#175 - Why Hard-Working Entrepreneurs Still Struggle to Scale: Michael Walsh

0:00 One of the mistakes a lot of people make is they actually think there's one world rather than eight billion iterations of it. I mean, we all see the world a little bit differently and we interact with what we see, but then we don't understand when somebody else interacts differently. It's like, don't they understand? They just don't understand life. And it's like, well, actually they understand it from their shoes. They just don't understand it from ours.

0:41 All right. You all welcome back to another awesome episode of the necessary entrepreneur. Not awesome because of me. It's because the guests on the other end. So today, um, I have the opportunity to welcome the guest, Michael Walsh. He's a founder and CEO of Walsh business Institute. He also goes by WBI. Michael works with entrepreneurs and leadership teams to help them scale businesses through operational clarity, leadership discipline, and systems that actually get used, not just talked about. His work sits at the intersection of strategy, execution, and personal responsibility. And today we're going to talk about what really breaks as companies grow and what leaders have to fix in themselves before they can fix the business.

1:26 I'm pumped about the conversation. Welcome Michael. Yeah, we can talk about books you've written in 2025 and, and all this stuff, but why do you think I'm just going to come out and just hitting big? We're in, I'm in New York city today, Europe and Vancouver, and having some great entrepreneurial and in depth and AI is trickling into things, but why is business growth so hard even after entrepreneurs have gotten over this hurdle of a million or 2 million in revenue? Why is it so hard? Well, everybody thinks that once I've gotten my first name, first of all, the first thing that people do is the minute they want to get into business, their first goal is to hit that million.

2:07 And then they hit the million and they think that they will not, now I know how to do a business. Except if you take a look at a business at a million and the same business at 2 million and the same business at five, the same business at 10. And even if you want to go farther to the same business at 20 million, you know, Take a look and think about this. What is it that they share? They got the same product, hopefully, sometimes even that changes. If they have the same founder, they'll have the same core values. So the value set goes with the founder and they may have a few of the same people. But that's about it.

2:48 Everything else. can't run on the same systems, right? That's probably what's breaking. You can't run all those. Everybody thinks that, you know, people come and people go, but your systems are there to stay there reliable. Well, that's not true at all breaks. Like you're literally in four or five different businesses as you go, because think about it, could you run a $10 million business with the structures that are there for a $2 million business? No, I faced the same struggle when I was growing my businesses. two million did not get me to five and it was a hard hurdle to overcome. Absolutely. And that's because all the structures that you put in for the, know, first of all, you get past the first million. Okay. A lot of people think that the million is a dream thing, but you know, we actually have it.

3:32 We have a formal technical term for, for what the zone of a million is, especially in a service based business. Cause that's where, you know, it's all delivered by the people. That's called the zone of hell. Okay. People, you are literally too big for the structures you've had and you're too small for what's coming next. you and and there's no extra money to deal with because a million dollars is a lot of money and so as they continue to grow what happens is you is you get closer and closer to two million now I've got 12 15 people and I'm in a situation where I can't manage them properly so the so the first thing that people do is they say well guess I need a manager well who's the person on my team I trust the most I can get them to manage so they might have the you know Max could be the the highest individual contributor and you know what I trust Max he does a great job And so, you know what?

4:22 And he, every single time he asks, you know, I ask him to get stuff done, he's always getting it done. So I'll make him my manager because I trust him the most. Except the same skills it takes to deliver a result are different than the, you know, what it takes to actually manage other people. And as a result, you're in a situation where I've got to mismatch a skill. So I take, I take Max out of an area where you might be really good with the hopes that the same skills that he's using there. will actually help them succeed as a manager and the skills you need as a manager are the opposite. Now that's just getting to do the end of it. Yeah. I don't think oh what I found, I don't know, you this is nice that we didn't have any previous context and I'm sitting here listening and like, man, if we all would have known these rules beforehand, uh you know, I think really my profit was the same from one to 2 million as it was at 5 million.

