3PX Coaching

Why Most Companies Wait Too Long to Change.

• 3PX Coaching • Season 2 • Episode 9

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In this episode of 3PX, Steve and Wayne pull back the curtain on the two year journey of rebuilding their business while it was still running. From overhauling their ecommerce platform to relocating operations into a new 200,000 square foot facility, they share the lessons learned from making high stakes decisions before their systems became the bottleneck.

They discuss how to recognize when your current business model is holding you back, why waiting too long to change can be fatal, how to lead a team through uncertainty, and what it really feels like to rebuild the plane while you're flying it.

🌍 Interested in getting one-on-one coaching from the 3PX team? Go to https://3pxcoaching.com

Follow us on Instagram:
Wayne Foreman: @wayne4man
Steve Kincanon: @Steve_kincanon

LISTEN TO THE SHOW
Apple: https://podcasts.apple.com/podcast/id1810132342
Spotify: https://open.spotify.com/show/6icTxp0wsvMPmnjZsGtybV

JOIN OUR COMMUNITY
📸 Instagram: https://www.instagram.com/3pxcoaching/
📖 Facebook: https://www.facebook.com/61575312680020

Intro and outro music by Korshun
https://audiojungle.net/user/korshun

Produced by Quentin White | @quentinlwhite

🌍 Interested in getting one-on-one coaching from the 3PX team? Go to https://3pxcoaching.com

Follow us on Instagram:
Wayne Foreman: @wayne4man
Steve Kincanon: @Steve_kincanon

LISTEN TO THE SHOW
Apple: https://podcasts.apple.com/podcast/id1810132342
Spotify: https://open.spotify.com/show/6icTxp0wsvMPmnjZsGtybV

JOIN OUR COMMUNITY
📸 Instagram: https://www.instagram.com/3pxcoaching/
📖 Facebook: https://www.facebook.com/61575312680020

Intro and outro music by Korshun
https://audiojungle.net/user/korshun

Produced by Quentin White | @quentinlwhite

SPEAKER_00

Growing a business is not the same as transforming a business.

SPEAKER_01

You know, we've we've built ourselves to where we're we're getting closer to being debt-free, and going to a building like this, you know, you're taking on a lot of risk.

SPEAKER_00

How do you know when your current model isn't just um strained, but when the current model actually becomes your constraints?

SPEAKER_01

Communicate, communicate, communicate. You have to communicate, you have to just keep driving it home, you have to keep talking about it. If you're not talking about it with your team, then you're you're gonna fail right off the bat.

SPEAKER_00

Hey, welcome back to the 3PX show. I'm Steve. This is Wayne, and um you wouldn't realize, but um, we're starting a little bit late. Part of that is Quentin's fault, the other part of that is my fault.

SPEAKER_01

I'm just sitting here.

SPEAKER_00

But it's on time. If you're a viewer or a listener, it's right on time. It's right on time.

SPEAKER_01

It's exactly what you wanted when you when you get here. So we're we're here, we're ready to start. That's that's right. All right. No rabbits that we're chasing.

SPEAKER_00

We have to remind ourselves of that every time, every episode we start. Um Okay. But the context of this one, of this episode, um you know, if you've been following our journey, then uh most of you know we went through a major, major transformation. We did. It was it was really um a total of about a two-year transformation. And then the launch of it was probably 30 days or so, like hyper care, you know, all that. But the lead up to it was, you know, about two about two years.

SPEAKER_01

So Isn't that crazy though that the lead up that it's been a two-year transformation on that? That's I mean, that it flew by in a sense. Like that, yeah.

SPEAKER_00

It yeah, it really did. It was probably the fastest two years I've ever experienced in my career. And here we are in July. I know already. Dude, about to be August. Yep. Okay. So what what we're gonna talk about is is is we're gonna talk about how growing a business is not the same as transforming a business and kind of what that transformational journey uh looks like. Because growing a business creates pressure on the business, but transformation, when done right, creates capacity. And that's the place that we have arrived at now where we're growing again and we're not, we're we're not feeling the pressure of that growth. Right. Because the transformation created capacity for us.

unknown

Yeah.

SPEAKER_00

So we're in a good spot.

SPEAKER_01

You know, that's a that's a a great spot to be at, honestly. I mean, think about where we were this time last year, because both systems, uh, well, both not both systems. I say the the the e-commerce system and the facilities, we were bottlenecked on both. You know, we we were struggling, we were hitting capacity, we were hitting the ceiling on both both sectors. And uh, you know, if we wouldn't have been working on this for the past two years, really, I mean, we'd we'd be in a world of hurt. And now we we with this transformation, it has allowed us to have that capacity in both areas that now it's just has set us free.

SPEAKER_00

Yeah, that's uh actually that's a really good point. I never thought about that. If we had not started when we started, it was a two-year transformation. If if we had not started two years prior to the point where we were about to explode, yeah, we would have exploded. We would not have made it another two years.

SPEAKER_01

There's no way. I mean, we would have been lucky if we would have made it another year. I mean, it's one of those that you have to either uh um slow down or or do something totally different, right?

SPEAKER_00

We would have had to slow down, say no to a lot more business. Yeah. We would have had to we would have had to shrink back down in order to be like and in order to be manageable again based on the system that we had and based on the facility that we had. Um we we were it was breakneck speed.

SPEAKER_01

Aaron Powell Yeah. And and and most businesses, that's a death sentence, right? That's one of those that if you slow down, uh then you then then the wheels stop turning. And just industry for us, the way we do go to business, it would just, you know, sometimes you feel like you can't slow down. You gotta you just keep moving forward and you gotta keep pressing and keep uh uh just your eyes on the future and where you're going. And uh that slowing down can really cause a huge dilemma.

SPEAKER_00

Yeah. And um I'll say this to that point. Most companies don't don't fail because they change too much. They fail because they change too late.

