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The Culture Shift That Took a Business from 18 to 100 Million · Brick by Brick - Wealth Building Conversations

• David LaDue: It's helpful that we know each other and we work together like we do. so my compliments to you as far as that goes. In terms of if somebody so my message to leaders is simple. If if you feel like you don't have all the answers, you don't have to climb alone. You don't have to be on this journey by yourself. Find people. who give you clarity, who are willing to challenge you, and have the courage to challenge you and collaborate with those people where there's no agenda, like we talked about earlier, Lauren. Find people you you really trust who are willing to challenge you and willing to collaborate with you. That would be that would be my encouragement. And that's the benefit we've seen as we work together with others in our group. And I I think any of us, if we get in the right situation where you have that right environment, you can be hugely you can be more successful than you than you've been ever before. Loren Wernette: Welcome to another episode of Brick by Brick. Today I have a very special guest with me, Mr. David Ledoux. David not only has 35 years of entrepreneurial and C-suite executive leadership experience, he has led business units for over $300 million, attributing to $1.5 billion in North American sales. He has grown a company from $18 million to $100 million. He is Currently the owner of LA Management Consulting and my personal business coach and vistage chair, for which I am been a part of for the last year. David, thank you for being on the podcast. David LaDue: My pleasure. Thank you, Lauren. Loren Wernette: So I'm super excited to have you. I think the amount of experience that you provide for the audience on not only your knowledge, but also your leadership experience, and you know, some of the mistakes you've made along the way is going to be incredibly valuable to our audience. And I want to start the podcast off with a question about your experience. So you've been in this for 35 years. Can you set the scale for me on what of that 35 years you've actually owned and some of the contributions or things that you've achieved over that time? David LaDue: Lauren, when you say you've actually owned, t tell me, just explain that a little bit to me, please. Loren Wernette: So processes, people, companies, what has been owned versus influenced? David LaDue: Hmm, gotcha. Okay. Yeah, thank you for that. Appreciate that. So in terms of ownership, you mentioned that one of the organizations, I was part of a group that built a company from 18 million to to over a hundred million dollars in revenue, and we did that profitably. I had an ownership stake in the business. There was five of us that had an ownership stake in the business. And we worked very, very collaboratively on that growth and the rate of growth. It was a it was one of the most valuable leadership experiences because there was so much learning. How you lead a company when it's 18 million versus how you lead a company when it's 25 or 50 or grows up to 100 million, those things change. And you learn that you've got to evolve and adapt along the way because you can't be everywhere for everyone all the time. So your leadership needs to evolve in that process. That was owned. you mentioned that. I was part of an organization that had I led a $300 million business unit for an organization. That was a group of l people who were selling to the Fortune 500 customers in the North American marketplace. And during that period of time, that was a five-year span, we grew the business by over 300%. And the growth happened, and and I was the the leader of that. that business unit, the growth happened because we had a group of people who began to share a common goal and a common vision. We organized ourselves very, very well and we got highly focused on the right accounts that would generate the right volume. And it worked. It was a very effective go to market strategy and it produced it produced results that had not been seen before in the history of that, in the long history of that company, because it's very mature industry. additionally, you mentioned that I had responsibility for a $1.5 billion. I was connected to a $1.5 billion business. It was actually a European company that had a business unit. They were global, and the business unit I was responsible for was North American. Loren Wernette: Yeah. David LaDue: I didn't have full ownership of that business unit, but I was one of the top leaders in that business unit. And in that case, I had responsibility for our sales, our direct sales as well as through our dealer network and the development of that dealer network. And what we saw in that period of time was a 4X growth, which was far beyond anything. And that company had been in North America since 1978. And over that period, that short period of time, four years I was with that organization. We had 4x growth, never had that been seen before. So that that does that help in terms of what parts I was responsible for and what part I owned and was accountable for in those experiences. Loren Wernette: Yeah, no, that is great. And I and I think I wanna you mentioned the 18 million to 100 million and specifically the jumps in in revenue or or valuation, you know, up there. So as you think about that business and how it grow grew, you know, what were some of the moments that you realized that hey, David LaDue: Yeah. Loren Wernette: how we're doing stuff right now isn't gonna get us to where we want to go next? And how did you adjust how how you thought about things or how you did things to reach that next level. David LaDue: Ooh, good question. Yeah, thank you for that question. So, give you a little bit of context, when you think about that business, it was fairly small in a mature industry in one of the top three markets in North America. Arguably per sometimes number one market in North America. But the business was underperforming financially. It was near last place in market share. We had an underperforming sales team. We had low customer retention. We were under pressure from the manufacturer to perform at a higher market share level. And quite candidly, Lauren, we were under pressure from the banks as well. So the pressure was coming from all all directions. And what we did is we sat we got very, very intentional about setting v a very clear vision, help communicating our mission, and creating a winning culture. We needed to shift from a losing culture to a winning culture. Part of the way we did that is we set very clear business goals. Every member of the team participated. They all knew their part and how their part contributed to the overall value of the enterprise. And we began to win more. We began to, and not only did we begin to win more, we began to celebrate our wins more and we began to celebrate bigger wins more often. Now what was what was pivotal in that process? We learned that we needed to get hyper focused on the 20% of accounts that were either buying or leasing 80% of the equipment in in the market. Now that applies to any market. We're all familiar with the 80-20 rule and Loren Wernette: Mm-hmm. David LaDue: and so on, but we needed to prioritize a disproportionate Amount of our