Jeremy Weisz 16:41
Are there any stories that stick out from Flourish of a breakthrough? I know you can’t share the company or person, but maybe a breakthrough someone had?
Mike Maddock 16:52
Yeah, sure. And again, it is highly confidential, but I’ll tell a story that has a theme that most of your listeners will recognize. It’s really difficult to scale heroics, and most companies are started by a visionary leader who carries the water like they inspire, they sell, they make everyone believe people want to be around this person, and at some point that What Got You Here Won’t Get You There, as my friend Marshall Goldsmith says, and they have this wake-up moment where their go-to punch is no longer working. So there is a member that had grown a company to a couple 100 million dollars, and I would say that they were able to do that, and all of a sudden things stopped. That member, having the benefit of listening to an operator and a visionary and a rainmaker and a orchestrator all view his issues differently, decided to completely reorganize his board, hire a new CEO and replace himself as the president of his company.
This last year, he doubled his EBITDA and added 200 million to his top line. So he had hit a plateau. He great, great leader, great company, but it’s that plateau, you know, here, symptomatically, if you are showing up in your group and talking about the same problem over and over and over again, to the point where you’re embarrassed to bring it up anymore, you are probably working on the wrong problem. And it’s up to the group to see it differently than you do, and it has to be a group that you respect and love and are willing to learn from. And that’s really, really hard, your baby’s ugly, or maybe that’s, you know, my favorite innovator joke is, how many innovators does it take to change a light bulb? Does it have to be a light bulb?
Jeremy Weisz 19:01
It’s funny, Mike, because we, or my business partner, John, implemented this. We do an intervention meeting. And the intervention meeting is on me, by the way, every two weeks to see what I should not be doing, even if I like doing it right. And so they kind of forced me to take stuff off my plate that I like. No, I like that. No, you should get rid of it. You should not be doing that. So I appreciate you. It rings home to me, for sure. Talk about Marshall Goldsmith a little bit and his influence, and what you’ve learned from him.
Mike Maddock 19:37
So I’m a member of I went through the EMP program, birthing of giants, which is started by Vern. It was in conjunction with Ink Magazine and MIT. And after a three-year program, and after that three years a bunch of us got together and said, we want to keep going. We want to keep meeting. So we went to Vern and said, we want to keep meeting. And he said, No, it’s a three year program. So we gave them a Rolex inscribed from our class. We collected credit cards, nominated chairperson, and we’ve been getting together now for 21 years, and I have chaired that conference five times, and one of the people that I asked to come speak to us is Marshall. For those of you that don’t know, Marshall is lauded as the number one business coach in the world and he charges a million dollars and offers a money-back guarantee if he doesn’t give you that value.
So, he was the coach of Bill Ford and people you’ve heard of, and he’s an incredibly humble guy. He started as part of his legacy. He started a group called 100 Coaches, and invited people that were coaching to come and be one of his 100 coaches, and in turn, he would teach what he knew to those coaches. I was fortunate to be nominated and selected. So I’ve spent enough time with Marshall to know that he’s a WYSIWYG — What You See Is What You Get — the best kind of person. He is very direct, and he’s very kind, and most importantly, he’s curious. So what I’ve learned about Marshall is curiosity is the ultimate superhero power for a coach.
Jeremy Weisz 21:28
I’m curious about some of your favorite books, because he obviously has some great books as well. What are some of your favorites throughout the years?
Mike Maddock 21:37
One of my favorite books is What Happy People Know Dr, Dan Baker, and the reason I love it is because it is the perfect combination for me of storytelling and science, and it talks about things like, it’s impossible for the human brain, impossible for the human brain to be afraid and grateful at the same time. And I love — if I could give two things to my children, they would be, let me make it three. It would be a strong faith, high self-esteem and gratitude as a go to punch I learned from my mom and Baker about gratitude, and it’s really been it sustained me. Grateful people are curious, grateful people are happy, grateful people are inventive. Grateful people make the world better. So What Happy People Know is one of my favorite books. I love some of the classics Built to Last, Good to Great. I can’t read those enough. I like Mike Michalowicz, his books, because he is hilarious too.
Yeah, he’s a good buddy. He’s actually, I know Mike because he sat next to me in my first bog class, like right next to me. And Mike has the distinction of making me snort beer, milk and coffee out of my nose, because he’s so funny. We’ve become very good friends. So Mike has the ability number one. Mike is a true entrepreneur. He has driven planes in the mountains, in terms of his own companies and he’s had a couple exits, so when he talks about a business, he’s speaking from his own experience. He’s not an academic. This is what happened to me. I love people that are willing to share wisdom along with intelligence. Yeah. I mean, I’ll stop there, but.
