The SMB Blueprint for Building an Operationally Excellent Company

Welcome. Thank you Kevin, Sam, and David. But one person we definitely have to give thanks to is Tara Henderson. She does a ton behind the scenes. Can we give her a round of applause? Love you, Tara.

Thank you for coming today. For those of you that don't know me, my name is Joshua Schultz. I'll get into a brief thing on my background, but more importantly, what I want to talk about today is operationalizing excellence, building what I call this SMB blueprint. The blueprint of what builds a great company that gets great outcomes. To me, it's a machine.

What happens is you buy a business and you've got your Excel model, you've got your value creation plan, you've got the things that you know how to tweak before you buy the business. But then you get in there and you realize that it takes twice as long to deliver value to your customers because your techs are slow or your machine's broken. You realize nobody's updated the machine in five years, and it's months away from breaking down, which is going to totally handicap your manufacturing plant. You realize nobody's had a raise in three years because the guy's been knowing he's going to sell and pulling all that cash in. You have problem after problem. Before you know it, you can't deliver a product, you have no one to sell to, you're getting bad rapport with your customers, and stuff starts going downhill fast.

The experienced operator, the owner, would have known what to do, but you don't have his 15, 20, 50 years of experience to fix this. So the question is, what do I do? Where do I start? In about 40 minutes, I'm going to run through at a high level what you should be doing when you get there.

This happens over and over. It's not just when you buy a company. When you start a company, it happens when you hit about 50 people. It happens when you hit about 120 people. Things break. If you overbuild too early, everybody's just going to be doing process all day, and you're not going to have a company. You're just going to have a really well-run machine that does nothing. If you have nothing, it's all going to be tacit knowledge in people's minds. So how do we create something, implement the right playbooks at the right time, and build something that is operationally excellent?

I'm a work-backwards person. This whole thing comes from: what do the great companies do? When did they do it? How do they do it? Why does it matter? And how does that flow down into what I do over three to five years, every year, every quarter, every month, every week, and every day? I call that the SMB blueprint, and I'm going to give you four pillars that the SMB blueprint is built on. This isn't a tactics talk. This is to give you the broad framework from which you can pull the tactics.

I had the pleasure of learning operations helping build my dad's business growing up. I left finance in Manhattan and came back to start working from there. I was also an accounting professor at Syracuse University for the MBA program. Then I got asked to be inside the tech hub, which was an incubator for businesses in Syracuse, New York. I got to mentor 50 businesses and see the same problems over and over, the same ones I faced with my father. We sold our business and I started working for the private equity firm that bought our business. They put me in charge of 30 plants. Problems that I didn't have at $14 million were a major problem. I used to say I hate meetings, you don't need a meeting ever. When you have 30 plants, hundreds of employees, and you can't get everybody to focus on one thing, all of a sudden there are key moments when a meeting becomes necessary. As we grew, I realized it's not only what's important and what's not, but also when. As you scale, what problems are you facing?

This is a work-backwards playbook from what matters. I'm going to go over the four pillars, and what I hope you do is ask, what are the problems I'm facing in this machine, in strategy? And what can I do to fix it at the level that I'm at?

What is an operationally excellent company? One, everything you do is top 1%. It's world class. I hear people say this and then they go use the template invoice out of ServiceTitan, or the lowest level of manufacturing expertise. Don't document anything. Nothing's 5S. If you really want to be the best, you're going to think about every single point that your customer touches, every point your employee touches, every touchpoint that your bank interacts with you on. You're going to want it to be the best. You're going to want to have the best approach to preventative maintenance. It takes years to do. But this is the goal.

We also want it to be emotional. The best brands have an emotional attachment. If you go in every day and say, we're going to try to grow this company, I need you guys to do your things, the scorecard is off, please get it together, I'm going to fire you, you're going to constantly have turnover and you're not going to really build a thriving company. But if you can connect into something higher, and get them excited about what you're building, their piece of it, clarity on how they benefit, you can start to build something exciting where you are no longer having to solve all the problems of your company. You have awesome leaders and problem solvers that are bought in, giving their energy to also help you solve. That's when stuff gets exciting. You get momentum and all of a sudden it feels like you're running a company, not just playing whack-a-mole all day long.