5:15 It only started changing then. Yeah. It really did. There's that we could sit here and probably talk for three hours about the reasons why. But at that moment, somewhere, I guess it depends on business you're into that 5 million mark. We had figured some things out. We had developed some efficiencies. kind of, and so that 5 million gets us north of 10 and you're starting to print money. And then what I always said is you all, now we have real money to build this thing with. Sure. Sure. Because until then you just don't have enough money to go around and there's too many um precarious turns that you, that you stumble into along the way. You know, the thing that I do find though, is that entrepreneurs are pretty savvy group.

5:55 mean, it takes a lot to get into business and, and, know, if you can see a problem, you can figure it out. Yeah. Okay. Or you can get the resources to figure it out. If you can't see the problem, but you know it exists. You know what? Usually you can figure those out too. The ones that get us is if you can't see the problem and you have no idea it even exists while it's got you in its grips, those are the ones we struggle with. And so that's the stuff that lurks beneath the surface. I mean, you can figure out a marketing or a business development issue. You can figure out operational issues. You can even figure out money and metrics and things. But I got to tell you, the stuff that lurks beneath the surface, those are the ones that really get us.

6:39 So where do you start when you pick up the phone? Used to be pick up the phone. Now you check your Instagram inbox. Now you check your, every once in a while we'll be on text messages. You get a video. Where do you start when that person says, I'm really struggling. I received a referral. I saw that Walsh business business Institute does this. I'm at 2 million. I'm stuck. Where do you start? Well, I find out what they want is the first thing, because if what they just want to do is to correct the problems that are there and then continue on at 2 million, that's one set of conversations. And sometimes we can just come in and give them a hand and sort of tweak something and help them go. ah If they're stuck because they really want to grow their business and make an impact in some meaningful way, those are usually the people that end up wanting to work with us on a longer term basis.

7:25 And so what I do is I actually take a picture of everything and I try to understand what are the working flows between and among the people, including between the people in the company and the customers, obviously, but also with suppliers and that, I just want to understand where are the flows of the business. But then I go, what are the underlying issues that are beneath the surface of the business? if I can get to, so what are the structures they're using? To what extent have they unstripped their structures? How are they taking care of their people? To what extent have they got people as a priority? You know, it's interesting. want to grow our people and we want to, you everybody loves their people until the people show up as a big threat.

8:05 And by the time it doesn't take many people to actually start showing up as a threat with some companies, it could be as few as 20 people. Others, it could be 30. Others, it could be 50. It depends on, you know, what kind of project based company, let's say I have a project based company. If I deal with large projects, I know how to work with people up to 30 or 40, you know, strong. But what happens is that. As I have stripped my structures and I find that there's way more people here and I'm trying to keep up with all that. try to, you know, when I put in the new structures, I put in the structure to try to get them to do what I want them to do, which really you're trying to control people with the structures. And I don't know, Mark, last time I checked, nobody really wants to be controlled. And so what happens is that's when you start losing the edge that people can break, you know, One of the biggest mistakes people make is they actually try the structures to corral the people rather than putting in structures that make it easy for people to bring their best.

8:59 And it's hard to think of how do I make people be at their best when I feel like I'm stuck and I can't get anything right. So it's sort of a, it's a counterintuitive mechanism. It's like skiing. you're not, know, the way to stop from falling is to lean into the hill. And that just feels wrong for your body. But if you don't do it, spend your day on your butt instead of on the skis, you know? Yeah. So, so, you know, that's the kind of stuff that that that's where we look as I look, what are the structures? What are serving them? What are not serving? Is there something that we can talk about like from a practical standpoint that if I make this big statement of what impedes growth from established businesses? Is there something that right because if there's an established business I know and that you know and all these entrepreneurs that I've connected with now Kudos to them because they accomplished something and did something surviving for three to five years that the majority of businesses don't so there's something that got them there But then what is impeding them now?

9:57 Cause it's like, Hey, kudos and credit for doing all this and winning. But what's the thing now? mean, if there's 20 of them, there's 20, is there one that really like there it is again. um Well, one of the basic ones that nobody realizes is we don't understand what management is. I mean, the picture that we have for management, most people think the management is, I'm the boss, I'm accountable for the overall result. You're the employees, your job is to deliver it and my job is to tell you what to do and your job is to follow what I do and together we should make this work. And it's just not how it works when it works well. In fact, that's a way to actually alienate people. know, definition of management that we've got now, uh we didn't always have.

