Dave Ramsey: The 5 Stages Every Business Must Master to Scale | Entrepreneurship | YAPClassic

17:39Hala Taha:Yeah, so I'm hearing time blocking. I'm hearing saying no, even though you want to help people, but sometimes you just got to say no if it's not going to be aligned with your priorities. So you've got this new book and it's called Build a Business That You Love. By the time this comes out, the book will be out. In the beginning of your book, you mentioned an analogy about golf and red lights. Can you share that story with us?

18:03Dave Ramsey:Yeah, I went to Scotland recently and played golf. I'm not a good golfer, but I had a lot of fun because it's the home of golf. And Scotland is famous for its horrible weather when you're playing golf. Among the horrible weather is fog. And so we played one course one day, my wife and I, and it was super, super foggy. And you couldn't see 40 feet in front of you. and so we had a caddy and he would say just aim it that way and you're just hitting a ball off into oblivion you have no idea where it's going none whatsoever and it was really really really a frustrating experience and and then we went about three days later it was foggy again and we went to a different one and these people had taken uh bicycle seat lights that were strobes and put them on little posts about every 50 yards out through the fog.

18:55Dave Ramsey:And so you couldn't see the hole where you were hitting to, and you couldn't see really a lot of the nuance of the terrain that you were hitting into, but you could see one light blinking in the fog. And so if you could hit the ball towards that light, you knew you were going to be okay. And that changed the whole experience. Exact same weather, but it was nowhere near the frustration, even though it wasn't as enjoyable as being able to see the whole thing and place the ball where you wanted to place it. But at least we had the sense that what we were doing was getting traction and it wasn't just a random freaking chaotic thing.

19:32Dave Ramsey:And so you land out there and then you could see the next light and get up onto the green and then you got a whole different process. So the point of that is that having a clear path in anything gives you a huge hope and energy and belief to move forward. It's very difficult to move forward when you're in the fall, when you can't see, and you don't know what you don't know. And it's just, you know, not only do you have all the frustration and the angst of being in business and working your butt off and not knowing, but you can't see where you're going. So one of the things we attempted to do is to lay out a clear path through the process of business that we've observed in our business.

20:14Dave Ramsey:And back in about the year 2000, we started coaching small businesses, and we've now coached about 10 ,000 of them. And as we've coached them, we've watched them go through the same five stages of business, and that's the clear path. That's the light in the fog.

20:28Hala Taha:And I can't wait to go over those five stages and the six drivers. It was really interesting to learn about that. But first, I want to ask you why you think this book is so important right now, because I've heard from other entrepreneurs that have been on this show that it's the easiest time to be an entrepreneur and a business owner. And then other people come on the show, and they say It's a very difficult time. So what is your opinion on that?

20:48Dave Ramsey:It is the easiest time, but that doesn't mean it's easy. That's what it is. I mean, ease of entry into the world of content creation, as an example, you can just decide one morning and you have a YouTube channel. You only have two people watching it, but you can decide and start. You can start a podcast. You can start and print a book today very easily. You can become an author very easily. The ease of entry into, for instance, your world, my world is amazingly easy in terms of the actual tactical things. But starting and running a business is hard. As soon as you become self-employed, you realize you have a jerk slave driver for a boss.

21:30Dave Ramsey:I mean, your boss will work you to death when you're self-employed because they think about it all the time. And they think about what you should be doing all the time. And you're just consumed with it. And you do stupid stuff and it hurts and you make mistakes, lots of them, and you have to survive them. So ease, easiest time to start a business, that's the tactical thing and all that. But it's still hard because the first prototype you come up with is your sweet little baby and then you figure out your baby's ugly. And it's never even going to make it to market. We've got to iterate this ugly baby and get it because it just sucks.

22:09Dave Ramsey:It's awful. And we do that at Ramsey to this day. We're messing with products. We're putting them out for tests. We're doing beta with them. We're doing all kinds of stuff. We'll test stuff on a reel and throw it out there. And if the reel goes crazy, we ask ourselves why, and does that indicate we should be in a product lane and all that? And it's, you know, no, it's not easy, but it is easiest to start than it's ever been. So you ought to do it. And, you know, the other thing that's happening right now, too, that's super exciting. I've got 1 ,100 people on our team right now.

22:39Hala Taha:Wow.

