EntreLeadership - The Keys to Start Innovating in Your Business with Brett Hagler

Episode Date: August 16, 2021

The business landscape is changing faster than ever before. So, how do you keep up? Through innovation! In this episode of The EntreLeadership Podcast, we sit down with Brett Hagler, CEO and co-founder of New Story. New Story has been named one of Fast Company’s Most Innovative Companies multiple times. He talks about how he’s using innovation to change the affordable housing industry around the world. Then George Kamel interviews Ramsey Trusted Senior Executive Vice President Herb Jenkins. This interview is chock-full of inspirational stories and tactical advice for implementing innovation in your business!   Take The EntreLeadership Podcast Audience Survey   The EntreLeadership Podcast New Story's website Read the Fire Bullets, Then Cannonballs concept from Jim Collins. Download the EntreLeadership Goal Tracker. Schedule a call with Tim, our producer.   Learn more about the offers from our EntreLeadership Partners: BELAY  |  Gravy  |  Hite Digital Learn more about your ad choices. Visit megaphone.fm/adchoices

Henry Ford once famously said, If I had asked people what they wanted, they would have said faster horses. Customers can easily describe a problem they're having, in this case, wanting to get somewhere faster. But it may not be the best solution. Are you an innovator? You might not think you are,

but if you have a vision and you're introducing something new, then that is you. But how do you make that a rhythm of your business? From the Ramsey Network, this is the Entree Leadership podcast, where we help business leaders grow themselves, their teams and their profits. I'm your host, George Camel, and on today's episode, we are talking all about innovation, which ties into our business driver of plan. Our first guest is Brett Hagler. He's the CEO and co-founder of New Story, a nonprofit organization that has pioneered a radical

solution to end global homelessness. The answer? 3D printing houses for those who can't afford a roof over their heads. We had an incredible conversation about innovation and how any business can change for the better. After that, you'll hear from Ramsey leader, Herb Jenkins. We talked about a framework that he's used at Ramsey to innovate. Up first, our conversation with Brett. His non-profit journey started with a trip that inspired him to think differently about housing and homelessness. Brett, thanks so much for being with us today. How are you? George, I'm great. It's an honor to be on with you. So you have an amazing story. You're a very accomplished person. Just reading your bio, I got tired. I I literally, it was, you know, cancer survivor, why combinator graduate, Forbes 30 under 30, top 100 most interesting entrepreneurs in the world by Goldman Sachs.

Or a speaker, angel investor. What haven't you done? What is on the bucket list for you at this point? Oh, no, dude, it's, I think I just, I got started at a younger age. That was really just it, you know, right out of college, started my first startup that ended up failing. And so that just gave me, I think, an experience and some insight. Yeah, the last five years have been better. But yeah, it's still very early.

So it's clear you've always kind of had this entrepreneurial bug in you, but it wasn't always that you were, you know, this aspiring kind of business owner. So talk to me about the story from you going on a life-changing trip to Haiti to going, all right, I'm not going to go be a missionary. I'm going to go be a business owner. What was that like? Yeah, it's a great question. So I took a trip to Haiti, and it was actually for a for-profit startup that I had.

and we were starting to give back a little bit of the money we're making to a charity. It wasn't a lot, but it was a little bit. And that's what put me on that trip. And then what I saw was, you know, families living in extreme poverty without shelter. I mean, just horrible tents. And then when I came back, George, I didn't think I would start a charity necessarily in my early 20s. I always wanted to be more of a technology entrepreneur was kind of the hope one day. And so I try to find other organizations that I could get really excited about and I could champion and I could get really behind.

And for me, that was a lot of the entrepreneurial thinking, the are you taking calculated risk, how are you hiring, like standards? And the more I looked for me, from my perspective, as a younger, ambitious entrepreneur, I felt things were a little outdated and a little traditional. And I came up with a long list of frustrations that as a customer that would have been a, a donor, I got very frustrated. And then the entrepreneurial kind of side came on and said, what if we could from scratch just kind of reinvent or have a blank slate to create an organization that would do things that are different from all these frustrations. And that's actually why called it a new story, why I thought it made sense to actually start an organization as opposed to joining one, was because I wanted to really just make something that myself and my peers

would get excited about. Wow. So give us the elevator pitch for a new story and what you guys are doing. We pioneer solutions to end global homelessness. So we work with families that are living in extreme poverty between $3 to $10 a day. They do not have life's most basic human needs, safety and shelter. And what we do is we come in and we partner with excellent local organizations and local municipalities. and we are kind of arming them with new innovations and new designs and models and ways of working to make everything more effective and more efficient. So we try to really focus on, I mean, the why is very clear, right? It's a human problem.