And then: are we doing the right things in the right way and getting the right result? That's more of a measurement thing. We're going to apply this to every machine we look at.

For me, the business has always been the product. I have sold sand castings, tech services, coffee. The business is the product. How are we going to operationalize this business so that we have success? Here's how I've measured success, and this has evolved a lot over the years.

First, are we developing employees? A business that is not helping people learn and grow, whether you're sharing blog articles, sending them to podcasts, paying for training, or bringing them here with you, if employees aren't growing, you are eventually going to plateau. You cannot outgrow your employees. There is no tech stack, no automation, no AI that is going to help you outgrow your employees. They are your team. They are the ones going to save you.

Are we helping our customers be profitable? Our customers are entities that need to make a profit. Our goal is to help them attain that. Are we rethinking what we're selling them and how we're selling it?

Are we enriching our stakeholders? This could be the banks, this could be your investors. They bring connection, possibly more capital, opportunities. This is not just about money. If you have a lot of stakeholders, hold an annual event. Make it fun. Make it so that people want to invest in you just so they can be part of the community you're building.

Advancing the industry. This isn't pertinent to all, but in some industries I've worked in, we have contributed research. Are you developing best practices and sharing them publicly? There is something really impactful about shaping an industry. It can be a niche industry, but figuring out a better way to do things, working with competitors to do that, can be powerful. Sending out white papers, talking at universities can be powerful.

The last would be connecting with your community. The community we hire from, the community we work in, the streets we drive during the day, the Pop Warner that our kids go to. We want to be investing in the community because this feeds back into your business. The more you do this, the more you're going to be able to hire, find customers, and have people who've heard of you. It's going to grease all the wheels of everything you want to do operationally.

What you'll notice is the key here is people. A lot of times when we're doing our models, doing our value creation, we're forgetting that people drive everything. Your vendor is a person. Your customer is a person. Your employee is a person. The excellent salesperson you're trying to recruit is a person. If you don't have a people-centered mentality as an operator, you are missing a major component of growing an enduring business.

We have operations that we want to run, and we also have aspirations. We're going to use the operations to fulfill our aspirations, but no matter what those are, there's a bottleneck in between. Whether you want to build a park in your community, start a nonprofit, hire more people, work less, get that boat, whatever it is, cash flow solves it. So while cash flow isn't the most important thing for an operator, it's the ultimate metric, because it's going to enable everything else we're going to do.

No matter what we want to do, whether it's operational, business, personal, or community-focused, industry, acquisition, it all needs cash. Cash is the measure. Cash is what we're going to talk about every single day. Cash is what every scorecard pushes towards, whether it's sales, ops, or finance. Cash is what the strategy is driving. Cash is the most important thing to talk about. It just isn't the most important thing. It's important to explain this to all employees because this can be confusing. This enables everything you want to do, tech, operator, manager. So I don't think it's important and you don't think it's important, but for everything you want to do, it's the most important thing.

The goal is, how do we maximize cash flow? That is our job as an operator. There are other roles in the company. There is visionary: I'm going to work on strategy direction, I'm going to acquire excellent talent because I'm a magnet and I'm charismatic. But that is not what we're talking about today. The operator infuses energy into an operation that is full of friction. Operations by nature is a series of friction points, connections, transfers. We have four flows: money, people, information, and material. Stuff gets lost. We waste, money gets confused. As that goes through, we are losing things. It's a closed system that loses energy. So we put energy in, we work on lowering the friction, and we spit out cash flow. That cash flow, if you're small, is for you to go do your stuff. If you're bigger, it's for your partner to figure out how to get the next acquisition, the next service truck, whatever it is.

When you take that as an operator, you aren't just doing operations. Operationalizing a company is making it systematic, scalable, trainable, documented. It's something that you can hand to people, you can hire into. You can go from 10 to 100 people. That is operationalizing something. So when you're an operator, we are operating the business, but we aren't technically only in operations.

