How to Manage Through 1000 Percent Growth

How to Manage Through 1000 Percent Growth

Brian:                       Welcome to this episode of the Sell For Millions show. We're back with Mr. Nick Macco in beautiful downtown Chattanooga.

Nick:                         Yeah, that's right.

Brian:                       We're going to have Nick talk about leadership. What he's had to do over the last 10 years. The different stages of your company. How many employees do you have now?

Nick:                         150.

Brian:                       150 employees. You grew it 1,000% over a couple year period.

Nick:                         We did, yeah. That was a tough one.

Brian:                       Give us some of your wisdom on leadership, how to make this happen. How to help our audience do the same thing you did.

Nick:                         I mean, that's a great question. We could talk about that for a long time, I bet. Well, I mean, I can speak to when we went through some pretty extreme growth and maybe how we managed that because, I don't know, I-

Brian:                       When you say extreme growth, what-

Nick:                         ... We're talking it was like 1,100% over three years, when we made Inc 500 fastest growing companies. That period of time, we were changing our facility, every 18 months we were signing a new lease. We were rapidly having to expand our team, trying to ship as much product as we could, and still had to be profitable because we're self-funded, so we couldn't lose sight of that.

Brian:                       ... Were you able to manage the customer expectations through that time, where your deliveries and ...

Nick:                         Yes and no. I think we had some years better than others. I think there's a great concept that I had heard once, whereas you're growing rapidly you're going to have fires everywhere. The trick is letting some of those fires burn, which nobody wants to do. I think we knew strategically hey, look. This area of the business isn't so great, but it's not critical.

Brian:                       It's not on fire.

Nick:                         This one is critical. I mean, they were all on fire, but this one is critical and this is critical. If you boil it down, we got to keep selling. Gotta keep selling, because if we're not selling, we don't have the resources to continue to fight another day. So, let's make sure that's healthy. We always made sure that was healthy. And then, simple as it sounds, we thought okay, how do we make sure we continue to deliver product well?

Brian:                       Meet the client expectations.

Nick:                         Meet those customer's expectations, which was a lot harder during those growth periods and we had some times where our turnaround time would increase.

Brian:                       Did you expand hours? Was that how you did it? Did you ...

Nick:                         We tried all of the above. I mean, wee hired as fast as we could. We did little incentives, where if you brought in a friend to work for us you got some sort of little bonus. We had friends in town, where their families would come and just work temporarily for us. We used a temp agency a couple of times, which did not work out great. We did everything we could. Everything we possibly could. We also tried to manage customer expectations. We just let them know up front if we weren't going to be able to deliver on the promise that we had made. We tried to let them know that and then make sure do right by those customers in that period.

Brian:                       So, the first one was really putting out or managing the most expensive fire, or the critical one.

Nick:                         Yeah, and understanding the most critical fires that you're facing and yeah, making sure you focus on that. I mean, you're prioritizing those things constantly. I think some people talk about some sort of real nuanced business plan, and we do three year planning and things like that, but we got to constantly be reprioritizing and adapting, particularly when you're growing that fast.

Brian:                       Did you do it monthly, quarterly, weekly? What was your [crosstalk 00:04:01]

Nick:                         Man, it was actually weekly, and it was as simple as this process ... In the biggest growth periods. Now it's a lot more stable and steady, but in those periods where it was the wild wild west, me and Adam would sit down, my business partner, and weekly go okay, what are the three priorities you have this week? What are the three priorities I have? We would sort of negotiate those. We would argue over what was actually most critical for him to accomplish, and for me, every week.

Brian:                       Who won the arguments?

Nick:                         We both did.

Brian:                       Good.

Nick:                         No, we both. We both won the arguments. We were pretty evenly matched. Maybe that's why it works well.

Brian:                       Work out well as partners.

Nick:                         Yeah, we both did. But yeah, three things. Even now sometimes, if we feel a little lost, like I don't know where we're going, I'm not sure, we'll sit down and go for coffee and say okay, what's the three most important things you could be doing, three most important things I could be doing? And we'll get those out on paper. So, constantly prioritizing is a key there too, I'd say.

Brian:                       You manage different areas of the business then? You guys divide up, so you're like co-CEOs?