It's an economic problem that families don't have adequate housing. But we focus a lot on the how, right? How do you create a home that is lower cost? How do you create a better mortgage option for families? families that are unbanked and that can't get access to a mortgage, right? So we try to just stay in our lane and be best at what we think we have a chance of being best at. And that's focusing on really just innovating in the space. And innovation, George, to me, is way less of sexy, shiny, you know, PR headline stuff, right? Like, that's not really innovation. That can just be, like,

you know, interesting things. The only thing that matters is, are you getting adoption on some type of new model or process that is adding value to the customer, right? And for us, the customer is most importantly the future homeowners that haven't had access to a home before. So we want to just think outside the box, work incredibly hard to create a better solution and see if they'll get adoption. I love that you mention that because I think a lot of business owners are listening and they're going, I would never describe myself as an innovator, right? Like, I think innovation and you think you think the Tesla or the, you know, the iPod and you think of these big things in the headlines that have changed to history. But you're saying, this is just saying, hey, what if there was a better solution? And it's just

those incremental steps to get there. Exactly. So let me give an example right now. So this is like literally, I'm working on this today, right? So one of the big focus areas for New Story as an organization is trying to rethink micro mortgages for the point. families, right? So there's a long list of reasons why the interest rates are so high, why these families can't get access to a mortgage, right? Which makes sense. It makes sense why they can't. It's insanely hard. But we are trying to envision what it would look like if they actually did have access. And then we're reverse engineering. What would that look like? Right. And how could we actually do it? And maybe there's a technology that's really important that's part of it.

maybe there's not, right? Maybe there's not a lot of technical innovation whatsoever. It's more of designing and getting to and problem solving a solution that can then provide a better value to your customer. And you can do a lot more of that than you realize. You just have to really break it down and be intentional about setting small goals and milestones that you can get to. And I think for me and for our team, the more that we made progress against some of these smaller milestones and goals, not only do we get confidence to go even bigger the next time, but you're also then getting funding, right? You're either getting more revenue or more customers that are going to want to buy what you're starting to prove is better value to them than the competitors.

Wow. And you talk about dreaming big a lot, but I love that you couch it by saying start small. because a lot of people think if you have these big visions, you've got to take these giant risks. And that's innovation. But a lot of what you talk about, you're asking that question, what would it take? And then you're reverse engineering that with those small steps.

That's right. Have you found that to be the path? Absolutely. I mean, I think different leaders have their own styles. I'm not a let's bet at all. Let's take insane risk. I really like taking calculated risk that if they work, could provide just outsized value, right?

Like it's doing something that is you're not going to get incremental or linear improvements, but you're going to really get a big step or a quantum leap in how something's done. And to get there, you have to choose what are a few things that you're going to be willing to try, that you're going to put some of your best people on. If they fail, which some of them definitely will, and we've had a lot of things that have failed, you're going to learn, and you're not going to sync the company. Right. And so Jim Collins has a great concept that is people hear it all the time, but it's this idea of firing bullets before cannonballs, right? So if you only have so much budget, if you only have so many people, they only have so many resources, and you have a conviction on one thing that you think could really add value to your customers, do you just bet it all and put all of your ammo, meaning your money and your people, into one cannonball and then fire it? at the ship and hope it hits, that's pretty risky, right? Because it might not. Or do you do bullets?

We're using way less ammunition, but you're getting multiple shots and you're learning and your aim is getting better every time. And then once you know something's working and there's traction, that's when you can go invest, right? You can go raise money against that if you need outside capital, or you can just start doing it because you know it's working. I'm such a proponent of starting small and firing bullets. before cannonballs. Yeah, we've adopted that Jim Collins model here at Entree leadership here at Ramsey, and it changes the game because it takes the pressure off of, hey, if this fails, we've sunk. Totally. It just goes, okay, we learned a little something there. Oh, and that worked. Let's chase that

down. So I love that model. And when it comes to these dreams, you know, some of these business owners out there listening, it can get obsessive when you start to have these. Having vision is great, but having it take over your life because it's an obsession, that can be dangerous. So how do you chase that dream without it becoming an obsession? Well, this is a tricky one, to be honest. And it's something that I've worked through a lot in the last couple years. I think for me, ideally, you have a healthy obsession. I think it's hard to find a growing organization where, you know, somebody at the top does

not have some level of obsession about things getting better, about raising the standard you need to have that drive. And, of course, you have to be wise and smart about the other things that matter most in your life. And you need to set an example for your team as well. And so what I've learned is the first thing that I did, I took a sabbatical when I turned 30, which is pretty young to take a sabbatical. I was encouraged by my best friend, Mike Arieta, and then a board member of ours as well to just go take a sabbatical, zoom out. We know that you're obsessed with what you're working on.

