The CEO Mandate: Turn the Board’s Number Into a 100-Day Plan | EP13

Bill Canady: To be here this afternoon. We're going to walk through what the first hundred days looks like when you are a CEO or coming in as a CEO. Now, I like to think of if you any of you have ⁓ familiar like Peter Thiel's book that talks about zero to one and then everything that comes after it. No matter where you are in your journey today, I think of that as day zero. So you've got something going on, you're having challenges, you're not sure how to deal with those challenges. And so it starts you're wondering. And my bet is if you're all here, you're all thinking the same thing. How do I solve the problem that I have? So I think of you at day zero. When you make that choice, when you make that change, now you're at day one. You can start going. And this is what we want to talk about today is what does that look like and feel like to make that change? So in command, getting command of your company. is about really four very simple steps. So step number one is no surprises. I talk about this all the time. If you're a sitting CEO today and you're struggling to go through it, your job is to be that connection between your board and your team. And the four things I always tell everyone is exactly the same. First is no surprises. You know, bad news, fish, and relatives all stink after three days. And if you are not communicating with your board about what's going on, even if you're doing a good job, It's not going to go over well. Second is be on pace. I think about it in a thousand days, going from day one, you've got your hands around the controls or you've made that decision. I now know what I'm going to do, even if you're in your tenth year. There's a pace for you to get there at the right speed. If you go too fast, you'll leave your team behind. If you go too slow, you'll be the bottleneck. So there's a right pace and you want to push that pace as fast as you can. It's shocking how fast time goes by. Data driven, I think this is the heart of it all. It's really looking at do you know what's going on? Do you understand exactly what's happening? And the way that you do it, you got to look at your data. If you have less than 20% of the data, you're simply guessing. If you have more than 80% of the data, you probably have taken so long to get that 80%, everyone else has passed you by. So it's working somewhere in that gray, in that ambiguity about how you're going to take it from today's numbers into tomorrow. Exactly where you want to be, the number you signed up for, your team signed up for, what the glory looks like for you. Then the final one, I think this is the most important. And I bet we've all experienced this. The team goes, I did the best I could, but we're not a best efforts company. Results are going to matter. And if you're going to be successful and if you're going to have people who ⁓ who ⁓ if you're gonna make this company work, You got score some points, right? So results matter. So it's great to say I did the best I could. You know, if you bat 300, it gets you in the in the Cooper's town, right? It gets you into Hall of Fame. In the business world, you gotta be right more often than not. You gotta be successful. You got to drive the results across the organization with it. So these are the four things that I think what it means to actually have command and control of a company. People know what's happening. You're moving at the pace that it takes to achieve the plan that you've all signed up for. You're using data. You got your gut, that's important, ⁓ but you need data to really show you where you're going. And finally, you actually got to go win sometimes. Okay, so one central question here is ⁓ can you state the board's number and the five levers that got you there right now without opening up a file? Now, let me tell you what I mean by that. When you took your job and there's three different types of companies, there's public, there's a private, and there's a private equity. Today we're gonna primarily talk about ⁓ private equity. But honestly, it doesn't matter. It's important for all ⁓ of the businesses. ⁓ with it. There's some goal that you've got to. Typically in private equity, when they buy the company, there's a thesis. In other words, they say, this is what we're going to go do, this is how we're going make our money. And generally, they're looking for the equity that they invested, they're looking to get a return somewhere between two, two and a half to four times. But the most common that I'm familiar with around three times. So if they put in $50 million of equity, just using that as an example, they're expecting to get 150 out. Do you know what that is? Does your team know what that is? And do you know the levers that you're gonna pull and in what order? If you don't, you're just running enthusiastic. If you don't, you're not sure how you're getting there. And the unaimed arrow never misses. You know, to make a metaphor, if you're drive you're setting today in Sarasota, Florida, and you're gonna drive to Chicago, Illinois. If you just randomly start off, you might be making great progress totally in the wrong direction. Maybe you wind up in California. You want to get where you have said you're going to get. And in order to do that, you need to know the plan. Otherwise, plan failure. Okay, now the math for the people setting in the CEO. This is factual. You can look it up. 70%. Now, fact in fact, I think it's about 71.6% of all CEOs get fired before they achieve the final goal. 70%, over 70%. You generally get less than six months to establish your credibility. That means you go through at least one board meeting. You have them