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Alaska Airlines would not have been interested in buying us if we were just some some company that was operating flights to Hawaii and they could just come in and compete with us and just basically run us out of the market because they did a better job.
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No.
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We were doing such a good job with our team and with keeping our customers not just happy but delighted that Alaska Airlines figured out that if they wanted to come into our market, they would have to buy us rather than win the market because we would be tough to beat.
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And we had already been competed with by Hawaiian Airlines and Northwest Airlines.
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And we won both times.
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Because our team was like unbeatable.
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And however, Alaska Airlines was a much more formidable competitor, and we knew that their pockets were deeper than ours, and ultimately the war would probably go in in their favor.
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I'm your host, Mo Salami.
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Every week we dive into real conversations with high-achieving founders and leaders, uncovering the mindsets, strategies, and takeaways that help you define and achieve success on your own terms.
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Welcome to another episode of Purpose Driven Success.
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And I'm just gonna let my guest intro speak for themselves.
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We're certainly in for a great one today.
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Rao West is our guest, and Rao West is a best-selling author, entrepreneur, and business mentor.
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And Rao's 45-year career has been defined by one mission: helping founders build businesses that run without consuming their lives.
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And Rao is best known for co-founding and scaling Hawaiian vacations into an eight-figure travel company that moved over 30,000 passengers annually before being acquired by Alaska Airlines.
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Today, Rao teaches entrepreneurs how to transition from overwhelmed operators to true business owners using her organized to optimize framework.
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Rao's work blends systems, leadership, and culture to help founders create scalable, self-sustaining businesses and reclaim their freedom, clarity, and purpose in both their work and their life.
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Rao West, welcome to Purpose-Driven Success.
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So glad you're here.
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Thanks, Mouse.
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That was lovely.
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Rao, just before we start, where are you right now?
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What's the time?
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And I know you're in a pretty awesome part of the world right now.
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I'm in Australia in a small town called Bathurst in New South Wales, where my daughter and her three children and her husband live.
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And we're here visiting them for a few weeks during their winter break.
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Yeah.
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So let's just jump in.
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So, Rao, as we're just having a quick chat in a prequel, I was expressing that I really like your backstory.
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And for listeners who haven't heard your story before, Raoul, take us back to the beginning.
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How did Hawaiian vacations come to exist and get started as a first a simple business idea and then become one of Alaska's largest Hawaiian travel companies?
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So over to you.
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I guess I should start at the very, very beginning.
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I was born and raised in Seattle.
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And in my mid-20s, I left the family business, which was the last for tourism business, and moved to Alaska, ended up in Anchorage, and there I met this young man across the hall from me.
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I opened my own marketing consulting firm that specialized in tourism because that's what I knew.
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And he was in real estate.
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But some of my first clients were located in Hawaii because they were selling to Alaskans.
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So I had to go to Hawaii to familiarize myself with their products so I could represent them.
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Well, he saw me flying off on these business trips to Hawaii.
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And he's like, You're going to Hawaii again?
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I need to figure out how to get in on this because I like Hawaii.
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I want to go there on a business trip for free.
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And so he was picking my brain.
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And he came up with the idea of representing Alaskans who owned vacation rental condos in Hawaii.
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Quite a few Alaskans do.
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And so he said, Well, I'll be your rental agent, and people can come to me and I'll book them and he'll get me a commission.
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So he started that.
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And I said, Well, that's that's an interesting idea.
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But in the travel industry, we would package that together with like a rental car and inner island air and make a vacation package and then add the Trans-Pacific Air component as well to get them between Alaska and Hawaii.
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So he was taking all of my advice and got this business going.
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We ended up getting married less than a year after we met.
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And his business just kept growing and growing.
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And I kept it with my business, but was still like his advisor.
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And eventually the scheduled air carriers that were serving the Alaska-Hawaii market with nonstop flights decided to just stop their nonstop flights.
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And that left the business with no way to get the passengers between Alaska and Hawaii.
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So we were faced with what do we do?
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Should we just shut the doors?
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We were putting the payroll for the company on our personal credit cards, taking cash advances because we didn't have any income from that business.
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And we had a kind of a heart-to-heart talk and said, we need to figure this out because Alaskans really love Hawaii and they really want this fast and economical way to get there on the nonstop flights.
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So we got to figure this out.
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So we decided to keep forging ahead.
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And soon after that, my husband found a jet that had time on it.
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It was actually running some charters between Anchorage and Tokyo.
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And in between those flights, there was enough time to run to Hawaii and back.
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So, and the plane was actually based in Honolulu.
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So he negotiated a contract with that airline, and we chartered the entire plane.
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And this was a DC 8.
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We're not talking about a little corporate jet with 12 or 20 passengers.
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It was like almost 200 passengers.
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And this was a major risk.
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And people thought we were crazy because it was a summertime charter.
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And I just got out the spreadsheets, you know, and looked at the statistics of how many passengers had we actually carried in the summer months between Alaska and Hawaii in the previous years.
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And the math added up.
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So we said, okay, we can do this.
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This makes sense.
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So we forged ahead.
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It was a success.
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And so there was our new business model.
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And that gave us the fuel to continue chartering more jets, bigger jets.
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We ended up with wide-body jets several times a week between Alaska and Hawaii.
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So that was the beginning.
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We named the company Hawaiian Vacation.
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And it had a 25-year run.
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And it, as you said, mid-eight digits annually in revenue.
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It was incredible.
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But there's more to the story, but I'm going to stop there.
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You probably have a question.
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That's so outstanding.
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And Rao, when people hear eight-figure business or sold to Alaska Airlines, which we'll come to, they naturally focus on the outcome.
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And what do you think you completely misunderstood at the time about what it took to build Hawaiian vacations?
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Oh, we had no idea what we were getting into, really.
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Because yes, it sounds very simple and in a retrospect, it it's this beautiful story.
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But at the time, it was painful.
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It was kind of miserable at times because I closed my business because this growing business and the risks that we were taking required my full attention.
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So it was mom and pop, John and Ral, running this business.
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And we did a lot of things very wrong.
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And we we were learning every day.
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But mostly the misery came from the fact that we were trying to do it all ourselves.
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We were the heart and soul of the business.
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And we kept hiring more and more people because these charters were carrying hundreds of people, thousands of people a week.
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And that was a huge amount of business.
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But we didn't have anything established in order to serve that kind of market.
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And so our customers were not happy with us.
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We were hiring staff, we didn't train them well.
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And we'll tell the story often of one of the people that I hired, we were just, we were so inundated, and the phones were ringing off the hook.
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And I hired her.
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And at the end of the interview, I said, Great, you're hired.
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There's a phone, it's ringing.
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Answer it and take a booking.
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And that was it.
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And she's like, Oh, okay.
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She ended up staying with us for like almost 20 years.
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But it was fantastic.
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But yeah, I realized that no, this is this is not good.
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This is not the way a business can can succeed.
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Maybe we'd limp along like this for a while, but it was either going to kill us because our our health was suffering.
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We were exhausted, we were overwhelmed.
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We were eating junk food at the office for dinner, along with our grade school age daughter.
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This was not a sustainable lifestyle.
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So we had to figure out how to fix it.
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And we didn't know.
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So I went back to college because I dropped out of college several years before.
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And I started studying organizational management and read books.
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And we talked with our mentors.
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And thankfully, one of our early mentors was Robert Kiyosaki before he wrote Rich Dead Poor Dad.
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He was in Anchorage giving classes on the weekends.
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And I started taking classes from him in early 1987.
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Got John into the classes.
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We both started studying with him.
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And I remember having lunch with him on the big island in 1994, I think it was in the spring.
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And we were telling him about what we were doing.
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And he says, Oh boy.
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He says, Yeah, you guys are doing great, but you need to get these two books.
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And it was the EMyth by Michael Gerber and The Great Game of Business by Jack Stack.
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And after lunch, we flew to Oahu and we went to the bookstore, bought those books, started reading them immediately.
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And a couple days later, we were back in Anchorage saying, okay, we're going to run this company differently now.
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And here's what we're doing.
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And took our staff aside and said, this is what we're doing, and it's what we've learned.
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And then it was, okay, how do we implement everything that we've learned?
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It sounds great in the book, but we need to actually make it happen.
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So there was a lot of stumbling on a lot of, you know, doing it wrong the first time and then eventually getting it right.
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But over a period of several years, we were able to get the business set up and organized in a way that we did not have to be at the center of everything anymore.
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And we had a dream.
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I had seen a home on the big island with this beautiful cobalt blue tiled roof and housing.
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That would be so wonderful to have a house like that someday as our vacation home.
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And I thought it was like maybe 20 years away.
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And John said, Oh no, we'll have that sooner than that.
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Well, in about five years later, we had a beautiful home.
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It was on Maui, not the big island.
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And the tile roof was kind of green and not pull-up blue.
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But anyway, it was this beautiful home.
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And we had that home for 27 years.
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We're actually in the process of selling it now, but we've enjoyed it for 27 years.
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Just an amazing lifestyle.
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But we had to work hard at creating the dream.
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That's why I call my business living the dream.
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And then figuring out how to actually do it.
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How can you run a business and still have the life that you really want to have?
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And now that we've accomplished that, I look at other entrepreneurs who are struggling, like we were, who are working way too hard too long.
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And I say, no, this is not right.
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They need to learn.
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I can teach them how to get out of that rut and have them reclaim their life so that they can have their wonderful, successful business and still have a life that they love.
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What a great duopoly, if we can say that.
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When you look back, what are two or three moments that completely changed the future of Hawaiian vacations?
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Well, that very first charter was definitely a game changer.
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That was an entire paradigm shift for the company.
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And taking the risk was huge.
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And a lot of people would not have done that.
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And over the years, we had many people saying, Oh, yeah, you guys are doing that.
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That's great.
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I thought about doing that myself.
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And then we said, Oh, well, that's great.
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But did you?
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They didn't take the action because it takes a tremendous amount of guts to do what we do.
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And at the time we just thought, well, one of my sayings was, it's okay.
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When we're signing multi-million dollar guarantees and stuff, I said, don't worry, John.
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We don't have that money.
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They can't take it from us.
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So we might as well go for it.
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We don't have anything to live with.
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It's just going out on the limb.
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But other very, very pivotal moments for the company were by the late 1990s, like 1999-ish.
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Again, we were struggling because we kept trying to hire more and more people.
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And we had gotten really good at training our people by then.
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We developed a two-week training program.
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We hired reservations agents in cohorts.
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Maybe the cohort was five, six, eight people, and put them through a two-week class before we would let them answer the phone, far a cry from just saying, hey, there's the phone, answer it, take a booking.
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We really trained them and we inculcated them with our culture message, which John came up with, which is W-E-R-Q, win-win, efficiency, responsibility, and quality.
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And we we made sure that they understood that these were the guidelines for our business.
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And that was wonderful.
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But in those days, taking a booking to a book a vacation to Hawaii meant you had to call Hawaiian vacations.
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You were either a travel agent talking to one of our agents on the phone, or you were a direct customer talking to one of our agents on the phone.
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And we kept hiring, we kept adding on more space.
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It was like, what are we going to end up with?
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How do we serve all these people?
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And the whole times were long.
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And we were realizing that people wanted to call us at weekends and at nights.
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I was like, how do we staff for this?
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And the overhead was pretty astronomical.
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So it came to us that we needed automation.
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And in the industry at that time, the only companies that had automated reservations were the big, big airlines.
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And they had those huge mainframe computers like Sabre and Apollo, were the big airline reservation systems.
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And if you were a travel agency, if you had one of those, or and obviously the airlines had them, but the average consumer couldn't use that system.
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You still had to call.
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You had to call your travel agent or call the airline.
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So we said, no, we want our customers to be able to access reservations with us via the internet.
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The internet was growing at that time, late 90s.
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But we couldn't find a product to just buy off the shelf.
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We had to find an IT company, a tech company who would build the system for us, write the software so that we could have our air service and hotels and condos and rail cars and inner island air and some activities, Polynesian cultural centers, luaus, all that kind of stuff, accessible online so that people could access and build their Hawaiian vacation whenever they wanted.
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That was a major undertaking and another big risk because we didn't know if it was going to work.
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We hired this company and they said, Oh, yeah, we can do this for you, but what if it didn't work?
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So again, we took a big, big gulp and spent the money and the time and the energy.
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And when we were able to flip that switch and start taking the bookings via the internet, that was a total game changer again for Hawaiian vacations.
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And the business really, really took off.
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And over time, we were able to cut the staff down.
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We had over 50 people in our employee at that time.
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And over a period of time, through attrition and so forth, we were able to like cut it in half and yet serve many, many more people.
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The volume was growing, but we didn't have to have the staff to do it.
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It was incredible.
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Those were some of the key principles that I teach now that using that automation is using leverage and a system and also customer service.
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We had to find a better way to serve our customers.
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And that's part of what I teach.
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Wow, so outstanding.
00:18:49.599 --> 00:18:54.960
And so, Rao, you've just described this incredible story of growth.
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But behind every business story is a personal story.
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So I guess the question is: who was Rao West before Hawaiian vacations became successful?
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What beliefs were driving you at that point?
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Well, she uh is a was a much different person than the Rao West that you're looking at now, believe me.
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I was not as confident.
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And I did have, though, I had a great role model in my father and my mother because they were entrepreneurs.
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They had a business of their own ever since before I was born.
00:19:36.160 --> 00:19:44.720
And so the the willingness to take a chance and to go out on your own and to go out on a limb, that was something that I had grown up with.
00:19:44.960 --> 00:19:49.759
So that I think was what I brought into this life.
00:19:50.000 --> 00:19:56.319
The fact that I started my own business at marketing consulting firm when I was in my mid-20s and female.
00:19:56.480 --> 00:20:01.680
A lot of people keep asking me, well, didn't you have any trouble starting a business as a female back in the in the 80s?
00:20:02.400 --> 00:20:04.400
No, I didn't have any trouble at all.
00:20:04.480 --> 00:20:05.119
And why?
00:20:05.359 --> 00:20:08.160
But it just never occurred to me that I would have trouble.
00:20:08.400 --> 00:20:11.200
So that was, I guess, part of my upbringing.
00:20:11.359 --> 00:20:13.839
So you just you go for it.
00:20:14.000 --> 00:20:18.400
You have a desire and you have an idea and you just figure it out.
00:20:18.640 --> 00:20:20.799
I didn't know how to run a business myself.
00:20:21.039 --> 00:20:24.480
In fact, I started turning my company into an advertising agency.
00:20:24.720 --> 00:20:28.000
I didn't know the first thing about being an advertising agency.
