Mastering Leadership Is Mostly Saying No (And Living With It)

0:00There's genuinely one absolute fireball offense in this company is if you see something that is wrong and you say nothing and I find out I will kill you like you're done. Every time a dramatic person has departed, we have realized it is so much better without them. People aren't going to empathize with you when you're having a tough week. It's like, oh yeah, cry in your dollar bill. To have a competitive advantage, to have a distinctive mode, you're going to have to stand alone. That actually takes some real confidence. To be a really effective leader, you have to have a sense of what your hot dogs are.

0:29I'm just going to be completely unreasonable and inflexible around those things. You're going to feel lonely sometimes and you're going to feel a bunch of pressure. My views on how to manage people really have evolved. I was wrong about a lot of things. The game that we're trying to play is be a premium enterprise value company. If people just think of Hexed as a corporate company, we are going to lose. I find myself relearning the same lessons over and over again. I think one of the most dangerous ways to start sentence inside of a company is I feel. The single biggest pitfall that you can run into as a business owner is your own insecurity.

1:00The bottom 5-10 % that are genuinely not a good fit for the company, You're doing them a disservice by keeping them, and then doing themselves a disservice by staying. In investment banking, you're not treated like a human. You're a machine. Be the machine and go cry in the bathroom. If I do my job well, I keep the money in the pockets of tens of millions of people, and I make their life better that way. Business is so much about managing people and managing yourself. Welcome to the Operators Podcast. My name is Mike Beckham, and we are proudly brought to you by Fulfill, Aftersell, Rich Panel, North Theme, Sarah's Analytics, and PostScript.

1:32We are a community for entrepreneurs that are building things. And if you want to be a part of this community, you can listen to the podcast, but you can also go sign up for our newsletter. A ton of awesome information in there. We also partner with e-commerce fuel, a forum for you to connect with other entrepreneurs that are building businesses where we can learn from one another. So without further ado, onto the pod.

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2:33I think what you guys are saying, though, is like leadership has a cost. And when you're kind of an aspiring, ambitious up and comer, you see positions like CEO and you're just like, man, awesome. You get to tell people what to do. You're the boss. You make the big bucks and you see all the upsides and you just don't see any of the tradeoffs. And I think what all of us have learned as we sat in the chair is it's like there are plenty of tradeoffs. Like, and one of them is like, you do have to play a role, like you're saying, Jason, and you do have to like your ability to speak your mind is reduced.

3:09Your ability to be understood is reduced. You know, people are people aren't going to empathize with you when you're having a tough week. It's like, oh, yeah, cry in your dollar bills, you know. And like, I don't even think it's reasonable to expect people to be able to understand or empathize. So it's like, yeah, you're going to have hard things and other people aren't going to understand them and they're not even going to be particularly sympathetic to them. And you're going to have a lot of things that you just have to keep to yourself. And you're going to feel lonely sometimes and you're going to feel a bunch of pressure.

3:39And there's all these other great things that do come with it. But like anybody who's listening to this and like this same way when you're a seven figure company, you're like, man, if I was an eight figure company, things would be awesome. And it's like, yeah, there's some awesome things, but there's also some tradeoffs waiting for you. It's pretty awesome. Yeah, like what you're saying, Mike. It hits home because we are having to constantly change as leaders of exceptional businesses. My views on how to manage people, on how to run this business, they really have evolved. I mean, they are very different now in a good way.

4:16And like I was wrong about a lot of things. Like when it comes to managing people, I still have, I kind of still have a bit of an old school, like I was a banker, I was a lawyer, get the job done or get out. I think it's really important to maintain that. But at the same time, you know, as the teams get bigger, as the organization gets bigger, as a leader, it becomes more about like people management and knowing that, you know, not everyone is an A player and knowing that these people are human. In investment banking, you're not treated like a human. yeah you're a cog you know yeah in big law you're not treated like a human it's like you're you just you're a machine be the machine and go cry in the bathroom you know and that's made me the man i am today but um not you can't expect that everywhere you know things evolve so there's like a balance between just just get it done jason just get it done and you know making people feel good and i i I love what Matt said about the reviews because we're getting close to the end of the year here or this may air just like right at the beginning of the year.

