On this episode, Josh speaks with Bill Welter from Mindprep.com. They discuss four responsibilities of anyone in a leadership position.
Bill is a consulting-educator with over 50 years of experience spanning four separate careers: military, engineering, consulting and education.
He’s a founding Principal of MindPrep Resource Center, a small business that specializes in helping middle managers, business leaders and professionals become better thinkers and leaders. He does this through writing, workshops, team facilitation, and one-on-one coaching.
Bill has published five books that reflect two themes, that “chance favors a prepared mind” and that companies have to evolve “fast enough” or they become irrelevant.
In today’s episode you will learn about:
- Chance favors a prepared mind
- How you should scenario plan
- Hundred-year project
- Eight basic skills we need
Narrator: Welcome to “Cracking the Cash Flow Code”, where you’ll learn what it takes to create enough cash to fill the four buckets of profit. You’ll learn what it takes to have enough cash for a great lifestyle, have enough cash for when an emergency strikes, fully fund a growth program and fund your retirement program. When you do this, you’ll have a sale ready company that will allow you to keep or sell your business. This allows you to do what you want with your business, when you want in the way you want.
In Cracking the Cash Flow code, we focus on the four areas of business that let you take your successful business and make it economically and personally sustainable. 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 and allow you to be free of cash flow worries.
Josh: Hey, how are you today. This is Josh Patrick. You’re at Cracking the Cash Flow Code. My guest today is Bill Welter. Bill is a really interesting guy. He’s had like 19 careers. He’s written five books. His website is mindprep.com. I will highly recommend you take a look around that because he has tons and tons of information. He has lots of wisdom that he’s going to share with us today. I’m probably going to screw it up with my lack of wisdom, but we’ll do that anyway. Let’s get started. We’ll bring Bill on.
Hey, Bill. How are you today?
Bill: Today’s another wonderful day in the neighborhood.
Josh: The neighborhood happens to be in Loveland, Colorado which happens to be a really nice one.
Bill: You know, right now I can pick up and I can see the tops of mountains so life is fine.
Josh: Well, I look out the window out the side there. I can actually see sun which means it’s one of the 50 days in a year in Vermont. We will to talk about how much better Colorado whether it’s in Vermont whether we’re going to get into the topic today. You have some really interesting stuff that I found as I was crawling through your site. Looking at some information and one of your favorite statements is something which I really like is, chance favors a prepared mind. What do you mean by that?
Bill: Okay, so I got to give you a little bit of history. In my consulting years, I’ve got business products from Ernst & Ernst, Ernst & Whinney, Ernst & Young and in the middle of that was a boutique consulting firm. There were times when I used to wonder, why the heck am I sitting in this office or this conference room with somebody who I know darn well is smarter than me?
They used to bug me and I came across a quote from Louis Pasteur, the French microbiologist who dealt with the anthrax, rabies, and silkworm disease saved the beer industry in Europe. God bless that man. It was once accused of being lucky and he said, “Yeah, I was ready for it.” I used to wonder about that. What gets a person ready for the future? Then I decided to do some writing and thinking about it. I ended up running a couple of workshops at Northwestern University for Jeannie Headman.
I ended up getting a contract to write a book with Josie [inaudible 00:03:14]. There’s eight skills of people who are prepared for the future. You got to observe. You got to imagine. You got a reason. You got to reflect. You got to challenge. You have to decide. You have to learn and you have to enable. Then people will say to me, “Oh, of course, that’s boring. Of course, we have to do that.”
I’ve got 15 years of anecdotal information of running workshops around the world literally and I’d say, “Okay, so these are obvious skills, which ones aren’t used.” Then people get embarrassed and I got three. There’s three that don’t get used regularly. This is United States, South America, Europe and China. Those are my four areas that I had done work in. The three that are not used regularly is we don’t imagine enough. We don’t reflect enough. We don’t challenge enough. For all the stuff that we’ve done in, we should be innovative. Most corporations, most businesses just have not developed their sense of imagination.
Josh: I would add one thing to that, Bill. I would say we don’t prepare enough either. This is especially true with a smaller blue collar businesses who listen to this podcast is that I’m going through a lot. In fact, I’ve been doing programs like crazy recently, disaster planning in the age of the Coronavirus. Frankly, the amount of businesses have done any scenario planning whatsoever is about zero.
Bill: Here’s the advantage of being a little bit of gray in my hair, actually a lot of gray in my hair. We went back to the world of the oil crisis, if we remember the oil crisis in the 70s.
Josh: I do.
