To celebrate his 300th episode, Josh brings back Adam Mckee, owner of Contemporary Woods Furniture and does an impromptu coaching session with him.
Adam is the owner of Contemporary Woods Furniture for over 8 years, helping people and businesses craft their custom spaces.
Adam started practicing LEAN Manufacturing two years ago, and has decided to turn his business into a success, and is looking to grow into the leader his company needs to meet long-term goals.
In today's episode you will learn about:
- How one on one coaching session can look like
- How to make your employees reach your vision
- Defining values and clarifying statement
- Tips on how to improve your business on real-life example
Narrator: Welcome to Cracking the Cash Flow Code where you'll learn what it takes to create enough cash to fill the four buckets of profit. You'll learn what it takes to have enough cash for a great lifestyle, have enough cash for when emergency strikes, fully fund a growth program, and fund your retirement program. When you do this, you will have a sale‑ready company that will allow you to keep or sell your business. This allows you to do what you want with your business, when you want, in the way you want.
In Cracking the Cash Flow Code, we focus on the four areas of business that let you take your successful business and make it economically and personally sustainable. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he's learned through his 40 years of owning, running, planning, and thinking about what it takes to make a successful business sustainable and allow you to be free of cash flow worries.
Josh Patrick: Hey, how are you today? This is Josh Patrick and you're at Cracking the Cash Flow Code. My guest today is Adam McKee from Contemporary Woods. And Adam is a repeat offender and he's got all sorts of things he's trying to work on in his business. And the surprise for Adam, which he doesn’t know, is we're going to do a coaching session because he's got all these cool things he wants to work on and I'm like this inveterate coach and I can't help myself. So, that's where we're going to go. So, let's bring Adam on right now and we will start the conversation.
Hey, Adam, how are you today?
Adam: Hi, Josh. A little below average but I'm ready to rock and roll.
Josh: Okay. Well, hopefully, we'll get you to at least average by the end of our 23 or 24 minutes that we spend together today.
So, you’ve got a new fire lit under you to fix your problems in your business. So, my first question for you is what lit the fire?
Adam: Well, a series of events. Two years ago, I started reading 2 Second Lean by Paul Akers. That started me to get an audible subscription. I started reading more. Mind you, this is six years into my business. Mind you, I had a business coach for six years who was telling me, “You should read more.” So, I finally started reading more.
Six months later, I read Profit First, blew my mind. I immediately reached out to Mike and said “I'm accountable. I'm going to do the accounting.” A year later, we paid off a $17,000, three‑year old tax debt to the IRS. And my wife and I bought a couch and a rug for the first time in our adult life with cash, no financing, and that's just kind of the start. So that's been four months ago since we did that and-- I don't know. I feel like this new fire has been lit and I'm ready to tackle my demons and make this a great business.
So, I see that you are frustrated by allowing your employees to hold you back from reaching your vision. So, I have a question for you about your vision. Is it written down and do you share it with all your stakeholders?
Adam: No. It is not shared with our stakeholders. Yes, it's written down. I just went through the Pumpkin Plan five‑year vision casting. And I did the one‑year vision casting about three weeks ago. And I have not shared it with our team.
Josh: Okay. So, with the vision casting, how many pages or how many words is it?
Adam: My five‑year, I think, is three pages--
Adam: --or four. And my one year, I think, is at least two. I'm not sure on the page count.
Josh: So, here's a suggestion I'll have for you, is there any way you could boil that down to one or two sentences?
Adam: Yeah, I'm sure.
Josh: Here's the reason why and this is something I learned. My first business plan I wrote was 120 pages, I think. I used one of those programs, back in the early ’80s, where you sat at your computer and answered 19 zillion questions. We finally got that down to four pages eight years later - what was actually usable. And what I've learned over the years is less is more, meaning that the more brevity you can bring to the party, the easier it is for other people to get on your bus. And it also goes down to what I call the values game we call stage two values process. Along with vision, do you have four or five values which are very clear in your mind and, hopefully, are written down with a clarifying statement?