Fortunately, there's been some success. Like, it's been a good start. And so as you prepare for the next decade, you really need to get clarity on what matters most. And so for me, the framework that I did was I zoomed out. I took a whole month. You may not have to do that. But I got clarity on what truly matters most that I'm saying. And I made a one page. I call it a rule of life. And for the season that I'm in right now where I'm not married. I don't have kids, but my faith is really important to me. My family, my friends, things outside of work have become more important to me. And also dating somebody very serious. So that's very important to me. And I've just made the priorities and I've set up habits and rhythms where I need to execute on those. Just like I want to execute

on the business objectives that I have and the business goals, you need to also apply that same mindset and that discipline to the other things in your life. And so I think you can do both. It's insanely hard. I think it's the dichotomy of every ambitious leader. But I would encourage you to get clarity on what truly matters, write it out, and then create a plan of how you're, how you're going to execute against it. Yeah, we talk about this so much on this podcast. It's one of our six business drivers as personal. Totally. Because if you don't get that part right, nothing else is going to work. And so you've got to get that part under control. And we talk a lot about balance and having that clarity. So I love that you're talking about that kind of stuff. When you talk

about innovation and vision and strategy and all these things, you have to actually have time to think. So true. When it comes to that. And I think so many of these business owners, they're running ragged. They're trying to run the business and they're working in the business and not on it. So have you found ways to kind of step outside of the day to day and really create that time? Maybe it's on the calendar where you go, hey, this is just thinking time. This is us. We're going to get in the room and brainstorm for four hours or do it, you know, we call them strad ops around here.

Where you get in the room with the whiteboards, it's an all-day thing, and you're just trying to nail down the vision. How do you do that? What you said is, it's funny, the people I look up to most that I try to learn from, they all have carved out this time, right? And I think I've gotten a lot better at it in the last couple years. Advice I would give would be if you're not in a place to do that yet, I would say, make your top priority hiring one or two or three people that are great leaders that can then

free you up to go do that. And sometimes you can't do them all at the same time. So prioritize what if you want to have that time, if you want to zoom out more, if you want to think more about the future and not just thinking for fun, right? Thinking about what is going to be the thing 18 months from now that is literally game changing my business or my organization. That's the only, not the only way, that's one of the main ways you're going to grow and reach new heights, right, and get more customers and become more profitable. So what is the thing that's blocking you from doing that? And then as a leader, you should be allocating your time and your focus into solving that

challenge so that you have the space to do that. Yeah, that is so huge. I want to talk about this idea of innovation being a barrier to progress. Is that possible? Do you think we can overthink it and be kind of obsessed with innovation to where we actually are going backwards. Have you found that to be true? Yeah, I think so. I think that, one, if you are innovating and your innovation is not tied to your focus or your strategy, that is not going to help your progress, right? So I think whenever you talk about innovation,

it's usually something exciting or interesting, and the temptation of distraction is very real and very strong, right? And so we've made this mistake. I've made this mistake personally many times where we get an exciting, innovative idea, and it's like kind of aligned with where we're headed or where we say we want to go, but you can tell yourself stories. And so one, I think if it's not aligned with your longer term strategy and goals, then it's probably a distraction and it's going to cause setbacks. For example, new story, we just set a kind of a decade. B-Hag, right, our big, hairy, audacious goal. And we try to make it very specific because we work in a massive market. You can get pulled literally all over the world, right? We're saying we're trying to pioneer solutions to end global homelessness, right? That's unfortunately a really big total addressable market and you can get pulled all over the place. And we started to a little bit with our innovations because this was exciting. This was interesting. We have team. We have competence. So what we had to do is we had to get really clear what is success in a decade. And for us, it's housing a million. people for less than $1,000 per person housed in Latin America. So that is where we're heading, right? That's very

clear. Now, innovation, everything we're innovating on should be how do we get there faster or how do we make that possible. But it should be towards that goal. So that's like one learning that we've had and innovate underneath and innovate in a way that is going to drive you closer to that very clear top of the mountain or whatever, however you would describe it. The second thing I say is sometimes you get so excited about innovations that you don't kill them early enough. And so you need to have the humility that you're not Steve Jobs. You don't have all the perfect ideas. And a lot of your ideas, if you're actually really being innovative, the majority of them won't work. That's just how it goes. So you have to be able to kill them early. And that's a

judgment call, right, of should I kill it now? Should I wait? But you have to have discipline to to kill it early. And the last thing I'd say is a mentor said this to me last week. He said, it's better to be intentional than brilliant. And I think whenever you hear creativity or innovation, you just think about, oh, those are for the brilliant people, the brilliant thinkers. But usually it's about people that are being very intentional, right? Insanely intentional. And that's what's actually going to make progress. So those are some of my thoughts on that. Yeah, that'll preach. We've got a core value here at Ramsey Solutions, shoot sacred cows, and it reminded me of what you were talking about. And it can be hard because you're talking about shooting things early,

right, knowing when to quit and tying it back to that clarity and that mission and is this really tied to our why. But there's some things around here where you go, hey, it's not broke. Why are we trying to fix this? And it really comes down to this idea of breaking it before it's broken and You're interrupting yourself. And we've seen that play out with, you know, Blockbuster and Toys R Us where they went, hey, it's not broken. Let's not get crazy. And then you see this decline. And now they went the way of the Buffalo.

