Latest / The Action Catalyst / They'll Have To Kill Me To Stop Me, with John Hewitt (Franchising, Taxes, Business, Leadership)

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They'll Have To Kill Me To Stop Me, with John Hewitt (Franchising, Taxes, Business, Leadership) · The Action Catalyst

• 0:00
  Adam Outland: Welcome back Action Catalyst listeners. I am
• 0:22
  your host, Adam Outland. And today, I'm pleased to welcome
• 0:52
  John Hewitt, the Hewitt in Jackson Hewitt Tax Service, the
• 0:56
  second largest tax service in the United States, which was
• 0:59
  founded in 1982. Afterwards, John also founded Liberty Tax
• 1:03
  Service, which is the third largest tax preparation service
• 1:06
  provider in the United States. Since exiting both companies.
• 1:09
  John has authored the fascinating book, I compete and
• 1:13
  now accept the CEO of loyalty brands, which we will hear more
• 1:17
  about a little bit later. John, good to meet you.
• 1:20
  John Hewitt: You too. My pleasure.
• 1:21
  Adam Outland: But reading up on your background a little bit
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  more. And at first, I was like, Oh, wow, he grew up in Hamburg
• 1:27
  and Greece. I was like, please, really traveled the world. And
• 1:29
  then I read the clues were smaller towns in New York,
• 1:32
  right?
• 1:33
  John Hewitt: Yeah. My girlfriend now lives in Italy, Texas,
• 1:36
  Italy, Texas. Yes. Right. 35 miles south of Dallas.
• 1:41
  Adam Outland: So you tell all your friends you go to Italy?
• 1:45
  They asked you to bring back some wine and you say I don't
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  know if you want wine from Italy.
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  John Hewitt: Exactly.
• 1:50
  Adam Outland: You've accomplished so much. And a lot
• 1:52
  of your story I think starts with working for H&R Block, was
• 1:55
  that while you were still at university or...
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  John Hewitt: Yep, I was attending the University of
• 2:00
  Buffalo. And I took a tax course for h&r block. You know, I was,
• 2:04
  I've always been self confident, if not cocky. And when I was in
• 2:10
  high school, I decided I'm going to be a millionaire. I no clue
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  how my major was mathematics. And my dad interceded. And he
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  was always wanted to be an entrepreneur, but had too many
• 2:22
  children too quickly. And we were too poor. But he called up
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  h&r block in 1969. And said, we'd like to buy a franchise in
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  Hamburg, New York. And they said, as a matter of fact, we're
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  going to open a company store there this year we already have
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  and it's right. It's right on Main Street. And it was life
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  changing. One of the biggest blessings of my life is when I
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  was 20 years old, I found out what I wanted to be when I grew
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  up.
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  Adam Outland: Not many people can say that.
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  John Hewitt: You know what, most people don't know if they're 20,
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  30, 40, 50. Most people don't know what they want to be when
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  they grow up.
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  Adam Outland: Yeah, vision is lacking for a lot of people and
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  and so they find themselves drawn to other people's visions,
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  which I guess it's okay.
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  John Hewitt: It's ok for people like me that have vision. I need
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  people like that. That's right. Yeah. Every industry needs CEOs
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  and visionaries. And I've always been a crazed competitor. You
• 3:17
  know, it's with me, it's show me a good loser, and I'll show you
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  a loser. So I've always had this fanatical, obsessive desire to
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  win. And so whatever I did, I learned something when I was
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  about 17, to solve arguments, because I'm so argumentative.
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  And my friends that I would be listening on the car radio, and
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  I saw would come on. And I'd say it was the Moody Blues, they'd
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  say, it was three dog night, and we'd argue and no one would win.
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  Right? So I invented a game that I played to this day, that I bet
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  you it out, you have to either have to stop arguing or bet it
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  out. And so I bet like a million dollars in my lifetime. I only
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  bet one at a time. I don't bet $10 or $50. Yeah, I'm incredibly
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  competitive. In 1980. I became a regional director and I
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  foolishly 10 years earlier said that's my dream is to be a h&r
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  block Regional Director. And I previously set that goal and I
• 4:20
  made it and I was so excited and and then my dad, he took me down
• 4:26
  a notch. He said, John, I'm going to computerize taxes, and
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  I want you to join me. It took him six months to convince
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  finally he convinced me and we both quit our jobs. And in 1981,
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  we built the first tech software for an Apple computer.
