Podcast Episode 17 with Transcription – Rem Oculee

Rem Oculee:

Welcome to the Exit Mindset Podcast. I’m Rem Oculee. 15 years ago, when I was trying to sell one of my companies, I couldn’t get what I thought was the right price for it. I realized I had things set up the wrong way, even though the company was profitable. So, I spent years researching and studying exit strategies to improve my company’s valuation. I discovered that the same process that improves valuation would improve business profitability and give me more free time. I’m here to show you what I have learned. You see, the best way to grow your business is to look at it from the perspective of someone who’s going to buy your company. Once you start thinking that way, magic happens, and you start seeing things you could not see before. But that’s not all, I also discovered the three principles that you must know to command a better price for your company. The three principles are first, the product, second, the infrastructure, and third, the conversation you have with the consumer. Once you master these three principles, you will be on your way to increasing your profits, your company valuation, and get more work-life balance. So, listen in and learn how you can do that. I will teach you through this podcast, lessons from the trenches, and we will have a dialogue with some of the greatest minds on the planet.

Do you ever wonder why sometimes no matter what you do, your teams don’t set up correctly? And you try to make them work a certain way, you have certain objectives, but it never seems to shape down in the way you want it. Well, we can talk about that today because the exit infrastructure actually might have something to do with it. And I’m going to show you some strategies and some ways where you could improve that process and make it better for yourself. So, let’s just start going through some fundamentals with infrastructure. Infrastructure consists of four elements that are called the SLPP Elements. That’s S-L-P-P. Stands for systems, locations, processes, and people. And people essentially are your employees. Whether they’re actual employees, independent contractors. Whether they’re on locations, off locations, it doesn’t really matter. It’s the people that you work with to help you achieve the objectives you’re looking for.

So, many of those people have different core talents and different personalities. And the biggest problems you’re going to face over the years is that you’re going to see that each person is going to be different. And sometimes they have certain things you’ll look at and go, well, they’re not strong at that. And you wonder why there couldn’t be stronger at that. And you wish they could be strong with that, because you really think of them as being valuable and great people. But I think you’re missing the big picture here. Nobody I’ve ever seen has got it all in one shot, you cannot go left and right. Lots of times when someone is not as good in some area, you’re going to find that’s probably the reason why they go to another area. You can argue that personalities are like a balance, and you’re going to find some strengths in some areas, and things that are not going to be very strong in other areas.

But believe it or not, sometimes the things that are, they’re not strong on could be strengths in another area, in a different kind of work. So, the idea behind this, how can you set up a good team when everybody is not good at everything? Which is by the way not reality, everybody’s going to be doing something, including yourself. Cause you don’t gotta be good at everything. And that’s one of the reasons you have other people helping you, because you’re not good at everything in the world. You’re going to be good at somethings, and they rely on you, but you got to rely on them. So, the trick to this is to do the following. Combine people in a way it maximizes the strength of the company and the objectives you’re trying to achieve. The way this works is this way, is that you’re trying to identify what each person has in terms of their biggest strength and the things that they’re really good at. And combine that with somebody that has strength in an area that they need to achieve the objective. To do that you can use multiple techniques.

One of the techniques we use in companies is something called primary and secondary sheets. Other ones would be just listing characteristics of people, what they’re strong at and trying to see if we could combine them with others that are strong in the other character. So, the biggest thing for you is to find the core competency of what that individual has and that, by the way, takes time and experience. First of all, you gotta be attuned to people and understand what they’re looking for. Because if you don’t understand what they’re looking for in terms of what they want, in terms of their likes and dislikes, what they’re comfortable with or not comfortable with. You will probably be assigning the wrong work to the wrong person on the job. The idea is that you find the right kind of work that the person enjoys, and wants to do, and is excited about and assign them that work. That would be right work for the right person. In many organizations I’ve seen, they bring in people and just assign them to a job and say, “Here’s the job, and go in and go do it.”

And then it works out sometimes. But in my opinion, most of the time that doesn’t work out very well, unless you really, really try to understand is that job conducive to what that person likes to do and wants to do. And I’m going to give you a strategy or a tactic actually for doing that, is that simply ask that person or assign them the job and see if they get excited about it, they want to do it. Now, of course, just because somebody is excited about a job, doesn’t mean they’re going to do it very well. Cause sometimes people have sort of momentarily excitement about a job. But if you take someone and assign them something, and you find that they actually liked it, and they want to do it and they give you a good result. And most of the time it is what they do…

What they bring back to you is what is the actual indicator of whether they’re really are fit for the job or not. So, you find that they’ve done well, you follow up with another one, another assignment in that area. Then you follow up to the third assignment. And if you find that person always is doing that thing that makes the job really well, is when you really have discovered where the true ability is and where they should be at. And I find that in many cases you can then add another area to them and see if they bite on that one or not. And ultimately sometimes they do, and sometimes they don’t. And if you do that a few times with somebody to get it, you get to discover where they’re good at. And if use your experience in knowing how people work, you’re going to be able to direct them in the right direction.

And I find that the best way to assign jobs to people is assign of the jobs that they really, really want to do, they enjoy. It’s the worst thing in the world for you to go the other way around. And if you want to build good infrastructure for your company, an infrastructure, that you want to exit from, meaning that you want to sell to a buyer. Then when you sell it, you want to have the right people in there that are happy with the work that they do. Remember people have to be fulfilled in their jobs, and people are only fulfilled if they’re doing the work that is meaningful to them and they enjoy doing. And the world runs that way, people are like your thumbprint. It’s different than anybody else out there. So, every individual is different than the other person. You always got to figure out what is it that they want to do.