00:20:28.319 --> 00:20:29.359
But I just learned.
00:20:29.440 --> 00:20:31.680
And so I yeah, I made lots of mistakes.
00:20:31.839 --> 00:20:41.279
And and that was one of the other things that that has fueled me over the years was learning how to get comfortable with making mistakes.
00:20:41.519 --> 00:20:49.920
Because when you're in your mid-20s, mistakes are like, oh my God, life is going to end because I just made this huge mistake.
00:20:50.160 --> 00:20:53.039
I just wanted to dig a hole and crawl into it.
00:20:53.680 --> 00:21:04.240
And as the years passed and I made more and more of them and I lived, I realized, oh, okay, mistakes are good because I learned something from every mistake.
00:21:04.319 --> 00:21:06.319
And so now I'm comfortable with it.
00:21:06.400 --> 00:21:08.000
And in fact, I just kind of embrace it.
00:21:08.079 --> 00:21:13.200
It's like, oh, okay, there's another chance to make a mistake and just go with it.
00:21:13.440 --> 00:21:18.160
So yeah, I I had to grow up and I had to gain confidence.
00:21:18.400 --> 00:21:23.039
And I had to fall on my face a few times and pick myself back up.
00:21:23.279 --> 00:21:32.720
So there was some resilience that I guess I had in my core, and that carried me along the way because certainly it hasn't been always easy.
00:21:33.039 --> 00:21:38.559
Again, the story sounds beautiful and like a little fairy tale, but it was not always easy at all.
00:21:38.960 --> 00:21:44.000
Which is why it's just so commendable, Rao, what you you and John have done.
00:21:44.240 --> 00:21:53.039
And so Hawaiian Vacations eventually became an eight-figure business serving tens of thousands of travelers every single year.
00:21:53.519 --> 00:21:58.000
At the beginning it was an idea, but what convinced you to take such a big leap?
00:21:58.960 --> 00:22:04.240
Well It seemed like we it we had a couple of options.
00:22:04.640 --> 00:22:07.519
Like we could close the doors and just stop.
00:22:08.079 --> 00:22:13.200
And John could go back to selling real estate and I could keep doing my consulting business.
00:22:14.079 --> 00:22:20.559
But I think we get caught up in the the purpose and the mission.
00:22:20.880 --> 00:22:26.720
And you realize that there's something that you're serving that's bigger than yourself.
00:22:26.960 --> 00:22:36.079
Like the idea of providing for Alaskans the product that they really wanted was something that came from our hearts.
00:22:36.319 --> 00:22:46.000
And so we we just followed through with that and followed our gut and maybe listening to our higher power and saying, Yeah, go for it.
00:22:46.079 --> 00:22:46.720
You can do it.
00:22:46.799 --> 00:22:50.559
And in the worst case scenario is that we would fail.
00:22:50.799 --> 00:22:53.920
But again, what what do you lose if you fail?
00:22:54.240 --> 00:22:56.799
But what do you gain if you win?
00:22:57.119 --> 00:23:14.240
So if you let that that fear of failure stop you, which a lot of us do, and I I've done that many times in my life, but you you have to just sometimes just say, Oh, I'm just gonna I'm gonna bite the bullet and I'm gonna go for it to see what I can do.
00:23:14.720 --> 00:23:15.920
So yeah.
00:23:16.799 --> 00:23:17.440
Wow.
00:23:18.079 --> 00:23:26.480
And as we've alluded to before, most founders eventually become prisoners of the businesses that they created.
00:23:27.279 --> 00:23:32.960
And you've alluded to the fact you've experienced that whilst building Hawaiian vacations.
00:23:33.200 --> 00:23:34.319
What's another example?
00:23:34.400 --> 00:23:38.480
You mentioned hiring that staff member and immediately having them jump on the line.
00:23:38.559 --> 00:23:45.519
Like, what's another example where you felt like you're a prisoner of the business that you created, if that was the case?
00:24:57.400 --> 00:25:00.440
Yeah, well, vacations were a rarity.
00:25:00.680 --> 00:25:05.880
I remember one time my husband and our daughter went to Hawaii.
00:25:06.200 --> 00:25:11.160
He was always visiting properties, visits to Hawaii weren't weren't strictly vacation.
00:25:11.240 --> 00:25:17.240
He was always working with the relationships with our vendors, which is hotels and condominium groups and so forth.
00:25:17.400 --> 00:25:22.600
But I had to stay home because we had to put out a new tariff for the airline.
00:25:22.920 --> 00:25:26.840
We had to figure out the next year's worth of flights and products.
00:25:27.000 --> 00:25:37.400
And I ended up working like night and day in our home with actually one of our top managers and I guess snowed in at our home in Anchorage with a big snowstorm.
00:25:37.560 --> 00:25:42.759
And we were stuck just figuring out all these details and spreadsheets and all this kind of stuff.
00:25:43.000 --> 00:25:48.440
And I was doing that while my husband and daughter were having a good time in Hawaii.
00:25:48.600 --> 00:25:52.440
So, and that happened more than once that things like that.
00:25:52.600 --> 00:26:03.880
Or we'd be on a trip and I'd be on the phone talking to the office and working out the details for a big brochure that we're putting together or something, and just you'd you just don't get away from it.
00:26:04.040 --> 00:26:10.759
Maybe it looks like you're on vacation, but you're not because you're tethered to a computer or a phone line or something.
00:26:11.000 --> 00:26:15.640
So yeah, that there wasn't much freedom from the business.
00:26:16.200 --> 00:26:16.759
Right.
00:26:17.080 --> 00:26:22.519
And the business eventually became valuable enough to be acquired by Alaska Airlines.
00:26:22.920 --> 00:26:24.440
Growth is really a straight line.
00:26:24.600 --> 00:26:30.840
What was the hardest season at Hawaiian vacations that nobody saw from the outside?
00:26:32.040 --> 00:26:41.480
Well, that the period of rapid growth when we when we started the first charter, that was incredible because we didn't have the systems that we later developed.
00:26:41.640 --> 00:26:43.320
So things were chaotic.
00:26:43.480 --> 00:26:46.200
It's like when something would come up, like there was a flight delay.
00:26:46.279 --> 00:26:48.759
We didn't all oh what are we going to do?
00:26:48.840 --> 00:26:49.880
There's the delays.
00:26:50.040 --> 00:26:51.560
Oh, it's more than just a couple hours.
00:26:51.640 --> 00:26:57.000
Now it's going to be 12 hours because the flight crew came from Honolulu on the plane.
00:26:57.320 --> 00:27:01.400
And that same crew needed to turn around and go back to Honolulu.
00:27:01.880 --> 00:27:04.200
And the SAA has rules about that.
00:27:04.279 --> 00:27:12.120
The flight attendants and the pilots can't be on duty more than X number of hours at a time before they need what's called crew rest.
00:27:12.519 --> 00:27:24.920
So if the flight delay goes beyond a certain point and they can't make it all the way back to Hawaii within their prescribed limit, the plane has to sit on the ground in Anchorage until they get the rest.
00:27:25.080 --> 00:27:33.000
So now we have a plane load of passengers in Anchorage and another one in Hawaii waiting for the return flight.
00:27:33.160 --> 00:27:35.560
And it's a 12-hour delay.
00:27:35.800 --> 00:27:37.240
Oh, what do we do?
00:27:38.920 --> 00:27:42.759
These were very stressful times and we were just scrambling.
00:27:43.080 --> 00:27:45.080
Later, we figured it out.
00:27:45.160 --> 00:27:51.080
And our staff actually came, our team, we had a most amazing team because, well, we worked to build a team.
00:27:51.400 --> 00:27:55.320
I talked to you about that culture that we inculcated into the team.
00:27:55.640 --> 00:28:00.120
And they came up with a system that we had been teaching them how to use systems.
00:28:00.200 --> 00:28:03.320
And they said, okay, we need a flight delay manual.
00:28:03.480 --> 00:28:12.120
And we're going to include in that manual, we're going to make sure that we have water and diapers and formula and cash and vouchers to take to the airport.
00:28:12.200 --> 00:28:21.480
We're going to have a team on standby so that every flight we have people on duty that they know that they could be called in the middle, because our flights last at like midnight.
00:28:21.720 --> 00:28:31.000
So our people would have to be like called at home at midnight to say flight delay, get to the airport and stop by the office and pick up all these supplies.
00:28:31.240 --> 00:28:39.960
And then we were able to serve these people that were at the Anchorage Airport in the middle of the night and no flight for another 12 hours.
00:28:40.040 --> 00:28:40.759
What are they going to do?
00:28:40.840 --> 00:28:42.519
Just sleep on the floor at the airport?
00:28:42.680 --> 00:28:47.960
That we had to arrange hotels and we had to give them meal vouchers, or sometimes the meal vouchers didn't work very well.
00:28:48.040 --> 00:28:54.759
So we just gave them cash, like whatever we had to do to make sure that the customers were, well, maybe they're not happy because it's a delay.
00:28:54.840 --> 00:28:59.320
So nobody's happy, but at least they knew that we cared and that we were taking care of them.
00:28:59.480 --> 00:29:09.400
So that was the kind of thing that we struggled and then we kind of like broke through and okay, here's a system that would can make this workable.
00:29:09.560 --> 00:29:17.240
And flight delays, whenever they happen, then became a matter of routine and not a stressful, chaotic situation.
00:29:20.840 --> 00:29:25.480
Today you teach founders to stop being operators and to become owners.
00:29:25.880 --> 00:29:36.200
Looking back at Hawaiian vacations, when did that identity shift from operator to owner happen for you personally?
00:29:36.840 --> 00:29:38.360
It was a gradual shift.
00:29:38.519 --> 00:29:41.880
It wasn't a snap your fingers and overnight it happened.
00:29:42.200 --> 00:29:44.759
It took like five years, really.
00:29:45.560 --> 00:29:49.080
So it started with that lunch with Robert Kiyosaki.
00:29:49.560 --> 00:29:53.320
And it ended, that was in, like I said, the spring of 94.
00:29:53.560 --> 00:30:05.080
And five years later, we recognized that we were ready to hire a chief operating officer and a chief financial officer to take hold for the reins and run the business for us.
00:30:05.240 --> 00:30:19.080
And we handed them our baby and we handed them all the systems, all the processes, our culture, all the everything that we had built and the team, and said, okay, here you go.
00:30:19.240 --> 00:30:21.160
This is how we want you to run it.
00:30:21.400 --> 00:30:35.240
But these what we used another Robert Kayosaki lesson, which was a fruit bowl theory of business, which is you create the bowl, which is has a static shape and it's made of something solid like wood or china or metal.
00:30:35.560 --> 00:30:37.800
And you don't vary from that.
00:30:37.960 --> 00:30:39.160
That shape stays firm.
00:30:39.320 --> 00:30:44.279
But inside the bowl, the fruit can be organized, arranged in a number of ways.
00:30:44.519 --> 00:30:46.200
So they they were the fruit.
00:30:46.440 --> 00:30:49.160
We gave them the bowl and said, okay, here's the fruit bowl.
00:30:49.400 --> 00:30:51.960
And don't go outside this bowl.
00:30:52.279 --> 00:30:59.320
And then we let them be creative and they grew the business even more, which was a little bit of an ego blow for me.
00:30:59.400 --> 00:31:03.720
But but yet I was happy because it certainly meant money in the bank for us.
00:31:03.880 --> 00:31:06.279
So it had it was it was that gradual shift.
00:31:06.360 --> 00:31:17.560
And I did need to mention one of it, one other thing, and that is that in about 1996, we recognized that we needed some advice from other mentors.
00:31:18.200 --> 00:31:24.519
And we used an example from my family's business where they got an outside board of directors.
00:31:25.080 --> 00:31:33.240
People who were not owners in the business, but they could advise how the business was growing and running.
00:31:33.480 --> 00:31:43.160
And so I looked around Alaska and I identified three people that I thought would be like eight members to have on our board.
00:31:43.400 --> 00:31:45.880
And we approached them and all three said yes.
00:31:46.120 --> 00:31:54.600
One was a former bank president, one was the CEO of the largest grocery store chain in Alaska, and the other one was a leader in Alaska Tourism.
00:31:55.000 --> 00:32:00.120
And we got them to agree to work with us and give us advice.
00:32:00.200 --> 00:32:08.840
We met with them like two or three times a year and had all our departments give reports to them so that they knew everything that was going on, all of our financials.
00:32:09.160 --> 00:32:18.680
And they were the ones that helped us figure out that we we were be ready to step aside if we did X, Y, and Z.
00:32:19.080 --> 00:32:30.040
And the other the lesson that I didn't mention earlier was the one that we got from the Jack Stack book, the great game of business, because all the systems and everything came from Michael Gerber.
00:32:30.200 --> 00:32:34.200
But what Jack Stack taught us was open book management.
00:32:34.440 --> 00:32:39.000
And he said in his book, share your financials with your team.
00:32:39.320 --> 00:32:41.800
That was a rather revolutionary idea.
00:32:42.040 --> 00:32:47.720
And most of our fellow business associates in Alaska said, No, don't do that.
00:32:47.800 --> 00:32:48.840
That's that's crazy.
00:32:49.000 --> 00:32:52.200
Don't share your financials with your employees.
00:34:05.080 --> 00:34:05.880
Come on.
00:34:06.200 --> 00:34:07.320
But we did.
00:34:07.800 --> 00:34:10.280
And it was one of the most brilliant moves we made.
00:34:10.599 --> 00:34:15.639
Because what what we did, well, we had to teach them how to read a financial statement.
00:34:15.800 --> 00:34:18.599
Because for one thing, they we said PL and they went, huh?
00:34:20.360 --> 00:34:22.200
So we thought, oh, okay.
00:34:22.360 --> 00:34:24.200
They're not financially literate.
00:34:24.440 --> 00:34:29.720
So we set up the little classes and I would teach them line by line, go through the financial statements.
00:34:29.800 --> 00:34:31.480
This is what all these numbers mean.
00:34:31.639 --> 00:34:38.840
And what that did was that it opened their eyes and they realized, oh, this is what it takes to make the business successful.
00:34:39.079 --> 00:34:42.920
And then we went back to our WERQ that John had come up with.
00:34:43.079 --> 00:34:49.880
And that win-win was that when the company wins and we achieve our goals, you're gonna win too.
00:34:50.119 --> 00:34:53.720
And then we demonstrated it by passing out bonuses.
00:34:54.119 --> 00:35:03.480
We would do fun things like we set a goal for a month, and if that goal was met, we'd pass out hundred dollar bills at the staff meeting.
