Firing The Man

The Man Who Was Fired Becomes the Man to Follow with Steve Preda

• Firing The Man • Episode 270

Share episode

What happens when getting fired becomes the best career move you'll ever make? Steve Preda, founder of SummitOS and host of the Management Blueprint podcast, shares the remarkable story of walking across the street from the bank that just terminated him, opening his own office, and systematically winning back every client his former employer had.

Steve's journey from his "golden cage" of prestigious corporate roles to entrepreneurial freedom offers powerful lessons for anyone feeling trapped in traditional employment. Despite coming from a family of professionals and earning impressive credentials including the rigorous CFA designation, Steve discovered his true calling lay in building businesses and helping others do the same.

The conversation explores the critical distinction between entrepreneurial functions (marketing and innovation) and execution functions (operations) that allow businesses to become truly self-managing. Rather than chasing the myth of passive income, Steve advocates for entrepreneurs to focus their energy on value creation while building systems that handle day-to-day operations. His SummitOS framework, which he describes as "EOS on steroids," provides a customizable, scalable approach that helps business owners harvest low-hanging fruit quickly while building for long-term success.

We dive deep into practical strategies for attracting and retaining top talent, including Steve's three-tiered approach to compensation that evolves as employees demonstrate their value. His insights on defining culture through behaviors rather than abstract ideals and measuring outcomes through function-specific KPIs offer actionable frameworks for listeners at any stage of business growth.

The interview concludes with Steve's powerful formula for entrepreneurial success: desire provides the motivation to overcome challenges, resilience enables bouncing back from inevitable setbacks, and curiosity drives continuous learning and improvement. With these qualities and the right systems in place, entrepreneurs can achieve what Steve calls the ultimate gift: owning your time.

Ready to transform your business into a fast-growing, high-profit, self-managing organization? Discover Steve's frameworks, books, and coaching at summitosco.com or connect with him on LinkedIn.

How to connect with Steve?
Website: https://SummitOS.co
Apple Podcast: https://bit.ly/MBPpodcast
YouTube channel: https://bit.ly/MBPodcastPlaylistYT
LinkedIn Personal: https://www.linkedin.com/in/stevepreda/
LinkedIn Summit OS: https://www.linkedin.com/company/77938145/admin/feed/posts/  Facebook: https://www.facebook.com/steveipreda/
Instagram: https://www.instagram.com/stevepreda/
TikTok: www.tiktok.com/@summitos_creator
Twitter: https://twitter.com/StevePredaCom
Amazon: amazon.com/author/stevepreda
Email: steve@stevepreda.com 

Support the show

Speaker 1:

Welcome everyone to the Firing the man podcast, a show for anyone who wants to be their own boss. If you sit in a cubicle every day and know you are capable of more, then join us. This show will help you build a business and grow your passive income streams in just a few short hours per day. And now your hosts, serial entrepreneurs David Shomer and Ken Wilson.

Speaker 2:

Welcome everyone to the Firing the man podcast, where we explore the journeys of entrepreneurs who have successfully transitioned from traditional employment to business ownership. Today we have a special guest, steve Prida, a seasoned business growth coach, author and podcast host. Steve is the founder of SummitOS, a platform dedicated to empowering business coaches and business owners to transform companies into fast-growing, high-profit and self-managing organizations. With over two decades of experience, he has guided numerous entrepreneurs in scaling their businesses and achieving their ideal lives. In addition to his coaching endeavors, steve hosts the Management Blueprint podcast, where he delves into the frameworks and strategies that drive business success. Each episode features insightful conversations with entrepreneurs and thought leaders, sharing practical tools and experiences to help listeners navigate their own business journeys practical tools and experiences to help listeners navigate their own business journeys.

Speaker 2:

Steve is also an accomplished author, having written six books on business growth and leadership. His latest work, summit OS A Fable, presents a compelling narrative on transforming businesses using the Summit OS methodology. In today's discussion, we'll delve into Steve's transition from corporate roles to entrepreneurship, explore the principles behind Summit OS and uncover actionable insights for business owners aiming to fire the man and take control of their destinies. Stay tuned for an enlightening conversation with Steve Prita Steve, welcome to the show.

Speaker 3:

Well, that's an amazing introduction. Yeah, I'm excited to be here.

Speaker 2:

Absolutely, absolutely. So to start our conversation off, can you talk about your path in entrepreneurship and how you transitioned from kind of a corporate role into an entrepreneur?

