Why Executives Fail

I'm Alex Charfen, and this is the Momentum Podcast, made for empire builders, game changers, trail blazers, shot takers, record breakers, world makers, and creators of all kinds, those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy, and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, then rewrite them around our own will. We don't accept our destiny. We define it. We don't understand defeat because you only lose if you stop, and we don't know how.

While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future. Instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world, because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.

Why executives fail. I am in the process of onboarding two executive level people at my company right now, so I have this in the moment experience of onboarding executives and realizing, having realizations about where I've made mistakes working with executives in the past. I'm just sitting here going through my career and thinking what I would have told my younger self when bringing on executive level team members, high level strategic team members. What would the explanation be so that you could success earlier?

Here's what I've gotten really good at over time. I'll tell you how I build businesses. You now understand the Billionaire Code, so let me give you a perspective. What I've always done when I look at my career is I've figured out some type of a business to get in. At the beginning, it was in consulting, then it was real estate. Then it was having an educational company. Now it's in very high level coaching. I find a business where I can, with very little help, strategically or tactically, I can grow it through seeker and starter and promoter and builder into somewhere in the operator range with maybe one or two people who are really strategic and where I end up doing a lot, but knowing that I'm going to be able to transition.

I'm not good at talking to people who do the actual work. It's just not a talent of mine. I'm not good at talking to people who are doing tactical work. I wish I was because it's so frustrating sometimes that I have trouble communicating at that level. It's part of the reason I had to get out of real estate is that I had trouble coaching real estate agents because the vast majority operate at a tactical level. Some don't. I have a real estate agent in my high level coaching group, [Jay Baraby 00:03:15], who operates at a highly strategic level. He has a team. There's an ongoing business there, but most of the real estate agents in the country just mathematically, I'm not passing judgment, but most of them are just single person, self-employed, tactically doing all the work.

That's not where I'm good. What I do to build companies is I bring in people who I know I can trust, that I know I can build around, that I'm excited about. In my life, what I've had to learn how to do is bring in executives and help them be successful, provide an environment where they can be successful. As a result, I know what creates a lack of success for executives because I've done it. I've made the mistakes. I've brought in people and I've given them the wrong environment, and it's crushed them.

Here are some of the things that I want you to think about when you're bringing in anyone to lead people. Here's the challenge. When we're recruiting someone who's going to lead people, when we're recruiting someone at a very high level, we ask ourselves a question, "How much can they do?" I needed a little water there. I've been meeting with Matt for two days. I'm super dehydrated. Even though I've been drinking water like crazy, I'm still dehydrated.

When you're recruiting an executive level person, you ask the question, "How much can they do?", but when you're onboarding and coaching, you need to transition to the question, "How little can they do?" I don't mean that literally, like you're trying to make it so they don't do anything, but here's the reality about people like us when we bring in leadership. We want to start coaching them to offload as quickly as we can because if you get somebody who's really good, you want them to offload the things that they can because they'll start moving towards what their really highest and best use is.

When I'm onboarding and coaching executive level people and people who I want to be leadership in my organization, I'm immediately starting ... I switch a hard shift from, "How much can they do?", to, "How do I start helping them offload?" I think in the back of my mind, "How little can they do?", because here's what I know. If I hire the right talent and I help them assemble a team and I show them how to communicate with that team and we create a cadence and people hear from us on a regular basis and they understand what we're doing and everyone knows where we're going and there's clarity in the company, what happens is if you start helping executives build that structure around them, they will do way more. Your business can grow much faster. It starts one step at a time.

First, at the beginning ... I'm onboarding two executives. One of the questions I've asked both of them is, "What are you used to having? What are you used to working with?" With Matt coming in as CMO, I'm asking him what parts of marketing is he accustomed to having so that I'm giving him an environment where he can succeed. I'm asking him what he's used to being responsible for. What happens is that's a lot of stuff, so I want to immediately coach him to handle that. How does he do more, and how do we go faster, and how do we get even more? With executive level talent, it's not how much can they do, it's how much can they get done in the structure that you create, how much can they get done with the people around them, how much can they get done where you're still maintaining your margins and you're growing the business.