Adam: Yes. So, we just did the clarifying statement. We're calling them immutable laws through the Tap the Potential kind of framework with Dr. Sabrina Starling. And we've had our core values for a year and a half or two years now written down. We recently cut ‘em from eight to three. Our core values are quality, teamwork, and improvement.
Josh: Okay. So, what is the definition of each? What's your clarifying statement for each?
Adam: My clarifying statement for each is quality-- I'd like to just read ‘em. Do you mind if I look ‘em up real quick or am I supposed to read it off the top of my head?
Josh: Well, we could do that, actually. But let's just talk about the reason why you want to have clarifying statements and why you want to memorize it. The reason is, they’re tools. If it's not like that off the top of your head, it's hard to use it as a tool. And the reason that you have to look it up is because you're not using ‘em every day. Does that make sense?
Josh: A lot of times, what I see with people is that they've got values and they’re in their head. They may have written them down with clarifying statements but they're off someplace, maybe they're on a wall which nobody ever looks at. But if they're not used as a tool, every day, it's really hard to make them stick.
And from those values, that's where your vision statement comes from because your vision is to support your values. So, we always start with values. We always start with clarifying statements. Then, we go to mission, vision, and goals.
Adam: So, my clarifying statements that I did use, one of them was fail forward. I've been using that for four or five years now. It means learn from mistakes. Do it better than last time. Don't repeat your same mistakes. But it's okay to fail and learn from your failures because we learn more from failures than we do from successes. So, that's one of mine without looking it up.
Josh: Yep, absolutely.
So, if you're using that and that becomes a mantra, the next question you have to say, “Is that a core value or is that an aspirational value?” In other words, when somebody makes a mistake, do we learn from it or do we punish people? Because, most of the time, when people make mistakes, we say, “Oh, that was really dumb. You can't do that again.” Or do you say, “What did you learn?”
Adam: Oh, boy. I think it's 70% true and 30% aspirational.
Josh: Okay. So, this is another thing that I learned over the years is with values, especially in the business you're in where you’ve got blue‑collar folks out on your floor, they have really good BS sniffers. So, if you go out and say, “Okay. One of our core values is learn from our mistakes” and 70% of the time you say, “That's great”, 30% of the time, you say, “It’s not great.” They're not going to believe it’s a core value because they're going to focus on the 30% where you're wrong and you're not following through.
Forty years ago, I discovered values and I made all the mistakes everybody in the universe makes around values. I was saying things were core values when they were aspirational values. And I was seen as being a fraud. So, what I learned was that I needed to let the people who were working with me saying, “This is something which I think is really important for us to do and I'm going to need your help getting there.” Now, for me, the first value I played around with was personal responsibility because I was really good at blaming and justifying.
So, when you're a 70/30, we'd like to think it's a core value but it's not. Does that make any sense?
Adam: Yeah. Yeah. I think the hard part by saying that makes sense is we can say we may not have any core values. I'm not trying to exaggerate but like-- they just might be half that. I mean, our other three statements are-- so, fail forward, I told you already.
Adam: Leave it better than you found it. Every day, make your surroundings a little bit better. And then, our reputation is our quality. That's what I narrowed down to the supporting statements for our core values.
So, your reputation is your quality. Hmm, interesting.
So, how do you maintain your reputation? By shipping quality products, is that your--?
Adam: Yeah. I mean, if there's a defect, we just redo it. We make a new one. We buy the material and we eat the cost. If we scratch something or cut something wrong, we order new material and re‑make it. We don't pass on that crap to our customers.
Josh: So, Adam, allow me to go back and say, What is it that your company actually does?
Adam: Oh, sure. Yeah. So, we're a team of custom woodworkers. We make custom furniture, custom cabinets for people that can't find what they want at the store, basically.
I bought the business about eight years ago. This is our 40th year in business. And we have quite a bit of finishing expertise. That's one thing I feel like separates us from the competition is that we build stuff and we also finish it, too, to a high standard - executive boardroom tables, residential high‑end cabinetry and furniture, high‑end closets, a lot of kind of custom unique pieces for people that have a discerning eye and want a creation of their own, basically.