time, effort, and energy on those on those accounts so that we could grow the business, not just grow the business, but grow the business profitably. And when we did that, when that change happened, our rate of growth literally accelerated at the fastest pace possible. We became super intentional about making sure we were calling on the right accounts inside our market. It's not that we wouldn't do business with The small the other eighty percent, we would do business with them, but we were putting a disproportionate amount of our time, effort, and energy on the that top twenty percent. That was the difference maker in that market that literally changed the game for us. Loren Wernette: So was that an insight that you brought in when you came into the company, or was that something that there was some pivotal or realization moment that said, hey, we've got to start doing this? And once you made that mental shift, did then things shift, or were there other personnel or structural changes that need to be made to make that happen? David LaDue: Mm-hmm. That's good. Yeah. Beautiful question. The the candid answer is I didn't bring it to the company. I learned that while I was during that tenure with the company. And I'm not the biggest fan of consultants, and which is ironic, Lauren, because you know I am a consultant. So Loren Wernette: Right. David LaDue: but there are a few who have been very, very good at what at what they do. And they're and we worked with one who was a financial consultant. And in fact, I'll I'll you know we'll probably talk a little bit about how that connected to the business. But he's the one that actually, his name was Bob, and he's the one that actually challenged me around this notion of now he didn't use the term top 20%. He had a different terminology for it. But in effect, what he was saying is, David, you've got to figure out who those big accounts are, and then you've got to figure out how to get your team. To go call on them and do it more intentionally. And I said to him, Okay, Bob, that sounds good. I love what you're saying. It makes sense to me. I buy into it. How do you do that? And his and his Loren Wernette: Right. David LaDue: answer was, you know, David, that's for you to figure out. And I thought, wait a minute, we're spending a lot of money with you, and you don't have the but here's the reality: is he his background was very financially oriented, he was very much into the numbers. So He didn't know the answer. He just didn't know the answer. So we developed the answer together and figured out, okay, how do we go about that? How do we get crystal clear on who they are and how do we get our team to really prioritize our focus? So and and we did that. So no, I didn't bring it, but my consulting friend, and also he became a mentor, quite frankly, Bob did that. And so what else did we change? We changed the We got very intentional about how we structured the incentive plans and the bonus plans for our leadership team. Loren Wernette: Mm. David LaDue: What I mean by that, Lauren, is we needed to invest the time, effort, and energy to structure them, not just to drive growth, but also to support the culture we in we intended to build and we were that we were building. Now I'll give you a real example of that. I mentioned to you that I own part of the business, so I was an owner and an operator. My responsibility was leading sales. I worked with some of my counterparts, one of them was also an owner operator. He was responsible for service for the business. In sales, we would generate about 8% gross profit on average. In service, we would generate about 50% gross profit. Loren Wernette: Yeah. David LaDue: So if you're gonna earn business, which one would you want to earn? And so if we had an opportunity. where we were selling equipment or or maybe leasing equipment and also providing the service for that equipment. And we needed to take a little bit of a discount to make sure we won the business so that we could get the service business. If I was, if my bonus plan was structured around just my silo, my area of responsibility, I may may have not made the best decision, but it wasn't. It was structured around the net profit of the company overall, and so was his. So together we would make better decisions faster about how to serve the market. As a result, it supported our rate of acceleration growth. We simply were faster to market. And then th the the the last piece to to address your question. We over time became, we were always financially disciplined, but over time we became more and more financially disciplined. We got to a point where we were meeting monthly to review the financials of the business. And not only would we review the financials, we would look at our month to date, quarter to date, and year to date and compare that to our business plan as well as the financial model. Remember, I mentioned to you Bob was the gentleman who challenged me to call on the big accounts and so Loren Wernette: Mm-hmm. David LaDue: on. He was also the person, his business consulted many, many companies like ours, and they created a financial model based on the top 10% of all companies in the industry. So we were comparing our performance against our plan and the financial model, which was the top 10%ers, which is where you want to be. You want to be in that Loren Wernette: Right. David LaDue: group. And in each case, we would look at our gap to plan. And as a leader, presenting your profit and loss statement, you would identify your gaps and then talk about what are you going to do to close that gap down, to meet plan, and ultimately meet model. And the beauty of it was frequently we would challenge each other. Now think about it. Here you are in a financial meeting, you're presenting to your peers, and one of your peers challenges you. If you don't have high trust in that meeting, you're going to treat that like Loren Wernette: Mm-hmm. David LaDue: a threat. You're going to think, man, I just got threatened by that person challenging me. Not the case. We had high psychological safety, never took those as challenges, took them as opportunities to debate our solution around the financial performance. And then once we settled on a decision, I mean, if I was one percent, it ultimately was still my decision. But once that decision was made, we would get committed. that decision. All of us would support the decision. We would help hold each other accountable to achieve that decision. And our attention to results was unwavering. So, and the the beauty of that is that the again it supported the growth of the business and not just growth, but profitable growth of the business. Because we were all very, very focused on the health of the enterprise and how to grow it in a profitable way. Loren Wernette: Yeah, I so that's all that's all great. And I I think I can boil that down a little bit here because what I heard here was asking the right questions was just as or more important than finding the right answers, right? Aligning all the parties, and I'm a huge fan of of alignment, right? In my businesses, with my investors, with all of my all my borrowers, making sure that there's proper alignment is critical. Otherwise, you're rowing the boat in opposite directions and people are going to get off skew. And so making sure there's