And if you build an organization in that way, you’re going to find your infrastructure is great. And you’re going to have an easier time exiting the company. Now, we always talk about this whole thing is not necessarily about just exiting the company. It’s more about also creating a more profitable company, and a company that gives you more time and freedom. And nothing would give you these things more than employees that are doing the work that they want to do. Their enjoying their work, they’re growing, they’re thriving. They know there’s growth in your company. So, that’s what you want to do. Now, it comes to how do you combine them? So, here’s what you do. You have to combine the projects and the jobs and the kind of work you’re trying to achieve on accomplishing your company, with the types of personalities and abilities at the same time.

So, if you combined personalities and abilities and you take someone who is good in one area, but they don’t do well in another area. But he brings somebody else that does well in that other area that this person doesn’t do, but they are not as good in that area the first person is good at. Now, you’ve accomplished it. Now, you got it right. And you let people do what they’re supposed to do. So, again this was on another subject, which is micromanagement versus people doing what this, what they want to do. And when I say that, it means that give people the freedom to exercise judgment and to be able to make mistakes. And when that happens, you’re going to find that you’re going to succeed. Your people are going to be happier, and you’re going to have a company that’s growing. An infrastructure that keeps growing, growing, growing in a positive way.

So, remember the Exit Mindset is about building certain steps. Someone very methodical, that you got to do a certain way. But some of them require thinking. Remember in SLPP, the employee part of it is there because you need thinking. You can’t run a company by computers, machines alone. It doesn’t work that way. You will still need humans that think, create, produce, and care to get your objective. One of the most important things you got to realize is that you cannot overload people with different tasks in different jobs that don’t necessarily belong to them. What you want to do is segment your infrastructure, when it comes to people in a way that allows each person to be assigned one type of work. Now, I’m not saying to you give them one item or they have to do one item, but maybe you can do multiple items. But it has to be synergistic.

It has to flow well within their psyche, with their desires of what they want to do, and with the objection of the company. So, if you align all these three together in the right way, and you do not just pile on different types of work in different areas that don’t make any sense just because it can be done. And probably it is done by someone. But at the end of the day, you really aren’t building an exit infrastructure. All you’re doing is building regular infrastructure that probably doesn’t allow you to achieve the goals you’re looking for. Which is again, profitable company with a lot of time and high valuation. Keep in mind, if you start building people in that way, each one of your people is going to be equivalent to three to four people, believe it or not. That’s how you leverage. So, if you have a team of ten; I’ve seen companies that have ten people equivalent to 30 people somewhere else.

Why? Simply because those people are working so seamlessly in an organized manner, they’re into their work they’re doing. So, what I want you to do is make sure that you build your team in a way that maximizes the output and doesn’t turn people into just robots executing work. Because remember people don’t necessarily thrive in just repetitive work, they want a challenge. And if you provide them with that, you’re going to find that you’re going to achieve a lot of your goals, a lot of your objectives in the company. And it does help everyone here, this is good for everyone. Another thing you could do to make sure that your infrastructure, when it comes to people, is well-run. Is to make sure that you assign each person, what I call a primary and a secondary function. Now here’s where you can sort of violate the rules a little bit.

So, what happens here for each individual? You can have a primary, which is a thing that they like to do the most. Now, the secondary, it could be a backup to something else in the company that could be good in case something goes wrong. So, maybe somebody takes a vacation, somebody is not feeling good. Things happen. You need additional support for one particular function. To design a primary and secondary sheet, it really is not complicated. You get a simple spreadsheet and here’s what you do; you list as many functions as you can within your company. And I’m talking about even detailed functions. I mean, it could be as simple as answering the phone. It could be as complex as designing a new model for your product. And you’ll list all these things. And each role you state those functions. And then on the columns you’ll list the primary and secondary.

So, the primary person is the one in charge of that particular area or multiple people in charge of that area. The secondary would be their backup. So, the backups are the people that can step in if needed. So, let’s say you have an overcapacity in some area. Let’s say you talk about customer service, I’m making it up completely, and you need more people to support your team. If you have the secondary functions listed, you might have a number of people that can step in quickly and do that for you and help you with that. And if you undertake that process and you fill that sheet, it’s going to be great for you and for the team because the team would look at it and decide that, “Hey, we need somebody here.” The team would look at it, and if there’s a need, they know exactly who to go to when they need something.

Remember that synergy is not about one plus one equals two. It’s about one plus one equals seven or more. And if you combine the right people in the right way, the synergy between those people could be exponential. So, you might have ten people, but their brain power and the amount of output that they create, and the amount of intelligence they exert on the production that you have there, could be equal to 40 people. And that will be obvious in the output you created in the company and in the organization, you have in there. So, you’ll notice all these things. And when a buyer comes in and says, “I want to take a look at your company, because it’s interesting to me. I want to pay you for it.” Ultimately, they going to say, “Wow, this is a company that’s well run. And it’s got a good human resource in it that I definitely want to acquire.” In addition to that, you don’t even have to take it that far, just because of the benefits you would get and you might decide, “I would love that company. I love business I’m in. I want to keep it forever.” So, if you have any questions, feel free to email me; askrem@exitmindset.com. Remember, action is everything. Use it or lose it. I’ll see you in the next episode.

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