Today’s guest is Philip Williams, who helps small business owners build profitable and well respected companies through his consulting firm – Ask Philip Williams.
Since he was 8 years old at the family dinner table he’s been learning about small businesses. Raised by a Barber Shop and Auto Salvage Yard owner, Philip
climbed the corporate ladder outside the family business. He’s worked in manufacturing, distribution, engineering consulting, and professional services helping companies solve the right problems first.
He’s a 3-time Inc5000 honoree after becoming the CEO of a 17 year old cash strapped company and growing it at 50% per year for 5 straight years. That resulted in two nearly simultaneous acquisition offers from two publicly traded multi-national corporations. He accomplished it all by bootstrapping the business – no outside money. He’s bought and sold a couple companies and been through the highs and lows you can only experience through small business ownership.
In today’s episode you’ll learn:
- How to grow 50% without setting goals.
- How employee personal goals affect company results.
- 87% of Businesses solve the wrong problems and that causes big cash flow problems.
- When to say what to your team.
- What you should be talking about in a Driving Vision.
Narrator: Welcome to The Sustainable Business Radio Show podcast where you’ll learn not only how to create a sustainable business but you’ll also learn the secrets of creating extraordinary value within your business and your life. In The Sustainable Business, we focus on what it’s going to take for you to take your successful business and make it economically and personally successful. Your host, Josh Patrick, is going to help us through finding great thought leaders as well as providing insights he’s learned through his 40 years of owning, running, planning and thinking about what it takes to make a successful business sustainable.
Josh: Hey, how are you today? This is Josh Patrick and you’re at The Sustainable Business.
My guest today is Philip Williams. Philip and I kind of seem to have a bit of a similar background. He started working in his family business at eight. I had him beat by a whole year. I started at seven. He was just telling me that he was working in a junkyard and I was working in a wholesale tobacco company, putting candy on the shelf. So, from there, he’s been a little bit more successful than I.
And it appears that in creating businesses. You know, he was a three-time Inc5000 honoree and grew the business at 50% a year for five years which I find just incredible. I managed to do 100% for one year and 20% for two years after that and I thought I was going to die, so the fact that he’s still alive is pretty amazing all by itself. So instead of me yammering on around Philip, let’s bring him on and we’re going to start talking about goals first thing out of the box.
So, hey, Philip, how are you today?
Philip: I’m doing quite well. Thank you very much for that introduction, Josh. You make it sound pretty incredible [laughs]—
Josh: Well, I actually—
Philip: –although I have to compliment you 100% [inaudible 00:01:46].
Josh: [laughs] Well, I’m reading this thing and I’m saying, “Wow, this guy– you know, it’s often I have to sort of figure out how I’m going to fit somebody into my podcast show. But in this case, I don’t have to work it out at all. You’re just there and the stuff that you want to talk about is stuff that I would love to talk about.
So, first of all, tell me a little bit about you, your company and how people can find you.
Philip: The easiest place to find me is askphilipwilliams.com. And my mother spelled Philip with one L so if you’re looking for me it’s there. You can also find me on LinkedIn Philip-Williams. We can connect there. Looking forward to talking to everybody. What else would you like to know, Josh?
Josh: What is it that you do for work these days? It appears that you left your company.
Philip: Yeah. After we sold— I kept getting a lot of questions. You know, how did you do this? How did you do that? You know? And it just sort of settled into this form where I started answering questions and people just kept asking. And the next thing you know, I’ve turned it into something where I like to get paid to do it so.
But the nuts and bolts of it is if you were to look through my professional resume, I have little ability to go into a company and very quickly figure it out – figure out what makes it tick and figure out how to make it go faster. And I also learned that I’m a person who likes a lot of change. So I’ve never actually worked in the same industry twice. I went back when I was an employee.
And I always enjoyed a lot of really good success going into different industries and helping them. And I had a track record of being hired to implement changes in the companies. And so, you know what, I’m just going to turn that into my own deal.
So after I got done running businesses for other people, I thought, “You know what, I’m going to do what so many people are telling me to do. And I’m going to [inaudible 00:03:33] people as I can. And so, I help, you know, probably 10 to 12 companies a year on a one-on-one basis and really get a kick out of helping them make their business do what they want it to do.
Josh: Well, that’s cool. I actually think you and I probably share a whole bunch of things in common, is that having the skill to walk in and know which lever to push is a rare skill. There are only a few people I’ve ever met that are good at that. I consider myself pretty good at that also.