5:24We changed our fiscal this year, so we're doing all of our reviews in January, but we're prepping for that now. And Matt said, like, you get a job satisfaction survey and like the bottom 10 percent who aren't satisfied with their job. Well, clearly they should just be fired. Right. Like that's the thing about it. It's almost like you should have a conversation where you're just saying like, hey, if you're really unhappy here, let me help you find a place where you're happier. Like it doesn't even have to be punitive. It's just like if you have 100 employees and five of them are just really not happy, then it's like, well, I don't know that it makes you a bad person.

6:00It just makes it a bad fit. Yes. Yeah, I think that's the thing. Don't cater to the minority when you're building a team. like that is i had to learn that lesson the hard way and that's what i'm saying it's like the bottom five ten percent whatever it is that are genuinely not a good fit for the company you're doing them a disservice by keeping them right and then doing themselves a disservice by staying so you can't be all things to all people you know and no and i think that that anytime you've led an organization you figure that out really clearly and one of the the phrases i've i've said a lot around our organization recently is it's like, hey, I'm not saying this is the best way to do things.

6:38I'm not saying this is the right way to do things, but this is the way that we're going to do things. And that's just pretty much what leadership is, is that you really, I don't even know if I believe in the idea of quote unquote best. I just see trade-offs with different ways of doing things, but you got to pick a lane. And this kind of, I'd love to hear you guys take on this. like when I'm going through and doing my one-on-ones, I will kind of come across ways of saying things that I'm like, that was kind of bouncing around in there, but I hadn't put it into words. And I think that's right. And so here's my, my kind of theory from yesterday.

7:11I was sharing with my direct reports. I think to be a really good leader in general, you have to be an open-minded person. You have to listen to feedback. You have to hear what other people are saying, but then you have to be almost completely unreasonable and inflexible in two or three key areas that now what those two or three key areas are, I don't think it has to be the same from leader or organization organization, but you have to have at least two or three areas. And I was thinking about like, well, what's a, what's kind of a parallel. And I was thinking of the Costco story with the hot dogs.

7:46This is like, uh, you know, you see this on Twitter every month, somebody posts it, but they famously have these$1.50 hot dogs. And I think Jim Senegal, I think this was his thing. And one of his key leaders came into him one day and is like, we can't sell the hot dogs at$1.50 anymore. And he was like, if you change the price of the hot dogs, I will effing kill you. And it kind of made me think about this question of to be a really effective leader, you have to have a sense of what your hot dogs are. What are the things where it's like, I'm just going to be completely unreasonable and inflexible around those things because they're that vitally important.

8:29And then I'm going to be really open-handed and flexible on a bunch of other things. And I'm going to hear feedback and I'm willing to go with the flow. But for me to be the leader I need to be, I've got to have a couple of these issues that I'm just like, this is how it's going to be. You guys think that's right? I 100 % think it's right. I'll take it. I think, yes, it's the main thing. keep the main thing the main thing is another way to say that there's like the theory of uh like in a business you should focus intensely on the constraint like that if there's like usually one or two constraints in a business that if you just focus on those two things your business will get better i think every company particularly like on tie this to the leadership thing the way your culture is built also has to be around a few non-negotiables right and how you run your team and how that team shows up.

9:20They need to know what those non-negotiables are. I think values gets a bad rap for this because they kind of got construed into this. But really what it comes down to is what are the things that we believe? What principles or what ways do we operate? These are not negotiable. One of mine, Mike. Yeah, I want to know what you guys' hot dogs are. That's the question. What are your hot dogs? When it comes to people, I have told people, like there's only there's genuinely one absolute fireball offense in this company is if you see something that is wrong and you say nothing and i find out i will kill you like you're done right like you're just doing everybody a disservice at that point and there's no room for that i often i'll tell you like jason the whole you know cultural thing like this non-negotiable pieces I am often saying my response to things is more often than not, do you want the answer that makes you feel good or do you want the honest one?