So how do you kind of break things before they're broken, especially if there's legitimate revenue tied to it, right? It's scary. It's like, hey, we're going to lose $100,000 if we pull the plug on this. So what's the smart way to take those risks and to shoot those sacred cows and to break things before they're broken? Yeah, I mean, this is a massive question, right? It's a lot of the innovators dilemma. I think that you can run, I think you can do it in parallel. I think if you look back at a lot of the best case studies, there are businesses that, you know, if we use it Blockbuster, right? Like Blockbuster, they had something that was making money. They could continue opening up Blockbuster stores. They probably knew at some point that that wasn't going to be the future 20 years from now. So ideally, they should have started. the Netflix, right, of Blockbuster in parallel. Because you have the kind of money-making machine that's still bringing in the profits, you start something on the side and you can maybe hire one of your best people to work on that, bringing somebody from the outside. But yes,

you absolutely have to be thinking about disrupting yourself and thinking five, ten years down the future. If not, it's not going to be a good outcome. And does that take a certain level of foresight and investment to go, hey, if we're going to take this risk and we're going to disrupt this thing, we've got to be prepared over here. Exactly. You know, we need to have more profits set aside or we need to hire the right people. How do you go about doing that on kind of the team side? Yeah, yeah.

I think, you know, just what we were saying earlier, not to be repetitive, but I think for business owners listening, the bullets before cannonballs is the best concept for this, in my opinion, right? And you, you as a leader, you can allocate your budget, right? can allocate, where is the money being allocated, how much are you putting towards an initiative that probably isn't going to show up as a return a few years from now? You're going to assign great people to that project. You're going to assign a certain budget. You're going to have really clear goals. You have to earn the right to go to the next phase in that process, right?

So what are the really clear goals that if we hit this by this date, that unlocks the next phase, right, the next phase of investment. And that could be adding one or two new team members. That could be adding a couple of hundred, a thousand dollars to the budget. So you just have to be clear about what success looks like. And then if you're not tracking there, that's when you have to cut it. And that's not necessarily a failure, right? It's, you were being a forward thinking leader. You were trying something that the worst case scenario, if it fails, you still learned an insane amount. and the business is still there, it's fine, right? Maybe the worst case scenario is it was, you know,

five or ten percent of your budget, which of course, that's not ideal, right? That's definitely not ideal. But you have to give yourself a chance to have these outsized returns and bring your business into the future. Man, that's so good. You have so much wisdom for being your age. And I mean, you've obviously, you've done a lot, you started early, but what are those things that you feel like caused you?

you to have this level of just composure and clarity when it comes to business. I've heard you say, you know, talk about daily rituals and talking about reading, but you also say this. The one thing you can control is effort, right? Is that something that you've really adopted to go, hey, I can't, you know, fast forward and make myself have 25 years of business experience, but I can control what I'm putting in every single day. Is that a big part of your daily ritual? Yeah, I think so, George. I'm usually never the smartest person in the room. I usually don't. There's a lot of things that I don't have, that other leaders have.

But I think what's been an advantage for me is just intentionality and habits and discipline. Nothing crazy. But having those habits and being intentional day after day after day, it compounds. It compounds over five or ten years. And that's what I've been trying to instill into our team. and into our culture, we have a value to just improve through learning, right? It's very, it's very basic and simple, but if you're doing that on a very intentional basis and consistent basis, like you can't help but to grow and to get better and to have

better ideas and to think about execution in a different way if you're being consistent with your learning and what you're listening to. Yeah. And who you're talking to, right? and who you're talking to and learning from. And, you know, at the core of all of that, I think, is humility, right? It's humility and it's having a hunger and a desire to learn from others and just try to get better.

It reminds me of Pat Lynchione's humble, hungry, smart, and having those three components. Totally. As you're talking, I'm thinking, man, innovation is really just tied to personal development. And if you're a healthy leader, you're naturally going to be thinking, strategically in carving out that time because you've put the right processes in place, you've got the right team in place, you've kind of have all these drivers working to where you don't have this flat tire. So what encouragement as we wrap would you give to those leaders?

I think just on the kind of tying a bow on innovation or starting, you know, trying something to firing the bullets. I think first you have to make sure that that the business or the organization is in a good and healthy place. Right. So for us, before we got into 3D printing houses or before we got into, you know, rethinking mortgages and microfinance, like, we first, like, really got our core business right, right? And it was working. And that's what brought us the momentum and the resources, meaning funders, backers, team, right, to then keep that going, right?

Definitely keep that going and keep making that better. But now to also start to think about what is this. next thing and what is this next thing and again kind of do it on the side in parallel. But if you're listening, I just want to encourage you that the best thing you can do is make sure that your current business is in a really healthy place and is growing. And then I think you kind of earn the right to start making some smaller investments for innovation. Yeah, it's kind of like what we talk about with finances. It's really hard to build for the future while you're paying for the past.

Yeah. And so if you're struggling in the day-to-day and you can't keep up with everyday tasks, you're not going to have the ability to think ahead and think strategically and have that vision for the future, and especially when it comes time to execute it. So I love that you're talking about that kind of stuff. Yep, that's right. That's right. My last question really comes down to this.