Bill: [Inaudible 00:04:49] planning was got all kinds of press because that’s when Royal Dutch Shell went from what being one of the smallest [inaudible 00:04:56] companies to the largest company because they had prepared for the future. They wrote a scenario that is, what if when we think in terms of this whole issue of scenarios, I think it’s a Lost Ark. I strongly recommending that people get back into that habit of playing the what if, what if this happens, what would we do? Yeah, scenario planning, huge issue.
Josh: I have a question for scenario planning. If you would tell someone, here’s how you should scenario plan, because I think this is a really big deal today. How would you recommend they go about doing it?
Bill: Okay, first of all, you got to spend a little bit of time looking around the world. There’s a couple of versions of this thing. One of them is and the metaphor that I use is I use radar screen metaphor. I tell people, “What’s on the edge? What’s on the edge of the radar screen that you’re not paying a lot of attention to, but it’s a clue to the future?”
If they do that, they’re going to see some clues and then you can start saying, “All right, let’s create a couple of different two or three different scenarios. One of them would be what’s probably going to happen. What do you think is going to happen?” This is where the bosses got to shut up because otherwise the boss overrides everybody else’s voice.
Josh: I would say the boss should always shut up [inaudible 00:06:08] scenario planning.
Bill: Anyway, because you got a whole bunch of smart people. One of them is, you look out there and you see what the clues are? Once you do that you kind of say, “What’s probably going to happen?” Then you might even talk in terms of, “Well, gee, how good or how bad could it be?” You try to bracket the future. You get arguments go on and you fight things out and you think of things through.
The one that’s kind of interesting is the one actually that for those of us who remember, John F. Kennedy and the whole space program and his idea of in 1962, putting a man on the moon. That would be a preferred future as opposed to a possible future. Because most everybody at that point said, “We can’t do this.” He said, “No, we’re going to do it.” It’s easy, but it’s hard. Look to the outside of the radar screen, what’s going on, and then start saying what do you think is going to happen? How good could it be? How bad could it be? Then there’s a one that kind of that says, “Well, what do we want it to be?” You start changing your business in order to make it the way you want it to be.
Josh: That’s great for like a positive scenario plan. I actually like people to do a negative scenario plan first. Here’s the reason why, is that although we think, these negative things that come along, or black swan of events. They’re really not. They actually happen a lot more than we think. People say, what are the three to five things that would happen that would put you out of business? In a small business, it doesn’t take as much as it does. I was looking at the amount of cash on hand recently.
By the way, we’re recording this on April 23 in the middle of the Coronavirus. This is why we’re talking about this right now. I was looking at the amount of cash on hand that the major airlines have. The worst was 200 days when you take a look at that, and you say, “Okay, those guys, they’re going to probably weather the storm.” There are very few small businesses that have 200 days’ worth of cash that’s on hand or available to them.
It’s really more important in my opinion that you can look at, what the death defying things could happen? I used to run the food service business. One of the worst things that could possibly happen and kills most food service companies was having a salmonella breakout or foodborne illness breakout. We had that happen. We lose one customer. We got sued by one person out of the 35 or 40 people that got sick.
The reason was we had scenario plan that particular instance of happening because that was one of the death defying things that would have killed the company. Have we not had a plan, but because we knew exactly what to do, relatively little bad happened except I didn’t sleep for two weeks and I don’t think I ate for two months, but that’s beside the point.
Bill: Let’s tie into that a little bit because one of the things that you think about is strategy, whether it’s a big business or a little business is built upon a set of assumptions. My pitch in this world is assumptions are the high blood pressure of strategy. If they’re good, everything is cool. High blood pressure is referred to as the silent killer. You don’t even know you’ve got high blood pressure until one day you stroke out or you have a heart attack. The doctor says, “Oh, my gosh.”
Assumptions are the same way. One of the questions you would ask exactly to your point is, what assumptions have to be true for us to succeed? If you say, what if this assumption breaks? Now, what’s going to happen? You can look to the edge of the radar screen and see things that might be good clues. You can look to the edge of radar screen and see some things that might be bad clues. I agree with you completely.
You’ve got to be willing to talk in terms of failure. Along that line, there’s a psychologist by the name of Gary Klein, who has instituted something called a pre mortem. The pre mortem is interesting because what you do is you go out into the future and you say, “We failed.” Then you work backwards and you say, “How did we fail?” Bunch of years ago for a pretty good sized restaurant company, I had a chance to spend some time with them doing scenario planning, literally.