22:39Dave Ramsey:And somewhere around 650, 700 of them are millennials and Gen Zs. Most of them are millennials and Gen Zs, in other words. And those two generations are the most exciting entrepreneurs I've ever seen in my life. They are amazing entrepreneurs. They don't trust the standard way of doing things, and they color outside the lines, and they've grown up with a magic wand in their hand that if they push a button, stuff happens and you can get the answer to anything. And so they believe anything's possible. They have an abundance mentality, not a scarcity mentality. They distrust traditional processes and bureaucrats, which is what every entrepreneur should do.

23:26Dave Ramsey:And so these two generations, the ones that you work with a lot and I work with a lot, I'm a huge fan, especially from an entrepreneur standpoint. So this moment in time.

23:38Hala Taha:Yeah. Well, that makes me feel good. That's a confidence boost for all the entrepreneurs tuning in who are millennials and Gen Z trying to make it work. But we still want wisdom from you. And you talk about these six business drivers. Can you break that down for us and help us understand why they're so important?

23:55Dave Ramsey:What are the things that drive a business? We started asking ourselves, what are the components of business that we had to continually get better at. And as soon as we got around and got better at each one of them, by the time we came around, it was a whole new set of problems and we got to get better at them all again. So these things spin out. And I would say we've rolled through these six drivers probably somewhere around 10 or 20 times over the years, over the 33 years here. And so there's not a set thing, but the point is you've got to get good at each, competent at each one. And as soon as you do, you get the opportunity to solve a new set of problems in each one.

24:37Dave Ramsey:And so it starts with, most of the time, one of us wants to start a business, we have a product or service idea. So we skip ahead and start with product, which is a mistake, but it's normal. It's what most people do. It's, I've got this great idea. And that's what causes you to be a business person, causes you to be an entrepreneur. I've got this great idea. And that's okay. You've got to start working on the prototype. Like I said, it sucks. You're going to get to do it over, but you can start working on the first version of the show, the first version of the book, the first version of the app, whatever it is, and start getting out there.

25:11Dave Ramsey:But really the first thing that you had to work on before you got there and you didn't even realize it, number one is personal, the person. And John Maxwell, my friend, one of the top leadership gurus in America today, has written a bazillion books, and his bestseller and my favorite of his is the 21 Irrefutable Laws of Leadership. The third law is the law of the lid, and the law of the lid says that my business will never outgrow my competencies and character. And so I, personal growth, is 1 ,000 % necessary to move forward. The person that started Ramsey couldn't even get a job at Ramsey today.

25:53Dave Ramsey:That's me. Okay. The 33-year-old version of me, I couldn't even get on here. You know, obviously I'm not the same guy. I've learned a lot from experiences, books, friends, mentors, events, taking notes, learning, learning, learning, learning, learning, learning, learning. So the problem with my business is in my mirror. That's the bad news. The solution for my business is in my mirror. That's the good news. This is a controllable I can control. I can continually fight, scratch, and claw to get better, smarter, faster, wiser, all of those things. So you got to do that one. The second one is purpose.

26:31Dave Ramsey:And if your only purpose in business is to make money, you will not last. Business is too hard. It's too painful. There's too many emotional ups and downs, you work too freaking hard. And if all you want is a stack of cash, as soon as you get a stack of cash, you're going to figure out it doesn't do it. Now, I want you to make money. I like making money and I believe in making money. I'm not against profit. I'm a capitalist pig. I love it. And so I want you to go do that, but it does not get you there. It doesn't fulfill you spiritually, psychologically, anything else. And we always just say, when I was a little kid, I never had lobster until I was like 14 years old because I grew up in a redneck neighborhood and the red lobster came to town.

27:16Dave Ramsey:That was the first lobster I ever got, but I loved it. It was my favorite. And I thought, man, if I ever get some money, I'm going to eat lobster every day. No, you won't. If you eat enough lobster, it tastes like soap. If you get enough cars, they're just a stupid car. If you get enough jets, it's just a stupid jet. I mean, you cannot get enough money for the stuff to give you fulfillment that your spirit is not built that way. So you need a bigger purpose a reason for doing it. At Ramsey, it's we provide hope. And we get great fulfillment from giving people instruction and a clear path in this book or in the Total Money Makeover on finances or whatever.