The first pillar: how do you view your business? I view my business as a machine. I want to tweak it. I want to replace parts. I want to get a new motor and just keep tweaking. I don't throw it out, I don't ignore it. If one of these parts breaks, the whole business breaks at some point. You can't continue to grow without all these machines working together. This is the framework I use when I'm fixing a business. You walk in, you're brand new, or it's just a business that's new to you. There's a thousand things going on, everybody's complaining. Have you ever done that one-on-one thing where you talk to everybody in the company over two weeks and you end up with 14 pages of complaints, from the water's never cold enough to our two biggest customers are about to leave? You're like, what do I do with that information? I need a framework to put it into so that I can prioritize, so that I can understand what to work on and what can wait.

Sales: the purpose of this machine is to communicate value outside the company. Not just customers, industry, community, stakeholders, vendors, people you want to hire in the future. If you are not purposely sending a message, then you're unpurposefully sending a message. Something's getting out to the community. A horrible place to work for is going to really hurt your hiring. You want to purposefully be shaping these messages. Customer is one of the most important we focus on, but sales is about communicating value.

Operations: are we delivering that value? If part of our sales is to communicate value to the community so that we have a better time hiring, we get a reputation for being a good company to work for, we pay for training, well, we've got to deliver on that. How are we actually going to train them? We're going to hire trainers, we're going to find people having a hard time getting jobs, we're going to pull them in and pay for it all. That's all the ops, all the logistics of making that work to help our sales team get a better reputation in the community so that our people team can do a better job hiring.

Finance. I'm calling these by very generic names: sales, ops, and finance. Finance is really your data center. It is not bookkeeping. It is your data center that feeds back into the other two. How do you know what your ROI is on marketing? How do you know how long it takes for an employee to really become versed in what they're doing? That's your finance function. They measure the numbers, the data, the money, time, utilization, capacity. Your finance function might just be you six hours a week if you're really small. It might be a bookkeeper that you've enabled with calculators built in Excel if you're medium. It might be an actual team if you're $50 million plus. The finance function should be where you go to make a decision or ask, is our op improving? It's where you go for the source of truth, and that feeds back to the other two.

This is all built on what I call a scalable platform, a series of ways in which you operate these machines. For example, it should be async. Not saying that the company has to be async. I'm saying everything should be built async. If I have to meet with Jackie every single time I want to make a decision, I need her to be free, I need to be free. I'm preventing her from doing something. I'm forcing my urgency on her. If you have a company of people doing that, you have a company forcing urgency across the board, not getting anything done unless six people, who are probably making a collective $600,000 a year, all sit in a room focused on one thing. Build it async. Find systems to make decisions async, solve problems async, make process changes async. It's really easy nowadays with cloud, Slack, Confluence. There are so many tools. We can execute and share tasks. We should never be updating people on things live. That's a waste. Are we building something that as it grows isn't going to create more friction? Our job as operators is to lower the friction.

If you had asked me after Chess Group what was most important, I would have said the model right there: those three plus a scalable platform. I was a systems guy. Then I got thrown into a $150 million company partnered with a CEO running 32 plants in the US and one in Mexico. A couple things changed. Not everybody knows what you know, thinks how you think, and is trying to get done what you're trying to get done. You go from a small group of tight-knit people that have known each other their whole life trying to grow this business to all over the spectrum. Some people are there because they have to be, some want a job, some want to grow their own career, some are biding time. How do we get them together? We need strategy.

We need something they can all align around. The biggest problem with most strategy I see is, one, it's not tactical enough. It's in the clouds. It doesn't help people know what to do on Tuesday. The second is people aren't aligned to it. It's not shared, it's not clear. Clarity builds trust. Trust and respect is the bedrock of building a great people machine.

People and culture is the second thing I learned that I added to this, because people and culture run the machines. I can only build so many repairs, understand so many problems at a time. But if I have a team of 10, 20, 30, 40 people that are like-minded and trying to build the same thing, you have a powerhouse of a company. That comes with developing people, onboarding properly, early expectations, clarity. We want to build that machine.

