Delegation Isn’t Leadership—And Hiding Isn’t Ownership

Here’s the trap most leaders fall into: they delegate a problem and think they’ve led. But when things go sideways, they point fingers instead of owning outcomes.

Let’s be real—handing something off isn’t leadership. And when you delegate too early—or to the wrong people—it doesn’t create freedom, it creates chaos.

In this episode, we unpack the uncomfortable truth: real leadership starts when the excuses stop. We break down the difference between delegation and deflection, how extreme ownership reshapes your company culture, and why skipping leadership development is the most expensive mistake you can make.

We walk through the four levels of delegation, how military structure drives business clarity, and why you can’t expect $200/hour results from $20/hour thinking. You’ll hear real examples of what works, what breaks, and how to lead through both with intention.

📌 Key Topics:
 ✅ Why most delegation fails before it even begins
 ✅ The $200/hour mindset shift most business owners miss
 ✅ How military structure creates clarity and buy-in
 ✅ The cost of skipping leadership development
 ✅ Why the lid on your business is often you

You don’t need more hands—you need more ownership. And it starts with you.

Chapters:

00:00 The Importance of Ownership in Leadership

05:56 Levels of Delegation and Their Impact

11:22 The Role of Hierarchical Structures in Business

17:24 Learning from Mistakes and Taking Responsibility

24:01 The Balance of Risk and Reward in Leadership

29:54 Empowering Employees Through Defined Roles

35:48 The Value of Fast Failure and Continuous Improvement

Transcript

Ryan Miller (00:35)
All right. Well, Ryan, about time I finally kicked off one of these podcasts. So figure the topic that we talk about today is delegation and ownership and how strong leaders can, ⁓ can avoid hiding behind their team and their employees to avoid owning outcomes for, for solving problems. And so obviously with you taking over a business,

You're definitely falling into those shoes where you have to, mean, every outcome you have to own. Right. And one book that I think we're both very familiar with is extreme ownership. And there's a lot of stoicism principles in there and there's parts of the Bible that talk about it, but I to get your take on ownership versus delegation. It's interesting. ⁓ actually the book I'm reading is, ⁓ or just read through part of it was, ⁓

It's called high road leadership by John Maxwell. Anyhow, part of it, he talks in there about, ⁓ taking ownership and.

He goes a little deep into the term, the buck stops with me and kind of where that comes from. So I didn't know that to read in this book, but it was basically, it's a poker term. So when they used to play poker, they'd pull out, they'd normally play it with a knife, which was a buck knife, like a buck horn knife. And so they would pass it as the deal goes.

So that's where the buck stops with me, basically means that you're the dealer. And so it was kind of a interesting take on it. He was comparing it to, I think it was Truman and that was one of his big sayings. just how the buck stops with me, the buck stops with the president, the buck stops with the leader, buck stops with whoever's in charge and they have to take ownership of everything.

You mentioned the extreme ownership. It's the book. In one of the opening chapters, if it's not the opening chapter, they talk about a blue on blue situation where they kind of started debriefing things. he was like, well, he had the realization that ultimately, even though I wasn't there, I had nothing to directly do with it. There was things that I could have done that would have.

help prevent this in the future. And for context, a blue on blue is friendly fire. Yep. It's practice. Yeah. And Navy seals, it's like Cardinal sin, you know, you avoid at all costs. And when that happens, like skulls are getting cracked trying to out what happened. Well, yeah, he, you know, came in a room. It's like, whose fault is this? And well, guys, you know, they all kind of like, he's like, no, it's, it's my fault. I could have done X, Y, and Z. I think that's

with everything and it's

And it can get hard. And, I think Jocko does a really good job with this. Like, I got cancer. How's that my fault? Or my kid has cancer. My kid died in a car accident and it, and it's situations like that. Like you can't own the situation that happened, but you can own how you react and the outcome that comes from it. And so I think that's the biggest thing is.

