Are you stuck in your business? If so, than stay tuned to this powerful podcast episode with Todd Palmer of Extraordinary Advisers. As the CEO of a 6-time INC 5000 company Todd is keenly aware of what it takes to make it in business. Follow the key pillars he discusses in this interview and you’ll be on your way to sustained profitability.
Josh Fonger: [00:00:00] Well, welcome to the Work the System podcast, where we help entrepreneurs make more and work less using systems. And I'm your host Josh Fonger. And today I've got a very special guest. We've got Todd Palmer here. Todd is a renowned thought leaders, CEO, executive coach and author who is committed to improving lives as a successful entrepreneur and business owner himself. He works with both individuals and companies to support corporate growth, foster business startups and guide leaders in the areas of talent management, workforce planning and organizational development. As a CEO of a Sixth Time Inc 5000 company, Todd knows the struggles that businesses face around the areas of people, cash, strategy and execution. Through his firm Extraordinary Advisors, Todd is able to guide leaders into programs of sustained profitability. All right, Todd. So before we get started, I hear you with questions. Once you start off by telling us all your business background, how did you get to this line of work?
Todd Palmer: [00:00:55] Well, you know, I sort of my first company when I was 27 years old and I had my business plan and required a hundred and forty thousand dollars in capital. And, you know, everybody wants to give a 27 year old a hundred and fifty grand. So I found a friend of mine at the time who, you know, was willing to. And he tells a story now because I didn't bet on your business plan. I bet on you, which is so common nowadays. People bet on the talent and the idea. So he gave me fifteen thousand dollars and gave me about a 90 day runway to try to make that business work. And it was by day 72 we actually turned a profit is back in nineteen ninety seven. So the country in; it was an employment company, diversified staffing and the economy was very similar to what it is today. I didn't know how good it was that we where we were. If you basic if I could find a body I could get the body place and I used to drive people to work. I set up a busing company. I did all this crazy stuff just because someone believed in me. So I literally got into the business because I found out I wasn't really a very good employee. I had too many ideas, too many suggestions, and I just had that each that I just had to do it. So I dialed back my expectations. I produced that. Go ask him out from ordering 40000 cars 15 grand and started off from there.
Josh Fonger: [00:02:08] Wow, So how did your first company go? I mean, from there I mean, you've been I mean, you been on the INC a thousand lists and you've grown. Why did you get from there? Was it the same company?
Todd Palmer: [00:02:17] The same company still exists today. Still exists today. It's a different version of it. We were all yeah, we we're temporary help back in those days. Now we do a high end skilled trade manufacturer recruiting, just do very small niche, but much better margins, much less hassle. Yeah.
Josh Fonger: [00:02:33] So do you still run that business while you do your executive coaching, training and speaking or do you have you got sold off the company?
Todd Palmer: [00:02:41] You know, it's kind of an interesting phase right now. I still own that business. But as you talk about with your book, we put systems in place, a lot of systems. So the business really runs itself. It's more of a; Combination of a strong systems in place. I have a very tenured team. My average employee, as is 10, has been with me for 10 years, which is rare in the recruiting space. But also we kind of adopted a modified version of wholeocisy where there's a lot of self accountability, self self sufficiency to the system. We don't have a physical location where everybody now works from home. So we meet like we're meeting right now and it's gone really, really well. And now we're trying to figure out what the next few years are going to look like. Do we want to, you know, keep it as it is? Do we want to grow? Do we want to possibly spin it off, sell it? We're in that exploratory phase right now.
Josh Fonger: [00:03:29] It's very cool. Well, good. And you've been able to figure out how to go from working in the business your whole life, driving the bus, like you said, to where you are now. So that would be fun to explore. Now, before we get on the call, you mentioned that you had a pretty big dip in 2006 and maybe that led up to it. And then you were kind of in the hole and you're able to get out of that. Are you sure how that happened? I think that's a place that a lot of entrepreneurs find themselves in a hole where they're just stuck.
Todd Palmer: [00:03:57] Sure.
Josh Fonger: [00:03:57] How did you overcome that?
