We're talking with Jon Rennie who is an author and CEO of Peak Demand which provides components for the electric utility industry. You will learn that it is very important to work as a team, no one is more important than anyone else to achieve your mission in your business. How vulnerability and authenticity go together and will help you to make better decisions and to have a mindset to keep pushing yourself to learn and stacking up your skills which will certainly help you in your career.

Jon-Rennie-squareJon is the Co-Founder, President & CEO of Peak Demand Inc., a premier manufacturer of critical components for electrical utilities. He is a former U.S. Navy Nuclear Submarine Officer who made seven deployments during the end of the Cold War.

Prior to starting Peak Demand, he led eight manufacturing businesses for three global companies. He is the author of the best-selling leadership books, I Have the Watch: Becoming a Leader Worth Following and All in the Same Boat: Lead Your Organization Like a Nuclear Submariner and is the host of the Deep Leadership podcast.

The most important lesson he’s learned in the past 30 years is that leadership matters. Leadership can make a significant difference in the performance of any organization. He shares his thoughts and insights on business and leadership with the desire to create better leaders. His hope is that his work inspires you to look at leadership in a new light.

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 today my guest is Jon Rennie. And Jon has just written a new book. He is the CEO of Peak Demand which provides components for the utility industry. But we're going to start off talking about his book. And I'm going to probably just make him kind of tell me how the book relates to running his company because those things usually do go hand in hand. So, instead of me yammering on about Jon, why don't we bring him on and start the conversation?

Hey, Jon, how are you today?

Jon Rennie:     I'm great, Josh. How are you?

Josh:                I'm well, thanks. Thanks for joining us today.

So, you came out of the nuclear submarine world?

Jon:                 Yes. So, I started my career, right out of college, in the Navy. I was an officer on the USS Tennessee, a nuclear submarine. And this was during the end of the Cold War. And that's where I kind of cut my teeth in leadership.

And then, when I left the military, I spent 22 years in corporate America. I ran eight different manufacturing plants during that time. And then, about six years ago, I started my own company, my own manufacturing company, Peak Demand, which you mentioned. I just decided to leave and do it on my own. So, that's what I've been doing the last six years. And so, I run a manufacturing plant that makes products for electric utilities.

Josh:                So, did you buy the plant or did you just start it from scratch?

Jon:                 No. We started it from scratch, from the ground up. We developed the products. We created the market, the brand, and what have you, yeah, right from right from the start.

And I had been in this industry for a long time so I was very familiar with the products and the customers. So, you know, it's funny, because a lot of young people start companies but, I think, in some cases, it's better that you have some real‑world experiences because it certainly made it a lot easier when we got our business started because we kind of knew what to do and what the customer pain points were. And so, it made it a lot easier for the startup of this company.

Josh:                So, I'm going to assume that manufacturing companies are pretty expensive to start.

Jon:                 They are. Yes. Yeah.

Josh:                So how did you finance it? That's my-- then, we’ll get to talk about what you were going to talk about. I'm just curious about that.

Jon:                 Sure. Sure. We did find a partner that was interested in our vision for creating this manufacturing plant. It was actually an offshore partner, originally. So, he was very interested in doing this project and building this company up. And, eventually, we bought him out. So, he helped us get this thing started. And then, we were able to buy him out and run it on our own now.

Josh:                Okay. Cool. So that makes a lot of sense.

You know, one of the things I find is that, as you get a little bit older and you start businesses, you do have that real‑world experience and you've made enough mistakes along the way that you're not likely to make the stupid mistakes that people make just because they're young, like I did.

Jon:                 Yes. Well, and the other thing is you have connections, right? So, I think that really helped me, you know, again, get financed for this - build a customer base, build a brand. I had connections. I knew people. So, I think that's very helpful, too.

So, you know, for those who are listening and thinking, “I'm too old to start a business,” I don't necessarily think so. I think you come with a lot of experience which helps the learning curve a lot.