Speaker 3:

Yeah, so I am a child of two professionals, two doctors. My family was full of attorneys, accountants, so I was really not born to be an entrepreneur. But somehow I felt a little bit of a disconnect with this whole professional ethos that my parents were representing and I wanted something more adventurous, more exciting. And then I learned about my great-grandfather who, before the Second World War, one of the most successful entrepreneurs in Budapest, hungary, my hometown, and he built a chain of bakeries and he supplied all the hotels in town and he was one of the biggest taxpayers, even though I learned that he was not reporting all his taxes. But so I was very mesmerized by this story and I was very much attracted to it and I thought when I was in high school that I was going to become an entrepreneur and I had some ideas.

Speaker 3:

But as I graduated college that was when the Berlin Wall was coming down and there were so many opportunities with big companies and studying abroad and traveling, and so I basically took a job and then for the next 12 years I was kind of in my golden cage. I had high-paying jobs and because I was in this generation of the post-Berlin War generation, we were in high demand by big companies and they went to hire us and therefore I was kind of trapped in this world. And then when you say firing the man, so I actually was the man who got fired. I didn't fire my boss. I should have, but I didn't, and that's how I transitioned.

Speaker 3:

So suddenly my golden cage opened and I was free to go. My opportunity cost was gone and actually I was very excited. I was 35 years old. I walked across the street from the bank where I worked previously and I got my blue and my pink slip on Friday and the Monday morning. I got my pink slip on Friday and Monday morning I opened my office. I rented this apartment for a friend and I was in business as an investor banker. So that's how I kind of got fired, but I proverbially maybe fired the man.

Speaker 2:

Absolutely. Now, before we hit record, we were discussing something that we had in common and that was that we both are a CFA charterholder and, for those of you who don't know, this is a very rigorous exam. It takes three to four years, thousands of hours of studying and it sounds like you're in investment banking, which is a very prestigious position. And what advice would you give to people who are in a similar position, where they've worked really hard to advance this career but they're not feeling satisfied and they just believe that there's more to life than working in a typical corporate environment?

Speaker 3:

Okay. So I long believed, actually since I left high school. Actually, when I left college, I made a pledge to myself that I'm not going to be willing to be bored for a single more minute. I'm only going to do stuff that interests me. So curiosity has been a big driver and ever since I left college I think I learned a lot more than in college. I've been reading stuff and one of the things that really excited me was to get into these very rigorous qualifications like the CFA. I'm also CPA, like you are, and I've got other stuff as well stuff as well.

Speaker 3:

But I was very, very motivated and curious about learning deeply about the world of finance, which interested me at the time, and I thought that if I get more knowledge than anyone else in my environment, it's going to give me an edge and it's going to give me the confidence and it's going to be kind of a passport for me to take a job anywhere in the world or to make a living anywhere in the world. So that was kind of my thing and I highly recommend that. There's a saying that in your 20s you learn and in your 30s you earn. So take the long view and absorb everything while you're young, when you don't have entanglements, commitments, family and try to learn as much as you can, and it's going to help you to have a great career later on Outstanding, outstanding.

Speaker 2:

So you fired the man at age 35. You got an office. What comes next?

Speaker 3:

So my initial goal was just to replace my salary. So at the time I think I was making three or $4,000 a month and I said, okay, so I just have to make sure I make that much so we can keep things going. And then I set up my computers and another desk and then I moved to another office and my expenses started piling up and then I just had to revise my business plan all the time. So my replacement income became bigger and bigger and bigger, and that's what basically was going on the first year.

Speaker 3:

The other thing I was really pissed off that I got fired because I thought it was unfair and it kind of hurt my pride because I thought it was unfair and it kind of hurt my pride. So I made the pledge to myself that I'm not going to rest until I lure away all the clients I had in the bank. I was in the investment banking department and I said I'm going to prove to you that you're not going to be able to keep these clients. And actually the first couple of clients walked with me the first two or three weeks and then within six months I got the last one as well and it gave me a lot of satisfaction that you know they didn't just reduce the cost but they also got the revenue when they fired me.

Speaker 2:

Yeah, yeah, revenge, you got your revenge.

Speaker 3:

I love it.

Speaker 2:

Yeah, which is very petty, but there you go yeah, it's good motivation sometimes. Yeah, which is very petty, but there you go yeah, it's good motivation sometimes. So in your management blueprint podcast, you look at different business frameworks and my question is what are some of the most effective frameworks that you've seen for scaling a business?