10:20Because they sometimes aren't the same. Right. And your job, I think, in the seat that you have, at least for you guys and myself, is to just say the thing that is true or you believe to be true. regardless of how it makes people feel. And you kind of need to have a company where like that's a non-negotiable. Like you should just be able to speak plainly. Like never attack people. I don't do that. But I definitely like I am brutal with attacking problems. Like that's a non-negotiable in this company. And that's cultural.

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11:35As a CEO, that's like music to my ears. Sign up now and you can lock in 50 % off unlimited tests for the year. Jason, what are your hot dogs? One of the things that I really focus on is making decisions and taking emotion and drama out of work and out of decisions. it's incredible how often people allow their emotions to affect their decision in business i think it's the fatal flaw and everyone suffers from it including me right you know it's like that's the who you like to tell me that or like this is my department or but you just you just got to check that. You just got to be like, wait, I'm system A here.

12:26I got to get into system B, critical thinking, thoughtful, logical thinking, decision-making mode. System A was built to help you survive in the outdoors with predators when you had to hunt and live and fight. And that's not, the fight is different now. The fight is applying logic and reason to succeed. And I just see it. And like the one thing that I'm constantly thinking about, well, I'm constantly thinking about a lot of things, but one thing that I am constantly thinking about is like, who is a drama person? You know, because every time a dramatic person has departed, we have realized it is so much better without them.

13:10And that's all. They were dramatic because they were making emotional decisions to making decisions based on emotion. So my hot dog is not allowing people to consistently make emotional decisions that cause drama, that they will hurt the business, period. You know, this might be a bit contrarian because we're in consumer and we sell things to people. and oftentimes to sell those things we have to uh we're building messages right like we design visuals copy that are compelling they make people feel things i think one of the most dangerous ways to start a sentence inside of a company is i feel yeah i feel like and i hate saying that because like the marketer in me is like no no man like write better make better marketing that makes people feel things.

14:05But what you're hitting on, Jason, is that internally, when you're building high performance teams, they need to become, I would say, far more objective and data-driven than they should be emotionally driven. Now, the weird part of that is that great CEOs, great decision makers often have an incredible gut feeling. But you know, Matt, I think what makes it powerful, well i was just i think we were going to say the same thing jason which is i think you know the what makes intuitive people really powerful is when they pair that intuitive thinking and feeling with data so there are a lot of times where i will have a hunch but there's a a rigor and a discipline to saying i'm not just going to go out spouting off my hunch I'm going to actually see if objectively if I can verify that hunch and I've said this before on on this pod but one of my phrases I started saying around the company is when people would say I think or I feel I'd be like it's a knowable answer you know or we can get real data we can test your hunch we should do it right you think we'd sell more if we had free shipping knowable answer right You think we could drive costs down 10 %?

15:25Knowable answer. Let's go find out. And so there's definitely room for intuition, thankfully. I mean, I'm 100 % intuitive on Myers-Briggs. But what I've learned with my personality in particular is that I'm a persuasive speaker and that I'm highly intuitive. And so if I'm not careful, I can get a hunch and then I can get very charismatic and persuasive about that hunch before I actually realize whether or not that hunch is right and that I've got to do the work. And I need to have an environment where people are like, hey, show your work and not just make it sound good, but like show me, prove to me that you've actually thought this all the way through.

16:06And that's healthy when you have that, when you have both, right? You and I have the same disease. On the gut feeling, right, this is about time in the game. And the leaders have risen to their position through experience and application of good judgment and making better decisions on average over time. We're all going to make bad decisions like we all have. Sean here to tell you about Sarah's analytics and Sarah's pulse. Ridge is profitable every single day. And we've taken that super seriously since we built this business. We track contribution margin by day. We look at the SKUs we sell every single day.

16:47And we have to do this manually up until Sarasomics came out. We take all of our SKU level data. We build it into the data warehouse. Everything that goes into making a true P &L, I get on a day-to-day basis. Saras Pulse gives you clarity. So your CLO and your CFO and your CMO start speaking the same language. Contribution margin shifts teams away from hoping profits survive the season to Manning's Nome in real time. Book a walkthrough with the Saris Pulse team today. Click the link in the description and thank you Saris for bringing you this show. This is actually one of my biggest problems is I very often can feel the right answer, but not express why it is the right answer.

