How to Succeed at Onboarding an Operator with Mandi Ellefson

00:03 Welcome to another how to Succeed podcast. This is how to succeed at onboarding an operator with Mandy Ellufsen. She's the author of Hands Off CEO, and we're going to handsoffcEo.com to find her. But you can also go to Amazon or the audible audiobook, brand new, find the new book, the Hands Off CEO. We're going to talk about how you can replace yourself in your business and enjoy that sweet life of passive income and much more on this week's episode. I'm looking forward to that. We're just elevating yourself to bigger and greater work, which is awesome, too. The how to Succeed podcast is brought to you by Sandler, the worldwide leader in sales, management and customer service training with over 200 locations. More information@sandler.com dot here we go. All right, Mandy, tell us a little bit about the hands off CEO book, how you got here, and what we're talking about today with onboarding and operator.

01:00 Okay, those are three distinct questions. Very big. So hands off CEO has been around for about twelve. I think we're coming on 13 years actually. And as I was mentioning before we started for my last business, my first sales coach, which actually trained in Sandler. So that was a Sandler methodology. So shout out to Alan the darce, who was an earlier Sandler coach. Yeah. And hands off Cu has grown from a place of solving a problem that I was not able to get out of the day to day of my company. I wanted to take maternity leave and I basically had to shut down my whole business and my last company because I couldn't both focus. I couldn't have the company run without me at all. And that was the reason why I start the company. And it was pretty frustrating. So I went and I started testing and learning how to, to do this so that I could apply it for my own situation. And as a result, I accidentally started a consulting company, sold the other company that I had for a pittance of what it would have been worth if I actually would have put these things into place. And the hands off CEO is a culmination of everything that I have learned along the way in really over about 15 years career doing that and 16, I guess. And it's all the best practices, specifically on how to scale up a service based company and make it run and then grow without you.

02:29 I love this topic so much and I'm excited to dive into it with you today. I think everybody that has started a business has learned this one the hard way. So hopefully we can prevent some of that for people that haven't yet learned that lesson, but also help people that are stuck in it now make their way out of it. For me, my first business was Mike Montague Internet marketing, and I learned pretty quick that people expect Mike Montague to do the Internet marketing. If you name your company that way and it becomes really hard to get yourself out of actually doing the work and hiring outsourced providers and activity. I forget who said this line to me, and I shared it on a podcast recently, but one of my favorite lessons was your job as a leader is to make yourself irrelevant. It may have been Dave Ramsey and Entrez leadership, so I'll give him the shout out. But I love this concept because you keep elevating yourself. So no matter what business it is. The e myth by Michael Gerber and other books have mentioned this, too. When you scale, you have to replace yourself in the work below you in order to move up to that higher level of work. So maybe you want to own two companies or other companies. When we start with attitude here, can you tell us a little bit about why we would want to be a hands off CEO or hire an operator in the first place?

03:53 So this is a podcast about sales. So you guys understand that sales is a life bread, lifeblood of the whole business. And what that means is that you have no business without sales. So you need to be your job as the CEO of the company is to make sure that you're driving growth in the company. And you can't be doing that if you are actually in the day to day running the business, too, and your customers and your clients are not being well served if you're trying to do everything as well. It's just, it doesn't actually work that well. So one of the first things you need to be doing is getting the business to first run without you so that then you can focus on sales, you can figure out what's actually working the best in the business, and then you can scale and replicate yourself out of that. But some of the problems, there's a lot of challenges that happen when you step away from the day to day in the business. And we can get it go into that if you'd like.

04:45 Yeah, for sure. You mentioned 80% of problems are sales problems. And I'm sure everybody listening to this podcast can relate. But why do you say that and how would we eliminate them?