Josh:                Yeah. And it also depends on the type of business. And there's a whole bunch of variables that go into that. But I think you're basically right about that.

So, let's talk about nuclear submarines, leadership skills, and what you learned in the Navy that you use every day in your company.

Jon:                 Yeah. You know, it's funny because I didn't really think that I was any unique kind of leader when I was in corporate but the last, maybe, 10 - 15 years, I've really felt like the training I received, the experiences I had on a submarine were really unique and really special. And it really affected how I lead and how I treated people.

You know, on a submarine, at sea, it's very interesting. Even the most junior sailor can make a mistake and would cause all of us to perish, right? So, for us to be able to complete our mission and come home safely, we relied on everybody. So, there was a shared accountability and a shared vulnerability.

What I learned, you know, through my years in corporate is that there wasn't that same shared experience in a lot of companies. If things went poorly, the leader typically got promoted and the people got let go. And the leader was always sort of protected from the consequences of actions, or even the economy, or things that change. So, we were never really in it together, right? And departments would fight between each other. Market would fight with engineering. And engineering would fight with sales. And we weren't ever in it together.

So, as a general manager, as a vice‑president, in corporations, I was always trying to bring people together towards a common objective. I was always trying to the enemy being outside the four walls, not inside the four walls. And that just came from my training in the military.

The enemy, in our case, on a submarine, was the seawater trying to force us to weigh in, right? So, it wasn't necessarily just the Soviets, it was the seawater, right? And so, we had to work as a team to keep that seawater out. And we were in it together to do that.

And the other unique thing about a submarine is that we would lock the hatch and we'd be gone for three months at a time with 155 of the same exact people for three months straight. So, you learn to get along with people that you had differences with and that you had opposing views. You came from a different part of the country or a different religion. You learned to get along with people that had a lot of differences than you had.

And so, I think, you know, my years in corporate, that helped me get along with people that I had-- with difficult people, people that I had, you know, a rival of vice presidents and getting along with bosses that, you know, didn't have the right personality. But we learned to get along with people that we had disagreements with. And I think that always came into how I ran businesses. And it’s certainly how I run businesses today. So, it's about, you know, all of us being together in trying to achieve the goals of the business.

So, the name of the book is All in The Same Boat. And, literally, that's the way I run my business is that we're all in it together to achieve a common goal. No one is more important than anyone else to achieve our mission.

Josh:                So, do you consider your company values led?

Jon:                 I would say so because, I think, you know, our vision is to be a different kind of supplier. So, we talk about that all the time. We were formed as a result of frustration in our industry. So, there was a lot of big suppliers in our industry that treat customers like a number. They don't they don't follow up on phone calls. They don't ship products on time. They're difficult to do business with in terms of processes and quotations. And so, you know, we went into this business with “We're going to eliminate that. We're going to be the fastest.” And we are. We're the fastest supplier in the industry. We're the quickest. We're the most responsive. And not only that, it’s that we've been in this industry a long time so we fixed a lot of the known product problems in the industry as well. So, we make a better product. We ship it faster. And we're easier to do business with.

So, I would say those are our values - to be different and to be an alternative to the status quo in the market. And that's who we are. So, I would say probably we are values based, yes.

Josh:                Yeah. It sounds like that you're an action values based, but it doesn't sound like you've really sort of articulated those values with clarifying statements around them. Am I correct in that or am I wrong?

Jon:                 I don't know what you mean by that, so.

Josh:                Well, you know, how you go into a place and people say, “Well, here are our values” like it could be rights and respect. And that means rights and respect would mean that we treat our employees and stakeholders with respect and we expect you to treat us with respect. That's one of our values. So, it means--

Jon:                 Oh, yeah. We--

Yeah, no. We do actually have-- we have two things. We have one is our expectations. And then, the other thing is who we are as a company. And so, one of those values is, you know, treat people with respect.

But the other one, it’s is interesting, is that we celebrate the people that use our products. So, in our case, it’s the linemen. So, we celebrate the linemen and we support the people that physically use our product, not necessarily the companies, but the people that actually use the product.