00:35:03.720 --> 00:35:06.200
And boy, did that create excitement.
00:35:06.280 --> 00:35:13.240
And it just entirely created this team alignment that was magical, just magical.
00:35:13.960 --> 00:35:15.159
So yeah.
00:35:16.280 --> 00:35:22.599
Wow, and bro, so you often say that businesses should run without depending on the founder.
00:35:23.159 --> 00:35:31.480
What systems specifically did you build inside of Hawaiian Vacations that finally gave you the confidence to let go?
00:35:31.639 --> 00:35:34.359
And was it a five-year run of building those systems?
00:35:34.599 --> 00:35:37.639
Mention it took five years before you then let go.
00:35:38.279 --> 00:35:38.759
Yes.
00:35:38.919 --> 00:35:40.599
And again, it was gradual.
00:35:40.839 --> 00:35:46.439
So the systems started with how to take a booking, but that's the basic one.
00:35:46.519 --> 00:35:49.159
It's like, okay, here's how you answer the phone.
00:35:49.319 --> 00:35:51.719
You say, Aloha, Hawaiian vacations.
00:35:51.879 --> 00:35:53.719
This is Ral, how may I help you?
00:35:53.879 --> 00:35:55.480
It's like the script.
00:35:55.799 --> 00:36:04.679
And then you just go through, write down everything that the a sales agent would need to know in order to take a booking.
00:36:04.839 --> 00:36:08.279
They needed to be taught how to use an in-house reservation system.
00:36:08.439 --> 00:36:10.199
So they needed to learn how to use that.
00:36:10.279 --> 00:36:15.159
So you do you take pictures of the screen, and this this is what it looks like.
00:36:15.319 --> 00:36:23.639
And so when you're making a booking, you do this and then you do that, just step by step, really detailed, step-by-step instructions.
00:36:23.799 --> 00:36:26.839
So you start with that and then you go to the next system.
00:36:27.000 --> 00:36:31.479
Like, okay, now you need to make sure that the hotels know who's coming.
00:36:31.639 --> 00:36:33.879
You've you've booked a hotel or a condo.
00:36:34.039 --> 00:36:41.799
Now now you have to communicate that information to them so that when these people show up in Hawaii, property knows to expect them, right?
00:36:41.959 --> 00:36:44.599
So that there's a whole nother set of systems for that.
00:36:44.839 --> 00:36:49.319
And then managing the inventory of each flight, that's another system.
00:36:49.559 --> 00:36:52.599
The financial systems, that's a whole nother set of systems.
00:36:52.759 --> 00:37:00.119
So it's you go through the entire company, department by department, and make sure that every role is spelled out.
00:37:00.279 --> 00:37:09.159
And then one of the key things that I learned along the way was that it wasn't just the what to do that you needed to teach them.
00:37:09.399 --> 00:37:12.519
You needed to also teach them how you think.
00:37:13.239 --> 00:37:19.719
So I think it was in the email that he that he sent, Michael Gerber said, you need to learn how to duplicate yourself.
00:37:20.039 --> 00:37:23.639
Well, so you have to think, okay, well, what do I need to duplicate?
00:37:23.719 --> 00:37:28.519
What what is it about me that I need to create a clone of how do I do that?
00:37:28.839 --> 00:37:36.999
And one time it was my marketing team said to me, How did you know that we needed to increase the advertising spending right now?
00:37:37.239 --> 00:37:46.839
Because I said we had a situation and and I just said, Yeah, we need to we need to bump up the spend on we did radio and television and print advertising in Alaska.
00:37:46.999 --> 00:37:50.439
That was the primary way of getting the word out to our market.
00:37:51.319 --> 00:37:52.599
And it worked.
00:37:52.839 --> 00:37:56.919
And so they went, well, how did you know that that was the right thing to do?
00:37:57.479 --> 00:38:00.439
And my answer was, well, I don't know.
00:38:00.519 --> 00:38:01.879
I I just knew.
00:38:02.119 --> 00:38:02.919
I just knew.
00:38:03.319 --> 00:38:06.359
And then I went, oh, okay.
00:38:06.759 --> 00:38:14.279
I need to figure out how I can teach them how to figure that out for themselves in order to duplicate myself.
00:38:14.519 --> 00:38:18.439
So I had to really do some internal introspection.
00:38:18.759 --> 00:38:20.039
Well, how did I know?
00:38:20.279 --> 00:38:23.319
Because again, my first response was just well, I just knew.
00:38:23.879 --> 00:38:26.999
Well, it took me probably two or three weeks to figure it out.
00:38:27.239 --> 00:38:33.799
And and finally, I came up with the fact that oh, I was watching our sales.
00:38:34.279 --> 00:38:44.679
And then I came up with a formula that, okay, if our sales volume was dropping three days in a row, that indicates a trend.
00:38:44.919 --> 00:38:50.599
So that trend indicates that we need to increase the advertising to reverse the trend.
00:38:50.919 --> 00:38:56.119
So part of what I teach also is tracking all of your data, tracking your performance.
00:38:56.439 --> 00:39:00.279
We knew every day what our sales volume was.
00:39:00.359 --> 00:39:04.119
We knew what each each reservations agent was doing every day.
00:39:04.279 --> 00:39:09.079
We had statistics coming out our eyeballs and with lots of reports.
00:39:09.239 --> 00:39:15.799
And sometimes we had to change what the reports were measuring because, like, oh, okay, that that particular measurement isn't doing anything for us.
00:39:15.879 --> 00:39:17.479
Let's measure something else.
00:39:17.799 --> 00:39:30.279
But in the end, when you're able to figure out your thought process and translate that into a teachable formula, now you've really duplicated yourself.
00:39:30.439 --> 00:39:31.799
And that was pivotal.
00:39:32.199 --> 00:39:34.759
So culture, and you've alluded to it as well.
00:39:34.919 --> 00:39:40.359
Culture seems to have been one of the hidden engines behind Hawaiian vacations.
00:39:40.679 --> 00:39:40.839
Yes.
00:39:41.239 --> 00:39:48.039
You mentioned showing your team the numbers and having them understand how to do a PL and the bonuses.
00:39:49.159 --> 00:39:55.879
How did you build a team that cared as much about the company as you cared about the company?
00:39:56.359 --> 00:39:58.039
Wow, that's an excellent question.
00:39:58.199 --> 00:40:13.399
And it's the thing I'm probably most proud of our run with Hawaiian Vacations, is that our team embraced our company and our mission and our vision just incredibly.
00:40:13.639 --> 00:40:18.039
We called ourselves the Ohana, which is family in Hawaiian.
00:40:18.279 --> 00:40:23.079
And I I think there's several reasons why it worked so well.
00:40:23.319 --> 00:40:28.279
One of them I've already mentioned, which is that we made it win-win and we shared the numbers with them.
00:40:28.359 --> 00:40:30.599
And so they could see that we were winning.
00:40:30.679 --> 00:40:39.399
And then when they got the four and five-digit checks as bonuses, then they really came home to them, how important that was.
00:40:40.119 --> 00:40:52.359
But I think that we also carried with us our love of what we were doing, our passion for providing this product to Alaskans.
00:40:52.519 --> 00:40:53.799
We loved Hawaii.
00:40:53.959 --> 00:40:55.879
We loved sharing it with people.
00:40:56.119 --> 00:41:01.239
And and in the reverse, there were Hawaiians that would come to Alaska and we loved that.
00:41:01.639 --> 00:41:07.239
And I think our our passion and our enthusiasm was contagious.
00:41:07.559 --> 00:41:13.319
And another thing that we did is that we treated our people like Ohana.
00:41:13.959 --> 00:41:15.559
They were family to us.
00:41:15.799 --> 00:41:17.159
We cared about them.
00:41:17.399 --> 00:41:18.759
And they could tell that.
00:41:18.919 --> 00:41:23.719
They could tell that we were not just treating them like numbers in some large corporation.
00:41:23.879 --> 00:41:27.479
And like I said, we grew to like about 50-ish people.
00:41:27.719 --> 00:41:29.479
So it's not a huge organization.
00:41:29.639 --> 00:41:33.799
It's not tiny, but we were still very close.
00:41:34.199 --> 00:41:39.079
And we celebrated birthdays, we celebrated holidays, we did a number of things.
00:41:39.479 --> 00:41:50.759
And every time we won, we would every year we would have a bonus party when when we saw the the year's results, and everybody got their bonuses, which we would give to them one by one.
00:41:50.919 --> 00:41:58.519
We would call them into like John's office, and the two of us would sit down with them and we would say, This is your bonus for this year.
00:41:58.839 --> 00:42:01.159
And oftentimes the tears would flow.
00:42:01.319 --> 00:42:05.239
I remember one time I said, This is the down payment on our house.
00:42:05.559 --> 00:42:20.599
And that kind of thing is something that you just can't put a number on that, that that level of heart and that level of caring and what it means to a person to be part of something like that.
00:42:20.839 --> 00:42:32.279
We we created the alignment that I often, when I'm teaching us, I talk about that you can have a, you know, like in Alaska dog sled team, you can have a bunch of dogs harnessed in front of your sled.
00:42:32.359 --> 00:42:40.039
But if they start taking off in different directions, yeah, the sled will probably just like fall over.
00:42:40.279 --> 00:42:42.439
And that's not an aligned team.
00:42:42.679 --> 00:42:52.599
But by making sure that everybody understood the direction that we were going and what it meant to be working together to get there, we had amazing alignment.
00:42:52.839 --> 00:42:55.879
And I think that that was one of the secrets to our success.
00:42:55.959 --> 00:42:57.399
And it was part of the culture.
00:42:57.639 --> 00:43:07.159
And because of the college classes that I had taken about organizational culture, I learned the importance of really building that into the company.
00:43:07.239 --> 00:43:09.559
And so we stressed our culture a lot.
00:43:09.719 --> 00:43:12.039
And it was incredibly intentional.
00:43:12.439 --> 00:43:14.199
And I think that it paid off.
00:43:14.359 --> 00:43:31.159
And Alaska Airlines would not have been interested in buying us if we were just some company that was operating flights to Hawaii and they could just come in and compete with us and just basically run us out of the market because they did a better job.
00:43:31.399 --> 00:43:49.159
No, we were doing such a good job with our team and with keeping our customers not just happy but delighted that Alaska Airlines figured out that if they wanted to come into our market, they would have to buy us rather than win the market because we would be tough to beat.
00:43:49.479 --> 00:43:59.879
And we had already been competed with by Hawaiian Airlines and Northwest Airlines, and we won both times because our team was like unbeatable.
00:44:00.279 --> 00:44:07.239
And however, Alaska Airlines was much a much more formidable competitor.
00:44:07.799 --> 00:44:14.839
And we knew that their pockets were deeper than ours, and ultimately the war would probably go in in their favor.
00:44:15.159 --> 00:44:17.239
We wouldn't go out easily.
00:44:17.399 --> 00:44:20.679
So they they'd have to really fight hard to win that market.
00:44:21.079 --> 00:44:31.639
But again, if we didn't have such a good product and such a good team and culture, it would have been easy for them to just beat us and then we would have ended up with nothing.
00:44:31.959 --> 00:44:38.919
But in the end, we we made the pitch to Alaska Airlines that, hey, you should you should buy this market instead of winning it.
00:44:39.159 --> 00:44:40.919
It'll save you money in the long run.
00:44:40.999 --> 00:44:42.039
And so they did.
00:44:42.599 --> 00:44:43.719
So outstanding.
00:44:43.959 --> 00:44:54.039
Looking back at Hawaiian vacations, what would you say were the three systems that made the business scalable instead of just bigger?
00:44:54.679 --> 00:44:58.519
Oh, well, the first was definitely the automation.
00:44:58.759 --> 00:44:59.239
Definitely.
00:45:00.039 --> 00:45:07.319
The in-house automation to begin with, and then converting it to the online internet-based reservation system was was huge.
00:45:07.639 --> 00:45:21.399
And then the way that we trained our people, that system that we put in place to make sure that we we invested two weeks of training in every person that that joined our staff, that was huge, I think.
00:45:21.559 --> 00:45:33.639
And then the entire system that we had around the win-win philosophy and creating the bonuses and making sure that everybody would get a piece of the pie if we won.
00:45:33.799 --> 00:45:39.799
I think that those were those three things together made us that unbeatable combination.
00:45:40.279 --> 00:45:40.839
So good.
00:45:40.999 --> 00:45:44.679
So, Rao, you have your organized to optimize framework.
00:45:44.919 --> 00:45:46.679
Love the naming of that, by the way.
00:45:46.919 --> 00:45:52.199
And that's come from lived experience that Hawaiian vacations rather than theory.
00:45:52.599 --> 00:46:00.039
If you walked into a founder's business right now, what are the first signs that they're still trapped as the operator?
00:46:01.399 --> 00:46:01.719
Yeah.
00:46:01.959 --> 00:46:11.799
When they're making too many decisions and that they're the ones that have to put out the fires, all the questions and troubleshooting lands back on them, their shoulders.
00:46:11.959 --> 00:46:13.559
They can't take a vacation.
00:46:13.799 --> 00:46:20.679
Or I've I've talked to many operators who say, well, I can be gone for like a week, maybe two weeks, but not beyond that, or things will fall apart.
00:46:20.839 --> 00:46:23.079
Yeah, they're definitely too much in the middle of.
00:46:23.639 --> 00:46:25.879
It so that that's the first sign.
00:46:26.119 --> 00:46:29.239
And I take a look at do they have systems?
00:46:29.399 --> 00:46:34.359
What what most businesses have some kind of system, but is it a good enough system?
00:46:34.519 --> 00:46:35.559
Is it efficient?
00:46:35.799 --> 00:46:48.359
Is it is it something that everyone in the organization really understands how the work flows from bringing in a customer or a client to all the way through to delivering the product?
00:46:48.519 --> 00:46:55.639
Is it something that makes sense and that is visible to everyone so that they know what needs to be done?
00:46:55.879 --> 00:46:58.359
Are the roles clearly defined?
00:46:58.599 --> 00:47:01.799
And does everybody understand what their job is?
00:47:02.119 --> 00:47:04.679
Do they understand what a good job looks like?
00:47:04.919 --> 00:47:07.159
Are they tracking their their data?
00:47:07.319 --> 00:47:09.959
Do they have measurements as to their performance?
00:47:10.199 --> 00:47:11.959
And does everybody know that?
00:47:12.999 --> 00:47:17.799
Are those measurements visible to everyone so that they can jump on board?
00:47:17.959 --> 00:47:21.319
Lots of things like that are pretty evident.