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  Adam Outland: What was it that made you feel that you guys
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  would be good business partners and that that would that would
• 4:49
  work out?
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  John Hewitt: Well, as a teenager, I mean, my dad and I
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  bought like cats and dogs. I mean, he wouldn't talk to me for
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  months on end. I was just so rebellious. Isn't it my
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  rebellion wasn't drugs or, or crazy stuff there was I wanted
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  to hang out with my girlfriend so I'd sneak out at night and
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  hang out with my girl. But he wanted someone that would obey
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  the rules. In my career I've had my mum worked for me, my dad, my
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  sisters, my ex wife, my children, my nieces. And I've
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  had lots of people work, but not everyone worked out well, I had
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  to fire my ex wife, fire one of my daughters, and I'm fired by
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  one of my sons so that everyone worked out well. But it was so
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  bonding with my dad, and that it took him from this rebellious
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  teenager, I had 45 years with him, where we were almost best
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  friends that we had something in common. He was partners with me
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  and building the software. He was the board of directors of
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  Jackson Hewitt, he was on the board of directors of Liberty
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  Tax. And when it came to business, he always gave it to
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  me, but in any in every other face of his life, our lives he
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  would not pay any attention to.
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  Adam Outland: Wow, and from there, how did you decide that
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  franchise was the route you wanted to go?
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  John Hewitt: We started with six offices in August of 82. By
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  January, we had a lot. So we bought six offices from Bell,
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  Jackson's widow changed the name to Jackson Hewitt, and had 11
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  nose then the second year we had 15. And the third season we had
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  22. So in two and a half years, we had gone from six to 22. So
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  that's pretty good growth. But my goal from day one was to have
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  more offices in h&r Block than they had nine bows. And I
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  realized I'd be like 600 years old by the time I got to 9000 at
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  that rate. So we immediately start change. I decided we're
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  going to franchise we need h&r Block franchise, and we exploded
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  we went from 22 to 49 to 197 to 350. So we exploded with
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  franchise, Adam, the beauty of franchising that no one ever
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  talks about because I think they they feel guilty, is I get
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  someone like yourself a very talented person, and you pay me
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  to work for me. I mean, if I went out in the marketplace and
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  had to hire you, I'd have to pay you hundreds of 1000s of
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  dollars. But you pay me I get a great person like yourself, who
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  wants to change their life, and you pay me to work for me. So
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  that's almost a scam except for I've made 1000 millionaires and
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  my 5000 franchises and hundreds of 1000s of employees. I've
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  changed 10s of 1000s of people's lives.
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  Adam Outland: And what you offer, I feel and then you can
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  correct me is when you buy a franchise you're buying into in
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  some ways, especially in the early days coaching and direct
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  mentorship, you're paying for the systems in the organization
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  to say this is the value proposition that you're buying
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  into. And there is 100 I think for a lot of successful people
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  to have that kind of mentorship and guidance and tools, because
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  they're motivated, but they prefer a little bit of a
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  shortcut on the learning curve, right?
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  John Hewitt: It's a huge shortcut it saves years and
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  years. Yeah.
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  Adam Outland: Because you hit those potholes. So they didn't
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  necessarily have to.
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  John Hewitt: I've either made every mistake or I've seen every
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  mistake. A couple of times, we almost went bankrupt. One year I
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  had an opportunity. We are growing by leaps and bounds. And
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  remember our number one goal was to be bigger than the 9000 HR
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  blocks. And there was a company in the country that had about
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  250 locations. And they decided to offer tax where there was
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  they had a relationship with a company come up every ward,
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  which also doesn't exist anymore, which is a miniature
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  Sears and they offered to sell us the Montgomery Ward contract.
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  Well I had just I had just hired my two favorite people from h&r
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  block that were running 300 offices, and I just done an
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  offering and raise money and it would make us immediately that
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  year, six years after we started we'd be number two largest in
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  the country. And so we didn't do enough due diligence but we
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  bought that relationship and we opened in about 150 Montgomery
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  Ward's Welcome to Buy Now they had treated the they had had a
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  horrible season and they treated the taxpayers all over the
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  country. And these countries they were in like 27 state. So
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  we went from three states to 27 states and they had such a bad
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  year the previous year. They hadn't paid their prepares so
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  the prepares were angry with them. They didn't either they
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  quit some of them a couple of situations they competed so mean
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  and miserably that they would come into the Montgomery Ward
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  because these are little kiosks and oh my god reward they would
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  come in and and Rick Truth to customers right from under our
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  nose and said, I'm over. You know, I've been doing your taxes
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  for three years. I'm over here, come to me. So we had to go to
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  Montgomery Ward that we have to shut down honor to these
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  locations. We're getting killed, you almost went bankrupt. Wow, I
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  took zero pay. And many people took a 50% pay cut. But we came
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  out of it very robustly bigger and stronger than ever.