Josh: So, basically, you're in the one‑off business?
Josh: So, what you make is unique and different and probably never make two that are exactly the same?
Josh: So, are you charging a premium price for that?
Adam: We have raised our prices quite a bit in the last year and a half. I don't know if we are considered a premium yet or not. That's something that's on my digesting thought list or whatever.
Josh: So, out of curiosity, what would it take for you to become a premium product?
Adam: My question, to answer that, I don't know if we're the highest price in our region. And I don't know if it necessarily has to be highest price. But, I think it has to be where the customer feels like they're getting two or three times the value of what we're charging even though we're charging a high price, I guess, is my goal - my aspiration.
Josh: Are you charging a high enough price to fill all your needs from profit?
Adam: I'm not sure. So, like last year-- yeah, I think it was the start of 2020, we started off at $45 an hour labor rate. Then, two or three months later, we realized that wasn't enough to reach our goals. And so, we jumped it to $60. And then, in the last quarter, of the same year, we raised it to $70 an hour. So, my point is I think we're heading towards that direction. I don't know if we've reached it or not. I don't know what metrics I would look at to see if we have reached it.
Obviously, if we get more no’s to our quotes than yes’s, then we're probably overpriced, overburdened for our market. So, either we need to switch markets or we need to adjust our prices but [inaudible 00:12:09].
Josh: Yeah, it all depends. There's a lot of people in your world that will get three no’s for every yes.
Josh: Obviously, you want to do better than that. But one thing you might want to be taking a look at is your sales process. Are you familiar with Donald Miller’s StoryBrand?
Adam: Yes, yeah.
Josh: Okay. One thing that will be really useful for you to do is-- and I don't know if you've adopted his framework for the way you communicate with your customers and potential customers, it will be a really useful thing to do, especially in the one‑off business, because what problem are you solving for your customers? What's the transformation that will happen when people buy your products?
Adam: Yeah, I'm glad you're saying that because we've started to put that into our email. It’s like, when we get a quote and we send a quote to somebody, we say, “Hey, here's all the details about your quote.” And I've instructed my team to say, “Hey, make sure we're putting them as the hero” like, “We're really excited to guide your ideas into a final result that you can stand back and be satisfied with or excited about.” I'm trying to make that shift.
The other shift that I want to make is I went through Michalowicz’ Serve Selling Course. It was just basically about changing how you talk to people and servant leadership, same kind of thing. And so, I have changed my vocabulary when I speak to people. When I answer the phone, it's, “Hey, this is Adam. How may I serve you?” And then, if I'm talking to other contractors, or colleagues, or designers, it's like, “Is there anything else I can serve you with? Is there any other knowledge you need to make this project a success?” So, I've just started doing that in the last couple months, three or four months.
Josh: Have you noticed any results, based on that?
Adam: You know, I don't know if I've reflected enough but I definitely see relationships getting better. I don't see any negative takeaways at all, for sure.
Adam: [inaudible 00:14:01] positives
Josh: You likely won't. I mean, the truth is we rarely hear negatives from our customers because they just don't tell us.
Josh: I had a call with the people who make these blue blocking glasses this morning. And they're great when I'm sitting down. And he asked me and says, “Well, why don't you call my customer service?” I said, “Well, it wasn't worth my time and effort.” They work fine if I sit. If I walk around, I get dizzy.
So, the truth is, most of the time, we never hear when people are unhappy because it's not worth the effort for them to do so unless they're really unhappy or it's a really expensive mistake. They just sort of say, “No. I don't want to work with them again.” So that's one of the challenges that you have that.
So, what are you doing to build authority in your industry which I think is a really interesting and good thing to do?
Adam: I love this coaching session because I feel like I'm getting all my clothes stripped off and “Look, you're naked now. What are you going to do?”
Josh: Yeah. Well, these are things you wrote down. I didn't write ‘em down.
Adam: Yeah. I know. I love it.
Josh: I'm just using your stuff [laughs].