04:57 Yeah, so let me, let me rephrase that. So a lot of times when you're looking at challenges in the company, on the operations side, on the delivery side. Most companies, when they're looking at solving operational type of challenges, will go to an operational expert. And the operational experts who knows absolutely nothing about sales, by the way. Most of them don't. They have their little siloed lane and where they feel comfortable. And they might be okay on the finance side, but they're not good at sales. They don't understand marketing, they don't understand demand generation, they don't understand why clients actually buy a. So what ends up happening is that they go and look at this from, well, how do we be able to make this efficient? We'll make this, we'll streamline this. We're going to simplify. And yes, we need to do all those things, right, but you have to first know what the customer wants. You've got to be able to deliver on what the market is demanding and preferably solving very, very painful problems that you can be paid a maximum amount of money for, because then when you do that, you eliminate an enormous amount of operational challenges. So what I say that 80% of operational challenges in your business are actually caused in the sales process.

06:15 And there's lots of ways that happen. I see it both ways. So in your explanation there, I remember one of the clients that was least effective with Sandler training that I've ever had. We're like, oh, we have an idea. Well, right now we have engineers and we have salespeople and the salespeople are selling stuff. Then we have engineers deliver. We'll just eliminate all these expensive salespeople and have the engineers go sell and save some bottom line dollars for the first year until the top line dollars dropped on renewals and new business pretty quickly after that. The other problem I see, though, is the opposite, where salespeople get really creative and they start selling stuff that doesn't exist. And now operations has to make up products to deliver on a new contract. And it becomes really messy because there's no consistency in what people are selling. Which do you see more often? Or I guess when we're thinking about onboarding an operator, you got to get really good with the upfront contracts of what the operator's job is to make widgets that we've all clearly defined or to make whatever sales promises happen.

07:25 Well, yeah, so it is really about the sales promises, making the sales promises happen, but you have to first define what those sales promises are. And this is actually a lot of sales companies that will, will do business development and done for you. Sales will actually refer their clients desks. What we do is we help them put together irresistible offers that allow them to double, triple what they can actually command in the marketplace. And the reason why is because we help them find their profit. Sweet spot client, this power of ones that we call it. So one client, not, not industry, but one client, one painful problem. Like we like multimillion dollar problems, really painful problems. And then one outcome. When you solve that problem, you'll deliver this out. A minimum outcome. What's the minimum outcome? And then what you can do is then you have your sales team just go after selling those types of solutions. And there's a lot that's talked about offers. Now here's the problem though. You can sell offers all day long, but if you can't deliver them, then you're going to have a bad reputation pretty quickly. So you need to be able to have a connection. I mean, to your point, like we can't have salespeople going out and selling all these making up things on the spot, or even this, like one of the bigger issues that we see with our clients that their salespeople are, will just go and sell whatever the small thing that they can sell is not, not the bigger engagements, not the clients that actually are going to add value to their business, but these little junk clients that cost more to actually deliver the service than what they're making on them. So it's very important that you're clear on this is actually what we do as a business. Because without that, you are not operationalizing anything of value. You're just spending a lot of time spinning your wheels. And that's what the job is of an operator, is to connect the dots between what is being sold and you really need a strategy for this. You're not just going out here and saying, we're just going to systematize all the average work that we have in our business, because that's a great way to become an average company. If you want to become a really exceptional company, you have to define what is exceptional and then standardize your business based upon that, starting with the sales all the way to delivery. So you have to really look at the whole lifetime of where your client starts, all the way to where you're continuing to add more and more value to your clients. And by doing this, it allows you to deliver just tremendously more results and value for your clients. And what that allows you to do is that's why our clients are able to charge know 200% or more for a lot of those services that they do.

10:10 I love that there's a bunch of really great stuff there. Before we move on from attitude, I want to ask you one more. I feel like we're missing something, like a common myth or misconception or why people mess this up when they try to hire an operator.