Jeremy Weisz 21:40
Yeah. I could keep listening. I have three audible credits. So Mike Michalowicz was on the podcast. People can check that out. He’s written books like Profit First and several others too, so he’s fantastic. And it’s great on the audio version, because his sense of humor comes through on those. So check those out for sure. We talk about flourish, and it makes me think, because you’ve also very heavily involved in YPO and EO, and you’ve been around run a lot of business teams. So talk a little about what makes a good business team.
Mike Maddock 24:31
Okay, so there’s this paradox that I call the partnership paradox, if you get along with your partner all the time, you’ve got the wrong partner. The same is true for business teams, and the reason is.
Jeremy Weisz 24:38
I definitely don’t have the wrong partner.
Mike Maddock 24:52
I hope he’s listening. No, I mean, it’s like, it’s, it’s like a marriage, almost. It’s a love affair in that you so deeply respect how they see the world differently, and you love them for it, you know. They keep you out of trouble. But under pressure, you go different directions. And that’s why, when I started with Free The Idea Monkey, the classic example are the operator and the visionary, it’s Roy and Walt Disney, who didn’t speak for three years, by the way, because Roy was so mad at Wald, so but then expanding on it, you have, the characters that I’ve seen and what I formed first round. There’s a great operator, there’s a great strategist, there is a great Rainmaker, there’s a really good visionary. But who’s under control? Tech futurist, a technology expert, has become more and more important on an executive team, and then finally, the orchestrator, who is the glue that holds the team together.
So just by way of example, Jeremy, if I came to you, or I came to my Flourish group and said, oh my God, we’ve hit 20 million, and now we’re at 18. Now we’re at 16. Now we’re at 14. We’re not profitable. I’m going to lose everything. A good advisory group will say the operator will say, let me look at the P now I want to punish every line, and I’m going to have you profitable in a quarter? The strategists will say, what are our KPIs look like? What are we measuring? The Rainmaker will say is, what are we selling? What’s our pipeline looking like? Maybe we should 80/20 maybe we should sell something different. Maybe our margins are wrong. The visionary that’s me will say, we need to buy someone. We need to launch something different. We need to change everything. Sometimes, occasionally, the tech futurists will go right to these days, will go right to generative AI or bots or something where like, well, maybe we can, our tech stack is inefficient.
How can we be more efficient using technology? And then the orchestrator will say something like, I think we have a trust issue. We’re rescuing each other. We’re not holding each other accountable, because maybe we love each other too much. Until we work on that trust issue, we’re never going to be profitable. The question is, who’s right? The answer is, everybody at a different moment in time. But unless you have all those perspectives on your executive team, you can be a bunch of hammers looking for a nail. And that is what happened to me. I did it. I am responsible for surrounding myself with all these beautiful people who I loved and who were brilliant, who saw the world a lot like I did. We were hammers looking for a nail.
Jeremy Weisz 27:36
Was that at Maddock Douglas, or one of the peer groups?
Mike Maddock 27:40
Maddock Douglas. That was at Maddock Douglas, yeah. And Maddock Douglas is responsible for that group of people has made such a huge impact in the world. I mean, billions and billions and billions of dollars of innovations that we helped our clients with, it spawned three different companies. Former Maddock Douglass people are chief creative officers all over the country. I mean, wonderfully brilliant people who I care deeply about and love, and I guess what I’m most proud of is people that have come to the Maddock Douglass sausage machine, speak lovingly about it, like it remains and was an incredibly great place to work and flawed because of me as a leader. How about that? I’ll take all the blame.
Jeremy Weisz 28:39
It’s funny, because with what you just said, leaves me a trail of questions and no answers, because I’m like, okay, that’s really interesting. Okay, who’s right? Right? You have the tech solution, you have the orchestra solution, you have the visionary solutions. So is there a scenario? Because, like you, I don’t know who ends up making the decision of the CEO, but one of those where everyone comes up with something. And, you know, is there a scenario we could think of? Okay, here’s what people came up with, but we went in this direction. I know every scenario is different, but it’s definitely, I love how you kind of lay out each of the people’s thought process, and to them, it’s all right and it could be all right together.
