How Minimizing Friction Maximizes Growth for Small Businesses

On this episode of the Reinvent Rich Podcast, Irvin welcomes Chad Jenkins, CEO and President of SeedSpark, to talk about how minimizing friction helps small to medium businesses maximize growth.

 

Irvin Schorsch:

Good afternoon everyone. I’m Irvin Schorsch, the founder and president of Pennsylvania Capital Management in Huntingdon Valley, Pennsylvania. We are a fiduciary wealth advisory firm that helps our clients create wealth, manage their money, and work through their estate planning through the lens of money and finance. I am joined today by Chad Jenkins, who just finished his latest book, Just Add a Zero, and Chad’s focus is on how do you remove the film, outperform your competition, and grow exponentially through collaboration. And today is meant to be a learning experience for all of you. And there are many concepts here we’re going to explore together in our conversation that will help you as entrepreneurs or small business owners. Chad, welcome. Happy to have you.

Chad Jenkins:

Thank you very much, Irvin. Yes, thank you Mr. Irvin, I appreciate the opportunity to be with you today.

Irvin Schorsch:

Chad, I’m very excited about our conversation and what our listeners can take away. So let’s jump right in. If you are a small business owner, how do you double the growth of your small company using the concepts that you put together in Just Add a Zero?

Chad Jenkins:

That tagline that is written is purposely and also in a hierarchy. So the very first thing that you mentioned earlier was remove the film. It’s a concept that I created years and years ago and it’s going to be a whole lot more simple than probably what it sounds like. So all of us have bought a new car, gotten a new phone, and you had to take the film off of the new phone or off the GPS screen in the new vehicle. I liken the value opportunities that exist in small to medium-sized businesses that are operating solely on conventions. It is like removing the film on their actual opportunity. So for me, remove the film stands for something very specific, friction identification and leverage the market. And one may say, “Well, how do you identify the frictions?” And to my response would be, “That’s the easiest part about it.”

Today, whenever you came into your business, you potentially even got a call on the way to the office and you heard something that otherwise would be known as a complaint. If you were to look backwards over the last 30 days even, or even the last two weeks, depending on the type of business that you’re in, you may uncover commonality in a lot of those complaints. Those are frictions that exist inside of your business or your industry. So in past I’ve been very fortunate to create, start, buy, run and exit over 50 small to medium-sized businesses over the time that I’ve been in business, which is quite a long time. Looking backwards, every time I had identified friction in an industry, I often shared that with whomever I was serving. I am absolutely a sponge and I’m driven on natural curiosity. So I have no formal education and along my journey as I was growing up and starting businesses, I served a wealth amount of small to medium-sized business.

I would always just review exactly why was this particular grading contractor or this wealth advisor knocking the cover off the ball. Sometimes I would meet with the same type of organization in the same day and I would have the same question but materially different. And why is this guy struggling. Every time I come to see him, whether it be for technology or one of my business was mobile phones and I actually delivered a ton of them, I would just constantly ask questions and measure up the differences between the organizations. And a lot of times when I was engaging with them, I would hear a lot of those frictions. I prefer to use that over complaints actually. In those frictions, whenever I would hear a lot of commonality in them, I would begin to ask questions. First question, if I put my effort in and resolve this friction for this particular business owner, does it just help him or does it help everyone that’s in the business like he is in this local market?

And if that was a yes, the immediate next question was, well, if I’ve resolved this complication or this friction and help this organization and then help the organizations locally, does it also apply to organizations like his in the entire country or in also North America? So three yeses in my history, I would start a business. So you ask how would an existing small business or medium-sized business owner leverage just one of the methodologies that exist inside of this particular book to double their business? The very first one of remove the film is friction identification even in their own business.

They begin to remove those obstacles and embrace those obstacles that once they do the learning and resolve the complication inside of their business, they would begin to notice that they’re creating competitive advantages and making it easier for their hero targets, which is of course a term that we learned at Strategic Coach, their hero targets do business with them, just easier, which is a old fundamental rule. So embracing the challenges that you have in your business and or your industry, looking at them in a little different dimension, leveraging them, resolving them, and beginning to benefit from that by helping your business grow, by creating competitive advantages that far out past your competition.

Irvin Schorsch:

As you said that there’s friction or distractions throughout the day for most business owners. How do you drill down to what’s important and eliminate those stumbling blocks from the time you open your door or you get up in the morning?