So I want to move on to goals because most of the time when I have people on the show and we’re talking about goals, it turns into a disagreement pretty quickly because I actually think goals are limiting factors. And one of your topics that you had for me when the person who booked you set us up said, “How to get 50% growth without having goals.” So tell me a little bit about your feeling about goals and why you think not setting goals might be a good thing.
Philip: From my perspective, having a goal to grow a business is important. However, as leaders, I think we have to understand that a lot of times when you’re trying to get your team to come along, if you’re the owner of the business and you’re thinking, “Hey, I want to grow this thing 50% a year” as we’re talking about. Your team doesn’t actually buy into that. It’s a number, right? But what they do buy into is the purpose behind the business or possibly getting better at doing what they do themselves. You know, their own professional development.
And so, when I go into a company and we’re talking about, “How do we make this thing grow?” It’s really boiling it down into focusing on three or four things that you really want to do in any given, say, year or period of time and three or four ways that you want to stop shooting yourself in the foot. And if you can focus on those two different places in your business, you’re going to find it will actually grow quite a bit. And so, that was actually the way that I grew HGI. Probably, that was solidly almost two and a half years before any one employee in that company had their own individual goal package.
Josh: Ah. So here’s my thing on goals. I find that goals actually limit what you can do. I use this example all the time. I used to be in the vending and food service business before I sold that in ’95. And we had these great, big glass front snack machines which you’ve probably seen in airports. And our average service, every time a guy went to the machine, was about $45 a machine. I won’t tell you the whole story but we moved it up to $145 per machine per service. And if I had set a goal, I would’ve never had a goal to increase our productivity by 300%. It was just, we said, “Let’s experiment and see what happens.”
Philip: Yeah. I think you’re right. I think the experimentation is huge. And I do agree with you in that, you know, if you set a target, it’s not uncommon to say, “Well, I hit the target. We’re good. Josh is happy. I’m done. I’m going to back off until next year.” Well, heck, if you get that target in September and everybody’s kind of backed off and coasting, that’s a little on the unfortunate side.
And so, I like to focus on “how do we get better?” Each step is “how do we get better?” It’s kind of funny that you bring that up that kind of the limiting factor. Back in [inaudible 00:06:58] around Lake Champlain. And that was fall actually, right after Greg LeMond won the Tour de France in 1989.
Philip: That was kind of what inspired me to do that crazy thing of bicycling around Lake Champlain. But Greg LeMond went into that final race. It was 15 miles and he had to make up 50 seconds. And everybody was so convinced that he couldn’t do it. That the French newspaper printed Fignon the Frenchman – they printed him, the day before, winning the Tour de France. They already had the winning issue of all of the French newspapers printed because all of the experts agreed that there was no way LeMond could make up 50 seconds.
A 2041-mile bike race. And just as he’s getting ready to ride last 15, he tells the team manager, “I don’t want to hear any time splits. Get all of the coaches off the track. I don’t want to see anybody calling me time splits because if I don’t ride my absolute best race, then this doesn’t matter. I have to beat every second, every turn of the crank, every mile on that track. I’ve got to ride my personal best.” You know, if you ask a lot of people, “Who was LeMond racing that day?” A lot of people would say, “Well, he was racing Fignon.” I propose that he was racing himself.
Josh: Yeah, I would agree with that.
Philip: And so, if the guy that rides a 2041-mile race to win by eight seconds. Greg LeMond won a race that everybody, all the experts, had written him off on. And he did it by racing himself and his own personal best. And so, that’s why I say and I agree with you that, you know, goals can be limiting. Why aren’t we just trying to do better than we’ve ever done? So many companies are trying to beat the competition when they don’t even know how to beat themselves yet.
Josh: Yeah, that’s a really good point. My goal, most of the time, is better. And sometimes better is 1% and sometimes it’s 80%. You know, you could have goals around tactics. I think that makes a lot of sense. But having goals around strategy doesn’t make as much sense.
Philip: Well, the other thing is, I teach a negotiations course. And I find that one of the worst things that a leader can do to their team is to put a time constraint on themselves. They may tell a buyer inside the manufacturing company, “Hey, I need X amount of cost savings by a certain date.” And that may or may not be achievable. Oddly enough, those certain dates tend to correspond with month end, quarter end, year end. And if you’ve read Malcolm Gladwell Outliers, you start to realize that these artificial time constraints really hurt your business.
Josh: Yeah, I would agree with that 100%.