Understand you're going to have to hire true believers because you're going to want to be able to trust that the more help you give them that they're still getting their stuff done, they're still doing stuff. One of the hardest things to do is get help in the first place, but then having other people get help? That's just as hard. That's another huge step of growth for an entrepreneur. It's massive. It usually takes us a long time to get there. When you bring executives in, if they're not a true believer ... By the way, that's the number one reason why executives fail, especially for entrepreneurs, because you're going to expect them to treat your business like you do. You're going to expect them to be just as obsessive as you are. You're going to expect them to do what they have to do to get things done when they make a commitment. You're going to expect all those things, so you better have a true believer.

Another reason why executives fail is that they're not allowed to lead an acceptable plan. They're not allowed to come up with how they want things done or how they want to do things and give you options for how you can do more and how you can lead more. With somebody coming in like to run marketing, I want to be able to give Matt as much an opportunity as I can to tell me how we're going to do that. With Isla coming in to lead product, she's going to get an opportunity or she's in the process of going through all of our products to say, "This is how we're going to improve them. This is how we're going to put a team in place to maintain them and continue to improve them. This is what's going to happen." I want the executives to help build that plan. I want to coach them doing that.

I want to make sure that as we're doing that ... Here's the biggest challenge. Executives fail because they don't have clear outcomes. With Matt and Isla, we will agree on what our 90 day targets are with clear measurement as to what we know we want and who's doing what. For everything that we do, we will have clarity as to what the accountability, the roles, like who does what in the org chart, how the chain of command flows. This is why like when business coaches say, "Run a business without an org chart", I'm like, "You are so screwed." You have to stop saying that crap to people because anyone who tries to run a business without an org chart, it's like trying to coach a football team without having any of the players have a position. It would just be ... That's a train wreck.

Then the third thing is you have to have measurement. A lot of times, executives aren't given clear measurement as to where you are keeping score, like what's important to you. You have to reset that often and make sure that it's valid and make sure that it still means something to you.

If you have those things in place, then you have to make sure that when you're working with them, you onboard that executive into a real executive position in your business. Here's what I mean by that. Entrepreneurs are infamous for giving away C-level titles and then treating people like mid-level managers. Entrepreneurs, we are terrible at giving over the reigns of control to people. We always want to drive how everything gets done. In the beginning, you have to do that because if you're using contractors, if you're using people as process, which gets you through some of those early stages ... I've done it. I've had to.

Those are people where you ... That's how a lot of us grow our businesses, but when you bring in executive level leadership, you have to onboard them into a real position. Far too many entrepreneurs bring in fake leaders. What they do is they bring people in and then tell them how to do everything, or they bring people in and they don't even involve them in the plan. When you bring in an executive level leader, you have to make sure that you are really first deferring to them. Let them lead an acceptable plan. Let them tell you how they think they should do things. Let them then start succeeding and showing you that they're succeeding.

Give them advice, but let them lead the plan because when somebody else is trying to lead your plan, it's hard. Give them as much leeway as you can to tell you how they think we are going to achieve the clear outcomes that you want. Then respect the chain of command you set up. If you bring in people in leadership and they're leading people, communicate through those people in leadership so that you actually create a chain of command that works. They're not fake executives.

Then when they make decisions, support those decisions. This is a tough one, but it's an important one. Make sure that they're okay when they make mistakes or there's misses, because here's what happens. When you hire true believers and you give them clear outcomes and they know what they're accountable for and what the people around them are and they have an org chart, and you're respecting that org chart, and they have clear measurement, they will do everything they can to crush goals. They will most of the time, but no team is perfect, no company is perfect. You can't expect that from your team. When an executive misses who's been performing, you need to go make sure they are okay because you don't want misses to become a habit. You want to make sure that they understand what happened. You want to make sure that they know you're okay with it. You want to make sure that they know they still have your confidence.