How do you, there's a difference between, I tell my kids this all the time, there's a difference between your feelings and how you react to those feelings, your behavior that's associated with it. You can be mad and not punch the wall. Punching the wall is the behavior associated with being mad. But that doesn't mean that it's.

good behavior or you know, like you have to disassociate the two. So yeah. And I think extreme ownership comes from the principles of the serenity prayer too, right? The, ⁓ ability to, or what is it? The wisdom to know the difference between the thing or the things I can change and things I cannot. is God give me a serenity to accept the things I can, ⁓ courage to change the things that are wisdom, the curse to change the things that can.

wisdom, I don't know. Yeah, yeah. I never want to say sorry. Well, but I think that's something I think about all the time is like, you know, problems in business and in life are constant. And it's one of the things that we talked about previously, is that the day itself is not good when someone says it's a good day. Like the day itself is not inherently good. It's your interpretation of the day. That's good. Like we said, a sunny day is great for someone who wants to go to the beach.

But for the farmer who's, you know, their livelihood depends on the rain, they're thinking, gosh, can it just rain? Except when they're trying to harvest, they want it to be sunny so they can harvest. Right. So the day itself is not good. It just is what it is. And it's your interpretation of that. And that applies to all things in business and life, that it's your interpretation of them. so for one of the studies that I found, Nicole, my life has gone really deep into this, but

from Dr. Gavin Adams, has the four levels of delegation. And this really helped when we were managing a team of VAs and we had employees, had agents and all that stuff. ⁓ Level one is investigation. All I want you to do is research and report back. Level two is informed progress. I'd love for you to complete this task or project, but check in along the way as you make progress. Level three is informed results.

I'd love for you complete this task or project. Just let me know when it's finished and then ownership, take this project and run with it. And I think that the biggest problem when people are new in business is they jump right to informed results or ownership is they delegate everything away immediately and just expect their employees to take it, solve the problem, come back with income, right? Like if you think about your plumbing company, if you were to tell your guys go out,

make some money, come back, let me know when you made the money. Like that is level four ownership. In the military, we have a rank structure, right? Like you start off as junior enlisted on the enlisted side. E1 to E3, they are very much so level one or level two. It's, you you start off, go do this research, come back and tell me what you find. And when I was a mechanic and I had junior enlisted coming into the shop, it was go read the T, like we have this problem, go read the TM.

Tell me what the TM says and then report back because a lot of times we have faster solutions than what the TM tells you to do. And so you'll have, you know, your E4, E5 that sends this guy out, do some research, come back, and then we'll go tackle this problem together. As you get to E4, E5, then those guys, they might be able to give their, you know, E6 or E7 informed progress or informed results where they have a problem. They're letting, you know, higher up know about the problem.

They go tackle the solution, come back and report back on what they did. When you get up into the E7 or E8, it's much more ownership. It's deal with it and then let me know when you're all done. But I think that if you were to just give that E1 full ownership of a task, you're to be disappointed 10 out of 10 times. It is very rare that an E1 comes back and solves a problem to your liking. So I think that the same applies in business. I'm looking at it in the trucking company.

hooking up a trailer and driving is not hard, but it's all the unknown unknowns in the business of making sure your straps are done right. Making sure you're communicating with your receiver, you know, ⁓ where are you getting fuel from? How does that affect the company's bottom line? Like all of these things that they don't even know to think about that you, you give them that informed progress and check-ins so that they can build up the, the knowledge to be able to do it on their own. And so that's why I really like hierarchical based.

⁓ leadership structures. I've heard things of people saying that, we don't have a hierarchy. We just have a, you know, everyone's on the same level. And I just don't believe in that. I don't think that's how people learn. And I don't think it's a good way to hold people accountable. NVIDIA has grown. It's one the largest companies and they got a pretty flat structure. Like basically everybody reports to the CEO.

