In this episode Josh talks with Kathryn and Michael Redman from Half a Bubble Out. They discuss crafting a vision for a small business that gets results.

Kathryn_and_Michael_K_Redman_together_SQUAREKathryn and Michael K. Redman are sweethearts, best friends, and the husband-and-wife team behind Half a Bubble Out (HaBO), a marketing and business consulting firm. They’re the co-authors of Fulfilled: The Passion & Provision Strategy for Building a Business with Profit, Purpose & Legacy, as well as the founders of HaBO Village, a membership website which helps leaders build Passion & Provision companies.

Michael and Kathryn have been featured in Forbes and Entrepreneur magazines, built two 7 figure companies, been visiting professors at multiple universities, are frequent guest speakers, and are the creators and co-hosts of the HaBO Village Podcast. For over 18 years, they’ve helped business leaders grow their companies through marketing, business coaching, and leadership development. They currently reside in their hometown of Chico, California, where they love going to work every day.

In today's episode you will learn about:

  • How to craft a clear, complete, and compelling vision for your business

  • The inner and outer game of leadership

  • The 5 Fundamentals of management

  • The Passion & Provision strategy for building a business with pro

Transcript

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.

And my guest today is Kathryn and Michael Redman. They are sweethearts, best friends, husband and wife, business partners, all those kinds of good things, and they have a very interesting business where they work with marketing and business consulting which is really unusual. And coaching, it sounds like, also. So, we're going to talk today around vision-- or we're going to start talking around vision and we'll see where that goes. So, instead of me yammering on, let's bring Michael and Kathryn on.

Hey, Michael and Kathryn. How are you today?

Kathryn:         We're well, Josh. Nice to meet you.

Michael:          Nice to be here. Thanks a lot.

Josh:                Well, thanks a lot for joining us.

So, let's talk about vision. I always like to hear how other folks help people craft vision statements. So, how do you guys go about doing that?

Michael:          Well, one of the things we've done is there's nothing new under the sun and so we didn't trademark any amazing thing.

Kathryn:         Nope.

Michael:          We just have studied a lot and watched a lot. And we went to Good to Great, and the work over there, back in the ‘90s. And we looked at realizing how much the research talked about people understanding not just a “Where do I want to go?” but more of a comprehensive thing. So, we deal with four areas. We deal with core purpose. We deal with the core values. We deal with a BHAG or a-- what's that big goal you're trying to accomplish that's more than just trying to make the payroll? And then, how do you describe that in a way that's going to interest you and engage you, so you really start realizing what does that look like.

So, it gives you direction. It gives you purpose. And it gives you kind of some moorings or some side rails for how the company is going to behave. And then, once you have that, not only does it help focus you more, but it helps you communicate to your people so they can start making decisions without you having to micromanage.

Josh:                Yeah, I agree 100% with that. So, let's talk about core values. Let’s start there because, in my opinion, that's sort of the bedrock of what makes a good vision statement. So, when you talk about core values, what do you mean by that?

Kathryn:         Yeah, it's a great question, Josh.

So, when we talk about it, obviously, most of us have what I would call a set of values that we ascribe to as people, as humans. Our own core values. Our own sense of the way we see the world and need the world to run.

When we're talking about a company's core values, what we're really talking about is, for the founders and if it's a smaller company - for the leadership team, “What are the three to five things that are so deep for you that, if you had to change that, you would rather close the company than keep moving forward?” For example, if one of your core values is, let's just say, something like kindness and suddenly you were in an environment where the only way you survive is to be completely cutthroat. Then, you would rather just do something different because it just so violates who you are and how you want to function and the way you want to treat people within the business community. So, that's one example.