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  Adam Outland: What was the number one lesson that taught
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  you?
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  John Hewitt: Don't roll out anything on a national level. If
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  you're going to test anything, do it reasonably small tests
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  before you go take it out and do it nationally.
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  Adam Outland: But in your, you know, in your position, you
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  know, would you say that your risk tolerance is relatively
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  high?
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  John Hewitt: I say it's off the charts. Adam. Think about it. We
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  had six stores. And I went through my investors and said,
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  our goal is to be bigger than h&r block. Now my word is my
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  bond. We only got to 6000 Jackson, it has 6000 locations,
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  but it became a billion dollar company. And Molly one, one of
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  1000 people in the country that are going to be at our company.
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  We didn't get to 9000. But but everyone made a lot of money. If
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  you invested 5000 with me in 1982 it was worth 2,000,015
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  years later. So I had no investors that were disciplined.
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  But I set big, hairy, crazy, audacious goals. I am so much
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  risk taker. I walk the tightrope of insanity.
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  Adam Outland: And then you did kind of repeated this again.
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  John Hewitt: Yeah, exactly when I sold Jackson Hewitt that I
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  started Liberty Tax and now when my non compete and then I had
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  to, I had to compete with my own name, my own software, my own
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  system and my own people. And now, Jackson unit 6000 offices
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  and h&r block at 9000. Guess what goal we set to be bigger
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  than block. And again, I didn't get to 9000, I only got the
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  4000. I did it five times quicker than I did it at Jackson
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  Hewitt I and I formed another half a billion dollar company, I
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  formed, again, one of the top 100 largest retail chains in the
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  country. I'm the only one that's founded to the top 100 retail
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  chains. But Adam, when you start out and you're competing against
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  a 9000 chain, and a 6000 chain, and the 6000 chain as your own
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  name and your own system, you have to be almost stark raving
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  mad to believe that you can do it.
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  Adam Outland: What phase of business building are you most
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  attracted to, the early stages where you have to be kind of
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  scrappy, or do you like the large scale sweeping side of it
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  once you've gotten to scale?
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  John Hewitt: It gets boring to me when we stop growing by when
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  we're not growing by leaps and bounds. You know, the culture in
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  your organization is critical to the quality of your
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  organization. And it's so much easier to have a great culture
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  when you're growing exponentially. If you're if you
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  ever get to a vantage point where they're not growing,
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  they're flat. Right to me, if you're not growing, you're
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  dying. That's not my leadership scope. I'm a builder and a
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  fighter and a scrapper as you said. But no, once it gets to
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  out, turn it over to the suits at that point. You guys take
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  over? Yeah, it was that growing double digits or more, or 50%?
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  Or is that growing by over 10% don't even waste my time. I've
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  got better things to do.
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  Adam Outland: And so because you were again, bored at your
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  enormous amounts of success that you had, you decided to start
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  something new again.
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  John Hewitt: After I sold Liberty Tax and we started
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  learning to branch out in each of the first two iterations that
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  Jackson Hewitt and liberty There was just one franchisor. At
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  loyalty, we have eight different franchise awards. And we're
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  exploring some extra some new concepts. And between the
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  brands, we're exploring mentorship, I can mentor CEOs of
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  each brand. We're exploring my vast array of people around both
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  the United States and Canada who believe in John Hewitt who have
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  either worked with me at blocked or Jackson Hewitt or liberty. So
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  when we go to a city when we when we go to Houston, there are
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  hundreds of people that have worked with me that believe me,
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  so they could be a customer, they could be an employee, they
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  could be a franchisee, so we're exploring that opportunity.
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  simplistically, it's just an umbrella company of a different
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  franchisors. So instead of standalone franchisor like
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  Jackson Hewitt, we're in liberty. We have a tax and we
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  have zoom and Grumman and we have inspection boys home
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  inspection. We have a different companies instead of just one
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  branch. Nice work. I've been always disappointed in
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  organizations like Berkshire Hathaway that couldn't cross
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  work. You know, they have a stable of great companies Coke,
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  Geico. But to my knowledge, they don't ever get the two groups
• 15:17
  across the market. You know how many people at GEICO drink Coke?