I don't know how many direct reports he has. The other thing that Jaco talks about in Extreme Ownership is that no one person is capable of overseeing more than three to four people at a time. And I think in military structure, you have your platoon sergeant who watches over four squad leaders, and those squad leaders might be separated into two or three teams of three. And so each

level is only reporting to two or three and then all the way down the fire team. Right. Exactly. And then, you know, even the first, the first, it's only talking to four platoon sergeants, you know, and so, and you look all the way up through the levels of the military, they really only need to talk to four or five of the next level, you know, three or four or four or five, whatever it is, but from division level to brigade battalion company, they're all that those levels of delegation are there and

I think that that holds true and it's not common in business. I would say it's somewhat common in business and I don't know, maybe I just come from the military aspect. just see it. Like I think a lot of business, I was talking to somebody the other day and I think there's a lot of overlap in business that we don't necessarily see or military with business that we don't necessarily realize until we start combining the two. And I think that's

Part of the reason why you have so many veteran owned companies, especially post 9-11 veteran owned companies. Yeah, I mean, I think in the successfully running ones, then there is that, but we're smaller sub a million companies where every employee has a direct line of contact to the owner and the owner's having to answer mundane, you know, everyday problems. Yeah, I mean, I guess if you do that, if you're talking about that, but.

That's just not a well run company at the end of the day. ⁓

Does it really matter? it? the next like I think you had just have a leadership and you aren't a level four leader at the end of the day. And so going back to John Maxwell, like he has the law of the lid. This is 21 irrefutable laws of leadership or something. The first one is the law of the lid. So your company can only grow to the level that you are. You are the lead as the leader and

If your company's not running right, you're the lid and you're holding your company back. So I think you have other leadership issues that aren't delegated delegation issues. I think an inherent symptom of that problem of having direct lines of communication with the owner or the CEO or whatever, that whoever runs the company is that person then reverts to that level for ⁓ ownership.

They delegate things and they just expect them to get done. And the problem behind that is that that allows them to hide behind the problems in business. Because when things go wrong, it's that person screwed up and they release themselves of responsibility because, I asked him to handle it. And then when it doesn't happen, well, he didn't do it. And I think if more owners or high level managers looked inwardly at the extreme ownership of like

They didn't, and Jaco talks about this all the time, they didn't fail to complete this because they're incompetent. They failed because I didn't train them well enough, or I didn't manage my expectations clear enough, or I didn't communicate with them clear enough. So by jumping, it falls into the right person, wrong seat, right? Like if you have someone who really needs that informed progress,

and they're intelligent, but they don't have the discernment to know the best solution for a problem, then they need informed progress. They need someone there that's to keep them in check, bring solutions and say, this is what I found, which direction would you like me to take? But then each level of leadership then needs to have extreme ownership because when a problem goes wrong and you look at like a restaurant, the general manager cannot be there answering small, you know, I say small, but problems with

you know, my, my steak was overcooked. have floor managers that are there for that. And when it's not handled appropriately, then the general manager should be handling it with the service manager who should then handle it with the floor managers. If the general manager is handling it directly with the, I say lowest level employee, but the direct to customer employee, that's taking them away from the parts of the business that require their attention. And if we look at the dollars per hour of being a business owner and

We've talked before about finding tasks. If you're a $200 an hour employee and you're handling $20 an hour tasks, you are losing $180 an hour by focusing on those tasks and not focusing on the overall business and the overall business will crumble. I can agree with that. I guess.

When you mentioned like someone messing up, I would argue that that general manager, whoever the chef manager, the highest, you know, at the restaurant, if you mess up on a steak, especially as a nice restaurant, they'll come in out to the table and say, Hey, apologize for this. Take care of it. That is a $200. That's a $2,000 an hour task. Even though the bill, it might be a $20 steak. The reputation.

of them coming out. I mean, I guess I'm just splitting hairs, but ⁓ like, I think.

There's always a time for someone to come out. That's my biggest problem with people in leadership. They always say, oh, I heard in the military, oh, the general doesn't do anything. He doesn't do anything that you think he should be doing. But I promise you, they're doing something. Just being able to pull that lever, hey, we're going to cop that. I'll give you a prime example. There's a restaurant. When it opened up, I took my daughter there.

I want to watch the Saints were playing, you know, Sunday and I couldn't watch it or something like that. Took my daughter just opened up. She ordered like just cheese pizza and they had a piece of glass. Like I'm talking about like almost a dime size piece of glass in her pizza. Oh gosh. And they didn't compare like they didn't. In my opinion, they gave her a free pizza. Like, we'll build, we'll get you a new pizza. Sorry about that. We won't charge you for the pizza.