typically on a quarterly basis. You get less than six months to do it. And the average hold period is seven years. Wow. That's a lot coming at you pretty quickly. So the odds are against you you are sa you are absolutely more likely to get fired than you are to actually see the number that you signed up for. That's important. We're going to tell you what to do about that and how to avoid that happening. They typically don't replace you for capability. When you go through the hiring process, again, regardless of what type of company, you're generally very well vetted. They'll have you take tests, they'll meet other board members, you meet the team, you do all of this type of stuff that you're going on. You're capable. You wouldn't be in the job if they didn't think you had the capabilities. The real question is: can you deliver the result? And because the result takes so long to get there, on average, over seven years today, it's the belief that they have in you as you go. And you generally get 90 days to get your feet under you, six months to have the plan clearly and start executing on it. And if you don't have it after six months, the board behind you, after the executive session, is going to be talking about what are we going to do about it? Bill's not working out. How are we going to make that work for you? Now The issue with your job, the challenge with your job is you are the only translator in the b in the in the building. And what that means is your board is talking returns. They talk about things like MOIC, multiple on invested cash, IRR, ⁓ internal rate of return, EBADA, exit multiples, all the math because that's what they put in. They don't, they don't know this company. They got the thesis, they went through the deal. Maybe they've been setting on it a while, but the average board member spends about twenty-four hours a year. Board meetings are about three hours long. There's four of those a year. They have a monthly financial call, about an hour. So if you do all that math, that's gonna put you right about 20, 24 hours. That's not including travel times and all that, but actually working on it. 24 to 30 hours a year. They do not know your business. They're just gonna go off of what you're telling them and what the results are telling them. Now your team speaks in tasks. They get the go-dos. How are we gonna achieve this? How are we gonna get this? This multiple and invested cash. They put $100 million in, they want $300 million back. How do we achieve it? You're the translator. You're the decodering. You're the one that has to set the goal. Set the goal of what good looks like. And that team has to build a strategy to get there. If you can't translate numbers into task, that's not going to go well for you. Okay, one document will solve all of these things. And I call it the CEO mandate, but it's really a board memo. And the reality of it is, and you probably have gone through this yourself already, is when you start out and the board tells you this is what they're wanting. So we're at a hundred million dollars. We need to get it to three hundred million. I'm just making up numbers here. Three hundred million be an extraordinary ⁓ piece, ⁓ particularly in organic growth. But whatever, whatever that number is, ⁓ the in order to get there, you have to be the one That will define that plan. Now, the the thing is, since you're only with your board such a little amount of time, you need to show them the documentation because I will assure you, whatever you think your plan is, it's not the way it's going to get there. And so you have to bring them alone. You have to have conversations outside. You to have very purposeful ones. A lot of times they'll be social and we'll be talking to them and they'll be happy and it'll seem good. But if they don't understand how you're going to get there and then see it and take that journey with you. It can go bad pretty quickly. Same time, your team, the things that they're doing, the strategy that they're developing, they have to understand and it has to make sure that it's getting to that number. Now, I've sat in a chair many times, and sometimes I'll get frustrated. I'll just do the strategy myself. When you're doing the strategy yourself, the one thing that is for sure not happening is no one's buying into it. You're doing it late at night, you're doing it in weekends, off hours, whatever. People haven't seen it, they haven't pressure tested it. That is going to be your strategy. And when it starts failing, you know what they do? They start saying, I never thought it would work anyway. And you're bored with since you haven't brought them along, they're like, we don't know what this is happening. You sometimes, when you take over a company, you actually have to shrink the thing. You actually have to get it smaller in order to get it bigger because you got to get away some you got to get rid of some of the lack of focus, the things that are not working. So the goal here is within the first hundred days, you take that board mandate. What they've told you they want to get. You translate that into an operating plan that your team owns. And between those, they need to match. So if your team plans too little or maybe too much, if it's not achievable, if it doesn't deliver that number, it's not going to work. If the ⁓ board has an unrealistic number and it cannot get there and your team can't do it, it's not going to work. You're the person in the middle. Your job in that first hundred days is. Get the goal. You're going to work that with your board. Take that goal. Tell the team about it. Get the team to build a strategy to go achieve that goal. Then the next step is you organize your company