10:26 Yeah, well, and we're really talking about the bigger picture for how all this fits together. But before you have an operator, you have to actually define what the business is that you're going to scale. So a lot of times, so there are a lot of mistakes made with going and saying, hey, you know what, I want to step out of the day to day business. So just go ahead and just systematize everything we've got here. You're an expert, I'm good at sales. I'm going to go out and sell. You just go and figure it all out. So they're abdicating basically. They're not actually leading. And this, by the way, is, unfortunately, this is something that on the sales side is a real, people who are very good at sales suck at operations. That's, that's just how that works typically. And so you need to, so knowing that you need a really strong operator, and also you need to recognize that you probably don't know how to actually train and develop this operator. And you're not just you going out and finding the most expensive COO or person who puts the COO title on their resume, by the way, that's oftentimes over titled that they're not going to be able to just jump in and run your company, especially if you have a service based company, because they, their job, they didn't, an operator does not know how to actually help you whittle down what's most important and valuable about your company to be able to scale. And they may, they may know they need to do that. The more advanced ones will, might know they need to do that, but they don't have the skills to do it because they're not sales and marketing experts. So you have to be able to have a, a full cohesive solution that pulls everything together, especially for service based companies. And that's why they're so difficult to scale. Because what happens is that if you don't have that in place, then you will let go and then the quality will completely plummet and, or even if it's, even if you're delivering about the same thing without the CEO's magic touch coming in there and making sure that you're putting a bow on it and that you're customizing little things here and there. Without that, your clients won't be happy?

12:33 Yeah, I think you nailed it right there. That was brilliant. I think that's also why people come talk to us at Sandler on that part and why they talk to people like mandy@handsoffceo.com. shameless plugs in there. We can move on to behavior because I think that's also a perfect transition to talk about doing the right thing at the right time. So I've seen people mess this up where they try and hire an operator off the bat before they have really even figured out what their business is or made it work. I've also seen people wait way too late and they're like, oh, I better, I'm retiring in the next, you know, two to three years. I better hire an operator. And maybe they don't give themselves enough Runway or it could be cash flow or other things where they're really struggling in their business. Can you talk a little bit about how we, when's the right time to onboard an operator? And then maybe from there we'll talk about what are the steps to go through that you don't just, you know, put out a resume and hire, like you said, hire a coo and check that off the list.

13:34 Yeah. So let's talk about the right time. And then let's also talk about how do you get an ROI from this role? Because that's, that's connected to that, right? Because that's one of the biggest things people are asking. Well, you know, how do I, how do I know can I can afford this role? And we're on a sales podcast here, so if you're any good at sales, you're losing a lot of money by not having an operator in place. And you're also doing all sorts of work that you hate doing that are soul sucking and that you shouldn't be doing and that you're bad at. So, and if you're spending, like, ten or if you think you're spending 10 hours per week doing all this operators, operations stuff, you're probably spending 20 hours and actually someone should be spending 30 to 40. And that will give you the bandwidth to actually be able to grow your company a lot faster and being able to keep the quality up. So that, so that's the rationale, the reason why you want that. Now, when is the right time to answer your question? The right time is when you have figured out a message to market match, where you know how to bring in customers and you are hitting at a point of capacity and you're actually losing opportunities or you're losing opportunities in your business because you don't have enough time to go out after them. And I'm not even, I'm not necessarily saying you're just turning away some, a lot of times people wait until they're turning away business.

14:56 Right.

14:57 But now what's happened is you've waited until you're about 120% capacity. So it's so, and this is another lesson, too. Like when do you hire? You hire when you're at 80% capacity. And that's just generally, I would say that generally for roles, if you're, if you want to grow your company, right. If you want to keep your company how it is, I mean, do something different, you know, wait until the very last minute and see how that works out for you. It's pretty terrible, right? I've done that a few times. Or you waited too long and you're like, oh, my gosh, my life sucks right now as you're trying to hire people. So, so that, so there, there's, I mean, that's one way of looking at it. Another way of looking at it is revenues in the company. And if you have a million dollar company and if you don't have an operator, you're shooting yourself in the foot and you're living a very painful life, so now you don't have to have one. Anyway, before I go into more, I want to just check in there. We haven't talked about Roi yet, but I've talked for a long time here.