SPEAKER_01

Aaron Ross Powell, that's a good point.

SPEAKER_00

And thankfully for us, that wasn't our case. Yeah. We started that change process you know two years before we were really at that kind of point of of breaking.

SPEAKER_02

Yeah.

SPEAKER_00

But had had we not uh changed in time, then it's trouble. So you have to recognize, and and and we'll and we'll get into this. You have to recognize well in advance before you get to the point where you know the company is falling apart, yeah, it's time to change. Because change, transformation doesn't happen overnight. It's a process.

SPEAKER_01

It's a long process. You also think, too, anything that you do when you're gonna build something, uh especially when it comes to technology, e-commerce and all that kind of stuff, it doesn't ever fall exactly on that date that you expect it to fall. You know, there's gonna be some pushback, there's gonna be some things that, hey, I got we gotta shore this up, we've got to do this, gotta do that. And it it you you add time to it, you know. You gotta try to keep the creep out, you know, the the scope creep uh as much as possible, but it still happens. And so it still it it delays the process. Same way with facilities, you know, going into this new facility, both of them, you know, we had a time frame where we were they were gonna be months apart from each other. And by the time it all hit, they were days apart from each other. And and then that that was like, okay, let's just let's do them both at the same time. And that's pretty much what we did. Yeah. But it that actually worked out well because, you know, if you're gonna do it, just go ahead and jump all in with both feet and do it, right? Worked out well for you. Well, I'm not saying it didn't work out well for I mean it worked it now. At the end of the day, when we look back, when we're through it, it's it's like, okay, we're we're done with both of them and it's and it's over. And now we're and honestly, now things are are clicking and not say that we're just like running super smooth, but we're we're running pretty good right now.

SPEAKER_00

Yeah. So um in case anybody's listening and you're like, these guys up here are telling us what they think, but they've really never walked the walk or any of that. We in in the in the same week, by accident, simply because the system launch got delayed. We were we wanted to launch in October and um and then take kind of that Q4-2 to transform to launch to get the system right, and then we wanted to move in in Q1. Well, what had happened was the system ended up getting launched because we or delayed because we just weren't ready. There were some there were some key blockers that we just had to fix and we didn't feel good about launching. So what so what happened was we ended up launching the new system in January, literally within the same week that we moved from a 50,000, 60,000 square foot facility into a 200,000 square foot facility, moved 150 in employees. Oh, and we moved one department at a time. You remember that? So one department would move and they worked in a temporary location for about a week, and then they would move into the permit location once construction was done, then another department would transition and they would move the next week into the temporary location, on top of installing all new machines, moving all the lifts, and launching a new system, training people, fixing bugs, you know, all that stuff on the fly.

SPEAKER_01

Doesn't it feel good right now? We didn't crash the plane. We didn't crash. Yeah.

SPEAKER_00

We didn't we've been there. That's that's all I'm saying is we understand what transformation is. We understand how challenging it is, we understand how hard it is to say yes to very, very risky decisions and then actually work through that because we did it twice at the same time. Right.

SPEAKER_01

And you know, hats off to our team because um you know we we have a strong, strong team. Uh and you can't do something like what we went through without having good people because that can't fall on the shoulders of one person uh at all. And and you know, honestly, I mean, if you think about how the transition went with the uh e-commerce getting the website, clicking off that night, um it was good. And you know, there you always have your little bugs here and there, but you know, it it was successful. The launch was, um, and and was was very good. When we moved into the new facility, we moved that entire facility over there as far as operations in less than a week. That's right, less than a week. Almost through a weekend, you know, and it it was a lot. And and there's a lot of coordination before and during, during, and after. And even after, like you said a second ago, when we moved departments from the other two locations into here, it was very orchestrated, very coordinated of how we did it. And honestly, it it went well. I mean, there was a few little hiccups and delays, but man, I tell you what, they they did a fantastic job getting in here.

SPEAKER_00

Yeah. Nothing ever goes smooth. I'm not, yeah. Busted a water busted a water main line. Oh my gosh, I forgot about that. Just happened like the first week we're in and we're ready to start running. We bust a water main line. I I say we, I won't mention who it was. I really, you know how I say I won't mention who it was, and then I say the name, but I'm not gonna do that. Uh, we busted a water main line. I will say we did call 411 and we they did mark everything, and they're they messed it up, anyways.

SPEAKER_01

Uh you just called that person out.

SPEAKER_00

No, but they're not the ones who broke it, but but they're the ones you trust to mark the line so that you don't break a line.

SPEAKER_02

Yeah.

SPEAKER_00

Anyways, we broke a water main line and it couldn't be like the kitchen or something. It had to be the sprinkler system for the facility. So then we had to take like 15 people and put them on fire watch. So now, right off the bat, we're extremely shorthanded. That's 20% or 25% of our operational staff. So now we're extremely shorthanded and we have a backlog of of work because we can't just came out of a one-week shutdown moving the new facility. Oh man. I'm getting upset and all stressed out just thinking about it. How did like how did we make it through? All right. Maybe it wasn't as smooth as we thought.

SPEAKER_01

No, it was it was. You know, hey, the first six months. We had good people though. You know, the first six months were we're we're a struggle to a degree. First quarter, like we said a couple episodes ago, but second quarter was great. And um, you know, we're we're we're moving pretty good now. You know, now we can look back and laugh about a little bit, but um and the stress is still there, but you know, a little bit of that pressure is off.

SPEAKER_00

What it do you remember what I I I text you, three words I text you after the Q2 PL closed?

SPEAKER_01

We're back, baby.

SPEAKER_00

I said we're back, baby. Uh-huh. Oh man, that felt good. All right. I did. Um But let me let me talk to you as an owner because I built version two of the Pro Builder, right? And and and you guys had built it from scratch.