27:53Dave Ramsey:We get great psychological income, spiritual income, fulfillment from meeting someone and go, hey, you know, our business was doing$2 million a year. We came through one of your entree leadership programs, and we're doing 25 million a year. And that just makes me high. I love that because that means the small business guy who's one of my great love, gal, who's one of my great loves in life is succeeding because, and I was able to be a helper. I want to help them. I want to give them hope and I want to give them a process. So that's purpose. And then that leads you to people where you start adding people to your team.

28:30Dave Ramsey:Oh, that's so fun. I love my team and And there are days they drive me nuts. Hiring and firing is probably the hardest thing a small business person does. And you get better at it and better at it and better at it, but you never really arrive. And building culture inside the team, building unity and loyalty and high levels of communication and conformity to a set of values that we call core values. And if you're not doing those, you're not a we. And you can't stay if you're not a we because this is who we are. And so we're working and working and working on the hiring and firing piece. And so we just go all the way around to planning, laying out a strategic plan, a tactical plan, a marketing plan to go to market.

29:15Dave Ramsey:Most entrepreneurs don't plan enough. We just go throw something against the wall, see if it sticks. And then product comes up and then profit. Product should be a byproduct of having that purpose of who you are growing as a person, of the quality of your team is gathering around. And in collaboration, we create this product. We develop a plan. And out of that, a product comes. But we often start with product and skip over those others. You'll get to do them again if you do skip over them. You don't really get to skip them. And then the last one is if you help enough people, you don't have to worry about money.

29:53Dave Ramsey:If you put out a really good product or service, people will give you certificates of appreciation with president's faces on them. Profit is the byproduct of serving well. It's the applause your customers give you, Ken Blanchard says.

30:09Hala Taha:Well, thank you for that overview. And you mentioned that these drivers, they're not a checklist, right? They kind of pour into each other and have a flywheel effect. So can you explain that? I know you were kind of alluding to that before, but now that you broke it all down, can you explain how it's not really just a checklist that you go through?

30:25Dave Ramsey:Because you get to do it again. And it does fly wheel and pour into each other. You're exactly right. So, you know, for instance, once we get around the wheel of the six drivers, you're sitting on that profit one. Okay. And you're making some money. Well, you're going to grow. And in order to grow, we go back to personal. And the person has to get bigger to grow. And so if you haven't changed since you left the thing and came around, it's going to stall out. You've got to get better. And then you've got to drive the purpose deeper into the team and deeper into the client base and deeper into the vendor base than it was before.

31:02Dave Ramsey:Or it won't spill over and go to the next. And now we're going to get better at hiring, and we're going to maybe start developing a second layer of leadership, a higher level of competence, because we're able to hire more people and or better quality people, people that are smarter, because now we've got a little more money. But it brings with it a whole other set of problems as well as opportunities. And so, again, they just keep pouring around. And then by the time you make a little more money and you come around, now you've got to grow again. And here the thing cycles again. So it never really stops.

31:35Dave Ramsey:And it's not necessarily tied directly to the five stages, meaning it doesn't turn like once per stage. You know, sometimes you might turn all the way around that three or four times in a stage. That's very possible. I know we have at Ramsey as we've looked at it.

31:49Hala Taha:Yeah. It makes me think like now that I have problems, I can be like, well, is this people? Is this product? Is like, what is the actual problem? Is it me? Right. So now that you.

31:59Dave Ramsey:Yeah. What's stalling the flywheel?

32:01Hala Taha:Yeah.

32:02Dave Ramsey:Because it is one of those buckets that stopped up.

32:05Hala Taha:Yeah. When it comes to personal, I know a lot of entrepreneurs start out being really tactical, right? We've just got to be scrappy. We're wearing so many different hats. And then as you grow, and like, for example, now I have 60 people who work at YAP all around the world. I have to become more strategic. But I was, you know, programmed that I do well or like good things happen when I'm tactical. So it's sometimes really hard for me to just like be strategic. So what advice do you have for moving from tactical to strategic as an entrepreneur?

32:35Dave Ramsey:When I started, I couldn't spell strategic. All I was was tactical. I'm an old salesman. And so get up, leave the cave, kill something, drag it home. I mean, that's about as tactical as it gets, right? And so push something. If nothing's pushed, if nothing's shoved, nothing happens. So push something, shove something, kick something. Go, go, go, go, go, go. Lack of activity will kill you. And that's how we start. and you should start that way. And you need to maintain that energy all the time because you should have folks on your team at all times that are doing very tactical things. And they need to feel the energy and the importance of that tactical behavior.