good alignment. And then to your point about having a safe place to challenge, like having the right company culture in there so that you can do those things and it doesn't become a big war over whose idea is going forward and who gets the credit. That is toxic to any environment or family or group or anything, right? David LaDue: percent agree. Yeah, well said. Thank you for summarizing that for me. Or for us or for everyone. Loren Wernette: Yeah. So the so we talked a lot about in that about things you did do, right? And I think it was kind of glossed over. But I in my mind, you in order to say yes to something, you have to say no to something else. And so can you give me some examples of some things that you were doing or the company was doing that you had to say no to, you know, and maybe it's servicing the bottom 20% or something that allowed you to take that next step and move forward. David LaDue: That's good. Yeah, so appreciate that question. So I'm gonna reveal something to you which which will be a mistake that I made, and it was a learning opportunity. But I can remember, I can remember we were in one of those conversations and we were talking about growing the business. And one of the things you want to do when you're growing the business is not just bring in new new business, but you want to keep the business you've got. And so and don't let out the back door, so to speak. Once they're in your house, don't let out the back door. And I can remember we were I I was doing an analysis on our invoice error rate. And and I'm not and I won't even tell you the number, Lauren. It was so it was so high, I'm embarrassed to tell you tell you what it actually was. But it was not good. And what that meant is imagine if you received an invoice from somebody you did business with. You wouldn't have done business if you didn't trust them. But if the invoice comes in incorrectly, how do you feel at that point? You're for sure your trust is at risk. You know, you Loren Wernette: Yeah. David LaDue: may think, okay, should I really continue to do business with this organization? So I went about the process of really sort of trying to understand, well, what's the cause of this? What what's driving this error rate? And I invested time, effort, and energy into that and came up with a solution. I can remember one day I was there on a Saturday and And finishing up the finishing touches on this and I presented it to the group responsible for this area of the business. And I thought, okay, it's clear, it's well written, they'll read it and they'll go ahead and put these changes in place. Guess what happened? Loren Wernette: Nobody read it. David LaDue: Nothing. Nothing. And so I went to I went to s to the person that led that group and I said, tell me about this. Did a lot of work to figure this out. What's going on? And and she said, you know what? She said that was that was really well. And she was very polite. She said it was very well put together. But in essence, they didn't help put it together. So they didn't feel a sense of ownership into the solution. And so I thought, okay, that was on me. You know, I needed so we gathered together the people that were responsible. And we started to ask better questions around, you know, what's causing this, what's causing that, and how can we improve our process? And over time, over time, several months, we were able to implement those changes. And because they had input into those changes, the ownership was there. And the changes got made fairly quickly, and our error rate went down to just the tiniest of percentage. And we had better customer retention as a result of going through that process. But that's that's something that reveals to you a little bit of an error I made as a leader, but what we did to sort of recover from from that error and continue to drive the results that I just shared with you. Loren Wernette: Sure. I mean, to be a leader or to be anybody that's striving for greatness is to err and to fail, right? You can't succeed without failure. and so anybody that has any s level of success, if they can't tell you some level of failure that they've had along the way, they're they're glossing over a bunch of things. I think it what's interesting about that story is there was kind of a hidden issue that was going on in your company that you under uncovered and then took action to fix. I think all too often businesses have these silent killers that are in their processes, in their email automations, in something that customers have impacts a customer, and a customer never says a thing. They just leave, right? David LaDue: Mm. Mm. Loren Wernette: And all of a sudden there's this churn that they're seeing and they don't know where it's coming from. You know, I case in point, I do you know, obviously we have our loan business, but I also work with another lender to do a little bit of brokering on the side. And I had a borrower come to me a couple of days ago looking for a loan. They, you know, I sent the information in to the lender and they're like, well, this this borrower already has been doing business with us. They've done like a four loans with us. Why'd they come to you instead of us? I said, I don't know. Here it is. And that borrower actually told me, I don't want to do business with them again. Now, if I was having on that business and I found that out, I would immediately be on the phone with them figuring out what the problem was. I don't know if they did that or not. But that borrower was out there looking for lending solutions because they didn't like something that happened with that lender that they were working with. And that is a silent killer that took, you know, tens of thousands of dollars off of that lender's balance sheet. David LaDue: Hmm. Good example. Yeah. Thank you for sharing that. Loren Wernette: So tell me about the meeting that you took at the Palm Springs Airport. David LaDue: Yeah. So yeah, that's interesting because the what was happening is this is this is with I was working for the OEM now that manufactured the equipment and we were distributing that equipment through two channels. One was our dealer channel and the other was direct to some of the large businesses. This particular company was one of the top home improvement companies in North America. It it's the privately held one. And a a a multi-billion dollar organization. If you follow any racing, you you'd you might see their name on NASCARs or Indie Racing League cars. But be that as it may, the they had been doing business the way they'd been doing business for a lot of years. And to be candid with you, Lauren, they were very good at it. The way they were buying equipment, keeping it for a number of years, maintain maintaining the equipment. They had meticulous records. They knew exactly the cost per hour. They were they were one of the best I've ever seen. And they knew it. And that kind of got in their way. Loren Wernette: Your your bus sorry your business was forklifts, correct? I just wanna Okay. Yeah, that that's important David LaDue: It was. Mm-hmm. Yeah, yeah. Loren Wernette: to know as you think about the this. Your business is forklifts. Okay, continue. David LaDue: Yep. And so they were using literally thousands of of them. And they were maintaining their own equipment. They and they were they