I'm thinking about, you know, the HVAC owner in Ohio, and he's going, all right, all this innovation stuff sounds nice, Brett. But how do I apply this to my industry, my business? How can I take this stuff and go, how can I innovate in a seemingly normal industry where, you know, I'm crushing it. I'm doing well. I've got a solid team. But how do you innovate maybe in those trade industries or industries that feel like, hey, there's not much room to change things up and get crazy? I would say that I come from a pretty typical normal industry, right? We're trying to, we're building houses for the poorest families in the world.

That's a pretty traditional normal industry. And so for whatever you're doing, I think what you have to do is you have to, you have to zoom out and like really think and ask the question, what is my customer's journey? What are the real pain points and the frustrations that they have, right? And be very honest and direct about what are the problems, right? What are the problems? Hopefully you're a customer as well of whatever it is that you're selling. And you have to identify what are the frustration. and what are the problems, right?

And so if you were going to measure something on a scale of one to 10, and you identified something, 10 being like excellent or great or an amazing experience, and you know something is a four or five, like then just do an exercise and ask yourself, what would it actually take to move it closer to a 10? Right. And I promise you it's, you don't have to start a new software company inside your company.

You don't need to, you know, go recruit people from tech. S& SpaceX to solve it. You usually can do it with either your internal team or maybe bringing on one or two other people from your industry or adjacent to your industry. But I think just so many leaders or teams, they don't pause and zoom out and really ask that question

and get clear about what are the problems, what are the frustrations, and then design an intentional plan of how to solve it. And anybody can do that, right? Right. Anybody can do that. They know what some of the problems are, right? And you can be creative and resourceful. And once you've identified what that frustration is, you could then set a really clear goal that by the end of the year, success for phase one looks like this. You make that super clear. And then you assign a team and a budget and you work every day to make progress on it. And if you fail, you've learned a ton. And you've learned a ton. And you've at least you failed against something that you know is a problem and a frustration in your industry, right? And sometimes, you know, not every problem of frustration can be perfectly solved within a certain time frame, right? So sometimes the reality is it actually is just too hard.

It actually is just, it's not ready yet. But you have to give yourself a chance to solve it. So really knowing your customer's problem really well. Totally. And then going, hey, what can we do to test this out? and how can we incrementally get there, learn from the failures along the way. And that's innovation. That's exactly it.

It's not as wild of an idea as it sounds. That's right, George. That is innovation, but you have to be, I would say, be obsessed about figuring out what are your customers' frustrations and problems and what's keeping them from being raving fans of your product or of your service, right? And you have to do that work, figure it out. And then if you can design a team and a plan to solve that, you're off to the races. Like that is, that is innovation, right? Jeff Bezos, maybe to close, Jeff Bezos has as an amazing quote. It's, I mean, it's very simple.

But, you know, he listed off all of these really shiny, sexy, forward-thinking innovations that they've worked on. And there was a graveyard of dead ideas because he said, there's no innovation unless you get customer adoption, right? And customer adoption ultimately means. that you've created some type of better solution or some new value add to the customer that they love and they can't help but do it and tell people about it. And you can control a lot more of that than you think, but you have to be intentional about it and you have to invest into it. So I would just encourage you to start small, zoom out, and try something. No better way to end it than that, Brett. You are doing amazing things. Love your heart. The mission that

that you guys are on, a news story, the innovations that you guys are taking every day to inspire not only the people that you're working with, but really other business owners around the world and especially the ones listening right now. Thanks so much for taking the time. All right. Thanks, George. Appreciate it. What an inspiring conversation about innovation with our friend Brett Hagler. And as you know, innovation can sometimes mean breaking things before they're broken. But how do you know what to break and what questions to ask? We'll have a conversation about that right after this. Our second interview is with Herb Jenkins. He's the senior executive vice president of Ramsey trusted.

We sat down to talk about how we do innovation here at Ramsey, and he shares a framework that he's used to get us closer to our vision and solve customer problems. Herb, welcome back to the Entree podcast. Thanks, George. Thanks for having me. I'm excited to talk to you about this because I see you, it's not your title, but I see you as our chief innovation officer. That could be a cool title.

Pitch it today, see what he thinks. I've got a meeting with them later today. That'll be the first topic. It'll go great, I'm sure. Well, what I think of you, you know, we see you, I don't know, we is collective Ramsey or the leadership team, but we see you as one of the people in the building who can help us innovate and get to places we are not currently at. And a lot of people listening, they hear innovate and they go, that feels big, that feels scary,

that feels high tech, Steve Jobs, Tesla, you name it. But the definition of innovation is the introduction of something new, an idea, a process, a product, and that's something that all business owners need to be doing. That's right. And you've done that a lot over your nine years here. Is there a recent example you can think of where you had to lead the charge on something like that? Yeah, it's a great question. And I do think all of us can be innovators, and I want to unpack that for you in a minute. But in my time here, I've done a handful of initiatives or changes at Ramsey and kind of develop that reputation. And most recently, that's around a new brand we're working on called

Ramsey trusted. So this is a brand new thing. This is something in real time that we're innovating on and changing within the company. And Ramsey Trusted, all it is, is it's taking existing things that we've been doing for, in some cases, upwards of 20 years and changing how we do them in order to get results that we've never gotten before. So we have three parts of our company that we're bringing together under this Ramsey Trusted brand. Brands, you know, like endorse local provider. some of our national advertisers, things that we've done, similar services we have done different ways around the company. And those were working great.