all the way around it. And then the final third step is you start executing on it. You get about a hundred days to go do that. Okay. So what's the board's number? Where does that come from? It comes from the LBO or leverage buyout. So when they buy this company, typically today, 50% is going to go in equity, in other words, the cash they put in, 50% is going to be in debt. You need to understand exactly what that number is because not only are you going to have to defend it, you're going to have to make sure that that plan delivers that. You're going to need to run the MOIC or the multiple owning cash conversion. So you've got to understand what it takes to only get the number. You've then got to decide is that payoff going to deliver what everyone's expecting, which is your team. Which is gonna have very high expectations, and the board, which is gonna have very high expectations, are you guiding them into the right place? And then you've got to get it all locked in on the one page that everyone blesses. This is really important. If every if it's wrong and it doesn't work, what happens is ⁓ you now gotta disconnect and you'll spend more time going back and trying to figure it out. I'll tell you a comment about this You guys, so the main use of this calculator and the purpose of being showing it is because this exercise is really helpful, especially at the beginning when you are taking control or being on board in this newly acquired company or you're coming in to fix things, because this will help you get aligned with the board, because once you have the clarity on the numbers that you need to get and ⁓ have an idea of what are the levers that you're gonna pull to to get there. It'll help you really really have a better plan eventually to actually have a better chance to to achieve it. And as Bill said, ⁓ we have to do what we can do, do it the best we can. And then if we have a little bit of help the market, that's how you're gonna make ⁓ a lot of money. Before you start growing, you need to earn the right to grow. And what does that mean? That's not some secular piece that says you gotta be a good person and all that. No, no, no. If you have a broken business, And you start trying to bring new customers or acquisitions in, you're just gonna upset them. You're just gonna get someone in, you're gonna overpromise what it was that you wanted to deliver for them, what they signed up for, and then you can't deliver it. So if you can't ship on time, adding more customers will not make you ship on time. You've got to go and look at your business and make sure that operationally you're getting this thing up and going. You're standing it up on its keys. So what are the five levers? Remember before I talked about do you know your number? And do you know how you're going to get there? One thing you cannot count on at all is the market. There's always going to be some war, some fire, some heat wave, some flood. Market's going to do what the market's going to do. And people will come in and say, well, you know, it was not a good month. It was not a good quarter. I did not expect the war that is going on in Europe to continue. You're like, well, can't do anything about that. Yeah, it rained too much. So I we've got a business that does outdoor power equipment. Rain too much rain hearses, too little rain hearses. Don't you can't control any of that, so don't pay any attention to it. What you can control are these five levers that you see right here in front of you. So price and mix, I put them together. It's really price, but you also want to focus as much as you can around ⁓ on the ⁓ on the mix ⁓ with it. Okay, so price and mix is one. Second one is cost, organic growth. ⁓ I saw the thumbs up. Way to go, buddy. MA and working capital. All right. Now, why in this order? And this is a real order. You go with price first because it is the fastest lever you can pull, ⁓ you know, excluding contracts. You may have someone that's giving you a contract that says you can't raise it for you know a year or something. Very common, but but you can raise it. ⁓ and it's frictionless. So if you change your price tomorrow on a product, it's going to flow right through the PL. You don't need new buildings for it, you don't need new people. You might have to pay a little extra commission. Otherwise, there's no other friction in it. Cost is the second one, but it takes time to get through costs. You have to negotiate contracts. So some are direct costs and some are indirect. So indirect would be something that's not used in the direct making of the product. You can renegotiate your freight con freight contract. That's one of the most popular with FedEx or or UPS or whatever you know ⁓ trucking firm you're doing, you can do that the moment you have in it goes in. If there is friction involved with it, there will be some switching costs. There will be some it may not go all the way through and it takes longer. So cost, you can typically get most of your pricing in within six months and then it flows through, sometimes very quickly within 30 days. Cost generally It takes you at least six months before you even start seeing it. And if it's a direct cost, if you're making a a ⁓ a ⁓ if you're making a highly engineered product, ⁓ that sometimes takes longer. Maybe you're getting castings out of India for it. It will take you a year to two years to get a a new source of casting. So ⁓ so that's gonna take longer and direct cost is harder to do because if you get the casting wrong, you're in trouble. No one's gonna buy your product, it won't work. Organic growth is the one that comes after that. So first six months through the year, you're going to see pricing comes in, comes