00:47:21.559 --> 00:47:37.719
So when I when I start with a coaching program, I I do a six-month coaching program where I spend the first day, a whole day, I'll go to their business and go into the company with them and take a look at everything.
00:47:37.799 --> 00:47:44.439
And then I can assess what's going on and see where the where the holes are that need to be plugged.
00:47:44.839 --> 00:47:46.119
So so great.
00:47:50.839 --> 00:48:02.599
If someone believes, our overachievers out there believe that the answer is simply work harder, what would you say that they've misunderstood about sustainable growth?
00:48:03.159 --> 00:48:09.239
Well, how much harder can you work to grow your business any further?
00:48:09.559 --> 00:48:11.319
How much energy do you have?
00:48:11.399 --> 00:48:17.159
Or is there some kind of limit to the time and energy that you have to grow this business?
00:48:17.399 --> 00:48:28.759
Because if you want the business to grow beyond your own capacity, it's going to get stuck at some point because there is going to be a time where 24 hours in a day isn't going to be enough.
00:48:28.919 --> 00:48:36.679
And you do still need to sleep, or you've totally ruined your health and then there's no business because you can't work because you're in a hospital or dead.
00:48:36.919 --> 00:48:41.559
So yeah, and there's a difference too between growing and scaling.
00:48:41.799 --> 00:48:46.599
So you can grow a business, which means you're just getting more and more revenue.
00:48:46.839 --> 00:48:56.439
But if the revenue is growing, but your overhead is also growing, like it was for us before we did the online reservation system, that was great.
00:48:56.519 --> 00:49:01.079
We kept growing, but the cost kept growing commensurately.
00:49:01.799 --> 00:49:11.079
And until we found that leverage point where we could grow the revenue without growing the overhead, that's true scaling.
00:49:11.319 --> 00:49:14.519
So there's a very huge distinction there.
00:49:14.679 --> 00:49:18.439
So do you want to grow your company or do you want to scale it?
00:49:18.679 --> 00:49:23.319
And how are you going to find that formula for actually scaling the business?
00:49:23.559 --> 00:49:32.759
And you can't do it without using some kind of leverage, which also involves systems and teams and the measurements and everything that I talk about.
00:49:33.479 --> 00:49:35.559
Rao, this is just so so great.
00:49:35.719 --> 00:49:37.559
Everything we're hearing so far.
00:49:37.959 --> 00:49:46.359
From the outside, selling Hawaiian vacations is probably seen as the ultimate measure of success.
00:49:46.759 --> 00:49:51.399
Looking back now, Rao, what part of that journey are you the most proud of?
00:49:51.879 --> 00:49:56.759
Yeah, I think building the culture and our Ohana.
00:49:57.159 --> 00:50:00.199
And it's been 18 years since we sold the business.
00:50:00.359 --> 00:50:04.599
And I still see Facebook posts of our Ohana getting together.
00:50:04.759 --> 00:50:16.119
Somebody will visit Oahu or someplace and say, hey, you just had dinner with one of the Ohana, the Ohana libs, and we all still love each other and still call each other Ohana after this much time.
00:50:16.439 --> 00:50:20.279
That is a true measure of success and win for me.
00:50:20.439 --> 00:50:22.519
It's just, it warms my heart.
00:50:22.839 --> 00:50:25.159
And we got to learn on your word today, Ohana.
00:50:25.479 --> 00:50:26.439
That's that's awesome.
00:50:26.679 --> 00:50:43.159
So, Rao, if you could sit down with every single entrepreneur right now who's exhausted, overwhelmed, and wondering if building a business is costing too much, what would you want them to know, drawing on your own experience, building Hawaiian vacations?
00:50:43.879 --> 00:50:47.639
Then it would want them to know that they don't have to do that.
00:50:48.039 --> 00:50:52.439
They do not have to sacrifice their life for their business.
00:50:52.759 --> 00:50:55.959
In fact, it's I believe it's wrong to do that.
00:50:56.199 --> 00:51:01.159
That they deserve better, and there are ways to get out of that rut.
00:51:01.479 --> 00:51:04.519
And there is never a dead end.
00:51:04.759 --> 00:51:09.799
So many of these entrepreneurs feel like they're stuck and there's no other way to get out of it.
00:51:09.959 --> 00:51:11.559
And it's just not true.
00:51:11.799 --> 00:51:26.279
And I would love to talk to each and every one of them and open their eyes to the possibilities that they can have a beautiful life, they can define their own, what living the dream looks like for them, and have a successful business too.
00:51:26.519 --> 00:51:27.639
It's possible.
00:51:28.439 --> 00:51:34.279
And Rao, so I wanted to ask this for about half an hour and I kept like body popped in.
00:51:34.359 --> 00:51:35.639
So I'm just gonna ask it now.
00:51:35.799 --> 00:51:45.399
There's this there's this true line that I I see between risk, regret, and mindset.
00:51:47.159 --> 00:51:53.639
So throughout the entirety of this conversation, you've spoken about these huge opportunities.
00:51:53.799 --> 00:52:01.079
I was gonna say obstacles, these huge opportunities that are cloaked as risks, and you've just gone for them.
00:52:01.319 --> 00:52:05.239
And I guess the question is what is what is the thought?
00:52:05.799 --> 00:52:16.199
I'm thinking of the the the founder that's listening to this and has all these big goals, and then it's the risk part that they can't hurry over.
00:52:16.999 --> 00:52:29.719
Talk me about your mindset, your your thought process about taking on the risk versus the regret that will happen if you don't take on the risk, and the mindset to take on the risk.
00:52:30.119 --> 00:52:30.759
Yeah.
00:52:31.319 --> 00:52:43.719
Well, I yes, you have to be able to take a risk, but I also want to caution that there are calculated risks.
00:52:44.039 --> 00:52:50.599
So there are some risks that maybe are ones that you should shy away from, which we did from time to time.
00:52:50.919 --> 00:52:56.999
There was one time when we contemplated buying a plane ourselves instead of just chartering these jets.
00:52:57.159 --> 00:52:59.079
And we had spent a lot of money.
00:52:59.319 --> 00:53:04.839
We designed the livery for the plane, the paint scheme on the outside, and we're all excited.
00:53:04.919 --> 00:53:12.599
And we were going to do this huge, much bigger risk than we'd ever taken before by buying a white-body jet.
00:53:13.239 --> 00:53:15.399
And we got right down to the wire.
00:53:15.639 --> 00:53:18.119
And I remember my husband called me.
00:53:18.199 --> 00:53:19.799
He was in some boardroom.
00:53:19.879 --> 00:53:23.399
I think he was in Chicago, I don't remember exactly, but I think it was Chicago.
00:53:23.479 --> 00:53:26.199
And he says, I'm in a room with 20 attorneys.
00:53:26.359 --> 00:53:33.399
And here I've got my representatives and two or like two or three of them, and then a room of 20 attorneys.
00:53:33.559 --> 00:53:36.439
And I said, just walk away.
00:53:36.759 --> 00:53:38.759
Just walk away right now.
00:53:38.999 --> 00:53:43.799
It's it's it's not gonna look good if we stay in this.
00:53:44.039 --> 00:53:46.999
And that was one of the best decisions that we ever made.
00:53:47.159 --> 00:53:51.319
So sometimes it is advisable not to take the risk.
00:53:51.559 --> 00:53:58.759
So you have to do your homework, you have to study the numbers and and rely on your gut too.
00:53:58.839 --> 00:54:03.879
That was definitely my gut that was saying a room full of attorneys and two or three of them.
00:54:04.759 --> 00:54:07.079
This math did not work out right at all.
00:54:08.279 --> 00:54:09.879
It's not gonna go in our favor.
00:54:10.439 --> 00:54:18.359
So, yeah, it's great to be able to take that gulp and that leap of faith and to just go for it.
00:54:18.679 --> 00:54:22.439
But don't do it like blindly, like you're gonna hurl yourself off a cliff.
00:54:22.679 --> 00:54:26.999
Make sure that there's that a reasonable chance of success before you do that.
00:54:27.159 --> 00:54:36.679
And so do the math, do the homework, and then listen to your gut and then go for it if it's if it feels right and if the numbers look right.
00:54:37.079 --> 00:54:37.719
Awesome.
00:54:37.879 --> 00:54:58.919
One of the themes of purpose-driven success, Rao, from my perspective anyway, is building a life that's aligned with your values rather than just chasing external markers that somewhere down the line you figure out, oh, they weren't that important as we're sometimes made to think.
00:54:59.559 --> 00:55:10.359
After everything that you've built, from Hawaiian vacations to helping founders today, bro, how do you define success today?
00:55:10.999 --> 00:55:12.359
Yeah, that's a great question.
00:55:12.439 --> 00:55:14.999
And my definition of success keeps changing.
00:55:15.159 --> 00:55:17.319
It's it's an evolving concept.
00:55:17.559 --> 00:55:22.599
And yes, certainly there was a time in my life where the success was very numbers-driven.
00:55:22.999 --> 00:55:26.039
How much money in the bank or how what's our income?
00:55:26.119 --> 00:55:30.999
And can we afford to buy a second home on Maui and have a yacht and those kinds of things?
00:55:31.079 --> 00:55:32.919
That's very monetary.
00:55:33.159 --> 00:55:41.879
But then you get beyond that and you start thinking of success in terms of your life, life's mission, your life's purpose.
00:55:42.039 --> 00:55:44.759
And am I fulfilling my purpose?
00:55:45.079 --> 00:55:46.439
Am I reaching people?
00:55:46.679 --> 00:55:48.279
Am I making an impact?
00:55:48.519 --> 00:55:52.439
And as you've asked me a few times, what would I say to entrepreneurs?
00:55:52.679 --> 00:55:54.679
That's what's driving me now.
00:55:54.999 --> 00:56:02.039
If if I can reach the people that need to hear this message, that is success for me.
00:56:02.199 --> 00:56:07.719
And if I can do it in a way that I can sustain this business financially, that's great.
00:56:07.959 --> 00:56:19.319
But I'm not as much motivated by making millions doing this as I am about reaching millions of people and impacting their lives, making a difference.
00:56:19.559 --> 00:56:25.319
That's what drives me, and that's what my definition of success is more about today.
00:56:25.879 --> 00:56:27.559
So outstanding, Raoul.
00:56:27.719 --> 00:56:30.359
And this is we're gonna wrap up with this next question.
00:56:30.439 --> 00:56:35.719
And I'm looking at it thinking, I hope this isn't a copy and paste, but let's see what happens, as in already covered.
00:56:35.879 --> 00:56:44.599
If you could go back, Rao, to the day that Hawaiian vacations first became more successful than you could ever imagine.
00:56:45.159 --> 00:56:54.519
Knowing everything that you know now, what would you tell that version of yourself about success, freedom, and what actually matters?
00:56:55.159 --> 00:56:55.799
Wow.
00:56:56.599 --> 00:56:58.199
Let me give that a minute here.
00:56:58.439 --> 00:57:23.399
I I just think that that person that me 20, 30 years ago, didn't really have a clue what success of that magnitude meant and what that would feel like, and what that would mean that we could do for ourselves, for our children, for our ohana, and for our community.
00:57:23.639 --> 00:57:29.079
Because when we reach that level of monetary success, we were able to give back.
00:57:29.399 --> 00:57:31.959
We have been very philanthropic.
00:57:32.119 --> 00:57:37.559
We've donated millions to causes that we feel very strongly about.
00:57:37.799 --> 00:57:52.519
And to be able to reach that point in your life where you can have everything that you want, and you're also able to give to others, as I said, our family, our Ohana, that family as well, and to our greater community.
00:57:53.399 --> 00:57:56.759
I didn't have a concept what that would feel like.
00:57:56.999 --> 00:57:58.839
And I I wish I had.
00:58:13.159 --> 00:58:14.599
So many great insights.
00:58:14.759 --> 00:58:26.439
And I think this is an episode that if you're listening to this episode, this is one of those where you want to set your diary to listen to it again, and then set your diary to listen to it again, and set your diary to do what?
00:58:26.599 --> 00:58:27.479
To listen to it again.
00:58:27.559 --> 00:58:31.479
Because there's so many incredible insights in this episode.
00:58:31.559 --> 00:58:36.839
So, Rao, again, thank you so much for your share, your wisdom, your generosity.
00:58:37.159 --> 00:58:39.319
It's just been so, so outstanding.
00:58:39.559 --> 00:58:51.399
Rao, if somebody is listening to this and they think in, and they're thinking they want to learn more from you, work with you, have you as a coach perhaps, where do we send them to find out more about you?
00:58:51.959 --> 00:58:53.479
Oh, well, I love that question.
00:58:53.559 --> 00:58:54.119
Thank you, Mal.
00:58:54.599 --> 00:59:10.359
Well, RaoWest.com is my website, and we've developed a diagnostic that owners can take as a little eight-question, three-minute quiz that will help them pinpoint where are they the bottleneck?
00:59:10.519 --> 00:59:13.959
What are they really the bottleneck or are they doing pretty well?
00:59:14.119 --> 00:59:17.879
And this three-minute little diagnostic can give them an idea.
00:59:18.039 --> 00:59:19.879
And then we can talk.
00:59:19.959 --> 00:59:32.119
I'd love to re to hear from all of you and reach out to me through my website and take the owner-diagnostic.com and get in touch.
00:59:32.359 --> 00:59:36.999
I I have knowledge that I'm very wanting to share with you.
00:59:37.239 --> 00:59:39.159
So don't be shy.
00:59:39.639 --> 00:59:40.199
Absolutely.
00:59:40.359 --> 00:59:41.319
Do not be shy.
00:59:41.639 --> 00:59:44.519
Rao, have an amazing rest of today or tonight.
00:59:44.599 --> 00:59:49.639
I know it's pretty late over there in Australia, and a superb speaking too, like I mentioned.
00:59:49.719 --> 00:59:50.199
All the best.
00:59:50.359 --> 00:59:51.079
Ciao.
00:59:51.559 --> 00:59:52.679
Thank you so much, Val.
00:59:55.079 --> 00:59:58.439
Thank you for listening to Purpose Driven Success with Mo Salami.
00:59:58.759 --> 01:00:02.679
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01:00:02.839 --> 01:00:05.879
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01:00:06.039 --> 01:00:10.199
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01:00:10.359 --> 01:00:17.079
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01:00:17.239 --> 01:00:24.599
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01:00:24.919 --> 01:00:33.479
Work on your mindset, work on your skill set, and always move in the direction of the result you want before you see the result you want.
01:00:33.639 --> 01:00:37.159
And until next time, do the best you can consistently.
01:00:37.479 --> 01:00:38.279
Ciao.