When an executive misses, I guarantee you they are dying. If you hire the right people, it will crush them. What you should do is sit down with them and talk through where the miss was and why it happened and how they can make corrections and how it will move forward. When you're working with executives, you want to support them as much as you possibly can because what they are is they are your representation of leadership in your company.

In my experience, having coached hundreds of entrepreneurs to build teams, I can tell you that the vast majority of failures on a team are when someone is hired into leadership and given a fake position. If you've ever been in that position, you know what I'm talking about. It's the one where you have the title, but the entrepreneur still makes all the decisions anyway. This happens in corporations too. It's the one where you get the title, but the VP won't let go of the responsibilities. You're in a position where you can't really control what you need, and so you don't really have the leverage or the tools or the understanding to make sure that things happen in the right way. Instead, you're trying to do everything with a limited set of the tools and the limited set of the understanding, and you end up failing.

If you put a executive in a fake position where they're not actually responsible for the chain of command, responsible for the plan, responsible for the outcome, and you're coaching them through that, they're going to have a hard time succeeding because you're already working against them. It's not easy being an executive in an entrepreneurial company because here's what's going to happen to them every single day. If you guys are succeeding, there's going to be more and more for them to do every day. You have to get into the habit of helping your executives offload where they're uncomfortable, understand where that is, get help, get leverage, so that they can get more done.

As entrepreneurs, here's what I can tell you. You put somebody in a high level position, you're going to expect a lot from them, but there's a point in positions where it's not from them. It's how much can they have done, how much can they create, how much output can they manage, what type of structure can they create so that the same things happen over and over again that generate business in a predictable way so that you can grow your enterprise. That's how you climb the Billionaire Code, because no person who's ever been to nine figures and beyond has ever just done it by themselves. It's even laughable to talk about it.

You don't have to have a massive team. You just have to have a team you trust and a system that works, and you have to have leadership around you that you're willing to delegate success to. When you look at the Billionaire Code, one of the things I do early is delegating success, because not only am I not so good at coaching the tactical, I'm not really that great at doing the tactical. I delegate the plan and the success as early as I can. I don't necessarily recommend that for everyone because it's a much higher strategic level of leadership, so if you haven't led people before, you might want to go back through the Billionaire Code a little bit slower.

For me, hiring executives and delegating success has been how I've always grown companies, so I can tell you that these are the things that absolutely will help you have executives succeed in your business. Above all, make sure that you're just transparent with them, that you let them know what's going on, that you let them know how you're feeling, that you let them know what's happening in the business that you're happy with, what bothers you, what would you like to see improved, because they're going to know if you're not communicating with them transparently. They're going to know if you're not telling them what's really going on. They should know because that way they know what's happening for you and they can support you like an executive should.

There's a clear reason why executives fail. Most entrepreneurs don't really hire people that they trust, don't give them responsibility. If you want someone to be responsible, you have to give them responsibility. They don't really treat them like executives. When you bring in an executive team member, somebody who's going to lead people in your company, give them the tools so that they can actually succeed and you'll see your company grow.

If you're ready to start recruiting that executive team, if you have a business where you're building a team, if you're ready to get to the next level as an entrepreneur and you've already created an opportunity you know that you're leaving money on the table, you know you could be doing more if you just had the infrastructure, you could have more going on right now, you could be serving more people, creating more revenue, creating more profitability and net worth and stability for your family, then we want to talk to you. Go to billionairecode.com. Fill out a short survey. We will send you a full summary of the Billionaire Code, and we'll give you an idea of how we can help an entrepreneur like you build a team, a solid infrastructure, and a communication system that can get you from seven to eight figures, but you can take it all the way past nine if that's what you want to do.