Gabe Arnold Part 2 - Double Business While Working Less

This is the Momentum podcast. Welcome back to the Momentum Podcast. This is part two of my conversation with Gabe Arnold about how he doubled the size of his company, improved profitability and is working less so that he can scale faster. I'm excited for you to hear this second part of the conversation because Gabe goes into the tools, the actual resources that he used to help him really move his company forward and grow to more than doubling his business. I'm Alex Charfen and this is the Momentum podcast made for Empire Builders Game Changers, trailblazers, 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. Should 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. And 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. Here's Gabe Arnold.

Yeah. So there's a handful of tools, you know, that we've implemented from the beta program that have gotten us there, the OTAs, which are the project or process scopes, like I said, of some he's not familiar with that term. Handing that off gives a ton of clarity to what we're going to do next. And so that takes I've, like you said, verified that they have it right and better than I had it, and then I can forget about it and just check in support and give maintenance. And then with the org chart, I've had an hour chart off and I but I never used it. It's just something I was supposed to do.

Because that's exactly like, oh, that's not an update. Our org gets updated every two or three weeks. Yeah. No, not necessarily because I knew team members, but because like if some a rule changes or something shifts, we want it to be super accurate and we talk every week we bring up the org chart. So new team members. All team members now. Awesome. You're in the copywriting department. You can go talk to Kiersten and she's going to support you. And if anything happens or she's stuck, she's going to bring it to us. We always communicate totally transparently here, but you have a dedicated leader here to support you in your needs in that department. And so that's taken away a significant amount of decisions from me that I'm not qualified to make, to be honest anymore. Like I can have an opinion, but even when I get asked my opinion, I'll say like, here's my thought. But Danielle, this is 100% your decision or, you know, units early project manager like here's how I think I want to do this. But you, you own this, this is your department. And so it needs to work for you and obviously needs to work as in relation to other departments. So by having the org chart, it was a little bit hard for me in the beginning because I felt like I was going to be disconnected from the team by not talking to everybody every day. It wasn't everybody, but it was. I would talk to 15 or 20 or more team members a day and like talk about losing focus because I want to be as present as possible in a conversation. But if I'm trying to have four or five or ten at once, you know, I wasn't I wasn't present. So it was a little bit uncomfortable for me to say, okay, everybody needs to go through the org chart if they need to get to me. But what it's created is stability and security and better results and so many other things that the team really understands it and respects the system. And I still have the open door policy of like on the daily huddle this morning. I shared some personal work I've been doing and things like that around mental health and self care. And I said for this, anybody can reach out to me. I will make time for you when we do a Saturday call or like I am here for you personally regardless, but when it comes to the projects, I'm not qualified to make the decision. It should be your department leader or another leadership person. And the quality of decisions that our organization makes is I don't want to like overexaggerate, but it might be 100 times better that I've noticed that because we're.

Naturally. Exponentially better because like across the board, everything's gotten better. But one thing that has been really prominent for me the last few months is our recruitment and hiring process is exponentially better. And I don't I don't hire anybody anymore. There's a couple of roles that I may sit in and do the last interview or I'll check in on. But we hire rock stars because I'm not involved in it. My bleeding heart and I want to take care of everybody. Always got in the way of hiring the right qualified people.

Yeah. No, I know that feeling. Yet you made a statement twice that a lot of entrepreneurs will probably either question or be confused by. And some some might think that they know what you mean. But I want to make sure that you kind of explain it. So you said twice they're making decisions I'm not qualified to make. And here's what I know what happens in the mind of an entrepreneur who hasn't turned over ownership. It's like, of course you're qualified, it's your company. This is what we do. This is what I have to do. What do you mean you're not qualified to make? Can you explain that?