33:14Dave Ramsey:Because if all we have is an organization that plans, that's called a dreamer. And dreamers live in their parents' basement. We don't want to be a dreamer. We want to be somebody that executes dreams. And so you move through the tactical. The tactical has to be there. But I was beating my head against the wall at the treadmill stage and even up into the second stage of Pathfinder. And so because there's only so much tactical will move because it's very inefficient once you start putting some scale to it if it's not the execution of a plan. It's kind of like getting in the car and slamming on the gas and saying, I'm going to Florida.

33:54Dave Ramsey:Oh, wait, where's Florida? I don't have a plan. I don't have a map. And you could end up driving in circles. You could end up driving the wrong direction. It might be a good party. We might have a lot of fun on the road trip, but we really are not very efficient about getting to Florida. If you want to get to Florida, you get the map out, and one of the map apps tells us the most efficient way, and then we begin to execute tactically on that strategic plan. And so what happened with me was people kept talking to me about this and I wasn't very good at it. And I've learned in the personal to be good at it, but it wasn't my natural.

34:32Dave Ramsey:I started hiring. We ended up with some people with MBAs on our team. And 100 % of the MBA programs in America, Masters in Business, teach strategic thought. If you get an MBA, it's one of the things you're going to get out of getting an MBA. I don't have an MBA, but I have observed this and talked to a lot of MBAs that work for me. that or have worked for me over the years. And strategic thought is one of the things drilled into an MBA's head. And so they came on board and they're like, Dave, you're missing this. You need to do strategic thought. And I'm like, I don't want to do it. I want to get work done.

35:06Dave Ramsey:And they're like, no, your work will be more efficient. And I'm like, if you get above it, get a 30 ,000-foot view, you can actually walk around the barrier instead of running through it. But you just have to know there's a path around it. You can't see it while you're looking at it. You've got to get above it. Okay, okay, okay, okay. So we always laugh at Ramsey and make fun of me and say, well, you know, the MBAs that we hired taught me strategic thought and I adopted it and I taught them how to work.

35:32Hala Taha:I love that. I love that.

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40:02Hala Taha:That's shopify.com slash holla. Go to shopify.com slash holla. Now, I know you've been kind of teasing the stages. So just so everybody is like on the same page and understands all the different stages. And then we can talk through drivers and stages some more. But what are the five different stages of a business?

40:21Dave Ramsey:Well, the first one is treadmill. And that's where we all start. And you work your butt off and it's very chaotic. And everything depends on you. You set up the microphone. You set up the chairs. You set up the screen. You set up the printing. You create the revenue and you create the product that creates the revenue. And if you're not at work, nothing happens. You don't really actually own a business when you're at the treadmill stage. You actually own your own job. Because if you don't come to work, you don't get paid. A business, if you don't come to work, you get paid. Because it keeps running without you.

40:52Dave Ramsey:So you really don't own a business yet. And I didn't either. You're just working your tail off. It's exhausting. It's 16-hour days. I would get home. I would flop on the couch. and my wife would say, what'd you do today? I said, I have no idea, but I did a lot of it. You know, and we just, you're just working and running and running and running. You don't feel like you're getting traction. That's why we call it treadmill. You don't feel like you're ever going to get out. And if you don't begin to see a way out of that, you will burn up. Not more than burn out. You'll just burn up. You'll fry. And because the hours are crazy.

41:24Dave Ramsey:The stress is crazy. The weight on your shoulders, the whole thing depends on you. The dream is going to die. if I take a minute off. I can't let it die. I got to get this done. And it's a lot of fun. You're very important because you are very important. That's kind of nice. And you can really see the short-term feedback loop. You get real quick results and real quick answers to your questions because you're it. And that's very rewarding, but it's not sustainable. And so the way you level up to the Pathfinder stage, the next stage is you work on a couple of things. One is you work on time management and you start with the idea of, I have got to do some things that I have to think past Friday.

42:09Dave Ramsey:I can't quit. I have to quit thinking short-term only. And I've got to start time blocking. And I've got to say, all right, I have to block out time to, and the other discussion we're having, to be the product. And I have to block out time to make sure the accounting is done. And I have to block out time to make sure that the SEO people are doing their job with all the social media launches and reels and shorts and TikTok drops and whatever we're doing. I got to watch over their shoulder as the leader and make sure they're getting that done. And I have to block time for that. It doesn't happen unless I block time and I look at it and make sure it happens.

