267. How to build a business bigger than you, with Dustin Hillis

0:00Most business owners pride themselves on being high capacity. You know, that person who handles the operations, the marketing, and the strategy all at once. We rely on sheer willpower to get things off the ground. But there's a very specific point where that do-it-all attitude actually becomes the bottleneck for the entire organization. A lot of common themes you'll see is somebody that's super passionate about what they're doing, somebody that has high charisma, somebody that has high capacity kind of naturally, innately in them. They're a go-getter and they're the rainmaker, they're the operations person, they're the marketing person, they're the CEO, and they're the bottle washer all in the same day.

0:40That leads to burnout. And if you're doing it all, then there will be a point where working harder does not equal more results.

0:50Leanne:Our guest today is Dustin Hillis. Dustin has led a$100 million company and is currently building toward a billion dollar valuation. He spent 16 years coaching hundreds of CEOs through the messy, often painful psychological shifts required to stop being the bottle washer and start being a leader. He argues that your growth isn't limited by your talent, but by the systems you are willing to put in place. Dustin's book, Capacity, Building Your Business Bigger Than You, is actually out right now. It was released yesterday or day before, I think. It really is a masterclass on scaling teams, creating the right strategy to grow, and is written for you, the overwhelmed business owner.

1:32And if you enjoyed this interview, I really would encourage you to go out and buy it, especially this week, because you know, as a new author, then the first week is the most important week for sales. We get into the grit of scaling today and Dustin talks us through the five essential pillars of growth. You're going to learn the pruning process required to keep a team healthy. And Dustin also shares a sobering statistic about business partners and betrayal. If you want to scale your business to 1 million or 10 million, or even 100 million or even a billion, then this episode is for you.

2:05Leanne:This is Truth, Lies and Work, the award-winning podcast where behavioral science meets workplace culture. Brought to you by the HubSpot Podcast Network, the audio destination for business professionals. My name is Leanne. I'm a charter occupational psychologist. My name is Al. I'm a business owner. And together we help you simplify the science of work and create amazing workplace cultures. We'll be back with our conversation with Dustin Hillis after this very quick word from our sponsors. HubSpot makes impossible growth impossibly easy for their customers. And here's a perfect example. Lee, your turn.

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3:11Leanne:Welcome back. Let's join the interview where Al is asking Dustin how to build a professional system that will facilitate growth without killing the creative spark that made the business great to begin with. Well, that's the reason I wrote the book. And I really think that the strength of your systems is in direct proportion to your capacity. So the more that you create a system, the more that you build people around you that are able to help do things that their God-gifted abilities have in store for them. and you don't spend time doing things that you don't need to do. Well, let's talk about these processes for a second then.

3:59I think a lot of particularly creative people or entrepreneurially minded people would feel that systems and processes are constraining what they're doing. That you're telling them, right, do X, Y, Z and you'll get A, B, C. Bosh, go ahead and do it. How are you reconciling that? It is a mental shift. A lot of leadership, you're dealing with emotions, you're dealing with psychological barriers more than you are literal technical limits. And so as a leader, you have to realize that that a lot of people are operating out of some baseline of fear and you helping them have that confidence to break through that fear, to understand that that they're capable of doing more than they think they can, encouraging them, training.

4:52So a lot of leaders miss the fact that their role is to train people how to do what they're supposed to do to set those expectations and to make sure you don't have the right the wrong person on the bus. And then once you have the right people on the bus, that they're in the right seats. So sometimes, you know, a really talented person becomes a generalist, for example, and you get this person who has high aptitude and they become the catch-all and you start giving them everything. and they're doing marketing, they're your executive assistant, they're doing operations and they get burned out and they quit two years later and you wonder what happened.

5:30Well, that's your fault as a leader to not have an executive strategy, which is the first chapter of the book capacity to create those processes where people want you to have that process. They want you to give them that guidance, that framework so they can excel. Um, so looking at, um, their strengths, looking at their weaknesses, looking at their past experience and past performance, and then setting up a process, setting up a structure where they're optimized, where, where they're thriving. And if you got a team full of people that believe in your mission, their skill sets is aligned with what their job is to do every single day.

6:12And they feel like they're winning, man, that is a formula for success. It sounds to me as a very fly with the seat of my pants kind of guy. Executive strategy sounds boring. I don't want to do that. But I feel like I'm wrong. So school me. Why should I have some kind of strategy? Well, you know, sometimes it could be boring counting all your money, but it might be a good idea to do. And so, you know, after running a global consulting company for 16 years and personally coaching hundreds of CEOs and owners and executives, I found that, you know, you have a couple of different types of entrepreneurs that start companies that lead companies.