Yeah. So when you start a company, it's you and your assistant, or it's just you and it's you or two or three other people. You probably are qualified to make a lot of decisions. I mean, that's me. Like, you're the guy or you're the gal. You're you're the person doing everything. But in a very short order, I lose all the context of a project or I don't know, the processes that we I mean, I know of them, but I don't actually know the process of, you know, interviewing and onboarding. And so then I fall back on old habits or old behaviors, or I make a decision with such limited information that when I do that, I break everything, like break it department, break a project. Like, I've broken things a lot. And if you talk to my team today, they'd be like, Yeah, like we really like to go and Gabe and you know, leadership team, we're in an operations program and got this foundation built because now Gabe doesn't come in and blow shit up every week. So I'm like, That's what I did. I wasn't I'm trying to, but like I always have a million ideas and now I have a process for my entrepreneurial personality. And so I'm not qualified to make a decision about how we build out email sequences and send those out. Because I haven't done that like. Typically I can still jump in and do it if I want to, and once in a while I send a one off email but to our list where like if I jump in and do that, I just missteps and break things. And I we have amazing content managers and technical folks that know the ins and outs of everything. They get to have their total focus there. So if I'm making a call about something that I don't even know how to use any more, talk about confusing the team and delivering a bad result. That's all that happens.

Yeah, no doubt. You know, I love that you shared that because so many entrepreneurs have this insecurity of letting things go. And what I always share is until you let them go, until you transfer that responsibility to somebody else, that is going to stay with you. And so so often, I mean, I think you kind of express it so often. That's what creates that ceiling. That's what creates that growth ceiling, that feeling of constraint like we can't break through this. Would you agree that in your case that was part of in.

Yeah, I actually did a fun kind of personal experiment like six, eight months ago because everything was running so well and like our growth was just taking off and I wasn't stressed out and Tim wasn't stressed out overall. And we had a couple Perry weeks, but nothing, nothing bad at all. So I ran a little experiment for myself and I'm I'm like, I don't get addicted to anything, but this is as close to the addiction as I've had in my life is playing chess online because.

I just love it. And so I actually delete it from my phone and cancel my accounts, you know, periodically if I get too intense. But on a Saturday and I'm a decent like 700, 750 score for chess players, I'm not a grandmaster or anything, but I can maintain a pretty decent performance and beat my friends and I enjoy it. So on a Saturday I sat down and started playing for like four or 5 hours straight, and I ran some math and and looked at stats and stuff. And I think you make like. 45 decisions per game, plus or minus, like for an average like game at my level, maybe not for other people, but so by the time I got to playing my fifth or sixth game, my performance just fucking drops to nothing. And if I play a full ten games, I am exhausted emotionally, mentally and I love it. So it's like it's an area I manage in my life a little bit. But I started realizing that the reason the business is growing is because I'm reserving my decision making power for the most important decisions, and I take time to make those decisions. And I sleep on stuff and I gather feedback and I gather critical feedback from, you know, my fiancee, Rachel, who is I do this gardener, too, and my operator and my leadership team. Like I asked them to poke holes in what I'm going to do before we do it. And then I can make a really clear decision. But I don't think that people have a I don't know a lot of people that have run an experiment or tested where their decision making falls apart. And for me, I think I landed on like I can make 100, 120 decisions a day and be good. But when I cross that line, then I start to make dumb decisions or I or I slip into not practicing self-care, if that makes sense. Like I start to beat up on myself, even if maybe I'm making decent decisions, but I'm mentally exhausted and I have some stamina, like I can go get it, but I wanted to know what was really happening there. And so if I make less decisions, I make better decisions.

Yeah. Decision making body is not a met it's real value. When people ask me why I wear the same thing every day, it's literally so I don't have to make decisions. I walk in everything like it doesn't matter what pants I grab and what job I grab. Everything matches and literally like the lightest weight decision making I ever could have when I had a closet that was full of clothes, it would sometimes take me a few minutes and I would like consider things and think about it. And so just like eliminating that static in your life is so important, so that you can, like you said, I love what you said. You make less decisions, but now you make much better decisions.

Yeah, I'm the same way. And like, I remember if I read that from like Bezos or Steve Jobs or whatever, but years ago I asked Rachel, I said, Would you mind like picking out my clothes and picking what I think where we go to dinner and pick everything that doesn't have to work? And she loves doing that for me. We have such a I'm so grateful for our relationship. And so I don't decide anything that doesn't have to do with work. So that made a massive impact years ago. But I was realizing as the company was growing, I started making a bunch of decisions I shouldn't have. And so yeah, I'm the same way. Like there are so many decisions I don't need to make and I don't want to make.