So, yeah, I think-- yeah, we definitely have those in there. You know, we talk about ‘em all the time. They’re posted on the wall. But, yeah. So, I think--

But, I think, the big thing for us is we live our vision. And I think that's really important. One of the things I see with big companies, corporate, is they create a mission and vision statement and it sits, you know, in a dusty binder on a shelf someplace and no one knows what it means. So, we boil our vision down to four words, you know, being a different kind of supplier. We talk about that every day in our morning stand‑up meetings. What does that mean to be a different kind of supplier? And that's something we talk about.

Josh:                Okay. So, you do a morning stand‑up meeting. What happens at those morning stand‑up meetings and why are they important for you to do that?

Jon:                 So, it comes right down to, you know, what I talk about in my leadership books is that leadership is a people business, right? And what I mean by that is that our businesses, our plans, everything we want to do is nothing without the people to make it happen, right? And so, the morning meetings are connections. So, we connect with everybody. We look everybody in the eye. We can see who's there, right?

And then, by that connection, you see what kind of mood people are in, right? I know my people well enough to see who's in a good mood, who's not in a good mood, who's late, who's frantic, who's-- whatever. But we all get together. And then, we say, “What are we going to do today? What's happening today? So, what shipments are coming in? What shipments have to go out? What's our priority?”

And then, we have a discussion around the room with anything that needs to be brought up that others need to know about. So, is there anything happening today that others need to know about? And it's a great chance for us to connect, bring up issues, and make sure people are aware of everything that's going on that day.

And I think some people listening to this would say, “Well, you know, that's not that important, right? You can do that with an email. You can do this with a-- whatever.” But I think it's really important to have those personal connections and everybody gets on the same page on the first part of the day so that we kind of all go in the same direction. And we're not surprised by a truck that shows up or a shipment that's late or whatever. We all are aware of what has to happen that day. And I think it really helps us be on the same page. And I think that's really important.

Josh:                So, how many folks work in your company, Jon?

Jon:                 We have 10 in the office here.

Josh:                Okay.

Jon:                 Ten employees in the office. And then we have the factory employees as well. And the factory employees kind of, you know, it grows and it shrinks based on the demand.

Josh:                So how many folks are in your factory?

Jon:                 Right now, there's just five.

Josh:                Okay.

Jon:                 So, we're a little slow. We're waiting on parts right now so.

Josh:                You and the rest of the world.

Jon:                 Yeah, yeah.

What's neat about it is we actually, the office people, actually work in the shop, too. So, when we get busy, we all kind of go - we work together. We're a small company so we all work together towards whatever we're trying to do, so.

Josh:                Yeah. Well, that's a very cool thing.

So, what other stuff did you take from--

By the way, I believe that the military is probably among the best leadership trainers in the world. My son's a medic in the-- well, he was in the 160th. He's now over with the National Guard training emergency medical people around the West Coast. But I would have the opportunity to go out and visit him and go visit him at work. And I was really, really unbelievably impressed with what a great leader he had become. And this was a kid who was just obnoxious as a teenager, so.

Jon:                 As was I, so.

Josh:                So, I've learned a great deal of respect for leadership training that the military does. And what other kinds of lessons did you take from your time in the Navy and bring it into your company?

Jon:                 Well, you know, it's interesting. The one thing that was very unique, especially in the submarine community, is that you had to get qualified. So, before you were trusted to a duty station, you had to prove that you are capable in that duty station. And so, there was a qualification process. And that's something that is really different than you see in businesses, right?

So, you know, how do you move up in a company? Well, you know, sometimes it's based on your performance, sometimes it's based on your skills, sometimes it's based on your knowledge but there's no really set way to advance or to move up in a company. I mean, it's performance based. It's who you know. It's how you contribute.

