***DISCLAIMER: Please note that the following AI-generated transcript may not be 100% accurate and could contain misspellings or errors.***

Mahan Tavakoli: . [00:00:00] Kevin Lawrence, welcome to Partnering Leadership. I am thrilled to have you in this conversation with me.

Kevin Lawrence: Thank you. I'm looking forward to it today. Thanks for having me.

Mahan Tavakoli: Kevin, look forward to talking about the four forces of growth, defy the odds, and keep your company scaling. Before we do though, we'd love to know a little bit more about you, Kevin. Whereabouts did you grow up, and how has your upbringing helped contribute to who you've become?

Kevin Lawrence: I grew up in a place called North Delta, British Columbia, just outside of Vancouver, the typical suburbs of almost any major city. And the way I grew up, my parents were like in working class jobs. My dad was a mechanic, and my mom worked in a deli. And the way I was brought up is ke kept me very grounded working with, successful executives and leaders all around the world.

I, I, my metaphor for it is that I have always got my steel toe boots on, as in I go back to those working class roots and it ke it keeps me grounded. Both in terms of humility, but secondly in terms of getting down to the basic fundamentals [00:01:00] that make things work. And not getting too too smart more, more intelligent and more intellectual than needed to keep it down into fundamental basics.

Mahan Tavakoli: I think that's really important and it shows also in your writing as well, Kevin. Part of it is what is important for us to focus in on. Now, one of the things you open your book with is you say leaders don't lose ambition, lose orientation. What do you mean by that?

Kevin Lawrence: As organizations get bigger, they get more complex and there's just more moving parts, and in many ways, metaphorically, it's like you end up working inside of a big storm, like inside of a tornado and within a tornado. It's hard to see clearly sometimes, and people unintentionally end up working passionately and really hard on the wrong things.

And they're not bad people. They just, can't see clearly and they pick something that seems relevant, although it's not.

Mahan Tavakoli: There's a level of, agency that you also [00:02:00] mentioned in the book, Kevin, regardless of the role, the size of the organization, where we are in the hierarchy of the organization, is an impact we can have on growth . Where do you see that agency playing a.

Kevin Lawrence: Yeah, it's a big part of it because you're not always gonna get told or directed on what you need to do. You need to pay attention. So again I like metaphors, but no different than a pilot that is noticing some things. Air traffic control may not tell them about the bad weather or the turbulence. Maybe they don't.

But it's still their job to pay attention. And ideally, they have the understanding to self recalibrate or make adjustments as needed. And again, that's why, for me, that's why tools or models help people to see those things. So for example, in the book, the Four Forces Model, it's like sometimes you get too obsessed with problems.

Which is natural and human, but maybe there's opportunities that you would be better served to focus on. And if you have tools and models, it can help you to recalibrate on your own without even [00:03:00] needing to be told or guided. That's the ideal. I call it autonomous accountability. Ideally, we all have the autonomy or in some cases create it so that we can continue to try to do the right thing.

Mahan Tavakoli: Actually, Kevin, I've been deep into AI and the transformation. It's causing, in many organizations, I

Kevin Lawrence: Yeah.

Mahan Tavakoli: do believe we need a lot more of that at all levels of organizations. Those are the organizations that will thrive as we go through

Kevin Lawrence: yes. It shocks me when I'm hearing organizations trying to over control it. Now you gotta, people have to be using the right platforms, so we're not pushing out information that's confidential where it shouldn't be. But some organizations are like telling, just chatting with a, an executive yesterday, and they're talking about in their company, in the professional services.

How everybody is using ai, but the leadership doesn't really want them to, so they're all using it on their phones or on their personal device, but on the, but no [00:04:00] one's using it on their main computer because they don't wanna get in trouble. This is this is legal in professional services.

Like they should be using it. They're crazy. But the, there's almost, and that will change in time. But yes people need the autonomy to run with it and you can't, this type of change in a company, you can't just control it all from the top. It's gonna be the people all throughout the organization that do it.

But that's easier said than done. People. There's governance and rules and things we need to follow.

Mahan Tavakoli: It's interesting, Kevin, because I have heard that a few times as well, in conversations with people inside organizations where they use their phones,, to access the different LLMs. And one of the interesting things about it to me is that therefore then the learning doesn't transfer to others in the organization when people pretend they are not using it. So , I wanna touch briefly your experience, that led to you writing this book. Where did you get the [00:05:00] insights and the experience where these are the four forces that really impact growth of organizations?

Kevin Lawrence: Most of it, if I go back to my steel toed boot metaphor most of it I've spent 30 years in boardrooms with CEOs and executive teams of growth companies every week pretty well, whether it's virtually or in person around the world, with organizations that have notable aspirations to grow. And we've used all kinds of tools and frameworks.