So yeah, and I love that you said to it now you're not just rushing into a decision because you have this awareness. Sometimes you sort of slow things down, you will give yourself time, you'll sleep on it, which like sleeping on a decision for an entrepreneur is such a foreign concept because we're not if we're not moving with this, this velocity and speed, we'll lose momentum. So game reflect on this statement. So I always tell people that one of the keys to building a business and growing massive momentum once you have a team is actually slowing yourself down a little bit and taking an hour to make a decision or sleeping on it or telling somebody on Thursday, Hey, I'm going to have an answer for you Monday. I'm going to take a hope for three or four days. What would you tell an entrepreneur about what I just said? Because they're thinking like I'm crazy.

It definitely feels crazy in the beginning. So that's that's a valid feeling. If we if we think about like team size and organization size and run rate and, you know, financials always, you can show us where we're going and how fast we're going. And I want to touch on the CEO report, too, because it relates to empowerment. But if we think about only start, we're in we're in a canoe with one other person. And if I if we're going one way and I say, oh, let's turn last, we can turn left instantly when we get to like a whitewater rafting crew and we have like ten or 12 people. If you turn too fast, you can kill people, but you can still turn fast and navigate and kind of do it and it's a lot of fun. So maybe that's like the 3 to $500000 range. I don't know.

Yeah, but when I cross the $500,000 mark, I noticed that I was, you know, part of directing a cruise ship. And if you ever get on a cruise ship and they keep changing directions, if you're lucky, you'll spend in port, but you'll probably crash into something and carried a bunch of people and you won't be on cruise ship anymore. And so as entrepreneurs, it's easy for us to ignore or not recognize the season that we're in, in business and behaving like we're a startup. And so I always remind myself, I'm not a startup anymore, so I can go faster, farther, more profitably. If I slow down, think about it. Always aware of my surroundings and opportunities and risks, which a system actually gives me way more information around that. But then I'll sleep on it and then I'll make the move because I'll burn out my team and crash the boat. If I just keep changing direction, we'll run out of fuel. You know, there's just a. Such a problem.

So, so. So when you slow down, you actually create a higher level of momentum. And you know what you said at the very beginning, that answer is so important and gave that, hey, that's a valid feeling. We've all I've had it know you've had it everyone who comes into our program when they first hear me say that I can actually tell who's new in a live event because I can see how uncomfortable they get with me saying it's like, Oh, am I in the wrong room? Then I didn't join the mastermind. When you slow things down, right? Or during the coaching program where you slow things down, let's let's touch on what you just said because we left an open loop. As far as the CEO report, I think you're talking about CEO metrics. Yeah. So so share share with us just because I don't know if everyone has context of what they are and then what it's done for your business.

Yeah. So for a little background on that, I lost I was in construction and remodeling with my first business and went bankrupt for $1,000,000 in oh seven and eight. You know, I'm not alone. There's plenty of people that went through that. But one of the things that that my grandfather probably told me, let's be honest, because he taught me most of life and entrepreneurship. But one of the things that I've learned is never waste my struggle and never waste my lessons. So after that happened, I was like, clearly, I have no financial management and no financial intelligence, no financial control. So I invested heavily in it for a few years to learn things like profit first and like financial management and things I'd seen but didn't think were important. So I, I had decent financials when we came to you, but I didn't have the routine of every month looking at them with my leadership team and, you know, with my fiancee and business partner, Rachel. And we, you know, we now have a routine of reviewing that. And what that's allowed us to do is have a much higher awareness. Like I said, I think we were fairly sophisticated. Now we're super sophisticated in our finances. Most financial folks that we work with like are in all of what we showed them before we start working like, Wow, you guys do things. They're like, Yeah, and here's why. But now when I get a CEO report, I'm super conscious of what my team costs, what expenses we have, how much profits, and what my personal net worth is going up or down, how much I paid myself that month and racial manages all that really well. But I'm in charge of the strategy for it. And so by implementing your your program and system, we were able to increase profits significantly. And if you don't have process and structure like you guys teach your own finances, it doesn't I would say it almost doesn't matter if you have everything else right, because you're not going to be profitable. And if you're not profitable, then you don't have the mental, emotional and financial security to empower a team member. It's been nice over the last 18 months to be able to hand a project to a team member and say, You own this and you're financially responsible for this portion of it and go learn. Because when somebody has their own kind of skin in the game with that, then they're actually empowered to learn and grow. And I don't have to feel like if this doesn't go right, we're going out of business. Because if you either don't know your numbers and you're actually profitable, you still feel at risk. If you maybe you do know your numbers, but you don't have a good enough process around that to evaluate it, then you actually don't. In some cases, you don't have the ability to actually fully empower your team because they don't know the finances. You know, you don't know the finances. And it's it's super scary to empower somebody when you have financial risk. So that was a huge shift for us because every week I go over financials of the team. Every month I present the CEO report that says, here's the revenue we did, here is our profit. And then we implemented profit sharing in January this year. And it's it's not a ton of money. You know what I think for people hear that they think they're giving away all their money. That's not how you teach it. And the way you teach it is super responsible and it really incentivizes the team, even though it's just a small bonus check when we do have profitability, but it makes them personally invested and if we're going to be successful for the month. And so having that having that process around finances where it was super transparent to the team scared me a little bit. But everything else that you told me to do worked. So I was like, I'll do that too. And it's talk about full empowerment. The team knows or they know or they know what we did. And and I also really know the numbers. So I can say I'm comfortable risking this project or this new initiative because the team has ownership in it and we're profitable because I pay attention to numbers at an even higher level now. And so my fear of delegating or empowering somebody is so low that I can do the right thing.