But one of the things I definitely learned through that qualification process in the military was coming in, in my own career, and I just called it skill stacking. So, stacking skills, and talents, and experiences as a young person coming into corporate America allowed me to sort of differentiate myself from the rest of the people that I worked with and eventually got me my first manufacturing plant. At 32 years old, I was running my first plant and went on to run many more.

But there was a mindset, when you came on to a submarine, that you-- and they called you a NUB. And it doesn't matter if you're an officer or enlisted. You were a NUB when you showed up. And that's called a non‑useful body. And that meant that you were breathing the air and eating the food, right, but you didn't earn it. And there was a positive peer pressure to get qualified and to become useful on the boat.

And I think I felt that same pressure when I came into corporate America. It’s like, “How can I be useful? How can I add value?” And, for me, it was about doing my job very well, learning how to do my job very well, spending time with the people that knew it really well, and becoming an expert. And then, of course, volunteering and taking on assignments. Anything that came up, I was willing to go because it was one more thing I could learn how to do.

So, I would say that kind of mindset of, you know, continuously pushing yourself to learn and stacking up your skills certainly helped me in my career. And it's what I encourage my team to do, is that you become more valuable to your company, the more you know, the more you learn, the more experiences you have.

Josh:                So how do you give your folks, in your company, the opportunity to learn more today?

Jon:                 Well, I think, it's a great question, especially as, you know, those people that might be entrepreneurs listening to this conversation is that one of the challenges that entrepreneurs have, when you start a company and you're the founder, right, is letting go of control, right? So, the reason you're successful in business is because you're good at what you do, right? And we have a hard time letting go and letting go of the things that we're really good at that that make us a great company, that make us a great leader.

So, one of the things I try to do is do that, is to let go and give people challenging assignments where they get an opportunity to do things that are outside of their comfort zone and learn from ‘em, and having those experiences where they get to do something that they don't think that they're ready for but, you know, you give it to ‘em anyway.

I have a young-- a recent college graduate that's coming up, and he's learning, and he's starting to spend some time in marketing. And I'm having him do, you know, quotations. And some of these quotations are very technical and very difficult. And I recently gave him one and it was very difficult. And he had to do a lot of cross comparison of our competitors’ products. And I said, “You're not allowed to ask me any questions. You just have to come and present when you're done.” He's like, “Well, how am I going to do that?” I said, “You're not allowed to ask questions.” And what I was purposely doing was letting him try to find how can you solve the problem if I'm not around.

And that's what we need to do. As entrepreneurs, we need to let our people do things without us like because we like to have control, because we're the owners, right? We're the leaders. We have a hard time letting go of control. And our people can rely on us too much. So, sometimes we just have to let go, let them do it without asking us, and learn from those experiences and become better at their roles by doing that. So, it's about letting go and letting other people learn and grow.

Josh:                Okay. So, there's a-- it's not a danger point but it's sort of a point that you were just talking about that most employees have a really hard time with and that's the concept of mistakes. What you have just described is you're basically inviting people to make mistakes so they can learn from them. So, how did you come up with that strategy because it's a really good one, by the way?

Jon:                 Well, again, going back to my Navy days, controlled failure was how they trained us. So, they put us in scenarios that were outside our comfort zone so that we would learn and, in most cases, we would fail through that process. And one of the things about failure which is so, so good as a learning tool is that it's very emotional, right? When you fail, when you miss when you don't do what you're supposed to do, you never forget that sting of failure because, as humans, we don't like to fail. It's embarrassing. It's not a good feeling. And so, we learn from that. So, that was one of the things they did in the Navy was they gave us opportunities that were outside our comfort zone or what we felt we were capable of, so that we could learn and we could--

You know, usually like if I stood watch, as a young officer, I was under instruction. So, I had another watch stander with me that’s sort of making sure I don't really screw things up, right? But they gave us enough rope and let us fail. And then, we would have the conversation afterwards. “Well, what did you do wrong? What happened? Why did you do it that way?” And we learn from those things and we became better at our craft. So, I think failure was something that was naturally thrust on us in the Navy. And I think I just naturally find that a great teaching tool, learning tool.