10:43 Before the 19th century and the 19th century and earlier, mean, there was uh promotions to management from a political realm, but functional management was always, learn from the master. So if you were an engineer and I was your underling, I'd do all the Joe jobs and you'd teach me how to be an engineer. Or if you were a doctor or an architect or a blacksmith or a carpenter. You um you'd actually teach me your craft and my job would be to support you in the delivery of stuff. It's only when the industrial age came by and we had assembly lines, you can't put a bunch of veterans with their apprentices all on the same assembly line because you get a lumpy assembly line. So instead of teaching me six things, you'd have six of me each doing one thing.

11:27 And as a result, what we became is cogs in a system. And you know what? Notwithstanding how much the employees hated it, it really worked. to the store i mean a better than steel date they used to be nine linear feet of steel per minute processing cut nine linear feet of steel per minute at the turn of the century and that you know going from eighteen hundred nineteen hundred. You know they brought in uh management thinking and within three or four months they went from nine linear feet to fifty linear feet. Because i said instead of dragging the materials over here what are we just. Park them here instead of way. I mean, there's so many, you why don't we cool down half the lathe at the time?

12:10 Now both sides of the lathe all once by throwing water on it and everybody has to wait. I mean, there was so much that had to go into the thinking and it really, really worked. And as long as no matter how complicated the algorithm, if the the inputs were the same and the outcomes were the same, no matter how complicated this was, I could break it down into its parts and parse it out to people. Now, what we what's happened since is we've gone into the information age. Okay. And a network world now it's not about a complicated algorithm. It's, actually a complex one. You need everybody's brain at the table. You could hold a gun to my head and say, lift that rock. And I go, and then I'd lift the rock. But if you hold a gun to my head and say, be creative, the brain just doesn't work that way.

12:55 And you need my brain at the table or else I'm like, you know, the groups of the group of people are who get the job done. And so the manager has been. has been shifted from a thing where they're the boss and accountable, although they're still treated as if that's the case, to one where really they're an ally and their job is to support the people and but leave it to the people to, you know, including the manager to collectively figure out the solutions because the problems are way more complex than they used to be in a service based world. So when I find that that a manager understands that his or her job is to really work with the people, now they still have logistics and things that they take care of. But it's up to the people to generate the result.

13:35 That's actually where the work happens. So the misunderstanding of uh a manager's role really gets in the way. People think that I'm accountable for a larger result. That's not accurate. My job as a manager is to support you in your thinking. Because when I was an individual um contributor, it's the expansion of my thinking that allowed me to figure out how to get more done with less. And that thinking is what I get to pass along. The minute I tell you what to do, I get in the way of your thinking. And now it becomes a leader with a thousand helpers rather than people that are actually evolving their thinking to generate a result.

14:17 So if you had to point to one of them, that's a big one. We're talking about culture and values pretty much, Well, that absolutely. And I wouldn't, I wouldn't actually limit it to that. I'm talking about functional activities on a day in day out basis is how you work with your people. And, and it includes your culture and your values for sure. Cause if you don't respect your people, then it doesn't matter that you, you're just not going to get a result, but even people who respect them and like everybody loves their people until they get so big that they're finding that people are not doing what I'm supposed that they're supposed to do. So then I try to get them to do that through control rather than. finding out what they need and I gotta make sure I'm hiring right. It's probably half the game.

14:57 But if I've got the right people on my team, let them do their job and get out of the way. I can build teams based on complementary strengths and collectively they'll get the job done. Is there another piece that stacks on top of this? Or do you think we vetted it out about this sense of having all the employees, uh people put all kinds of different terms to them, right? Partners and associates, but all the people that are responsible for running the systems to have them have a sense of ownership. Is there another piece? Yeah, I'd say that I'd say it's not that stacks on top, but I'd say that's a foundation for underneath. One of the core pieces that I find is if people have a really basic understanding of four different components of human behavior, you can understand your people at a whole different level.