Mike Maddock 29:23
Yeah, so the best answer I have for you is what we tell our clients to do if you think about your own your money, think about your finances. If I told you, Jeremy, put everything in Bitcoin, that would be irresponsible, but that’s a visionary, oh, man, it’s all Bitcoin. You got to go Bitcoin. So if you think about how you handle your financial investments, if you have a good team, you can create a portfolio of experiments. And I lay this out in both Plan D. It’s in flirting with the uninterested as well. There’s a portfolio framework where XY axis, we know how to do it, we don’t know how to do it. We know people want it. We don’t know if people want it. So we know how to do it. We know people want it. That’s evolutionary innovation. That’s what operators do. We’re just going to make what we did yesterday a little bit more efficient and profitable. Today.
You have to do it. It should be a big part of what you’re doing. But if that’s all you’re doing, you’re going to go out of business, because eventually your margins will shrink to nothing, and you will be out pivoted. We don’t know how to do it, but people are demanding it. Differentiation, that’s where you lay some of your you invest in that, and margins are higher, you’re answering the needs of your current customers or consumers. And if you get really good at that and put just enough investment in it, you’ll constantly be growing. I already mentioned, we don’t know how to do it. We don’t know if people want it. That’s revolutionary. There’s your Bitcoin. Maybe 5% of your investments should go in there, and then finally, where the entrepreneurs live. I know how to do it, but I don’t know if anybody wants it. That’s where you rapidly prototype and you just run experiments, and that’s typically how entrepreneurs create Napster moments.
A Napster moment is when someone with no business being in your business comes along and puts you out of business, and it’s because they’re moving much faster, running experiments more quickly than you’re able to do. So with a highly functioning team that has six different lenses, you are equipped not only to have those ideas, but to have someone who say, no, no, we have enough differentiation we need to work on a little bit more fast fail or evolutionary innovation.
Jeremy Weisz 31:47
Thanks for closing the loop on that a little bit. That’s very helpful, portfolio of experiments and having a diversified strategy in general. But you know, you mentioned this, why are some companies good at launching new products, and some aren’t.
Mike Maddock 32:07
Okay, that’s a whole another podcast, but let me give you just a few thoughts. Number one, if you’re on a treasure hunt for being disruptive, go to what people hate about your industry. And my friend Barry Calpino, God rest his soul, used to say, embrace the hate to innovate. You have to go to things that people absolutely hate about your customer experience or your product. And guess what? Nobody wants to talk about what people hate about our product or service, but that’s where all the action is. So you have to start with things that people hate about the customer experience of your product or service. Start there. Number two, there’s this expertise trap. I like to say you can’t read the label when you’re sitting inside the jar. You know what you’ve tried in the past? You know what you can afford. You know what your customers really need. You know what’s legal. You know it’s illegal. You know what your boss wants. You know, you know, you know.
And that expertise keeps you from seeing things possibility that’s walking right in front of you, which is why companies that are really good at innovating usually hire someone from outside their company, outside their industry to run innovation. Another axiom is that everyone thinks, if everyone thinks it’s a good idea, or said differently, if you keep working on something till it offends nobody, it’s no longer a good idea. It will not get any love in the market. I like to tell people that, and this is funny, I mean, a little bit ironic, because McGuffin is a marketing and advertising company that is amazing, so they’re going to hate me for this. But I say marketing and advertising are a tax you pay for a bad idea. Why do I say that? Because if you’ve solved a meaningful problem in the market in a really eloquent, elegant way. Guess what, Jeremy, I’m calling you.
I’m like, holy shit. Have you seen this? What a great solution. We tell our friends about great solutions, and you need to market them less and less in the future. So there’s a few reasons why big companies. One last reason, great companies run by wonderful operators are designed to mitigate risk, not take it. And so you have this, the DNA of a company, these antibodies that kill risk. That’s what they do. And so innovating is risky. It takes courage and most companies are ill-equipped to take those risks.
Jeremy Weisz 34:53
I forgot which company it was, and it doesn’t really matter, but you were talking about working with a company, and you’re walking around the office, and the people had been there for 20 or 30 years, they were all older, white males, and you were thinking, how are we going to innovate? Can you talk about that for a second?
Mike Maddock 35:15
Yeah, I remember that well, it was General Electric, and I was asked to be on the advisory board, the innovation advisory board for General Electric Beth Comstock, the CMO. At the time, a wonderful leader was running that program. And I remember Robert Walcott, who teaches innovation up at Northwestern or University of Chicago now, was on the as well. Anyway, we went out to New York, went to 30 Rock, took the elevator up to the top floor. I’m walking down this long white hallway with this group of advisors by all these black-and-white pictures of middle-aged white guys who’d run this company. And one of the advisors said, you know why we’re here? And I said, yeah, we’re here to help innovate. He’s like, yeah, kind of, do you know it’s been 13 years since General Electric has launched a new product or service or business model based on one of their patents, 13 years this is Thomas Edison’s company.