SPEAKER_02

Yeah.

SPEAKER_00

Moved into what what when when you got this new building, when you moved into the depot, it was like it was you thought it's all the room you'd ever need.

SPEAKER_01

I mean, I never would have thought.

SPEAKER_00

Because you didn't even take the whole building at first. You just took a little piece of it, and then you just kept growing and growing and then and then and then took took it over. So talk to me about the the the moment where you start to realize that the thing, the thing that you created is actually the thing now that is starting to hold you back. Wow. And you get and now you got to make a decision, right? Yeah. What does that feel like as as an owner?

SPEAKER_01

That that's a that's a tough feeling. I I feel like we were hitting those walls a lot, you know, because when we first started CDF, we were in a 3,000 square foot facility, just me and and one other person, and we weren't there for very long, but it was just, you know, we had our our offices, we had our warehouse, our shop, everything in that 3,000 square foot facility, and we were buying just small orders, but you could feel it just everything it was on top of you. And then when we moved, broke through that and moved up to the depot, um, it's a 60,000, 70,000 square foot building. And um, we took over 7,000 square foot of warehouse space and then about 1,500 square foot of office space. So we almost tripled in size, which was a fantastic feeling. And I feel like that, you know, just you could take off and and and move and breathe. And it wasn't very long that we all of a sudden hit that capacity. And so it's just I feel like we've been doing this the the whole time for uh for uh uh years on end. And uh I've always told my my team, you know, let's just let's let's grow until we got to break through a wall, basically. Because sometimes you can you can step into something way too big and then it it it swallows you up, right? And so, you know, because there's times that we took over another section of it, and honestly, we weren't necessarily ready, but we we worked our way through it and we had we moved offices, moved different things, and I was like, hey, let's until we're ready to basically hypothetically break through the walls, then we're not ready to get that next spot and do it. But um, you know, it's um it's really it's a tough feeling because you know, you you really stress out on where you're gonna go next, how how you're gonna make that next move, because there's always something that comes along with that next move. You know, there's that's a big financial commitment. Yep, uh, there's more equipment, there's more people, uh, just everything grows and everything expands. So you got to be prepared to make those moves. And it's um sometimes it's not an easy, easy decision to make, but it's a very necessary. If you want to continue to grow your business, it's very necessary to to look and see, hey, what's what's next, and um, and then be willing to to take action on that.

SPEAKER_00

You know, um I need to I'll I'll write this down as a reminder, but a great episode would be as a as a founder, as an owner, also husband, homeowner that's got kids, walking through how to know when it's the right risk decision because you mentioned like you didn't just write a check for millions and millions of dollars, right? Like we're you, you're borrowing money, like we're going into debt to to to fund a lot of this, uh, a lot of this this new growth. And uh that alone is scary. So I don't want to do it today, but I think that's a really great episode for any scaling founder um that's taking on personal debt to to finance, to fund, to run, you know, uh the.

SPEAKER_01

And that's the aspect that a lot of people don't see too, is that um that when you make those moves, like coming into this building, it's a 200,000 square foot facility. That was a it was a scary decision for Stephanie and I to make that because you know, we've we've built ourselves to where we're we're getting closer to being debt free. And and going into a building like this, you know, you're taking on a lot of risk.

SPEAKER_00

Probably probably more debt than at that probably more debt than you guys have ever even thought about taking on.

SPEAKER_01

Not even close, yeah by far, yeah.

SPEAKER_00

And I think that that we had a good I said we weren't gonna talk about this.

SPEAKER_01

But you look at good debt and bad debt, and we feel like that this right here was uh was a very good debt type of thing.

SPEAKER_00

I I agree. But also I did challenge you um, because I didn't want to be the person that was just always pushing and and hey, we can do this and we can do that, and it's not my mortgage on the on the line, you know, it's not my house on the line kind of thing. But I I said, hey, if you're not comfortable with this, w we can stay right where we're at. I'll tune this thing up, we'll do we'll do over 20%, you know, net income and we'll just print money. We don't have to do this.

SPEAKER_01

Yeah, but at some point that's gonna break too, right? Because at some point you keep growing and and growth, you know, as you grow, I mean, you it just the the evolution of it, you know, you got to have more spaces sometimes. You gotta bring in more inventory if you're gonna grow. Well, how do you bring in more inventory? We had already put, what, nine or ten containers in the back lot and it couldn't hold anymore. Maybe it could have held a few more containers, but we were starting to get full back there. And then if you had to go uh put uh uh another warehouse because you're gonna bring material in, well then you gotta have more machines to be able to do it, more people. And before you know it, you your your expenses outweigh the risk anyway, right? And so you gotta look and say, okay, what where do we go and what do we do? And and so it it took a little bit of prayer and uh a lot of prayer actually, and and just some some thought process to to go through it. And you know, now we're on the other side and looking back, it was, I mean, by far the best decision that we made. Yeah.

SPEAKER_00

So um what I want to get into now is is uh how do you how do you know when your current model isn't just um strained, but when the current model actually becomes your constraint. Because what what Wayne is describing is that's when our that's when the model transitioned from, hey, we're strained, things are tough, to we are constrained.

SPEAKER_02

Yeah.

SPEAKER_00

We can't figure it out anymore in our current situation and we and and and we have to pivot. And there's things that you that you see.

SPEAKER_02

Right.

SPEAKER_00

So I I think Wayne from a visionary perspective may have a different answer than than me from the integrator perspective. But my my so my question to you is as an owner, what were some of the things that you saw starting to break or starting to become hyper-constrained that told you we have to transform, we have to change, this isn't gonna work much longer. What did you what were you seeing happening in the business that gave you those indicators early on?

SPEAKER_01

Well, so you know, from a financial part of it, uh especially let's look at the e-commerce side for a second. When we started looking at that, that we were spending 80% of our money on fixing the old system, you know, if not more than that, you know, that that's uh that's a huge tell right there, right?