There was nothing wrong with the way we were doing business there. But as we've taken a step back and said, you know, how do we get to where we want to go? We looked at the services and said, those need to change. The way we do them needs to change. The standards we hold, the way we scale this needs to be at a whole different level. So we took something that was working and was existing, and we've rethought it, overhauled it, and made it better for the customer, made it better for our pros, and ultimately it'll make it better for us. So Ramsey trusted, all it is, we've been in the business of referring people to high quality providers for years, and we're taking that same concept and saying, let's make it better. So we are implementing new ways of scoring pros and holding them to new levels of accountability.

There's new customer experiences that we're creating that are lower friction. These services are easier to get. We're creating new products around them that we've never done before. And that is a form of innovation, right? But it's not the kind of innovation that sometimes we think about with the example you gave of Steve Jobs or, I don't know, I tend to think of like a Thomas Edison or like a DaVinci. you know, that are like by candlelight, you know, innovating as just like this, this mountain top retreat type thing. But I just don't think that's how innovation really works for the majority of us. Yeah. And I imagine a lot of the people listening are going, I don't see

myself as an innovator. But you believe that if you're a business owner, you are in the business of innovation. Yeah. And I also would say I'm not an innovator. Like I'm not one of those guys, right? But that's the thing. There's a lot of different types of innovation. The kind of innovation that we often think about or the kind of innovators that we think about are these people that are almost idealistic. But innovation comes in a lot of different forms. You know, there's bigger, more radical innovation. There's also more incremental innovation that happens all throughout businesses on a regular basis. And like you said, all innovation is is the idea that you're improving or replacing something for the better, whether it's

within your business or whatever. So yeah, I'm not an innovator. Let me just say that out loud. I'm not one of those guys. Those those like I was born that way. I'm just wired that way. Now, I've worked with some people who I would say are very much wired that way. That's just not me, you know. And yet I've still driven new things into Ramsey that wouldn't be there if I hadn't, you know, gone through this process or found out a way for me to still drive new things in. It seems like you've got to zoom out a little bit because the business owners, they're in the business day to day. And it feels like what you're saying is you've got to kind of zoom out and go, what are the things out there that we're doing right now that could be better? And how can that help our customers?

And how can that help lead us to our vision and our bigger goals? And you've got to take a step back to do that. You can't be running full throttle in the business and do that at the same time. That's right. That's right. And if you're like me, if you're somebody who says, I love the idea of innovation or I wish I were an innovator, but I don't know how or I'm just not that person. There are ways, there are things you can do to be more innovative and just not be naturally wired that way.

It's actually not that hard. But it's amazing how we can go for years and years and years operating in a mindset that prevents us from innovating like we're talking about. So I've got three things that I do. and this is just stuff from my experience, stuff that I've seen in others and learned from, people who've done it before me, that I think would be valuable if I were in the shoes of, you know, I love the idea of it, but it's just not how I'm wired. And this applies to any business, no matter of the scale, the industry, the size. It is, yeah. And I would say how you apply these things to your business is going to be very specific to you. But these principles or these truths, I would say, apply regardless of business. So, you know, really the first one, and let me just say as a preface on these three things, they're not earth-shattering concepts, but how you do them is what actually creates the innovation.

That's the secret sauce. Yes. And that's the part where I see most leaders stumble or stall. And so we can talk about that. Okay. So number one, what do we got? Number one, if you said, hey, I need my company to be more innovative or I need to be more innovative. I would say for me, it all starts. with you have to start with having call it a vision, call it a B-Hag, call it a long-term goal, call it whatever you want. You've got to have a goal for your business that is bigger than where it is right now, right? There's, I mean, there's a lot of ways you can create a goal. It can be really measurable and specific. It can be really broad and kind of emotional and kind of visceral, but it's got to be something that's greater than you are today. And that matters because,

well, let me put this way. Not everybody. needs to be an innovator. If all you want for your business is just to sustain, we just want to keep things the way they are for forever, you know, ongoing, which I've never met a business owner's ever said that. Not these listeners, that's for sure. Yeah, right. But if somehow you were, then great, you don't need to innovate. You don't need a vision. You don't need a B-Hag. But for those of you that want something greater for your business, you've got to get really clear on what that is. You want it to be something so big that it requires change. When you're in the mindset of it actually requires us to change, then it's a given that we need to innovate. It's just a

question of how. But I often find that most businesses, the starting point on why we're not innovating is because we don't have a vision that's bigger than we are right now. So we don't have this prompt or this impetus that's pushing us towards doing something different, changing the way we're doing things to get results that we've never gotten. So we've got to create a clear vision, number one. Once we've got that in place and it's been communicated to the the team and we go, hey, we're all in on this. And you'll know the vision's right when, let's say you were a plumber and you went from, you're saying, I want to go from being a single shop to being the number one