Then principles and values. Use mission, vision, all that stuff. I like these two because they are the two I use on a Tuesday. Principles are how we make a decision. I have always written a decision matrix. If I'm not around and you use these five things, you'll probably come to the same conclusion I will. If you come to a different one, I'll still back you up. We approached it differently, but at least you ran through this: take care of the customer, were all the employees safe, did you make sure you installed the top 1% system. If we wronged the customer, refund them. If we didn't, I don't care how much they complain, we're not refunding them. Follow the principle.

Values: what do we hold dear? Build them. Talk about them every day. Put them in your CEO newsletter. Bring them up in the daily huddle. I'm always referencing some version of this because it doesn't happen until you say it 50, 100 times. You want your team mocking you for your values, mocking you for your principles, because that means it's drilling in finally and they get it. Again, this is a series of a lot of playbooks. Think through each of those machines, think of how to increase volume, velocity, variety, and value across them, and start to come up with new ways to get more done with less, lowering friction.

Pillar two is the operating model. When I coach somebody, almost always the first question I get is, what am I supposed to be doing? I know what the owner does, he wants the money. I know what this guy does, I wrote his job description. What am I supposed to be doing? We don't know. We end up running back and forth. Fire this, I can solve that problem, I'm the best problem solver, I know how to code, I can do that. You end up running to all the things you know how to do because you're the only one willing to do it. That is not your job as an operator. In fact, you're ruining the company if you're doing that.

I had a saying at one of the companies I ran, a manufacturing company. Somebody would come and say, hey, there's this problem and I think you're the only one who can do it. I would say, that's a $2,000 problem. I only solve $100,000 problems and up. You are well capable to solve a $2,000 problem. Even if you can't, it's a $2,000 problem. Do your best. I'll help you train, I'll give you the resources, but I'm not solving that problem. Your team needs to realize this isn't just pushing stuff upstream and downstream. It's on us to become problem solvers.

What is your job as an operator? It's to use your assets to produce revenue. You are given square footage, trucks, people, IT systems. Your job is to manage those and turn them into revenue. Then to take that revenue and turn it into profit. The last one is take that profit and turn it into cash. A lot of people forget that last one. Companies with great EBITDA and zero cash going insolvent. I call this asset effectiveness, margin efficiency, and cash productivity. This is your job. When you're walking around your plant, doing ride-alongs, what you're looking for is, how do I get more asset effectiveness? Do we need more assets, and how do I get more effectiveness out of the ones we have? How do I get more margin efficiency? Are we spending money on 18 pieces of software when we're really only using two and the rest are just because it's a little prettier than Google Sheets? Then turn that into cash. That's AR, AP, inventory. You maximize AP, minimize AR, minimize inventory. The more you can do that, the more you turn it into cash.

Sit down and think how can I lower my AR and raise my cash flow. Can they prepay for anything? Can I call it a membership and really it's just a prepayment? You can multiply these together. These are actual ratios. You can score yourself every month. Look at the balance sheet and score yourself. One company I work with is heavy into people capital. For them on asset effectiveness, we include salaries as part of the assets because that's our capital, that's what's creating the revenue. You don't have to follow GAAP principles. Nobody's going to come in if you start changing numbers around.

This looks like sales over assets, income over sales, cash from operations over income. If you're good at math, you can cancel those out. What are you looking at? For my assets, what's the income or cash flow I'm getting? That is your job as an operator: maximize cash flow. Go through and ask, what are all the ways I can get more revenue per asset? Am I maximizing my square footage? Do I have room to fit a machine? Are my trucks optimized down the route when doing deliveries? Am I storing things properly? You can run a leaner shop, get rid of waste.

Think in ratios. Just because you can get another million in revenue, if you buy a $2 million machine, that's a 0.5 ratio. You're going to dilute that. If your sales-to-asset ratio is three and you add 0.5, in other words you spend $2 million on a machine for $1 million in revenue, you're going to dilute that. It's more revenue but it's actually going to add friction and problems and tie up your cash flow. Think in ratios. You are a decision maker, and your job is to say no more than yes. As an operator, there's tons of opportunity out there. Your job is to find the ones that help the company get better. We call that accretive ratios.