Todd Palmer: [00:03:59] Well, I saw that. The reality is I am the person who was a big contributor to getting the company in the hole. And I think a lot of entrepreneurs have a very hard time looking in the mirror and recognizing that. And I was in denial for a really long time, 2004, that things were going so good. 2005 things were going so that by 2006, things were really in bad shape. And I was just steeped in denial. I not only denied it was happening, I suffered from imposter syndrome, because when I realized it was happening, I thought I had to fix everything. I thought I had to have all the answers. I thought I was the be all and do all the business, which wasn't true. It was a story I was telling myself. And so in 2006, company was six hundred thousand dollars in debt. We were about two months away from running out of all of our cash. And I reached out. And for the first time in almost 10 years, being in business, I asked for help and I hired my first coach. And I've had a coach in my personal life and my business license, since two thousand six. And it's changed the game for me completely. He helped me put in the proper systems that the proper people, but also the proper mindset for me as the entrepreneur and as I didn't have to have all the answers. There were a lot of things I was doing right. But to continue to beat myself up for the things I wasn't doing right was counter-productive. And one of the things we had to really work through is we had a very toxic culture. We had the wrong. We not just had the wrong people, the wrong seats in the bus with the wrong people on the bus, Totally. So walked in September 9th, 2006, fired the entire company, changed the operating model, changed how we did building, changed how we did pricing, changed how we marketed to. And then while I through the overnight success of suffering and misery, we made INC five thousand six times as one of America's fast growing companies.
Josh Fonger: [00:05:42] Wow. That's pretty amazing. Also, how do you that, that takes some courage. And there are some companies I'm working on right now that kind of already a sticky plan right now. How did you muster up the courage to make that kind of a shift in that situation?
Todd Palmer: [00:05:56] So one of the exercises the coach had me do is to figure out what my core values were. As the entrepreneur who was I and I thought I knew and thought I had an idea of what that was all about. But really, I took a look at my core values as a as an executive and the core values not only written on the wall, the company that were being followed, but also those that weren't being followed, there's a big gap. And it was really when I took a long, hard look at, you know, this is who the company is. This is what I aspire the company to be in. This is who I am as a leader. If those people didn't meet those core values, then the decision was pretty easy. Now the execution is always the hard part. But once I figured out that, you know, this is where we want to go. That's often what leadership is about. And as a leader, does it know what direction, where to go or going to or where to put a stake in the ground? We're gonna walk north. I'm not sure if we're gonna get there in two days, five days or 10 days, but we're going to head that way. Trust me to get through, because I have a belief that this is the right way to go. And that's what I did. I believe in the processes that we're putting in place. It gets the resistance I was getting. I believe in how we're going to move the model from point A to point B. And honestly, what I really do is a plugged into the coach has confidence in me as a leader and the coach has confidence in the plan. You've been doing this for 30 years. I believe what you're doing. I believe in why you're doing the why you're doing the way you're doing it. And I believe in you individually. So on your crummy days when you don't feel like getting out of bed. I was I was suffer from that. When did you feel like picking up the phone to make the sales call, The days you don't, call me, text me, stay engaged. We went through about a two month period. We were communicating almost on a daily basis. That's how invested he was in with me. And so now, like with my extraordinary advisors practice, that's all I do with my clients. They plug into that confidence I have in them and we drive their businesses to new levels.
Josh Fonger: [00:07:38] That's amazing. And I think there's an element of humility that goes into it as well. In terms of picking out a coach logical or are they don't really want to admit that they have a need, so they just aren't willing to go that level. I made a huge difference in you. That's amazing.
Todd Palmer: [00:07:53] It's well, it really has. It's interesting. If your viewers can see you, I'm kind of a big baseball nerd. I actually still play competitive baseball and I've no problem to anybody I'm 50 years old. So you think why would a 50 year old guy still play baseball? That's a podcast for a different day. But if I'm going to play it, I want to play it well. So I have a hitting coach. So I go and this guy walks up like this 10 year old for me and my session that he works with me and he works with his differently. But I want to be better at what I do. So I recognize there's such a such a power of community. I'm part of EO, entrepreneurs organization. You can get a connection and that community can get mentors and, you know, pseudo coaches and that yet unpaid board of advisors that way. But the entrepreneur I found for me by being an entrepreneur alone, I was an entrepreneur at risk. And I didn't know what I didn't know until someone else pointed out to me or the marketplace pointed it out to me. So I think there's such a huge value in our lives that we know a lot. We're smart people and now we have Google and we can ask you anything and Alexa can tell us what this is. Siri can tell us what that is. But we need a tribe of people not only to raise a business sometimes, but also to even raise a family.