SPEAKER_00

Another podcast topic.

SPEAKER_01

Yeah, it is. But you're spending more money on on fixing something, and so you have to look at it and say, okay, we can stay and do what we're doing, but we really are gonna have to bite the bullet and and fix this and make it better, especially if we want to continue to grow. So, and as we're seeing it, and we sit and I look at it and I say, man, we got we're such a um small spot in our industry in a sense right now, even though we're growing tremendously, our industry is still really big uh compared to where we are. And so we have such a high growth rate, growth projection that we can that we can capture and and get in. And so you either have to step back, like you said, and hey, we can step back and we can just do what we're doing and try to become ultra competitive and ultra uh um uh successful and profitable and just stay where we are. But at some point you're gonna hit the constraints on the production side of it as well. And so, you know, we looked at some of the products uh that we were doing, and and you start looking at uh, let's take Storefront, for example, and we were there, everything's done by hand. And at some point, you know, we we gotta become more precision. We got to be be better at what we do and how we we do it and and really uh uh fix you know some of those holes as well. And we had no place to put equipment to be able to get ourselves more automated. And and so that was uh a constraint. Inventory, you know, we're putting inventory and containers in the back. So how do you count inventory really well if you got containers and people are trying to crawl through there or if they need something, you know, you're you're you're fighting, you start fighting against yourself, not fighting as a that, but you're you're fighting mentally kind of thing against yourself. And and and at some point you just realize, man, we have to do something, otherwise this thing is gonna totally break, right? And so as an owner, I look at that and and my whole thought process is if if we're gonna continue to grow, continue to keep moving, and me being the eternal optimist all the way around, you know, I see that the opportunity is endless. And if we stop, then you know, we're gonna get passed up by our competition. Uh they're gonna catch up to us, whatever it may be, uh, but we have to keep growing, we have to keep moving. And the next step is naturally, hey, we got to rebuild the system. The next step is naturally we got to move into a bigger facility, and we got to take those, uh, take those chances and and make it happen.

SPEAKER_00

So something you said I just want to bring out because I think that was uh that was pretty profound. And that is when you said we're fighting against ourself, and and you didn't, you know, you didn't mean literally, you know, but what I wouldn't what I would uh challenge the audience to ask yourself right now is think about the system that you use or the building that you have or whatever. Is all of that rowing in the same direction? Like is it fighting for you to help you grow? Or do you find yourself more often than not fighting against your system to try to make it work? You're fighting against your capacity and your facility to try to make it work. And that's where we were, and that's what you're describing is we were fighting against ourselves. That's the 80, the the 80-20 that you were talking about earlier. We were spending 80% of our time, 80% of our uh IT investment, yes, trying to fix the system, trying to put out the fires, trying to make it work for us because we were had grown so much. And we recognized, like, dude, we gotta we either gotta just completely rebuild this thing or or or pivot. And ultimately, you know, that's what we did. We we comp 180 degree pivoted. Um it was worth it now.

SPEAKER_01

Yeah, you remember being in the warehouse too in the other facility. We had so many forklifts, had so many people, and and they were just zigging and zagging all over the place, going down to the basement to get material, coming back up. I mean, there was no flow. We we could we didn't what we're we didn't have the luxury of really putting ourselves in a flow because we were so on top of ourselves.

SPEAKER_00

Dude, you'll appreciate this because you're from Mississippi, like me. Yeah. I I ref I referred to I used to refer to it as a fire ant mound. Okay. Remember the fire ant mound? You kick a fire ant mound over?

SPEAKER_01

Yeah.

SPEAKER_00

That's what it looked like.

SPEAKER_01

Because they were going everywhere. That's right. They scattered on top of each other. And that's what we were.

SPEAKER_00

That's so from my so from my perspective, from the integrator um per perspective, you know, I want to break it down, you know, kind of people, process, profit. What I what I see like starts breaking first, and kind of then what happens after that is in my opinion, what what I Saw was process started breaking down. Um, people couldn't get the job done in an eight-hour day. So overtime starts to spike. We start trying to create more hours in the day. Processes just start failing because the process that we had that got us to the point that we were at was no longer good enough in the moment that we were in. Forget the process like getting you the next two years down the road. We were getting stuck right we were. Well, then what happens is because process starts failing. And as an integrator, as an operator, you start feeling pressure. The next thing you want to do to release pressure is hire people.

SPEAKER_02

Yeah.

SPEAKER_00

So because everybody's stressed out, there, there's the work is complex, the work is overwhelming, and there's a ton of work. You're short on space, you're short on optimum automation, you're short on efficiency. So the next lever that you pull naturally is let's go hire people to try to help help us get out of this. And then the death blow, which we didn't get to this, thankfully, but then the death blow is that's when profit starts to take a nosedive.

SPEAKER_02

Yeah.

SPEAKER_00

Because you've lost efficiency. Processes are breaking down, you're trying to hire more people just to get the work done. And now your PL starts to tip upside down, and that's the death spiral.

SPEAKER_01

Yeah. And we never got to that point, like you said, which is good. But um, you know, going through the whole process, I mean, what a, you know, kind of reminds you of uh uh being in mid-flight of an airplane and trying to rebuild the airplane at the same time, right? Oh yes, yeah, yeah.

SPEAKER_00

I know that's a cliche statement, but that's uh uh any any business owner going through change or transformation. Yeah, you can't you can't land the plane.

SPEAKER_01

Sit there, take a break, and fix it and do that. Hey, you're sure you're still flying, bro.

SPEAKER_00

You can't just pause the business for two years and and rebuild it.

SPEAKER_01

Yeah. That that's that's that's a no-go. You have to keep uh you have to keep flying, you have to keep moving, and uh you just gotta fix it on on flight, you know.