Michael:          Well, and one of the things that happens when you start to think through those things which, when you get into this kind of process of vision, and you start looking at your core values, as you well know, Josh, this is where you start taking a deep look at what you care about - what really is something that you value. And it's really different for every different company. But when you started, it's just kind of like, “Well, this is who I am. I started my company. I have my values.” When you start to codify them, you can actually start integrating them into the company so that the people around you-- well, we say hire, train, and fire to your core values. If you can hire, train, and fire new core values you're going to have a team of people around you that is going to feed that culture that you want. It's going to automatically build the culture that you like and want. And you're going to have a way more longevity when it comes to your employees and service to customers and everything else because it's amazing how often people are saying things like, “I just can't find good employees anymore.”

But when you ask them if they can identify their core values and if they're interviewing to core values then, all of a sudden, they go, “What do you mean? Why would I do that?” Like, I bet you, if you understood your core values and then interviewed and hired to your core values, you'd probably find a lot better employees. And the biggest reason that I can say that is not just because I think it's true. We've seen it for 20 years in our own company. And we've seen lots of our clients do the same thing.

Kathryn:         Well, and I would say too, I'm just going to-- I'm going to throw this in really quick because I have a recent momentary experience, even just this morning. So many people just hire for competence, right? They have the list of skills that I need.

Josh:                Yep.

Kathryn:         But if they don't have the character that I want my company to live into, then I don't care how skilled they are, it's not going to work well, right?

So, I looked at a resume this morning for someone and I was like, “Wow, good skill set.” And then, I dug a little deeper and I found a whole set of places where I thought, “Ooh. Yeah, our values aren't aligned. I don't care how skilled you are, we're not going to do well.” So, those kinds of things become really significant.

Josh:                Yeah, it's actually two things I want to say about that. One is, I sold my first business because, for me to stay in the business, I would have had completely had a major break with a core value.

Michael:          Really?

Josh:                Yeah. It was my-- what I call rights and respect which also honestly fits under. And for me to stay in the business I was in, which was a food service and vending business, we would have to start cheating on the commissions we sent to customers. And I said, “Well, I don't want to do that.” So, I sold the business and moved on.

Kathryn:         Wow.

Michael:          Good for you.

Kathryn:         It’s so fun to actually hear a great example of that because you don't hear it very often because that requires an incredible amount of courage.

Josh:                Well, it took me three years to get there, so it wasn't like I woke up one day and said, “I'm going to sell my business because I have to cheat.”

Kathryn:         I'm no longer impressed, Josh. I'm kidding.

Josh:                I never ended up cheating. But it took me three years to make the decision that the industry was untenable, not just my business.

The second thing is-- I have a question for you about this because I think it's really important, is a lot of times I see people call a core value a core value and it’s actually an aspirational value. And, to the outside world, that probably doesn't make a big difference. But inside your company, it's huge, especially in the world of blue‑collar business because those frontline workers, the blue‑collar workers in your business, they have great BS sniffers. And if you're taking an aspirational value and you're calling it a core value, you've lost all legitimacy with that and they see you as a great big, fat liar.

Michael:          Give me an example of what you see as an aspirational value.

Josh:                I have a client that, about five or six years ago, he went through our values exercise with them. And they decided one of their exercises was they were a learning organization. And they weren't a learning organization. They wanted to become a learning organization.

Kathryn:         When I grow up, I'd like to be a learning organization.

Michael:          Right.

Josh:                Well, that happens a lot. I mean, my own personal-- and this is where I came, I read Patrick Lencioni’s book, The Advantage and I said, “Aha! Now, I know why I have this problem.”

Kathryn:         It’s a good book.

Josh:                Going back to my vending company, I was the world's worst manager. I mean, I was Attila the Hun. I blamed people. I justified my way through the world. I yelled at people every single day. And then, I went to one of those new age seminars and I said, “You know, personal responsibility is something that we really need to have in our company. And it is a core value.” So, I went back and I announced to my company that one of our core values was now personal responsibility.

Kathryn:         Uh-oh.

Josh:                Well, you can guess what happened [laughter].

Kathryn:         Well, I'm thinking you took it on the chin a few times [laughs]. Oh, my.