42:42Dave Ramsey:So time management is one of the things you do to level up. Very careful time management, time management away from the treadmill. And then the second thing is you start you start making your first hires here to where all the production of the actual unit of service or good is not dependent on you. As a matter of fact, you quit doing it. They do it. You might be the product like you and I are, but the video, the editing, the placement, the chopping up and sawdusting out of the actual piece of content in the case of content people is not dependent on you. You're going to do your thing in front of the microphone, then somebody else is going to do all that.

43:18Dave Ramsey:So we start to put people in place, which is where you are right now. You've done that. And in your case, you usually have 10 to 50 or 60 people at this stage. That would be typical. It's not necessary to be at the stage, but that's about where you are. So you start to delegate the creation of the product and the creation of the revenue. Now you're starting to own a business. And then when you've done that, along with time management, you'll level up and you go into the Pathfinder stage. And at Pathfinder is where you discover you've really got to lean into your values and your people that you're starting to hire have to be able to complete your sentences.

43:55Dave Ramsey:What would Dave do in this situation? What would Dave say in this situation? And if they can complete your sentences, you've got a delegatable environment. But if they don't know what you would do, then they're frozen every time a decision comes in front of them. And so they haven't been trained yet on the values and they haven't been trained on the decision-making paradigms. And so we train them, we start to build that level of delegatable people. And then we move into Trailblazer. And Trailblazer is the biggest thing that holds you back in Trailblazer is the middle. It's the middle one. It is really frenetic.

44:30Dave Ramsey:There's a lot going on. It's so fabulous. A lot of chaos. And the thing holding you back now is what got you here won't get you there. And so you've got to implement systems that are more sophisticated than you've ever done. Processes that are more sophisticated than you've ever done. Technologies picking up the weight of things that people have been doing on paper. You've been killing two dead gum many trees. We've got to get this digitized. We've got to get this accounting system where it's efficient and automated, not where we have to pull 17 spreadsheets together to make a basic accounting system work.

45:04Dave Ramsey:That's ridiculous. But it got us here, but it won't get us there. It's not taking you out. It's not going to keep you, but it's going to keep you from moving forward and getting bigger. And so you really start working on systems and processes. I resisted this stage a lot because I didn't want to be corporate America. I didn't want a bunch of rules. I didn't want a bunch of freaking policies, policy manuals, and people saying, well, accounting said we can't do this. Our legal said we can't do this. Bull crap. We got to get this done. And I didn't want that. And so I resist processes because I like the chaos of entrepreneurism, but it won't get you there.

45:40Dave Ramsey:You've got to increase your sophistication level and start to do those things. And this is also the place where you start doing your first real serious strategic planning, where you really start looking forward. Not just two weeks out, but a good solid six-month and one-year plan, probably some rolling 18 strat ops are going to go on where you do strategic operations you do some off sites you sit down you shut everything down get the best minds in the room where are we going how are we going to get there you convert the strategic plan into tactical breakouts of defined objectives and you get in gear and push it through and the team is all bought into it we all know where florida is and we all know how we're going to get there and we know george is going to make sure the tires are good and sally's going to make sure that the car's got gas and henry's going to make sure we got lunch in the back and so on.

46:26Dave Ramsey:Whatever we got to do to get there. What are the defining objectives that keep us from getting there if we don't do them and get us there if we do do them? When you do that, you move up to peak performer, the fourth stage. That might take you 20 years to do that. It's not going to be 20 months. I don't know how many years. It's not a set number of years, but we have observed that people will move through these things and only to the extent they do the stuff to level up will they move into that next stage. But the next one is a sweet spot. Peak performer, oh, you're making so much money. It's unbelievable.

47:02Dave Ramsey:Your team is incredible. They can finish your sentences. Stuff is getting done better than you would have done it because they know stuff you don't know. They're taking you places that you couldn't have thought of. They're teaching you things when you're the owner, the leader that you didn't even know. And so the six drivers are spinning all throughout this. You can hear them in there as I was doing this almost. But Peak Performer is the, there's only one negative thing about Peak Performer. It's so freaking good. Everything's going so good that you forget to break it. But you better break it before it breaks.