Josh:                So, Jon, we have time for one more thing to talk about and I want to circle back to a word that you used right in the beginning of the podcast today. And that word is vulnerability. Can you just talk for a second or a minute or two about how vulnerability fits into your life and might be a good thing to do for other business owners to think about?

Jon:                 Yeah. You know, when you hear the word vulnerable or vulnerability, you think weakness, right? Some people think weakness but it's not weakness. It's about the ability to just say “I don't know” and being willing to listen to others and listen to other input.

Let me give you an example. When I was 32 years old, I took over a manufacturing plant, my first manufacturing plant. I had employees that had been there for 30 years, right? I was a young manufacturing leader. I didn't really know all the answers to all the problems. And the problem was I thought I had to have all the answers, right, in the early stages. But what I learned is, is that if I could tap into the talent that I had and the experienced employees at that site, and find out from them, what's working, what's not working, what needed to be fixed, putting my ego aside and doing some serious listening to what the challenges were at that organization, then it helped me make better decisions. And it helped me build respect between myself, and the employees, and the employees with me, that I was listening, I was paying attention. And I knew that I didn't have the answers.

I was not faking it. Some leaders try to fake it and they say, “Well, I'm the boss and you’ve got to listen to me.” And that's not what it's about. Vulnerability is about stepping back, letting go a little bit your ego, and listening to others, and getting input from others, and using that to help make better decisions versus trying to do it all by yourself.

Josh:                Yeah. I find that vulnerability and authenticity go together hand in hand. If you want to be seen as being authentic in your company, you better be a little bit vulnerable because if you're perfect at everything, nobody's going to buy it, no one's going to believe you, and nobody's going to follow you.

Jon:                 Yeah. There's no trust. When a leader appears to be faking it, there's a trust gap. You know, like, “I don't understand this guy. He doesn't seem to make sense to me.”

You know, when COVID hit, for example, we didn't know what was going to happen to our business. And I didn't pretend like I did know. I said, “Well, I don't know what's going to happen in the future, but this is what we're going to do today,” you know. And so, you do your best to respond. But I think you bring your whole self to work. And you bring your own-- you know, you tell people how you're feeling or how something makes you feel. You shouldn’t be a robot when you're a leader.

Josh:                Yeah. No question about that.

So, Jon, unfortunately, we are out of time. And I'm going to bet there are lots of people who want to at least read your book, if not have a conversation with you. So how would they find your book and how would they find you?

Jon:                 Yeah. Everything is at jonsrennie.com. My books are there. My links to social media are all-- everything is there. It's a one stop shop and it's easy to find.

Josh:                That's cool.

And I've got two things I'd like you to do. The first is really easy. And I ask for it after every single podcast episode. And you know what it’s going to be. It’s I want you to go and give us an honest rating and review wherever you're listening to this podcast. If you love us, you can say, “Oh, this is a great podcast.” If you hate us, you can say, “Those guys stink.” But I hope you don't say that because it'll make me feel really, really, really bad, and I might cry a little bit. Not really, but. If you don't like as you can say that, too.

The second thing I want you to do is I just published my second book. It’s called The Sale Ready Company. It’s a continuation of our journey with the Aardvark family as we go down the business parable. And this time, John is getting ready to transition out of his company. And he has tons of personal and economic challenges that come along the way. You'll find how he goes through and solves those issues or at least thinks about solving those issues. And if you ever want to transition out of your business, and you're thinking about transitioning the ownership of your company to your kids or to your managers, this is the book for you.

You can find it. It’s really easy to get. You just go to www.salereadycompany.com. That's www.salereadycompany.com. We're selling the book for half price there, at $7.95. We’ve got eight or nine bonuses that are infographics, ebooks, and checklists that will help you implement all the things that we talk about in the book.

So, this is Josh Patrick. We're with Jon Rennie. 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.

Topics: teamwork, Business Values, shared values

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