7:00A lot of common themes you'll see is somebody that's super passionate about what they're doing, somebody that has high charisma, somebody that has high capacity kind of naturally, innately in them. They're a go-getter, and they're the rainmaker. They're the operations person. They're the marketing person. They're the CEO, and they're the bottle washer all in the same day. And so that leads to burnout. And if you're doing it all, then there will be a point where working harder does not equal more results. And I do think that you can get a lot of results, though, as a one man band and mom and pop shop, you, your family, your your wife, your your sister.

7:45Somebody knows how to do a spreadsheet. You're the CFO. Somebody knows how to do social media. You're the marketing director. Somebody just really likes helping you. You're my executive assistant. And there you go. There's your team. And I think you can get to about$10 million in revenue by sheer willpower, sheer mom and pop shop. And there are a lot of examples out there of these mom and pop shops that get to$10 million off of just discipline, work ethic, passion, and persistence. However, what gets you to$10 million will not get you to$100 million. And if you have aspirations to grow to a$100 million business, it's virtually impossible to not put an executive strategy together to map out a five-year plan on how you're going to get to$100 million.

8:36Because what got you to$10 million won't get you to$100 million. And the same is true for those individuals that are out there listening to the show who might have a$100 million company. You know, I was CEO of a$100 million company, and it was a much different experience than being president of a$10 million company running a$100 million company. And right now, my aspiration is to go from$100 million to a billion. And I'm literally going through a pretty painful process of growth as a leader, putting a new executive strategy together that are doing things I've never done before and surrounding myself with people that I've never been surrounded by who have built a billion dollar business that that know how to get to a billion dollar valuation.

9:21and I'm having a lot of fun in that growth process. But I think it's up to the entrepreneur. It's up to the leader. It's up to the owner, CEO, whatever your title is, to be willing to change and to be willing to go through the process of thinking about what you're going to do before you do it. It's much easier to wing it. It's much more fun to shoot from the hip. Discipline is actually like a naughty word. It's a nasty word for most people. Like who wants discipline? So the question that you want to ask yourself in executive strategy is who? Who is on your team? Who are you? What are your skills as a leader?

10:01Do you have a job description for yourself within the company? And am I doing the things that I should be doing or am I doing a bunch of stuff I shouldn't be doing? And then making sure that people on your team are in alignment with they are doing the things that they should be doing. Then what's missing? What are the gaps? And what are the people that you need to go out to the market, find them, hire them, empower them. And ultimately, over time, this creates departments. So you'll have, you know, an executive suite. You'll have a business development department. You'll have a marketing department.

10:36You'll have operations. And most mom and pop shops, they don't think that way. And the way that you feel good is you say that's just not us. Culturally, that's not us. So there's a lot of things that can creep in. But the example in the book is Chick-fil-A. I think Chick-fil-A is one of the coolest companies ever. They have an amazing executive strategy. They have an amazing corporate culture. I think any entrepreneur would say, if I had a company like Chick-fil-A, I'd be OK with that. Even though they say, you know, I don't want to be corporate. I don't want to have all these things that these big corporations have.

11:13I look at companies like Chick-fil-A and think, that'd be pretty cool to have a billion dollar company like Chick-fil-A. But without ruining too many secrets that are in the book, would you be able to talk us through what specifically you like about how Chick-fil-A have set their organization up? Well, in the book, I tell the story of meeting Dan Cathy and getting to go to breakfast with them and interview them. And it was incredible. So it was a rainy day. I went in to Chick-fil-A. The guard met me in the rain and said, you must be Dustin Hillis. And I was like, well, yes, I am. And he said, well, Mr.

11:50Cathy, so excited to meet you. Yeah, go on and park and go through this door. And can I get a high five? And I was like, sure. And so he gives me this high five and I'm driving through the rain thinking that's the most pleasant experience of a guard at the front gate that I've ever had. I pull in a lady at the front desk, runs around the counter, opens the door. Good to meet you. You must be Dustin. Mr. Kathy is so excited to meet you. And I'm like, I've never had somebody run around the front desk and open the door for me like that. Then it went on and on. And I won't tell the whole story that's in the book, but basically the gist of it is Dan said, you know, it really comes down to our interview processes.

12:32It really comes down to making sure we hire the right people. And we have certain things that we do. And in the book, I give specific examples of he did it to me when I met him. And he did two of their interview processes right there in person. and he said, we take the traditional questions that people ask for interviews and threw that book out the window and we look for character traits that are displayed during your interview. We see if you have the character to work at Chick-fil-A and I'll never forget that. And I started adopting some very unique and different interview things. Dave Ramsey is also a mentor of mine.