00:00:00.800 --> 00:00:17.199
Alaska Airlines would not have been interested in buying us if we were just some some company that was operating flights to Hawaii and they could just come in and compete with us and just basically run us out of the market because they did a better job.
00:00:17.440 --> 00:00:17.760
No.
00:00:18.160 --> 00:00:35.280
We were doing such a good job with our team and with keeping our customers not just happy but delighted that Alaska Airlines figured out that if they wanted to come into our market, they would have to buy us rather than win the market because we would be tough to beat.
00:00:35.520 --> 00:00:41.520
And we had already been competed with by Hawaiian Airlines and Northwest Airlines.
00:00:41.679 --> 00:00:43.280
And we won both times.
00:00:43.520 --> 00:00:45.679
Because our team was like unbeatable.
00:00:46.320 --> 00:00:59.600
And however, Alaska Airlines was a much more formidable competitor, and we knew that their pockets were deeper than ours, and ultimately the war would probably go in in their favor.
00:01:17.760 --> 00:01:20.079
I'm your host, Mo Salami.
00:01:20.480 --> 00:01:33.760
Every week we dive into real conversations with high-achieving founders and leaders, uncovering the mindsets, strategies, and takeaways that help you define and achieve success on your own terms.
00:01:35.439 --> 00:01:41.040
Welcome to another episode of Purpose Driven Success.
00:01:42.159 --> 00:01:46.079
And I'm just gonna let my guest intro speak for themselves.
00:01:46.239 --> 00:01:48.560
We're certainly in for a great one today.
00:01:48.879 --> 00:01:56.719
Rao West is our guest, and Rao West is a best-selling author, entrepreneur, and business mentor.
00:01:57.200 --> 00:02:08.080
And Rao's 45-year career has been defined by one mission: helping founders build businesses that run without consuming their lives.
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And Rao is best known for co-founding and scaling Hawaiian vacations into an eight-figure travel company that moved over 30,000 passengers annually before being acquired by Alaska Airlines.
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Today, Rao teaches entrepreneurs how to transition from overwhelmed operators to true business owners using her organized to optimize framework.
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Rao's work blends systems, leadership, and culture to help founders create scalable, self-sustaining businesses and reclaim their freedom, clarity, and purpose in both their work and their life.
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Rao West, welcome to Purpose-Driven Success.
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So glad you're here.
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Thanks, Mouse.
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That was lovely.
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Rao, just before we start, where are you right now?
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What's the time?
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And I know you're in a pretty awesome part of the world right now.
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I'm in Australia in a small town called Bathurst in New South Wales, where my daughter and her three children and her husband live.
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And we're here visiting them for a few weeks during their winter break.
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Yeah.
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So let's just jump in.
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So, Rao, as we're just having a quick chat in a prequel, I was expressing that I really like your backstory.
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And for listeners who haven't heard your story before, Raoul, take us back to the beginning.
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How did Hawaiian vacations come to exist and get started as a first a simple business idea and then become one of Alaska's largest Hawaiian travel companies?
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So over to you.
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I guess I should start at the very, very beginning.
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I was born and raised in Seattle.
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And in my mid-20s, I left the family business, which was the last for tourism business, and moved to Alaska, ended up in Anchorage, and there I met this young man across the hall from me.
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I opened my own marketing consulting firm that specialized in tourism because that's what I knew.
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And he was in real estate.
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But some of my first clients were located in Hawaii because they were selling to Alaskans.
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So I had to go to Hawaii to familiarize myself with their products so I could represent them.
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Well, he saw me flying off on these business trips to Hawaii.
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And he's like, You're going to Hawaii again?
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I need to figure out how to get in on this because I like Hawaii.
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I want to go there on a business trip for free.
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And so he was picking my brain.
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And he came up with the idea of representing Alaskans who owned vacation rental condos in Hawaii.
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Quite a few Alaskans do.
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And so he said, Well, I'll be your rental agent, and people can come to me and I'll book them and he'll get me a commission.
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So he started that.
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And I said, Well, that's that's an interesting idea.
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But in the travel industry, we would package that together with like a rental car and inner island air and make a vacation package and then add the Trans-Pacific Air component as well to get them between Alaska and Hawaii.
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So he was taking all of my advice and got this business going.
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We ended up getting married less than a year after we met.
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And his business just kept growing and growing.
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And I kept it with my business, but was still like his advisor.
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And eventually the scheduled air carriers that were serving the Alaska-Hawaii market with nonstop flights decided to just stop their nonstop flights.
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And that left the business with no way to get the passengers between Alaska and Hawaii.
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So we were faced with what do we do?
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Should we just shut the doors?
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We were putting the payroll for the company on our personal credit cards, taking cash advances because we didn't have any income from that business.
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And we had a kind of a heart-to-heart talk and said, we need to figure this out because Alaskans really love Hawaii and they really want this fast and economical way to get there on the nonstop flights.
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So we got to figure this out.
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So we decided to keep forging ahead.
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And soon after that, my husband found a jet that had time on it.
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It was actually running some charters between Anchorage and Tokyo.
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And in between those flights, there was enough time to run to Hawaii and back.
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So, and the plane was actually based in Honolulu.
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So he negotiated a contract with that airline, and we chartered the entire plane.
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And this was a DC 8.
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We're not talking about a little corporate jet with 12 or 20 passengers.
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It was like almost 200 passengers.
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And this was a major risk.
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And people thought we were crazy because it was a summertime charter.
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And I just got out the spreadsheets, you know, and looked at the statistics of how many passengers had we actually carried in the summer months between Alaska and Hawaii in the previous years.
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And the math added up.
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So we said, okay, we can do this.
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This makes sense.
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So we forged ahead.
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It was a success.
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And so there was our new business model.
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And that gave us the fuel to continue chartering more jets, bigger jets.
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We ended up with wide-body jets several times a week between Alaska and Hawaii.
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So that was the beginning.
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We named the company Hawaiian Vacation.
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And it had a 25-year run.
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And it, as you said, mid-eight digits annually in revenue.
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It was incredible.
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But there's more to the story, but I'm going to stop there.
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You probably have a question.
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That's so outstanding.
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And Rao, when people hear eight-figure business or sold to Alaska Airlines, which we'll come to, they naturally focus on the outcome.
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And what do you think you completely misunderstood at the time about what it took to build Hawaiian vacations?
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Oh, we had no idea what we were getting into, really.
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Because yes, it sounds very simple and in a retrospect, it it's this beautiful story.
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But at the time, it was painful.
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It was kind of miserable at times because I closed my business because this growing business and the risks that we were taking required my full attention.
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So it was mom and pop, John and Ral, running this business.
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And we did a lot of things very wrong.
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And we we were learning every day.
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But mostly the misery came from the fact that we were trying to do it all ourselves.
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We were the heart and soul of the business.
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And we kept hiring more and more people because these charters were carrying hundreds of people, thousands of people a week.
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And that was a huge amount of business.
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But we didn't have anything established in order to serve that kind of market.
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And so our customers were not happy with us.
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We were hiring staff, we didn't train them well.
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And we'll tell the story often of one of the people that I hired, we were just, we were so inundated, and the phones were ringing off the hook.
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And I hired her.
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And at the end of the interview, I said, Great, you're hired.
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There's a phone, it's ringing.
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Answer it and take a booking.
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And that was it.
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And she's like, Oh, okay.
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She ended up staying with us for like almost 20 years.
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But it was fantastic.
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But yeah, I realized that no, this is this is not good.
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This is not the way a business can can succeed.
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Maybe we'd limp along like this for a while, but it was either going to kill us because our our health was suffering.
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We were exhausted, we were overwhelmed.
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We were eating junk food at the office for dinner, along with our grade school age daughter.
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This was not a sustainable lifestyle.
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So we had to figure out how to fix it.
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And we didn't know.
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So I went back to college because I dropped out of college several years before.
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And I started studying organizational management and read books.
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And we talked with our mentors.
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And thankfully, one of our early mentors was Robert Kiyosaki before he wrote Rich Dead Poor Dad.
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He was in Anchorage giving classes on the weekends.
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And I started taking classes from him in early 1987.
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Got John into the classes.
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We both started studying with him.
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And I remember having lunch with him on the big island in 1994, I think it was in the spring.
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And we were telling him about what we were doing.
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And he says, Oh boy.
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He says, Yeah, you guys are doing great, but you need to get these two books.
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And it was the EMyth by Michael Gerber and The Great Game of Business by Jack Stack.
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And after lunch, we flew to Oahu and we went to the bookstore, bought those books, started reading them immediately.
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And a couple days later, we were back in Anchorage saying, okay, we're going to run this company differently now.
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And here's what we're doing.
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And took our staff aside and said, this is what we're doing, and it's what we've learned.
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And then it was, okay, how do we implement everything that we've learned?
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It sounds great in the book, but we need to actually make it happen.
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So there was a lot of stumbling on a lot of, you know, doing it wrong the first time and then eventually getting it right.
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But over a period of several years, we were able to get the business set up and organized in a way that we did not have to be at the center of everything anymore.
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And we had a dream.
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I had seen a home on the big island with this beautiful cobalt blue tiled roof and housing.
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That would be so wonderful to have a house like that someday as our vacation home.
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And I thought it was like maybe 20 years away.
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And John said, Oh no, we'll have that sooner than that.
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Well, in about five years later, we had a beautiful home.
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It was on Maui, not the big island.
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And the tile roof was kind of green and not pull-up blue.
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But anyway, it was this beautiful home.
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And we had that home for 27 years.
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We're actually in the process of selling it now, but we've enjoyed it for 27 years.
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Just an amazing lifestyle.
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But we had to work hard at creating the dream.
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That's why I call my business living the dream.
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And then figuring out how to actually do it.
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How can you run a business and still have the life that you really want to have?
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And now that we've accomplished that, I look at other entrepreneurs who are struggling, like we were, who are working way too hard too long.
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And I say, no, this is not right.
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They need to learn.
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I can teach them how to get out of that rut and have them reclaim their life so that they can have their wonderful, successful business and still have a life that they love.
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What a great duopoly, if we can say that.
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When you look back, what are two or three moments that completely changed the future of Hawaiian vacations?
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Well, that very first charter was definitely a game changer.
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That was an entire paradigm shift for the company.
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And taking the risk was huge.
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And a lot of people would not have done that.
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And over the years, we had many people saying, Oh, yeah, you guys are doing that.
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That's great.
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I thought about doing that myself.
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And then we said, Oh, well, that's great.
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But did you?
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They didn't take the action because it takes a tremendous amount of guts to do what we do.
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And at the time we just thought, well, one of my sayings was, it's okay.
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When we're signing multi-million dollar guarantees and stuff, I said, don't worry, John.
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We don't have that money.
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They can't take it from us.
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So we might as well go for it.
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We don't have anything to live with.
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It's just going out on the limb.
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But other very, very pivotal moments for the company were by the late 1990s, like 1999-ish.
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Again, we were struggling because we kept trying to hire more and more people.
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And we had gotten really good at training our people by then.
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We developed a two-week training program.
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We hired reservations agents in cohorts.
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Maybe the cohort was five, six, eight people, and put them through a two-week class before we would let them answer the phone, far a cry from just saying, hey, there's the phone, answer it, take a booking.
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We really trained them and we inculcated them with our culture message, which John came up with, which is W-E-R-Q, win-win, efficiency, responsibility, and quality.
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And we we made sure that they understood that these were the guidelines for our business.
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And that was wonderful.
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But in those days, taking a booking to a book a vacation to Hawaii meant you had to call Hawaiian vacations.
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You were either a travel agent talking to one of our agents on the phone, or you were a direct customer talking to one of our agents on the phone.
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And we kept hiring, we kept adding on more space.
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It was like, what are we going to end up with?
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How do we serve all these people?
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And the whole times were long.
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And we were realizing that people wanted to call us at weekends and at nights.
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I was like, how do we staff for this?
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And the overhead was pretty astronomical.
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So it came to us that we needed automation.
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And in the industry at that time, the only companies that had automated reservations were the big, big airlines.
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And they had those huge mainframe computers like Sabre and Apollo, were the big airline reservation systems.
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And if you were a travel agency, if you had one of those, or and obviously the airlines had them, but the average consumer couldn't use that system.
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You still had to call.
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You had to call your travel agent or call the airline.
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So we said, no, we want our customers to be able to access reservations with us via the internet.
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The internet was growing at that time, late 90s.
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But we couldn't find a product to just buy off the shelf.
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We had to find an IT company, a tech company who would build the system for us, write the software so that we could have our air service and hotels and condos and rail cars and inner island air and some activities, Polynesian cultural centers, luaus, all that kind of stuff, accessible online so that people could access and build their Hawaiian vacation whenever they wanted.
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That was a major undertaking and another big risk because we didn't know if it was going to work.
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We hired this company and they said, Oh, yeah, we can do this for you, but what if it didn't work?
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So again, we took a big, big gulp and spent the money and the time and the energy.
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And when we were able to flip that switch and start taking the bookings via the internet, that was a total game changer again for Hawaiian vacations.
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And the business really, really took off.
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And over time, we were able to cut the staff down.
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We had over 50 people in our employee at that time.
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And over a period of time, through attrition and so forth, we were able to like cut it in half and yet serve many, many more people.
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The volume was growing, but we didn't have to have the staff to do it.
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It was incredible.
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Those were some of the key principles that I teach now that using that automation is using leverage and a system and also customer service.
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We had to find a better way to serve our customers.
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And that's part of what I teach.
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Wow, so outstanding.
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And so, Rao, you've just described this incredible story of growth.
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But behind every business story is a personal story.
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So I guess the question is: who was Rao West before Hawaiian vacations became successful?
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What beliefs were driving you at that point?
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Well, she uh is a was a much different person than the Rao West that you're looking at now, believe me.
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I was not as confident.
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And I did have, though, I had a great role model in my father and my mother because they were entrepreneurs.
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They had a business of their own ever since before I was born.
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And so the the willingness to take a chance and to go out on your own and to go out on a limb, that was something that I had grown up with.
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So that I think was what I brought into this life.
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The fact that I started my own business at marketing consulting firm when I was in my mid-20s and female.
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A lot of people keep asking me, well, didn't you have any trouble starting a business as a female back in the in the 80s?
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No, I didn't have any trouble at all.
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And why?
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But it just never occurred to me that I would have trouble.
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So that was, I guess, part of my upbringing.
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So you just you go for it.
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You have a desire and you have an idea and you just figure it out.
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I didn't know how to run a business myself.
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In fact, I started turning my company into an advertising agency.