Josh:                Well, not to my face but behind my back. You couldn't believe what they were saying about me. So, I would have been fine if I said, “This is a value I think is really important. I'm not there yet. I need your help. Can you help us get to this point?” And then, it would’ve been seen as legitimate and they might have even said, “Maybe we should give him a chance” instead of just trying to cut me off of my knees which they were very good at doing.

Michael:          Yeah.

Kathryn:         Oh, it’s so good. It's so good because I think one of the realities-- you're right, with the values, they've got to be legitimate to who you are. And I think it's okay to have aspirational values. I think it's good. But I do agree, you have to identify them as such. And then, if you do that, you also have to create a culture where people have permission to say, “Hey, we're really striving to be this and that didn't represent that, you know. What do we do?”

I mean, I listen to Brene Brown, right? She's one of my favorite humans. And she'll talk about times where she's in the middle of a meeting and her team will-- like, they'll go through the meeting. and she'll step out of the meeting and one of her people will go, “Brene, do you know that, when that person said that, you rolled your eyes?” Oh, man. Dang it. And so, then, you know, you’ve got to go through the whole like willing to apologize, willing to re‑engage that. So, there's the permission. When you're creating aspirational values, I think you have to create permission to help each other grow into them.

Michael:          Yeah, it's interesting because I go, if it's an-- this is my opinion. Classifying. My opinion is coming out now.

If it's an aspirational value, that is, literally, we can't obtain it, it would be nice if we could wish our way into it, but we're never willing to earn our way into it. That is something that is not true. And it's not going to be true anytime soon, because we don't want to work at it.

If it were a value that says, “I believe this is important,” like you said, that having self‑responsibility for what you're doing or accountability, and you're not willing to own it, and allow people to call you on the carpet for it, even though you haven't grown into it yet, there's that place where I start to think that an aspirational value, if you're saying, “Hey, we don't do this well. It's critically important. I have decided it is important that we're going to move towards it as company.” Then, I'm okay with that being a core value.

But there's a whole lot of stuff that we would coach a leader to do. And our coach would call us on the carpet and tell us, “Look, you can't just switch the gears that fast. You're going to grind them and drop the transmission in your car” because it's not going to work. So, you’ve got to ease your way into it if you're going to take that big of a turn in your core values.

And it's really-- I like the way you say it. You can't have that aspirational, in the sense - the way we would talk about it is, do you really live that because if that's your core value and we're defining your core values of your company right now, our job is to identify them and codify them. And if you don't live it out, that's a big deal.

We're going to talk about the ones you have right now. And then, if you want to change them, let's talk about a change strategy that may take a lot of humility. And it's going to say, “I don't do this well,” and that the whole core building trust is to say, “I did something wrong. I want to change. And I want to let you know that I'm sorry. And I think it was wrong.” You've got to have that relationship.

Josh:                There's a crucial piece, I think--

Michael:          Okay.

Josh:                --for success in this and that's what I call cultural mistakes. And if you're going to have a transformation of any sort, or a transition of any sort, it’s likely to have a bunch of mistakes that go along with it.

Michael:          Oh, yes.

Kathryn:         Absolutely.

Michael:          Oh, yes.

Josh:                And where I see people falling down is they don't tolerate or they can't have a system for handling mistakes.

Michael:          That's a really good point.

Kathryn:         Yeah. And the system - the culture of being able to handle mistakes, that really-- it's a leadership thing, right? Because if I can't tolerate a mistake in you, it's likely because I can't tolerate a mistake in me. So, I just can't.

And so, that willingness, as a leader, to say, “Okay. This is a major issue for me. Like, I am a perfectionist, and if you don't attain perfection, I'm going to be mad at you because I would be mad at me if I failed.” That's a dangerous position to put people in.

So, just realizing-- you know, as we talk about what it looks like to be holistic, running your business, you create your core values but this inner game of leadership, this 90%, that's under the water that people don't know about, they only see the 10%, that 90% is affecting everything about how you put stuff into your culture, how you show up. And so, that's just the super critical pieces owning where you are and being willing to grow so that you can be who you need to be as a leader.