They were run by a great operator, Jack Welsh, and he had done such a great job at mitigating risk Six Sigma in their company that they had forgotten how to fail forward. So all their leaders were just working on a tiny little margin, you know, making their business quarterly a little bit better, a little bit better, until there was no more juice to squeeze, and now they had to come up with something different. And that’s why we were there. I read that when Jack Welch left that business, General Electric stock lost to $200 billion in value, which is a great example of what happens when one of the greatest visionaries of all time starts a company, Thomas Edison, and eventually, what happens if you are out of balance and you have an operator running the show, just an operator, so Balance is where the actions at.
Jeremy Weisz 37:21
Really interesting. So what do you do first, in that situation you’re walking in and it’s been 13 years?
Mike Maddock 37:27
Well, that’s a complicated question, but quarterly shareholder reviews are really hard to overcome when it comes to innovation, because you’re being judged on the value you’re getting from shareholders every quarter. And so taking risks, that’s a long, blue ocean strategy takes some years and isn’t like, oh, next quarter we’ll be ready to go. So that, and that’s why, oftentimes, the best thing to do is first identify gaps in the market that you have the ability to serve, that your brand can serve, and that’s research, and there’s a way to do it. I again whole another podcast, but that’s a discipline that science and art mash together. Once you have those needs, you can invent new ways to serve them. It can be a product, service business model.
You need to be agnostic. And then for a company like General Electric, sometimes the best thing to do is go out and buy it. Somebody is already, some visionary has already created this product. You can go acquire it, which is what usually happens if you want to start an innovation practice in your company, I recommend making it a completely different department, making it a completely different P&L, giving it a real budget, a real leader who can be autonomous and you know, tell you that your baby’s ugly. Take risks without impacting your bottom lock quadrant of your portfolio.
Jeremy Weisz 37:38
Yeah, Mike, I had one of the founding engineers at Mobileye. Mobileye helped fuel the autonomous vehicle, and they were like the only chip in the car, besides Intel. So Intel was looking at buying them, and they ended up buying them, I think it was like $15.3 billion and they thought it was cheaper to buy them than to try and figure it out, to do it themselves at that point.
Mike Maddock 39:33
Yeah. And then the next step is, how do you not kill what made that brand special with your own Mojo, because food is a great example. There are a lot of big food companies that buy these granola E West Coast healthy brands, and then they just kill them by changing the ingredients, letting people know that now this is owned by us, and people don’t want their food from a mass producer. Usually they change the what happens is the operators come in and say, we can make this cheaper, faster, better, and they kill the very thing that was special about the product. So that’s a whole nother conversation, and it’s hard to do.
Jeremy Weisz 40:21
There’s three things we talked about before we hit record. I’m curious which one will be the best. We talked about a great story about telematics. We talked about Proctor and Gamble and a patent in the billing expense, in AT&T, which one is your favorite?
Mike Maddock 40:39
Let’s do Telematics. There’s a Harvard professor 1967 I believe, Theodore Levitt, who came up with the frame marketing myopia. And he argued that if the railroad barons at the turn of the century, had thought they were in a different business. They would own everything said differently. We tend to be myopic about the business we’re in and so if you are making rail cars, you’re putting down railroad tracks across the country, you are negotiating for cheaper steel, cheaper engines, better laws around rail cars. You wake up one morning and you ask any employee, including the CEO, what business are you in? And they will say, we are in the railroad business. If they had said we are in the transportation business, those barons would own every plane, every ship, every car, but they forgot the business they had the right to be in marketing myopia. In the case of CNH Case New Holland, they hired us to come up with some innovation for their Parts and Service Division.
The first thing we did was we interviewed small, mid, large and corporate farmers to figure out what itch they wanted to scratch, what was an open insight that needed solving. And just for a second, take a step back so you have guys behind the counter who are selling oil and fan belts and things that make tractors run. And what we did was reframe the business they were in. What we heard from all those farmers was, look, man, all I want is my combine, my tractor, my fertilizer equipment to run when the sun is shining. And we came back to them and said, the business that they’re really in is the farm efficiency business. All people care about is making them more efficient. That’s the business you’re in. And with that lens, we could start saying, okay, what are the ideas that makes farms more efficient? And it turns out to be telematics. So telematics are satellites that run tractors. Now this is about a 10-year-old project, maybe nine at the time. It wasn’t happening, really. But today you can plant a seed, fertilize a seed, water a seed, and harvest seed within a quarter inch without ever touching the steering wheel on your equipment. I mean, and you increase efficiency by like 14%.