Chad Jenkins:

God gave us four inputs and one output. I use them proportionately. So you have two eyes and two ears. Whenever I’m saying or projecting to listen to all of those frictions and to find the commonality there’s an amazing amount of white noise in all of our businesses and currently, I believe I have 15 to 18 different operating companies, there’s a manifold more when you begin to multiply them. But even in those, certainly from what I would classify as the core functions that exist in all of my operating companies, when I hear a friction from let’s say a general contracting company or a cybersecurity company or a digital marketing company or a real estate investment firm from an HR perspective or from an accounting perspective or from an accounts receivable perspective, there’s commonality in those complaints/frictions. When I see there’s a high number of those, that tends to get my thoughts going first. So frequency and volume.

Beyond that, my mind is built to… Are you familiar with Six Working Types of Genius by Patrick Lencioni?

Irvin Schorsch:

Yes.

Chad Jenkins:

I’m IW. So invention, come up with a solution, wonder, ask the question. I’ve learned and matured over time where I asked the question first even though I’ve resolved it in my head, I don’t let that out anymore over the last probably four or five years. In this scenario that we’re teeing up, let’s say that there’s a challenge with human resources. I’m noticing a lot of commonality. There’s also a challenge with our accounts receivable, let’s say in six out of 10 businesses, one of those with the resolve, there’s going to be an investment of time, effort, and energy in the resolve for both of them, and there’s going to be an outcome to both of those. So measuring the outcome and also considering the amount of time, effort, energy.

And then the last one that I alluded to earlier, which is a quite unconventional. When I resolved this, is it something that I can begin to offer to the marketplace because there are others, just like any of the businesses that I own, are having the same friction. There are differences in many, many businesses and while the amount of times that I’ve walked into any business of any type and heard “We are different”, I haven’t noticed that to be an appreciable amount. So whenever I resolve something from one of my operating companies, it’s just ingrained in me. Is this something that once I put the time, effort, energy in, it’s going to make a material difference in my organization, but is it something that I can begin to offer to the marketplace? And if so, what is it going to take to offer that in the marketplace? Is it just a landing page? Do I already have the resources at my fingertips in my existing organization to begin to materialize this as a service offering out to most likely, people and clients that we’re already serving? So it could be that-

Irvin Schorsch:

Chad, let me interject for an example here, a real life one you’ve got to be dealing with if you oversee 15 to 18 different companies simultaneously. In the morning, you get four or five of them calling you saying, “Look, we’re stumped about this or that,” or “We’re having trouble with this team or that employee or this marketing metric”, what do you do to leverage yourself? Is it a matter of delegation? Is it a matter of a system that you use to send those frictions or complaints or problems out to others? How do you, for yourself, in the morning with running that many companies, manage to get it off to someone who can deal with it better and save you the time?

Chad Jenkins:

That’s a multipart answer. First one, I have leadership teams in every organization that these things don’t make it to me anymore. Not with a lot of consistency or not that haven’t already been addressed and after the addressing of it, all these organizations do run EOS by Gino Wickman and now EOS Worldwide. So we have mechanisms of leadership scorecards that rolled up to what I would classify as corporate, that overarching governing body, which is one of my organizations that oversees all of them with the CEO, the CFO and a controller, etc. So that particular scorecard, it receives the things that are coming up from each of one of the organizations so that we do have global visibility and we have a process to which we began to interpret the velocity, the intensity or severity.

We have asked and trained our leadership teams to understand and dictate to us the resolve both in time, effort, and energy. We have focus groups around them as well where three organizations that are very abstract in their service offering to the marketplace, that those leadership teams come together before he gets to my level when there’s commonality in the frictions that they’re being afflicted by [inaudible 00:09:23]-

Irvin Schorsch:

Makes sense. That makes good sense.

Chad Jenkins:

Multiple tiers. Now the things that do get to me, which the system is starting to proof to be extremely valuable, and I’ll put that in a little context. When things do make it to me, they are things that they’ve identified are going to make an impact to multiple organizations and they would like some really out of the box unconventional thinking to resolve it because it is absolutely something that they expect, I’ll be able to figure out a way how to monetize it and turn it into a business. In 2009, I exited quite a few organizations. At that time I believe I owned between nine and 12. I was not nearly as organized nor did I have leadership teams that were very… They were qualified. I wasn’t mature enough to get out of their way. I was still way too involved in the day to day.