in quick. Costing generally takes between six months and 18 months before you see it, depending on direct versus indirect. Organic ⁓ growth, if it's an existing customer, you can go win that new ⁓ customer. ⁓ and ⁓ but if it's if it's an existing one, you just gotta win the new product. If it's a new customer, You have to take them from someone else and they're gonna fight you for it. So that generally we say comes after year one, typically in year two, for if you're selling like Caterpillar, Calibra's a wonderful company. I've sold them most of my career. ⁓ they have a product roadmap. And if you're selling them a say a piston for their engine or a ⁓ scavenger pump for for the ⁓ the to do the oil out of the sump. That's four years ⁓ before they even change it on their ⁓ a ⁓ before they change it in their drawings, right? So recognize that's your third one. Typically we say that comes year two to year three, unless you're a current customer and you're already in the gap, right? If you're selling commodity items, you can get it pretty quickly. Engineered items takes longer. MA, you need to start right away, but you need to be tempered. ⁓ with it and make sure your business can handle it. Now, the honest to God's truth is in private equity, you want to start dealing doing deals your first year. And the reason is you need time for traction to happen so you can get a real return. And there's two times that you will do the deal. So the first time is early in the hold, that first year into that second year, so you've got time to get them in, integrate them and all that so you get the benefit of the second one is you buy them just before you sell the business. If you buy them just before sell it, you don't actually have to do anything. And they will carry the same multiple that you're selling the business for. So if you're buying a three or four or five term small business and yours is going to sell for 11, 12, 13, you're automatically getting that step up. And that's important to know. So it's in the middle that is really hard and you typically don't get a payback on it. So if you buy it in the middle of your hold, it's closer to multiple you think you're going to get, you don't have enough time to get the synergies ⁓ for it. And then the final one is working capital. That is releasing capital out of the business. That's getting rid of those inventories, those excess footprints. So the working capital, you want to work on that. But a lot of times in industrial, you come in, you're looking at two turns, three turns, sometimes four, whatever it is. You want to be in the middle, single digits and beyond. Now it totally depends on your business. If you're if you're selling software as a surface or a SaaS company, there is no inventory. It's a negative working capital business. Many of you may know like a roper technologies. It used to be roper pumps back in the day. Today they're a negative working cabinets. It's infinity. That's where you want to be. If you can get there. But if you're selling a product, most product companies are going to be in the mid-sing, if they're running good or well, the mid-single digits, all the way up to maybe you can get into double digits, but it's hard. A good running company in industrial products will be five or six times. And you're pretty pleased with that and you're always trying to get it. Now the reason is. That is stacks of cash setting on your shelf. And you go out there and you see, ⁓ my God, I've got two million, three million. The last company we took over, ⁓ we had eight hundred million dollars in working capital. We took out three hundred and fifty million dollars in year one. We we had to do it to save the business. Freed up so much capital, but not only did we get the money back, but we could exit the buildings. We didn't need that anymore. We'd have to do the care feeding of it. And so that's the fourth lever that you pull and the re or excuse me, the fifth lever. The reason I put it there is You start working on it in day one, but if you're putting new products in, if you're collapsing facilities, if you're adding facilities, all that, it is hard to get your working capital. But you can do things like AP and AR really quickly. You can get those negotiated. You know, that'll help you get towards that, you know, proverbial land of of plenty of negative working capital. I've never had a negative working capital business because I've always made products and I gotta have the material to go do it. But anyway, those five steps are the main levers you can control. You can decide what you're going to do on price. You can decide how you're going to get your costing and you can fight your way through it. The organic growth, you know, if you look at a typical industrial company, you know, we'll say, all right, we're going to get inflation, whatever that is, and historically it's been three percent. Now you can't look back the last few years and say, what the heck is a historical mean? But historically it's been that. Then you get pricing, and maybe you get three percent pricing. So if I get inflation, call it two. I get my 3% on pricing. I'm at five. And I get my initiatives, my key things I'm gonna do. Maybe that's going to add another three points or four points. Heck, I'm looking at nine points. That's how you stack that stuff up. In private equity, the l the the holy land is 10% on the top, 20% on the bottom. That's what we're looking for. Grow at 10% top. You get leverage coming through. In other words, you don't have to add people, facilities, PP and E, any of that stuff. And you want 20% on the bottom. You know you're running a good business. When you get flow through your PL and it comes out