15:43 Then you can actually navigate your way through it. And you don't have to try to you don't have to try to constrain a problem with systems. And then the systems you put in can actually help them do their job better, which is what we all want. Ultimately. And the four behaviors that I look at is, know, we have a biological need for survival. And we have an innate desire to thrive. Now survival is about us and protecting ourselves or those who we deem as part of us. Like if it's with my family, it's me. If it's the people in my company versus somebody else's company, that we'd go for survival in that whatever I deem to be, or we deem to be our group. The innate desire to thrive is also present and you don't need to have all your survival needs covered before you thrive because otherwise why would a five year old ever share a toy?

16:29 But but both occur concurrently. But if there's a threat to my survival, I'll go there first. So if I understand that that thing is there and it's ever present in my job, know, and people say, you know, how does psychologically safe workplace? Well, that sounds nice, but it's like the poor guy is scared. He's worried about his family. He's worried that he's going to lose his job. settle them down and he'll get his brain to the table. I mean, it's just functional. And if you can actually create an environment where people don't have to worry about consequences like the boss stealing their ideas or actually competing with somebody they're supposed to be collaborating with, those kinds of things, then they really do want to contribute. If you've got the right people, they do want to contribute.

17:09 I've got survived thrive. The third one is we have both the need and the ability to connect. And the fourth one is we actually have this really interesting ability to adapt to a changing environment. Even if we don't like the environment that's evolving, we know how to adapt to survive it. Okay, so that's part of our survival and even our thriving skills. So if I look at survive, thrive, and adapt, understanding those makes it not some utopian kumbaya, everybody loves everybody thing, but actually, you know what? Supporting human behavior becomes a really powerful, hard-nosed process that makes a huge impact on a business and is way more fun for everybody.

17:53 Does this line up with these, you talk about two core issues, I believe, that often clash and create friction inside companies. And can you break those down and how the leaders can get ahead of them? Well, the two things are one, outstripping your structures. And the second one is understanding the people and what are the things that actually drive them. So the first job is if I know what structures are gonna break and when, the more I can understand about, you know, how the longevity of certain structures, then I can actually anticipate what's gonna break and I can actually start planting the seeds for the replacement structures.

18:35 Instead, if it could be as simple as, you know, from a million to 20 million, OK, you're probably going to go through three accounting systems. So why wait till I'm at eight or nine million before I go away from QuickBooks or Sage, you know, the basic version of Sage, because I'm stretching it so thin that it's going to be really painful to do the next one. Whereas if I'm at four million or five million and you know what things are going on, my QuickBooks doesn't cost a lot, but the next level program doesn't cost that much more. You know, there is a little bit of investment, what happens is if I have at four or five million, if I start getting the metrics and being able to measure things that I couldn't measure just with QuickBooks, even though QuickBooks will tell you they can measure anything.

19:17 I mean, you can run a hundred million dollar company on QuickBooks, according to the people who sell QuickBooks. But but the other side of it, and they'll say, no, we can't. can only go to 20 million. Right. Like as if you could go to 20 million on QuickBooks. But I haven't heard salespeople for QuickBooks tell people that. mean. You know, so everybody knows how great their system is, but the truth is functionally, it's not quite as strong as they think. So just changing out the system and saying, I'm going to see the biggest problem that you run into it about five million is that. To get past two million, I had to figure out how to have people work together well in teams. OK, and how do I set it up so that they actually work with each other? They're not just taking direction from somebody, and if I can build that, then I'm in good shape.

19:58 And as long as I got a low number of teams, it's easy. By the time you're at about five million. You start to see uh profit drop, start to see quality issues arise, you start to see people late, you start to see people eating through a lot of the finances for the mandate without the equivalent progress on the actual percentage completion of a project. Things like that happen. And the reason is because there's too many teams and I've had to promote people that actually don't know how to support these teams. And so what happens is the measures that I'm using at five million. are usually just off the financial numbers and the financial software. But the financial software doesn't tell you how far along the team is.

