So now you got the bigger , sexier projects , you're getting more stuff , and then somebody gets really excited about that next big , giant sexy project . Oh man , we've been wanting to work with that client . If we work with that owner , we're going to get in the paper . We're going to get all kinds of run out of this . We need to take it .
That client is so influential in the local community we can't pass this up . Sound familiar . What ends up happening there ? You oversell the capabilities of the organization . In simple terms , you just outsold your workforce . I've seen it happen . I'm not talking about you . I pinky promise what's going on . L&m family .
I got a solo cast for you today and I'm going to be diving into . I don't even know what to call it . It's like the indigestion trap , and when I say indigestion , there's a saying out there that most businesses don't die from starvation .
Most businesses don't die from starvation , they die from indigestion , and I've been able to see this like play out over and over again . So I want to talk about like what that looks like and I promise I am not talking about your business or your company .
It is a dynamic that I've seen play out over and over and over again and also want to give some ideas at the end of it about what I think or what I've seen work in mitigating that , the failure or the collapse of the business like what's really more important .
Sure , the failure and the collapse of the business is not good , but it's the quality of life that people lose when they're in this cycle and in this trap . Right , the frustration , the defeat , the failure , the low sense of self all of those things ain't good .
And so , if you're new here , I'm Jesse and usually I interview amazing people so that we can learn their tips and tricks and how they carve their unconventional path to success . And every now and then I do a solo cast . And so here we go , here's the deal New team , new business , new organization in a new market .
They just came into town , they got a new boss , new department head , new VP came in to take over . You know , you know the deal . Something big has happened and all of a sudden they've got a plan . They've got a different way they want to approach things . It sounds like it's going to work . They start doing it . Then they get some traction right .
All of a sudden the market starts responding and say man , like they , like us Okay , start building some credibility . They get some projects to get some work . They deliver on the things that they promised .
And then they start getting bigger and sexier projects , because now they've got a name for themselves and people are reaching out and saying , hey , we heard about you or we worked with you on the last project . We want to do another project with you . Things are good , things are humming . Now what's happening here is the business is starting to grow .
What I mean by that is the number of people required to deliver the work is growing at this time . So what's also happening , while this credibility , more business , getting recognition , developing a brand is happening , the need for more people is beginning to grow . That doesn't mean that you're out hiring people , right .
That is very different than actually growing the team , and we'll come back to that later . So now you got the bigger , sexier projects , you're getting more stuff , and then somebody gets really excited about that next big , giant , sexy project . Oh man , we've been wanting to work with that client . If we work with that owner , we're going to get in the paper .
We're going to get all kinds of run out of this . We need to take it . That client is so influential in the local community . We can't pass this up . Sound familiar . What ends up happening there ? You oversell the capabilities of the organization . In simple terms , you just outsold your workforce . I've seen it happen . I'm not talking about you , I pinky promise .
So now you got all these other little jobs that you had and that you've been building and you've been hustling and delivering on , and you got the big sexy one . And of course , you're going to go get more business . And then , uh-oh , we need more people .
So you start hiring more people , bringing new people , and you don't have the time to train and develop them because this work is on your back door . You got to go do the damn thing . So what do you do ?
You hire experienced hires people that have been in the industry doing the roles that you need , but they've been doing them for someone else , and what that means is they've been doing it differently . Again , none of those points we're going to come back to .
The next thing that happens is your customers the customers that everybody was working so hard to build relationships with and build trust with start having an inconsistent experience . They start wondering like wait a minute , this ain't , this isn't what it was like on the last project . Wait a minute , this isn't what so-and-so taught told me about .
Like these guys , these people are just like everybody else . That ain't no good . And so what happens ? You lose credibility in the market , not because you were trying to . We'll talk a little bit more about why . I think like the why behind losing the credibility . You start losing credibility . Your warranty quality experience starts getting more and more diluted .
So you got callbacks , you got cancellations . You start losing business . So you got callbacks , you got cancellations . You start losing business . That's no win-o . And now , because you went in a frenzy to hire people , you got all these people that you've got to carry and that creates this whole other thing that is like less than awesome .
Then , oh , somebody in the organization says we just need to get back to basics . Somebody in the organization says we just need to get back to basics because of all the dang demolition that they just did , the good credibility , the good name that was built , and then the cycle starts again .