at a greater percentage than it goes in in. That's the key. That's the magic right there. All right. First step on this is so now you know your levers. The board's told you the number. You know what levers you're gonna pull. You gotta lock that number in with your team. So you've got the goal. You think you know where you can go get it, you have an idea. You and the team have to translate that into a strategy. that you can execute on, that you can own those numbers. This is critical for you. Now, what are we looking at? The first thing is do you have the right team? And I think of the three people, the last book we just put out called The Rule of Three, it talks about the visionary. Typically that's the C CEO. They're gonna own this is where we're going. This is the vision. All right. Then there's the operator. They're the actually the one that's doing it. They're the people showing up. They're the president, the vice president, the directors, the managers. They're the one that makes it happen. And then the final one, the one I see the fewest companies having, is a profit. Now I use that term because I think it gives two kinds of things. One profit is in money. That's where the money's at. And two, profit as in they have the wisdom to tell you the operating system that you will use. It is not unusual in a small company or any candidly any size company to have them where they're doing all three. It's hard to do all three. It's almost impossible to do all three. It's common to see the visionary and operator together, though. So Your CEO owns where we're going. The operators drive the car to get us there. They ⁓ they put together that map, that strategy of how we're gonna do it. The proper profit has the wisdom, the training to show everyone on it, right? These are how it goes together. Second thing you gotta do is you gotta make sure that the compensation plan that you have aligns with it. I come in typically, salesmen are paid on revenue. I've certainly dealt with that every time. If you're going to be selling this off of EBITDA, in other words, earnings, you need to get everyone aligned around EBITDA. That's what you should be paying on. Not 50 some different metrics, not some, hey, we got a top line and a bottom line and all those. The fewer you can have tied to the same thing that the board has tied you to, the more likely you're going to get it. Let's be honest. They're all coin operated. And you'll tell a salesman or you'll tell an operator, do this. Isn't that great? And you're going to. But if you're paying them to do something else, they're going to do something else. They're going to do what is not only good for the company, but what's good for themselves, as they should. You're telling them what you want and you're showing them that by rewarding it. Chulio just took and put in the ⁓ rule of three. You can see ⁓ all about that book if you like. ⁓ you're gonna need to make sure that you have one owner per initiative, one throat to choke to use an old term. But what that means is are they doing everything? Of course not. But someone who's owning the initiative to go that you can talk to. You can use the races chart, right? We have all those kind of materials. You can look it up on the internet if you're not familiar with it. But one owner that is showing up on your quarterly meetings, on your monthly meetings, saying, This is where we are. This is the date it's going to be done by. This is who owns it. This is the number. This is how we're tracking. Then you're going to take and look at everyone around it and you're going to ask yourself, are we, are we keeping it? Are we doing more of it? Are we going to take and get rid of it? Or are we going to develop? It's the same way with the team. It's the same way with the initiatives. Do I have the right team to get me there? Do are we focused on the right pieces? You have to go through all of these. Starts with you setting the goal, they building the strategy, then you organizing around that strategy. They have to own that. All right. Then you got the rhythm. That's your monthly, quarterly, weekly, annually, all these meetings with it. You got to bake this stuff in and you want to put it in early. I like to have my calendar being a rolling 18 months. Rolling 18 months. Why is that? Because if you put these big rocks in, these quarterly meetings, these monthly meetings, that means people know when they're coming. I use week three. I'll tell you why in a second. But then they can plan vacations. People got to have it live. And if they can't be there for it, then they can have a proxy. You don't move those once you get them locked in. It will drive people crazy. So your monthly meetings, you put them out there for a quarter. The MBRs or Monthly Business Review, those are backwards looking. They're looking at how did we do against our plan? The QBRs are looking at Ford. It's a strategy meeting. Given what's happening in the monthly, is our strategy right with it? So you have those meetings baked in so people will come and you'll measure and monitor what's happening. It makes all the difference in the world off of it. And then finally, the ⁓ crucible is that before you go deliver your plan to the board, you want to make sure someone's looking at someone like myself, Tulio, someone like Jeremy on here, right? Is to make sure that someone is going through and asking you the tough questions before you get in front of your board and you're not prepared off of it. So the operating rhythm is having a calendar. Everyone's on it. You're looking for it. I choose week three. Here's why. The first week we're just trying to close the month, get the numbers. Week two, you have chance to study them