Speaker 3:

And how can our listeners apply them. Okay, so we probably recorded 300 episodes by now and initially we covered the major frameworks like ScalingUp and E-Myth and Great Game of Business, eos, this kind of stuff, and then we ran out of those pretty quick and then we started niching down and going for more vertical frameworks and going for more vertical frameworks, and recently we've been looking for frameworks that the entrepreneurs, the thought analysts that come on the show, have discovered themselves. It's some ethno-forced process that allows them to see the world differently, to make things simpler, to be more effective. So what I'm trying to say here is that there are hundreds of frameworks. Basically, everyone has at least one or two frameworks in them that they don't realize that other people could use, because we all find ways to cope with situations.

Speaker 3:

However, if I had to cluster this, I would say that I would put them in three clusters.

Speaker 3:

So there are the organizational frameworks, where it's all about people and how you create a culture and how you create a healthy way to grow your leadership and your people.

Speaker 3:

Then there is the strategy frameworks, which is figuring out where to position your business and how to be different and what's your vision and, essentially, how you create a unique business. And the third type of framework is the execution framework, which really helps you with the execution to be effective, to organize everyone, to align everyone and to get things done and solve your problems and essentially move the business forward and building your capacity to be able to do better and greater things. So that would be the three buckets, and of course there are more buckets if you want. But I think if you take care of that, if you have an organization where you think about the people first and foremost and the kind of team you want to build and the culture and growing your people, and then you figure out how you're different with a good strategy, a few good strategy frameworks, and then you execute, you can have a good run.

Speaker 2:

I love it. I love it. So before I ask this next question, I will mention to you that I am a huge fan of the book Traction and the EOS. I've implemented EOS with every business that I've ever owned and I'm a huge fan of that. However, for the first couple of years of my entrepreneurial journey, I did not have a framework. I was kind of just putting out fires and I sit down at my desk and whatever was the biggest problem or the biggest opportunity is what I would work on what is a good out-of-the-box framework or book that they can read or something that they can implement to take that first step in getting some organization.

Speaker 3:

Well, I mean, there are many, many books they can read. There's not one. That would be the ultimate winner. And yeah, and I generally struggle with this, this question of what is the one book, Because it's like, what is the one silver bullet, right? Yeah, no silver. But the whole point is that you need to learn a lot and you need to experience a lot to be successful in business. But to answer your question, so obviously you mentioned EOS is a very popular framework and there are others like Scaling Up.

Speaker 3:

The original one was the E-Myth from Michael Gerber in the 1980s, who wrote this book, and he talked about working on the business. It's a great start for people because it's a fable and it's really easy to understand the concepts. That's what I implemented first in my business in the early 2000s and then I persevered and I'm biased that the SummitOS framework is the one that is the most effective one. So this is a book I recently updated. It talks about, essentially, it's EOS on steroids. So it is a version of EOS that is customized to each business, so it's not cookie cutter. There's a deep pool of tools that can be customized by a coach or by an entrepreneur. It is scalable by a coach or by an entrepreneur. It is scalable, so it supports you for not just an 18 to 24-month journey, but a 7 to 10-year journey. You're not going to run out of concepts and tools and you can keep growing your business and get to the Inc 5000 and beyond.

Speaker 3:

And thirdly, it is a fast-start program. So I strongly believe that what an entrepreneur wants is they want to harvest the low-hanging fruits quickly. They want to get going, and we have developed a process called the 45-day execution momentum where we teach them all the basic concepts of execution and actually help them practice it in the first 45 days. So for some operating system it takes nine to 12 months to get there. We have them, we have our clients get there in 45 days and then it gives them such a momentum. Then we can have them implement some of the more strategic frameworks as well, which then ultimately re-acits their business. So we want to be the private equity without the private equity. So as a CFA chapter, you probably understand you don't need to bring on an investor to tell you what you do, to tell you what you already know and that you should be doing. You just need a coach that is going to hold you accountable to doing the right things and help you habit stack your business.

Speaker 2:

I love it. I love it, and I'll tell you, there was a phrase that you said that automatically added SummitOS to my reading list, and that was it's EOS on steroids. That's all I needed to hear to add that to my reading list and to all the listeners. I'll post a link to that in the show notes. But so let's dive into SummitOS. As I was prepping for this interview, I was reading up on SummitOS, and one of the things that this methodology describes is a self-managing company. And before we dive into the specifics of that, what does that look and feel like? And I'll tell you a little bit of background on where this question is coming from. You hear a lot of influencers talk about passive income. Oh, passive income. I have not found most of my endeavors to be passive. I am showing up for work and putting out fires, and I don't think that when you say self-managing, that's what you mean. But what would, from a 30,000-foot view, what would a self-managing business look like?