I thought we were going to end, but I just I have to dig in on one last thing here. So what you just shared is one of the biggest insecurities or fears that entrepreneurs have. Is is should I share my financials with my whole team? And, you know, I've been doing this long enough and coaching long enough that I've seen hundreds of companies go from no transparency in financials to sharing gross revenue expenses and profitability. So everyone knows. Theoretically what the owner makes every month and the insecurities that entrepreneurs have are things like if they know how much we're making, they're going to want more money. If they know how much I'm making, they're not going to trust me, you know? Or on the converse, you know, hey, every once in a while we lose money. They're going to run for their lives and go find another job. What has been your experience of creating that transparency in gross revenue, expenses and profitability?

If anything, it's just deepened the loyalty of our team members and they understand where we are. And everybody, I think, in life wants a cause to fight for. And when you make it a team sport, which entrepreneurship is a team sport, it's not about the entrepreneur, it's about the whole team. And everybody can engage and help. And it's we had some transparency before we put the program in place and then we put it in place is even more I know that I could go to my leadership team if we had a crazy bump or something. Way crazier than the economic stuff we have going now is a normal cycle to me, but like if we had some crazy shit going on. My team has done this to me in the past. They will volunteer to work without pay and have me pay them back later. I mean like that's how invested they are. And like I did take up a couple of team members up on that when COVID hit and we paid them back and everything was great. But that's what happens when you're transfer out of the team. They're so invested that they're going to sacrifice their own finances and their own well-being for a season to make us successful. And that's very different than what you expect when you're transparent with your money.

So yeah, that is so awesome. Gabe This was everything I expected and more. I really appreciate you taking the time with me to share this. I know it's going to help people that are listening. I know that even even if somebody is not in our program, you sharing what you shared with enough granularity and detail that I think if you're listening, there's some changes to make here. There's some incredible wisdom here from Gabe. And, you know, I'd like to see all of you do that. And if you're interested in joining the same program Gabe was in and is coming back too, by the way, about 20, 30% of our members leave at some point and come back. And we have a lot of repeat customers because business grows in season. So they'll take a break, they get to the next growth season, they come back. If you're interested in having a call about the program, you can go to Simple Operations dot com. Answer a few questions from my team. One of us will jump on a call with you and we'll see if you're right for the program as well and see if we can help you. Gabe, I appreciate you, man. Thank you for taking the time today.

Absolutely. Anytime, man. If you're wondering how to grow and scale your business like you just heard about Gabe doing, if you'd like more information on any of the tools that he discussed, if you'd like to understand how we may be able to help you, go to Simple Operations dot com and fill out the form. And we will jump on a call with you and show you how we help business owners like Gabe and like you install an operating system that allows you to work less so that you can scale faster, get more done with your team, and grow your business in the way you've always known you should. Simpleoperations.com