• 15:22
  And how many people had coke by Karcher, you would think there
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  would be some attempt at cross marketing, but they do nothing.
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  Adam Outland: And what's the vision going forward for you?
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  John Hewitt: The vision has something to do with my age, I'm
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  74 years old, and I'm going to work forever, they gotta kill me
• 15:41
  to stop me. But I only I don't think I have energy to go more
• 15:45
  than another five or six years in eight brands, I think I think
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  that we're going to get down to just one or two industries over
• 15:55
  the next five or six years. So and that's more related to my
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  age, and then to any other business reason. So we'll sell
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  off the lesser performers, or the ones that I don't enjoy as
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  much. And then alcohol, I personally down soon have the
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  management that then that I put there. So have access to the
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  mentorship. But my focus is going to be just on one or two
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  different industry, there's no retirement again, they got to
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  kill me to stop me when I was young. I said, You know what,
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  I'm going to be a mentor. I don't know how I'm gonna be
• 16:31
  there. And you know, I have the greatest line, I just go retire.
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  You know, I'll be 20s or 30s. And I'll just have the screen
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  sight. And I realized along the way, what would I do? I mean, I
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  don't like fishing. I don't like golfing. I don't like sitting I
• 16:48
  like fast ADHD, fast, go, go go, changing lives. But I enjoy
• 16:53
  business and helping people more than anything else.
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  Adam Outland: I love that mindset. Often leaders are asked
• 17:04
  to share their best advice they ever receive. But I kind of want
• 17:07
  to flip that question. And ask you, what's some of the worst
• 17:11
  advice that you've ever received?
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  John Hewitt: Wow, I the worst advice that I ever received, the
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  one of the worst that when there's, there's a bunch of
• 17:21
  statements I really despise. And one of them is that's the way
• 17:26
  we've always done, right? I've always been at the cuts of
• 17:30
  creativity in my industry and in DOD. And the people that I mean,
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  the dumbest advice I ever saw, written and made me was the head
• 17:41
  of the US Patent Office 1899. He well, we might as well shut down
• 17:48
  the patent office, because everything that can be invented
• 17:52
  has already been invented. And this was in 1899. I mean, just
• 17:56
  the human beings inability to improve and, and be committed to
• 18:02
  improve and change in and just meeting tooth and nail, you
• 18:07
  know, one of our 10 principles is improve each step. And one
• 18:12
  one year, I had a sort of an epiphany. And I went to each of
• 18:16
  my leaders at their year end review. And I said, How do you
• 18:19
  improve? It was sorry, it was the salary state. It was like, I
• 18:24
  read two books, or nothing about change of behavior. And change
• 18:29
  is so hard for people and it's it's not the change. That's
• 18:33
  hard. It's the pain of change. Everyone I know virtually any
• 18:38
  every person I know if I say to them, Do you want to change? Do
• 18:41
  you? Do you want to improve? They'll say of course I want in
• 18:44
  from of course. But just don't ask me to change. Don't ask me
• 18:48
  to get up earlier. Don't ask me to eat their bread. Don't ask me
• 18:52
  to exercise different. Don't ask me to think different. Of course
• 18:55
  I want to improve. Just don't ask you to change. You know, if
• 18:59
  you do what you always did you get what you always got. Doing
• 19:03
  the same thing and expecting different results is the
• 19:06
  definition of insanity.
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  Adam Outland: I love that one. And everything you just said
• 19:12
  about coming back to the original answer your question
• 19:15
  that one of the worst things for you to hear is well, that's the
• 19:18
  way we've always done it. And I feel like that even points back
• 19:22
  to when you approach h&r Block originally with the software you
• 19:26
  design and said, Hey, you guys should should use this. And I'm
• 19:30
  imagining the response was something like, well, this is
• 19:33
  the way we've always done it.
• 19:35
  John Hewitt: Yeah, in that in that annual report. They said
• 19:37
  people ask us why we don't computerize why should we
• 19:40
  customers don't care? It doesn't save us any money. We're never
• 19:43
  going to compare us. How could they be so inane to say, we're
• 19:47
  never going to computer. I can see okay, we're not going to
• 19:50
  computerize next year. What we're never going to computer is
• 19:54
  how stupid is that?