13:18And I've known him for many years and do quarterly mentor calls with him. And he has a similar culture and process that Dan Cathy and Chick-fil-A have when he interviews people. He'll take them and their spouse out to eat. And he actually interviews the spouse. And that was the first time I ever heard of that. So I think learning from people like people that have cultures and very large companies like the Ramsey organization, you know, getting to meet and break bread with people like Dan Cathy and learning from Chick-fil-A. You know, if you want to be like an avatar of a company, I think you actually have to physically go there as a leader.

14:00I recently drove to or I flew and then rented a car and then drove to the Apple headquarters, the Google headquarters and literally walked around as an actual just visitor. And I just wanted to, like, see how do I feel about this? I didn't really like it, to put it bluntly. It was very not welcome. It was the opposite of Chick-fil-A. And as a tech leader, and we're buying it, we're opening a new office this week here in Nashville, Tennessee. And it's going to be called the Tennessee AI Center of Excellence. And I don't think I'm going to go down the road of the Google Experience Center. And I just it was too cold.

14:41It was too stale. It wasn't personal. It was kind of the opposite of Chick-fil-A when I walked into the Google Experience Center. It was cool. It was it was clean. It was nice. It just didn't feel personal. And so as we're designing it, we're actually I have meetings like this week on designing our experience center. I'm going to lean more towards the Dave Ramsey Chick-fil-A experience versus the Google Experience Center. So I think you have to know what you want and you have to look for other examples that are out there that you can pull snippets from. You don't want to carbon copy anything. You want your own identity.

15:18but I think there's elements of it where you can set a culture that you want and maintain those values that are important to you as a leader to build that company culture. Do you think that it is a different culture for someone like Chick-fil-A and catering as opposed to someone who's got a high, highly driven sales culture? Is it a different, totally different kind of fish? So I spent 20 years in a very high driven direct sales environment. And, you know, it's it's it's you have to be intentional that there are good elements to that high accountability culture, especially when you're young. It's kind of like joining the military when you're young.

16:02You need that discipline. You need to be told what to do. You need that formation. But then at a certain point, you know, you kind of have the basics down and you need to empower people. You need to equip people and you need to create a culture. I think Chick-fil-A's is the most caring company in the world was the mission that they they put together. So I think your mission is the most important thing. And, you know, the the the mission statement should drive all the decisions. So the vision is where the company is going. The mission is who you are and what you do. And then the core values are how you make those decisions.

16:48And so distilling your core values and not just having them be, you know, arbitrary and something that you just put on the wall and you never talk about, but they're real that you talk about them every day. When you're interviewing people, you actually look through your core values and go, does this person align to not only our vision and our mission, but do they actually live the core values we have? Because if there's misalignment with your core values, it's not going to work with that team member, no matter how talented they are. So a lot of times people get stuck with somebody's resume and they talk about how smart somebody is or how they went to a certain school.

17:25They have all these things on their resume and it's like, yeah, yeah, yeah, that's great. They're smart. And yeah, they did some interesting things. But do they match our culture? Do they match our core values? Do they do they believe in the same things we believe in? Because if you surround yourself with people that believe in what you believe in, man, that's powerful. That becomes fun. That becomes, you don't even feel like you're at work. You just feel like you're accomplishing something big together as a group of people who believe in the same things. And that starts with the leader having clarity about their mission, about their vision, about their core values.

18:02And that is all part of executive strategy.

18:04Leanne:We'll be back with more from Dustin after this very short break. Billion Dollar Moves, hosted by Sarah Chen Spellings, is brought to you by the HubSpot Podcast Network, the audio destination of business professionals. Join venture capitalist and strategist Sarah Chen Spellings as she asks the hard questions and learns through the triumphs, failures and hard lessons of the creme de la creme so you too can make billion-dollar moves in venture, in business and in life. Maybe start with episode 124, where you're going to hear how industry giants from Canva to YouTube define leadership. Listen to Billion Dollar Moves wherever you get your podcasts.

18:43Leanne:Welcome back. Let's rejoin the interview with Al and Dustin. So as someone who has led a$10 million company and then currently or has led a$100 million company and then in a couple of years time will have probably even sooner will have led a billion dollar company. What is it actually like the differences between running a smaller company, a medium size and potentially a bigger? Yeah, this will be fun. So starting a company from scratch is you have to have a bit of a of a screw loose in your head to be willing to do it. And so it's incredibly hard. The amount of times I mean, even recently having family members call me saying, you know, statistically, the odds of your success are like one out of 5000 or whatever.

19:30I'm like, thank you for sharing the stats with me of how unlikely it is that we're going to be successful. And so you just have to be willing to go through the gauntlet to start something from scratch where it's a blank piece of paper and you are literally like on a whiteboard. you are writing down your ideas for here's the concept, here's the name of the company, here's what the product's going to be, here's the pricing, how am I going to get the money, here's some ideas of how I'm going to get the money to pay for all this. I mean, if you're at that level of entrepreneurship, I have a 14-year-old daughter and I've watched my daughter be born.