were they were quite good at it. The decision maker there was questioning how they were doing what they were doing. And we were working with him him and we were part way down the journey. We were in fact we were probably nine miles down a 10 mile journey. And he actually, with the group of us there, the group I had put together. He had actually asked the question, can you put this into a one pager? He was funny. He said, You know, I know you got great marketing stuff. I know you got all kinds of beautiful bells and whistles. Give me a one-pager. I want to put it in front of the owner of the business and I want to get his signature. Good sign. So he so at the time my wife and I were relocating and we happened, I was flying into the Palm Springs Airport. Normally Southern California has beautiful weather. There was weather that day, so the flight was late. I was scheduled to join a production meeting with with the other executives and give input onto what our production planning. So I joined from the Palm Springs Airport on the phone. Everybody else was in the room. I was the one on the phone. And I can remember I shared this opportunity, and it's it's one of those opportunities that any, anybody would have been drooling over. And it's a company that had done business for some number of years. And so someone in the room at that production planning meeting knew of the company, knew of the history. And I can remember, I'll call him Fred. That's not his real name, but who knows who'll see this. So I'll call him Fred. And I can remember Fred was one of those naysayers. He said, you know Loren Wernette: Mm. David LaDue: what? He goes, I know the company. You'll never get anywhere with them. They'll do what they've always done. Don't waste your time. Now imagine imagine if I'd listen to that. Loren Wernette: Was was Fred a peer or a senior? Yeah, was was Fred a peer or senior to you? David LaDue: Here, peer level. Loren Wernette: Peer. David LaDue: Yeah. So two things happened. One, I didn't listen to him. And the other, the the production planners didn't listen to him either. They put 50% of that production into the into the production schedule, which was multi-millions of supply planning that began. Soon as it hits production, you start ordering off your suppliers. So a lot of a lot of risk associated with with that. But it came through. I the the business did come through about two months later, the business came through and of course at that point we're celebrating. But it just goes to show you there's always gonna be s someone in the in the audience, like the two guys on the Muppet show back in the back of the audience, being the hecklers from the back. Don't listen to the hecklers. Pay it stick with your game plan. Loren Wernette: So so it couldn't have been just, you know, we it that smooth, right? That you just gave him the one sheet and he signed it. Was there ever any a moment where you were concerned that, hey, I might lose this deal? David LaDue: So it it you're right, it wasn't just the one sheet. The one sheet came after something like eight months worth of work and multiple meetings, a lot of all the sort of activities that you would that you would typically expect. There's always the opportunity that something may come apart. The owner maybe didn't sign off on the on the one sheet. We we were at the we were nine miles down a ten mile journey. You could argue we were ninety-nine. yards down a hundred yard football field since football season's about to start. the question is, do you step out of bounds on yard 99? And we we stuck to we stuck with our plan in spite of what the competitors may have done to counter. We believed in our plan. We had a team of people that were working together. We shared cot everybody knew what the benefit was, including the customer, knew it knew crystal clear what it was. And even the naysayers inside their organization that was saying, We've always done it the way we've always done it. Why do we want to change? We still stuck with our plan. And yeah, there was a risk, but the business came through. And and still today, it's my belief that's the largest the largest single transaction in the history of that industry. And it's a really, really old industry. Loren Wernette: What was the size of the transaction? David LaDue: It's a hundred and twenty million dollars, a little over a hundred and twenty million dollars, when the average transaction is somewhere around fifty thousand. Loren Wernette: So we spok spoke about like gaps earlier and we were talking more financials at the time. But what do you think the gap was between the naysayer who said this'll never happen and the execution that caused it to happen? What was what was the thing in the middle that made this come to fruition? David LaDue: So I think the biggest thing was just two things. One is the the main decision maker, the primary decision maker at the account, had a belief system that said, you know what, I'm open to a better way. Now had he been closed off to a better way, or had he had tunnel vision like this, the chances were were low. But we but he didn't. He had open vision and he was open to better ideas. Two, we had what I put together was a group of people who shared the same point of view that there was a better way, that we could provide a value that would drive a significant savings to that organization across thousands of machines. And in the it it became to fruition. It wasn't you know, it wasn't a sales pitch, Lauren. It was real. The numbers were we validated the numbers and the Customer validated. Remember I told you they had very they had meticulous data. So they validate the numbers against their own data. So when you have when you've when you've checked your numbers and you have confidence and you have trust in the people you're doing business with, the chances of that business happening are strong, really, really strong. And that's why I gave the I gave the the nod to the production team, let's go ahead and and put that into the production schedule. It will come. There's always a risk, but the the risk was the risk was very, very low at that point. Loren Wernette: I mean, any entrepreneur can tell you that there's always a risk, right? The but at some point you've got to take calculated risks. Otherwise, you might as well just put your money in a bond and and sit on your hands. So that that that David LaDue: Good point. Loren Wernette: is a a great story. I I love to hear that. 120 million dollars is a lot of money no matter who you are. So awesome to hear that. So a bit ago you gave an example of, you know, communication error that you made and you know how that that impacted you. you've got 35 years of experience. I would love to hear a story of David LaDue: Yes. Loren Wernette: something, some mistake you actually made that cost either money or personnel and what caused it and how it was fixed and what you learned from it. David LaDue: Hmm. Yeah. So I I think about I think about the business in it was in Southern California is where it was. I don't know if I mentioned that to you, Lauren. and I think about how we were how we were going to market and we were following very sort of the very standard and very traditional approaches. And we were working hard. And we thought, well, we'll just keep working harder. And what we