SPEAKER_00

Well, think about that from your so from your perspective, from the owner visionary perspective, when's when somebody says, you know, relative to transformation, system rebuild, we're moving, when you know, what moving facilities, we're we're rebuilding the entire plane while we're flying it. Yeah. From your perspective, like what are the things that you saw, what did that mean to you, you know, as as the owner, as the visionary?

SPEAKER_01

Oh my gosh. Um, I mean, it just, you know, you got to keep going. You got to keep keep flying, right? And so, you know, whether whether you have uh an issue with the windshield up there in the front or the engines, um, you're still, you know, trying to, you know, you got you got a bunch of duct tape sometimes. And that's what we had at the very beginning, right? We had the duct tape, we were, we were fixing everything as we were going and and keeping the wings together and and keeping everybody on board and making sure everything's safe and we're still moving. But at some point, you know, you got to say, okay, uh, duct tape's not working anymore. Now we got to really start uh taking our time. And so while you're flying, you're inside and you got a crew down there, it's almost like the Titan, not the Titanic, but you know, because we don't want to sink the ship, right? But uh, you know, you're you're building things as you're going and you're and then you're replacing them as they as they go. And so at some point, you're gonna, if you keep doing that, you're gonna have a new plane. It just takes time to get there. And that's what we did. We we, hey, let's first thing we need to do is is fix the left wing because it's it's in the worst shape. It's so we get in there and our team on the e-commerce side or even on the production side, they they did it. Or are there maybe the e-commerce is fixing the inside of the plane and operations is more of a they're fixing on the outside of, you know, if you're gonna look at it from that analogy. But uh you know, you you you just can't stop.

SPEAKER_00

You know, uh what what you mentioned in adding duct tape to the plane.

SPEAKER_01

Yeah.

SPEAKER_00

So when you said that, i if you're if you remember, we're sitting in in like an in our ELT uh L10, and this build was gonna be expensive. And we knew we were gonna spend a lot of money and we were ready to make the investment because quite frankly, we were already spending the money. We were just spending it keeping the old system alive. 100%. You're right.

SPEAKER_01

Yep, yep.

SPEAKER_00

But you can't afford both. You can't you can't afford to keep spending money in the current system that you're in and invest in the new system at the same time. So when Wayne said duct tape, it reminded me of the conversation where we all agreed we're not spending money on the old system anymore.

unknown

Yeah.

SPEAKER_01

Just enough to just enough for duct tape.

SPEAKER_00

Just to enough to keep it alive.

SPEAKER_01

Yep.

SPEAKER_00

Just duct tape.

SPEAKER_01

Wow, that's a good point. So great point.

SPEAKER_00

We so we allowed bugs, we let, you know, some things break and we had to create manual workarounds to keep the system going.

SPEAKER_02

Yeah.

SPEAKER_00

We uh there were no new for two years basically, no new enhancements. We were asking ourselves every single time we had to spend money, is this something that we have to have to keep the business running or not? And we didn't, those were very hard decisions because sales is screaming, customer service is screaming, order processing screaming, they're all screaming about we need this and we need that, and this isn't working right. And we're up here trying to fly the plane and we're telling people, no, people are getting sucked out of the, you know, the window and the plane's broken, and people are getting sucked out of the window, and we're like, put some duct tape over it or you know, plug it up with your hands or something. We're just, you know, we're we just get we got to get there, kind of, kind of thing.

SPEAKER_01

It was one of our yeah, it was one of those uh, as as you've called it before, is uh maybe like a fail-safe environment where, hey, if it, you know, what's gonna happen if if this does break? And if it doesn't, if it's not gonna be something that's detrimental, then it's gonna be okay and we're gonna we're gonna be able to still fly the plane and keep keep things moving in the right direction. Yeah. Because that was a big deal because uh, you know, for two years, like you said, we never made the enhancements. We slowed down on the stuff. But one thing that never suffered, our customers never never felt it, I don't think. Not, you know, they they still saw the same experience that they always had, and we still made sure that, hey, they're gonna get that same experience. Our salespeople can still sell it the way they are. We just internally, we had to feel the pain for two years. And then once we got the new system, you know, you still gotta now you gotta learn how the new system works. But, you know, now with the new system, now with the new facility, man, you're talking about being able to to just open up and and stretch a little bit. You know, now you're you're off that plane and you're on to a different plane. You you've all of a sudden you built, you know, you you've gone from a uh a little prop plane to a a jet engine, right? Plane. And uh, you know, no longer you hear the propellers and they're about to fall off and that kind of thing. Now you can it's a little quieter to a certain degree because the jets are behind you and you're flying and now you can just uh put the gas in it and make it go.

SPEAKER_00

Yeah. And um you know, for for the folks, you know, we have a lot of uh as a percent, we have a lot of folks like Steven. What's up, Steven? What's up? Running fast partitions. Um you know, a lot of other listeners they have multiple businesses, multiple divisions. Yeah. So we had this massive investment going on in CDF and fast partitions was just as wrecked from a system standpoint, just as many issues. But we couldn't do both at once. Right. Number one from a capacity standpoint, number two from an affordability standpoint, right? We couldn't do both at once. So we had to make that decision. So it's it's difficult to keep it's easier to keep the CDF team motivated because they can see what we're building. They're they're a part of it, but it was much more difficult to keep the fast partitions team engaged because it's like, hey, you guys just have to wait and and wait and wait and wait. So we we had to continue making investments in that system.

SPEAKER_02

Right.

SPEAKER_00

You know, it wasn't fair for us to just cut that off. So we did. We continued enhancing, we continued upgrading, we continue, you know, because we knew it was going to be really up until you know kind of where we are today before we could start pivoting our attention to fixing the next big constraint, that being the FP system. Yeah.