15:58 Yeah, I think that makes a ton of sense. I think the one thing that came to mind for me that we didn't mention is you may need to be prepared for a little bit of a dip here, too, which is when people wait too long or they're messing it up, and because they're the salesperson. Now, I have two thoughts here. You've said it a couple of times, but I wanted to say it more strongly, is that you don't want to hire to replace yourself as another salesperson. A lot of people make the mistake of saying, I'm really good at sales. I need to find somebody like me to replace me. And then they still don't have the operator. They still don't have somebody that likes doing all the details, the spreadsheets, paying the taxes and stuff. And now they have two problems in their business rather than one. The other side of that, though, is they don't realize that there's a dip here, that you're going to have to slow down a little bit to bring this operator up to speed. And so everybody tries to change the tires while the car is going down the track at 200 miles an hour. And that doesn't work very well. Like, you may need to pit stop, do a retreat, take some planning off sites, like really slow down and be prepared for even a 20% drop in your sales to get back up. But I would love to hear if you have any thoughts on how to prevent that part.

17:14 Right. Well, you definitely do need to slow down. I mean, slow down meaning that you have to be stop and be very intentional about it. And how you prevent your sales dropping 20% is that you stop doing all the stupid things you shouldn't be doing and delegate those things so you can focus on really important work, like being able to develop this operator coming in. Now, here's the thing, is that there's certain skills that you're not going to know how to develop them in. They're going to need to come in there. There's also some skills that they probably don't even have at the level that you need them to be at the. Unless you're bringing in someone who is a multiple six figure candidate that has run many very robust companies and knows how to scale a service company. Now, most of those people are going to be completely out of the budget of many companies that are in the lower seven figures or even the mid seven figures, and even those that can afford that, I see people who can afford someone at that level and they still mess it up. And that's why we actually, over the years, we decided to put together a certification program for operators. We have three different tiers that helps them become proficient, then intermediate, then advanced so that they can actually get up to speed running the company in as little as 90 days. Now doing it on their own, what most people do is they say, well, you know, I don't really have time to train you. They don't consciously say this, but, you know, just follow me around and, you know, just kind of figure things out. And that's a really great way to blow a lot of money and frustrate someone. So this person needs to come in and actually build out all the structures and the systems in your business if you've never had an operator before. So that's now, if you hire someone that is too high level, they will not want to do that. They will want to come in with a company that's already a certain level and they're going to want to optimize it. So just first of, first of all, so you probably don't qualify for someone who's really high level because they won't want to work for your company. So you need to have an operator who is not too senior, but also experienced enough that they're going to be able to roll up their sleeves and they're going to be able to build out all these systems in the business for you. And they have to build up the management rhythms. Know the weekly meetings for managing the KPI's across the team, managing the team structures, putting in place project management systems. Even if they have project management systems in place, I mean, most companies we come into, if they don't have an operator, their project management systems are usually pretty messy. Even if they have project managers on their business, they're oftentimes client facing. So they don't have space to do, to actually do the work. And that's another piece, too. A lot of operators, they, wearing so many hats like the CEO, has successfully removed themselves out of the day to day. But now they've created a new bottleneck. So that person has to be backfilling their role, too. So those are all the challenges that we are, we help our clients with to be able to remove this person from the day to day. And what we found is that we can get that person paying for themselves within 60 days.

20:27 So let's talk more about that and what the ROI looks like and how that happens.

20:34 Right. So the question I'd ask myself is, you know, if I had, let's just minimum ten extra hours per week to spend driving growth in the company. You know, that's a 40 extra hours per month. How much new business could I bring in? And I imagine most people listening to this podcast could probably bring in multiple millions of dollars more growth for their companies with that amount of extra time. Now imagine if half of your time was spent doing that. Well, at some point you're going to run out of time and capacity to be able to make those sales. And that's part of why, I mean, to your point earlier, I completely agree with you that you need to get out of operations first before sales because you can get by selling without great sales processes because they're kind of in your head and you can be effective. Right. But that's not going to work with the sales team. You've got to have things dialed in. You have your offers dialed in. You need to have all the things dialed in that you guys teach at Sandler. And without that, then it is a great way to just flush a lot of money down the toilet.