Now I touched on a couple of things , right , one of the things I touched on that I think and have seen be huge in like avoiding this problem , and that's discipline . Discipline to what ? The discipline to stay on plan , and so what I mean by that is one of the decision makers up there in the ivory tower . They have an annual goal .
Everybody has an annual goal X amount of revenue per year , x amount of backlog per year because that's going to keep the business growing , thriving and healthy . That's the point . And so let's just use $200 million as an example . If $200 million is the annual revenue target and you've hit that target in Q3 , you're ahead of plan .
What most people do that contribute to this indigestion trap is they continue selling . Now . They may be strategic sales that are pushing out into Q4 or Q1 of next year , whatever . In that case they're not going to be selling . They're not Good , keep doing that . But often that's not the case .
Often it's a favor or a little extra for this one client , because we want to build rapport with the client . So they give us that next project that they want to partner on . And there's all these like weird politic things that we start doing Hit target $200 million , oh , $210 million , $215 million , and then we take the big one .
And so what's also happening is that $200 million revenue mark was growth right . Hopefully there was some growth built into that , meaning you would be having to , the business would have to deliver more in the new year or by the end of the new year .
So there was already a stretch , an expectation of growth built into the goal , and then you exceed the goal or decisions are made that exceed that goal .
However , what isn't happening , or rarely happens , is the systems and mechanisms to recruit , train , integrate people into the organization have not been adjusted appropriately , if they even exist , because in a lot of cases they don't . It's just hire people , hire people that's what I am saying is the number one contributor to the problem .
Not necessarily the people , but the lack of discipline in pursuing or exceeding that revenue goal . Exceeding that revenue goal because it's easy to say , yes , let's sign that letter of intent , let's , here's the deal , let's start moving forward . That's way easier than it is to say wait a minute , how many people do we have ? How many people need to do that ?
How many more people do we need ?
And here's the thing how long is it going to take us to acquire , find , recruit a new , experienced , hire , integrate them into our system , meaning , teach them how to do the things the way we do them , so that they can deliver a consistent experience to our client and to the people that have been recommending us that's the trick .
Yes , you can hire new people and when you grow what I've seen is when they grow faster or beyond their britches right , they see that big , fat , happy bonus at the end of the year let's go get that bad boy . They're not considering that . Yes , you got to hire people .
You don't have time to hire like fresh people out of university , out of high school or out of trade school . You're going to hire experienced people because you don't have time to help them develop the core skills to do the job .
But the problem with that is those people know how to do that from a different context , a different definition , a different way of doing that , and so when they come into your organization , you're probably throwing them straight into the damn project and they're going to do it the best way they know how , which may not necessarily be and rather is almost not
anywhere near what you want it to be , or what the current standard is . You want it to be , or what the the current standard is . That creates dissension , that creates distrust , the disconnect like it . There's a lot of disses that happen when this , this sort of thing , occurs . So I'm gonna go back to the discipline thing .
I got the fortune of working with an amazing forward thinking leader who asked me like what do you think ? What are the problems ? Man , this is the thing I've seen all the time we get a , a new business unit manager comes in . They got great .
Another fan this is like my sixth business unit manager , by the way comes in , has a great idea and they're going to change everything . They're going to make everything better . The BU hasn't been performing the way it was supposed to , and so that's why I'm here .
I'm going to fix it , I'm going to make everybody perform , and then they come in and , you know , mess things up and two or three years later they're gone . This one said he spent like , like , for real .
He spent about 90 days , at least 90 days , investigating and understanding how we were doing business , how we were doing the stuff we were supposed to be doing or , more clearly , how we were delivering value to our internal customers and our external customers .
And then he started saying , okay , what do we need to shore up and step on the gas on , and what are the gaps and how do we close those gaps ? So he and I had a conversation and he asked me he's like , why do you think this thing keeps happening ? I said , well , here's why .
We get a new person in , we start doing pretty good , we oversell ourselves and then we start doing bad and then we start over again . It's pretty simple , like that's what happens , and he's okay . Well , what do you recommend ? I said , well , if the annual goal is this , let's just hit that goal .
Like , let's hit the goal , because we have to build our internal resources , our personnel , so that we can hit that goal again . Right , like , revenue is great . Earnings is a different question .
If you're hitting $200 million in revenue and you got 1% earnings , you got problems , and so let's hit the goal and let's figure out how to take 1% earnings to 4% to 7% or whatever that is . That's a different ballgame . That's a thriving business .