Michael:          Okay. Josh, do me a favor. How would you describe-- I'm going to interview you for a moment. How would you describe a system for handling mistakes?

Josh:                Well, essentially, it really comes down to having a conversation that goes something like this. “What did you learn?” And there's two Buckminster Fuller statements that always come to mind to me about mistakes.

Michael:          I love Buckminster Fuller.

Josh:                Yeah, so do I.

Kathryn:         I can't even believe you said Buckminster Fuller.

Michael:          Okay. Tell me about Bucky.

Josh:                One is, “You don't learn less.” And the second is “Mistakes are learning opportunities.” So, if you're focused on learning and you're focused on growing, you're focused on making mistakes. Now, in the innovation world, there's a guy named Doug Hall who runs around. And I forgot what the name of his company is. But Doug is a really interesting guy. And his mantra is “Fail fast. Fail cheap” besides systematizing the whole innovation process which is another conversation. It would take us another 40 or 50 minutes to talk about, so we won't go there.

But when you're in the world of mistakes, or you're in the world of small experiments, the vast majority of your small experiments are failures. And it's okay to say failures because those are mistakes. So, the question comes, what did you learn and how can I move on to the next thing as fast as I possibly can? So, that's my system for handling mistakes.

Michael:          No. I like it.

Monday morning, we had our Monday morning staff meeting. And we launched a project campaign on Friday. And we realized that already two emails had gone out in our sequence. It was a big deal. And the wrong link was in the email. And it accidentally was discovered in the middle of our staff meeting as we were looking at analytics. And all of a sudden, one person was saying, “Well, this is the page we're going to” and the other person says, “That's not the link that's in the email.” And I'm sitting there going, “Okay.” That's where I wanted to roll my eyes, as a leader.

Josh:                Yeah.

Kathryn:         Like, “Oh, no!”

Michael:          I said, “Okay. Here, we've got a problem. Let's make sure we're clearly defining this problem because I'm not sure if this is all of it or part of it.” And in my staff meeting this morning with our office manager, she'd already set forth a meeting yesterday. They sat down. Tried to figure out-- I asked them, “Why did this happen?” Not so heads can roll, but I needed to know so we can learn from it and figure out what happened, so we'd, hopefully, don't run into this mistake again.

Josh:                Can I do a little bit of coaching with you for a second?

Michael:          Yeah, please.

Josh:                Lose the word “why”. Why puts people back on their heels. It's a really bad word to use. If you were to say instead, “How could this have been different? What did we learn from this? What was the reasons this went this way?” It's a much softer way of getting at why.

Kathryn:         So, “What led to this?” Yeah.

Josh:                Yeah. What led to this? There's a whole bunch of things she can say. But it’s sort of like why fits in with the but’s of the world. You probably know that if you use the word but, whatever you said before the but becomes the opposite of what you said.

Kathryn:         Yep, yep.

Michael:          Absolutely.

Josh:                So, I try to train people to lose the word but and lose the word why.

Kathryn:         Interesting.

Michael:          I'll take that into consideration. I'll think about that. I'm a big why guy.

Kathryn:         You're a big why guy.

Michael:          My curiosity stems to it so I'll have to sort it out because I don't think all why’s would go by the wayside. But I hear what you're saying. I'm going to think about that.

Josh:                It's fine to ask why to yourself. But when you're talking to somebody, you have to realize that, if you're the boss and you have employees with you, you're in a power position.

Michael:          Yes. Always.

Josh:                And the words that you use in a power position are incredibly important versus the words that you might use with a friend.

Michael:          Do you ever think that the words-- because I know exactly what you're saying and I will definitely take that to heart. Do you ever think sometimes though that the words itself isn't the whole problem? It's the way it's being said. And it can be delivered differently and not be challenging for people?

Josh:                Yes. And, at the same time, there are some linguistic meanings that happen around words--

Michael:          True.

Josh:                --period. And it doesn’t matter how you say it.

Michael:          That's true.

Josh:                But, why, should - those are three words which have linguistic meanings. and you can say it in the most general way or the most obnoxious way, but it's always going to put somebody in the defensive.