17:26This is one of the things that frustrates me most in my life, in my career, but more often than not, and more often than most people, I am correct. I know I am. And it's just like, I can't get it out. I can't verbalize it. But what it is, is years and years and years of experience and success that is inside you. It's like walking. You don't have to think about how to walk. It is so hard when somebody comes to you with something, like one of your people comes to you with something and immediately in your head, you're like, this is going to fail. This is a bad idea. and you can't actually put into words exactly why.

18:09You just kind of, you just have the spidey sense. And it's really challenging for a couple of reasons. One is sometimes you're wrong and it isn't a bad idea, just something, an experience you had in the past, like kind of prejudiced you against this idea. But also it's dangerous because if somebody comes to me with an idea and I'm just like, that won't work, we're not going to do that. in their mind, if I don't really walk them through the reasoning, and sometimes even if I do, well, you don't get to see the counterfactual. So if I just kill it and we don't do it, then it's like, that would work.

18:47They just don't know. And your people can start to be that way. And so sometimes I've learned that sometimes you've got to let people try things to be able to share your intuition. And I've still not figured out how to do that balance. But I know exactly what you're talking about, Jason, where you just somebody starts saying something and you just immediately start to feel uncomfortable. Like I have seen something like this before and it went really, really poorly or I just kind of know this is not going to work. But I don't know exactly how to put my finger on it. And it's going to be really discouraging, unsatisfying to this person if I just say that's a bad idea and I can't tell you why.

19:24It's I do this with. I do this with customer feedback. I don't know if you guys do the same. Like I read so much of our customer feedback, like every review, all the post-purchase surveys. I just like to read them. And what you're describing, Jason, is like, there's just an intuition that it's like you can read, if I can read a thousand reviews and pick the four that matter, right? And you just have a feeling like, oh, that's actually really insightful. Like what that one person said. The tricky part, where I struggle is like, how do you build this muscle in a company? Because like I, on one hand, I think that it does come from years and years and years of experience.

20:08So like Jason, the thing you're describing is pattern matching. Like you just intuitively pattern match off of like, you don't even, you can't even tell what you're matching off of the computer in your head is just like, we've seen this before. This is the conclusion we're getting to. It just can't demonstrate the formula that got you there. But then on the other hand, there is like a natural, some people just naturally have it. Like I have people on my team who have incredible intuition, particularly when it comes to customer product, like all that stuff. But yet I still think that that statement I feel is a dangerous thing to allow to be a regular way to lead conversations in a company.

20:53It's like all that to say, I still think that if you have a culture or you're like, you're finding that that is the way that people begin most of their arguments. Culturally, you have a like you have a leadership problem. But here's the issue with that, Matt. 50 percent of people are feelers and not thinkers. I know. And the vast majority of women are feelers, not thinkers. Jason doesn't like feelers. Well, it's like when you're a highly logic driven person, it's like everybody should work the way that I work. But it's like many people don't. And like you said, many of our customers don't work that way.

21:30And so this is this is the probably an example of where you have to have diversity. If I had a bunch of, you know, very logical androids running my company, we would just miss all kinds of things because primarily we sell to young moms like that's our demographic. And you know what is not the guiding principle of all young moms is a purely logic based approach to life. Like it's one of the most emotion driven in a good way. Seasons of life. Right. It's all about protecting my kids and taking care of them and looking out for my family. And so running a brand trying to sell to them where it's all about logic is going to be difficult.

22:14I don't know what the balance is here. But I do know that what you don't want is you don't want the loudest person in the room or the most emotional person in the room to be able to sway discussions simply by saying things like, I really feel like we should do this. I think, so what you're hitting on too, like as a consumer company, I think about this a decent amount, right? Which is, what are the reasons that people buy from us? So like, let's use Hexclad. Hexclad, you sell right now, primarily it's cookware, right? Lots of different types of cookware. Great product. We know that. there's like a very like functional benefit to the product right so there's some amount of people that are like i need to buy a pan i need to cook things so they're buying for like a problem solution reason then there is another portion of people who are buying from an identity perspective like i want the same cookware that gordon has or i want the same cookware that like some chef on instagram has i'm gonna buy cookware but i'm gonna buy this one because like it's speaking to some portion of my identity.