20:40 So if I'm 65 % of the way through my fee, and I only have 25 % of the actual percentage completion of the project, I need a way to figure that out. And sometimes it's as simple as having somebody go talk to each week, you talk to your team leaders and you say, where are you at? Where are you having a difficulty? You know, is there somebody we could swap out or somebody we could add to the to the resource that knows more about what they're doing rather than having too many juniors that are burning through a feed, for example. And that's one area at about five million where you do see a lot of burn, you know, and it's just eating up profit. So so there's specific str- I mean, there's a bunch of them, but that's a that's one example of one, you know, associated with finance.

21:21 You also uh talk about there's a contrast of two different perspectives about growing businesses. Yes. And, know, one's the well oiled machine and the other's this intelligent ecosystem. Why is the shift in that thinking matter from where it starts to where it needs to go? Why is that important? Well, what, what people, people cling to structures and they cling to systems and they cling to the notion of a well-oiled machine because if at least it feels like I have some semblance of control, because as you grow the numbers of people, feels a little bit like hurting cats.

22:02 Now, if you take a look, you know, if I've got four people in a company, if I have four staff, there's six one-on-one relationships between the four people and the staff. Okay, if I go to nine people in the staff just over double, I don't I'm not at six. I'm at thirty six one on one relationships with nine people. If I go to twenty five people, which is not which is not a big huge company, there are three hundred one on one relationships that are there. OK, and if I go from twenty five to fifty, that three hundred jumps to twelve hundred twenty five one on one relationships that are there. And don't kid yourself in a fifty person company. Everybody really does know everybody else. Now they may not. You know, they may not hang out with them a lot, but they know them by name and you know, some of them they're closer to than others.

22:46 Now the 1225 jumps almost 5,000 if I go to from 50 to 100 relationships. That's just too unwieldy. So that's why people go to a structure and they say, well, if I treat this like a well-oiled machine, here's your role. Well, that's exactly what was happening in the industrial age. People were treating people like cogs in a system. And it was interesting because the employees hated it. Even though was way more lucrative for bosses, the employees stated they started sabotaging machines and everything like that. The bosses just started making them pay for those changes. And if they didn't want to pay for them, you know, to fix their sabotage, they got fired and then bringing the three people to cover the three parts of the role they used to cover. And they'd end up, you know, working out fine. So what happened was that I have this illusion that, that I actually have some control if I treat people like a machine in an ecosystem.

23:35 I'm in a situation where that feels so unwieldy. You know, the difference though is I look at the ownership and I look at who benefits in a well-oiled machine. Whoever owns the machine is the beneficiary, but the people are actually cogs within the machine. So if you want a car, okay. I asked one guy, said, you know, who benefits from your car? He says, my kids. It's just like I see it from time to time in the driveway. I don't get my car anymore. I said, OK, but you and your family are all the so you're saying they're functionally the beneficiaries of your car. You're just the financial custodians.

24:15 That car pieces. Yes, pretty much. I said, so your family owns that car for your family's benefit. Now think of a business. So if the business is there for the benefit of its owners, the people in the business are like the shock absorbers and the electrical system. They're actually parts of the car. They're not the people riding in it. You know, they're the parts of it. In an ecosystem, it's got to be there for the owners, it's there for the clients, it's there for suppliers, it's also there for the staff, it's got to be there for everybody. And really, an ecosystem is uh just a fancy way of saying how people work together for everybody's benefit. So you have to set something up. Now that looks more hairy and ornery initially, but if I can understand those four little components of human behavior and understand how people work, the truth is there's, you see, there's structure to behavior.

25:04 And so knowing that there's structure to behavior, if I just understand some of these things now, given that everybody's got the need to survive, you know, everybody thinks that your past is what gives you your future and it doesn't. Okay. Or your past gives you your present looking into the future. It's your perceived future that shapes your present. You know, I saw studies on this and I, know, people were asked when, when do people at the peak, um, satisfaction of a vacation? And the response ended up being three weeks before the thing starts. I mean, what do you do in two days before it starts? You're everything organized, you're making sure everybody's got everything covered. And then what are you doing when you get on the plane?