realized is, it took a while, it was mostly on me. what we realized is the traditional approach is not going to get us where we really want to go. If we want to deliver above expectation, not only everyone's but our own, we needed to be really, really open to. to do the we couldn't continue to do what we've always done or what the industry said always was done. And I can remember Lauren, it was very common because for years before before I took an ownership position in that business, I was in the industry and people would say, you know what? You can either grow market share or you can grow profitability. But you can't do both. Now imagine if we held that belief. Imagine if that was part of our belief system. We would have said, we got two roads here. We can do one of the two, but we can't do both. The reality is we actually did both. It's just the harder road. It's a much harder road to do both. But if you if you want to really grow a business, you've got to be, I believe, you've got to be willing sometimes to take the harder road, the road less traveled, you know, use the To use that title from that book. And the road we took was to be candid with you, Lauren, I don't know if that road had ever been traveled. I can't say that it wasn't ever. I just don't know that it was ever done the way we the way we approached it. And when we when we initially, and and I I shared part of the story earlier around the consultant who put the challenge out there, when we initially started down that journey, we made so many mistakes. And when I say we made, I should say I made because it's har it's it's a difficult journey to follow. To be able to identify who those 20% are that are buying or leasing 80% of the gear. I think we found every possible way to do it wrong. But ultimately we got to a place where we found out the way to do it right. And so I would say that I would say that wasn't just one mistake. I would say it was a whole series of mistakes around trying to figure out. how to really accelerate your business and do so in a profitable way at the same time. That those series of mistakes were the biggest, probably the biggest of of my career. Loren Wernette: Yeah, I mean when you talk about I'm not sure how to find the top twenty percent of customers and then I don't know how to grow it from there, like that to me just smell spells like trial and error, put your head down and and grind to figure out what's gonna work and what's not. Try to fail quick and move on to the next thing, right? David LaDue: Hm, boy, you must you must have been there. We must you we must have been working together at that time 'cause that's exactly what we did. Yeah, or I did. You know, Loren Wernette: Yeah, I mean, David LaDue: I'm the Loren Wernette: yeah, I I obviously wasn't there, but I think anybody that's in business, I I th let me take a step back. Entrepreneurs, specifically ones that are just starting out in business, they tend to have this this lens that they look through. I've got to solve this problem. It's super unique to me. I've no one's ever seen this problem before, or if they have, it's different because my business is so special and unique in this little snowflake. Well, guess what? Where your business is at is where 4,000 other businesses were two, 10 years ago and 20,000 were 100 David LaDue: Yeah. Loren Wernette: years ago. And you have to try to learn from those that have already gone through the trenches and take those. And maybe it doesn't solve your problem all the way, but if it can get you like 70% of the way, 80% of the way to a solution, man, it cuts down on a lot of trial and error. David LaDue: Hm. Yeah. Yeah, we should have had this conversation some years ago. It would've helped me immensely. Yeah. Loren Wernette: Yeah. Easy easy to think through, harder to execute on sometimes. So, but there's there's there's David LaDue: Fair enough. Loren Wernette: paths to do that. So okay, so let's jump ahead a little bit. Okay, you've got the business to hundred million dollars, you're in the operator seat, you've had all this success. Why'd you walk away? David LaDue: Mm, yeah. So Walk away, walk away maybe interesting term. I made a choice. Loren Wernette: Why'd you leave? Why why aren't you current in that r currently in that role? David LaDue: Yeah, so in in your journey, you know, early in your career path, you're you're the warrior. You know, you're gonna you you you've got all the answers or you'll figure everything out and you're gonna you're gonna find success and you're gonna work and drive and and lead towards success. And and a lot of a lot of really good things happen. Along with a lot of mistakes along the way which which which you learned from. And one of the things over time it began it became more and more apparent that those mistakes that I've made, it is possible that I could help others learn from those and also the successes. You know, there's nothing wrong with with learning from successes as well, and begin to help other people. So I started a consulting company. That helps other businesses in similar industries with their go-to-market strategy. Because it's fairly common for business owners to look at their enterprise PL and see that on the sales side of their business, they're spending a lot of money on sales talent, but not necessarily getting the return on that investment. And Loren Wernette: Mm. David LaDue: but the question is: well, how do we change that? How do we drive a profitable PL in sales in an industry that people say can't be done? So the the consulting business is helping others to avoid the mistakes I made and then also learn from the successes that we realized with the company in Southern California. And that that be that be that began the shift by helping others in that that way. Along that journey, one of my clients was a vistage member, and he mentioned to me, he said, you know. David, I'm a part of a group called Vistage. And in that group, and he started to describe why and what what was important about that. And he said, you know, I think you'd make a great vistage chair. And I said to him, I I think I know what a chair is, but I don't think I know what you're talking about. And so we went through the we went through the description and ultimately I became a vistage chair and worked with CEOs and business owners to in a group to help. drive make better decisions and drive better business outcomes for the business. So those are the two directions since the the the items that we've talked about here today. Loren Wernette: So it sounds like instead of being pushed away from the company, you are certainly pulled towards another calling, which is coaching, whether that be on the consulting front or the vistage chair front. David LaDue: Agree. Yeah, very much so. Loren Wernette: So, you know, I I've been involved in coaching Vistage Now, several other things previously, you know, and one of the values I always, one of the benefits I always get from it is having a relatively neutral third party to talk about ideas and discuss concepts through the business or personal life. Because David LaDue: Because it's a problem. Loren Wernette: when you're a business owner, everybody's got an agenda, whether they will you believe it or not, right? Your business partner. Has an agenda because they want to do what's best for