SPEAKER_01

Think of how scary that was, though. So you you brought that up, but think about how that was because when uh we took over FP and then we, you know, we had to make some changes and get it to where it was moving good, and we did and and really turned it around really quick. And then we implemented a new system for them. If we're talking about that metaphor of flying a plane, that plane almost hit the ground and and blew up. I mean, we were you we were at 30,000 feet and it and it went down to a hundred feet before it turned and went back up.

SPEAKER_00

It it actually may have bounced off the ground.

SPEAKER_01

It may have bounced off the ground. I mean, it was bad. I mean that it w it we were in a bad situation for a bit. We were close to saying, hey, should we even keep this thing running and close it down, if you remember.

SPEAKER_00

I don't want to talk about that because it's a good thing I've got these like earmuffs on. Yeah, yes. Because my ears right now are bright red with blood with blood pressure because we were, you know, as we discovered, we were flat out lied to about why we had to transition to the to the to the new system. And so I don't want to get into it.

SPEAKER_01

And we transition too soon on that. Yeah. But you know, you look at it now.

SPEAKER_00

But at the end of the day, what I'll I'll ultimately take ownership. The biggest regret I have is with fast partitions is we should have never, ever, ever, ever in a million years put them on that new system.

SPEAKER_02

Yeah.

SPEAKER_00

We should have stayed right where we were and if nothing else, optimized there or or pivoted away. But you're right. That the okay.

SPEAKER_01

And the reason I brought that up though, real quick.

SPEAKER_00

Yeah, no, go, go ahead.

SPEAKER_01

The reason I brought that up is going into what we're what we just did with CDF and putting the new system in here, that's always something in the back of your mind, right? That man, I, you know, we just saw what happened there, and that that was that hurt. And CDF has always been the the the company, the main thing. Keep the main thing, the main thing. Paying the bills. And paying the bills. And um, man, that was for me as a business owner, that was one of the scary things too. That I think looking back on it, it was always in the back of my head. And so getting it right off the first part and making sure you had the right team. And I remember us having that that that um when we were just meeting with different companies that were gonna help us, different people and how we're gonna do it. Because we're gonna do a lot inside, but we're gonna have to have some help on the outside. And uh, you know, we we interviewed several different people.

unknown

Yep.

SPEAKER_01

And I remember when Joe came in and uh we we sat down and and uh started and he's and all of a sudden he just stood up and he started talking and started laying it out. I don't I can't remember if I looked at you or or whatever, but I know when that meeting was over, I was like, that's our guy.

SPEAKER_00

Yep. And that's and that's when we we decided to hire it was at that time Hero. Yeah. Hero Digital.

SPEAKER_02

Yeah. Yeah.

SPEAKER_00

Um Yeah, we yeah, we knew we we went through multiple consultants, multiple agencies interviewing and trying to find the right, the right fit for us because it was a big deal. But yeah, you're right. The sting of crashing the fast partitions plane multiple times. Um, and it did crash because I've said this before on the podcast, you you pulled me in your office uh one day, I'll never forget. I am traumatized by this. Wayne that I I can't remember him ever like raising his voice or yelling at me, thankfully. But uh he he he pulled me in his office and he said, Steve, I just had to pull a half a million dollars out of the CDF profit account over to Fast Partitions just to keep the bills paid. Like we can't keep going like this. And that conversation just stuck. It was like a knife right straight in my heart to know that that's what we had done to a business that just several months before was printing printing money.

SPEAKER_01

Yeah.

SPEAKER_00

And we put in this new system that was that ended up being just, you know, garbage, and we crashed that sucker. But any other business owner would have been sunk. But we had CDF that was making money, so we had that to find out.

SPEAKER_01

The diversification helped us, to be honest with you.

SPEAKER_00

I didn't have if we didn't have that situation, we uh any most other business owners would have been out of business.

SPEAKER_01

Yeah.

SPEAKER_00

Without without question. And not like sold to somebody.

SPEAKER_01

No, out of business.

SPEAKER_00

You're you're bankrupt, out of business. Because nobody would have wanted it. Nobody wanted it. Nobody would have wanted it at that point. Because that's that's the money.

unknown

All right.

SPEAKER_01

But you know, the transformation and and the the other side is what uh is what helps, right?

SPEAKER_00

So all right, let's let's let's keep moving. Um why do employees often feel the pain before they see the benefits? And uh from my perspective, I'll I'll answer this. Um, you know, why do employees they feel the pain of the transformation before they see the benefits of the transformation? And I was very clear with the CDF team. I basically told everyone, I didn't say for two years, I said for about a year and a half, it just ended up taking two years. But I told them, you're gonna work overtime, you may be working nights, you may be working weekends, you're gonna have your normal day job flying the plane, and then you're gonna have this part-time job of helping us build a new plane while you're doing it. And I very unapologetically, I tried to cover that up front because I didn't want to feel bad six months down the road, 12 months down the road, asking Austin Squires or Trevan Poole or Steven uh uh Matthew Wilson or any of those folks. Right. Shout out to the Brain Trust, you know. Um I didn't want to feel bad for asking more of them. So I I handled it up front. Hey, you're gonna feel it, and I don't want you complaining. This is how it is. And and, you know, above and beyond core values, passionate about winning, they, every single one of them, I only mentioned three names, but every single person on the team jumped in and said, Hey, we got your back. And they all did more. Every single person.

SPEAKER_01

Yeah, and that that was very pivotal, p pivotal at that time. It was uh, but you know, think about that. When you have that kind of change, it's very there's so much uncertainty when you're when you're doing it. And and nobody wants that. You know, when you come to work, you want to know, hey, what's going on, what's in there for the day, and how we're how we're how we're doing and where we're moving. And even when we get the new system and our sales team starts working with it, um, it was a lot of uncertainty because it wasn't because the system was bad, it's just because they still were getting used to the system, right? And the even though the old system, for the most part, was broken and and unrepairable at that time, moving into the new system, there was so much uncertainty because you just didn't know how to do it and what to do. And and we had a lot of fail-safes inside of that one where people just take, follow the instructions, ask the right people, ask the system. The system will tell you as well how to fix it, uh, which is uh genius on that part, you know. So uh but there's a lot of things on that.

