I made a year and he said, “it’s ok, it’s a learning experience, we’ll make it back.” So he was an amazing mentor.
ROCKEFELLER AND DOING WHAT YOU LOVE
Dan: John are there any, you got to share some amazing, maybe some things that people don’t know about Rockefeller or, you must have some stories, come on.
John: Oh I’ve got a bunch. The Rockefeller that I worked for was an extremely kind man. Generous, very focussed on business, big outdoorsman. The thing that I always thought was cool about him is when he got into something he really liked, like fishing, or flying or something like that, he would buy a company that did that so he could make money playing at what he enjoyed.
Dan: That is smart, that is very smart.
John: Yeah, I loved it. He collected corvettes, and he had corvette number one for every year that a corvette had been made. And to make sure that he got that he bought several Chevrolet dealerships and made sure that he sold more corvettes than anybody else and he had access to number one every year. Did the same thing with jets, did the same thing with yachts. And he would get the brand new one that just came out. Play with it for a year, fly it, ride in it, fish in it whatever it was. Then after a year – he kept the corvettes, he had turned an old movie theatre into a three story place to hold his cars – but after about a year, year and a half he’d sell the yacht and upgrade to the next one, and sell the plane and upgrade to the next one. And because it had been owned by a Rockefeller it always went for a premium price, and because he owned the company he basically took it at cost and sold it at market.
Dan: That’s awesome.
John: Yea, and it’s sort of what I’ve tried to do with my career. I’ve looked around and said, “what do I love to do, what do I,” – you and I were chatting about this.
John: I travel about 198 days a year, I have no kids, my wife travels with me, she’s in the business with me. And how do we decide what assignments to take? Are they in really cool places where we can go fly fishing, go to the beach, go hiking or have fun? And I take some regular clients obviously in regular cities, but most of the work we look for is: how can we get paid to do what we would normally do on vacation.
Dan: I love it. That’s what I always referred to as the work/life integration. People always say that “I love this so much that I would do it for free.” I think that’s not a very smart statement. I think you should be more: “I love this so much it’s the only thing that I would do for money.”
John: Yea, I’d switch it around, I’d call it “life/work balance.” Instead of work/life, how can I make my life/work balance with my work, but put life first and having fun first and enjoying yourself and finding a way to create work that allows you to do that.
Dan: That’s an amazing story, the Rockefeller. I like how you say – it’s easy to write a cheque, but how can you get it done, or how can you get what you want without writing a cheque.
Dan: He actually makes money from it. And that takes business acumen, it takes intelligence, it takes creativity. Maybe share one more story with us. That’s a great story.
John: Well I’m trying to think, what are you interested in learning about.
Dan: Maybe, what some of the people maybe believe about, you know, Rockefeller, the name and maybe the first.. and maybe that’s not so true and they think he’s a certain type of business man, or what was he really like.
John: I’ve got a perfect story for you. When I worked for them I had 13 men and women on my board. Three were billionaires and the rest were worth more than a hundred million dollars each. For the fun of it once, we figured out what the wealthiest director on our board made per hour for the time he was actually sitting at his desk. When he was in his office at his desk, on the phone, signing cheques, you know, meeting with people: what was his hourly wage. And we did the math and it came down to about $750,000 an hour. And he was one of the most unsuccessful people I have ever met.
Unhappy, fourth marriage, one of his kids was a drug addict and the other one committed suicide. You looked at him and his life was a catastrophe. He had more money than anyone I’d ever met in my entire life by a wide margin. Making basically a million dollars an hour, and I would not have traded places with him. Now the other side of the coin is I had a couple people on my board that were incredibly wealthy, had fantastic families, great lives, they were healthy they were balanced, they were laughing, they were joyful and it had nothing to do with the money. Yes, they got to ride around in private planes and hang out in nice yachts and go to places but that was just part of a much more vibrant, rich life and they looked at their family and their friends as far more important than their net worth.
DEFINITIONS OF SUCCESS
Dan: Then what’s the distinction. Why both people, both incredibly wealthy, one has a successful life, the other doesn’t?
John: One’s highly self aware and living a values based life and making decisions on what will make them happy, what integrates with their values, what’s most important in their life. And the other one is just trying to get the biggest bank account they can possibly get. They measure their life and success with zeroes, the other ones measure their life and success with moments, people, relationships and getting up every day… You know, a lot of people in our country, and in many countries, define success as an abundance of wealth, fame and power.
I like these things, I got nothing wrong with them, but my definition of success is when your self concept and core values are in harmony with your daily actions and behaviors. In other words, when you’ve got a really, really closely held set of core values that are fundamental to who you are and that you get up every day and you actually live a life that makes you happy. If you’re rich and famous and powerful and you’ve got private islands in the Bahamas and jets and helicopters, that’s awesome. If that’s truly what you value and it truly makes you happy.