47:41Dave Ramsey:You better break it before it's broken. You better continue to iterate. You better kick, you better, you better send a jolt of energy and lightning ever so off. shock the crud out of people ever so often and stick a cattle prod on the thing and get it moving because you will kick back and ride on how cool and how great and how profitable you are. And you'll start to believe you're a big deal and you're not. You're just doing good. That's all. So this one's real easy to settle in because everything's going so good that you can take your hand off the wheel and put your feet up on the dash and run the car in the ditch.

48:14Dave Ramsey:Don't do that. You've got to keep driving. You got to keep thinking. You got to keep getting better. You got to keep iterating. You got to keep killing bad products and inventing new ones. You got to keep going. And then once you do that, you will naturally roll into the last one, which is where Ramsey is, which is the legacy stage. And that's where we start talking about succession planning. We start talking about how this thing survives the individual, whether it's through a sale, whether it's through a succession plan. In our case, my children are in their 30s. and 40s, and they are the owners of Ramsey, all but 1%.

48:53Dave Ramsey:And I own the only voting stock, so I'm still in charge. But anyway, the ownership has already passed. The leadership team can carry this without me. We now have multiple other brands other than me on the stage, on the microphone, called Ramsey Personalities. And the show actually gets higher ratings when they're on than when I'm on, which is distressing to me personally, but it was the plan. So it's kind of insulting, but yeah, it's real. And so it means our plan's working. We've been working on that for 16 years, by the way. Wow.

49:27Hala Taha:Wow.

49:28Dave Ramsey:While we were riding along in Peak Performer, we've been working on how we were going to create a succession plan, how we're going to implement it. We kept asking ourselves, if Dave dies this year, how much of this place survives? When we started, it was 3 % would survive 16 years ago because I was 100 % dependent on my being the product, even though we were in the peak performer stage. But nowadays, it's like 97 % would survive without me. And so I've worked myself out of a job, so to speak, which means I'm a fabulous leader, but it also hurts my feelings on a personal level.

50:03Hala Taha:Sometimes you got to get ego out of the way, right? For what's best for the business. So when I was thinking about this and learning about all these stages, I was like imagining like our company, where we're at. I think we're like somewhere between the Pathfinder and the trailblazer stage right now. And when I was thinking about being a treadmill entrepreneur, I found myself thinking, you know, I feel like parts of our business have moved back to treadmill because now it's way slower to hire. The people who used to be directly working for me are now leading departments. And then I find myself again, working a lot because we haven't hired fast enough because we have all these new fancy processes.

50:41Hala Taha:And I used to just go on LinkedIn and poach whoever I wanted. And now it like might take three months and then that compounds. And then suddenly I'm doing grunt work that I wasn't even doing two years ago. Now I'm doing it again. Right. So is it possible to actually move some of your business back to certain stages or like what are your thoughts on that?

51:01Dave Ramsey:Yeah. Anything that's new or broken is going to start at treadmill. And so you can have a company, an organization that's running all the way up at Pathfinder. But when you launch a new product, everybody on the brand new product starts a treadmill. We're all gutting it until we get the thing up and moving. And when that product starts to monetize or that service starts to monetize, it can start to self, you can fill positions to carry it. But in the meantime, somebody's got two jobs. You know, I've got to lift this new baby out of NICU. And, but yeah, so anytime you're launching it, Or if you have something that gets in the ditch.

51:38Dave Ramsey:We've had product lines that they just kind of got the flu and then they got pneumonia. And they were sick, you know. And now we have to stop and take care of the ill patient. And then how do you get them going? Well, you know, paddle's clear, you know, and you're boom. And you get them going again. And that's like starting a brand new product almost. So, yeah, it's going to start at Treadmill. The good news is those little, those departments or those product launches or recovering areas, they'll blast through the stages and catch up with the organization pretty quick because the organization is not functioning at that level.

52:11Hala Taha:Now, I know you were talking about this lid on leadership, the note that John Maxwell says, the law of the lid, right? And you mentioned some characteristics about leaders, like they're servant leaders, they're humble, they can be godly, visionary. How can we start to learn how to be a better leader and start to emulate those characteristics?

52:32Dave Ramsey:What I did was I read every book I could get my hands on of successful people. I read a lot of biographies of business people that were successful. And I started noticing a trend in the leadership literature and in the biographies. The best leaders in the world, the world-class leaders are other-centered. They're serving. They care about the outcome of the individual and of the organization at the same time, and even the personal situation of the individual, the team member. And so I can love my team, and I can, one act of love is not allowing them to work here because they're incompetent here, which means they must be competent somewhere else.