Michael:          Yep, yeah. So, if you would replace why with--

Kathryn:         What led to this?

Michael:          --what led to this? Would you use the word how?

Josh:                Yeah.

Michael:          How did this happen?

Josh:                Yeah. How did this happen? Sure.

Michael:          Okay.

Josh:                I mean, again, I wouldn't say it, you know-- again, we say, “Okay, we made a mistake. What led to our mistake?” There's your why. “How can we make sure this doesn't happen again?”

Michael:          Yeah.

Well, and you were using the word failure earlier and clearly okay with it. There's a lot of groups of people who will say, “We should never use failure because there are no failures.” This is what they say.

Josh:                Well, I think that's BS, frankly.

Kathryn:         Yeah. Me, too.

Josh:                I think we need to--

Kathryn:         I'm like, “There are epic failures.”

Josh:                I think we need to learn there are failures and we need to-- I mean, the worst thing we did, as a generation, with our children who are now millennials, is we didn't teach them how to fail. And when I hear boomers complain about millennials, it’s typically around that. They've never learned how to lose. One of the really good things about competitive sports is you lose and you learn how to handle it.

Kathryn:         Yep.

Michael:          Yeah. Or you never learned how to handle it but, at least, you get used to it [laughter].

Kathryn:         Yeah.

Michael:          I was on the soccer team for a long time. That's all we had to get used to. It was losing.

Josh:                You know, it was like my high school basketball team. Three wins in two years.

Michael:          Yeah.

Kathryn:         Whoo, that was-- that’s painful.

Michael:          Yeah. Yeah.

Josh:                [inaudible 00:19:22]

Michael:          We had a horrible name for our soccer team too. We were called the AJAX. It was awful. There was nothing clean about us either.

Josh:                We have a few minutes left. And I want to get to one more thing.

Okay. We now have our values. And we spent 20 minutes talking about that. Now, we have four minutes to talk about how do we make those values into a vision? So, when you guys do a vision statement, tell me what it looks like.

Michael:          One of the things that we do is I actually don't-- and this may sound contrary to what a lot of people do. I don't try and shove it all into one statement. We actually try and create a vision document. So, we label it with parts. This is your core purpose. and that's one or two sentences of “This is what we do.” And the intent of that is to be more general and not super task oriented. So, I'll take ours. We help small business leaders build passion and provision companies that are more fulfilling and more sustainable. That's basically the core of what we need to do. That's what we do every day.

Disney does-- they provide-- especially Disneyland, the theme parks, they’d provide wholesome fun for the family. It's as simple as that. It's meant to not run out in a hundred years. You could be able to do that.

If we've got a core purpose of “This is what our end goal or objective is every day. And here's our core values, three to five. Then, where's our big thing? Where are we going over the next 10 - 15 years? And we'll put that together in a document. So, the answer really is there's not really a mission statement. It's our core purpose, our core values. And then, that big thing, Why are we doing all this? Where are we headed in the long haul? And then, we build a strategic plan that goes alongside of it.

So, that's how we craft the vision stuff for our clients so that they can communicate the different pieces to their staff and, potentially, to their marketplace in a way that's helpful and easily remind--

Josh:                Your vision statement is very similar to what I like people to do.

Michael:          Oh, really?

Josh:                In my world, I like my vision statements to be less than 10 words and can be answered with a yes or no.

Michael:          So, give me an example.

Josh:                In my food service company and it wasn't a huge thing, it was “We provide quality food service at a reasonable price.”

Michael:          And the yes or no part is “Do you do that or do you not?”

Josh:                Right.

Michael:          Okay.

Kathryn:         Yeah. And does this objective fit into it? Probably, right?

Josh:                A lot of people do vision statements where there's no yes or no, you know?

Michael:          Hmm, yeah.

Josh:                So, if I'm trying to use this as a tool, which is all this stuff is-- besides, it’s great tools, I want my vision statement to be something I can hang what I used to call pillars on which is, Here's the vision. Are we doing it? Are we not doing it? And, if we're not doing it, what do we need to change to do it?