Pillar three: the power center, people. If I boiled everything I have learned with people down, managing a wide spectrum of individuals, trust and respect is the most fundamental thing. If they don't trust you and respect you, it doesn't matter what system, incentive package, feedback, or one-on-one. You could have the coolest template in the world. Whatever we think is going to solve these problems, without trust and respect, you've got literally nothing. They're looking for a chance to leave. They don't trust you. Our job is to build trust. You need people to help you do it. They know the business, they have the history.

People talk about day one, the speech you give, how to supercharge a 90-day sprint and get things done. If you skip this, throw it in the trash because you are going to get one-tenth of what you should be getting done with the same payroll, the same crew. You need trust and respect.

The two most important places I have found this are the daily huddle and ride-alongs. I know nobody wants to get up at 4:30 a.m. and make the daily huddle, but that is where the magic happens. Guys do not trust you if they don't ever see you do it. I'm not saying that should be your job, but that's where the trust is built. Do a ride-along and ask about their history. The daily huddle is my favorite. There are consulting clients where I tell them I will not do consulting unless I can come be part of the daily huddle. That's where the nudges happen. They're more vulnerable, open to talking, and they haven't started working yet. You start to lay down ideas and concepts.

Most people don't want a 14-page strategy you really enjoyed writing over the weekend that you're super excited about and tweeted out. They don't care. What they do care about is how it affects them. Take the next 30 days and share nuggets of that strategy document with your team. Hey, just so you know, one of the things I'm really excited about: we want to be top 1% pay in the area. Can't do it right now, we don't have the cash, but I think if we go after this market, service them correctly, get our billing efficiency correct, I actually think we can pull it off. Can you help me do that? Three minutes, you're done. Then go to the scorecard. Then the next day a small nugget, and the next day a small nugget. People nudge and will change over time.

The more you follow through on what you told them, hey, we didn't get the full yet but we did get more cash, so I'm going to start us toward that. I'm going to bump everybody up a buck fifty because I think we have enough to at least start working toward that goal. That's the trust and respect. They said something and they want something good for me, that's the respect. They followed through on trying to make it happen, that's the trust development.

Always be developing yourself. I don't have to tell this crew, you're here. Always be developing your team. Train your team in different ways: blog articles, podcasts, whatever you want to do. Then plan. People love execution but nobody has plans. I ask people all the time, what's your number one goal right now? Wow, I don't know, we have 18 things. You can't even keep this straight, how is your team going to keep this straight? You should have one goal at a time. Six to 18 months, however long it takes. Knock them out like dominoes. Make it a sequence. You want a plan for your team. If they have a plan, they execute, they get accountability, and they'll get clarity, which is key. They'll have trust and respect, and you will literally be able to do anything with your team. I have seen entire teams turn around with trust, respect, and clarity.

One thing I've realized: the more your team trusts and respects you, the less systems you need. Systems are bureaucracy, which I don't like. You have to use them to scale, but you don't need as much built out if your team trusts you, because they'll be out there working for you too. You don't have to say leave the place at 6:30. The guy will be in the truck at 6:15 because he wants to get more done. He loves what you're building.

I struggled with this because at a large company there were a lot of people that didn't care about money. I was like, what do you care about? We all talk about cash flow, we want to grow, and you guys do not care about money. What I found is there are nine things, and each has a series of five to 20 ways you can utilize them to connect with people. Pick one or two ways you could use each of these with your crew. Some people are attracted to vision, I want to be part of something big. Some, feedback. I'm a feedback guy. If you don't give me feedback for months, I feel like I'm drifting. Some people like accountability. They like to check in every day, know what they're doing is right. People are all over the board, but this captures the majority. I have a system or two for each one, and that way I'm helping everybody connect with the company and the vision. I give whole-company town halls. That's my clarity. I walk through our vision once a quarter. You're trying to find a way to connect with everybody.