Philip: So now, you’re taking a goal, “We want to hit X amount of growth or X amount of profit.” And you’re putting this time constraint on it. Guess what, your vendors know what you’re trying to do. Competition knows what you’re trying to do. You’re better off just to say, “Hey, we’re going to get, you know, like you said, 1% better, 10% better” because the other thing is, you don’t know when the breakthrough’s going to come.
Josh: Yeah. Breakthroughs are always— and I think this is the problem with big companies, is big companies really make sure they don’t have breakthroughs because they’re looking at small pieces and not experimentation which is innovation.
Philip: Right. I’m a big fan of Watson, you know, the founder of IBM, a hundred-something years ago.
Philip: He realized that if he wanted to have more breakthroughs, he was going to have to health more failures. Now, that’s just part of the deal.
Josh: One of my favorite innovation thinkers is a guy named Doug Hall. And his mantra in his program is “Fail fast, fail cheap” which kind of goes into the world of behavioral economics which is the more effort you put into something, the less chance there is that you’re going to kill it.
Philip: Yeah. It’s the old sunk cost problem, right?
Josh: Right. That’s exactly the principle.
Philip: How could I possibly quit?
Josh: Yeah. That’s actually the behavioral economic principle that I was talking about is sunk cost. The more we sink into something, the less likely we are to pull the plug and say, “Well, that didn’t work.” And making small experiments allows us to pull the plug and do a pivot if that’s what we need to do.
Philip: The other piece is you’ve got to celebrate your failures. And that’s something that—
Philip: –we did at HGI.
Josh: I call that becoming a mistake-positive company. And my philosophical mentor on mistakes is Buckminster Fuller. He had two great sayings about mistakes. One is, “you don’t learn less.” And, two, is “mistakes are learning opportunities.” And I want to add Deming in here. For one thing, he says, “When you do have a mistake, blame the system, don’t blame the person and systematize your solution.”
Philip: Yeah. Bingo. Right there. The Deming quote is exactly it.
In fact, when I was at HGI, we created an award called a Huggie because everybody called us HGI because they couldn’t pronounce hydroGEOPHYSICS.
Philip: And the purpose of the award – well, they were given out every year, at the end of the year, at the Christmas party. And the whole thing was we were making fun of every individual’s personal largest screw up for the year, you know.
Josh: Ooh, I like that [laughs].
Philip: Yeah. And it was this public thing. If you get the certificate, you might get like a goofy little trinket with it or something. But you’re exactly right, you have to realize that nobody comes to work every morning with the intention of screwing up.
Josh: I would say nobody does.
Philip: Nobody does.
Josh: Yeah. Nobody wants to screw up but we all do.
Philip: Yeah. Even leaders do. And, you know, the humble piece is you’ve got to be able to admit that something you did was wrong.
And so, you know, heck, even this Huggie Award, my team would always get together every year and say, “Okay. What’s Phil’s Huggie Award?” And you’ve got to be a good sport about it, you know. But you cannot take yourself so seriously that it kills the cultural interest in trying new things. And you can’t develop people until they know that’s it’s going to be safe to step out on the edge and see what happens.
Josh: Both, I agree with 100%.
So I want to do a little bit of a pivot here. One of the things that you say 87% of businesses—I love it when people use those percentages, solve the wrong problem. So what do you mean by solving the wrong problem? I think I agree with you but I want to hear what this means.
Philip: You brought up a little piece of it already. It’s the sunk cost problem or maybe a company, or a group, or a leader inside a business falls in love with their widget. They think it’s the greatest thing on Earth and they’re going to try and figure out how to sell it.
I love, you know, the Pontiac Aztek but horrible execution. It’s a perfect example of solving the wrong problem. Blockbuster – unfortunately Josh, you and I are both old enough to have just seen the birth and death of an industry in looking at Blockbuster.
Josh: Yes. Yeah. I actually got the same thing with physical CDs.
Philip: The world changes so fast and you have to respect that your clients’ wants and needs change very, very quickly.
Philip: And faster today than they did 10 years ago or 20 years ago. So your clients’ wants and needs are morphing. So if you’re falling in love with a service or a product that you think is wonderful but your client doesn’t want it, you’re not listening to your client. Therefore, you’re solving the wrong problem for your client. So one of the things that you’ve got to do is learn how to listen to what your client wants. And the trick in that is don’t listen to the thing they’re telling you that they want all of the time. You actually have to do a much better job at getting them to describe their current pain.
Josh: I agree with that. And I would also add something to that which is, when they describe it, then you have to ask them if they’re willing to pay money to solve it. And if the answer is no, it’s not a real issue.