You should have copped the whole meal. Like it was only the two of us. So it was $40 maybe. Like it put a bad taste in my mouth for that. Like, pun intended. Yeah. mean, theoretically you could have killed my daughter, you know, like, you know, had, had to have some kind of major surgery or something like that for a while. Like it was a big piece of glad like it's basically like a beer mug, uh, thickness. And it was almost a dime. So I mean,

It was big enough that she saw it, but she's seven, eight years old at the time. ⁓ so one by the way, from owning a pizza shop. And so it's just.

That was a mismanagement of the management. know, so well, and that comes down to the underlying S O P's is if like when, when, uh, when I worked restaurants, they, had, um, levels of empowerment. So the manager level, they were allowed to comp anything up to $50. And so if they came across that problem, then they could comp it. Otherwise they need to go to the service manager. Service manager is allowed to comp the whole tab.

And if it's a bigger issue than that, then they get the general manager involved. But they had the SOPs in place to ⁓ escalate problems. And you hear it all the time with like phone services, right? we're escalating this. Let me escalate. And then they have too many levels where it takes you six hours before you even get an answer, especially insurance companies. Insurance companies are ridiculous with escalation. So it's interesting. And I don't remember the level. So I worked for

Fortune 50 company, roughly. ⁓

they, uh, like from the CEO down to the lowest level, they want it to be X number of layers, but in practice they never make it there. Like there's, you know, same thing in the military. So many different, about the E one to the general, like that's 400 layers of people in between, you know, and same thing with a large company. But I don't think it should be like, I think they're

I think four layers is probably as far as you should realistically. Well, depending on the size of the company too. Because I mean, you start losing culture. Yeah, of course. And that's one of the aspects. I can't remember which book I was listening to where it's about that growth is once you pass that $10 million company threshold, you need to start having more layers of separation between you and I say, scut workers, but like the ones who are doing the actual work.

and having middle level managers and all that stuff. At the size company that you have right now, you still could know every name of every employee. But if you double the size of the company, the likelihood of you knowing the names and the backstories of every single one of your employees goes down. You just don't have the capacity to know everyone and the churn is so high, right? Well, yeah. imagine if you go from a $3 million company to a $30 million.

If you 10X that right there and you 10X the number of employees, the number of output, all that stuff, it is not possible for you to keep tabs on all them. You need those, those layers. Yeah. I think, and that's kind of the transition. That's one of reasons why the old owner or whatever, I mean, still on his partner, but, um, why he sold us. Cause you reach a point that you can't, you know, I see three children, $3 million in the

company, like those are all ⁓ turning points. I forgot what it's called, something of three, but so 3 million, 30 million, 300 million, those are all like, flexion points. And

So I think he was at that point, know, like I can either sit here forever and wreck my brain about everything or I can accept that he found the ceiling. Yeah. Yeah. And, there's, of course, there's always exceptions to the rule. I'm sure there are companies with a thousand employees where the CEO has direct contact with all the bottom line employees, but that's an exception. You know, I don't think it works in standard. I'm talking about Nvidia, like, I don't know how many, so he has 50 direct reports. I don't know.

But it's basically.

CEO, 50 direct reports, and each one of those people have 50 people underneath them. So it's a large company, but it's a flat structure versus a tiered structure that you're talking about. Yeah. And I can understand that. It's almost like having 50 employees might be the threshold of a small company. And then if you have 100 employees, then you have two tiers of 50 employees. I think the point still remains.

I think the important thing is when we talk about the extreme ownership is the layers of leadership need to be responsible for the outcomes at each level. And if, like we said in your plumbing company, if the people doing the work were calling you for every single little problem that, you know, maybe they're missing a fitting or maybe, you know, the

the water heater doesn't fit right or something like that. They're calling you for every single one of those problems. Like you're going to spend all day on the phone just answering these problems where there's probably someone in your organization that is more qualified than you to answer those questions that can take ownership of their outcomes. Well, I think this goes back to why I bought a business versus built a business. Um, you always have saying work on the business, work in the business and

Like I have no choice but to work on the business. Like I'm not there day to day. I'm not the plumber. I can't tell them, Oh, run the line like this or, you know, like I don't, I don't do the inventory. don't like none of that stuff is mine. Like I would just, all the systems that process is on the backside. one of those things fails, who's accountable for