Speaker 3:

Yeah. So first the passive income. I don't believe in passive income either, because what creates income is entrepreneurship. So how can you creates income is entrepreneurship. So how can you create income without entrepreneurship? You can create income by giving your money to someone else to manage, whether it's real estate or whether it's investing in equities or investing in alternative investments. Essentially, you abandon the responsibility for managing that stuff, let someone else manage it who is a person who is paid to manage stuff, and then you hope that they're going to manage it. Well. That's passive income. That's not attractive to me. What's attractive to me is to control, create value, to control the creation of value, which is entrepreneurship. So that's just about the passive income. Some people they're not like this kind of perspective, but I just had to get it off my chest Now on the self-managing idea.

Speaker 3:

So the idea is that, again, there is the entrepreneurial function in a business and then there's the execution function, and what creates the value is the entrepreneurial function. And Steve Jobs talks about the two a private, functional business, which is marketing and innovation. These are the entrepreneurial functions. These are the creative functions. These are the creative functions where you create a messaging that resonates with people. That's the marketing, and then you create innovative products that provide more value than other products out there. That's how you create value, and then you have to have an execution system so that you actually turn it into a machine. Your company turns into a machine and provides it right.

Speaker 3:

So what self-managing really means is what Michael Gerber he coined working on the business, not in the business. So remove yourself from the hurly-burly of the business, from the execution function because that can be delegated with good organization and with good tools and re-elaborate your time so that you can work on the entrepreneurial functions, which is marketing, innovation, building relationships, getting the word out about your business. And then the business is self-managing, but you are the entrepreneur, you are providing the entrepreneurial energy. So it's not like a perpetual motion machine that works without energy, because that doesn't exist right. So you need an energy source. That's the entrepreneur, but the actual money-making machine, the business, can be self-managing, so the entrepreneur is not buried in the data.

Speaker 2:

I really like that answer on making the distinction between the entrepreneurship function and the execution function, and I like that way of looking at it, and I think that that's something that a lot of entrepreneurs, especially early on, get caught up in is, you know, we're bootstrapping, resources are tight, I'm going to do everything myself, and it seems like that really, really stunts growth.

Speaker 2:

Honestly and I will also like to talk about this a little bit A trap that I've fallen into a lot of times is and I'm just going to use an example of Amazon PPC when I launched my first Amazon business, I knew nothing about pay-per-click advertising, but I knew it was important, and so I took to the internet and tried to learn it, and I self-managed for probably three months, and at that point I realized I'm not good at this and I don't have the time to do this, and, as you pointed out, that would fall in kind of the execution function, and so then I hired it out, and I can think of so many examples of my career where there has been a task that needed to be done. I didn't have any experience doing it, but I tried to tackle it anyway, and three months later I ended up hiring an expert, and so how can people kind of avoid that trap or recognize that's what's happening when they're managing their own business?

Speaker 3:

I don't know if you can avoid it altogether, because the fact is that when you are boot setting, when you're starting out, you have limited resources and you have to find this balance of uh, of uh, you know, economizing on your resources so that you have enough buffer to experiment and make mistakes, because you you learn by making mistakes. So you have to have some kind of a reserve to fund your mistakes. So you have to have some kind of a reserve to fund your mistakes. And if you hire a bunch of people and you're taking too much risk and you're going to run out of your reserves and you're out of business. So that's really the big conundrum of when to hire and how to hire. And one of the things that I think is a really big opportunity for entrepreneurs is to hire offshore talent that can be really inexpensive, so you can build an inexpensive team and you can experiment, especially if you have other income on the side that funds your business. So that's another concept that maybe we'll talk about later is how to get into business and how to fire that man. Do you fire them from the get-go or you just develop a side hustle and you still keep that man as your employer and let them pay the bills, you know, and and then give yourself some time to to make some mistakes and build up your, your side hustle. So yeah, I mean it's. It's a big question when the typical point comes.

Speaker 3:

In general, what I see is that even the big companies, they try not to take reckless risks with hiring. What they do is they not hire great employees? They create great employees. They go to colleges and they hire young, smart students, bring them in for an internship and if they look good then they hire them. But they bring them in at the beginning of their career so that they can move into the right kind of person. They can get them while they are still relatively inexpensive. So that's how they do it. They don't go out in the market and hire an expert who supposedly have already done it for hundreds of thousands of dollars, because it's a highly risky thing to do. So no easy answer there, I'm sorry.