53:15Dave Ramsey:And so working with them and teaching them and lovingly guiding them, and then, you know, having a difficult conversation or two or six and saying, you know, this is not working, we probably need to find you something else to do because you're not fitting here. This isn't working. We have 1 ,100 team members. We probably have close to 2 ,000 people over 35 years that used to work here. And they either left of their own accord because they got married and had kids, or they left because they moved, or they left because they got a better job, or they left because we let them go. The vast majority, we did not let go.

53:50Dave Ramsey:We don't have that many firings around here. But we are not going to sanction incompetence. or misbehavior, or lack of character interacting with each other. We don't have people messing with each other and that kind of stuff. We don't do that here. And you can't be a we if you do that. What it took me a while to figure out was that I was loving someone well by not allowing them to sit in the poop. If they're just sitting in the poop, it doesn't work. And we've all been in situations where we're just not good at something, and it's frustrating for us. Oh, by the way, it's frustrating for the customer.

54:25Dave Ramsey:Oh, by the way, it's frustrating for that person's leader. Oh, by the way, everybody's pissed. But we're not admitting it because we don't want to do anything about it because it sounds like it's mean to do conflict. It's not mean. It's mean to not do conflict. We say around Ramsey, it's unkind to be unclear. We need to be very kind and clear and very blunt with folks. And we don't have to wait to do annual reviews. If we're in the middle of a project and something's not going right because of an individual, we pull the individual aside and talk about it right then. Then we don't embarrass them or shame them in front of the rest of the team, but we don't let this stuff lay around.

55:03Dave Ramsey:And consequently, we have an incredibly productive, wonderful culture where people trust each other and things move at the speed of trust.

55:12Hala Taha:When I was reading your book, I saw that you have a 90-day period for onboarding. We actually do this at Yap, and I've been loving it because within 90 days, if somebody is not able to get up to speed on a job, it's really great that they know and we know that there's like a probationary period for them and that they can be let go. And there's kind of like just no hard feelings. It didn't work out. It's already pre-planned that they're going to get evaluated. So talk to us about that and how that's helped improve your hiring.

55:41Dave Ramsey:And it works the other way too. For the team member, they don't have to sit and wring their hands and feel like they let everybody down or everybody's going to be mad or whatever. It's This is a probationary period. And so we don't require a two-week notice anyway, but you don't need a two-week notice. You just need to come in and go, you know, I'm just, this isn't working. And we've had some funny ones, some weird ones over the years during that time. You know, we had one guy come to work here about a year and a half ago, and he sat down and we do a three-day in-depth onboarding. And after the three-day in-depth onboarding, he sat down at his desk and he had like a panic attack, an anxiety thing.

56:20And he's like, I just can't do this.

56:25Dave Ramsey:And we're like, what? He goes, what I signed up for, I just, and he really even couldn't verbalize what was wrong. But he quit that day. Four days he'd been here.

56:37Hala Taha:Oh, my God.

56:38Dave Ramsey:Well, that's better. You know, it's better than, you know, 40 months of lack of productivity and everybody around him's frustrated and he's angry and he doesn't even know why. He couldn't even verbalize what the panic was from. But that's okay. I get it. I mean, you know, everybody gets, but the hilarious one, we hired a kid that owned a landscaping company and he'd sold it and he was like 22 years old or something. And he wanted to work in an office. He wanted to work in a white collar setting instead of pushing a lawnmower. You know, we went through the whole interview process, the whole onboarding thing.

57:11Dave Ramsey:And he was going to be in customer sales and he had put on the headset, sat down, started making calls, started taking calls. And he was there about two hours. And he like, at lunch, he ripped the headset off, went running out the door. We never saw him again.

57:25Hala Taha:Oh, my God.

57:26Dave Ramsey:It took two days to get in touch with him. And we said, what's the thing? He goes, I just can't work inside. What part of working at our company did you not think was inside? I mean, you know, how did you miss that part in the interview? It's like hilarious, but I can't work inside. So, yeah, we laughed at the HR team and the recruiters. We said, hey, you have to start telling people that we work inside as part of the onboarding. But yeah, I mean, that's okay. Let them go. That's better than the pain of somebody staying in a job they hate. They start to hate themselves. They start to hate the boss.