them and their family, which may not always align with what you are doing. Your wife has an agenda because they want you to spend more time with them or spore money for the family. Your kids have an agenda. And so having somebody to kind of bounce ideas off that maybe you don't feel comfortable or don't feel like you'll get the best advice from someone that's in your direct circle that has a dog in that fight has been immensely valuable for me over the years. Ha have you do you see it kind of the similar way or are do you see it in a different vein? David LaDue: I see it very much in a similar way similar way, Lauren. When you think about a CEO of a company or a business owner of a company, where is that business owner gonna go? What room are you gonna go get into? Or what people are you gonna talk to where you can say, you know what, I d I don't know. I don't know the answer. And That's the type of room we're trying to create, is a safe environment where it's okay to say, you know what, I don't have the answer. And then say, here's what I'm working on, here's the challenge as I see it, and have a group of other, almost like a private advisory board, that ask questions around this issue that's being brought forth. And those questions provide great clarity around, okay, let's make sure we're clear. On this issue. And once the person that brought that issue, let's say it was you, Lauren, you brought that issue, ultimately the group can give you input around what they think the issue is, but you make the decision. You know what? I'm gonna stick with my original description of the decision of the issue, or it might be an opportunity, or you're gonna say, you know what, I like what so and so said, I like what so and so said. I'm gonna make a change to how I'm describing. The issue. That provides great clarity into defining what the problem is in the first place. Then the group can come forth with suggestions and bring those suggestions. Again, if you're the one that brought the issue up or opportunity up to the group, they give you suggestions and it's the same exact thing. Ultimately, you're going to make the final decision about what you decide to do. But some of those, some of that input that came from the group. might be something you didn't think of. It might be a blind spot you hadn't taken into consideration. So the beauty of that environment, and incidentally I just gave you a little bit of the secret sauce, but you know it, Lauren. The beauty of that environment is other people in similar because businesses, even no matter what the industry is, people have people have mostly the same problems. And so They've experienced some of those things or they've got ideas about some of those things. You take in their input and then you make decisions about what it is you're ultimately going to do. Here's the additional side of it. That whole group, when you come to the next meeting, they're going to want to know how it turned out. Accountability. Yeah. And so it's it's it's an old process, been around a long time, almost 70 years now, but it's hugely effective. And you remember the story I told you about those financial meetings in the business in Loren Wernette: Mm-hmm. David LaDue: California? Those were those were the first meetings like what you and I experience when we when we work on issues and challenges. It's it was really the same thing. I just didn't know what to call it back then. Loren Wernette: Yeah. I mean, whether it's vista or something else, it's the structure that matters, right? And having the right people. Too many entrepreneurs or business owners or or even C-suite executives in large companies, they they get in a culture where no one challenges the questions or the decisions they make, right? And and I'm sure you've seen that before. You know, someone has an idea and all the underlings just nod their head and go forward and then someone blows $20 million on some project, right? can can you give me a good example of somewhere that happened where someone didn't have the support system around them to vet their ideas out and they went forward with something and it actually cost them money or time or personality. David LaDue: Hmm. Yeah, so there's there's there's literally hundreds, probably thousands of examples of that. You know, I think about I think about the this I think about that large opportunity which was an industry standard setting or best ever in a in a really, really old, long term, w very mature industry. And the and it was a success story, no question about it. But what went along with that was when when you are successful, there's that risk. You know, success actually has a risk. And sometimes you can you can start to believe that because you've had these good things happen, that your next great idea really is a great idea when it probably isn't. And in the case of that super large order, part of the process was around the way the service would be provided. And ultimately s some things didn't go well on that on that side of of business. So years later, some a number of things changed with that order. Those and that that ego that drove that decision had had that person had the benefit of a group of people that could challenge his answers or question his answers and say, you know what? Have you thought about this or have you thought about that? Most likely he would have approached things a little bit differently and still still in enjoyed that business today. And today is 15, close to 20 years later. still enjoyed it today. So I think I think it's important to be able to to have people who will challenge what you're what you're thinking about or what you're intending to do, people who will question your answers and say, you know, Lauren, have you thought that all the way through? And have you looked at it from every single angle before you make that investment or before you hire that person or before you terminate that person, have you really thought every part of that through? And I I think there's huge value in that. We you and I have talked about clarity, courage, and collaboration. I think first, anytime you have an environment like that, you've got to have trust first. Loren Wernette: Mm-hmm. David LaDue: And you've got to have psychological safety to be able to admit that you don't necessarily have all the answers. And then you've got to be willing to be candid about it. You've got to be willing to say, you know what, here's what's on my mind, and I don't know yet. And then you've got to be Loren Wernette: Right. David LaDue: willing to be curious and say, be open. Be open to what other people are saying and advising. And you're right. There's so often that when you own the business or you're the CEO of the business, everyone around you've got some amount of an agenda. And they're probably unwilling to take the risk associated with challenging what you're saying. And consequently, you're not going to get the sort of challenge you will get when you're in a completely unbiased Completely objective group of fellow leaders who the only thing they want is your success. Loren Wernette: Yeah. I mean, even when you ask so from an employee stand, even when you ask your employees as an entrepreneur to give you open and candid feedback, it doesn't always come through. You know, I have several really, really good