21:42 I can actually add some stats to this so it's handler. We have over 200 locations and not necessarily an operator, but we have the stats on an admin. When our consultants hire an admin, it is worth about $200,000 a year to their business and a 44% increase in sales in the first year of going from one to not one. And I think if you just sort of work those numbers like Mandy already shared, and look at what your time is worth, what your average sale is worth, what a percentage bump of 20% to 40% would be worth, you're starting to put a ballpark on the budget of how much it's holding you back and the opportunity cost of even just the turnover that you have from not having somebody focused on operations and other stuff. The lifetime value of losing one of these clients or not getting a new client. That's like you said, an ideal, profitable client that stays with you for years be worth millions of dollars. So it's worth doing. As we come into the technique and we wrap up here, I guess my next question is for you is it's still feeling a little bit to me like an easier said than done. Like, we've made a great case for this, but you've also hinted at, you probably just don't go on Zillow, post a job for CoO and hire an operator. Can you tell us a little bit about the techniques, the tactics and strategy we use to find hire an onboard an operator?

23:19 Okay, I'll do my best in just a few minutes.

23:25 Just solve the world's problems in the next two and a half minutes.

23:28 Yeah, this is actually, I would say, second to only sales operators have the highest risk of failure for bringing them on. So they're so. And a lot of times what happens is they don't necessarily get turned over. They kind of end up staying in the company, being overpaid, not really doing their job, and causing a lot of stress and frustration for the owner because while they are adding some value to the company because the owners doesn't have to put their name on it. Sound a lot like sales, right? Like, like they emotionally say this person's doing this, but they're not really doing it. You know, it's the equivalent of hiring a salesperson who's like, doing the work but not actually producing. So you can have some dead weight in your company. And then it's. Now it's more work for them to actually, the CEO to actually be doing the work right alongside the operator or thinking things are being done. And then later on when that person's gone, you find all the skeletons in the closet, which is not fun. Right. So it's really important that you have someone that has a very high level of follow through, very detail oriented. I'll just share on the Colby scale, the Colby a score. Something to look for is high fact finder, high follow through. Someone who has a very high attention to detail. They need to be a lower quick start. You don't want to have someone be like a one or two quick start, but they need to, you want someone like four or under, anything higher than that, then you're like a salesperson is going to have a high quick start, you know, eight or above quick start. And the, and the fact finder can go either way. With CEO's, you can have the high fact finder or low fact finder, but follow through. So people who are pretty good at sales, who are real stars, oftentimes their follow through is not as strong either. That's a characteristic with a lot of really high powered CEO's. So you need somebody who's going to counterbalance you. So that's, that's, that's a profile you might be looking for. You can look at a disc. There's some similar ones on that, too. But that's what you're looking for profile wise.

25:37 Yeah. What about the strategy to find them? Because I think I said Zillow earlier and I meant zip recruiter, but you're probably not. Just, it's like sales. Good salespeople. I think it's a great analogy because great salespeople are not looking for a job. They can sell anybody on a job or they can sell anything. Like they're, they're making money doing something else. I feel like. Same thing with operators. Really good operators are probably not on the beach waiting for a job. How do you find?

26:03 Well, yeah, so, well, we have sources where we find them from eastern Europe. That's our favorite place to hire, actually. And we used to hire from them from Canada and the United States. We still have clients that hire from them for whatever reason. Sometimes they need them there, sometimes their team is already in the states, and that's great. But what we found is around 2020, 2021, we were having a really difficult time getting people to actually apply for jobs. They were sitting at home not working, and I found that rather frustrating, that we were not able to fulfill these roles for our clients. So what we did is we said, you know, what, what other markets can we hire from? So we've tested different markets. There's some markets I would definitely not hire from for that, for the operator role. We haven't had as good luck in Latin America. I'm going to be honest with you. We have found some great roles in Latin America, don't get me wrong, but we found the best luck in eastern Europe. And the best part about that is you have people who really want to work. They want to work hard and they will stay long term because they're looking for great opportunities. A lot of people love working from home and it gives them an opportunity to make more money. But the best part is they actually, you can get a lot better talent for the same price and you can actually end up paying about half the price as a us based person. And they're, their education is every bit as good as ours, if not better.

27:33 I've seen a lot of that in marketing, outsourcing and other stuff too. Not just operational roles, but it can be interesting. So you have to decide, I guess, whether you, you're talking mostly about service based businesses or we have been so far, but if you need somebody in the planter or not. Any other final thoughts or anything I should have asked you and didn't about onboarding an operator. I'm sure there's plenty more. Again, we'll shout out the book the hands off CEO if they want to hear the whole story.