So imagine going to a guy that is used to selling motor oil and saying, hey, we want you to sell software. It all starts with, What business do we have the right to be in? And I think that’s the most important question a company that’s trying to disrupt can ask themselves, what business are we really in? What business do we have the right to be in? When you can answer that question, it unlocks the possibility that you won’t see.
Jeremy Weisz 43:50
I love that. Yeah, thanks for sharing that. And so, Mike, I have one last question before I ask it. I just want to point people to your websites. It’s Mike-maddock.com Mike does speak all over the place. And I know you’ve keynoted, I know you’ve also emceed conferences. You could check out maddockdouglas.com you could check out flourishadvisoryboards.com and I’m sure I’m missing three other companies that you’ve started,
Mike Maddock 44:22
MacGuffin Creative.
Jeremy Weisz 44:26
My last question is, you know, you talked a little bit about what you learned from Andrew Herrera, Vern Harnish, Marshall Goldsmith, and this interview wouldn’t be complete in my mind without talking a little bit about what you learned from your wife.
Mike Maddock 44:41
Yeah. Thank you for that. So, I’ll tell a story. Our family’s had a pretty tough four years, and my son was a senior in high school during the COVID years. Pretty good kicker, and like being recruited by colleges, and his senior year in high school is basically canceled. So he came to us one day and said, hey, listen, I want to go to a kicking camp because I need to get my stats higher. I’m not going to, the NCAA just gave everybody an extra year, it’s musical chairs. There are no seats left. I need to elevate my position in the world. So we went to Vegas at a kicking camp. And he did great. And the next day we came back, and my wife, Ruthie, was cutting his hair on the back porch. I was in the office writing. She came. I heard her kind of yelp. She came stumbling in and complained about seeing light. She was trying to scoop some snacks. She couldn’t find a bowl. I asked her, I could look for my phone. I thought she was having a stroke, and I asked her to call my phone.
She couldn’t use her phone. So I rushed her to the hospital, went to the emergency room, and 20 minutes later, the doctor came outside. Your wife isn’t having a stroke, there’s a mass in her brain, and we have to determine where the cancer started in her brain or somewhere else. So that was the beginning of a really difficult few years for our family, turned out she had a very rare and aggressive form of glioblastoma. I called my forum mate, actually, Ari Levy from the waiting room, just sobbing. It was just a nightmare. And he offered to come and be with me, but what I really needed were the best experts in the world, and he helped make that happen immediately, which is very generous of him anyway. It was such a privilege. My wife was a woman of incredible faith, and she was like a shining light. People were attracted to her, her joy, she and that. I guess I wrote an article, if you want to, all the lessons I learned from my life about gratitude and finding your tribe and not playing victim. I wrote about it in an Inc. article, which I think is worthy of reading.
But the number one lesson years ago, I saw Simon Sinek. We became friends. I had come to Chicago a few times, and so I got, like every other entrepreneur, I’m like, What’s my purpose, what’s my why, what’s my why. And I remember word sniffing it, and spending all this time coming up with perfect words. And I went home and presented it to my wife, and she nodded, and kind of went put up with it. And she said, you know, I think I know what my purpose is, too. And I said, what’s that? She said, to love I’m here to love people. And it was like this mic drop moment that I got to witness. I had the privilege of witnessing the last 17 months of her life where, under the harshest of circumstances, she was still able to demonstrate that love is the only thing that matters, and that’s the lesson.
Jeremy Weisz 48:17
I appreciate you, Mike, sharing that I think I told you before you record, I was doing research for this interview and walking through Costco, and people were probably wondering why I was tearing up as I was walking through the aisles, because I was listening to you talk about your wife. So please check out all of Mike’s companies. Check out that article he wrote. And Mike, I want to be the first one to thank you for sharing your journey with us. So thank you so much.
Mike Maddock 48:42
Privilege, Jeremy. I appreciate hanging out with you, and I hope we get to do it again, maybe with a glass of wine, beer, a cup of coffee.
Jeremy Weisz 48:49
Me too. Thanks everyone.