numbers. Understand why it happened and why. Anyone can report the news. It's the insight. Week three, you can talk about it. Now, here's what I'm gonna do. Here's my countermeasures. Week four, you got to get ready to close the month. So the week three is the best one. And if you schedule all these meetings in there, that's the week they don't travel, right? That's the week they can stay wherever they're after working out of their home, they're working out of their office. Week three is the best one for me. You can decide what works for you. So you're getting ready to go show your board. You're gonna show them the CEO mandate, right? You're gonna show them this is the board. mandate that we put together. And there's two ways to show up here, right? So the first way is you can do all this yourself. And it honestly, the plans I've seen out of CEOs that did them stuff, they were actually outstanding plans. The problem is they couldn't get anyone to buy in. Nobody understood it and they didn't follow it. So without going through a program to help you get ready for it, working with someone outside of your company, working with the people inside of your company, you're going to show up with this in your head and you're going to be defending. But by going through and having someone ask you the tough questions, that this is how you have command of you understand they're going to ask you questions you're not prepared for. I do this before every board meeting I get myself, my CFO, my strategy leader, you know, my operators in the room. I go, all right, what kind of questions are we gonna get asked? Well, and we have a lender call. What kind of questions are they gonna ask? We have a lender call every month, updating them exactly where we are in our journey. There's a lot of money riding on this. So It allows you to go back to those four things and avoid surprises. And if you need to make corrections, since people are owning it, it's really, it's never easy, but it's it's it's never simple, but it's pretty easy to keep going because you're making small changes as you go. This is a super important point off of this. Okay. At the end of day ⁓ 100. So you came in, you're at day zero now. I'm not sure what to go do. I need a plan. We will help you get that plan. We get you to day one. That's the day one you're starting. And over the course of the next hundred days, these next 12 weeks, you're going to be every week having a deliverable that you've got to go do. You're going to wind up at the end with a signed board document. Now, are you really going to get assigned? Up to you. The board will sign it. But you want to make sure that you've built the plan showing the board before you get to that meeting. Hey, you told me what it is. I signed the contract. Is this really the number? This is what happens. Did I misunderstand this? Is this great? You'll be shocked at how powerful that is talking to you and your chairman or you and your board members, whoever they may be, on it. Same thing with your team. This is what I understand. You said you could deliver nine points of growth by looking at your plan and we're going backwards. How are we going to get there? You've got to make sure that people are aligned. You put it down. They can do it. Then you need a bridge that gets you from there with those five levers. Don't put the market on there. You can have the market. The market's just going to tell them what you think is going to happen. Whatever it is, it's going to be different than what you put down. But what are you doing in pricing? What about ⁓ what are you doing in cost out? You're purchasing. What are the initiatives? And you can say I've got a purchasing initiative, but if you can't articulate it, you don't have a purchasing initiative. You can say you've got deals you're looking at, but if you don't have a pipeline full of them, then you don't really have it. It's a wish list, right? It's one thing to put a here's my list of 50 targets. Have you talked to any of them? The answer would probably be no. Or have you talked so much to them you haven't got the operating capability going? So You have all of that. You've got your monthly MBR. Some people call them MORs. Doesn't really matter. Monthly operating reviews, monthly business reviews. You have been running it and you've ran it at least once against it with the people on there who own the initials going to be delivering it. It's super important you do that. Then you've got your board deck. Now, there's different theories around the board deck. I like my board deck to not be particularly pretty. The reason is I'm an operator. I'm not a consultant who's selling these things. I'm going to show up and I need Absolutely truth and transparency. And my style is I want to be cautiously optimistic. I want to say, this is not going well. Here's what we're doing about it with clarity, with real action, with names and times and what we're going to get when we get there. And then I want them to fully understand that. And I'm going to talk to them offline to make sure I've answered those questions. So these board meetings are straightforward with it, right? So I show up, they've already seen it. It's already done. They are happy. I do the same thing with the team. I talk to them regularly, both in a group and individually. So we're all aligned. It take you go from these big whipsaw changes when things aren't working to small incremental changes. And you will have small changes with it. Okay, so what is our program that we're here to ⁓ to ⁓ talk about? The things that we can help you with. And you know, whether you work with us or someone else, you're all here for a reason. This is the way our program works