Adam: You’ve got me speechless [inaudible 00:15:06].
My point being I've started connecting with more people. So, Michalowicz, he's a big hero of mine. I've mentioned his name several times, obviously. And he offered a Different is Better beta program for his new book. I don't know if you heard about his new book coming out this fall. That's a marketing‑based book about being different - how you stand out in the market.
And so, I paid to be part of this beta program that was amongst 20 other entrepreneurs. And it was a really invaluable experience. And I got to talk to Mike a couple of times over Zoom, in the group setting, and really kind of added a lot more fuel to my fire, per se.
Anyway, there was a great number of people in that group that I reached out to and connected to on a one‑on‑one basis. And that has kind of snowballed into me, on this connecting journey. Kind of like you and I doing today, just having a short half‑hour conversation. It could be about nothing specific. It could be something to help serve other people.
Anyway, that's kind of got me into a whole new tier. And I've gotten to a point where I've reached out to a couple builders and contractors that are on Instagram and YouTube but they have thousands, or tens of thousands, or hundreds of thousands of followers, and they've responded to me. And Michalowicz has responded to me in a few different ways. And other people in Michalowicz’ sphere, other co‑authors that written some of his derivative books have responded to me and had phone calls with me and Zoom calls. So, I'm excited to like build this little network. I don't know exactly how to execute on becoming the authority.
Josh: So, do you sell just locally or do you sell nationally and internationally?
Adam: Mostly just regionally, around us, two or three hours away from us, and that's it.
Josh: Okay. So, you really aren't looking to build a national reputation?
Josh: You want to build authority?
Josh: So, again, we're going to go back to StoryBrand, for a second because this is one of the steps in building trust with your potential customers is what is your authority statement? In other words, how do people know what you're doing and you're competent at it?
Now, there's ways of doing that. You can do blogposts. You can say, “We've been in business for 40 years and this is what we've learned.” You can start a podcast, if you want to, and talk about the issues with having custom furniture built for you and custom cabinets done, what are the good things? What are the bad things? What are the up’s? What are the down’s?. All those sorts of things are good.
There's a book out there from one of the HubSpot top agencies called You Ask, We Tell. And, in there, it has a really interesting process where he says, “I get my salespeople to give me all the questions they ever hear from our customers. And we answer those questions in five‑minute videos or a blogpost - a 700‑word blogpost.”
And when you're doing that, you're helping people because when someone's going to come and buy something from you, Adam, my bet is they're going to spend a few thousand dollars at least. And when someone's going to spend a few thousand dollars, they're probably going to look at four, five, six, eight, 10 pages on your website to see if you're the type of person they want to do business with. And if you've been there and you've answered all the questions you have, and you even have a video you ask people to watch before you get on a sales call with them, you're going to have a more informed customer who you've already proven that you're an authority just by the content you put out there.
And when you talk to Mike, you know, Mike Michalowicz, who’s actually helped me write my first book and [inaudible 00:18:42] for my second book also, is that, when you talk to Mike, you know he's an authority because he's written 19 books, and does all these programs, and has the Profit First Program. You know the guy knows what he's talking about so you're probably going to listen to him.
If you go to my website and you look at what we do, I've got 1500 blog posts, 200 videos, 300 podcast episodes, basically, on five topics - values, operational relevance, systemizing your business, having recurring revenue stream, and filling the four buckets of profit. So, it's pretty easy for people to figure out that I'm an authority on those five issues. Because I've got so much content about it, people are probably going to say, “Well, this guy must know what he's talking about. Otherwise, he's just a blabber mouth.” Probably a bit of both.
So, when you're building the authority basis, all you need is one sentence. “I've been in business for 40 years and we understand the world of high‑end custom woodworking.” But it goes more than that. So, if you use the brand script which is Donald Miller's thing. You might be aware of it. I kind of think that's a pretty good framework.
I love frameworks. Frameworks are easy because you don't have to think about what you're doing. You just fill in the blanks and then your piece comes out.
Josh: So, it's one of those good things to do.