employees. And, you know, one of which, you know, I've said several times, like, you've got to give me the honest feedback or give me ideas on this because their area, like, why would I hire somebody that is not as good as me? I try to hire people that are smarter than me in areas that I'm not. as good at, right? To offset that skill so I can focus on the things that I'm really good at. And so if I'm hiring you, it's because I see something in you and I want you to help drive that side of the business. And by you not sharing your insights or not giving your opinion, you're actually removing value from yourself that I I see in you when I hired you. But very scary, David LaDue: Yeah, well but Loren Wernette: very scary from an employee standpoint, because nobody wants to get canned because they argued with the boss Unfortunately, there's too many cultures out there, business cultures out there, that that is a factor. David LaDue: Mm. Yeah, the s there's not enough safety there for people to say what's really on their mind. Yeah, that's good. Thank you for sharing that. Loren Wernette: Yeah. And and so that goes back to the that goes back to the culture thing. but even more reason why if you're not sure if that's happening or not in your company, to find that group of people that can help you bounce those ideas off and and make sure you leave your ego at the door when you're having those conversations and not just let's see who can talk about their bigger revenue numbers, but how can we actually solve problems together? David LaDue: Mm-hmm. Well put. Love it. Thank you, Lord. Loren Wernette: So, you know, we've spent a lot of time talking about, you know, really challenging David LaDue: But Loren Wernette: things and challenging, you know, the agenda, who's gonna be looking at, you know, who's gonna be there to challenge the agenda or talk to you without having an agenda? you're a vistage chair. You get paid when the room is full and members renew. That's an agenda. How do you keep that from bending your advice to your members? David LaDue: Hmm. Yeah. So the most important thing we can have in the room is psychological safety. You have to have it. And one of the most important things to do when it comes to that safety is you've got to have confidentiality. So whatever's said in the room stays in the room always. That gives people the ability to say what's really on their mind and really talk things through. My job as the chair is to when someone is considering joining our group, my job is to make sure that the values of a potential member align with the values of the existing members. So I'll give you an example. Number one on that list is growth-oriented. That's that's number one. If there was someone that's in a lifestyle business, take you, for example, Lauren, you have s super strong aspirations about growing your business. And I admire that about you. Everyone in the group admires that about you. Imagine if I invited someone to join the group who was in a lifestyle business, not really interested in growing the business. How much value would they bring to you as a member of that group? Loren Wernette: Depends on where what what stage of maturity they're at in in that. Cause they may have grown their business from eighteen million to a hundred million and now they're in a lifestyle phase and they have something to offer there. David LaDue: Could be. Yeah, could it's possible. It is possible. But those are the type, that's the type of discernment as a chair that is super important that I be very, very thoughtful and very, very careful before ever extending an invite to anyone to join, to join the group. I think the other part of the question you you asked is around my interaction with you and other members of the group. And one thing that's really important about that interaction is my role as a chair is not a consultant. I don't come to you and say, hey, Lauren, this is what you need to do. When we have our conversations, it's up to me to ask you questions and help you think through what you are, what you're working towards. And there's times that you will come back with a response, and you've noticed, we've done this before. Where I've said, Lauren, let's think about that. Let's talk about that a little bit further. And and we do. You will continue to go through that. So the risk there is for me to try to give you answers. The value there is for me to do a better, to do a really good job or even a great job of asking you great questions so that you can come up with your own answer. I'm a big believer that the answers are within you. Sometimes working with someone else helps you to think it through, talk it through, and then come up with your the best possible solution. And then potentially, and this is always your choice, but potentially you bring that topic to the group and get the additional feedback from the group overall. And then you t then you take it to decision and execute on your your decision. Is that helpful? Loren Wernette: Yeah, I I think it's a a bit of a catch twenty two because people join groups like this to try to get better answers. And really what they end up getting, which I think is more valuable, is the ability to ask better questions. David LaDue: You're exactly right. You're spot on. Oftentimes the c better questions they're asking is the question of the person in the mirror. Loren Wernette: Yeah. Yeah. Yeah. We you know, I remember one meeting we had a while back and we had a a guest chair was there and someone was asking a question and the chair was like he asked the question and he would say something and the chair would be like, You know the answer. Like he they're just trying David LaDue: Mm-hmm. Loren Wernette: to dig into what the person you you know a lot of times what the answer is. Sometimes the answer isn't what you want. You're trying to find a way around the uncomfortable choice. David LaDue: Yeah. Yeah. Sounds like you might have might have had an experience or two along those lines. Loren Wernette: You know, there there's always a lot of self exploration anytime you you have to make a hard decision, right? So I mean I think one of the other pieces and and I know the answer to this, but what happens when someone's not a good fit for the group? David LaDue: Yeah. And and we've had that. We've had situations where because when you join a group like this, it's not just about what you get, it's also about what you give. Cause it's very much a two-way street. So if if if someone were to join our group and they they were unwilling to participate, and I'm not talking about being there every single time, but I'm talking about regular participation, then you're not giving. You're just taking. And so that wouldn't be a good fit for our group in that situation. and there's times where there's times where someone it's possible, we haven't had this, but there's times where someone feels like they they already have all the answers and they've got such an ego that they're not willing to be humble and open to to learning. And for us that wouldn't be a good fit in our group at all because we we don't have that. That's not our culture. Our culture is one where we're We all of us we're all humble, all of us are open, and all of us are willing to learn. So it's the the most important thing by far is fit. We get that right and