service provider in this region. And that requires, you know, a handful of locations, a whole distributed network of pros, you know, something that's way bigger than we are right now. You'll know it's right if you look at that vision and at first glance, you're like, I'm not sure how we're going to pull that off. It should feel a little bit scary. That's right. beyond your depths there. That's right. I've learned to embrace that and appreciate it, not be

afraid of it or avoid it. If you can define that kind of B-Hag, that kind of goal, that kind of vision, then step two is being willing and able to actually answer the question, what must be true, right? What must be true is a phrase that Dave says all the time around here. It's kind of our common vernacular around really just how we think through the how. And it's easy to, when you, when you stare something really big in the face, it's easy to ask the question, what must be true. But it's deceptively hard to actually answer the question, what must be true. And here's why, because when you start answering the question, almost unavoidably, there is a phase in that process where you feel overwhelmed. It feels too daunting.

It feels I don't even know where to start. But just trust me, if you power through that, if you stick with it, chip. by chip, just keep leaning in and keep trying to figure out how would we pull that off. What must be true for that result to happen? Eventually, you get to there. And when you start getting clarity on what must be true, actually start getting to the other side of that question and actually starting to answer it for yourself, that's where a whole new type of focus comes in that you never had before.

It's so important. Like, it's weird to say, like, I'm going to sign up for feeling overwhelmed and looking at something that's so daunting that I'm not sure how we're going to pull it off. But if you just lean in and see it through, the clear you get on the other side makes it more than worth the process it takes. So when you're saying what must be true, for example, you want to be the number one service provider in the region. What might need to be true for that to happen? Well, let's say we're a team of five right now, and you're a player coach. You do some of the service yourself, and you've also got five service providers.

It may be that you need to hire 45 people over that timeline, which seems like an impossible number of people to manage. It may be that you need to make some capital investments into equipment or vehicles or back office software or hire an operations person or completely change what your day-to-day looks like or enter into new types of services that if you want to be the number one provider in that general category, you may be needing to expand into new types of services that you've never done before. It could be any and all of those things and then some. And any one of them you can look at and say, I don't know how in the world I'm going to hire 45 people. Or I don't even know

where to start on back office software because right now I just use pen, paper, and sometimes Excel, you know. But that's okay. It's at least being able to start with a list. And what you're doing is taking this big, massive goal. And even there in that list we just ran through, if we then look at each one of those things, it becomes more digestible. Then we start pairing it down more and more. It's not I'm going to hire 45 people all at once. I'm not even going to hire 45 people in the next year. Lord help us, you know, but who do I need to hire next and why? You know, what are the first handful that we need to hire and why? When do we know we need to open a second location and why? You know, the, as you just work your way down and work your way down to where that big, massive thing

becomes a series of smaller digestible problems to solve, then you can actually get your arms around it and say, actually know what must be true with some sort of plan on how I'll walk it out. So it doesn't have to happen tomorrow. We're just going, what do we have to do today to take that baby step to then make progress towards that bigger vision? It becomes baby steps. Yeah. But when you first start staring it in the face, it never feels.

feels like there's baby steps there. Yeah. All you feel like is this unscalable mountain. You see the mountain top, but how you go from here to there is just one big question mark. Yeah. But eventually, you shine light on all the individual parts and it's like,

oh, I get it. And when you get to there, it is such a rewarding, encouraging feeling. It's just a, I'm just throwing that out there to say, like, it's there. And when you feel it,

you'll feel glad that you went through that process, even though on the front end, it all it just feels like is daunting and I don't know how I'm going to do this. Yeah, I remember just this week, you know, when I started eight years ago, we had 330 team members or so, and we just hit 1,000. And earlier this week, we had confetti and it was this big moment. And I thought in my head, I wonder if Dave at one point said, what must be true for us to have a thousand team members and have the impact we're having today and have the revenue we're having today?

And it wasn't an accident. It was an intentional act that we've gotten here. He didn't accidentally hire 700 more people over eight years. You know, like that's, there's a lot of things that have to happen there. There's a huge team that made it happen. But in the early days, he didn't have that huge team. And he slowly rolled into this thing. And I'm sure once he got there, he went, what would it have to be true for us to have 2,000?

That's right. And get to this next level. And so it takes a level of drive. And we're really reverse engineering the goal in this step. We've got the vision. Let's reverse engineer it and take the right steps to get there. So what is the last and final piece here? So as you get clear on the what must be true.

and as you get clear on the steps you've got to take, if you can then treat that body of work like a goal as intentionally as you would, the revenue goal you've got for this year. That's how I see people, that's for me personally and also in others, where I see people actually get traction on innovating within their business.