I think that you're on with this, with building authority in your industry, it's more important to build authority in your community.
Adam: Okay. Yeah.
Josh: I see this happen all the time. I see this in the wealth management world a lot where wealth management companies, they want to build authority with other people and with their peers. Who cares about your peers? You care about the people who might buy things from you.
So, in your case, it’s not the industry, it's your community. So, if you can be the go‑to guy in your community for high‑end custom stuff, because you've answered everyone's questions, people will gladly pay you a premium price because they think you're the expert. And you've proven you are.
Adam: Yeah, that's interesting. That kind of echoes a lot of other things I've been learning recently.
Josh: It's just really, really important stuff.
The other thing I want to quickly talk about, because we're just about out of time, but I'm having too much fun to stop now, is hiring A players. You know, I see this all the time. Everyone says, “I want to hire A players.” No, you don't. You want to have a couple of A players and you want to have a bunch of really good team members.
I used to be a member of a group called young presidents’ organization. The YPO will get access to about anybody in the world. And we had a meeting at the Patriots practice site once. And the player personnel guy came in. And this was a Drew Bledsoe. He was the quarterback. And they had one defensive person. ”We have two players we are not going to lose no matter what - the defensive guy and Bledsoe.”
So, then we have eight or nine people who are really key players. And we're going to go to a point where we really want to keep them here but, at some point, we have to say, “I'm sorry. We can't do that. You’ll have to go away.” And then, the rest of the people are guys. They come and they go. We want to treat them really well, so they love being here while they're here, but they're essentially interchangeable pieces in our company.
And we need to be thinking about our companies that way because if we have a company full of all A players, we have total chaos running around all the time. We need a bunch of people who can be good soldiers, and build the stuff that you need to have built, and do it in a systematic way that really works. Does that make sense at all?
Adam: It does. Obviously, if everybody’s a leader, there's no one to follow or you could go on with that for a while.
I guess, my definition of an A player, in my head, is not what you're saying. Like, I agree that you do need a few A pillar players that are like your next leaders. And they lead the other five people, or whatever. But we've been reading the book Surrounded by Idiots, recently, as a team. It goes over the DISC thing.
Anyway, I think it's like you almost need A player as a detail‑orientated person, the blue. And you almost need an A player as a red. And they need to like work with each other so that they counteract their strengths. I don't know.
Yeah, I get what you're saying that you do need followers. That's interesting.
Josh: So, Adam, thank you for playing with me today. I really appreciate it.
Josh: And I'm going to bet people are interested in finding where you are. So, if they want to do so, how would they do it?
Adam: They can look me up on LinkedIn, becoming more active there. And if anybody wants to start a conversation, they can email me direct at email@example.com.
And I have two things I would like you to do, because we are out of time. One is please, please, please, please, please, please, please, please, please, please, please, please, please, please - you get the idea now? Go to wherever you're listening to this podcast and give us an honest rating and review. If you love it, let us know. If you hate it-- well, I hope you don't hate it. But if you do, you can say that too.
And the second thing I'd like you to do is, I came up with this thing - it was kind of a joke, but it's actually been a really useful tool over the last 20 years or so. It’s called the periodic table of business elements. You may remember the periodic table when you were in chemistry class. Well, I did one for different tactics and strategies that you can use to make your business economically and personally sustainable. It's really easy to get. You just go to www.stage2planning.com/periodic and you'll be able to download our periodic table and learn some new tactics and strategies you can use in your business. And if you want to talk to me about it, I'm happy to do so.
Hey, this is Josh Patrick. We're with Adam McKee. You're at Cracking the Cash Flow Code. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You've been listening to Cracking the Cash Flow Code where we ask the question, “What would it take for your business to still be around 100 years from now?”
If you've liked what you've heard and want more information, please contact Josh Patrick at 802-846-1264 extension 102, or visit us on our website at www.sustainablebusiness.co, or you can send Josh an email at firstname.lastname@example.org.
Thanks for listening and we hope to see you at Cracking the Cash Flow Code in the near future.