Nick:                         We're co-CEOs, and actually we don't have specific separate duties. We just switch off. He's like look, I'm going to handle ops for a little while, you handle marketing. Or, I'll handle marketing for a little while, you handle this. Sometimes we'll team up and handle those things together.

Brian:                       Which is also great from a diversity standpoint or contingency plan if something happens.

Nick:                         Oh, yeah. No, it's great, and I think it helps us because it prevents any sort of weird interpersonal battles where you're like well, I'm representing this part of the company and you're representing this interest of the company. We're all representing all interests of the company, just from each of our different vantage points.

Brian:                       What did you learn about hiring and getting people ramped up quickly? I mean, you're growing like that, it's like you need them to come in and start performing as fast as possible.

Nick:                         Yeah. Well, we learned a lot what not to do. There was sometimes we'd hire and we'd double our production team, say, and we'd see a 10% bump in outpoint. So, you're going uh-oh. We hired all these people, but we didn't train them well. So then, we would go and respond to that need right away and go okay, how do we get people trained really quickly? Again, we just tackled each of those things as they were coming up. We learned in short order okay, let's train people on the easiest tasks first so they can become-

Brian:                       Get them performing.

Nick:                         ... Yeah, so they could come in and they could start performing right away. Then, we can start layering on complexity and difficulty as they go along.

Brian:                       You know what I've just learned and what I've seen from working with several companies, you took the responsibility there as a leader, where you said okay, what do we need to do? We learned that we need to train them better.

Nick:                         Oh, right.

Brian:                       There are a lot of times where I'll talk to business owners, they'll be like oh, I can't find anybody to do it and it's like everybody else's problem but theirs.

Nick:                         Yeah, and I think on our last episode, we talk about family lessons and I think one of those things always was, for my family, was not to externalize things. It's not somebody else's issue. It's not the employee's fault. It's not the customer's fault. What can you do? I think we're constantly looking at that. Even if a customer, they have some really bizarre expectation and they're not happy and they're unreasonable, then we're going well, maybe there's something we did to not set the right expectation for them. Maybe there's some way we missed in how we communicated to them. There's always something I can do, which is really encouraging actually. It means you're not defeated. Right?

Brian:                       Yeah, if you're empowered to take care of it.

Nick:                         Right. I think that's always the lesson, and we've learned that one particularly with our employees. It's on us to equip them to do the job. It's on us to set the right targets for them and then give them the tools they need to hit that. If we're not doing that, we shouldn't be upset with them-

Brian:                       If you're not covering it, making it happen.

Nick:                         ... if they don't make it. Yeah, that's part of it.

Brian:                       Another great lesson on really making sure the communication, the expectations are clearly communicated and if somebody doesn't perform you take the responsibility on did we do everything we can to get them there?

Nick:                         Yep.

Brian:                       What's another Nick Macco leadership lesson?

Nick:                         Leadership lesson? That's a good question.

Brian:                       How about how you communicate with all of your employees and accessibility and 360 feedback? How do you learn from them what you need to be doing?

Nick:                         You know, I think we're still getting better at that. I don't know that we'd be the best example to follow in that, but we're starting to learn more how to do that. I think one good leadership thing that we've always tried to do with our immediate direct reports that we're working on making sure is the consistent way the teams are ran down the line is to have high trust. If you have high trust between your, in our case, our direct report leadership team, if we have a lot of trust it means people feel free to voice their opinions. It means the best ideas come out. That's a phrase that we always talk about. Hey, best idea wins. It's not about what I want, it's not about what you want. It's literally about whatever the best idea is to help the company.

Brian:                       You're very transparent with your direct reports.

Nick:                         We are, and I'll say that might not have always translated to every level of the company as we grew because we've had to really teach our managers that same mentality, but that's something that we're working on is okay, this is how we operate and we need to make sure this is consistent at every level of the company as we add in management. But, we're seeing it pay off. Give you a great example, in production now, they have this meeting structure and they're constantly encouraged as managers to bring those issues to the forefront, and then they have the autonomy to go and fix those things. We're seeing that pay huge dividends in not just how well that team works, but also in just the morale of their people.

Brian:                       The principle of best idea wins as part of your company culture. It started from the top.