One of my challenges to them was giving you the pre mortem. Tell me how you could fail and know its seven teams out there. Six of the teams came back the next day, and they said, “Well, here’s how we could fail.” They thought about failure. The seventh team came back and said, “We decided our strategy is so good. There’s no way we could fail.” Fortunately, I had a senior vice president in the room and she went crazy on them. I mean, she just called— I mean, sailors would have been blushing.
She told them to leave the room and not even come back until they could think in terms of how they might fail. They came back in about 15 minutes and said, “Well, on second thought, yeah, we could fail this way.” And so agree, scenario planning sometimes is for good, but sometimes it’s for bad and that’s what Royal Dutch Shell did in the in the oil crisis. They painted a bad scenario and said, “What if it happens? What do we do?”
Josh: I hope the old companies are doing that right now.
Bill: Oh, Lord.
Josh: Because they’re almost in an existential threat right now.
Bill: Oh, yeah.
Josh: This is as bad if not worse. They’re all companies in the ’73 Oil Embargo was.
Bill: Well, now the big problem is, and that was the point the other day is, they’ve got no place to put it and so we’ve stopped by him. They’ve run out of storage space, and some of them, they’ve got to shut down because there’s no place to put this stuff.
Josh: We got start [inaudible 00:11:35] is all there is to it.
Bill: Yeah, which will shut down a lot of the shale operations and stuff like that.
Josh: Yeah, well, the shale will come back eventually, who knows what the eventual is because there’s actually some really interesting technology in the future which I was looking as an oil company, I was saying, we need to be out of the oil business and into the solar business. Because there’s solar technologies that are absolutely going to replace every electric plant in the world with battery technology that also is going to make that realistic. One of these things where, I think you and I like to do a lot of the same sort of future thinking stuff.
Bill: I hope I’m around to see some of this play out.
Josh: Well, I think so. Actually one of my things we’re on right now which I think is important is what I call the hundred year project. A 100 year project actually has two questions to it. The first question is, if you absolutely need to live to 100 years old to be healthy to your 99, how would you live your life differently? The second question was, if you wanted your business to last 100 years, how would you be running it differently than you are today?
Bill: Oh, man, that’s an interesting one.
Josh: Yes. The first question is, if you’re 30 years old, that’s something you have to be thinking about. If you’re 40 years old, it’s something you should be thinking about. In businesses, one of the questions I’m actually writing another book right now in one of the questions I’m asking is, the rising generation, do they want to run the business for 45 years? Because their business spirit is not to 65. It is to 75 or 80.
Bill: To that point, when thinking in terms of you want your company to run 100 years, if you look at the big companies right now, I think that there’s got to be some people that are kicking their selves by saying, “Why did we do all the stock buyback? We should have been using that money in other ways.” To the airlines might have had 200 days of slack that they can put up, there’s a whole bunch of companies that have spent their retained earnings and now they need them. There’s this question of, how do we use what we’ve got?
Josh: I just read an article yesterday that said, department stores are toast. I think that’s probably true. I don’t count Walmart or Target as department store, but I do count Macy’s and Lord & Taylor and Neiman Marcus has already declared bankruptcy. What you’re seeing is there’s going to be a complete realignment of our economy when we come out of this.
It’s going to be an interesting thing. I want to talk a little bit about your eight basic skills. Can we go through them one at a time? We’re not going to have time to go through all of them, but pick the ones that you think are the most interesting. Let’s talk about each for a minute or two.
Bill: Well, let’s start with the one of the missing skill of imagination that everybody says we should do that. Typically, if I run a workshop I’ll ask people, how many of you are imaginative? Raise your hand and things like that. I’ll get one or two people that raise your hand. Then I say, “Okay, now I want you to think back to when you’re eight years old.
A large appliance is delivered to your house or to your apartment.” And I stop it within 30 seconds, somebody will say, “The box.” Then it’s a question of, what came with the box? Then it’s like, it was a fork. It was a truck. It was a jail for my little brother.
In my pitches, you had a great imagination when we were young and then it got squeezed out of you. He went through school, 12 years six seniors 18 years. I don’t care how many years. We squeezed imagination out of people. You really want people to give themselves permission to imagine again, smack yourself in the back of the head. Let that kid wake up.
Josh: Well, I think they have a reason why people don’t do that is because we are, at least in the United States, and I’m assuming the world. We are mistake adverse. We’re told that making mistakes is a bad thing. I’m a big fan of Buckminster Fuller. Buckminster Fuller got two statements I loved. One was mistakes are learning opportunities. Two, you don’t learn less. Both speak to, mistakes are the best thing that can possibly happen to you. You don’t learn by doing it right. You learn by doing it wrong.