25:46 Right. And then you get to the place. It like day two or three of a week, is what I would have thought. Exactly. And then you get there and you go, okay, this is not quite as nice as the brochures said. well, we'll make it work and all that. So let's say I'm on a two-week vacation and on day one, I opened the balcony doors on my second floor, let's say looking over the beach and I see this pristine white sand and a sort of an aqua blue ocean or landmass right off that. And it just looks great. Now, let's say, you know, the family's frolicking in the sand and we're having fun in this location. By the last day, when I look at that same thing again, it doesn't quite look as magic as it did on day one.

26:30 Well, where's my energy? My energy is getting myself sorted out to get home and what do I have to walk into a work? I may be, know, rested and excited to go back to work or I may go, I wish I could spend another week here or, know, wherever it is, but it's always our perceived future that shapes your present. So if your perceived future is brighter, You're happy in the present. If your perceived future is dim or stuck, like you feel like you're in a dead end, then you're not very happy in your present. know, a lot of people tell uh their staff, a lot of people tell their kids, you know, you have a bad attitude, change your attitude. Well, they can't, and that's due to function of your feelings. If you see somebody that's walking around with a bad attitude, what you want to do is you want to get to understand what's the future they're perceiving.

27:14 Where do they see the impediment? Where do they see they're going to get stuck? And if I'm a manager and I see an employee in that situation, it's like, wow. So they don't see that they've got any access to it. Well, the truth is they've got eight of the 12 skills they're going to need for that next promotion. Why don't I just show them the progress they've made, help them get those other four skills. And next thing you know, I've got somebody that feels like they're on the right track again. I've got, I get their energy back. And you know that when people bring positive energy to a company, can be electric. Absolutely. So you, I think the last book you wrote was in 2025, which we're just a month out of it, but mid year it was called freedom by design. the high level of it was it's a, it's a growth framework for established business owners who they feel stuck in their business.

28:00 And I'm sure it's a combination of trying to take their life back and how can I make this what I envisioned it to be? And not to work in the business, right? To work on the business. What was your idea and then the outcome of this book? it have your intended outcome? it beneficial to your customers and clients? Well, what I found was that, I mean, what we cover in the book is after somebody's passed their first million, what are the danger zones for those hidden issues that lurk beneath the, you know, the surface of a business? And we looked at them at, somebody approaches 2 million, just after they hit five, when they're between eight and 10, and then in this big chasm between 12 million and 20 million, you know, there's all different types of issues, but they're fed from the same things.

28:46 And that's two things. One is outstripping your structures. and just the increased number of people and try to figure out how to work with those two. And then from that, what we do is basically give people a seven point framework, not like some formula to follow, because I don't believe there's a formula. Here's the thing, there are as many ways to grow businesses as there are people. Everybody's got different skills, everybody's got different passions, and even if they had the same skill, they'd use it differently. So what we found is by You know, identifying the fact that yeah, they'll all grow it different way. The question is, where do the problems sit? Cause they're all the same. So if you can help people overcome the problems, then you're in great shape.

29:28 So what we've done is as I've written this book and we've gotten it out to people and working with people with it, what I'm finding is, that they're gaining a lot more freedom in their business because they can do more of the parts of the business they love. They got more freedom from their business. They can actually have a life outside the business. They get more time off things like that. And also freedom because of the business, both in terms of their increased wealth and their increased uh financial freedom, but also their increased ability to generate an impact outside of their walls. So that's been the impact that we're seeing with regards to that. It's also nurtured the conversation uh with regards to what has a business be excellent.

30:11 So we've been having a lot of fun with it. Yeah, I think in the book you touch on it, but also it's this idea that you say, thinking big is not enough. And where did that statement come from? Well, actually, that was the title of my second book. And when we actually helped, we had a client, her name was Louise, still is Louise, in the UK. was one of our UK clients. And they had a little company. It was about 400,000 pounds when they contacted me. And the previous year, that's what they'd made. the bank had cut. This was back just after the recession in 2008. She contacted me in 2010.