So I’ve been to the other end of the spectrum where I have a ton of complexity and not the correct organizational structure and I could argue that I was part of that frustration, the creation of it. I’m on the other side of it now where I empower leadership teams to run the day-to-day operations and I’ve done a ton of work with, I mentioned Strategic Coach earlier, and their concept of unique ability, I’ve spent the last four years deep diving and really honing in what exactly it is that I am uniquely capable of doing and is specifically growth innovation, to look at existing resources, understand them not for what the label on the outside of the bottle tells you it is, whether it be a person, a place or thing, but it’s authentic expression and then understanding how that can be in collaboration with another people place or thing to create more value.

So that is the place in which I operate today. Those things do make it up to me and when they do, I take a really hard look at it and understand all the facts and how we can collaborate with other people, places and things and come up with a real solution.

Irvin Schorsch:

Let’s shift here and pivot to ambition. How do you channel ambition within your employees and inspire team members to meet their goals?

Chad Jenkins:

Lovely. For all of my organizations and anyone I come in contact with, growth mindset is extremely required just to be engaged. If not, you’re not going to enjoy a lot of time around me at all because I’m definitely not a me too guy and complacency, there’s no real place for it in my world. I also am a very firm believer that God made us all a true genius. I am very aware that only a certain very small percentage will ever be intentionally motivated or determined to find out exactly what their genius is. So with organizations that I own and team members that have joined us, I take it personally that we understand exactly what their genius is as early on as we possibly can. And as I mentioned, the label on the outside of the bottle doesn’t really mean anything to me other than that was somebody else interpretation of value creation.

Irvin Schorsch:

That makes sense.

Chad Jenkins:

That also is required in my world of humans. So we may have hired somebody for a particular role, they may have come to us with a previous title, they may have had a certain amount of experience that we can sort of moderately interpret because we did not spend the last 25 years doing it is whatever they did do along their own growth journey. So taking a really hard look, and I know we’d subscribe to some of the same methodologies, utilizing the tools that give us multiple dimensions of the person and understanding exactly what their true unique capability and ability is, empowers us to also get on the same page with my vision for that organization and the rest of it, and I mentioned it earlier, it’s important that we get out of their way.

So oftentimes, and I can only speak to this with many examples of experience where I was holding very, very qualified people back from reaching their true potential because I was so adamant about creating the most value for our hero target and for a long time I was directly involved in that. I hired the right people, I just didn’t get out of their way. So I’d strongly encourage others who in small businesses that feel like they’re running on a hamster wheel to empower your people. You probably have a lot more talent on your team than you would ever imagine, but sometimes we stand in their way. Only I can speak from experience. Yeah.

Irvin Schorsch:

If we take a look at your existing companies and what you’re doing to inspire your clients, how do they take care of their businesses in terms of making in the repeatable processes so that they can expand the business that they’re doing?

Chad Jenkins:

A solid foundation, very important. Complexity, run like a scalded dog from it. When we began to create value and we begin to add revenue and then we begin to scale a little bit and hire people, we manufacture complexity. We also, at least again from my experience, when we’re younger and we’re very busy trying to be everything to everybody, we’ve heard this before, that just also manufactures complexity and you have limited resources in human capital, but we in adversely are adding complexity to a small team. I would strongly encourage you not to do that. There’s a little book called Built to Sale, and it escapes me at the moment who wrote it and it’s an excellent listen to. I feel like I’m watching in a small medium-sized business sitcom. This gentleman frames up all of his mentors into a guy named Ted. His name is Alex.

He has a marketing firm and he’s doing what I would say is the very conventional small business growth cycle. He’s trying to be everything to everyone. His team is in a little bit in disarray. His revenue is okay, but not growing consistency because he has no process and his margins are really, really thin and he’s just burned out. He’s ready to exit. He has nothing to sell. That particular marketing firm [inaudible 00:14:50] listened to his actual mentors and they of course were telling him the same thing that probably all of your listeners know. I’m not saying they all subscribe to the methodology and it took me a while as well. Pick one thing,.pick one thing that you and all of your resources are better in the world of doing than anyone else and all the other stuff that you’re doing as your organization delivering what you perceive as value to the end user, but it costs you a ton more effort, time, and specifically energy, and you may consider stopping that.