57:59Dave Ramsey:They start to hate the company. They start to detest the very organization that feeds their family, which is betrayal and lack of loyalty. That's ridiculous. And it happens because leaders aren't strong and aren't strong enough to let somebody go during that 90-day period.

58:13Hala Taha:On the flip side, there's a lot of internal promotions that are going on, especially when it comes to the trailblazer stage and you've got to really pull people into leadership. So what are you looking for when you're pulling somebody into a leadership position?

58:26Dave Ramsey:Well, leadership is service. Again, you're, you know, doing a task is one thing. Leading people doing that task is a whole different skill set. Leading people is different than task orientation. And so we've got, you know, probably 500 people on our tech team writing code for software engineers, platform people, architect people, so on, all the way through the whole organization, because everything's digital today, of course. A lot of those tech guys, our gals, are really, really good at the execution of the tech, writing the code, building the code, making the website do what it's supposed to do.

59:02Dave Ramsey:That's a whole different skill than leading tech people. Leading tech people is a whole, it's a science unto itself, because they're different. They're They're very, most of them are introverted. And so you're really looking at how we're going to lead, how we're going to love them well, how you're going to serve them well. So in other words, a great salesman might not be a great sales manager because sales management leading salespeople is different than making a sale. Now, they can empathize and sympathize with what's going on naturally because they've been there. And the natural path is for them to move into leadership from having done the task.

59:39Dave Ramsey:but we just have to identify that the rest of the leaders have to train the new leader to be a leader, not just a salesman, not just a tech.

59:48Hala Taha:Before we close with my last two questions, I want to ask you, what advice would you give to an entrepreneur right now who wants to start their own media business?

59:58Dave Ramsey:Do it. Start it. Don't get married to your first microphone, your first set. I think I'm sitting in my seventh or eighth studio I've built in 30 years. Don't get married to a platform, like we said earlier, platform agnostic. I would be on everything. I wouldn't just be a YouTuber or just be a TikToker. I think that's a mistake. Now, each of the platforms we all know watching this or participating in this, they have different personalities, and you have to put different versions of you in that. I know that. I'm not saying that at all. But you need to get good enough at all of them and start using all of them.

1:00:37Dave Ramsey:And it doesn't cost anything. Just go do it. You'll mess it up. Well, so what? I'm convinced about 90 % of the ideas that we've had at Ramsey, including me, during the 33 years I've done this, is about 90 % of them suck. That we survived them. We lost money. We lost reputation. We look back on that stuff and we look, that's pitiful. You were awful. Those old tapes make me laugh. But do it anyway, because you don't know which 10 % is going to work. Quit doing the stuff that doesn't work, obviously. But, you know, and every idea I have is a good one when I'm out walking in the morning, right? Or having a cup of coffee.

1:01:18Dave Ramsey:Every idea is a good one. But when it hits the market, most of them aren't. So go do it anyway and keep going, keep going, keep going. Don't stop. Don't stop. Never quit.

1:01:26Hala Taha:I love the motivation. You taught us so much today. So I'm going to end this show with two questions that I ask all of my guests. The first one is, what is one actionable thing our young and profiters can do today to become more profitable tomorrow?

1:01:40Dave Ramsey:Make sure you're always wearing your customer's shoes. Quit thinking about how you can make money. Think about how you can make their life better. And they'll give you money.

1:01:49Hala Taha:I love that. And what would you say your secret to profiting in life is? And this can go beyond business.

1:01:56Dave Ramsey:Well, in my case, when we went broke, I had met God on the way up. I got to know him on the way down. And so my walk with God has changed my entire life. I'm a different man. I'm a different dad. I'm a different husband. I'm a different leader. And that faith journey is woven into any story that is a Dave Ramsey story. So that might not be true for others, but that's the answer to my question.

1:02:26Hala Taha:And where can everybody learn more about you and everything that you do?

1:02:29Dave Ramsey:Oh, it's pretty well everywhere. I think you can find it. But RamseySolutions.com is the mothership website, and you can find all the stuff going on there.

1:02:37Hala Taha:I'm sure everybody knows where to find you, Dave. Thank you so much for joining us on Young and Profiting Podcast.

1:02:42Dave Ramsey:Honor to be with you. Very good job. Thank you for having me.