• 19:55
  Adam Outland: Yeah, that's good. And then what's a habit or
• 19:59
  practice that you feel has saved you the most time each day or
• 20:03
  made you more efficient?
• 20:05
  John Hewitt: I'm like the world's best at that. I'm more
• 20:08
  jealous of time than any human being you've ever met. So if
• 20:11
  someone says, sends me a question, I'll say, Why are in I
• 20:17
  won't bother. I won't bother sending a long answer. And if
• 20:20
  someone makes the mistake of sending me an order question, do
• 20:23
  you want to do it on Monday or Tuesday? I'll say I always say,
• 20:27
  to irritate them and to get them to change. I always say what you
• 20:31
  know that do you want to meet on Monday or Tuesday? I'll say why
• 20:34
  not? Yes. Why? And so now they gotta come back. So my people
• 20:39
  they used to, I try changing for a little while, like Monday or
• 20:42
  Tuesday. I put one if I met Monday, and two of I met
• 20:46
  Tuesday, but some people couldn't figure it out. So when
• 20:49
  my my staff sends me an email, and I wonder, do I want to meet
• 20:54
  one Monday or two Tuesday, so they have to type in one letter?
• 20:58
  And I don't, the biggest savings is I don't talk on the
• 21:02
  telephone. It's almost impossible to get me to talk on
• 21:04
  the telephone. Now, when I say that I'm exaggerating a little.
• 21:08
  I talked on the phone maybe once or twice today, but I hate chit
• 21:12
  chat. I'm horrible at chit chat. I mean, let's get down to
• 21:15
  business. Let's, let's talk I don't really care how I mean, I
• 21:19
  tried to be nice. And how's your family? How's your child? I was
• 21:23
  your spouse and but I'm not good at what let's get down to
• 21:27
  business. So not talking on the telephone. And answering
• 21:32
  questions very succinctly is my style. And so if you sent me an
• 21:38
  email, it could be 100 words, it was almost impossible for you to
• 21:43
  get more than 10 words back. I learned a valuable experience
• 21:47
  with with people that just like to vomit talk. I mean, I've had
• 21:51
  a couple of employees one person, one woman found me to
• 21:54
  the door the bathroom, she'd couple times she found me it's
• 21:57
  in a car. And she'd be talking, I'd be shutting the door and
• 22:00
  driving away. And I realized that they're so used to being
• 22:04
  there, the rude ones, and they're so used to it, that it
• 22:07
  doesn't bother me. But that didn't affect them at all. The
• 22:10
  next day, they were the same way. Talking too much time is
• 22:13
  the only irreplaceable resource. You can replace gold and
• 22:17
  diamonds. And every time you can't replace that.
• 22:23
  Adam Outland: Last question to end with, with all this
• 22:25
  experience behind you, if you had an opportunity to sit down
• 22:29
  across the table with a 21 year old version of yourself, what
• 22:33
  what advice would you give that 21 year old version?
• 22:37
  John Hewitt: Yeah. What are the ways that I'm different than
• 22:40
  other people? I never worry about what if I never go back
• 22:44
  and think about? I know, I know. I mean, because let's say I give
• 22:48
  myself the greatest advice in the world and went out got hit
• 22:50
  by a bus. So don't have any advice I'll give. I'll give this
• 22:54
  advice to every 21 year old, find something you like to do
• 22:57
  work hard, persevere. Life's too short. A Monday morning, if
• 23:02
  you're going to work and not looking forward to it, you're
• 23:04
  going to the wrong place. So that's the advice I would give
• 23:07
  each and every 21 year old. I don't ever think about what if I
• 23:11
  had done something different. So probably somebody loves to do
• 23:14
  work hard, persevere.
• 23:15
  Adam Outland: Great interview, great anecdotes. You wrote the
• 23:18
  book, I compete. And if people wanted to follow your journey or
• 23:21
  stay in contact with you in some way, what would be the best way
• 23:24
  for listeners to do that?
• 23:27
  John Hewitt: Well, first of all, I'm on LinkedIn and Facebook and
• 23:29
  then get my book for free. I will send it to him for free.
• 23:32
  Just send me J O H N at loyalty brands.com and I'll send him a
• 23:37
  free book.
• 23:38
  Adam Outland: I'll take you up on that. That's great. I really
• 23:40
  enjoyed this conversation interview with you.
• 23:47
  John Hewitt: My pleasure. Thank you.