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I didn't know the first thing about being an advertising agency.
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But I just learned.
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And so I yeah, I made lots of mistakes.
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And and that was one of the other things that that has fueled me over the years was learning how to get comfortable with making mistakes.
00:20:41.519 --> 00:20:49.920
Because when you're in your mid-20s, mistakes are like, oh my God, life is going to end because I just made this huge mistake.
00:20:50.160 --> 00:20:53.039
I just wanted to dig a hole and crawl into it.
00:20:53.680 --> 00:21:04.240
And as the years passed and I made more and more of them and I lived, I realized, oh, okay, mistakes are good because I learned something from every mistake.
00:21:04.319 --> 00:21:06.319
And so now I'm comfortable with it.
00:21:06.400 --> 00:21:08.000
And in fact, I just kind of embrace it.
00:21:08.079 --> 00:21:13.200
It's like, oh, okay, there's another chance to make a mistake and just go with it.
00:21:13.440 --> 00:21:18.160
So yeah, I I had to grow up and I had to gain confidence.
00:21:18.400 --> 00:21:23.039
And I had to fall on my face a few times and pick myself back up.
00:21:23.279 --> 00:21:32.720
So there was some resilience that I guess I had in my core, and that carried me along the way because certainly it hasn't been always easy.
00:21:33.039 --> 00:21:38.559
Again, the story sounds beautiful and like a little fairy tale, but it was not always easy at all.
00:21:38.960 --> 00:21:44.000
Which is why it's just so commendable, Rao, what you you and John have done.
00:21:44.240 --> 00:21:53.039
And so Hawaiian Vacations eventually became an eight-figure business serving tens of thousands of travelers every single year.
00:21:53.519 --> 00:21:58.000
At the beginning it was an idea, but what convinced you to take such a big leap?
00:21:58.960 --> 00:22:04.240
Well It seemed like we it we had a couple of options.
00:22:04.640 --> 00:22:07.519
Like we could close the doors and just stop.
00:22:08.079 --> 00:22:13.200
And John could go back to selling real estate and I could keep doing my consulting business.
00:22:14.079 --> 00:22:20.559
But I think we get caught up in the the purpose and the mission.
00:22:20.880 --> 00:22:26.720
And you realize that there's something that you're serving that's bigger than yourself.
00:22:26.960 --> 00:22:36.079
Like the idea of providing for Alaskans the product that they really wanted was something that came from our hearts.
00:22:36.319 --> 00:22:46.000
And so we we just followed through with that and followed our gut and maybe listening to our higher power and saying, Yeah, go for it.
00:22:46.079 --> 00:22:46.720
You can do it.
00:22:46.799 --> 00:22:50.559
And in the worst case scenario is that we would fail.
00:22:50.799 --> 00:22:53.920
But again, what what do you lose if you fail?
00:22:54.240 --> 00:22:56.799
But what do you gain if you win?
00:22:57.119 --> 00:23:14.240
So if you let that that fear of failure stop you, which a lot of us do, and I I've done that many times in my life, but you you have to just sometimes just say, Oh, I'm just gonna I'm gonna bite the bullet and I'm gonna go for it to see what I can do.
00:23:14.720 --> 00:23:15.920
So yeah.
00:23:16.799 --> 00:23:17.440
Wow.
00:23:18.079 --> 00:23:26.480
And as we've alluded to before, most founders eventually become prisoners of the businesses that they created.
00:23:27.279 --> 00:23:32.960
And you've alluded to the fact you've experienced that whilst building Hawaiian vacations.
00:23:33.200 --> 00:23:34.319
What's another example?
00:23:34.400 --> 00:23:38.480
You mentioned hiring that staff member and immediately having them jump on the line.
00:23:38.559 --> 00:23:45.519
Like, what's another example where you felt like you're a prisoner of the business that you created, if that was the case?
00:24:57.400 --> 00:25:00.440
Yeah, well, vacations were a rarity.
00:25:00.680 --> 00:25:05.880
I remember one time my husband and our daughter went to Hawaii.
00:25:06.200 --> 00:25:11.160
He was always visiting properties, visits to Hawaii weren't weren't strictly vacation.
00:25:11.240 --> 00:25:17.240
He was always working with the relationships with our vendors, which is hotels and condominium groups and so forth.
00:25:17.400 --> 00:25:22.600
But I had to stay home because we had to put out a new tariff for the airline.
00:25:22.920 --> 00:25:26.840
We had to figure out the next year's worth of flights and products.
00:25:27.000 --> 00:25:37.400
And I ended up working like night and day in our home with actually one of our top managers and I guess snowed in at our home in Anchorage with a big snowstorm.
00:25:37.560 --> 00:25:42.759
And we were stuck just figuring out all these details and spreadsheets and all this kind of stuff.
00:25:43.000 --> 00:25:48.440
And I was doing that while my husband and daughter were having a good time in Hawaii.
00:25:48.600 --> 00:25:52.440
So, and that happened more than once that things like that.
00:25:52.600 --> 00:26:03.880
Or we'd be on a trip and I'd be on the phone talking to the office and working out the details for a big brochure that we're putting together or something, and just you'd you just don't get away from it.
00:26:04.040 --> 00:26:10.759
Maybe it looks like you're on vacation, but you're not because you're tethered to a computer or a phone line or something.
00:26:11.000 --> 00:26:15.640
So yeah, that there wasn't much freedom from the business.
00:26:16.200 --> 00:26:16.759
Right.
00:26:17.080 --> 00:26:22.519
And the business eventually became valuable enough to be acquired by Alaska Airlines.
00:26:22.920 --> 00:26:24.440
Growth is really a straight line.
00:26:24.600 --> 00:26:30.840
What was the hardest season at Hawaiian vacations that nobody saw from the outside?
00:26:32.040 --> 00:26:41.480
Well, that the period of rapid growth when we when we started the first charter, that was incredible because we didn't have the systems that we later developed.
00:26:41.640 --> 00:26:43.320
So things were chaotic.
00:26:43.480 --> 00:26:46.200
It's like when something would come up, like there was a flight delay.
00:26:46.279 --> 00:26:48.759
We didn't all oh what are we going to do?
00:26:48.840 --> 00:26:49.880
There's the delays.
00:26:50.040 --> 00:26:51.560
Oh, it's more than just a couple hours.
00:26:51.640 --> 00:26:57.000
Now it's going to be 12 hours because the flight crew came from Honolulu on the plane.
00:26:57.320 --> 00:27:01.400
And that same crew needed to turn around and go back to Honolulu.
00:27:01.880 --> 00:27:04.200
And the SAA has rules about that.
00:27:04.279 --> 00:27:12.120
The flight attendants and the pilots can't be on duty more than X number of hours at a time before they need what's called crew rest.
00:27:12.519 --> 00:27:24.920
So if the flight delay goes beyond a certain point and they can't make it all the way back to Hawaii within their prescribed limit, the plane has to sit on the ground in Anchorage until they get the rest.
00:27:25.080 --> 00:27:33.000
So now we have a plane load of passengers in Anchorage and another one in Hawaii waiting for the return flight.
00:27:33.160 --> 00:27:35.560
And it's a 12-hour delay.
00:27:35.800 --> 00:27:37.240
Oh, what do we do?
00:27:38.920 --> 00:27:42.759
These were very stressful times and we were just scrambling.
00:27:43.080 --> 00:27:45.080
Later, we figured it out.
00:27:45.160 --> 00:27:51.080
And our staff actually came, our team, we had a most amazing team because, well, we worked to build a team.
00:27:51.400 --> 00:27:55.320
I talked to you about that culture that we inculcated into the team.
00:27:55.640 --> 00:28:00.120
And they came up with a system that we had been teaching them how to use systems.
00:28:00.200 --> 00:28:03.320
And they said, okay, we need a flight delay manual.
00:28:03.480 --> 00:28:12.120
And we're going to include in that manual, we're going to make sure that we have water and diapers and formula and cash and vouchers to take to the airport.
00:28:12.200 --> 00:28:21.480
We're going to have a team on standby so that every flight we have people on duty that they know that they could be called in the middle, because our flights last at like midnight.
00:28:21.720 --> 00:28:31.000
So our people would have to be like called at home at midnight to say flight delay, get to the airport and stop by the office and pick up all these supplies.
00:28:31.240 --> 00:28:39.960
And then we were able to serve these people that were at the Anchorage Airport in the middle of the night and no flight for another 12 hours.
00:28:40.040 --> 00:28:40.759
What are they going to do?
00:28:40.840 --> 00:28:42.519
Just sleep on the floor at the airport?
00:28:42.680 --> 00:28:47.960
That we had to arrange hotels and we had to give them meal vouchers, or sometimes the meal vouchers didn't work very well.
00:28:48.040 --> 00:28:54.759
So we just gave them cash, like whatever we had to do to make sure that the customers were, well, maybe they're not happy because it's a delay.
00:28:54.840 --> 00:28:59.320
So nobody's happy, but at least they knew that we cared and that we were taking care of them.
00:28:59.480 --> 00:29:09.400
So that was the kind of thing that we struggled and then we kind of like broke through and okay, here's a system that would can make this workable.
00:29:09.560 --> 00:29:17.240
And flight delays, whenever they happen, then became a matter of routine and not a stressful, chaotic situation.
00:29:20.840 --> 00:29:25.480
Today you teach founders to stop being operators and to become owners.
00:29:25.880 --> 00:29:36.200
Looking back at Hawaiian vacations, when did that identity shift from operator to owner happen for you personally?
00:29:36.840 --> 00:29:38.360
It was a gradual shift.
00:29:38.519 --> 00:29:41.880
It wasn't a snap your fingers and overnight it happened.
00:29:42.200 --> 00:29:44.759
It took like five years, really.
00:29:45.560 --> 00:29:49.080
So it started with that lunch with Robert Kiyosaki.
00:29:49.560 --> 00:29:53.320
And it ended, that was in, like I said, the spring of 94.
00:29:53.560 --> 00:30:05.080
And five years later, we recognized that we were ready to hire a chief operating officer and a chief financial officer to take hold for the reins and run the business for us.
00:30:05.240 --> 00:30:19.080
And we handed them our baby and we handed them all the systems, all the processes, our culture, all the everything that we had built and the team, and said, okay, here you go.
00:30:19.240 --> 00:30:21.160
This is how we want you to run it.
00:30:21.400 --> 00:30:35.240
But these what we used another Robert Kayosaki lesson, which was a fruit bowl theory of business, which is you create the bowl, which is has a static shape and it's made of something solid like wood or china or metal.
00:30:35.560 --> 00:30:37.800
And you don't vary from that.
00:30:37.960 --> 00:30:39.160
That shape stays firm.
00:30:39.320 --> 00:30:44.279
But inside the bowl, the fruit can be organized, arranged in a number of ways.
00:30:44.519 --> 00:30:46.200
So they they were the fruit.
00:30:46.440 --> 00:30:49.160
We gave them the bowl and said, okay, here's the fruit bowl.
00:30:49.400 --> 00:30:51.960
And don't go outside this bowl.
00:30:52.279 --> 00:30:59.320
And then we let them be creative and they grew the business even more, which was a little bit of an ego blow for me.
00:30:59.400 --> 00:31:03.720
But but yet I was happy because it certainly meant money in the bank for us.
00:31:03.880 --> 00:31:06.279
So it had it was it was that gradual shift.
00:31:06.360 --> 00:31:17.560
And I did need to mention one of it, one other thing, and that is that in about 1996, we recognized that we needed some advice from other mentors.
00:31:18.200 --> 00:31:24.519
And we used an example from my family's business where they got an outside board of directors.
00:31:25.080 --> 00:31:33.240
People who were not owners in the business, but they could advise how the business was growing and running.
00:31:33.480 --> 00:31:43.160
And so I looked around Alaska and I identified three people that I thought would be like eight members to have on our board.
00:31:43.400 --> 00:31:45.880
And we approached them and all three said yes.
00:31:46.120 --> 00:31:54.600
One was a former bank president, one was the CEO of the largest grocery store chain in Alaska, and the other one was a leader in Alaska Tourism.
00:31:55.000 --> 00:32:00.120
And we got them to agree to work with us and give us advice.
00:32:00.200 --> 00:32:08.840
We met with them like two or three times a year and had all our departments give reports to them so that they knew everything that was going on, all of our financials.
00:32:09.160 --> 00:32:18.680
And they were the ones that helped us figure out that we we were be ready to step aside if we did X, Y, and Z.
00:32:19.080 --> 00:32:30.040
And the other the lesson that I didn't mention earlier was the one that we got from the Jack Stack book, the great game of business, because all the systems and everything came from Michael Gerber.
00:32:30.200 --> 00:32:34.200
But what Jack Stack taught us was open book management.
00:32:34.440 --> 00:32:39.000
And he said in his book, share your financials with your team.
00:32:39.320 --> 00:32:41.800
That was a rather revolutionary idea.
00:32:42.040 --> 00:32:47.720
And most of our fellow business associates in Alaska said, No, don't do that.
00:32:47.800 --> 00:32:48.840
That's that's crazy.
00:32:49.000 --> 00:32:52.200
Don't share your financials with your employees.
00:34:05.080 --> 00:34:05.880
Come on.
00:34:06.200 --> 00:34:07.320
But we did.
00:34:07.800 --> 00:34:10.280
And it was one of the most brilliant moves we made.
00:34:10.599 --> 00:34:15.639
Because what what we did, well, we had to teach them how to read a financial statement.
00:34:15.800 --> 00:34:18.599
Because for one thing, they we said PL and they went, huh?
00:34:20.360 --> 00:34:22.200
So we thought, oh, okay.
00:34:22.360 --> 00:34:24.200
They're not financially literate.
00:34:24.440 --> 00:34:29.720
So we set up the little classes and I would teach them line by line, go through the financial statements.
00:34:29.800 --> 00:34:31.480
This is what all these numbers mean.
00:34:31.639 --> 00:34:38.840
And what that did was that it opened their eyes and they realized, oh, this is what it takes to make the business successful.
00:34:39.079 --> 00:34:42.920
And then we went back to our WERQ that John had come up with.
00:34:43.079 --> 00:34:49.880
And that win-win was that when the company wins and we achieve our goals, you're gonna win too.
00:34:50.119 --> 00:34:53.720
And then we demonstrated it by passing out bonuses.
00:34:54.119 --> 00:35:03.480
We would do fun things like we set a goal for a month, and if that goal was met, we'd pass out hundred dollar bills at the staff meeting.
00:35:03.720 --> 00:35:06.200
And boy, did that create excitement.