And after thousands and thousands of strategic planning meetings or one-on-one sessions with CEOs. Over a period of years, the patterns really become obvious. And what I continued to notice is incredibly smart, capable teams, passionately working on things and they wouldn't grow. They would get stuck.

And when I finally. When I saw it, but it took me a while to see it because in all that complexity it's sometimes hard to tell which variables are really driving a difference and which ones aren't. And everyone's got theories, but over time it [00:06:00] started to emerge and some brilliant growth CEOs I work with had pointed out a, a few things.

And once I saw it and I really saw the root of it is people, as organizations grow problems get louder. And incentive systems reward, problem solving, incentive systems are so over-indexed to improvement, quality service all those good things. But almost all of the incentive systems financially promotion wise, psychologically, our egos, all this stuff gets so over-indexed on solving problems, which is easy.

The focus comes off of growth. The things that actually drive growth end up getting neglected. And it's hard. And so as I started to see this and then I ended up thinking what is a way I tried to look for, I always like to go back to nature, simple principles, and I ended up finding this through a bunch of exploration.

I was looking at everything from biology and all kinds of aspects of science [00:07:00] and physics until I landed on it. But the root of it is humans, like we get attracted to negative news. We get attracted to car accidents on the side of the freeway, and we see all the time when traffic slows down. It's human nature and you have to fight that natural tendency , to really create growth and the best companies do, but it's hard 

Mahan Tavakoli: is a powerful point that you make, Kevin, to the importance of opportunity, which is one of those forces to focus in on.

Kevin Lawrence: Yeah.

Mahan Tavakoli: As I was thinking about what you said, it is so true in vast majority of leadership team conversations the focus is on the problems and

Kevin Lawrence: Yep.

Mahan Tavakoli: if we solve all of the problems that the organization is facing. Things will be great.

Kevin Lawrence: Correct.

Mahan Tavakoli: as much time on that opportunity side.

Kevin Lawrence: Unless somebody in the room pulls the brains [00:08:00] up to opportunities to that strategic thinking of opportunity, it will be all problem. And by the way, all the leaders and executives are closer to the problems They live in problems and incentivize to solve them. So when we watch and when we work with CEOs and their teams, if you just let an executive team build a strategic plan, it will be almost all problem solving.

Because that's their world, but you need the CEO or that, that entrepreneurial mindset or the growth mindset to pull them out of it. And that's, and even the leaders themselves get pulled into it. So it's, it is very common. It's because it's human and it's almost not human or, unusual human behavior to stay focused on it. And that's why the companies that continue to grow or the individuals that continue to grow even as a human in terms of how we continue to grow, do focus on that. It's for example, I'll give an example. As a human, as an executive may be still.

Trying to master and build [00:09:00] out part of their team, right? Their team's not quite dialed in yet, and some of the systems are broken and not perfect yet, but the best executives are focused on how they want to be twice as good in three years, and they're doing that development, or they're working on those projects even though current reality is not perfect and still a bit messy.

And that's kinda one of the root insights is growth is gonna be messy no matter what. There's always gonna be problems that don't get solved, and within that you still need to push for growth, just like a pilot, an airplane. Even though the weather, even though there's a lot of turbulence, you still keep going on time to destination.

And that, that, again, it's very, it's hard. It's very hard to do, whether it's company growth or individual growth.

Mahan Tavakoli: It is hard and that's why I wanna understand the point a little bit better as well, Kevin. So wouldn't ongoing improvements lead to us capturing that opportunity?

Kevin Lawrence: No, that's the myth, and that's [00:10:00] why companies stop growing because the motion of improvement. If you think about this, and if we just go to financial to an income statement, improvement is the bottom half of the income statement. Improving your cost of goods sold and your efficiencies and your qualities, it's all optimizing what's getting put into the system, and that's good.

But growth, the engine of growth is usually new customers, new products, new markets, new services, new logos, right? That's a completely different motion. And let's just take mathematics for a second. If you are, if you're running at a quality 11 level of 8.5 outta 10, let's just say in a division you can take your quality level to a nine and that should be an aspiration probably.

That doesn't mean you get more customers. That just means you have less cost for rework. Rework if you let you have less unhappy customers, [00:11:00] but to get more customers, salespeople still gotta knock on more doors, generally, in most businesses. So it's a different motion. The improvement is an internal focus on optimization.

Good stuff. The growth is an external focus in the market of making new friends and new customers and new relationships. One is playing office inside, the other is in the market. And a lot of people don't like to keep going into the market. They, I call this saying that they play, they wanna play office.