we'll we'll have we'll continue to grow as a group, we'll continue to have the experiences, we'll continue to bring the value that makes sense. We get that wrong and we won't. Loren Wernette: Yep. Well, well said. So, you know, I I I our listeners are kind of across the country, different roles, different states. You know, there's probably a lot of them that don't have access to something like a vestige group for whatever reason. If someone wanted to build something like that inside their own organization to get some of those challenging questions, to build that culture, you know, what what would be some recommendations that you would give since you had that in your company, you know, when you went from eighteen to a hundred million, it sounds like you built that yourself. So how would someone do that within their own own organization? David LaDue: Mm-hmm. Yeah. So if if there's someone listening to this podcast and you want to have that conversation, you're welcome to reach out on LinkedIn and and and we could we could have an initial conversation around that. I could refer you to other chairs in other parts of the country. Additionally, there's a service called Trusted Advisor. And the Trusted Advisor service is exactly that. So if it's an enterprise with a leadership team and they're team is not necessarily functioning as well as the business owner would like to see. The trusted advisor would be a great resource to help drive cultural health within the leadership team so that the enterprise becomes more healthy in er in every way possible. Which which I'll take that as a compliment what you said there, because that that is what happened in that that organization. We built we built culturally We built a culturally healthy leadership team which drove a vibrant organization. Loren Wernette: Yeah, I I I think that's great. I think building that culture is is critical to long term success. If you want to get to some bigger level than where you currently are, right? If if you're happy with where you are at and you don't have any aspirations to grow, that's perfectly fine too. but for those of us that are really trying to drive into the future and and grow something big and powerful, there's such a cultural component to that that honestly it's it's not like you're just you just born as a CEO and you know how to build culture. You know, it takes practice and repetition and trial and error. And I'm still figuring it out. I think every CEO up to, you know, the Apple is probably still working on figuring it out, although some companies probably have it figured out a little further than others, right? David LaDue: All on the journey. I would agree. Yeah. Loren Wernette: Yeah, a hundred percent. So and I think the other piece about this or any any type of group, you know, the the challenge that I hear a lot is, well, you can go out and find, you know, people that are in this industry and create these, you know, little groups yourself. And I I think that's probably true, although it's going to be relatively challenging. You know, the the people that have the answers or at least the questions that I need for where I'm going the next five or ten years have already been there. They have a lot of things on their plate. They're very busy. They're very they already have money. And they don't have a lot of time. And so getting someone to commit to, I'm going to sit with you for a month and help you work through things is a big time commitment. And there's got to be some sort of mutual benefit there. And so to to say, I can, I can do this fully on my own, probably you can, but it's going to take a lot more effort. than starting something that's already got established process, established team, and working from there, it gives you a huge leg up and and really shortens the learning curve. David LaDue: Yeah. Well, having a trusted sounding board gives something that's enormously valuable. And that's people who can ask you, What haven't you considered? Loren Wernette: Mm-hmm. David LaDue: And they ask you that question before either the marketplace or an employee that works for you or a customer, or maybe your financial statement gives you the answer in a much more expensive way. I mean, think about it, Lauren. One bad decision avoided. Can be enormously valuable. Loren Wernette: Yep. I mean the the counter to that is one bad opportunity not taken can be enormously valuable. David LaDue: Sure, exactly. Imagine if I'd listened to those naysayers live years ago. Loren Wernette: For sure. So all right, David. So as as we wrap up here, I want to give you a little bit of time. Is there anything that we didn't touch on that you think that the listeners just desperately need to hear from you? And then if someone's interested in finding out about your consulting company or about Vistage or just generally wants to talk to you, how can they get a hold of David LaDue: Yeah, so I think, Lauren, in all candor, I think you've done a really nice job of addressing the key topics. It's helpful that we know each other and we work together like we do. so my compliments to you as far as that goes. In terms of if somebody so my message to leaders is simple. If if you feel like you don't have all the answers, you don't have to climb alone. You don't have to be on this journey by yourself. Find people. who give you clarity, who are willing to challenge you, and have the courage to challenge you and collaborate with those people where there's no agenda, like we talked about earlier, Lauren. If you do want to continue the conversation with me, reach out on on LinkedIn. I'd love to have the conversation, but it doesn't have to be me. Find people you you really trust who are willing to challenge you and willing to collaborate with you. That would be that would be my encouragement. And that's the benefit we've seen as we work together with others in our group. And I I think any of us, if we get in the right situation where you have that right environment, you can be hugely you can be more successful than you than you've been ever before. Loren Wernette: Yep, love it. I I would amend your statement that if you feel like you said if you feel like you don't have all the answers, I think it's if you feel like you don't have all the questions based on the theme of our our chill so far. David LaDue: Love it. Thank you there. Appreciate that. Loren Wernette: So, David, thank you so much for being on the show. This was immensely good episode. love the conversation, love the thoughtfulness of the answers. And I think that everyone out there should get a lot of value out of it. if anybody is interested in learning more about what we've been talking about. or learn about David's business or just generally connecting with David. He's a great human being and and really fun to talk to. I recommend reaching out to him. We'll have all of his contact information and links in the show notes. And if you got value out of this podcast and think someone else you know might get value out of this podcast, please share it. Sharing between peer to peer is how we grow. I don't advertise. I just want to share knowledge. I want to share interesting people on here. And the more people that see it, the better in my mind. So share the podcast. And until next time, thank you. Have a good week. David LaDue: Thank you, Lauren.