SPEAKER_00

But we could do a whole podcast too.

SPEAKER_01

That that's uh that's pretty sharp.

SPEAKER_00

The knowledge base we built is genius. You can ask the system basically what's wrong.

SPEAKER_01

Yeah, what's wrong with what I need to how to fix this, and it'll tell you exactly what you need to do. And I would say it's 99.9% correct on how to fix it.

SPEAKER_00

We're giving away our secrets now.

SPEAKER_01

Yeah. Well, you still got to know what the the knowledge base is.

SPEAKER_00

That's true.

SPEAKER_01

Um, but you know, the same way with coming in here, uh, you know, there's so many different things. It's something new. When you bring something new, it's it's always that uncertainty until you start doing it. You know, like the the big machine that we put in the in the back. Well, it's it's big, it's intimidating, you don't know what to do, and and you look at it as like, wow, you know, but now they're they're getting used to it. Everything's starting to move, starting to run. They know how to fix, do this, and it's like, oh, this this system it actually runs pretty good. It's it's pretty easy.

SPEAKER_00

For the first week, it felt like every time we broke we touched it, it broke.

SPEAKER_01

Yeah. But you know, we brought in somebody that that knew, understood the machine, and and doing it, so that made a huge difference for us. The same way when we started staining years ago, we had no clue or no idea how to how to stain a wood door. None. And now you look at it, and it's uh for us, the process is very simple and very easy because we've learned it, we perfected it, we put out a great quality product. Top notch. Top notch all the way around. And um, you know, and those are things you either get all the way in or you get all the way out. But you got to ask yourself, you know, is what is it is it worth um making that that in uh investment up front? And so we we just did.

SPEAKER_00

Two two quick things before we uh close. Quentin hasn't signaled me yet, but I feel like the emotion of him wanting to signal me is is growing. Um I wanna so two quick things. First thing I want to get into is what do leaders get wrong in a transformation, in a major change process? I want to talk, I want to talk about that because I made these mistakes and I don't want anybody else to make make those same mistakes. So I'd I'd love to hear from your perspective, but but I'll so I'll go first. What leaders, what I see leaders get wrong, what I got wrong. Number one is you want to trust your leadership team. Okay. And I'm gonna say but even though you're not supposed to, you know, uh I always tell people all the time, don't use but, you know, use which is why kind of statements. I've never taught taught that on the podcast, the which is why. I'll do that another podcast. Um, how to how to not use not say but but use which is why. Anyways. Um I always teach people to, you know, trust your leaders. You want to trust your leaders, right? Let them own and make decisions. In a major transformation, dude, you gotta ask questions. Don't assume anything. Like I'm I'm just gonna say it like this in a major transformation, trust is out the window. And I know that sounds terrible, but when you got 20, 30 million dollars hanging out on the line as an owner or as an integrator or whatever the case is, I'm not trusting anything.

SPEAKER_02

Yeah.

SPEAKER_00

And when I think back to the fast partitions disaster, what did we not do or what did I not do? I didn't ask the right questions. I didn't probe, I didn't dig in. I just trusted, oh, this broke. So we had to make this decision, right? Yeah. And we ran with it. Well, lesson learned. Well, in the CDF situation, you know, I again I hate to say it like this, but this is just a different level. This transformation is a different level. I didn't trust anything. I asked all the questions, I sat in all the meetings. Now, I made sure that I wasn't a bottleneck. We kept things moving and we made decisions, right?

SPEAKER_01

So it was a lot of good questions during the process when other people didn't ask the question. And if and if you would not have asked those questions at times, this system would have been, would not be where it is now.

SPEAKER_00

That that's that's true. And a lot of that was because I didn't know. So I'm asking questions about like, hey, well, how would this work and how would that work?

SPEAKER_02

Yeah.

SPEAKER_00

And then through that discovery, you find out, like, oh, we didn't think about that.

SPEAKER_02

Yeah.

SPEAKER_00

You know, kind of thing. So my challenge to leaders going through transformation is that's the time. I know it sounds terrible. I can't even believe I'm saying it myself, but this is not a fail-safe environment. You don't just trust your team to go execute. You dig in, you sit in the meetings, you know what's going on, you ask all the questions, you don't assume anything, and you take ownership for that whole entire thing. You don't hang failure on one of your teammates, right? You know, or somebody who's working for you in a major transformation. You dig in and you verify and you vet and you check everything. And that's what uh I didn't do the first time. And the second time, I feel like I did. And that wasn't the reason why we were successful, but I feel like that prevented us from crashing in a few different situations.

SPEAKER_01

Well, this uh communicate, communicate, communicate. You have to communicate. You have to just keep driving at home, you have to keep talking about it. If you're not talking about it with your team, then you're you're gonna fail right off the bat. And like you said a second ago, don't assume alignment, right? Because if you assume it, what is uh what what's that old cliche word for assume? You're gonna make it out of you and me. Dang it. I shouldn't have said that. But it it's true. He'll beep it out. He'll beep it out. But it's I mean, it kind of does work. You're right. That's exactly right. You have to communicate it because if you don't, how do you know that it's gonna work right? And that's that's what happened with with uh FP when we we did that system.

SPEAKER_00

We assumed.