You can't grow a company playing office. And so there's exceptions to every rule. But generally as a rule, when you're insular focused on improvement, growth slows down. And your p and l will get better though. Your profitability will be better and for a period of time. So in simple terms there's growth is external and future oriented improvement is internal and short term and you need both to succeed.

Mahan Tavakoli: Absolutely. It is essential for an ongoing focus on the [00:12:00] improvement of those

Systems, 

Kevin Lawrence: always.

Mahan Tavakoli: However, in many instances, those take all the time,

Rather than

Kevin Lawrence: yes.

Mahan Tavakoli: also a separate. Just as critical focus on the opportunity and on that growth, Kevin, I've served on many nonprofit boards.

I have clients in various industries, so it's not to say you shouldn't improve systems, that's

Kevin Lawrence: to. But if that's all you do, you're gonna have a beautiful, stale business that doesn't grow and just take a not-for-profit. We were just on with a not-for-profit this morning. It's great. Not-for-profit. That helps to provide beds to kids who sleep on the floor and we're talk and they have a massive ambition.

Great organization. And, but if you take something like that's doing really good work in the world, like lots of non-for-profits do. But at some point, if you dial everything in you, you could do a better job. It doesn't mean you put more [00:13:00] kids into beds. And the aspiration of most organizations is to have a bigger impact.

And there's all kinds of problems and things. So Yes, you're right. And here and what you find is exactly what happens when an organization gets caught up in problems and improving all of those things, which is excellent. They're building different muscles. And they lose the muscle of the growth motions because the improvement motions are easier.

And there's all kinds of intrinsic rewards. So I can give you lots of different stories, but again and again, when we look at when companies come to us and we look at them, most of them, they get frustrated around the organization not growing is because there's no external focus on new. And so again, and so if you think about it as an executive at an org, and you could be a division within a division.

Within a division. It doesn't matter if you think about your time, and I get people to look at their calendars, right? Like, how much of your time is focused on growth? And I [00:14:00] define growth as growing the XS or the core unit of your business. So if you're a law firm, for example, a simple one, it could be the number of clients that you have, number of projects that you do, or hours depending on how your law firm is structured.

So if you're not paying attention to getting more Xs. You'll just focus on optimizing the ones that you have and that's okay, but it doesn't create growth. And to create that growth, you actually usually have to do very different activities. And so if we go and look in the calendar, great way to look at this.

And in the book you can see the four forces model, but even the simplest portion of it, look at your calendar and what percentage of your time is on activities that drive growth, which is new Xs. And how much of your time is on improvement, which is optimizing or generating value or profit out of each of those Xs you already have.

And just look at the split and I don't know what's right, everyone's doing what's right for you, but look at it and say, does that match my ambitions? And if you're a law [00:15:00] firm that wants to double in size in the next three years. You probably need a lot of time on growth. If you don't, then maybe it's okay, but look at it and just self calibrate.

Hey, am I spending enough time in the quadrants based on what I want?

Mahan Tavakoli: It's important for us at least to pay attention to it, . I love what you mentioned in the book and you just mentioned our calendars show more about what our priorities are than any plan or

Kevin Lawrence: Anything I.

Mahan Tavakoli: or conversation does. So look at your calendar, look at your team's calendar, and see where the focus is just on solving those problems, or also focus appropriately based on your goals on the

opportunity. 

Kevin Lawrence: Yeah. And ' cause really there's two main levers or levers depending where you are that leaders have influence over when it comes to our teams and trajectory of our teams. One is opportunities versus problems. Possibilities for the [00:16:00] future versus issues today. And you gotta defy gravity to keep enough focus on opportunities because the problems will fill your day.

Secondly is courage versus fear, and that's the other axis of the model. And a lot of organization, like there's always reasons to be fearful. And there's always possibilities to be courageous and push ahead. But when organizations or teams get in trouble, you'll notice that they become more conservative.

It becomes more about consensus. Decisions take longer because they've lost courage. So I was with an organization last week. They do have enough focus on opportunities, but we noticed the organization has become so fearful, like terrified of making a mistake that all, although the leadership has courage, nobody on the team does.

Everyone's waiting for the leaders to make every decision and trying to get consensus on everything. So they're trying to de-risk their decision making and we noticed we gotta start to build more courage back in your organization. 'cause that's really slowing down. [00:17:00] So that's really from a growth perspective and what, again, whether it's individual growth of a person or it's growth of a org or a team, those are the two biggest influences we have in terms of the psychology of the team.