30:53 And the Barclays Bank had gone through with all their small businesses and cut everybody's lines of credit in half. Regardless of your credit rating, things like that, they just had to protect their asset base because they were still suffering through that recession. And so she oh contacted me and she was thinking, well, maybe we need to raise capital and things like that. So we agreed to go over there and help her out. And she was thinking, well, I want to grow big. I want to do this. I want to do that and all that. But no. Again, productivity is a function of design and structure, not your good intent. And whether it's the physical structures or was the structures of behavior, it's a function of design and structure. what we did was we actually supported her.

31:34 She went from 400,000 to 2 million in the next three years. And that's when I wrote that book. And then in the next four years after that, she went to just over 7.3 million pounds, which is about, what, $10 and a half, $11 million at the time, US dollars. And that's when she put a bull on it and sold it to another company whose net continued to grow itself to 20 million, you know, a private equity firm on it. so the, what she discovered was there's a lot more to it than just having these big thinking bots. So she had a really good outcome after she brought you in. That's a big win and a big success. We all have wins, losses, positives and negatives.

32:14 What did she do or what was she willing to do after you started working with her that some others maybe haven't that didn't get her outcome? Um, one of the things that, that she accepted and adopted was the whole notion that if you want something for yourself, you know what? Stop focusing on yourself, focus on how you get the other person away. And so we have a three, a three part sort of what we call the three uh core and constant components of effective sales, but also of effective management of effective interactions with anyone else in life. And those are, uh, number one, take their perspective. Number two, clarify their gain, including their issues, their concerns and all that.

32:57 Well, where do they see their gain? And then number three is build trust and confidence. So take their perspective, clarify their gain, build trust and confidence. And what I found was that if, know, you can never influence anyone unless and until you understand what's already influencing them. And so by stopping and actually learning about the other person first, and this is whether you've got an employee, whether you've got a customer, whether you've got a supplier, You know nothing happens until you do that and the other half of that though is that you'll never connect with anyone as long as you're busy judging them. So how do I park judgment and I really just listen to what's there you know and I put myself in their shoes and say well I may not believe what they believe but the question is can I understand from their perspective what they're believing and as a result what's the world they see that they're interacting with because One of the mistakes a lot of people make is they actually think there's one world rather than eight billion iterations of it.

34:00 I mean, we all see the world a little bit differently and we interact with what we see, but then we don't understand when somebody else interacts differently. It's like, don't they understand? They don't just don't understand life. That's it. Well, actually they understand it from their shoes. They just don't understand it from ours. So the big thing that she did was she just kept the focus on really listening and understanding other people. That doesn't mean that she parked everything she wanted, but she included them in the interaction. And as a result, her understanding of situations went much higher. She ended up winning eLearning Company of the Year uh in 2014. And it was just based on how focused she had her salespeople on what the clients actually needed from their perspective and why it was important to them.

34:45 We all assume that we know what our clients want. But it's different to get the nuances from them from their perspective. And you know, that sounds like it should be easy. And I guess it should be, except too often it's missed. And just by focusing on that internally with her own teams, externally with their clients, with her suppliers, she actually, she did incredibly well. And this is a woman, I got to tell you, this is a woman who came to me, you know, um at age of 52 when she started, you know, so, so. We're not talking about, we're not talking about like a 26 year old person who's youthful and has tons of energy. This is a woman who just, you know, her big goal to make a million pounds.

35:29 Everybody has the goal of a million, right? And in fact, it was funny because at year two, she says, I really, really Michael, I really think it's important to make a million pounds. I said, I'm sorry, you're not going to do that. And she says, well, what do mean? I'm not going to do it. I said, you're already 1.4. it's been a couple of months since we've checked, isn't it? Yeah, it's been a couple. Well, what do I do now? And then she actually had to shift her bowl of thinking. And she said, you know, I'm really enjoying this exploration. Why don't I just create a place where people grow? And that's literally how she grew the rest of it was that became her new commitment because she'd already out, you know, she'd outlived the dream of a million. She already had it. So it was fascinating to watch, you know.