I mean, it fails in what? I mean, if if there's systems of processes fail or ultimately you take ownership of the systems and processes, right? Correct. And that's what I'm saying. I own the systems of processes and you have layers of delegation of who you can hold accountable for when each of those things go wrong. Yeah. I mean, just because you're responsible doesn't mean that the person below you doesn't get fired. Like the responsibility could be, I hired the wrong person. There you go. And that's kind of what I'm getting at.

is that when you take the extreme and that's one of the things and one of the books, I really need to get better with my references, but they talk about the slow to hire, quick to fire, right? And when people hire someone on and they start messing up, there's an ego problem there where they don't want to fire that person because then that would be admitting that they were wrong. And when you take extreme ownership, you realize that, maybe I did hire the wrong person or maybe they fluffed their resume and I fell for

That's my fault is that I fell for it. Not that they pulled a fast one because people are too quick to say, oh, he lied on his resume. It's all his fault. No, it's your fault because you fell for it. Yeah. One of the things I like is there's things that you're responsible for and things that you're a fault for. someone could screw something up on the job and get someone killed. You know, I'm just full board. Like they're still responsible or they're they're a fault for that accident.

you're still responsible for it as the leader, right? With systems of process, like if OSHA comes out there, they started investigating it. Your systems of processes weren't right. You didn't have the correct tools, all that stuff. Like, yes, that person that, you know, did whatever, I'm just making something up that got someone killed, they're at fault for it. But you were responsible for, ensure that they were trained, ensure that they had the tools, the equipment, all that stuff. So.

And there's a term that we use all the time is your fault, my problem. And then I think that that's true in extreme ownership. There's no matter what caused the problem, you have to look inwardly and see what can I do to make sure this doesn't happen again? And as the business owner, you're not in the business, you're on the business. And when you see problems come up, it's implementing policies and procedures to ensure that that doesn't happen again. And for example, let's say that one of your employees goes and

walks through someone's house in muddy shoes and the customer's pissed, refuses to pay their bill, that becomes your problem. It's not your fault. It's common courtesy, but are you just gonna fight them on the bill and say, hey, you owe me that money because you walked through with muddy shoes? No. You're gonna implement a procedure that's set or a policy that says, if your shoes are muddy, take them off at the door or put boots on or the whatever, the shoe covers on. Booties, yeah.

that you're implementing a policy to ensure it doesn't happen again. And then you are going to do the right thing with that, that a customer, like, can I clean your floors? Let me submit cleaner in there. Let me do whatever I can to set, to keep this reputation. Like you talked about, reputation is huge. So you are going to be the one that gets involved because that becomes a $2,000 an hour problem. So that's when it's worth your time. So I think that discerning what level problem is worth your time because if it's a hundred dollar problem, like

toilet valve wasn't screwed on properly, are you going to get involved with that? Probably not. You're going to have one of your middle management take care of that and they will smooth it over and then they'll report back to you. That's informed progress. But if it's big enough to where you could lose considerable amount of money, five, $10,000, then yeah, you'll probably get involved with that. So I think that looking at every employee and getting clear about their skill set, their knowledge and

And empowerment, think, is the most important thing. And I learned this early on in business school when they talked about each employee having different levels of empowerment. And you see that at every major organization. And we don't have to recreate the wheel. We just do what the big guys are doing. I like to think of us as small business owners as the minnows that feed off the big fish. Well, I mean, I'll give a prime example to that. ⁓ The podcast diary of a CEO.

Like this guy spends tens of thousands of dollars on each podcast, A B testing things, running ads, know, paying his people. Why don't I, which is what we do, Hey, see their thumbnail? Let's rip it off. Like he spent $10,000. Apparently it worked somewhat. Like we might not nail it, but does it give me an 80 % solution? Does it give me a 50 % solution better than one I came up with on my own? Like, okay. That's

You know, the titles, like I said, the A-B test, the titles, the thumbnails, the wording on the thumbnails, the picture, all that stuff. I'm not gonna go through all that, but I see what works and how can we get a 60, 80 % solution based on that. I heard the same thing about investing early on about if you're ever looking at a place to invest, look where they're building McDonald's.

because McDonald's will spend $3 million to put up a $2 million building. Chick-fil-A. Chick-fil-A is a good example too. I... Chick-fil-A and Starbucks, those are the two that I think spend the most money. And I don't need to go spend $3 million doing market research. I can just see what the big fish are doing. And if they're moving to this area, then that population is probably growing to a point where it justifies them putting $5 million into a location and I can afford to buy a $300,000 property. Yeah. So...