Constantly identify the one thing it is that whenever hypothetically like a gumball machine, every time a client puts a quarter in the top, you deliver a bubblegum at the bottom. There’s no question. Even if you or I, we don’t have to be there to do and deliver that level of value to our hero target. Focus on that one thing. Begin to get rid of the other things and strong methodology I’ve been working a lot on is the art of collaboration. I’ve developed a tool that is bidirectional collaboration identifier. So consider if you have a hero target walking along their gross journey, this is the person that the identified target market other people would use is that language. This is the person that you want your business to be seen as a hero to and they’re walking along their journey.

Well before they get to you, if you really look at your clients and you study them, before they get to you they’re engaged with a person, place, or thing every time or at least 80% of the time. Then after it is what you do and you deliver value to them. When you track backwards to the clients that you’ve served between even since the beginning of the year, when you did the best job you possibly could do, they had a certain reactive behavior. They began to engage, let’s say in yours maybe with a trust attorney, maybe with somebody else. They engaged with a new merchant provider, a new bank or a commercial developer because they want to build a building because you’ve helped them grow in certain examples. But when you look at your client base or your hero targets and you understand their journey, whenever it is what you do, you deliver such value, after that they take this action.

Those are immediate collaborative partners that if you would consider the art of collaboration, you have now tripled your sales team to the market. You as well have enabled yourself to really hone in and focus on what it is that you do that is the most exceptional amount of value that you can deliver and the least amount of stress on your team and your organization. You have also began to help and drive business to the others, the one that comes after you and one comes before you. Well, that’s a two-way street. So you can as well apply that same methodology for collaboration along your normal hero’s journey just to triple your sales team and to enable you to really hone in and focus, but you likely offer a lot more products and services. You can use the same exact theme in collaboration to find the folks that do those other products and services that you’re doing that are a drain on your organization. Find someone to do those and enter into a collaboration with them.

Irvin Schorsch:

It almost sounds like you’re saying start with figuring out who you want to be a hero to, pick them up on the way in their journeys, show them the kinds of hero services or products that you provide so that not only do they become your clients, but they become your emissaries and talk about the kinds of things that you do that are so extraordinary that they want to share with friends, family, or their own inner circle so they become salespeople in their own right for you.

Chad Jenkins:

And as well look at service providers that come before and after you and be in collaboration with them. If I tell you that I’m in marketing, that’s great. You may know somebody who is looking for marketing. If I tell you that I do SEO for RIAs that have revenue between X and Y, then if you know somebody who is an RIA who does revenue between X and Y, it’s real easy to refer them to me. I don’t deal above and I don’t deal below. I have other RIA marketing focused firms for SEO that deal with higher revenue or lower revenue. I have other marketing firms that deal with IRAs hypothetically because I’ve been in collaboration with them. This is an exact example that focus on logos very similar to the example in Built to Sale. That gentleman decided the only thing he was going to do in the marketing world was sell logos. That’s it.

They didn’t do SEO, they didn’t build websites, they didn’t create copy. There’s no copywriters. They did logos. But whenever that gentleman made that decision, it empowered everyone who began and was engaged with his business to refer him for what? Logos. It also enabled him to really hone in on his five-step process and get really, really good at it because he wasn’t trying to create a logo and return comps back to the prospective client while that person was also writing copy for a social campaign. He got very, very focused, and it doesn’t talk about the use of collaboration to help round out and add value to his client base. But I dare say if I’d have a fifteen-minute conversation with him, he would see the wisdom in that because by doing that, he’s able to replicate his efforts and sometimes triplicate his efforts in no amount of time to give himself more exposure.

And if you only do logos, it’s very easy to refer you for what? Logos. So a lot of times people would say, and I understand that because I’ve owned these businesses and it took me a while to start making decisions this way, but it absolutely empowered me to begin to exponentially grow in the ones I made those decisions for and I would say, “Wow, I really don’t want to get rid of that revenue. I am holding to this revenue. I need it to pay my people.” Whenever you use the art of collaboration in doing so, until you have 100% of the market of, in this example logos, you still have a lot of room to grow. And I would dare say anybody who’s on this particular podcast listening to it that owns a small to medium-sized business, they don’t own a hundred percent of the market.