Speaker 2:

No, I think it's something that's important for entrepreneurs to think about, and I really appreciate your perspective on that because, yeah, when you are bootstrapping, resources are tight, and I can tell you, when I did hire somebody for Amazon PPC, the fact that I had done it for three months and struggled made me a better manager of the manager, and so I think there is value in that.

Speaker 2:

Another thing I want to call out from your answer was funding your own mistakes, and boy is that the truth. You need to have budget for that, and to think that you're going to start a business and not make mistakes is ridiculous, and I can say that, after starting several of them, hundreds of mistakes and lessons learned, and that's okay. That's part of the process, and so I'd like to turn the conversation over to technology and implementing technology in business. In particular, ai is a really hot topic right now. If I map out the number of times a day I'm engaging with AI, and if I were to graph that out, it would look like a hockey stick, especially in the early parts of 2025. I find that being something I'm trying to utilize more and more and more, and so my question to you is how can you integrate technology into your business and, as you work with entrepreneurs, what are some ways that they are using this technology, in particular ChatGPT or other LLMs, into helping their business grow?

Speaker 3:

Okay, so I have to preface this I'm not an AI expert. I was fortunate to have had a couple of AI experts on my podcast two or three years ago when ChangePT was coming out I don't even know whether it was two years ago or three years ago, maybe two years ago and the advice I got was that, whatever you do, just start experimenting with it. Just start playing with ChangePT and see what you learn and what you can use it for. And, as you say, I've been using it exponentially more and more over time and it's amazing how many things it can do for you. I love to ask questions. I'm very curious, so whenever a question pops in my mind, I just ask JGPT the question. But I use it for writing contracts, for creating visuals for my blogs, for proofreading my blogs, for strategizing for clients. I even, you know, this morning I got an email from a client who was very it's a difficult person to deal with and he has certain fears and it's a very complex situation. So I asked the GPT okay, here is what's happening with this client and how should I handle it and it basically, within 20 seconds, it gave me six or seven suggestions what to do and how to handle the situation and I put together an email and things are much, much better.

Speaker 3:

So JetGPT, and AI in general, can be used on many different things. We use it for social media, for creating posts, for transcribing podcasts. I'm sure you do that as well. From summarizing, synthesizing, developing the questions for sales meetings. I'm not an expert. What I can say is that use it Again. Don't complicate, don't overcomplicate. You're going to change the subscription. I recommend to get a private subscription so your information doesn't get used for training other people's models and just keep asking questions. And whenever you think that you are a proud in you see what ggpt comes up with. Sometimes it hallucinates, but, but most of the time it gives good information absolutely, absolutely.

Speaker 2:

Yeah, I think just the simple act of using it is huge, and the more you engage with it, the more your prompts become better. And yeah, I think it's something the more you use that, the better you get. And I have found it takes a lot of my 30, previously 30 minute tasks and makes them 10 minutes, and it allows me to do a lot of my previously 30-minute tasks and makes them 10 minutes and it allows me to do a lot more 30-minute what would have previously been a 30-minute task. In a particular day, I kind of feel like it puts a jetpack on the entrepreneur where you're just able to achieve more and kind of get rid of some of the tedious work that does need to be done. And so, okay, as we, one perspective I think that you're going to have a great perspective on is avoiding some of the common pitfalls. Now, many business owners they struggle with delegation and leadership as they're scaling. I know I've dealt with this before and so what are some of the common mistakes you've seen and how can those be avoided?

Speaker 3:

Yeah, so really I mean a company. What is a company? In my mind, it's a collection of people who are committed to a common purpose. That's really what it is. And then, of course, these people are going to do different things, whether you are a manufacturer or a service company or whatever company you are. So it's all about people. You need to put those people together and you need to have them work productively in this company. And how do you do that?

Speaker 3:

So I think the biggest pitfall is for people to not utilize the resource they already have, the people they already have. In very few companies do I see people maximizing their potential. It's probably no companies. People maximize their potential right, because our potential is much, much bigger than what you can do with it. So if all you do as an entrepreneur you uh, you attract and hire good people and then you help them maximize their potential, then you are going to avoid most of the pitfalls I like if you're good people and you have good processes, good approaches, good structures and frameworks, I like to say, then you can solve any problem.