Josh Fonger: [00:09:01] Mm hmm. Mm hmm. Yeah, I couldn't agree more. Don't do it alone. Very risky.
Todd Palmer: [00:09:06] Don't do it. Don't do it alone. Well, then that's what I did. And it got me into some pretty bad spots.
Josh Fonger: [00:09:11] Yeah, definitely so. So for those people out there who do have to say B level staff and C level staff, and they had this vision about where they want to go and are just like, wow, OK. So my current team is not going to get there. What would you recommend? Would you recommend trying to push the team along to or do or do you have to let them go or what? What do you kind of do when you're in that situation? I think a lot of people, this is kind of a long question. But they get. They grow their business and they realize the business kind of an, B and C business, the qualities B and C staff is B and C and everything is kind of substandard. And they're just like, well, now how do I say, hey, I want to be A plus going forward? Like, where do you where do you begin to make that shift?
Todd Palmer: [00:09:50] Well, I think if to define what A plus looks like for you. I think that's the first thing is what's important to you. I had a client with the exact same thing as I want to grow my business from from point A to point B because I want to get over the million dollar threshold. He was just running around 700 thousand. And I said, why do I do? Because I want to make more money. Great capitalists. Sounds great to me. We took a look at his team and like his team was very much in the mindset of, yeah, let's just not push this too hard. He's like, no, let's pour gasoline on it. But he would acquiesce and acquiesce. So well. So you're out of your values, what you want for the business. As the founder, as leader, as a guy paying the bills is to the left. What your team and your leadership team wants is to the right. So when we got our engagement started, I said, are you going to be comfortable that you may lose half your leadership team in the first six months and possibly all of them within the first year? And he said, why would that happen? If you want to pour gasoline on something that just kind of humming along? Well, they're used to humming along. They may not want to go with that for that ride. And so I am and we anchor that into why he wanted it and why he wanted. That was two things. You want to create work life, integration. You want to make more more money, also have more free time. And in order to do both. He had a stronger leadership team. So we anchored into what he wanted and within that, within a year, within four months, his entire leadership team quit. And he replace them with people who bought into his vision. So now we've moved his margin from single digit numbers to over 40 percent in less than 12 months because he followed his vision and we anchored that vision into what his core values were and why he wanted that and his drivers or changed his his leadership team has changed. And he's living proof that in under a year you can make a huge impact, a huge change in your business.
Josh Fonger: [00:11:38] That's amazing. It's amazing story now. I want to dig into this core values thing because, you know, years ago when I first read something 10 years ago, I didn't really believe in this core values thing. You know, we're going to be kind or honest or hardworking. Now, as I've worked with more clients and around the world, I see the power of it. But from your perspective and you make core values for the companies. How do you create ones that are actually going to actually make you more money? Not just ones that make you feel good, but how are you guys making more money? And once you write them down, how do you make sure they actually work? Actually can use them?
Todd Palmer: [00:12:10] Sure. Especially with companies that are have been around for a while or they do have a leadership team that's going to be intact? The exercise I put them through is I had them start telling me some of their best stories. Tell me a story about your biggest sales success. Tell me about it. Every companies had problems. No shame in having problems. How did you overcome that? How did you, What do you do? And how did you handle this? And I saw watching for patterns. We take a break and I'll talk to them about the core values and I'll say, OK, everybody independently write down what you think the five core values of the business are, and I'll do that. We'll put him on a board under categories and we'll start lining them up. And then what we'll do is it's only a core value. If the core value can be told through a story. So a construction company that that I knew of was really all about quality and what they wanted. They want to charge a premium price for them, but they could guarantee their do quality work on a high level. And I said to the owners, know they're struggling coming up with a way to articulate. This is what everybody talks about, quality. I mean, that's there's nothing sexy about that. Tell me how you're gonna do it. So tell tells a story about how he took his mom to his very first new build from the ground up. And she was so impressed about the cleanliness of the space and how it looked so good. Yeah, I just kept making my mom proud. I just kept making my mama proud. So that's it. That's your core value. Your core value is we make mom proud. And here's how we do it. So when you go to talk to a family to have them do it, you build their home. When you go to do something like that, tell them that story. So now they're their office. I love it. They're five core values. And the top one is make mom a proud.