McDonald's. I don't know. I've seen some shady McDonald's. Well, yeah, the historical ones. It's a real estate game. But I mean, look at 204th. You see one pop up right there. then the first thing on to exactly and now look at what's all around it is there's a thousand units within, two miles. You know, there's on 204th from Elkhorn to basically my house. There's four Starbucks. I believe it. That's a prime example. Ridiculous. There's one half a mile from here.

There's another one two miles from there. There's one in the grocery store and then there's one in Elthorn. I still can't control the market share over scooters. Yeah, it's crazy. Yeah. Yeah. So, I think to wrap this one up, I think that it's important to look in an organization and determine one, if you, you laid out all your employees on a board and you looked at their skillset, their knowledge base, their, their integrity, you know, every, all their attributes to determine what level

employee they are as far as the levels of delegation and give them opportunities to excel. you know, if they're at the informed progress, are they meeting their check marks? They're doing all the right things. There's less mistakes and they can move their way. I want to unpack that a little bit more. Like I think too often we try to make everybody level four and for an organization to be successful, going back to the army, you don't need

Not everybody should be and you don't want everybody to be a level four. You don't want everybody to be a level one. You definitely don't want everybody to be a level, sorry I said level one. I meant to say three and then you definitely don't want everybody to be a level one. You need that mixture of people. That's part of the structure there. We'll just use a fairly large, say 150 employee company. If you're at the top as the CEO,

type person, then you have your C-suite, COO underneath you, and then you have your other C-level people, CTO, CMO, CFO, whatever it is ⁓ at that level. you want those people to be level four, but then from there, you want level three, level two, level like, so as you build out your org structure, those levels, like for me in plumbing company,

I just want the apprentice to be a level one person. Hey, go grab that tool. Go grab me this pipe. Go do this. Hey, load this on the truck. Grab that water heater. That's level one. They're learning to be level two and that's what they're apprenticing. Now once they become a journeyman, now they can go and they're level two. But if they have something, they're still calling back to the shop. Hey, we have this. I'm gonna send you a picture.

Which level two is informed progress is I love it for you to complete this task or project, but check in along the way as you make progress. Yeah. I mean, yeah, I guess. Which is more, more along the lines of what you're talking about. Well, I mean, I'm, I guess I'm going two and a half with that, like, because for us, we just send people out and then I guess they check in with the. Now we, you know, so I was helping a client buy a property recently and.

They need to come out and get the sewer scoped and the sewer wound up having problems. But what I was really reading into is we worked with Major Drain for that. Major Drain is a great company. I've worked with them numerous times and just watching their processes. They had the guy come out and scope the drain, do ⁓ the radar, you know, where he's finding all the stuff. And then I'm trying to talk to him about what he thinks it's going to cost on stuff and say, I'm not allowed to tell you that stuff. I'm not an estimator.

So he is the investigation level one. So he's out there just to investigate, report back to the estimator. Cause the estimator can't be in 15 places at once. They're probably a higher paid employee where they have more levels of responsibility. They're accountable for more dollars. And if that level one employee gave me a price of $500 and then I took him by it. And then the estimator comes back and like, no, that's $3,000. Well,

That level one employee just cost the company a ton of money, you know, because I'm not going to work with them after that. So that level one is investigation. came out, he was the direct contact with me, did the investigation, came back, gave it to the estimator. The estimator is probably an informed results or an informed progress where he goes and sees all this stuff. He has all of his SOPs. It says, if it's this on a spreadsheet, this is how much it costs. And he has a better understanding of the overhead that the company experiences.