And it really impacts it because if you're really courageous, but you're only focused on problems. You will have a tight, run business, or it'll run like a Swiss watch 'cause you're doing all that improvement. And you also, ideally you go back to the model. You need to have enough courage and focus on those opportunities.

And they actually both can be scary because you're gonna make mistakes no matter what. And, but if the leader is not encouraging or celebrating mistakes, the appropriate ones the controllable ones yeah, the organization will slip into fear and slow down dramatically.

Mahan Tavakoli: I definitely want to touch on those as well. Kevin, jumping back a little bit to the problems, though,

how would executives and CEOs in your view, tell the difference between essential problems

Kevin Lawrence: Yeah,

Mahan Tavakoli: and what you call expensive [00:18:00] distractions?

Kevin Lawrence: . Everyone knows their business. I have some ideas. People will have their own thinking, but one for sure. Does it directly impact the customer? Or not. Things that directly Inc. Impact the value prop. We promise to our customer. Like we need to get on that. Those are critical. No, generally those go to the top of the heap.

For the rest. You gotta do mathematics. And what I've noticed in organizations, I have a, one of my favorite new sayings is that words are for writers, numbers are for business people. And if you really want to make good business decisions, you have to do the math. So when you look at these problems, so I'll give you an example.

In the book, there's a story. I have a client outta Chicago that I worked with for years, and we had their number one client send almost a demand letter for a 5% rebate. Now, thankfully, we had excellent financial information, profitability by customer, and in the middle of our meeting, our planning meeting, someone got this letter and it was, a notable [00:19:00] customer their biggest customer.

And because we knew the math. The CFO pulled the math in about a minute. We knew that this demand letter would take this client from being barely profitable to costing us a few hundred thousand dollars a year to keep them. So we were able to respond to that problem in five minutes. It was a, a multi, multi, a 20 million, $30 million a year customer, substantial revenue.

But because we had the numbers and applied the math, we gave it almost zero energy. And we said no and went back to work. But we had math and we applied math. And that is the way, only way you can do this. And it's shocking how hard it is to get leaders to do mathematics in a, in something called business.

'cause they wanna go with feelings and thoughts. And so we just say, okay, great. What is the impact of this problem? So another organization, we had a compliance issue and we said, okay, now what is the, if this goes wrong? 'cause they, people wanted to spend a couple thousand hours of human time to solve it. [00:20:00] I said if this goes wrong, and we ran through the math and I think our risk was like $10,000 and there was it was not like, it wasn't human safety.

There's that type of stuff that, it doesn't matter the price that's different. But the mathematics said, okay, we got a $10,000 risk. It's a $500 million business. Like we, we don't care. But people were pa so you gotta run the mathematics realistic. And I call it, it can be hockey math. I'm from Canada, so hockey, math, basic math.

And then you can triage them appropriately not based on passion, but based on math.

Mahan Tavakoli: That's a great point. Kevin and I was smiling as you were talking about this in that you could even do this , with your own calendar, I find a lot of times leaders spending a significant amount of time on improvements of things that if you add the math up, the cost of even their time is

Kevin Lawrence: it doesn't pay. You're [00:21:00] losing money by spending three hours on it.

Mahan Tavakoli: Yes.

Kevin Lawrence: had a great CEOI worked with spectacular. CEO built a massive company , massive in the mid-market, thousands of employees.

And we were going through and I found some big challenge problem in the business and I found one that was worth about a million bucks. And I said, look, we're burning a million dollars a year here. And he is okay, anything else? And I went and he goes at the end of the day, a million was not big enough for him.

It was material enough for him to pay attention to. And, but that's the strategic discipline to not engage. Now, if it was 10, he would've engaged. I'm not saying it's right or wrong, it's just that there is a strategic financial filter you need to put on this. And not everybody has that. Like I'm a math person, like numbers talk to, add up in my head and do strange things and I'm subconsciously doing math all the time.

But that is not normal for people. And a little bit of it helps. [00:22:00] Because you make better choices.

Mahan Tavakoli: It really does, when you talk about opportunity and problems, it's not necessary. Early that you don't focus on problems and just on

Kevin Lawrence: No. No.

Mahan Tavakoli: we overfocus on problems, not enough on opportunity and within problems. A lot of times we focus on problems that aren't worth the effort and time for that.

CEO, it could

Kevin Lawrence: Yes.

Mahan Tavakoli: dollars for someone can be a hundred dollars an hour. It doesn't

Kevin Lawrence: It doesn't matter.

Mahan Tavakoli: There's a lot of trivial things that we can spend time on rather than the more significant problems, and then being able to take advantage of opportunities.