Speaker 3:

In fact, I believe that there is a pandemic going on in the business world I call it business COVID which kills about 180,000 small to medium-sized businesses each year who run out of cash, who get disrupted, who get commoditized, who are not able to attract and keep the right people, who are not able to transition their business to the next level of management or ownership. I call this business COVID. And with the right framework and approach, such as SummitOS, you can eradicate business COVID one company at a time. You can eradicate business COVID one company at a time, and you know what the pitfalls come back to not having the right people or not being able to empower the right people to do the right things for you, and not having the right frameworks to organize these great people so that they can maximize their potential.

Speaker 2:

Absolutely, absolutely. Now, one thing you've mentioned a couple of times is finding great people so that they can maximize their potential Absolutely, absolutely. Now, one thing you've mentioned a couple of times is finding great people, and I think we could probably do an entire podcast on this topic alone. But I'm curious in the hiring process or when you're scouting for talent, are there any tips that you have on making sure that you're finding the right person for the right seat in your company?

Speaker 3:

Yeah. So a lot of people have written about this stuff in the gym, college putting the right people in the right seat, getting the right people on the bus and putting them in the right seats on the bus. Seats on the bus and the way I like to look at this and actually this. Gino Wickman articulated that right people is the people who live and breathe your core values, your culture and the business the right seat is well, that's paraphrasing, that's not Gino Wickman, but it is the people who are consistently highly productive in their seat, so they can be consistently highly productive. So that's right seat, right people culture, right seat productivity. So it's important to start with defining what your culture already is. So what are your core values? And I like to put them in behavior terms rather than abstract ideals that a lot of the companies they have integrity, professionalism, teamwork these are like corporate values, corporate ideas that the company aspires to, but that's not something you can hold people accountable to. What you can hold them accountable to is behavior. So express your core values in behavior terms. That's number one.

Speaker 3:

Then you have to know what are those seats that you want to hire people for right. So you have to define your functions in the organization that get work and do work and that helps you get paid. So these are kind of three factors of the types of functions that you need and then you have to define for each function what are the outcomes. So if you have a sales functions, what do we expect that sales function to deliver to us? Is it conversion, nurturing of leads, converting leads? Is it about onboarding customers? What are those outcomes? And for operations and for marketing and for technology and all those functions that you have?

Speaker 3:

And then you want to measure those. So you want to attract people who fit your culture, who have the profile to be successful in delivering those outcomes for you. So they have the technical skills and they have the desire to succeed. And then if you do that, then you're almost more than halfway towards the goal. And then you have to look after the people. You have to mentor them, you have to make sure that you help them fulfill their potential through great coaching and mentoring.

Speaker 2:

I love it. I love it One of the continuous conversation on building a winning team. One of the things that you had said was like having measurable outcomes and having that for each position, and if I put myself in the shoes of a business owner, in my opinion, one of the biggest KPIs you have is net income. That's kind of to me, the scoreboard for the company, but you can't hold everybody accountable to that. There's certainly things that are outside of people's control, and so that is not the best KPI for any individual position. However, it's the ultimate KPI for the business, as I view things, and so when you are coming up with these measurement outcomes, how do you identify characteristics that are within the control of that person and uh but, but lead to ultimately having greater net income?

Speaker 3:

Yeah, that's a great. It's a great question. So, um, um, okay. So the way I look at it, you have in small companies you will just have a CEO who basically is the entrepreneur and who runs execution as well, who runs the business. In bigger companies that can afford to have two leaders, you would have an entrepreneur and you would have maybe a CEO type person. You ask what is the visionary and the integrator? And then I would say, in a company like that, the entrepreneur's main KPI would be to increase the market share of this business. To basically proselytize what the business is all about, get the word out.

Speaker 3:

That, I would say, is the main outcome for an entrepreneur. For the CEO type person, maybe it's the profit, because they will make sure that the revenue happens, the expenses are controlled and the difference is profit. Sometimes it's the CEO who does that. So that's kind of the overall metrics. I think market share is very important and then profitability is important as well, because you want to make money today, but you also want to make money tomorrow, so you want both, and then the individual functions are going to have their main outcome. Maybe marketing is going to be to generate leads and then maybe marketing is going to be to generate leads, and then maybe sales is going to be to convert those leads into customers, and maybe operations is going to be to keep those customers, whatever those major outcomes.

Speaker 3:

And then the question becomes how do you reverse engineer those functional outcomes? So, for a CEO who wants to grow market share, maybe it's the number of speaking engagements, maybe it's the number of big relationships that they touched in that week. It's what's going to be their weekly metric. For the CEO, it may be the number of coaching conversations with their team members, the number of touches on prospective employees that you want to attract at some point when they get fed up with their current bosses. For the marketing person, it could be the content created and shared. It could be I think that's the big one. It could be the number of actions taken to maybe create PR for the business. For the salesperson, it could be the number of sales conversations scheduled so that they can convert. It could be the proportion of conversion, conversion ratio. So these are the kind of things that you can control and that will deliver you the outcome of your function and then all those functional outcomes going to add up into that net profit and this increase in market share.