If you have none of that but you get up every day and you live an authentic life, you tell the truth, you don’t have to put a mask on, and when you put your head on the pillow at night you go, “another awesome day, man that was fun.” And you have no fame power or money but, “wow, I’m doctors without borders or I’m volunteering, or I’m a poet and I’m doing ok but I’m not rich,” if that’s what you value, that is success to me. And when you go back and look at those other people the problem was that they weren’t living their values and they did not get up every morning saying “this is awesome.” They just struggled with “how can I make more money.”
WORKING WITH LEADERS
Dan: That’s amazing, that’s amazing. I think John, I’ve done so many interviews, I think we’ve packed so much golden nuggets in just such a short period of time, this is awesome. I’m also curious John, when you work with a client, let’s say an entrepreneur comes to you – he’s a CEO and he needs a little bit of help he needs a bit of coaching, how do you work with them.
John: Well I very rarely do coaching anymore and, Dan, you’ll know this, because you can’t coach somebody who doesn’t want to change.
John: So the first thing I look at is: are you really serious about changing. Or is this just somebody told you to get a coach or you thought a coach would help you. The first thing I typically do is some sort of an assessment. When I work with an entrepreneurial company and they say, “we want you to help us get better as a company.” I tell the CEO, “we are going to do a survey of every one of your employees, it’s going to be completely anonymous, it’s on an audit that I created, looking all the companies that I’ve worked with over the last 20 years, several hundred of them, of what are the 15 or 20 of the most important things I need to know to know if this company is doing well or if they’re dysfunctional.” After seeing that I will go talk to the CEO and say, “here’s what the survey results are.
You’ve got some real high scores, I’m extremely proud of you, but you’ve got some really low scores here that are going to need to be fixed.” And one of two things happens. They go, “great, I understand it, let’s go, lets work it, I’m on the team, I’ll take accountability for this. It’s my fault that we’re not doing well there.” I just got an email from a CEO in Vancouver where you are that said, “I own the deficiencies, I will fix them.” Unfortunately, most of them say, “well, you know, this is my people’s fault or the market isn’t good,” or I’ve even had a few shred it right in front of me. So when they’re not willing to take accountability and ownership and commit to making major changes and know that it’s going to be painful, I turn down the work. And you and I just said it before, I forget what we were talking about, but I never accept a client unless I know it’s going to be successful.
You know, if you want to be a home run king, only go to the plate when you know you can hit a home run.
So I’ve gotten – with all my speeches, all my workshops, all my clients, if I can’t absolutely dazzle them, I’ll turn them down. Luckily I’m in a place in my career where I can do that, but that’s also why I’m so busy, because I never, ever do work for anybody that, or very, very, very rarely do work for anybody who’s less than ecstatic. Who’s displeased with something that I did. Which means I drive tonnes of referrals and I’ve got lots of happy clients who bring me back year after year after year, which is exactly the way you create a strong business.
Dan: It’s like I say, we’re in the business of helping winners win more not turning losers into winners.
John: Yea, I’ve got a real good friend that runs an excellent organisation in New Zealand called Advisory Works, and they focus on nothing but execution. You’ve got a strategy, you got a plan, you’ve got your people, you’ve got your market, we are going to make sure you actually execute your plan. And the way that they’ve been successful is they only pick good companies that want to get great. If a company that is highly dysfunctional can’t execute anything, fallen behind, losing the market share, comes to them they go, “sorry, we’re not going to be able to help you because you can’t even help yourself.” But they’ve been massively successful helping good companies become much, much, much better.
Dan: So John, let’s say you do this, take that on and you’re working with them and then what’s the next step, what’s the arrangement like, do you coach talk to them on the phone, do you go visit the company. What’s your process like?
John: My process at this point in my career is that I will go over the assessment, I will interview many of the people in the company, the senior management team, key managers, things like that. I’ll get a feel for what they really, really need, where they need help, then I’ll do a one or two-day retreat. Usually a two-day retreat where we drill down into that and go, “these are your survey scores, this isn’t a lie, this is what all your employees say. Here’s your net promoter score, here’s what all your customers say.”
I deal with data. I don’t want to come in and say, “here’s what I think you should do.” I don’t have an opinion. “Here’s what the market says, here’s what your employee says. This is data, we can’t argue with it, how do we fix it.” And then we sit down and create a very clear, focused strategy with the accountability stuff, about what they’re going to do over the next six months or a year, and then I bring in a partner like the folks at Advisory Works or one of my other partners to do the actual execution and live with them. That’s not a good investment of my time, I’m too expensive for them to hire me all the time to come in.
So one of my colleagues will meet with them monthly, bi-monthly, check in on them, do stuff. They will report to me, I will send reports back to the CEO and things like that. Then about six months later I’ll spend a day or two with the senior management team. A lot of my work now is major keynote speeches, much like you, to companies – 5000, 10,000 people, couple of hundred senior executives. I also do a lot of half day and full day training sessions, I enjoy that a lot. But I’ve learned a couple of years ago that I get too frustrated trying to live inside of a company day to day and basically run the company for them.
The way I look at it is: “hey, it’s your company, you guys need to fix this.” And the key thing there is, I didn’t tell you how to do it, you guys worked with me to figure out what you all want to do. You came up with this plan, you developed it, I helped, but it’s yours and you own it so it’s not some outside consultant telling you how to fix your company, its me helping you figure out how to fix your own company and holding you accountable for what you said you would do.