Nick:                         Yeah, and I hope it continues to be even more ingrained in our company culture.

Brian:                       Outstanding.

Nick:                         Yep.

Brian:                       Any other lesson you'd like to add?

Nick:                         Actually, there's one really important one that I think. It's the number one value we have printed up on our values. It's ask what's best for Southtree. Ask what's best for the organization. It says ask, meaning we're all not sure and we're going to discuss it. I think the point there is there was this early, early on, when the first sales came in, I think maybe we had $500 in our little e-commerce PayPal account. It was just the two of us and I remember us looking at it going okay well, what are we going to do with that money? You could've said well, I'll take my half and you take your half and we'll go our separate ways. That's what we're doing. But, we didn't.

Nick:                         We say you know, we should look at the company as a separate entity. It's not me, it's not you. Let's look at it as a separate entity and then let's subordinate everything that we want to whatever is best for the company. Eventually, if it's good for the company, it'll be good for me and it'll be good for you. It'll be good for everybody. Then, it became very clear what to do, which was not to pay us. It was actually to reinvest that back into new opportunities that we could use to turn $500 into $1,000. That was what's best for the company. Even to this day, we settle a lot of disagreements with that. We go well, what's best for the company? We go back to that and go usually there's a really clear answer.

Brian:                       You know, what I love about that is I actually, in my webinar, I talk about the four secrets to building an irresistible company. I actually call that think of your company as a race car. Think of it as this is the vehicle to get you, your family where you want to go, and even what you're doing. It took the emotion out of it.

Nick:                         Right.

Brian:                       It took that personal emotion out of it.

Nick:                         And the ego.

Brian:                       And the ego. You look at your business as a separate entity, as just a vehicle to get you where you want to go.

Nick:                         Right. I love that analogy.

Brian:                       Outstanding. Outstanding lesson on that. I would say, from working with hundreds and thousands of business owners, the emotional tie that they have is too strong, where a lot of times they can't make decisions on what is best for Southtree, or their business, because they're too tied for it. It could be letting go an employee that really is not performing, or another thing that I've seen out there a lot is a family member is on the payroll that's not even really working and it's hurting the company.

Nick:                         Right.

Brian:                       That's a great analogy. A great way to do it. What do you think that one thing has done for you in amount of sales and about reinvesting back in?

Nick:                         Oh, man.

Brian:                       I mean, that is so important.

Nick:                         No, that was key. I mean, we've seen a lot of companies fail from the exact thing as you're talking about, is that they never had that mentality. Maybe, I don't know if entitlement is too strong of a word, but they're like this is mine, this is what I want to do. It's impacted every decision we've ever made.

Brian:                       Folks, that is, again from working with thousands of business owners, what he's describing here is, again you've proven it as a number one thing. Or, people, they take too much money out.

Nick:                         Oh, sure. Yeah.

Brian:                       Then, it's kind of like I was explaining to somebody the other day. The average entrepreneur, you're constantly reinvesting back in, and it doesn't show up. Some of the things don't show up in your balance sheet, where if you were an employee or something, it could be hey, I just bought $10,000 worth of Apple stock or I bought something else and it's going to show up in your net worth statement. When you're an entrepreneur, it doesn't show up. It's like money that you're reinvesting back into that entity, betting on it's gonna return but it doesn't show up on your personal financial statement anyway. Anything else you want to share with the audience? Just get started and-

Nick:                         Yep.

Brian:                       ... dive in on increasing the value?

Nick:                         Right. No, I think we covered it.

Brian:                       Outstanding. Well, thank you again for-

Nick:                         Thank you.

Brian:                       ... another episode. It's been great. I'm going to have Nick on the show as much as he wants. He's given us so many just practical wisdom. Again, that's what Sell For Millions is all about. It's just we try to make it simple. We try to make it so that it can be executed on. We don't use big fancy words at all. I mean, there are times I'm talking to advisors in my area of business, I'm like well, can you speak English so I can understand that? I mean, as a business owner, we give you simple things to execute on that will get that 10X return, or in your case way more than 10X.

Nick:                         Right.

Brian:                       Again, thank you very much.

Nick:                         Yes.

Brian:                       It's been a pleasure.

Nick:                         Thank you.

Brian:                       We will see you on the next episode.