Josh Fonger: [00:13:47] Well, just see a sidetrack. I had a client, same thing. They sold digital products. They weren't very good. They went to raise the value and they said, OK, sell products so good we sell them to our cousin or something like that. So,.
Todd Palmer: [00:13:59] Yeah,.
Josh Fonger: [00:14:00] We made these are products that we sell on Thanksgiving dinner to our cousins. And so as long as the products are pass, the cousin test the good out.
Todd Palmer: [00:14:08] Yeah, But then but then what happens is then you start making the decisions to hire people in the interview process because they can get the cousin test story or they had their own brother or sister test or to any. And then so once the core values are established, you build your interview questions off of those. We do a whole process where we work with companies to hire, hire for DNA. Don't hire for resumé unless you really need someone with a very finite skill set. So you hire accountants, accountant? Yes. They have to have an accounting background or a CPA degree. Great. I totally get it. Get to get the degree in place, but then hire, you know, bring in five CPA and hire the one that matches your core values. Because the worst thing you can have, I've had this happen in a company is you've got 20 people on a team. You get 19 of them sit there going in one direction and got one Darrell down or Debbie Downer over here complaining and not found on the process because they hired out of desperation for a specific skill set. And it just creates a toxicity in a cancer that 19 people want to have a cultural day out that the boss is going to pay for at an event. And Debbie Downer says, I don't want to go. I don't want to go. It is like, well, are you part of the team or not? Because if the team is 20 people rowing the boat in one direction is much, much more successful than one guy trying to do the work of 20 people going in the same direction.
Josh Fonger: [00:15:26] So what about I mean, a lot of questions and hiring, I think, will change gears to the hiring because I know you background. You've got a book on hiring. You've got a hiring company. What are the secrets to successful recruiting? Is there like a a method that you think most entrepreneurs don't know about, but they should be following?
Todd Palmer: [00:15:43] You know, I do. And I think the entrepreneurs need to recognize and realize this. That is a candidate driven market. There are five jobs for every one candidate. So typically what we see happen, especially with their recruiting business, is we'll see somebody interview somebody, let say client interview candidate on a Monday. We'll get feedback on Tuesday. We're gonna make him an offer. Great to have you off already. We're good. I've got to get management approval. Okay, when will you get there. Well, he's on vacation for two weeks. Listen, the candidate's gonna be gone. I'm not gonna place him, he's just gonna be gone. And they get so frustrated. So I think that the the smartest hiring companies now, the people who need the talent have to move at lightning speed prudently, but with a sense of urgency. They have to recognize that it's a candidate driven market. If you've got a rock star sitting in your office and how are you gonna make sure that they don't leave without an offer, especially for small businesses. You've got something like, I've gotta have this person right now. Then you find a way to make it happen, get them locked in and the next steps keep them locked in a new process. Recognize that millennials work differently than Gen X or baby boomers and they work differently in a couple of ways. They're willing to take sometimes less money for more flexibility and freedom, which can mean that they come in and at different times you're more focused on their work product than the hours they put it. They were the one to let them work remotely on occasion. You're willing maybe you can always give them as much vacation time as they want, but you're willing to give them unlimited, uncompensated PTO. There are a lot of different ways to approach it. And it's those companies that have a sense of curiosity on how to set it. If they treat the interviewee as they would treat their most valuable customer, they're going to get a whole lot more people. And I think the real secret is. I tell this, I take this, I'm doing speech this year, I'm do the same speech next year in Disney. Bringing me down to talk about the flip and how hiring a shift in the last ten years and how is going to stay this way is if you act like you're doing the candidate a favor to bring them in for an interview and to offer them a job. You've already lost them. It's the candidates that are in charge. If you didn't recognize that, you groom them, you treat them, you woo them like you would your favorite customer and recognize that they have plenty of options and you honestly need them just as much as they need you. It's not it's not like it was coming out of the recession in 09. You'll do a whole lot better and recognize it as a candidate driven market, not a customer, not a company driven market.