And then he probably has a buffer, like for our smart home installation company, we have a buffer of if we need to get a deal done, then based on the size of the business, we can discount or add margins into that we still can cover our expenses. And that is at the level three, where they have the empowerment to make that decision. The ownership level.

is probably your area manager, your regional manager or something like that. The CEO does not need to be looking at every single estimate. They don't need to be making those decisions, sending out estimates. That is just a colossal waste of their time. So in that example, all of those employees have a specified defined task. They could all get paid the same for all I know. But in their areas of responsibility, they have different levels of delegation. And I think that it's important to have that in an organization.

in order for it to flow smoothly. And that's just part of SOPs. To what you were just saying, you...

As, your level goes up typically. So does your, your monetary reward to it. Like I'm assuming when I was level one in the air force, like I wasn't getting paid. I think when I first started, I was going to pay like 900 something dollars a month. You know, like it was nothing in today's dollars. That's 2000 a month. So I don't know what it would be. It'd be interesting to look at it, but yeah. Um,

So I wasn't getting paid crap. And then as you move up, you get more. But that goes back to things that we've talked about in the past is that you were compensated relative to the value that you're providing to the marketplace. So a lot of people would argue that. Well, yeah. But the more value you provide to the marketplace, the more your pay increases. I forgot where. I'm pretty sure I read it or saw it somewhere. But like you're talking about negotiating a raise and like, hey, I have this idea.

I think it'll bring a million dollars to the top line revenue. At least Cody Sanchez, that was Tom on this. If I can do that, can I get $200,000 of? Raise. know, or raise. I'm just, you know, making something up. Or I think in her analogy, was like, can I get some kind of ownership? You know, can I get 5 % of the company?

And I'll continue to grow it after that. But I think in the first year I can get it to million dollars. If I get it to million dollars, can I get 5 % of the company? like, now you starting to pull all these other levers and now once you're at that level for ownership. there's a salary negotiation called Phantom Equity. And so what it says is that I know that this company's business has been at $5 million for the last five years.

If I can get it to $6 million, will you give me 30 % of that? Of that extra million? It's very similar to what I'm talking about. Like, yeah, like bringing on a new product center or something like that. But that's to your point. Like you're taking level four ownership, I think is what you called it. And running with it. And I think the biggest problem in society, especially when you look at 18 to 21 year olds, is they believe they are entitled to a pay raise just for showing up on time.

and doing the job to the minimum standards. I think go back to our education system. Somebody like, well, if you created a million dollars in revenue, shouldn't you get larger than 20 %? Well, 20 % is probably high because you have profit margins. If you're on 15 % profit margins, yeah, that's absolutely. Average issues are made up numbers. It's a good example though. But yeah, you're not, people just think, oh, they make $10 million. No, like.

The bottom line number might be they make 10 million, they might take home a million split by however many owners or whatever. I mean, there's, there's, mean, you also have to take into consideration reinvesting for later. Like you don't, you don't take all of that. There's companies with billion dollar market caps that are operating in the red and they look, they look great, you know, from the outside. And that's part of why we started this podcast is that, know, people look at the outside, they're like, Oh, they make so much money. It's a, I, it drives me nuts when people say, Oh, it's a cash cow.

I had tenants that, you know, that we were at a property the other day and one of the tenants came out like, this thing's a cash cow. I wish they'd put more money into improving things. It's a cash cow. don't you go buy one? Yeah, exactly. We have expenses. We have loans. We have responsibilities. so, sure, you might be making a million dollars a year, but if you have 50 % expenses and then another 30 % finances and you it's, your margins get eaten up real quick.

So yeah, I think that it's important to note that is that when people approach problems with how can they add value to the bottom line, then sure ask for a piece of that. That's I think everyone should look for that. That's the best way to grow their personal income stream is how can I provide the most value to this company? Yeah. So if I had somebody came to me as an owner and be like, Hey, if I add X percent or X to the bottom line, can I get 20 % of it?

and I'll run with it and do it all my, I did like, hell yeah. Like I'll give you 25 % of the, I'll take the risk because that's what people don't understand. Like the owner's taking the risk. When that vehicle breaks down, like we were talking about extreme ownership, that's my responsibility. Like I got to make sure the vehicle gets, so we put it back in service and start generating money. ⁓ You know, like not only do I have to worry about feeding my family, but I got 15 other families I got to feed now, you know, or make sure they're getting fed. So.