20:13So I cannot say that I'm a woman who has gone through childbirth, but watching my wife give childbirth and the agonizing experience of the whole thing. That's the only thing I could say. Maybe it feels like that on a daily basis where it's like having a baby daily and not just the pain of the childbirth. It's more the taking care of the baby, like in that first couple of weeks where they're so dependent on you that you can't do anything else. I remember taking several weeks off of work and just being like, you have to look at that baby 24 hours a day to make sure it doesn't fall, to make sure its head doesn't move to the side.

20:59Like you're literally holding its head. You're holding the baby. It consumes you 24 hours a day. You don't sleep. That's how it feels starting a business from scratch. So then you evolve to, say, a million-dollar business. and there is a point where the first business I started, I remember somebody telling me, hey, if you can get to the point where you do a million dollars a year in revenue, you're above 90 % of the companies that are out there. You know, when you're driving down the road, most businesses never get to a million dollars in revenue. And then he said, if you did it in your first year, you're light years ahead of where most people, you know, it takes years and years and years for most businesses to get to a million.

21:42So we set the goal that helped drive the goal to saying, all right, we're going to do a million in our first year. And we did. And I remember like breathing after looking at that financial review going, we actually have money. Wow. Like we don't have to just bootstrap and eat ramen noodles. Like we could actually buy the team dinner. you know, dinner. Now we, we might need to go to Shoney's and, and everybody needs to get, you know, the, the fixed menu at Shoney's still. Um, but at least it's not, you know, um, straight commission, um, uh, everybody's paying on their own and we're just talking about the future and, and everybody's just, you know, their, their, their payment is the belief we're going to figure this out at a million dollars.

22:29You actually start having resources. So I imagine that that feels like, you know, you have a six-year-old kid who I'll never forget my daughter. We travel a lot. She actually went to 30 different countries before she was 10 years old. And I used to be the pack mule. So I'd have my wife's bag, my bag and my daughter's bag. And we'd be going through Europe, going from Estonia to Latvia to Lithuania. And this is this crazy Eastern European track and going on these trains and I just felt like a pack mule. And I remember the day that my daughter could carry her own bag. And it was just like, for some reason, it was a huge day.

23:13The only day that was bigger was the day my daughter could wipe her own butt. So that might be a better example is when your kid can wipe their own butt, that's probably how it feels having a million dollar business where your team actually can do things outside of you. That's probably where the capacity you start thinking, hey, I could have a marketing person. Hey, I could have a operations person. Man, I might even be able to have a finance person. And you start to have these loose, they might be part time, they might have a couple of different roles. You know, your co-founder might all of a sudden go, hey, why don't you handle business development?

23:51And I'll do operations and finance. And it's like, oh, all of a sudden, we have two departments, you know. So at a million, that's about the time that your kid can start wiping its own butt. Then at 10 million, that's usually the next stopping point that you look back and you go, man, I have a teenager. And I'm about to go into that. And as an actual father, so my daughter's 14. We already have the Jeep picked out that she wants next year when she turns 15 to start driving. And I've already given her some driving lessons and we go to the church parking lot and she drives in circles. I teach her how to park.

24:34And very soon she's going to be driving and her mom's not going to have to take her to basketball practice. She's just going to take herself to basketball practice. So at 10 million, I think that's really where you have a teenager and they start driving themselves to school. They start driving themselves to basketball practice. Now, you need to check in because they're not an adult yet. So you don't want to just not talk to your 16-year-old for a week and just assume they're not partying on the weekend. So at a$10 million leader level, you're still managing the business very hands-on. You still know everything that's going on.

25:14You probably still know every customer's name. You probably still know every team member's name. you probably um are in every meeting you're probably like still feeling i think that that's kind of the breaking point for a lot of leaders is like they still think they have to do everything so they're they're hiring people but they're not really building the system to let that grow and scale um then then once you get past 10 million uh and you get to the 20 million to the 50 million to the hundred million, that really is finding the A plus people that know how to run their division of your company as if it's a business in and of itself.

25:55And so that's like an adult. So I haven't, I don't have an adult kid. I have friends that have adult kids and they said one of the coolest points in time, maybe in the mid twenties is they get a job and they first, and that's when they start appreciating you is, is once you have a team that understands the sacrifice you made as the leader, where you were personally paying payroll and you personally were losing five years of your life. You didn't go on a vacation. But then they look at you as somebody running a$20 million company who can take nice vacations now. And once you have a team that's mature enough to realize you deserve it and that that doesn't affect them and you don't feel this internal pressure from your team like, oh, I need to be here all the time because I'm setting the example.