SPEAKER_01

We we assumed and that, hey, this is what it is, and and someone led us in the wrong direction and and just almost buried the thing, you know. But with with CDF, we communicated, you did a fantastic job communicating, our other leaders did a fantastic job communicating. The team that we were working with, it was just there were so many calls, so many meetings. Uh, and I'm so glad for you because I didn't have to sit in on hardly any of those. You guys built it, you guys did it, but we had a great, we got a great team here. The the team that we have here now, the the the the brain trust, the guys uh and the girls that this really helped build that structure and that that team, man, they know a lot. Yeah. You know but it takes that team to be be part of it. Uh they they they owned it.

SPEAKER_00

You're right. And uh the the the the last question here, I think this is probably the the you know the most critical one is how do you know that transformation is working? Like you know, when how I don't want to answer this for you because but talk to me about the moment where you felt like dude, this is working, like this new system or this this new building, like we're gonna be okay. Like this isn't gonna crash. It's not gonna be an uh an FP situation. Like, I tell you what, it's it's what were you seeing or feeling that told you, hey, transformation's working?

SPEAKER_01

Transformation's I'm gonna I I'll let you discuss more of the e-commerce side, the the the the that part of it, because you got it on that part big time. I I could feel it just by your energy and the team and knowing where we're going with it, but I wasn't nearly as involved as I was in the warehouse. You know, for a long time though, there was a a joke. If you want to find Wayne, where would you find him? At the board. At the board. That's right. It looks so small here now, too, when you walk out. But what what uh what I did is I I got uh uh three four foot by eight foot dry erase boards magnetized, and I made an exact replica of this building, and I put it, I put all put all three of them together and put it right outside the conference rooms where we did most of our meetings. And so and then I started putting things in place as I saw it. And then as team members walked up, we started discussing like for fabrication for uh the frames and all that. If you'd have seen where it started and and what I had put together, because you know, I could I was looking at Through my lens, and then seeing the team come up and say, well, let's think about, let's do this. And let's and the alignment and the ownership that they had made me start feeling good because and made them start feeling good too. And not only, you know, and we did that with every department, every section. And there were times I would walk up and I would see several of those members sitting there looking at it and they were talking about it. And when I started seeing that, I knew that we we were starting to build something good because it wasn't my ownership at that point. It was their ownership. And when they started owning it and started taking it, and as we came in here, we put this thing together pretty much the way we had it laid out on that board. And not a lot has changed, to be honest with you. And it's and it's worked very effectively. And it's and it's a whole lot more streamlined now than it ever was over at the other facility.

SPEAKER_00

So this is this is when it happened for me. So transformation is a long is a long process, okay? I don't care what kind of transformation you're going through. Any type of transformation is is a long process, whether long as six months or whether long is two years. There's milestones along the way.

SPEAKER_02

Right.

SPEAKER_00

It's like diamonds in the rough, right? Well, the moment I knew transformation was working was we were in it, we were on one of those conference calls, and it was kind of like version one or version two was being unveiled to us with the custom UA UI that they had built and and and all that. And they're clicking through all of the options and we're seeing images, and then we see like we see it coming together, and and dude, that was like a catalyst that pushed everybody the rest of the way because we could actually tangibly visibly see the transformation right. It wasn't just on a spreadsheet anymore. It wasn't just requirements and rules and you know, all that kind of stuff.

SPEAKER_01

One of your 30 pages of this and this and this, this code, this code, this code, this does this, that does that.

SPEAKER_00

Customer is wants this, system does this, user, users trying to accomplish this, system does like all that, that's wild. But then when you see it in front of you, even when you're not there yet, when you see that first version, it's like, dude, this is gonna work. We can do this.

SPEAKER_02

Yeah.

SPEAKER_00

And that that's uh that's when I knew it wasn't, it wasn't at the end when we got the when we flipped that thing on that that first night, yeah, and we're all sitting there, we're cut over to the new system and we're waiting for the first quote to come through. It was like that was exciting, but it was way before that when I saw that it was possible, and that's when I knew that's the ownership of it, right?

SPEAKER_01

That's that's your drawing that you had, just the same as the drawing that I had with the team out there that just you knew when when everybody started collaborating and they started talking about it and they started taking ownership, then you knew it's gonna be a success. Yeah. And then it, you know, that night that you had, uh, you know, and actually Stephanie and I, we were out of town, but everybody was up there and and flipped the switch and got our first order just almost immediately. Uh it was it was such a surreal moment. And then being over here and moving into this facility and uh getting it all laid out and and then then being able to just move everything in and really one week was unbelievable how they laid that out. And and then we started running production super fast.

SPEAKER_00

So all right. Any last words befor uh before we close?

SPEAKER_01

Hey, just uh, you know, make sure you communicate. It's it's uh not about you, it's about your team, making sure that you just uh uh uh collaborate with each other, you know, look into the future as much as you can. You know, there's not there's never a crystal ball, but you always got to continue to look and see where that next, where that bottleneck is, where are you gonna are you hitting a ceiling somewhere? And we were hitting ceilings, but we were we knew we were gonna hit those ceilings before we ever hit them. And we and we started making uh uh plans to uh to take care of that before it ever happened.

SPEAKER_00

Yeah, yeah. Then then the last thing I'll say is I I think the biggest key takeaway on the CDF side was we had to transform before we hit the wall. Yeah. Like you got to make the decision to change, you gotta make the decision to transform before you hit that wall. Because, like we said earlier, um, you know, bus it businesses don't fail because they fail to change, it's because or they change too much, it's because they change too late. Yeah, you know, so you gotta make those decisions uh faster. All right. I didn't even look at that camera the whole entire time. I don't know if I'm supposed to or not.

SPEAKER_01

I never look at that camera.

SPEAKER_00

I've been staring at that one the whole time. I'm gonna stare at this one this time. Thank you for watching, listening to 3PX show. We love that you're here. Don't forget, like, share, subscribe, all the things, and uh, we cannot wait to talk to you on the next uh next episode. Thanks.