Kevin Lawrence: Yes, and that is the strategic filter that is critical within this 'cause. The thing is like most. Many problems do not need to be solved, although solved themself. But they have such energy behind them and drama and it pumps good [00:23:00] drugs in our system, engaging in them, like for so many reasons. Like it's, there's this thing that I talk about called the seduction of streamlining.

It feels so good. We put on our Superman cape. I did it like. That's right. I, I spent a thousand dollars and saved 50 bucks. Like saving $50 is not bad, but executives shouldn't be focused on and, but we inadvertently do that. And it's fascinating 'cause we all do it in, in, in my other book, your Oxygen Mask first.

And one of the things I talk about is stop being chief problem solver. Because as we grow up and move through organizations when we're started our careers, our ability to solve problems is one of our greatest values. And as you move up through the organization, that's why you get promoted. 'cause you're good at fixing stuff generally, but when you get to higher levels, you have to let go of that.

And you can't, you shouldn't do that most of the time mathematically your team or their team's team should. So it's like a shedding of a skin as you get to the next level of leadership [00:24:00] where you have to let go of the thing that actually made you successful. 

Mahan Tavakoli: And it's incredibly hard to do.

Kevin Lawrence: Yes.

Mahan Tavakoli: That's the opportunity and problems. You also addressed courage versus fear. Or of the things I wonder though, Kevin, it sounds good to say courage, what does courage look like when in many instances leaders feel like, you know what? I'm accountable to the board. I can't tell you how often heard from A CEO say I'm accountable to the board. Therefore they excuse not having that courage and then move on down in the organization. There's

Kevin Lawrence: Yep. And it's contagious. I was with a CEO today, and we're talking about it. I said, your job is to negotiate with the board. Direct the board, get help from the board. But it's almost like a victim mindset. It's up to the board or it's not my thing.

That's, again, that's not courage. And there are people who do thrive in their careers by skirting [00:25:00] accountability and almost playing that not my decision mode. I've seen some executives do it masterfully now, I wouldn't want them in my companies, but I have seen people, some people have an ability to dance around it and have no accountability.

So PE people do that and it's it's an easy stance to take. Those people don't create a lot of value in organizations. They hold jobs, they don't drive change. Drive Jo, drive growth. And that's a personal thing. That's some people's operating system. And if it works for them, great.

Those aren't the highest performing executives I've ever worked with. 'cause it does you, you have to be willing to get a little bit of mud on your face. If you're gonna lead effectively, you're gonna make mistakes. Like I have one of my slides and one of my presentations is, I have been in the room for $350 million of burnt cash.

We made the choices, we did the decisions, and then it did not go well, as in, and that's not opportunity cost. That's real cash burn. And [00:26:00] I wear that as a bit of a badge of honor because first of all, it's true. And that's where the learning comes from. You have to make mistakes. It's the only way people like innovation is about making a bunch of mistakes and testing things, but for some reason people get so afraid of it and they think it's a bad thing now, making the same mistake doing something because you were loose on management.

That's a, that's not but taking strategic chances. That's where all the great things come from. 

Mahan Tavakoli: How do you determine the right level of courage, Kevin? Because I imagine at a certain point it can also be seen as reckless.

Kevin Lawrence: Yes.

Mahan Tavakoli: between being reckless and having the right

Kevin Lawrence: Yep. So one of the things that I love Jim Collins has done the best research and we're grateful to have done a bunch of programs with him. We take CEOs to spend two days with him in his lab, like he is the master of building enduring great companies. And his one model outta the book great by choice is called Bullets and [00:27:00] Cannonballs.

And my gosh do I love that model. We use it all the time. And here's how I distill it, all of our strategies and goals and. Product launches and system implementations, it's all hypothesis and we can think it's excellent hypothesis, but it might not be. You don't actually know until you launch it and see how it works, and then you gotta nurture it and bring it to life.

So if you acknowledge that your best thinking is still a hypothesis, it's not. It's almost never truth. No guarantee. Then you would do his bullets versus cannonballs is do simple low risk tests where people get in trouble with courage is where they're stupid and they assume they know the answer and they act as if they have the answer.

And that's silly. It doesn't work. So let's just say we're launching a new program. We have a, I'm making it up. A $10 million budget. Let's start out and do a hundred thousand dollars and do 10 tests. Let's do 10, $10,000 [00:28:00] tests. Just do some little tests and then we'll go and do some a hundred thousand dollars tests.

Now we burnt 1.1 million and we've learnt a ton of stuff 'cause everything is about learning cycles. So now we're in for 1.1, we've still got $8.9 million that we can then go and do some bigger moves. And that's, so I'll give you an example. An executive we worked with worked for Lululemon the fashion or the clothing retailer that's based out of Vancouver.