28:07 Yeah, definitely. Well, something that would be really helpful for them is actually purchasing a copy of the book. The reason why is chapter 13. It talks about the five different exits that they walk through in order to be able to exit the CEO out of the day to day sales is exit four, not exit one. Everybody wants to do exit one because it's like sales is uncomfortable. Right? But if you don't like to sell, go get a job. So there are five different exits. But the first two exits around account management and project management. Account management, project management and account and operations management. Those are the two that it will just be life changing. And when you were talking about a 20% increase in revenue, that's very conservative for what's possible when you can remove the CEO from the day to day and get them focusing on running and growing the business.

29:04 I'll also just highlight you talking about the exits. Reminded me again, I shouted it out at the beginning, but a lot of people are looking for their succession plan and you really are destroying the value of your business. If you don't have this buttoned up on the operational side, you can't hand it over to somebody else. You can't make a successful exit in your business. So I think that is crucial and I appreciate you helping us think about it and put some structure around things today. Now, I want to get to know you a little bit better. Mandy, at this point in your career, how do you define success for yourself?

29:42 Success for myself is being able to spend time with my family and have the life, wealth, travel, whenever I want to leave my business, whenever I want to know that clients are well supported. Everybody's happy. They're renewing because they're happy and getting great results, and that my team is happy. That's on the success. Everything has to be connected, and the business is continuing to grow, and we're, we're reaching our goals. So that's like, that's success on the business side. But it's extremely important to me that I'm not having to sacrifice my life or, you know, being able to see my daughters grow up in order to grow my company. It's just not worth it.

30:21 Yeah, I love that. We may have been talking about it for the last 30 minutes, but what was the biggest challenge or hurdle you had to get over in your career in order to be successful? Was there a particularly hard lesson learned or something that was a struggle that you felt like was the pivot point for your career?

30:43 Pivot point? I think probably one of the biggest, one of the biggest pivot points was just making the decision to really scale my company. And there was, there was a very, there's a distinct moment, and I talk about this in chapter five of my book about the different stages scaling up. And there's, there's a couple of stages that are particularly under, under a million, where the biggest problems that are happening in the company is that the, the founder of the company hasn't really fully decided to go all in, and they, they're kind of dabbling. And some years back, I remember when I made that decision and I said, I'm going all in. And it was also a lifestyle choice, too, for a certain age where my kids were. And I made a decision on that. And when I really fully went all in, the business really took off.

31:39 Good stuff there. Do you have a favorite quote, motto, or mantra?

31:43 Yes. One of my favorite quotes is something that my dad would say growing up, and I think our sales folks on the line would appreciate this, but it's easier to ask for forgiveness than permission.

32:00 That's always a good one. I like that. We definitely have some ardnery salespeople listening today. So you've been listening to Mandy Ellipsen at Hands off CEO. Hands off CEO.com. and that's the name of the book too. She made it easy for you for the branding. So the hands off CEO, available on Amazon or Audible as well. Mandy, before we let you go, anything else from you as far as how can we help you? How can you help us?

32:30 Yeah. Well, if you go to handsoffceo.com book, there's actually a really handy checklist that everyone listening can download the scalability checklist for the exact steps in what order to be able to exit yourself out of the day to day. And it's a checklist you can print up, put it on your wall. That's what our clients actually do. And it walks through those five steps, those five x that we talked about. And also, you know what your offer needs to look like in order for you to be able to actually generate a higher price point for what you're doing, too. So handsome. CEO.com book.

33:02 Amazing. And you have a podcast as well. So people are listening to podcasts right now. They might as well go check it out exactly where you're watching or listening. That one would be great. Mandy, thank you so much for joining us this week. We appreciate it. Say the how to succeed podcast brought to you by Sandler, the worldwide leader in sales, management and customer service training. Over 200 locations and an enterprise team. So if you have multiple locations and stuff, go to sandler.com, check that out. And until next time, good luck. Good selling, everybody. Bye.