out, right? We call it the command one hundred, that's a hundred days. In a hundred days, we will take you where you are, which is day zero today. We will immediately get you to day one. This is the plan that we're going to go through to do it. It is laid out with training, with weekly meetings, and everything else. You and your team working through this. This is critical with it. Getting you ready, helping you be ready to talk not only to your board, but to the team, to be that translator between it. The first 14 days, you're going to get that number. You're going to make sure that number is right. You're going to pull the deck. If you are in private equ, you're going to Pull that out and it's gonna be clear about exactly what's happening and where's going on on this thing. The second thing, days 15 through 45, getting the strategy. You're like, how can I get a strategy in 30 days? Actually, you won't even need 30 days because you already have an operating company. It already is in doing something. So if you are in manufacturing of industrial switches, you don't need to go out and study the restaurant market. You don't need to go out and study what's happening in the place. You need to make sure you are getting depth. And breadth into where you are. So it's putting the rigor around what you're already doing and deciding where are you going to focus? The problem for most of us is not that. The problem is we have too many focus areas. It's getting it down. We're going to run the math, help you do it. So 14 days, you got a number. I am going from X to Y. I know it is. I own the gap. Days 15 to 45, I need a strategy to deliver that gap. That's what we're here for. It's how you're going to get paid. All right, 46 to 70 is the structure. How do I organize my company in order to do it? Now, here's the key point. You're not doing this by yourself. You're doing it with your team. We will show you how to do it. We'll give you all the documents, all the training. But it's you and your team coming together to go out there and actually do it. If you're a solopreneur, you still got to do the same thing. You are the team. If you're running a billion-dollar company like Tulio and I are, then guess what? Then you're going to have a bigger team. But you have to show up in that meeting and guide them to getting there. Not force them. We're not the military. It's not command and control and you're gonna do it my way. No, no, no. It's getting buy-in so that when you're not in the room, they're still on board because it's their plan. And in seventy one to a hundred, that's the cadence. That's getting aligned with it. So our program, the way it runs, is it's twelve meet it's twelve ninety minute meetings every week. We're having one. ⁓ they're on Tuesday. Sometimes we change it and things like that. ⁓ there is ⁓ in this case with ⁓ we're getting to the end of the year, so you got Thanksgiving and Christmas, all those things are taken into account. So it puts you into mid January. By the time you get to January, which sounds like a long ways away, it's ninety day ninety days until Christmas. If you haven't got your wife or your husband to Christmas, you better get on it because your kids are gonna be disappointed and she's not gonna be happy. So I highly recommend you do that. So it takes all that into consideration. You have private ones on ones with me. It's myself, Tulio, others. We got a whole team that'll help you go through this. But you're gonna own it. There's templates in there, you fill them out. Do you need to use our templates? Of course not. You can use whatever you want. The deck you build should be the deck that your board expects you to build. ⁓ not not using my term, but we do have all that for you. So the next cohort begins ⁓ the first of ⁓ cohort number one begins October sixth. And the second one is in January. So we run these once a quarter. We only take 10 CEOs per co. That's all we can handle. And we're all in it together. So it's no one competing against any anyone and it's everyone doing the same thing. ⁓ okay, we got a cut we got a question from Moses. My industry does not have material costs. We are a contracting service. Would make our material costs be equipment purchase of material costs? I'm a bit confused how to factor in employment costs of a percentage of revenue. Okay, that's a great question. You're a service business, right? So the services you're providing is you're doing ⁓ in this case, building something or engineering. You use that service. So you look at what it is, because today you're pricing it somehow off of that. So you use that with it. It will skew your costs. It will make your labor cost seem higher. That's perfectly fine. And so instead of you being great at 2.5 in average, you might be great at one and a half. I have in one of my businesses, we have a thousand service contracts. We do ⁓ pumps and compressor services all over the country. And so when we're at a one and a half, we're doing really well because all our cost is labor. So you're really using it, looking at the material piece going in there. The other thing, Moses, you want to do is your answer, the thing that gets you there is you need to sell subscriptions. So if you're in there doing contracting, the service work that goes behind it, if there is any, there's not, could you look at it? Otherwise, it's a project business. And if it's a project business, we look at that differently. So we can handle all of that. Point being is we have those types of businesses. It works the same and all of it, but the numbers are slightly different ⁓ with it. So if you can cost your jobs today, and I'm sure you are, because otherwise you wouldn't be in business, we'll