That's had a rough time recently, but even Lulu at their best when they were thriving and booming and expanding. Guess going back 10 years ago, even when they would enter a new market, like specifically when they entered the US and entered New York, Lululemon, who was doing billions of revenue at the time, would get C class space.

Retail off a back alley. Hire two or three local yoga instructors to go and seed the market, bring in the yoga, 'cause they, because they generally build through fitness instructors, bring them to their C class [00:29:00] cheap space, get them to see the clothes, experience the brand, and start to seed the market and see how it would do before they opened up a store.

And they were already wildly successful. They had a great model, but that was a brilliant example. So they are going into the US. Into a new market or new city, but they're doing it through very simple low risk tests. And they could do it way more bold, but often bold gets you caught out. So that as an example.

So it's that type of thinking is smart now, but go to New York and go get the space and go hire some people, but spend a hundred grand, not 5 million bucks to start.

Mahan Tavakoli: I love that example, Kevin. Actually, yesterday I was with a client and the leadership team around the table. We're all really convinced something they want to launch next year and want it to go all in, and that's the point I had to make. [00:30:00] Whether Minimum viable product, minimum viable concept,

Kevin Lawrence: Yep.

Mahan Tavakoli: Jim Collins' Cannons versus bullets. Courage is not putting all your chips and risking the entire organization

Kevin Lawrence: Courage is not ego courage, right? 

Mahan Tavakoli: It's that experimentation.

The willingness to experiment. So

Kevin Lawrence: yes.

Mahan Tavakoli: fear keeps you even from experimentation on the other level, it's crazy going all out without the tests that by themselves are a part of courage and show you whether something works or not.

Kevin Lawrence: Yes. And if you assume that once you launch your hypothesis, there's gonna be a hundred learnings to make it work. Or maybe you call it and it doesn't work. But if you assume there's gonna be a hundred micro learnings, you'll approach it differently. And by the way, you'll move faster. 'cause courage is about speed.

So if you're gonna wait till you have your hypothesis perfected, like no. Like for example, we have a leader of sales in another organization [00:31:00] and they're trying to get all their internal systems dialed in and everything. And I'm like, no. Go meet some customers. How about you go talk to 10 customers?

I don't care about your CRM cr. Sure, you need it. You need to administer what you're doing, but go talk to 10 customers. That's, or a hundred customers. That's how you're gonna figure it out. And through those conversations, again, you're gonna, you're gonna get bunches bits of learning, understand customer needs.

Go launch something. And that's, it's that mindset. But what happens is people want to seem like they have the answers and they think they can figure it out and they can't. And then they, again they play off too much instead of going and testing things in the real world with their customer. And the customers will guide you really quickly.

Mahan Tavakoli: Let the market reward your courageous actions,

Kevin Lawrence: Exactly.

Mahan Tavakoli: around the table all agreeing. This is a brilliant idea. It's definitely going to get traction.

Kevin Lawrence: Yeah, because you don't know you don't, like I [00:32:00] worked in luxury fashion for a long time with high-end fashion brands and the buyers would scour for the best parts of the new collection. And even the best buyers say they have good instincts, but often they're wrong. Like when the product gets onto the floor, sometimes the stuff that sells is different than what they would think.

'cause and even when you ask consumers, I love this one. You ask consumers what they want. Just because they say they would, doesn't mean they will. That's why you have to test. And by the way, you have to do fair tests. Like you need to do a relentless test, not just push the bird outta the nest and see if it flies.

Like you need to really be relentless about testing properly so that you give it a fair shake. And sometimes people also that's the other side of the courage is to do it, but be willing to really work it to try and make it work.

Mahan Tavakoli: Even if you look at some of the models of. Organizations that have taken off [00:33:00] sheen out of China, that's a huge part of their success, where they put a product on with maybe 10 units or 50 units, and if it sells, then they produce a lot more of that product. So it's letting the market tell you. Whether that courage and that path works or not. Therefore, it's smart courage. . It's not meaning you are doing something stupid that risks the organization. taking action that could potentially then reward you if it works in the marketplace.

Kevin Lawrence: And this example is not legal, but if you are going to gamble, you would only do it if you could count the cards. Counting cards isn't legal, but it's like gam ga 'cause the best leaders in organizations actually don't make big, bold moves when it's risk. They're very calculated, like they know they're [00:34:00] gonna win and then they go to bat.

One of my favorite quotes actually in the son of one of our team reminded us of us in our meeting. 'cause one of my team members' son joined in as a kind of a shadowing thing and it's from Sun Sue in the book Art of War. Victorious Warriors win first, then go to war while defeated warriors. Go to war first and then seek to win.