23:22I think, Mike, what you're hitting on, on the, like that intuition from, and how you construct team. I think a lot of that gets driven by how much your product skews to function versus identity and how it shows up in the market. Because if you're a far more identity driven brand, then you're going to need more people that are attuned emotionally to customers that you're trying to serve than you would if you were a pure like you buy this product because like you're going to buy this knee brace because this knee brace fixes your knee pain like super functional problem solution not a lot of emotion required there yeah outside of just scaring them and telling them how painful their life is i think to to your point going back to this idea of hot dogs i've had you know we're 10 years into simple modern and i had a little bit of an epiphany.

24:19Epiphany is not the right word, but like a refocusing moment over the last month where I'm just like, you know what I get really passionate about is driving value to customers. Oh, yeah. And that is a very logic driven thought process. And I just don't want to play the kind of popularity trend game. And there are a lot of people in our industry playing that. I don't think I'm particularly good at it and I don't get particularly passionate about it. I get really excited about the idea that if I do my job well, I keep the money in the pockets of tens of millions of people and that I make their life better that way.

24:58And I know exactly how to do that, right? Using like the skills that I have and logic and things like that. And so there's a lot of different ways you could run a drinkware brand and I'm just more and more. There's a lot of different ways we could run all the companies under our umbrella. And my kind of hot dog moment is like, we're just going to be about value. Like we're going to be about that. And there are going to be some people are like, that's not the coolest way to do it. Or maybe you could make more money. You could be more trendy if you did this or that. And it's like, I don't care. We're not doing that.

25:27We're going to be the company that when you buy something from us, you're like, this is amazing that I got this for this price. It's amazing. I got this level of quality, this level of taste, this level of style, this level of whatever, and I got it for this price. And it's been amazingly clarifying that, okay, so that helps all my leaders know exactly what they need to do. It helps us know the kind of diversity that we need and don't need on our team. It helps me to understand how to be the best version of myself as a leader, and it plays to my strengths. And so I think these ideas kind of come together, Matt, that you have to like, think about your organization and what your organization needs.

26:10And depending on the type of the way you're trying to be great and effective as an organization, you probably need a different balance of this stuff. But for us, it's interesting that you had to like re, I don't know if you guys, Jason, if you do this too, but like, I find myself relearning the same lessons over and over again in my career and it's like it drives me nuts i'm like no no i know this why am i having to relearn this and i think what it is is that like your context is constantly changing right so like where you are today is very different from where you are five years ago or 10 years ago like mike you're describing this like in the last month you've had this sort of like re-epiphany around the brand i only know the simple modern like if somebody said like what's simple modern and i it's like what makes it successful i would say they figured out the value equation yeah right in drinkware and they crushed that side of it when i remember on an ad in our first year it was like style quality value like that's what the ad said that was it and it's like yeah that's that's it that's what we do here style quality value and it almost at at points became pejorative inside of the organization of like, well, that's how a white label brand thinks.

27:26So that's how, you know, whatever. And to some extent, I allowed the organization to drift to a mindset of how do we charge more for our products over, I think, the last two or three years. And listen, we had an amazing couple of years in there. Our margins, our profitability, it was off the charts. And I think it just allowed me to take my focus off a little bit of how that's the thing that makes us great. And so, like you said, Matt, from the outside, it's kind of obvious that that's what we do and what we should do. But internally, we kind of drifted from it. And I have a theory about why. And I'd love to hear you guys take on this, because I think this is really like if you're on Twitter, if you listen to the Operators podcast.

28:14Here's my theory. My theory is that the single biggest pitfall that you can run into as a business owner is your own insecurity. That the more you listen, you read business books, the more you listen to podcasts, the more you look at what other people are doing, the more you see smart people that are running their businesses in smart ways. And you're like, well, we're not running our business in that way, but they are and they're being really successful. And so I should do that. And it's very difficult to have the kind of confidence and security in your identity that you're like, yeah, there's a bunch of other people doing a bunch.