For the past several decades, Rob Waite has studied what makes executives and entrepreneurs effective.
Rob’s career required him to master this topic. He’s been an international senior executive for Fortune 500 companies, CEO of a large privately held company, and CEO of a successful private equity-backed entity.
This episode is for anyone running a business. Rob breaks down what the most successful executives do differently from those who run their companies into the ground.
Why did you pick the title No Magic Bullets?
I have seen executives all over the world, entrepreneurs at every level, chase “the next big thing” when it comes to management theory, book ideas, etc., that deal with one thing.
What ends up happening is their teams get emotional whiplash every couple of months. It’s the new way they’re going to do things, the path to business nirvana. People fall into this trap too often.
Nothing comes perfectly easy in business. You have to continuously learn, evolve, and progress. That’s hard to do.
What’s a common example of business people latching onto “the next big thing”?
I’d researched the top selling business books over a 50 year period, and one book that has been on the top selling list since 1959 is titled The Magic of Thinking Big.
Now, that makes a lot of sense. You do need to think big, and it was written by a gentleman who is a PHD, but the cover goes on and states:
“Learn the secrets of success, magnify your thinking patterns, and achieve everything you’ve always wanted.”
If that isn’t a magic bullet statement, I don’t know what is.
That’s very typical of often how certain types of books are promoted. A modern example is Getting Things Done by David Allen. It’s a great book that people should read, but my perspective in No Magic Bullets as “getting the right things done.”
Because I saw a lot of executives read Getting Things Done, they loved it, they had their teams read it. Then everything was about the process that the author derived and they never overlayed on top of it.
They kicked up a lot of activity, but activity doesn’t necessarily equal accomplishment.
The better questions business people need to think about are, “What’s our business strategy? Who are the clients we want to serve? Are we in the best markets for ourselves?”
I’m guessing you’re not a big fan of The Secret.
What is the #1 idea that people need to take away from your book?
There are seven capabilities that I write about, which all work in conjunction with each other. If you decide you only need to focus on one or two, you will get out of balance.
But if you view how you’re approaching your company, your business, or your career through the lens of the seven strung together, you will have greater success than you’d otherwise envisioned.
What are the seven capabilities?
- Understand the purpose of a business.
- Create a strategic value proposition.
- Get the right things done.
- Exert leadership and influence.
- Possess mental toughness.
- Engage in proactive career management.
- Pivot from a “me mentality” to a “we mentality.”
Let’s make these seven capabilities more concrete. Can you give us some examples?
Sure. Capability number one — understand the purpose of a business.
The purpose of a business is to generate a positive cash flow and sustainably grow profits.
Now, that may sound cold, calculating, really not thinking about the greater good, but it actually is. Because if a business can’t ultimately generate a positive cash flow and sustainably grow profits, all the great things that they do or want to do aren’t going to come true. They’re going to fail.
TOMS Shoes, for example, gives out a pair of shoes to a child in the third world for every shoe that they sell in the United States.
At TOMS Shoes, they make sure that they generate a positive cash flow and grow profits, because that’s the only way that they’re going to achieve their objectives.
Think about cash flow as oxygen, and growing profitability as blood. When you lose sight of those, that’s when trouble occurs.
I could give you story after story of businesses that were fantastic, but once they took their eye off of breathing and pumping blood, they ended up dying.
For instance, a business called Wesabe was developing financial software. They were hit with so much investment capital that it blinded them to not seeing that their business itself was not going to generate a positive cash flow.
They kept investing in a deeper product, broader product, nothing could be outsourced, everything had to be done internally because they felt that they had all of this cash.
Meanwhile, Mint comes along and develops a leaner, meaner version of that software.
Mint was bootstrapped, they weren’t awash with investment capital. They kept their eye on the cash piece of their business. Mint is still here today, and Wasabi is gone.
Unicorns are called unicorns for a reason: they don’t exist. At some point, the piper’s going to be paid.
Fitbit is a great example of that, as well. Fitbit is a great company, very well run by a good CEO. Their problem was, prior to going public, they’d been given so much money that — for lack of a better term — ginned up their price per share.
Fitbit goes public, and their price per share is so outrageously high. Unless they performed perfectly, there was no way they could ever deliver on that share price.
At the time of their IPO, Fitbit was around $40 or $50 a share.
Within a year, they were down to $14 a share.
A lot of people took a bath, but those people were mostly retail investors. Which is a shame, because Fitbit was a good company and well run, but they had this millstone hung around their neck.
They would have been better off actually having less investment dollars and talking about a lower share price. They would be a lot more successful today, instead of trying to climb out of that hole.
What laid the foundation for you to write No Magic Bullets?
The corner stone of it was laid down in 1983. I was in my senior year of college, and it was the end of the semester. We were all getting ready for graduation, and the college placement officer was addressing the senior class.
The school I went to was in Central Pennsylvania, near where Armstrong World Industries was headquartered. (Armstrong is a fortune 500 company that manufactures flooring, ceilings, and various building products.)
The college placement officer comes out and addresses the senior class and says,
“You know, we have a bad recession going on here, and all you kids think you are going to get a job at Armstrong.