36:09 Um, have a couple of categories. It's been a great conversation, but I want to do some quick hit reflection questions for you on maybe there's some, some really good benefit and growth moments that, for all the listeners. So one, what's a belief about leadership that you've changed your mind about? that leadership has anything to do with speaking. Effective leadership really is about listening. You know, the best leaders really understand their environment before they act. Now, once they understand their environment, they act, and know, and they do rally people to a brighter future and all that, but they don't do it without listening first.

36:50 So that was the thing I originally didn't realize. a that founders overvalue early on. for his vote. You know, there's this thing called the tofu leader. The kind of bland and you know, they don't stick out, but they get along with everyone and they just create this value. uh tofu leader system. Every entrepreneur. know that's a big word, every, but a system, every entrepreneur resists, but eventually needs. Well, I mean, if you're looking at physical systems, I'd say enough financial clarity so that they can read the tea leaves on what's really going on in their business.

37:38 Cause your numbers will tell you a story. just have to have, you have to have the ability to watch and look and read that story. And they eventually get there as they grow. But I tell you, everybody resists that. Yeah, because it's important that what you got to do is you got to stay in business. That's your first job. That's what's business equivalent of survival. And it is survival, in fact, in the business. Alright, the last one of these quick hits. Biggest lie entrepreneurs tell themselves about growth. I can sell my way out of the overspending that's occurring in my company. What's one thing entrepreneurs should stop doing to have them scale faster? I know it's a negative connotation because we could say, what's something positive, but what's one thing they should stop doing to scale faster?

38:23 Because they don't need to reinvent anything else. Just stop doing this and you'll scale faster. Okay, so you said stop doing this and I'll scale faster. Here's what I would say. Stop doing the bigger you get, the more you're paid to think, the less you're paid to do stop running around and stop working so hard. People usually work more too hard to actually achieve their numbers. If they slow down, they can see more. And as a result, you're in a situation where you can, you can get higher, far faster. So that'd be one, I have a different answer as well. Let's do. Stop thinking that growth is linear. Time uh is a tool.

39:05 if I wanted to double or triple or even have a 10x of my business, if I have an impossibly high goal and an impossibly close timeframe, um nothing's certain. So it's not like I have to do this, but I'm in a situation where all of a sudden, instead of having a thousand different ways to get there, I probably only have two or three. And so what happens is it gets, it makes it easier for me to clear out the noise and focus on the signal. So I'd say stop allowing for the noise and focus on the signal of the pathway that'll actually get you what you want. And that's way easier to accomplish if I got a big goal and a short timeframe, because it just necessitates that I take out the noise, because I only have time for the signal.

39:53 Yeah. All right. The final one here to, um, to serve since, uh, the necessaries in the word of the podcast to serve the brand and the idea on, on today about, the necessity of being entrepreneurs. named it that for, have the life I wanted. was necessary that I became an entrepreneur. Not everybody needs to, they can have different lives, but what does necessary leadership actually look like in practice? You process the way you would. So whatever necessary leadership would be. What's it actually look like in practice? deciding what matters for you and then focusing on using the business as a conduit to get that.

40:36 Because the business is a tool, it can give you what you want. But if you want to make an impact, uh productive entrepreneurship is necessary for the, uh frankly, for a strong society. A business is the only place where value is actually created. You people will give part of their wealth to a charity that actually knows how to use it. The governments will take part of your wealth to make sure our roads are clean and you know we've got the police forces and the teachers and all that stuff. But I to tell you in an entrepreneur it's the value exchange that literally creates value. It's the only place it really happens.

41:16 So so entrepreneurship in and of itself is necessary to create and expand what's possible for everyone. And I can use that as a tool. It doesn't matter what your goal is, it doesn't matter what kind of an impact you want to make, whether it's to your family, whether it's to one corner of the community, just make sure you're making it. Use that tool to actually make a difference because it's so powerful to do that. That's part of why I get so excited about entrepreneurship. Hmm. So good. Michael Walsh, Vancouver, Canada. Thank you for giving us your time today.