So it's all in the planning and the strategy and the thinking these things through upfront. And that's where that smart courage is exactly what I talk about is that you it's very calculated and it's like you have high it, it, on the outside it might look like you made a big, bold move.

It wasn't, it was highly calculated and you knew you were gonna win. So example, even a, a large real estate organization we work with. And, in this market is a bit challenging. This real estate market's a bit challenging and they're still doing quite well. But what they're saying is that they know now when they're looking at land and they're still buying land, but there's like land that's no brainer.

Like [00:35:00] it's impossible to fail because it has all of the right things. And like they know and they're being smarter, they're still being courageous, but they're dialing in their smarts and decreasing their risk as much as possible, but they're still making moves.

Mahan Tavakoli: Absolutely. On. Podcast, Kevin. I've had John Rossman, who initially had launched the Amazon marketplace,

Of books on the Amazon Way and,

His most recent book was Big Bet Leadership, and that is a critical point that he makes whether when they were launching the marketplace. Or how organizations need to look at their strategy. Exactly what you mentioned, it's that kind of smart courage. There's a lot of testing and experimentation, not based on what smart people in a room think, but what the market shows you, the market wants , going out and experimenting with full force, full courage,

Kevin Lawrence: Yep.

Mahan Tavakoli: [00:36:00] willing to fail and then

Kevin Lawrence: Yes.

Mahan Tavakoli: elsewhere.

Kevin Lawrence: Yeah. Being willing to take the lessons. 'cause sometimes stuff doesn't work and that's okay. Let's just fail fast but as organizations grow and get more successful, keeping that experimental, failing fast culture is really difficult. And if we don't lead it, it will never happen. It's hard.

Mahan Tavakoli: I have a lot of CEOs and leadership teams that actually listen to the podcast together, Kevin, or they all listen to it. What questions should they ask as a team to. Surface or get a sense of where they are with respect to the four forces that you talk about.

Kevin Lawrence: Yeah, the simple thing, we talked about people's time, but if you look at the strategy of the company, we look at it to assess the organization through three points. The team members, the key leaders in the business, their strategy. And then their reporting or their numbers and on the team [00:37:00] members, it's really simple.

Like what percentage of your key leaders, not everyone, what percentage of your key leaders are what we call ACEs exceptional at their job. They're a delight to work with. They would get an A on the report card for fitting the culture and they would get an A on the report card for consistently delivering results.

An A is not perfect, but an A is damn good and they're damn good because if you. If you have a low percentage of your key leaders that aren't ACEs, you end up with a whole bunch of part-time jobs. And so your effectiveness dropped because you're having to actively manage these people versus, a little bit of guidance in leadership.

So you get pulled down to a manager instead of being a leader if there's not enough. So that's, and by the way, that's the hardest part. The people part of the business. That is the hardest part because developing great leaders, finding great leaders. Strategy is actually pretty simple. The people part is the driver.

And that's hard. That's hard. So that's, that'd be one. What percentage of your key leaders [00:38:00] are ACEs or whatever you would refer to them. And that's not about being promotable, that's just about excellent today in their job. And then the other on your strategy is how much of your, if you build out your, if you look, I like to look at the three year or the five year plan, whatever the organization works with.

'cause that's where they're, that's like the next mountain they're gonna climb to of that strategy. How much of your big strategic moves or investments is allocated in each of the quadrants, and there's the growth improvement. The other one is analysis, and then the other one's agony. Agony is like compliance, staying outta trouble and you might need some in there, but how much is in each of those quadrants and is does that match your aspirations?

Literally. And the idea is it's just to counter the gravity of having everything being about solving problems, optimizing our processes, implementing the new ERP whatever it happens to be. So , what is the directive you're giving to your organization or your team, and how much of it's about growth and improvement in the others?

And is it [00:39:00] okay? And if it is, okay. Go. And if it's not, how do you change it?

Mahan Tavakoli: If it's a conscious decision, outstanding, but as you mentioned, there's a gravity to these problems that sucks

Kevin Lawrence: Yep.

Mahan Tavakoli: almost like a black hole where everyone and their focus in the organization becomes consistently on addressing the problems you want to avoid.

Kevin Lawrence: And they mistakenly think that's good. I have another organization that, that's a thriving organization and the CEO reached out 'cause they were stuck and they keep adding more middle managers to and, but it's not growing. The only thing that's growing is their overhead cost.