Hey, there's a ton of risk there. Like I took a loan out to buy this business. So there's risks there. So it's just, you're not going to get a whole, whole hundred percent because you're not taking any risks. All the risk is on me. I guess is what I'm getting at. And so in closing, what do you think that leaders should be doing to avoid hiding behind delegation?

You just got to ask yourself, how could I have done better? How can I fix this next time? Like I said, taking responsibility and taking ownership of it doesn't mean that you have to do everything. And I think that's where micromanagement starts happening. I would rather systems break and people learn. If you have a new system that you're trying, hey, this is what the desired outcome is.

let them iterate on it. You schedule, like I had a meeting with someone working on like some triggers, some systems of processes in the backend. And so I'm not the one doing it every day, but I had a meeting with her yesterday. Okay, this is, know, what I want it to look like. Like a 30 minute meeting twice a week, just as a vector check for people goes a long way.

Talked before about I don't remember which book this was again, but where the guy was talking about how he made a huge mistake in the business and I don't remember if lost a deal or something like that and wound up losing the company like a million dollars or something like that. And when he got called into the CEO's office, he was expecting to be fired. He said, look, I know I'm sorry I messed up and I accept the termination and whatever. He's like termination. He's like, I just invested a million dollars in your education. Like you're going to make sure this doesn't happen again.

And I think that's such a good outlook to have not giving people too many strikes. Cause you know, if there's the difference, there's a habitual problem of mistakes or carelessness or whatever it may be, then yeah. I mean, you to that in the bud because it's a cancer and cancer will grow and it will destroy an organization. But if you have someone that makes a mistake, even a large dollar mistake, like look at that as an investment in them because they're going to make damn sure that that doesn't happen again. only time you're not going to make mistakes is when you're not trying.

And like when I heard a couple of new people and I'm like, listen, I want you to make mistakes. I want you to learn from the mistakes. I want you to make mistakes. The faster we make the mistakes, the faster we learn, the faster we grow. the same token, if say you're running my email and you keep making the same mistake over and over running my email, like then we have an issue. Right. But if you make the mistake and document it and learn from it,

there's no mistakes anymore. Like those are mistakes. Those are issues. And once you document the issues and you correct it, the only mistake is when you don't learn from it. And my wife and I have had a saying this year that we want to take action faster and fail faster. So we're trying to take action on every business idea that we have so that we can fail faster. And Cody Sanchez put out a video recently, um, saying that she, you know, talk to a billionaire friend and whatever.

and said, you know, what has been your key to success? And he said that when people are looking at an opportunity and they see the opportunity, they take it back to their committee, they talk it over, they brainstorm, they run their pro forma, they create these processes and then get ready to submit their offer. I've already bought the company, made three mistakes and found a better way to do it. Logan Rankin talks about that more real estate like.

He streamlined to systems and processes. He's, there's no, you know, bottlenecks, you will. ⁓ bottlenecks. I love that you said that because I'm listening to a book right now about supply chain management and the whole premise. think it's called the goal and it's a different formatted book than anyone I've read before. It's, like a storytelling, you know, but I'm getting very immersed in the story and they're very numbers heavy talking about finding bottlenecks and then

And I told you about the idle games that I like to play, know, the ones like the money manager stuff on the phone. Well, I like finding those things because it teaches you to identify bottlenecks. And then you improve the process. The bottleneck always shifts and you got to keep knocking down these bottlenecks and improving your process and procedures in order to identify the bottlenecks. And I think that it's constantly pivoting and trying to, you're playing whack-a-mole a lot of times.

But if you're playing whack-a-mole and you don't fix anything, it's just gonna come right back. You play whack-a-mole, you improve the process, move on to the next one, and then every time you should be getting better. And so people can look at that as failures, but just like I said with my wife and I, we wanna fail faster. We wanna find these mistakes faster. Well, as you grow, the systems you made down here, they're gonna break. guess part of the growth is breaking your systems.

And I think the biggest thing that an owner can do to not hide behind that is take responsibility for everything. And if they look at a problem and say, there's nothing I could have done, then you are the problem. way to wrap it up. So appreciate your topic. Keep fighting.