Dan: I love that approach, because then you’re more like a facilitator. And the answers are within the organisation already, you’re kind of like (inaudible 48:04) You came up with a plan, let’s execute the plan and you have their buy in already, so I love it.
John: Yea I think you said the key word – I’m much more of a facilitator than I am a coach. But like you, I only want to work with people that want to get better and companies that are doing pretty good and want to get much better. I’ve learned that with the highly dysfunctional companies where their scores on a scale of 1-10 are all, 1.2, 2.8, 3.0, I’m not going to be able to help them because the problems are just too too big and they’re usually problems that the president/CEO/owner is not willing to deal with, hence the reason they’ve gotten that bad.
Dan: That’s awesome. So John maybe talk to us about books you recommend to read, of course your books as well. But what are some of the top business books you recommend to read?
John: Well, you know, I’ve read hundreds, you know, well actually thousands, I wouldn’t actually recommend my books at the top, I mean they’re good but there’s ones better. If you wanted to learn about leadership, I think the best leadership books I’ve ever read is “The Truth about Leadership” by Kouzes and Posner . Same people that wrote “Leadership Challenge,” this one is just 220 pages instead of 460.
I just read a really good book on leadership too, a shorter one, called “Leadership Lessons from a UPS Driver.” Really good. It’s guy that started as a UPS driver, 18 years old, and rose all the way to be president of all of Europe for UPS and he talks about how he did it. Good friend of mine Anthony Iannarino just wrote a book, it’s getting released in October, called “The Only Sales Handbook You’ll Ever Need”. Probably one of the best sales books I’ve read. I’ll give you two more and then I’ll tell you something else. The sales area, because I know entrepreneurs and business owners have to be good sales people.
John: The two best books I’ve ever read are “SPIN Selling” by Neil Rackham.
Dan: Love that book.
John: Oh, awesome. And then “Let’s get real or let’s not play” by Mahan Khalsa, which is just an absolute gem with great ideas, and it’s mostly on large deals, how to close big deals, business to business. But, you know, I’m going to create a portal, specifically for your followers, it’s going to be johnspence.com/titan and in that I will put my list of the top 60 business books I’ve ever read, ever. And then I will also throw in there a bunch of free videos on leadership, teamwork, some of the stuff we talked about around leadership, teamwork, accountability, formula for business excellence. Those are all in there, they’re free. Your listeners can use it to refresh themselves or go train their staff, share them with other entrepreneurs and people they know. All that is there to help people be more successful.
Dan: John thank you I appreciate that, I appreciate that.
John: My pleasure.
Dan: John one question before we go.
ADVICE TO YOURSELF
Dan: If you could travel back in time to maybe one of your earlier days, one of your start-up and have a ten-minute conversation with your former self to communicate any lessons you’ve learned, with the intention of saving yourself the mistakes and headaches, what would you tell yourself?
John: It’s fascinating that you would ask this question because I actually had someone ask it to me the other day and I immediately said two things. Number one, take care of yourself – if you’re not healthy you can’t help anybody else and I’ve struggled my whole life with weight issues and health issues and breaking bones, I’m really good at falling down and breaking things. So I would have said, guard your health even more. I played rugby in college and I broke my neck, and I’ve broken a bunch of bones in my hands and feet, so I’m in pain now a lot. Had I known I would have said be better on your health. And number two I would have said think bigger, just think bigger. Even as big as you think John, you could double it or triple it or quadruple it or times a hundred and it’s still not big enough.
Dan: And any final thoughts, or contemplations so listeners can find out more about you?
John: Well I’ll give you one last thought, which is the single most important thing I’ve ever learned in my life: and here it is: you become what you focus on and like the people you spend time with. Whatever you read, whatever you study, whatever you listen to like this podcast, whatever you fill your mind with and whoever you choose to spend your time with will directly determine what your life looks like a decade from now, Out of everything I’ve read, everything I’ve studied, everything I’ve learned, that is my main mantra. You become what you focus on and like the people you spend time with.
As far as contact stuff goes, my website is johnspence.com, I’ve also got a blog there which I’d love folks to sign up for. My personal email address if anybody has a question or issue or concern is firstname.lastname@example.org . I’d encourage anybody to connect with me on LinkedIn or other social media. My twitter is “awesomely simple”. And then again I want to remind everybody that I’ve got that portal for you which is johnspence.com/titan. I’m actually going to throw something else in there that I hadn’t thought about Dan. I helped run the entrepreneurial masters program from MIT a couple of years ago and I was there for 7 days with a hundred entrepreneurs from around the world and some of the best instructors they could possibly put together and I boiled down everything I learned there down to a 12-page overview of just ideas, I will absolutely make sure that that’s in the portal.
Dan: Wow John, thank you so much. Thank you for inspiring us today with your amazing story and your generosity in sharing your thoughts and ideas and those gifts as well. Thank you so much, I appreciate it.
John: It’s absolutely my honour Dan, thank you for inviting me.