There are five ways to align people to the strategy: training, audits, reviews, weekly peer meetings, and incentives. They all hit different parts of our psychology. They hit a little of incentive, a little, I don't want to fail the test, a little, my friend is doing better than me and I want to up the game. We're hitting a lot of areas. That's how you start to push people toward what you want them to do. You connect them to your company, then help them align to your strategy, all while developing them and building trust and respect. This becomes a lot more fun when you figure this out and you're working with people you respect and that respect you, versus tirelessly shoving scorecards down somebody's throat.

The last pillar is strategy. I love Roger Martin's definition: the right playing field in serving customers. I'm going to modify that, because I don't just want to serve customers. I want to serve my community, my industry, my stakeholders, and my employees as well. We create a direct line from what I call ideals, mission, vision, what is it that I want to do, change the world, the ideal, straight down to my daily scorecard. I write them all in one document. Here's what we're trying to do, here's why we're different, we think differently, we operate differently, we're willing to make promises nobody else is. Then you get into the number one way to get us there, which is our strategic project, that you talk about in your weekly meeting. That's the most important thing. Who and how is responsible for each individual section, and what's the date? It's accountability that's lined up.

Then guaranteed success metrics. I know for a fact if we produce 10,000 pounds of aluminum a day, we ship all of that aluminum, our quality rate is below 2%, and our AR is in line, if I have seven of these and all are always accurate, I will always make money. What are the six to seven things that if you did every day, we always X, always Y, always Z, you'd make money? Those are called green days. If you stack green days, you have green weeks. You can see where I'm going. There should be a direct line from we want to change the world all the way down to here's what our day looks like and this is a win for us.

You have an annual plan. I like the box analogy. Mark Brooks mentioned that once and I thought it was useful. You start with a dream. I'll talk to one of the guys and say, what do you want this place to look like in a year? Don't start with numbers like grow 20%. When somebody tells me their goal is to grow 20%, you've lost me. How? Why 20%? Why not 21%? Start with what does it look like. I want to come in at nine every day. I want the team to have already done their daily huddle. I want everybody to be dialed. Describe qualitatively what that is. Then, what are the people, the skills, the capabilities that we need to develop to get there? What are the systems and equipment and resources we need? Then you know what you have to spend to build a company you just described. Now you know your numbers, you know your cash. You build this box plan, and if you expand the plant, it's a square to keep it ratio, you have to have more systems and capability and skills, and your numbers are going to be bigger. That turns into your actions, your outcomes, and your projects.

That drills down to your 30-day monthly review of the financials. That becomes projects you use to make the company better. You make intermediate decisions there. It's a weekly scorecard you review with your team where you adjust the day and your process and your template, and then your daily scorecard as well. This should drive straight through the organization. We talk about it so much that everybody knows the numbers, the metrics, the strategy, all the way up to the ideals. That happens in the daily huddle, the weekly meeting, the newsletter you use to communicate updates to your team.

Strategy is fluid. I only ever plan one ahead: one year, one week, one day, because things change. Every week I'm going to reassess and say the scorecard came out like crap, what do I need to adjust on the daily? Every quarter I'm going to look and say, okay, I'm about to plan next quarter, what worked over the last three months and what didn't. At each fractal, I have a three-year, a one-year, but I'm constantly reassessing. Way too much changes in this game. People change, markets change, environments change, interest rates change. Three-year plans, stagnant, posted up, are meaningless. It's a guide. We keep adjusting. I call it fractal iteration.

Last part, how do we take this and turn it into action? This is the same machine model I showed you before, but we're going to put what we just learned into a model. When I have a list of 150 things to work on, when I have problems being thrown at me, I need to step away and ask, what does this business look like? Am I developing the employees? Am I helping the customers? Am I enriching the stakeholders? Am I serving the community, advancing the industry? And am I doing all that while making cash because I'm doing it the right way? Cash is the metric to know if I'm doing it the right way. This is my cash generation machine. Call it the action model.