Josh Fonger: [00:18:14] And then once you hire, you know you're right about this as well. Once you do hire somebody, bring them on. What did you do? The first few days or months to really get them to buy into your core values and become an asset right away?
Todd Palmer: [00:18:27] I think you not yet know what your core values are. So say say your core values, for example, are we're a family. We're a family focused company. Your family is important to us. I always say to my clients are kind of family mentality and not everybody does. And that's OK if you do have that mindset. Find out in the interview so you get hired. Bob, the sales guy. Hey, Bob. Can you tell me a little about your family background? Is this a generic question? Does it violate any EEOC or anything like that? You know, you know, I've been married for 10 years. I get two kids, blah, blah, blah, blah. So he's volunteered that he's married. Right. You know, just out of curiosity, what do you and your wife do for fun? Our favorite restaurant. I don't make this up on the spot here. Maybe restaurants, Olive Garden and you know, not to the Olive Garden. We like to go to movies. Perfect. The first day Bob shows up for work. You have a big gift basket waiting for him and a big banner, Welcome to the company with all of his favorite, you know, office snacks with its almonds and coffee or whatever. What the savvy company will do is send home a gift card that arrives a day's first day. Friday, Fridays and us where you're going; We've got you set up to go to the Olive Garden and you're going to the movies. You're bringing the family together. So when you ask Bob, hey, can you go to town next week to handle a company issue? The family's already bought and, hey, they took care of us. Yeah. Go ahead. We told you I could get this kind of pushback and static. So they're doing the up front investment in the family, speaking their core values, offering them something of tangible value. You know, I've had I've had clients that are I had a client is a big wine guy. You always make sure he finds out the wife's favorite bottle of wine and sends it all to the house with a dozen flowers for a first day set. And so when she she, she doesn't have ask him out his first day was. She can tell him. Hey, yeah, I'm sure they were great to you. Look what they sent to me. That stuff gets everybody bought it together.
Josh Fonger: [00:20:14] Simple things. I can see how it can make a different. Instead of treating your employee like a number.
Todd Palmer: [00:20:18] Right.
Josh Fonger: [00:20:18] but actually a person.
Todd Palmer: [00:20:19] No, because the reality is your number one source for your next employee is your current employee. People will. People want to work with their friends and they like. It's like a referral. We give referrals to people to give you a referral or for you somebody that is gonna make me look good. I'm not going refer you to somebody who's gonna make you waste of your time and make me look like an idiot. Same with employees. The other flipside is a recruiter as we know this. The first question, if I were to cold call or get a hold of you through linked-in or on your phone. Is hey, are you looking for a new job? No, no, I'm good where I'm at. I'm just curious, what kind of boss do you work for? Well, my boss is kind of an idiot. He's a jerk, blah blah blah. OK. Now, I got you. Is the number one reason people leave a job. Isn't the pay? It isn't the drive. It isn't the work. It's their immediate supervisor.
Josh Fonger: [00:21:03] So if you're not being a good boss, then you'll be recruiting a lot in your life.
Todd Palmer: [00:21:07] That's a great way to put it.
Josh Fonger: [00:21:09] Okay, well, that's great. Also, a couple of quick questions. KPIs I wanted to get into because I think that's a big part of successfully managing your team. And you mentioned you get the millennials and the baby boomers and the different generations, different KPI is you would use for different generations? Are they pretty much the same?
Todd Palmer: [00:21:26] You know, I think the KPIs is the differences between the KPI tie into what the job duties are in that mutually negotiated conversation. I think it's really important as a leader for you to treat your employees as much as individuals as possible. And actually, I learned this being the big baseball. I got an AMA. I actually had an opportunity one time to meet Jim Leland when he managed the Detroit Tigers. And I only had one question for him because like Jim Leland, you're kind of a big deal. And so, Jim, you've got twenty five guys in the locker room. I said, what I said to him is twenty five millionaires in the locker room and you got some guys making 10 million a year and one guy making one million a year. But they're still millionaires. They're doing quite well. So how do you manage that? How do you handle all the egos and all the personalities? Oh, that's easy. I think if the skies are going to open up, like the pearls of wisdom are going to stream down upon me, that's easy. Managing twenty five different; Manage them all the same and you manage them twenty five different ways, shook my hand and walked away. I'm like, it's so simple but so brilliant. So if you've got twenty five employees, the great manager figures out what the KPIs are for the job. So, say you've got five people in sales. You might have something universal KPIs is with it's an activity metric person. But then you figure out what the individual KPIs are for person number one, number two, number three, number four. And then you manage to all of those. So not only do you have the overall corporate goals tied in, which also had the personal goals of that individual taken into consideration. So then you've got them hooked.