“I’m here to tell you that, given the economy, they’re not looking for kids like you anymore. They’re going up market, so you guys need to start thinking about jobs in retail.”
It was extremely defeating.
I never thought of myself as much more than just an average person.
But at that moment, I got pissed off.
I was thinking, “Who does this guy think he is? He doesn’t know me, he’s never spoken with me, he doesn’t know what I can do and can’t do. He probably dropped ball and didn’t do his job, and that’s why Armstrong isn’t interviewing on campus.”
The next day, I put on my polyester blue suit from SEARS, got into my Datsun B210, and drove over to Armstrong.
Over the lunch hour, I asked the receptionist to give my resume to their college recruiter.
It just so happened that their college recruiter was having lunch at his desk, and was intrigued by the fact that a college student cold-called this Fortune 500 company and had the receptionist send me in.
We chatted for about an hour and a half, and I walked out with an offer letter in hand for the first job I had after college.
I stayed there for 15 years, lived around the world, and made it to the level of vice president.
Wow, that’s quite the story. Why do you think you had that line of thinking, where everybody else took that guy for his word and said, “Okay, we’re defeated”?
He didn’t know enough about any one of us individually to make that statement. I thought, “Why give up? Why not try to figure out a way to show the companies you wanted to work for, why they should hire you?”
It made me mad that he said that, and somehow that ignited my ambition. I thought, “Really, I don’t have anything to lose by trying to get an interview with Armstrong, so why not?”
And actually when I got back to campus, I went right into his office and waved the offer letter in his face.
He was incredulous. He wanted to see it. He was like, “Let me see that!” He read it and handed it back to me and he said, “Good luck,” and that was it.
I tell you what, I owe him everything.
Who was the best you ever saw who followed your seven principles?
That’s going to be a tough one, but I would have to say Mike Endres.
Mike is a gentleman that was one of the founding partners of a private equity and mezzanine capital firm by the name of Stone Hedge Partners in Columbus, Ohio.
He strikes me as somebody that always was right on top of his game, and it was because he kept his eyes and ears open, and applied everything he learned to his craft.
Mike is on the board of directors of Worthington Industries, as well, and I was a senior executive in one of Worthington’s subsidiary companies. When I was in the process of acquiring Drexel Metals as the principle invested partner, Mike gave me a lot of advice along the way.
Tell me your favorite success story from a reader of No Magic Bullets.
My favorite success story is of a gentleman who is a branch manager at a construction firm. He was promoted into that role because of his work ethic, but he didn’t feel that he had the talent or the capabilities as a business person. He felt he really needed to build that up.
He worked through my book and reached out to discuss some things with me. He applied himself to some of the exercises in the book.
The net effect of all of that was he said that not only does he feel more confident and is succeeding in his current role, he also has found a lot more peace and contentment. The process helped him deal with issues of stress, thinking clearly through personal issues, and applying those lessons to his personal life, as well.
Not only did it help him make sure that he succeeded in his role, and that he was promoted, but it had a much greater impact on his overall life. That meant a lot to me.
What’s your book’s business model?
First is speaking. I’ve done a lot of speaking over the years, to groups as large as a few thousand, to groups as small as five.
I’ve always enjoyed speaking, and I’ve done engagements in South America, Europe, Canada, US. That’s been a big part of my life, selling books.
I was fortunate enough to have my first book sell well enough on Amazon, which helped with landing speaking gigs. The other factor was doing a lot of radio shows. I worked hard at getting booked on radio shows around the country. The radio shows drove my speaking success as much as anything else.
The reason the radio worked out well was twofold. The first was the people that were thinking about finding a speaker for either an industry trade association, or a large corporation who was putting together events, they could hear me and how I sound and how I interact with the host. So you get a sense of the personality of the person.
Secondly, they got an idea of not just the topics from my book, but where we went with the conversation. They could see that, “Oh yeah, maybe he could talk about A, B or C.” It was almost like an audition.
I was very surprised at how many shows I was able to land. I simply reached out via email, and mail with a copy of my book.
When you think about it, a radio show that is on the air five day a week, 52 weeks a year, that’s a lot of time to fill. So they’re always looking for somebody interesting.
What is your favorite internet resource or app that you would pair with your book?
Smartsheet is Excel on steroids, combined with Slack, then grafted in with Microsoft project management, all in one.
What’s the best advice you have for aspiring authors?
First, have your plan for your revenue model pulled together well before your book is completed.
It’s going to be challenging to really turn a book into a money-making proposition. If you take your eye off that ball, you can have a great book, but it’s not going to generate one dollar, unless purely writing a book is your goal.
I thought, “All right, how much am I going to invest in time, as well as money?”
Too many people focus purely on the money part, and not enough on the time part.
Then I thought, “How am I going to make that time? Am I okay if 100% of that money just goes away, if it doesn’t happen to pan out?” I made a conscious decision along those lines.
The other would be that it’s harder than you think. I’ve written numerous articles, but I still find the act of writing a book as much more difficult than I think it will be going into it.
Be sure to check out our next episode where we’ll be talking with David Basulto, the author of Life Camera Action.