use that same costing structure with it. Right. We just try to get the noise out of it and think of it from a contribution margin, ⁓ which is ⁓ you know, without putting all the S G and A stuff in it. We try to get that S G and A piece out. Hopefully that that worked, Moses. Let let me ⁓ let me know if it didn't. So That's the Command 100 ⁓ program that we have, whereas four sections that we go through that people that work with us over time really seem to enjoy. So the first one is getting command and control of your business in a hundred days. This is the piece that saves your job. This is how you avoid being in the 70%. It's not because you're not capable of doing these things. It is because you haven't got a plan that can be articulated. Now, maybe you own the business. Maybe Moses, this is your business. You can do whatever you want. But no matter if you've been in the chair for actually day one or you've been in there and this is year 15, once you have a plan, think of that as your day one. In a hundred days, you want everybody organized around what you're doing. And in this case, you're a service company or a contracting company and you need to organize ⁓ with it. We work with tons of them, so we have great case studies with it. Once you get the business ready, so you're sitting on the other side that 100 days, you now need go to go grow it. As I said earlier, Growing a business that's in chaos only invites more chaos, and the customers will leave you. If you don't take care of them, they will leave you. Now you're growing. You're past that. You're past your first year. You want to scale. You're going to double down on what's working. You're doing the flywheel. You've exited things that are not working. You're redeploying your capital in that. That's going to get you through the next year. The final year you are preparing yourself to exit. Now. Are you going to exit that 1,000? Probably not. We already know that the average hold period is seven years. Sometimes quicker, sometimes longer, but that's your average. Somewhere in that three or four or fifth year, companies are getting ready to exit. You cannot solve your issues in the 100 days when you hire the banker. You know, you get ready to go. You're going to six months out, you're going to say, okay, I'm ready to go. You hire a banker. He gets you ready. He does the same. They're just going to polish it. I have seen companies that have the best deck, the absolute perfect data room and all that, but it's all theater. They don't have succession plans. It's all on the owner. Their costing is out of control. They can't explain what they're doing. You can't fix that in that last year. You must fix all this in that first thousand days so it has time to soak in, become part of the culture. So it's real. Because they're going to look back at whatever spending and say, do you have good quality revenue? So you may have did. Ten times more revenue, but is it junk revenue? Is it repeatable revenue? Do you have contracts? Are they on a subscription? Is it a one time thing? Were the margins bad? How much did you get ad back on it? What are you carrying in ad backs? So all that first three year program is really to get you so you can run a really real company. You should run the company like you're gonna keep it forever because you'll do the right things and people will pay it for you. If you don't, it's just theater, you're just doing kabuki here. And people will discount. They'll take a turn or two off of it if you're too important. okay, motion gave project-based contracts paid solely on production. It's timber harvesting, logging industry, long-term ownership, family business, second year. Perfect. We work with stuff like that already. We've got a business very similar that goes and does the ⁓ reupfitting around oil platforms. They come in, they have to win and all that. Same idea. We just take your cost structure and work with it. So you It will be no problem at all, Moses. And that sounds like a really cool thing. I the logging and said the country was built around that. So that's fantastic. So this gets you set to go and grow from it. You will have growth coming out of it. Our average ⁓ piece coming out of this, that first year, we'll see about 30% profit improvement because you've taken action around pricing and all these other things. It's generally what you get in that first hundred days. You really start pulling that lever high. I hope that answered your question, Moses. If not, we can set up a call to chat. So what happens in real companies that work with us? We generally see about 350 BIP, so basis points. And those of you who don't think about that, it takes a hundred basis points to equal one percent. And so if you tell someone I'm gonna grow your business by five percent, is that five percent or is that five percentage points? So am I going from ten percent of EBITDA to fifteen, or am I growing ten percent by five percent, which is a very different number? So when we talk in basis points, you just realize saying three point five points of growth are going to go on there. That generally translates into about thirty percent and the margin in it's about four point five to four point two percent points over six months. So a seventy-five million dollar service firm and Moses we work with primarily service firms and manufacturers and distributors. That's what we do of people who have real products like trees. Like this is a really cool piece of it, ⁓ with you've been listening to the one thousand day CEO with Bill Kennedy. Follow the show for more decisive leadership, sustainable growth. And strategies that build enduring businesses. Until next time, make every day count.