Josh Fonger: [00:22:57] Ok. So individual performance plan and then department, department KPIs as well.
Todd Palmer: [00:23:03] Right. It all has to flow backup.
Josh Fonger: [00:23:06] Wow, I like that a lot. Well just do the time. I know it's it's almost the weekend over there. Why don't you leave us with, you know, the kind of an answer to a question I didn't ask? And what's one thing that you think all those owners really need to hear from you? And I just didn't ask the question yet.
Todd Palmer: [00:23:20] Well, when I want to think of that, I think that one thing I as a small business owner in my late 20s, early 30s, I wish someone would have taught me. And I do this a lot with my clients. Its revenues great. Nothing wrong with revenue, but it's really all about the margin. I met these two guys. Gosh. These guys were 10 years ago, was a two person company, an apartment in Cleveland, Ohio. They said, you know I was talking with them, yeah we do about eight hundred thousand dollars in revenue. Not too bad for you guys living in an apartment. Would you mind telling me how much you make? Our margins are 50 percent, so we take over four hundred thousand, two hundred thousand dollars apiece. Then he went We have no employees. I'm like, I want to work for you. You're 10 times smarter than me because they knew that the margin was the most important thing. It was so many people who can you can have a great meet. The reality is there's only four point three percent of all businesses ever reach a million dollars in revenue. And it's a very small number. So if you keep in mind that it's more I would rather have an eight hundred thousand dollar company with four hundred thousand dollar margins than being in the staffing space of a one million dollar company and have really weak margins. It's just it's margins are where it's at. That that's what I think. Anybody listening day if they can take that away. How do you goose that margin up? More power to you.
Josh Fonger: [00:24:42] Yeah, I think the other big thing with margin. That's great, great point is that when you have margin, you can start to make more creative solutions like buying the wine or whatever you can. Olive Garden gift certificates, but you can make those kind of choices when you have margins. When the margins are really tight that is when you're stuck.
Todd Palmer: [00:24:58] Yeah.
Josh Fonger: [00:24:58] You can't experiment with things.
Todd Palmer: [00:25:00] Yeah. So if you have cash. If you have cash. Cash is king and cash can also equal courage.
Josh Fonger: [00:25:05] Yeah, definitely. We'll get more. So. So how do people find you if you want more information about what you do? Where do I go?
Todd Palmer: [00:25:12] So anybody who wants to find you, I'm really easy to find. I'm at extraordinary advisors dot com. Anybody goes in a contact me page, They mentioned that they heard me on your show today. I'm happy to give you a half hour of my time for free is one thing as a gratitude expression for all the people in my life who've helped me to get to where I'm at. My first coach back in 2006. It's kind of pay it forward thought process. So I'm and I'm happy to talk with you about margins. I've had to talk about hiring or even how much the mindset of the entrepreneur, whatever you guys want to talk about. I'm happy to give you 30 minutes, my time, all that is mentioned where they heard you. Heard me.
Josh Fonger: [00:25:45] All. Very good. Well, I appreciate you making a time for this Friday afternoon. I learned a lot. This has been an inspiring story. Hopefully I'll be listening. Watch the podcast. Hopefully it helps you have the courage to make your vision and your goals a reality. Knowing that you're bold and take some steps, you can really just like make a massive improvement your life. And also wanted to mention before you use today and we are giving away a free copy of Sam Carpenter's book right there behind me. Work the System if you give us a review, either on Facebook or YouTube or anywhere else you see this. Let us know. Send us an email info at work the system dot com and we'll be drawing a winner this week, each week giving a book to you. So make sure you get info and work the system dot com. And I will see you all next week. Thanks again Todd.
[00:26:32] Take care.