Number one is people. Can't do it without people. If I had given this speech 10 years ago, it would have been a bunch of systems up there. It would have talked about scalability and feedback loops and mechanisms. It's completely useless if you don't have the right people. Being able to hire the right people, have the right culture, talk the right way, draw those people in. You don't need to be charismatic. You need to care, you need clarity, and you need to build trust and respect. You get the right people, onboard them correctly, train them, queue them up. Tell them they're doing awesome. Tell them how successful they're going to be. Prove it with the numbers, with the actions. You build a great people machine. Those people, no matter what role they're in, then need to plan, execute, and have accountability to each other and to others. They hold each other accountable. You hold them accountable. They hold you accountable. My team holds me accountable. I've given them permission. I love it. They say, you said you're going to do this and you didn't. I'm like, you're right. I got busy and I deprioritized it. I'm actually still busy. It's going to be another two days. But thank you for pointing that out. I'll try to be better on my timing next time. You all get better.

The method is printed right at the top of the board on our daily huddle. Everything we do is excellent, urgent, and with agency. Don't tell me we didn't get enough leads. Tell me we didn't get enough leads, here's why I think, and here's what we're going to adjust next week. That's called agency, force your outcome to happen. Don't just tell me, yep, didn't work. I can see the numbers. I was disappointed all week long. I was excited about what you were going to bring to the table on ideas. If you don't have any ideas, possibly we should switch some roles out, and you shouldn't be the lead tech. I've got ideas and I'm not even on the road. That conversation happens a little differently, but in my head that's how it's happening.

You want them to act with urgency. Don't put off till tomorrow what you can do today. I'm going to make a Google Sheet. Great, get the computer out right now. Create a new sheet. Can you share it with us? Throw the columns in there, we'll clean it up later. Force stuff to start happening. That's the momentum. That changes the energy of a company.

Excellence. We want stuff to be great. I don't want a template invoice. I don't want everything to just be the way the industry does it. I want every touchpoint to be amazing. It takes years to get there. Where I am now, we are not there, but that is where we're headed. We're constantly analyzing how we can make this better. How can we be top 1%? By the time a customer is done with us, or a stakeholder, or we give a tour to a possible employee, people walk out and say, man, I want to be part of that. I don't even know exactly what attracted me, but everything was just amazing.

Supported by our scalable platform, the way we implement new things, strategy, directives, our principles and values, and we're injecting energy. Remember the energy model: energy into the ops, lower the friction. What is that energy? If you always have new leads, new information, and new people coming into your business, the leads become customers and cash flow, the information becomes strategy decisions, and the people become your operators, your leaders, your problem solvers. This is what you need constantly going into your business. If you are a good operator, this is one of your main concerns. You can only operate whatever you have to a certain point. You can't raise margins to 95% in the manufacturing business. There is an upper limit on how much you can optimize, clean up, and systematize. That's where operators get stagnant. Why are you stagnant? Closed system. It needs more energy.

One thing I like to do right away is consistently find great customers. Know our ICP. Go after it. Dial it in, 20 different methods. What is your information flow? How are you finding out what's happening in your industry, adjacent industries, government regulations? And new people, how do you constantly have new people coming in? Always be hiring. You should have a database of people you've talked to in the last two to three months that you could call back when you need something. It's proactive. What are the chances you're going to find the right person when this guy quits and you need an operator quick? Almost zilch. You're going to be filling with subpar, not the culture you want to build. We want excellence. We want to hire the best.

This is the operating model. On top of that we have what I call community. This is our immunity, problem solving. This is how the business changes and gets better without you needing to. That becomes really important when you get to about $20 million plus or about 100 people. Then innovation. How are we doing micro innovation and macro innovation within our field? That is the action. This is what's happening all the time. As an operator, I am maximizing that operating model I gave you earlier by adjusting all of this.

Next steps. Pick a pillar, pick a machine, pick a goal. Rewrite part of your strategy. It should all be in one document. It should all flow from ideal to daily scorecard. That should be a three- to four-page document that all makes sense. It's not disconnected in separate places. Give it a shot. Start to share it with your team. Try to build trust and clarity, and start to use these four pillars. View it as a machine that can be tweaked. Understand your people. Build trust and respect. Understand your role as an operator and think in ratios and start to maximize your company. Connect it all in the strategy. Align everybody and get everybody driven.

I hope this helps. I hope this gives you a way to view your job and your business and to take something and really turn it into something that could be operationally excellent. Thank you.