00:35:06.280 --> 00:35:13.240
And it just entirely created this team alignment that was magical, just magical.
00:35:13.960 --> 00:35:15.159
So yeah.
00:35:16.280 --> 00:35:22.599
Wow, and bro, so you often say that businesses should run without depending on the founder.
00:35:23.159 --> 00:35:31.480
What systems specifically did you build inside of Hawaiian Vacations that finally gave you the confidence to let go?
00:35:31.639 --> 00:35:34.359
And was it a five-year run of building those systems?
00:35:34.599 --> 00:35:37.639
Mention it took five years before you then let go.
00:35:38.279 --> 00:35:38.759
Yes.
00:35:38.919 --> 00:35:40.599
And again, it was gradual.
00:35:40.839 --> 00:35:46.439
So the systems started with how to take a booking, but that's the basic one.
00:35:46.519 --> 00:35:49.159
It's like, okay, here's how you answer the phone.
00:35:49.319 --> 00:35:51.719
You say, Aloha, Hawaiian vacations.
00:35:51.879 --> 00:35:53.719
This is Ral, how may I help you?
00:35:53.879 --> 00:35:55.480
It's like the script.
00:35:55.799 --> 00:36:04.679
And then you just go through, write down everything that the a sales agent would need to know in order to take a booking.
00:36:04.839 --> 00:36:08.279
They needed to be taught how to use an in-house reservation system.
00:36:08.439 --> 00:36:10.199
So they needed to learn how to use that.
00:36:10.279 --> 00:36:15.159
So you do you take pictures of the screen, and this this is what it looks like.
00:36:15.319 --> 00:36:23.639
And so when you're making a booking, you do this and then you do that, just step by step, really detailed, step-by-step instructions.
00:36:23.799 --> 00:36:26.839
So you start with that and then you go to the next system.
00:36:27.000 --> 00:36:31.479
Like, okay, now you need to make sure that the hotels know who's coming.
00:36:31.639 --> 00:36:33.879
You've you've booked a hotel or a condo.
00:36:34.039 --> 00:36:41.799
Now now you have to communicate that information to them so that when these people show up in Hawaii, property knows to expect them, right?
00:36:41.959 --> 00:36:44.599
So that there's a whole nother set of systems for that.
00:36:44.839 --> 00:36:49.319
And then managing the inventory of each flight, that's another system.
00:36:49.559 --> 00:36:52.599
The financial systems, that's a whole nother set of systems.
00:36:52.759 --> 00:37:00.119
So it's you go through the entire company, department by department, and make sure that every role is spelled out.
00:37:00.279 --> 00:37:09.159
And then one of the key things that I learned along the way was that it wasn't just the what to do that you needed to teach them.
00:37:09.399 --> 00:37:12.519
You needed to also teach them how you think.
00:37:13.239 --> 00:37:19.719
So I think it was in the email that he that he sent, Michael Gerber said, you need to learn how to duplicate yourself.
00:37:20.039 --> 00:37:23.639
Well, so you have to think, okay, well, what do I need to duplicate?
00:37:23.719 --> 00:37:28.519
What what is it about me that I need to create a clone of how do I do that?
00:37:28.839 --> 00:37:36.999
And one time it was my marketing team said to me, How did you know that we needed to increase the advertising spending right now?
00:37:37.239 --> 00:37:46.839
Because I said we had a situation and and I just said, Yeah, we need to we need to bump up the spend on we did radio and television and print advertising in Alaska.
00:37:46.999 --> 00:37:50.439
That was the primary way of getting the word out to our market.
00:37:51.319 --> 00:37:52.599
And it worked.
00:37:52.839 --> 00:37:56.919
And so they went, well, how did you know that that was the right thing to do?
00:37:57.479 --> 00:38:00.439
And my answer was, well, I don't know.
00:38:00.519 --> 00:38:01.879
I I just knew.
00:38:02.119 --> 00:38:02.919
I just knew.
00:38:03.319 --> 00:38:06.359
And then I went, oh, okay.
00:38:06.759 --> 00:38:14.279
I need to figure out how I can teach them how to figure that out for themselves in order to duplicate myself.
00:38:14.519 --> 00:38:18.439
So I had to really do some internal introspection.
00:38:18.759 --> 00:38:20.039
Well, how did I know?
00:38:20.279 --> 00:38:23.319
Because again, my first response was just well, I just knew.
00:38:23.879 --> 00:38:26.999
Well, it took me probably two or three weeks to figure it out.
00:38:27.239 --> 00:38:33.799
And and finally, I came up with the fact that oh, I was watching our sales.
00:38:34.279 --> 00:38:44.679
And then I came up with a formula that, okay, if our sales volume was dropping three days in a row, that indicates a trend.
00:38:44.919 --> 00:38:50.599
So that trend indicates that we need to increase the advertising to reverse the trend.
00:38:50.919 --> 00:38:56.119
So part of what I teach also is tracking all of your data, tracking your performance.
00:38:56.439 --> 00:39:00.279
We knew every day what our sales volume was.
00:39:00.359 --> 00:39:04.119
We knew what each each reservations agent was doing every day.
00:39:04.279 --> 00:39:09.079
We had statistics coming out our eyeballs and with lots of reports.
00:39:09.239 --> 00:39:15.799
And sometimes we had to change what the reports were measuring because, like, oh, okay, that that particular measurement isn't doing anything for us.
00:39:15.879 --> 00:39:17.479
Let's measure something else.
00:39:17.799 --> 00:39:30.279
But in the end, when you're able to figure out your thought process and translate that into a teachable formula, now you've really duplicated yourself.
00:39:30.439 --> 00:39:31.799
And that was pivotal.
00:39:32.199 --> 00:39:34.759
So culture, and you've alluded to it as well.
00:39:34.919 --> 00:39:40.359
Culture seems to have been one of the hidden engines behind Hawaiian vacations.
00:39:40.679 --> 00:39:40.839
Yes.
00:39:41.239 --> 00:39:48.039
You mentioned showing your team the numbers and having them understand how to do a PL and the bonuses.
00:39:49.159 --> 00:39:55.879
How did you build a team that cared as much about the company as you cared about the company?
00:39:56.359 --> 00:39:58.039
Wow, that's an excellent question.
00:39:58.199 --> 00:40:13.399
And it's the thing I'm probably most proud of our run with Hawaiian Vacations, is that our team embraced our company and our mission and our vision just incredibly.
00:40:13.639 --> 00:40:18.039
We called ourselves the Ohana, which is family in Hawaiian.
00:40:18.279 --> 00:40:23.079
And I I think there's several reasons why it worked so well.
00:40:23.319 --> 00:40:28.279
One of them I've already mentioned, which is that we made it win-win and we shared the numbers with them.
00:40:28.359 --> 00:40:30.599
And so they could see that we were winning.
00:40:30.679 --> 00:40:39.399
And then when they got the four and five-digit checks as bonuses, then they really came home to them, how important that was.
00:40:40.119 --> 00:40:52.359
But I think that we also carried with us our love of what we were doing, our passion for providing this product to Alaskans.
00:40:52.519 --> 00:40:53.799
We loved Hawaii.
00:40:53.959 --> 00:40:55.879
We loved sharing it with people.
00:40:56.119 --> 00:41:01.239
And and in the reverse, there were Hawaiians that would come to Alaska and we loved that.
00:41:01.639 --> 00:41:07.239
And I think our our passion and our enthusiasm was contagious.
00:41:07.559 --> 00:41:13.319
And another thing that we did is that we treated our people like Ohana.
00:41:13.959 --> 00:41:15.559
They were family to us.
00:41:15.799 --> 00:41:17.159
We cared about them.
00:41:17.399 --> 00:41:18.759
And they could tell that.
00:41:18.919 --> 00:41:23.719
They could tell that we were not just treating them like numbers in some large corporation.
00:41:23.879 --> 00:41:27.479
And like I said, we grew to like about 50-ish people.
00:41:27.719 --> 00:41:29.479
So it's not a huge organization.
00:41:29.639 --> 00:41:33.799
It's not tiny, but we were still very close.
00:41:34.199 --> 00:41:39.079
And we celebrated birthdays, we celebrated holidays, we did a number of things.
00:41:39.479 --> 00:41:50.759
And every time we won, we would every year we would have a bonus party when when we saw the the year's results, and everybody got their bonuses, which we would give to them one by one.
00:41:50.919 --> 00:41:58.519
We would call them into like John's office, and the two of us would sit down with them and we would say, This is your bonus for this year.
00:41:58.839 --> 00:42:01.159
And oftentimes the tears would flow.
00:42:01.319 --> 00:42:05.239
I remember one time I said, This is the down payment on our house.
00:42:05.559 --> 00:42:20.599
And that kind of thing is something that you just can't put a number on that, that that level of heart and that level of caring and what it means to a person to be part of something like that.
00:42:20.839 --> 00:42:32.279
We we created the alignment that I often, when I'm teaching us, I talk about that you can have a, you know, like in Alaska dog sled team, you can have a bunch of dogs harnessed in front of your sled.
00:42:32.359 --> 00:42:40.039
But if they start taking off in different directions, yeah, the sled will probably just like fall over.
00:42:40.279 --> 00:42:42.439
And that's not an aligned team.
00:42:42.679 --> 00:42:52.599
But by making sure that everybody understood the direction that we were going and what it meant to be working together to get there, we had amazing alignment.
00:42:52.839 --> 00:42:55.879
And I think that that was one of the secrets to our success.
00:42:55.959 --> 00:42:57.399
And it was part of the culture.
00:42:57.639 --> 00:43:07.159
And because of the college classes that I had taken about organizational culture, I learned the importance of really building that into the company.
00:43:07.239 --> 00:43:09.559
And so we stressed our culture a lot.
00:43:09.719 --> 00:43:12.039
And it was incredibly intentional.
00:43:12.439 --> 00:43:14.199
And I think that it paid off.
00:43:14.359 --> 00:43:31.159
And Alaska Airlines would not have been interested in buying us if we were just some company that was operating flights to Hawaii and they could just come in and compete with us and just basically run us out of the market because they did a better job.
00:43:31.399 --> 00:43:49.159
No, we were doing such a good job with our team and with keeping our customers not just happy but delighted that Alaska Airlines figured out that if they wanted to come into our market, they would have to buy us rather than win the market because we would be tough to beat.
00:43:49.479 --> 00:43:59.879
And we had already been competed with by Hawaiian Airlines and Northwest Airlines, and we won both times because our team was like unbeatable.
00:44:00.279 --> 00:44:07.239
And however, Alaska Airlines was much a much more formidable competitor.
00:44:07.799 --> 00:44:14.839
And we knew that their pockets were deeper than ours, and ultimately the war would probably go in in their favor.
00:44:15.159 --> 00:44:17.239
We wouldn't go out easily.
00:44:17.399 --> 00:44:20.679
So they they'd have to really fight hard to win that market.
00:44:21.079 --> 00:44:31.639
But again, if we didn't have such a good product and such a good team and culture, it would have been easy for them to just beat us and then we would have ended up with nothing.
00:44:31.959 --> 00:44:38.919
But in the end, we we made the pitch to Alaska Airlines that, hey, you should you should buy this market instead of winning it.
00:44:39.159 --> 00:44:40.919
It'll save you money in the long run.
00:44:40.999 --> 00:44:42.039
And so they did.
00:44:42.599 --> 00:44:43.719
So outstanding.
00:44:43.959 --> 00:44:54.039
Looking back at Hawaiian vacations, what would you say were the three systems that made the business scalable instead of just bigger?
00:44:54.679 --> 00:44:58.519
Oh, well, the first was definitely the automation.
00:44:58.759 --> 00:44:59.239
Definitely.
00:45:00.039 --> 00:45:07.319
The in-house automation to begin with, and then converting it to the online internet-based reservation system was was huge.
00:45:07.639 --> 00:45:21.399
And then the way that we trained our people, that system that we put in place to make sure that we we invested two weeks of training in every person that that joined our staff, that was huge, I think.
00:45:21.559 --> 00:45:33.639
And then the entire system that we had around the win-win philosophy and creating the bonuses and making sure that everybody would get a piece of the pie if we won.
00:45:33.799 --> 00:45:39.799
I think that those were those three things together made us that unbeatable combination.
00:45:40.279 --> 00:45:40.839
So good.
00:45:40.999 --> 00:45:44.679
So, Rao, you have your organized to optimize framework.
00:45:44.919 --> 00:45:46.679
Love the naming of that, by the way.
00:45:46.919 --> 00:45:52.199
And that's come from lived experience that Hawaiian vacations rather than theory.
00:45:52.599 --> 00:46:00.039
If you walked into a founder's business right now, what are the first signs that they're still trapped as the operator?
00:46:01.399 --> 00:46:01.719
Yeah.
00:46:01.959 --> 00:46:11.799
When they're making too many decisions and that they're the ones that have to put out the fires, all the questions and troubleshooting lands back on them, their shoulders.
00:46:11.959 --> 00:46:13.559
They can't take a vacation.
00:46:13.799 --> 00:46:20.679
Or I've I've talked to many operators who say, well, I can be gone for like a week, maybe two weeks, but not beyond that, or things will fall apart.
00:46:20.839 --> 00:46:23.079
Yeah, they're definitely too much in the middle of.
00:46:23.639 --> 00:46:25.879
It so that that's the first sign.
00:46:26.119 --> 00:46:29.239
And I take a look at do they have systems?
00:46:29.399 --> 00:46:34.359
What what most businesses have some kind of system, but is it a good enough system?
00:46:34.519 --> 00:46:35.559
Is it efficient?
00:46:35.799 --> 00:46:48.359
Is it is it something that everyone in the organization really understands how the work flows from bringing in a customer or a client to all the way through to delivering the product?
00:46:48.519 --> 00:46:55.639
Is it something that makes sense and that is visible to everyone so that they know what needs to be done?
00:46:55.879 --> 00:46:58.359
Are the roles clearly defined?
00:46:58.599 --> 00:47:01.799
And does everybody understand what their job is?
00:47:02.119 --> 00:47:04.679
Do they understand what a good job looks like?
00:47:04.919 --> 00:47:07.159
Are they tracking their their data?
00:47:07.319 --> 00:47:09.959
Do they have measurements as to their performance?
00:47:10.199 --> 00:47:11.959
And does everybody know that?
00:47:12.999 --> 00:47:17.799
Are those measurements visible to everyone so that they can jump on board?
00:47:17.959 --> 00:47:21.319
Lots of things like that are pretty evident.
00:47:21.559 --> 00:47:37.719
So when I when I start with a coaching program, I I do a six-month coaching program where I spend the first day, a whole day, I'll go to their business and go into the company with them and take a look at everything.