Speaker 2:

I like it. I like it and I'm glad that you mentioned market share as a in addition to net income, and I definitely agree with that. I definitely agree with that. What on the topic of of building a great team and retaining a great team, compensation comes up, and I found that there's two primary methods of compensating team members. There's salaried employees and hourly employees. I think both are kind of not a great way to measure the impact that somebody has on a business. You take an hourly employee, for instance. If you have somebody that's super productive and is leveraging AI and technology, they may be able to get more done in two to three hours than another person does in 10 hours. Salary's somewhat similar. In that, I've always just kind of felt it's a lazy way of going about compensation. However, in my own businesses I have hourly employees and I've salaried people, so like I'm searching for a better way, and so I'm curious as you've worked with different business owners, have there been any compensation methods that you have found that really aligned the team with the company's overall objectives?

Speaker 3:

Yeah, well, you're right, it's a difficult topic and it's multifaceted as well.

Speaker 3:

Yeah, you're right, it's a difficult topic and it's multifaceted as well. I would say that in addition to the hourly employees and the salaried employees, you also have the business partners, who are maybe interested in profit. Maybe they get the profit share or they get dividends, so that's a third tier and for professional service firms. Then you get to the pinnacle of your profession. You're going to become a partner and that's what you're going to get. Most of your compensation is going to be partnership income, and what I see is that the more valuable the person in your business, the more interest you give them of the eventual product of the business, the profit of the business. If they are just executing manual tasks that are highly commoditized, then it doesn't really make sense for them to give them a profit share, because they don't have much impact on it and they have not yet earned the rights to get it right. So you just pay them. You take a low risk on them because they haven't proven themselves, and when they have proven themselves that you want to tie them to the business because they are harder to replace, then you give them a salary. And when you want to make them, give them an upside on the company's performance, because you might lose them if you just pay them a salary and you give them a profit share and then you make them a partner eventually. And sometimes you have to sell them the business because they are so valuable that they no longer are going to take your instructions and they're going to walk away from the business if you don't sell it to them or don't make them an equal partner. So that's how I see it, an equal partner. So that's how I see it. And when you make those moves and how you make those moves is highly nuanced.

Speaker 3:

In my investment banking business, at one point I decided to make my key employees partners. So I give them some shares because I thought that I wanted to express my belief in them and that I wanted them to be long term and wanted them to be feel taken care of. And then we paid dividends. And then, when the company went through hard times it was a hard adjustment because it was hard for them to accept that they were not getting dividends anymore and then they wanted to make decisions and the company so that they get dividends and counter to the long-term interests of the company in some way, so it became very complex and then I went away from that.

Speaker 3:

But yeah, highly nuanced, and I think what's important about it is you want to take care of your A players. So somebody is an A player who are fitting the culture like a glove and they are hitting the ball out of park in terms of performance, and you are at risk of losing those people if you cannot give them a bigger job and if you cannot give them bigger influence. And those are the people you need to think about. Okay, how do you keep them? How do you motivate them? How do you help them unleash the potential for your business more?

Speaker 2:

Absolutely, absolutely. I really like that answer and there's a lot to digest there. The main point I took away from that is ownership and profit sharing, and I just mentioned my primary KPI is net income, and so profit share is in direct alignment of that. I really like that perspective. So before we get to the fire round, I want to talk about your podcast Management Blueprint. That's how I discovered you, and so what was the origin of this and how's it going?

Speaker 3:

Well, to be perfectly honest, I didn't have a drawn design, and this is how many businesses start, by the way, that you just want to know. You just, you just want to make some money, and maybe you're replacing a job, or maybe you just want to make more money than what a job can pay you, and that's how you become an entrepreneur. And then then, over time, you, you refine your, your, your vision, and then and then you develop a higher purpose for your business and that that makes it more powerful. So that's kind of what happened with our podcast.

Speaker 3:

I just started it out because I wanted to create relationships, I wanted to generate content for my business and, you know, I thought that was going to be a good way for me to be able to speak without being invited on podcasts and to also engage people that I wanted to engage. And then, over time, I realized that we had this great thing frameworks, business opening systems that help people and I realized that there were so many ideas and so many great processes and frameworks that people have discovered and and they are applicable often across industries. So people can talk about what they discovered in one industry and that can be applied in another industry and other people can benefit and they can do something better in their business. It's kind of like AI it supercharges your business and yeah. And then we just doubled down on this whole idea of management blueprint frameworks and we're still going and not running out of them anytime soon.