Now they're still highly profitable, which is fine. But when we looked at it, they had a, the most beautiful strategic plan I had seen. It looked like McKinsey had done it for them. It was beautiful. Useless because, eh, there was nothing in there that matched their aspirations. It was all pet projects to improve [00:40:00] things in the business, and the business was good.

And the, it would help the business to stay good. It just wouldn't grow. And the thing is, but they couldn't see it. And that's why I wrote this book. I'm very passionate about the fact that amazing people are trying to do good things, but they don't win. Because they're passionately doing the wrong things and they don't even know.

'cause you would think solving problems and putting your energy there is a, is an excellent thing to do. And it is if you also focus on growth as well. If that's, and that by the way, and that's why organic growth dies in most organizations. Most organizations struggle to get 10% organic growth o over the long term as they scale.

But if you look at their plans, nobody's working on it. I got a call later today with the CEO I've worked with, and, at some point when their organization profitable was growing but at a unit level, they weren't. And I said to them, who's in charge of acquiring new customers says, okay, we have a sales team.

Okay, how many new customers did the [00:41:00] sales team bring in this year? They're like, I don't know. I said, okay, how often do you talk about it? And this is the CEO o. And the CEO was like we talk about sales. I go and they started their eyes are like oh, they realized what they were saying, but this, it's the.

The CEO didn't have fo they had to focus on sales and revenue, but that's unsophisticated revenue is compromised of lots of different things. And if you're not focused on adding new customers or new products or new services, you're not gonna get them. Your team will go from hunters and farmers to just farmers.

And I'm talking about the revenue team here. And by the way, if you let any sales team have a choice between hunting and farming. Almost all of them degrade to farming. It's easier. And I'm not, I don't judge them for it. It's the leader's responsibility to keep the focus on farming and it's hard. And again, this CEO, they did not have the focus on, so on hunting, they don't have the focus on new logos and hunting.

And it gradually disappeared in new organ. They said, Hey, can you talk [00:42:00] to the head of sales? So I talked to this head of sales. , Nice. They made a good laugh about it. And they're like, yeah. I hate to admit it I lost sight of it.

Mahan Tavakoli: It's critical at that level, Kevin, and I also think it's critical, as you mentioned on the strategic level for organizations where a lot of times. Even the strategic plans don't focus enough energy and then the follow through on growth. And one of the things that we talk a lot about being purpose-driven, purpose-driven teams, purpose-driven organizations. you are truly purpose-driven, so including your example with a nonprofit law firm. doesn't matter what the role is. If you are purpose driven and you believe what you're doing makes a positive difference, you would

Kevin Lawrence: You should wanna do more. Yes. Yes, , so we work with this great organization called The Little Potato Company Angela Santiago. She's out of [00:43:00] Edmonton, Canada. It's the little colorful potatoes, and you will see them all throughout North America. They'll be in your stores. You'll see them in Costcos and Walmarts, and they built the category and they've gone from.

Growing on a farm and selling in farmer's markets to hundreds of millions of pounds a year. But when we're, when I'm talking to Angela and her team, we are always talking about the pounds that we grow, process, and sell, and we have a growth goal of where we're going, and it's never lost. And it's hard sometimes, but we're continually focused on that and the organization stays focused on it.

Again, it's hard but they're insanely purpose led. They wanna feed the world better. That is their focus. And they love potatoes. And by the way, when Angela talks about her purpose, like I get emotional and she's talking about potatoes, but there's this deep passion because potatoes got big, bland and boring, and they wanted little flavorful, nutritious ones because potato consumption dropped.

Anyway, long story short, the purpose is there, but if you truly live your [00:44:00] purpose, you have to impact more people. But, and that, that is when it's, and that's the most filling and it's also very challenging, but that gets lost. It really lost unless someone continues to wave the flag of growth and impacting more.

And I always look to the senior leaders on that.

Mahan Tavakoli: To do that well, your book serves as a guidebook as well, Kevin, so where can the audience find your book, your writing, and follow your work?

Kevin Lawrence: Amazon has the book, the Four Forces of Growth, number four, also Your Oxygen Mask First, which is about growing yourself. The four Forces is not getting lost and disoriented and losing growth. And then Lawrence and Co is our firm, our consulting firm, Lawrence a and DC o.com.

And same on LinkedIn. Kevin Lawrence. So look up the book titles and on our site we have tons of free resources, case studies, articles, newsletter that comes out every week. . I feel very grateful for what I've learned and I feel compelled to [00:45:00] share it.

Mahan Tavakoli: I really appreciate you, Kevin, and your book, the Four Forces of Growth. Defy the odds and keep your company scaling. Thank you so much, Kevin. Lawrence.

Kevin Lawrence: Thanks for having me. 

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