Michael:          Yeah, absolutely.

Josh:                And if we aren't doing it, are we doing it in a world class manner?

Michael:          I love it.

Kathryn:         Yeah. It's good. That's good.

Josh:                So, those are the things that I think are really important. And, by doing that, it gives me a tool to work with my employees on. Just like values, you need a clarifying statement, in my opinion, around the value. I can't just say personal responsibility because your definition will be different than my definition.

Kathryn:         Absolutely.

Josh:                And unless I give you a definition, you don't know what I'm talking about.

Kathryn:         Yeah.

Michael:          And when we create this with our clients, we make sure that there is a clarifying statement that goes along with it because those--

Kathryn:         Always.

Michael:          --because those terms can be really fuzzy. You could ask five people what trust means and they might come up with five different answers.

Josh:                You know, it’s not they might. They will.

Kathryn:         Yes, definitely.

Michael:          Yes. It often happens.

Josh:                Back to the early days, before Tony Robbins became Anthony, I was actually hanging out with him a little bit. And he used to run this game he called the picnic game which he would say put people in groups of eight to 10. And say, “Here's the word picnic. Write down the first 10 words that come to your mind.”

Michael:          That's a good one.

Josh:                And we've done that for a really long period of time. And of the 10 words that people write down, there’d only be zero, one, or two everybody has in common. Usually, zero or one.

Kathryn:         Interesting.

Michael:          Wow.

Josh:                And I've done that probably a hundred times. I game and same outcome every single time.

Michael:          Yeah.

Kathryn:         That’s great.

Josh:                So, Michael, and Kathryn, unfortunately--

Michael:          We're out of time.

Josh:                --we are out of time.

Kathryn:         So much we could’ve talked about, but we're out of time.

Michael:          This has already been fun and engaging. I have two things I'm taking away from this phone call.

Josh:                Cool.

Kathryn and Michael, how do people find you? And is there anything you want to leave us with?

Michael:          Yeah, you know what? You can go to habovillage.com as in H‑A‑B‑O‑village.com. That's the educational arm of our company, half a bubble out. HABO’s an acronym. And I would suggest that, if they're interested at all and any of this, we have a quiz button on the front page there. That's a quiz for ranking your small business on how well you match up in passion and provision. And then, what's the core thing that you could be working on now to get yourself further along in that sustainability, from a cash flow perspective and from taking away some of the pain of the business and making it more enjoyable?

Kathryn:         Yeah. And it's actually halfabubbleout.com. If you need an out at the end, [inaudible 00:24:16] out.

Michael:          So, you can go to halfabubbleout.com or habovillage.com. Either place has a button on the front page that you can choose quiz, and go through that, and get an idea of what that looks like. And that'd be fantastic.

Josh:                Cool.

I have two things I'd like you to do first is please, please, please, wherever you're listening this podcast, go and give us an honest rating and review. If you love us, tell us. If you hate us, and I hope that's not what you're going to say but, if you do, you can say that too. And the second thing is, I've had this, you know, sort of thing I've been playing with for, I don't know, probably 15 or 16 years. It grew out of a friend of mine who was in the estate planning business. He had this thing called the periodic table of estate planning elements. I thought that was really clever. So, of course, I steal all my ideas from everybody else in the world.

Kathryn:         Don't we all?

Josh:                And I adopted it. And I said, “Hmm, I'm going to do a periodic table of business planning elements.” And I did it.

Michael:          I like it.

Josh:                So, there’s 56 strategies and tactics on this little periodic table that you can look at and you can apply them to your business to help make your business more economically and personally sustainable. It's really easy to get. You go to www.stage2planning.com/periodic. That's www.stage2 - the number two, planning.com/periodic.

And this is Josh Patrick. and we're with Kathryn and Michael Redman. 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 a hundred 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 jpatrick@stage2solution.com.

Thanks for listening and we hope to see you at Cracking the Cash Flow Code in the near future.

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