Speaker 2:

Outstanding outstanding. I'll post a link to your podcast in the show notes To all of our listeners. Check it out. It's an outstanding podcast. Cannot recommend it enough. And whether you're thinking about business, running your own business or have been in business for 20 or 30 years, you will take lessons away from this. And Steve, you're an outstanding host. And Steve, you're an outstanding host. So to wrap up the show, we have something called the Fire Round. It's four questions we ask every guest at the end of the show Are you ready, steve? I think I am. Let's do it. What is your favorite book?

Speaker 3:

Okay. So that was really hard and I just turned to my bookshelf and I picked a couple of things. So managing the professional service firm. So few people know this book but this is one of my favorite books. I love professional service businesses. I find the challenge of attracting and keeping people and empowering them and help them fulfill their potential. It's really hard to keep good people in a professional service, to not have them walk away with the intellectual property, and this book is kind of the Bible. It was written in the 90s by David Meister who ran law firms in the UK. It's brilliant. So if you're a professional service, don't miss that.

Speaker 3:

The other one again. There are hundreds of books I like, but this I really like. So this is Eugene Schwartz Breakthrough Advertising. This book was written, I think in the 50s or 60s and I actually had some audio tapes from Eugene Schwartz when he talked about copywriting. It's fascinating how he gets into the mind of the customer and writes copy. Highly recommend it. So these are like old books, the new ones and you know. The third one I recommend is Pinnacle, and you went there should Summit OS. So this is the Bible of the Summit OS system and I recently revised it. I think it become more powerful and more clear and more useful. We have more than 150 reviews on Amazon. I highly recommend you this book as well. This is self-serving, but there you go.

Speaker 2:

Outstanding outstanding Next question what are your hobbies?

Speaker 3:

Hobbies? Well, I love tennis. So every weekend I try to do it twice a week, but on average once a week I play. I have a Venezuelan friend and his name is Arvin and we play tennis for a couple of hours every weekend day and I love it. I also follow the tour. Grands says to go to the US Open most every year with my wife. I also love reading books, so thank you for asking me to talk about books. I read and listen to at least 100 books a year. And finally, I love music, and especially jazz music. So whenever I can make it, when I travel quite a lot and if I get in on time, then I look up the jazz club in town and go there and spend an hour there and it just always recharges me outstanding next question what is one thing that you do not miss about working for the man?

Speaker 3:

Well, not being in charge of my own time. So time is our most valuable asset, I believe, and not being in charge of your own time as an entrepreneur is super painful, and even as a self-employed person, I'm running my own business, but I still have to do things that I don't really enjoy doing and I feel like I'm not in charge of my time and I'm doing those things. So I try to delegate those things and luckily, or automate. Luckily, I don't have too many of those, but yeah, that's the biggest one. Owning my time as an entrepreneur is an amazing gift.

Speaker 2:

Outstanding. And final question what do you think sets apart successful entrepreneurs from those who give up, fail or never get started?

Speaker 3:

Okay. So I love this question. So I believe that the number one quality for an entrepreneur is desire. So I think if you don't have the desire, I don't think you stand a chance of even lining up at the starting line. You're not going to make it, because there's so many challenges in entrepreneurship and if you don't have a strong enough desire and that's why it's important for companies to develop a company-wide, a desire for the whole company, so that everyone can tap into it, that's super important. The desire. And the number two is resilience. So it's important to have desire, and you have to and resilience maybe the third one is curiosity. That's the third driver of that. Then you got it made Outstanding.

Speaker 2:

Steve, this has been a really fun podcast. If people are interested in getting in touch with you or checking out your podcast, what's the best way?

Speaker 3:

So I recommend checking out the book. What's the best way? So I recommend checking out the book Pinnacle. There are books which you can find in Pinnacle. My website is summitosco, so check out my website, summitosco. And I'm on LinkedIn as well. That's my main home, so visit me on LinkedIn, connect with me. I'd love to hear from you and you'll send me a message and I'll promise to respond outstanding well steve.

Speaker 2:

Thank you so much for your time today and looking forward to staying in touch yeah, david, great interview.

Speaker 3:

Thanks for having me on the show, absolutely.

People on this episode

Head Shot

David Schomer

Co-host
Head Shot

Ken Wilson

Co-host