If you don't treat it like a goal, if you just said, I want to be more innovative, you will never be more innovative. If you said, I want to implement these three things this year, and if I can take those steps, then I will be on the way to this big goal that we've got, then you can actually get traction on those things. You know, Dave talks a lot about when you set a goal, if you say, I want to lose weight, you know, lose more weight, you're never going to lose weight.

If you said, I want to lose 10 pounds in the next 90 days, okay, now we're on to something. right so whenever it comes to whatever those business changes are for you whatever the what must be true is you've got to be asking questions like by when when do i want to have the first step of this you know the first change implemented and think about this is this isn't a in stone commitment that you're making that you can't change but when would you want it by right let's say the the first step in this example that we're talking about is implementing a new a new back office which is completely innovating our business processes or fulfillment processes. When do you want to implement that by?

When do you desire it to be implemented by? And just start there. It'd be nice to have it done by end of this year. But I don't even know what provider I want to use. Well, great. Okay. Well, in order to implement something, you're probably going to need two to three months to actually implement the software. You're going to need another month for contract negotiation.

You're going to need probably two weeks of vendor vetting and research. You can kind of back into what do I need to do? right now to be on track for implementing by the end of this year. And I mean, just imagine how much change we've already created by the beginning of next year, how many steps we've taken in that direction that we never would have otherwise gone. If we didn't have a vision, if we didn't ask the what must be true, and if we didn't start creating intentional on-purpose goals around that what must be true that are as intentional as your revenue goals or, you know, whatever your other main goals are for your business. Yeah, it reminds me of desired future dashboards,

which is something we've talked about on this podcast, but it seems like such a great way to go, how are we going to innovate? Well, we're going to have this desired future, and we're going to have a dashboard that actually tells us how we're doing, and are we trending green? All right, we're doing great. We're on track to hit this goal that we set out. Or if it's red, we go, what needs to happen, what needs to be true for us to get back on the right side of this thing? So I love this framework for thinking through it. Like you're saying, this is not the go do this today, it's going to look different depending on your business. But these are the right questions to ask to go, do we have a clear vision? Have we asked what must be true to reverse engineer it? And what are we doing to make that goal really practical and tactical for today? You know, one of the things that's really stuck with me is innovation, you don't just stumble into innovation. Like this Ramsey trusted change that we made within our business. It didn't just happen. We had very intentional goal.

around rethinking the services, around rethinking the brand and renaming these services, around when we want to go to market on it, around how we want to get fan feedback in a new way. I mean, each individual part of that thing that we've been overhauling and rethinking has had that level of drive and intentionality. If you think innovation is just going to happen,

if you think a culture of innovation in your company is just going to happen, it won't. but if you, by degrees, have this kind of intentionality and have that force of will to make those goals happen, one day you're going to look up and others are going to be saying, wow, you guys are really innovative. In the trenches, it just never feels like that. It's just progress bit by bit. But the net effect of it is we're innovating, right? That's the outcome. This is the stuff that you've got to do on the front end to make that outcome happen. At least that's the way it's worked here. That's the way it's worked for me. And that's for somebody who's not wired that way.

This whole realm is a place of uncomfortable for me. But because we said we want to help people in personal finance the level that we are, we're in business and leadership at the level that we are. Because of the goals that we've set, it's forced me to think this way in a good, healthy, challenging way to do things we wouldn't have otherwise done. Well, it makes me want to retract the title of Chief Innovation Officer. I think you're now chief problem solver officer. How's that? And also entree podcast hosts.

Don't worry about it. It's all good. Well, Herb, always great having you on the podcast. Thanks for encouraging the business owners out there to innovate and encourage them that they're all innovators and that they can do this. It just takes the right questions and the right actions. Absolutely. Thanks, George. As Brett and Herb talked about in today's episode, we innovate because of vision.

But we can't move forward without goals. They convert that vision into energy. And there's a right way to set them. And our team made it easy with the Entree Leadership Goaltracker. To get this free guide, text Goaltracker to 33444-4. Again, text Goaltracker, no spaces, to 33444 or click the link in the show notes. Hope you enjoyed today's episode of the show. If you did, leave us a review and subscribe so you don't miss the next one.

And if you're a small business owner with 2-200 team members, we want to hear what you think of the show. What you like, what you don't like, and what we could do better. Give us your feedback by clicking the link in the show notes to fill out a brief survey and schedule a call with Tim, our producer. If you want to keep up with us on social media, you can follow us at Entree Leadership. This episode was produced by Tim Hull, edited by Jacob Harrison, and mixed and mastered by Will Rutter. I'm your host, George Camel, and on behalf of the entire Entree leadership team, thanks for listening. Until next time, keep learning, and keep leading. If you enjoy this podcast, you should check out other great podcasts from the Ramsey Network, like Borrowed Future.

Not so fun fact, America has a $1.6 trillion student loan crisis, and it's out of control. I'm George Camel, host of the Borrowed Future podcast, where we uncover the underbelly of the student loan industry and show you what you can do about it. It'll inspire you to see that it is possible to avoid student loans and graduate college debt-free. Listen to Borrowed Future wherever you listen to podcasts.