So I , in my head , I was like yeah , yeah , you're being nice and you're talking smack , but I'm going to give him the benefit of the doubt . Maybe he will be the one that , like , makes the disciplined decision and doesn't oversell us . Guess what he was . He didn't oversell us , he stretched us .
But there were some projects that we said no to because we weren't equipped to deliver on them . What we also did is we had some training that could have been better , or actually needed to be better to bring people in and integrate them into our system , and so that was a much different experience .
After year one , it's like , okay , we got some stabilization , we're doing the thing . We had another conversation and I said , well , I mean , it could be a fluke , how about we do it again Before we elevate the target ? Yeah , yeah , sounds cute , but we're going to elevate the target , okay , whatever .
Now the whole point of that story is the discipline , right , the decision makers . Yes , that big sexy project with the crane that's going to have your name visible for hundreds of miles or hundreds of eyeballs . There's value in that of eyeballs . There's value in that .
But if your whole organization or situation is not equipped to absorb that growth because here's the other thing that happens you get a contract . Every contract you have , there's a set price for it , but there's scope gaps and there's change orders and there's expansions , so that's going to grow . Most likely , that is going to grow also .
So now you've overshot your target by 20% and the current work that you have is expanding by , let's say , 10% . So now there's a 30% unplanned growth or bubble that you have to deal with , and all the while you're not growing your people , your departments , your capacity within the different departments and all the role players to execute at that level .
And so one part of the answer in Jesse land anyways , is to have that discipline to stay on plan and not oversell your work .
If you're a decision maker , you don't get to say , rather , if you're a real leader , like OG leader , you don't get to say , rather , if you're a real leader , like OG leader , you don't get to say that's not my problem , that's not my part of the business , because absolutely it is your problem . You just don't feel the worst part of that pain .
The other part is this A lot of folks like to think that there's a talent problem in the industry . There's people at Generational and all this other rigmarole , and I know this to be a fact .
If I were to give you all the talent that is available in your town , you could not predict whether they would be extremely successful , moderately successful or poor once they hit the project . It's a matter of who they end up getting set with . If they get on a team or a leader that regularly invests in their people , support them and develop them .
They're going to be successful regardless of their talent level . If they get on a team that's just living by the hair of their chin , that person is going to have the same experience . If they get on the low performing team , that's just . You know . You know the ones guess what ? That new hire is also going to suck .
And so it's not a talent problem , it's a system problem .
Very few departments I'm not even going to say companies very few departments or leaders of a department or a specific segment of the business know precisely , or even roughly , how long it takes to bring in an experienced hire , integrate them to the processes , systems , controls , measures that that organization uses or that team abides by , so that they can be
successful within the new company . Very few people know what that is . Most people are going to refer to that as onboarding and they think it's an HR responsibility , which I don't agree with that at all . Onboarding to the company is one thing . Onboarding or integration into the department or the specific team to the specific role is an entirely different thing .
And so that's my thought . If you want to break the indigestion trap , if you want to see or maybe kick this idea around with the people you work with .
If you've seen this cycle happen right , maybe not you , you never experienced it , but you know somebody that has I would examine , like ask them how many times do we exceed our annual goal or growth goal or our revenue target by how much ?
And then the follow up question to that is okay what is our system or method to integrate people into the specific roles so that we can deliver a consistent experience to our clients or to the people that are buying from us ? What's it going to take to build that system ?
I tell you right now it is way easier to build the system of integrating people and helping them understand the core functions , the core responsibilities , the core tech stack , all of those things .
It is much easier to do that and that ain't easy , but it's way easier to do that than it is for the decision makers in the business development sales department to exercise discipline and not oversell themselves .
So if you want a place to start , my recommendation is start on the system , the method , the way that you bring experienced hires in , run some like do it , do it a bunch and figure out like you can . I bet money and I've seen it done and I've been a part of doing it . You can get that timeline down to about six weeks .
New hire has experience done the role for other people . Some people call it brainwashing , whatever you want to call it . Get them through that training , through that integration period and then on the other side of that six weeks they can go execute . They can go do it precisely the way you expect them to do it , but you got to start .
So if you think I'm nuts , let me know . I appreciate you taking the time to listen to my little rant here and again . I promise I am not talking about your company . Be kind to yourself , be cool and we'll talk at you next time . Peace .