I’ll give you an example. In 1990, I bought a brand-new Toyota truck. The one feature that I loved about that truck that the domestic models didn’t have at the time is it had a cup holder right over here at my right hand. I could reach out. Pull it out of the dash and boom, put a cup holder in it. And the things that allowed Japanese models to become very popular in America ahead of the American versions because they had cup holders. You know, I have a 1976 Corvette that doesn’t have a darn cup holder it [laughs].
Josh: Yeah. I mean, well, it’s sort of like features and benefits. And somebody says to me, “Gee, what do you want in a car?” And there’s a hill that’s outside of Burlington, Vermont that I test cars on because I want my car to go up the hill without losing speed. So that’s about the only thing I really care about in a car except that it’s got to be big enough because I’m 6’5” but it’s really – car salesman, especially, get into this feature thing and not a benefit thing.
Josh: And that’s true for all of us. What problem are we trying to solve?
Philip: Exactly. So that’s on, you know, the client side.
But inside your company, here’s where we’re really get snake bit. And I’m sure you’ve seen this happen countless times, Josh. You go into a company and as you’ve been going through the introductory phase with the owner, the founder, the CEO, or whomever it is that you’re working with, they’re telling you their certain perspective on what’s going right and what’s going wrong into the business. But then, you get in there and, through your ability to look at the business, you start discovering that, “Well, Peter said this is how they were doing things” but come to find out, they’re actually doing things a different way.
And that was why I started paying attention to this – you solving the wrong problem, it’s because leaders aren’t always plugged into the way their team makes things work. And so, when they implement a change, the change doesn’t work well because they didn’t actually solve the problem of the internal process because the process wasn’t being operated exactly as they said it was. It’s kind of, you know, they’re not walking the talk so to speak.
Philip: And so, when you create a change, you don’t solve the right problem and you actually cause friction inside your business because now you’re changing sort of the cultural agreements that your team has made in order to make things work.
Josh: Great. So that makes like a ton of sense to me.
And one of the concept I like to play around with when I’m thinking about making a company better is the concept of the employee as your best customer. And with your best customers, you’re going to ask them what they want. You’re not going to tell them what they want. And we don’t do that with employees. We tell our employees what to do. We don’t ask them how we can make their life easier. And when I made that change in my food service company, the company changed so dramatically that it became to easy to run. It wasn’t work anymore.
Philip: I love Branson on this one. You know, he talks about how you hire great people and you get out of the way. And I think, a lot of times, you have to realize it, you’ve got to be humble. Running a business isn’t a cult of personality. It is trying to get a group of people to collectively move in the same correction.
And when the business was small, the business owner knew how everything was done. But as it gets larger, we don’t stay connected with the minute-by-minute issues that out team encounters and we understand. We do maintain that understanding of how the overall works. But different things happen inside – the client relationships adjust, or the client tweaks something a little bit, or maybe a vendor tweaks something a little bit. You know what, your team in many cases will just deal with it. They’ll cope with it. They’ll make an adjustment on the fly. And then that’s where, like you’re saying Josh, for feedback. You know, how can make your life easier? And, man, when you ask that question, you learn a lot of really good things.
Josh: Yeah, you do. There’s no question about that.
So unfortunately, we are out of time for the podcast. So once again, how would people find you if they wanted to get more information from you?
Philip: Askphilipwilliams.com. And again, Philip is spelled with one L. And then, over on LinkedIn, Philip-Williams. You can find me there and we can connect, and happy to answer questions through LinkedIn.
And I also have something for you. This is my first book. And it’s a parable. It’s called Sustainable: A Fable About Creating a Personally and Economically Sustainable Business.
You can get it at Amazon. You can get the Kindle version at Amazon and get a physical version from Amazon. If you go to my website which is www.sustainablethebook.com. Buy the book there. There’s two bonuses that come with that. One, is a 37-page cheat sheet on how to implement the stuff that’s in the book. And the other is a free 20-minute conversation with me about a problem you’re having or an opportunity you’re not taking advantage of. I can pretty much guaranty that in 20 minutes you’ll get at least one good idea.
This is Josh Patrick. You’ve been at the Sustainable Business. Thanks so much for stopping by today. I hope to see you back here really soon.
Narrator: You’ve been listening to The Sustainable Business podcast where we ask the question, “What would it take for your business to still be around a hundred years from now?” If you like what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 ext 2, or visit us on our website at www.askjoshpatrick.com, or you can send Josh an email at email@example.com.
Thanks for listening. We hope to see you at The Sustainable Business in the near future.