Bill: I agree. Absolutely agree. Yeah, so imagination is one of them and back to the education piece, if teachers said how much is two plus two and you said, well, it’s more than three. You were told you’re wrong because they want “the” right answer.
Josh: That’s a great rhyme by the way. I’m going to use that.
Bill: Feel free, it’s free. Let’s see a VA skills. Reflection is the one that also comes to mind because we like to kind of get things over and done with and not go back and think about it. Here’s an embarrassing thing. A bunch of years ago, I was Vice President of a small company. We had a big project. It failed.
I ended up firing the project manager. It took me three years to realize it was my fault because I put him in over his head and it was painful. I did not want to think about that. Then I finally had to admit to it and say, “Okay, it was my fault.” We don’t like to reflect and it’s time when we should do that. Sometimes I tell people, “You know, start writing a journal.” People look at me goes like, “Come on. Girls write journals.” No, Einstein kept a journal. Lots of people kept journals.
Josh: The most successful people in the world keep journals.
Bill: Oh, absolutely. So reflection is a piece that’s sitting out there. Let’s see, learning is one that I’m in love with because you got to keep learning. I mean, your knowledge has got a half-life and it goes away. We went out to this kick of lifelong learning 15, 20 years ago. We kind of gave it a nodding, “Oh, yeah, we should do that. We should do that.”
But we should do that, especially in business so much keeps changing. If you just fall back on what you used to know, there’s going to be some young buck that’s going to come and take your job because they know more. So if you’re going to keep up, you got to keep learning and that’s a strong one in that one.
Josh: I want to go back to reflection for a second because I think that’s a really big deal. Reflection fits in in my world with what I call personal responsibility. I would actually say go pass personal responsibility to super personal responsibility. Super personal responsibility is where you pretend that you’re personally responsible for everything that has ever happened near life whether you really have control or not. When you do that, it forces you to reflect on what got you there?
Bill: I’m going to steal that one. I like that one. I think that’s key. That whole issue of responsibility. I go crazy with people that they, “Oh, I’m responsible for everything goes right, but somebody else is responsible for everything that goes wrong.”
Josh: That was the most important lesson I’ve learned in my entire business career was that until I started taking responsibility for what happened in my life and stop blaming the others in my company when things weren’t wrong or justifying my actions being correct. That was when the world changed my business. We went from being pretty good company to being fully world class. That was that. Hey, Bill, unfortunately, we are out of time.
Bill: Bring me back in a year or two or three or four, whatever.
Josh: Well, actually, I might bring you back in about six months because that’s about what I like to do with great guests like you.
Bill: Okay, I love it. This is fun.
Josh: Bill, tell me I’m going to bet there are people listening who say, “Boy, this guy’s got a lot of knowledge and I want to tap into some of it.” If they wanted to find you or have a conversation with you, how would they do so?
Bill: Well it they can go to mindprep.com. You mentioned that at the beginning. That’s the website that I’ve got with three other old guys. We refer to ourselves as OOGs, official old guys between the three of us we got about 150 years of different experiences. Mindprep.com would be it or if they wanted to get ahold of me directly its firstname.lastname@example.org. Take care.
Josh: I have a request for you folks who are listening. It’s kind of something that would help me out a lot. I have been doing this podcast now for five and a half years. I love getting reviews about my podcast where you like it, you hate it or someplace in between. What I would really hope you do is as you’ll see podcasts, go to wherever you’re listening in iTunes or SoundCloud or Sonos and leave an honest review about what you think about the podcast and send me a comment. Or if you’d like to talk to me directly, you can always email me at email@example.com. That’s the number two. That’s firstname.lastname@example.org. I actually do read all my emails. I’m sort of email obsessed so I would likely get back to you really quickly. Hey, this is Josh Patrick. You’re with Bill Welter. We’re at Cracking the Cash Flow Code. Thanks a lot for stopping by. I hope to see you back here really soon.
Narrator: You’ve been listening to the “Cracking the Cash Flow Code” where we ask the question, “What would it take for your business to still be around a hundred years from now?”
If you’ve liked what you’ve heard and want more information, please contact Josh Patrick at 802-846-1264 extension 102. Or visit us on our website at www.sustainablebusiness.co. Or you can send Josh an email at email@example.com. Thanks for listening and we hope to see you at Cracking the Cash Flow Code in the near future.