00:47:37.799 --> 00:47:44.439
And then I can assess what's going on and see where the where the holes are that need to be plugged.
00:47:44.839 --> 00:47:46.119
So so great.
00:47:50.839 --> 00:48:02.599
If someone believes, our overachievers out there believe that the answer is simply work harder, what would you say that they've misunderstood about sustainable growth?
00:48:03.159 --> 00:48:09.239
Well, how much harder can you work to grow your business any further?
00:48:09.559 --> 00:48:11.319
How much energy do you have?
00:48:11.399 --> 00:48:17.159
Or is there some kind of limit to the time and energy that you have to grow this business?
00:48:17.399 --> 00:48:28.759
Because if you want the business to grow beyond your own capacity, it's going to get stuck at some point because there is going to be a time where 24 hours in a day isn't going to be enough.
00:48:28.919 --> 00:48:36.679
And you do still need to sleep, or you've totally ruined your health and then there's no business because you can't work because you're in a hospital or dead.
00:48:36.919 --> 00:48:41.559
So yeah, and there's a difference too between growing and scaling.
00:48:41.799 --> 00:48:46.599
So you can grow a business, which means you're just getting more and more revenue.
00:48:46.839 --> 00:48:56.439
But if the revenue is growing, but your overhead is also growing, like it was for us before we did the online reservation system, that was great.
00:48:56.519 --> 00:49:01.079
We kept growing, but the cost kept growing commensurately.
00:49:01.799 --> 00:49:11.079
And until we found that leverage point where we could grow the revenue without growing the overhead, that's true scaling.
00:49:11.319 --> 00:49:14.519
So there's a very huge distinction there.
00:49:14.679 --> 00:49:18.439
So do you want to grow your company or do you want to scale it?
00:49:18.679 --> 00:49:23.319
And how are you going to find that formula for actually scaling the business?
00:49:23.559 --> 00:49:32.759
And you can't do it without using some kind of leverage, which also involves systems and teams and the measurements and everything that I talk about.
00:49:33.479 --> 00:49:35.559
Rao, this is just so so great.
00:49:35.719 --> 00:49:37.559
Everything we're hearing so far.
00:49:37.959 --> 00:49:46.359
From the outside, selling Hawaiian vacations is probably seen as the ultimate measure of success.
00:49:46.759 --> 00:49:51.399
Looking back now, Rao, what part of that journey are you the most proud of?
00:49:51.879 --> 00:49:56.759
Yeah, I think building the culture and our Ohana.
00:49:57.159 --> 00:50:00.199
And it's been 18 years since we sold the business.
00:50:00.359 --> 00:50:04.599
And I still see Facebook posts of our Ohana getting together.
00:50:04.759 --> 00:50:16.119
Somebody will visit Oahu or someplace and say, hey, you just had dinner with one of the Ohana, the Ohana libs, and we all still love each other and still call each other Ohana after this much time.
00:50:16.439 --> 00:50:20.279
That is a true measure of success and win for me.
00:50:20.439 --> 00:50:22.519
It's just, it warms my heart.
00:50:22.839 --> 00:50:25.159
And we got to learn on your word today, Ohana.
00:50:25.479 --> 00:50:26.439
That's that's awesome.
00:50:26.679 --> 00:50:43.159
So, Rao, if you could sit down with every single entrepreneur right now who's exhausted, overwhelmed, and wondering if building a business is costing too much, what would you want them to know, drawing on your own experience, building Hawaiian vacations?
00:50:43.879 --> 00:50:47.639
Then it would want them to know that they don't have to do that.
00:50:48.039 --> 00:50:52.439
They do not have to sacrifice their life for their business.
00:50:52.759 --> 00:50:55.959
In fact, it's I believe it's wrong to do that.
00:50:56.199 --> 00:51:01.159
That they deserve better, and there are ways to get out of that rut.
00:51:01.479 --> 00:51:04.519
And there is never a dead end.
00:51:04.759 --> 00:51:09.799
So many of these entrepreneurs feel like they're stuck and there's no other way to get out of it.
00:51:09.959 --> 00:51:11.559
And it's just not true.
00:51:11.799 --> 00:51:26.279
And I would love to talk to each and every one of them and open their eyes to the possibilities that they can have a beautiful life, they can define their own, what living the dream looks like for them, and have a successful business too.
00:51:26.519 --> 00:51:27.639
It's possible.
00:51:28.439 --> 00:51:34.279
And Rao, so I wanted to ask this for about half an hour and I kept like body popped in.
00:51:34.359 --> 00:51:35.639
So I'm just gonna ask it now.
00:51:35.799 --> 00:51:45.399
There's this there's this true line that I I see between risk, regret, and mindset.
00:51:47.159 --> 00:51:53.639
So throughout the entirety of this conversation, you've spoken about these huge opportunities.
00:51:53.799 --> 00:52:01.079
I was gonna say obstacles, these huge opportunities that are cloaked as risks, and you've just gone for them.
00:52:01.319 --> 00:52:05.239
And I guess the question is what is what is the thought?
00:52:05.799 --> 00:52:16.199
I'm thinking of the the the founder that's listening to this and has all these big goals, and then it's the risk part that they can't hurry over.
00:52:16.999 --> 00:52:29.719
Talk me about your mindset, your your thought process about taking on the risk versus the regret that will happen if you don't take on the risk, and the mindset to take on the risk.
00:52:30.119 --> 00:52:30.759
Yeah.
00:52:31.319 --> 00:52:43.719
Well, I yes, you have to be able to take a risk, but I also want to caution that there are calculated risks.
00:52:44.039 --> 00:52:50.599
So there are some risks that maybe are ones that you should shy away from, which we did from time to time.
00:52:50.919 --> 00:52:56.999
There was one time when we contemplated buying a plane ourselves instead of just chartering these jets.
00:52:57.159 --> 00:52:59.079
And we had spent a lot of money.
00:52:59.319 --> 00:53:04.839
We designed the livery for the plane, the paint scheme on the outside, and we're all excited.
00:53:04.919 --> 00:53:12.599
And we were going to do this huge, much bigger risk than we'd ever taken before by buying a white-body jet.
00:53:13.239 --> 00:53:15.399
And we got right down to the wire.
00:53:15.639 --> 00:53:18.119
And I remember my husband called me.
00:53:18.199 --> 00:53:19.799
He was in some boardroom.
00:53:19.879 --> 00:53:23.399
I think he was in Chicago, I don't remember exactly, but I think it was Chicago.
00:53:23.479 --> 00:53:26.199
And he says, I'm in a room with 20 attorneys.
00:53:26.359 --> 00:53:33.399
And here I've got my representatives and two or like two or three of them, and then a room of 20 attorneys.
00:53:33.559 --> 00:53:36.439
And I said, just walk away.
00:53:36.759 --> 00:53:38.759
Just walk away right now.
00:53:38.999 --> 00:53:43.799
It's it's it's not gonna look good if we stay in this.
00:53:44.039 --> 00:53:46.999
And that was one of the best decisions that we ever made.
00:53:47.159 --> 00:53:51.319
So sometimes it is advisable not to take the risk.
00:53:51.559 --> 00:53:58.759
So you have to do your homework, you have to study the numbers and and rely on your gut too.
00:53:58.839 --> 00:54:03.879
That was definitely my gut that was saying a room full of attorneys and two or three of them.
00:54:04.759 --> 00:54:07.079
This math did not work out right at all.
00:54:08.279 --> 00:54:09.879
It's not gonna go in our favor.
00:54:10.439 --> 00:54:18.359
So, yeah, it's great to be able to take that gulp and that leap of faith and to just go for it.
00:54:18.679 --> 00:54:22.439
But don't do it like blindly, like you're gonna hurl yourself off a cliff.
00:54:22.679 --> 00:54:26.999
Make sure that there's that a reasonable chance of success before you do that.
00:54:27.159 --> 00:54:36.679
And so do the math, do the homework, and then listen to your gut and then go for it if it's if it feels right and if the numbers look right.
00:54:37.079 --> 00:54:37.719
Awesome.
00:54:37.879 --> 00:54:58.919
One of the themes of purpose-driven success, Rao, from my perspective anyway, is building a life that's aligned with your values rather than just chasing external markers that somewhere down the line you figure out, oh, they weren't that important as we're sometimes made to think.
00:54:59.559 --> 00:55:10.359
After everything that you've built, from Hawaiian vacations to helping founders today, bro, how do you define success today?
00:55:10.999 --> 00:55:12.359
Yeah, that's a great question.
00:55:12.439 --> 00:55:14.999
And my definition of success keeps changing.
00:55:15.159 --> 00:55:17.319
It's it's an evolving concept.
00:55:17.559 --> 00:55:22.599
And yes, certainly there was a time in my life where the success was very numbers-driven.
00:55:22.999 --> 00:55:26.039
How much money in the bank or how what's our income?
00:55:26.119 --> 00:55:30.999
And can we afford to buy a second home on Maui and have a yacht and those kinds of things?
00:55:31.079 --> 00:55:32.919
That's very monetary.
00:55:33.159 --> 00:55:41.879
But then you get beyond that and you start thinking of success in terms of your life, life's mission, your life's purpose.
00:55:42.039 --> 00:55:44.759
And am I fulfilling my purpose?
00:55:45.079 --> 00:55:46.439
Am I reaching people?
00:55:46.679 --> 00:55:48.279
Am I making an impact?
00:55:48.519 --> 00:55:52.439
And as you've asked me a few times, what would I say to entrepreneurs?
00:55:52.679 --> 00:55:54.679
That's what's driving me now.
00:55:54.999 --> 00:56:02.039
If if I can reach the people that need to hear this message, that is success for me.
00:56:02.199 --> 00:56:07.719
And if I can do it in a way that I can sustain this business financially, that's great.
00:56:07.959 --> 00:56:19.319
But I'm not as much motivated by making millions doing this as I am about reaching millions of people and impacting their lives, making a difference.
00:56:19.559 --> 00:56:25.319
That's what drives me, and that's what my definition of success is more about today.
00:56:25.879 --> 00:56:27.559
So outstanding, Raoul.
00:56:27.719 --> 00:56:30.359
And this is we're gonna wrap up with this next question.
00:56:30.439 --> 00:56:35.719
And I'm looking at it thinking, I hope this isn't a copy and paste, but let's see what happens, as in already covered.
00:56:35.879 --> 00:56:44.599
If you could go back, Rao, to the day that Hawaiian vacations first became more successful than you could ever imagine.
00:56:45.159 --> 00:56:54.519
Knowing everything that you know now, what would you tell that version of yourself about success, freedom, and what actually matters?
00:56:55.159 --> 00:56:55.799
Wow.
00:56:56.599 --> 00:56:58.199
Let me give that a minute here.
00:56:58.439 --> 00:57:23.399
I I just think that that person that me 20, 30 years ago, didn't really have a clue what success of that magnitude meant and what that would feel like, and what that would mean that we could do for ourselves, for our children, for our ohana, and for our community.
00:57:23.639 --> 00:57:29.079
Because when we reach that level of monetary success, we were able to give back.
00:57:29.399 --> 00:57:31.959
We have been very philanthropic.
00:57:32.119 --> 00:57:37.559
We've donated millions to causes that we feel very strongly about.
00:57:37.799 --> 00:57:52.519
And to be able to reach that point in your life where you can have everything that you want, and you're also able to give to others, as I said, our family, our Ohana, that family as well, and to our greater community.
00:57:53.399 --> 00:57:56.759
I didn't have a concept what that would feel like.
00:57:56.999 --> 00:57:58.839
And I I wish I had.
00:58:13.159 --> 00:58:14.599
So many great insights.
00:58:14.759 --> 00:58:26.439
And I think this is an episode that if you're listening to this episode, this is one of those where you want to set your diary to listen to it again, and then set your diary to listen to it again, and set your diary to do what?
00:58:26.599 --> 00:58:27.479
To listen to it again.
00:58:27.559 --> 00:58:31.479
Because there's so many incredible insights in this episode.
00:58:31.559 --> 00:58:36.839
So, Rao, again, thank you so much for your share, your wisdom, your generosity.
00:58:37.159 --> 00:58:39.319
It's just been so, so outstanding.
00:58:39.559 --> 00:58:51.399
Rao, if somebody is listening to this and they think in, and they're thinking they want to learn more from you, work with you, have you as a coach perhaps, where do we send them to find out more about you?
00:58:51.959 --> 00:58:53.479
Oh, well, I love that question.
00:58:53.559 --> 00:58:54.119
Thank you, Mal.
00:58:54.599 --> 00:59:10.359
Well, RaoWest.com is my website, and we've developed a diagnostic that owners can take as a little eight-question, three-minute quiz that will help them pinpoint where are they the bottleneck?
00:59:10.519 --> 00:59:13.959
What are they really the bottleneck or are they doing pretty well?
00:59:14.119 --> 00:59:17.879
And this three-minute little diagnostic can give them an idea.
00:59:18.039 --> 00:59:19.879
And then we can talk.
00:59:19.959 --> 00:59:32.119
I'd love to re to hear from all of you and reach out to me through my website and take the owner-diagnostic.com and get in touch.
00:59:32.359 --> 00:59:36.999
I I have knowledge that I'm very wanting to share with you.
00:59:37.239 --> 00:59:39.159
So don't be shy.
00:59:39.639 --> 00:59:40.199
Absolutely.
00:59:40.359 --> 00:59:41.319
Do not be shy.
00:59:41.639 --> 00:59:44.519
Rao, have an amazing rest of today or tonight.
00:59:44.599 --> 00:59:49.639
I know it's pretty late over there in Australia, and a superb speaking too, like I mentioned.
00:59:49.719 --> 00:59:50.199
All the best.
00:59:50.359 --> 00:59:51.079
Ciao.
00:59:51.559 --> 00:59:52.679
Thank you so much, Val.
00:59:55.079 --> 00:59:58.439
Thank you for listening to Purpose Driven Success with Mo Salami.
00:59:58.759 --> 01:00:02.679
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01:00:02.839 --> 01:00:05.879
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01:00:06.039 --> 01:00:10.199
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01:00:10.359 --> 01:00:17.079
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01:00:17.239 --> 01:00:24.599
Next week we'll have another amazing guest, so stay tuned for even more real stories and actionable insights.
01:00:24.919 --> 01:00:33.479
Work on your mindset, work on your skill set, and always move in the direction of the result you want before you see the result you want.
01:00:33.639 --> 01:00:37.159
And until next time, do the best you can consistently.
01:00:37.479 --> 01:00:38.279
Ciao.