On a daily basis I hear, “Oh, interest rates are high,” and I was with a mortgage gentleman yesterday or day before and he’d been getting his butt handed to him for the last 16 months, and you can tell he’s getting a little tired. There’s a lot of things that you can do to help empower that particular guy, but there’s one really clear perspective that I’ve always operated on. Until I owned 100% of the market share, maybe I would turn my growth strategies into increasing my market share and not trying to get net new clients to engage with the product or service that I was selling ’cause yes, that depth of market is less than what it was before this monumental event happened, the great recession or interest rates out of control for the applicable business.

But if I would then stop, take a focus, what can I do to make it easier for my hero target to do business with me and how can I add more value? Well, by doing that, you begin to create competitive advantages. You will see your market share grow, and while everybody else is saying, oh, the market, the market, you’re steady taking market share. But until we make those decisions to get really, really focused and to primarily focus on our hero target from a value creation perspective, we should expect to get blown abound by the wind of the market conditions changing.

Irvin Schorsch:

Very, very helpful. Chad, if we shift for a moment to digital marketing, which has certainly become the rage across many businesses, how do these techniques and these collaborations that you’re discussing pertain to digital marketing and growing your small business moving forward?

Chad Jenkins:

I know that we both share someone we think a lot of, Mr. Dean Jackson, who I think has the strongest, simplest, most powerful concepts that I can notice and tell other entrepreneurs that I deal with, it seems like his concepts are so simple and also so powerful, the simplicity of them sometimes gets by people. They’re so practically applicable. One thing in his most recent book, Breakthrough DNA, he talks about eight profit activators. He also talks about more cheese, less whiskers. Digital marketing has opened up the capability and I feel like definitely leveled the playing field from large organizations to small organizations to do exactly what he talks about. To be able to offer more cheese and show less whiskers is a concept where if you’re a cat and you’re looking for a mouse, he’s running from you. If your cheese, and if anybody’s ever experienced this at one of their personal residences, you do not have to hang a sign at the end of the road saying, “Hey, one of my children left cheese on the floor in the pantry.”

They find it. I’m not sure really how. So it makes a lot of sense to me that you would be able to nurture your clients. This is another common term. Nurture your clients so that you’re able to give them more cheese, show them where the cheese is, and certainly a lot less whiskers, a lot less asking for the sale. Educate them. So with the proliferation of the internet and access to data and content, and I’m absolutely one of the heavy users of it, I’m constantly going to college, consuming an exceptional amount of content for the sake of or so that I can use that actionable intelligence once I understand this practical applicability. So leveraging digital marketing from a standpoint of creating content very similar to what you and I are doing here, to empower those who are looking for the cheese that you have, educating them along the way, costing you an immense amount less than the traditional marketing tactics that were yesteryear, it’s empowering you to play just like the big boys.

A lot of people don’t do that. They think that it takes all this production value and they blow it up much bigger than it needs to be when ultimately, if I can get you on YouTube personally, I’m talking to me personally and, I may be the exception to the rule, but I don’t believe so. If I can get to your content that interests me, and my goodness, YouTube’s algorithm does a really good job at helping me find what I’m looking for. Oftentimes I hit the play button and turn my phone over. I need the content. I’m not looking so much at the visuals. I don’t need entertainment. I’m looking for substance. So that in itself, if you just run it through that filter, you have so many capabilities at your fingertips inside of your small to medium-sized businesses.

Oftentimes we look at those capabilities or those resources by exactly what I mentioned earlier, the label on the outside of the bottle. It applies to the individual team members on your team as much as it applies to the collection of them because you’re conventionally delivering a product or service today. I would strongly encourage you to take a really hard look and to inventory them and not from a standpoint of what it’s called or what title we have it or what product or service we’re delivering, but get to the natural expression of the value creation of that person, place our thing, and then leverage digital marketing and content creation to get that out to the world. You’re going to see yourself begin to exit the competition train and begin to leave those, your contemporaries, in the dust.

Irvin Schorsch:

I want to make some connections for our listeners today that what Chad is assembling for us, here are several key concepts that will help our clients. If you can focus in on eliminating the friction, having a leadership team that you can delegate to who can take this and run with it so that you, the CEO, aren’t dealing with it directly, or the owner as in the case of entrepreneurs in many cases, and you can work on how do you find the right strategies by narrowing it down. Don’t be great at many, many things. Be great at one. Be exceptional, develop that market, own that market. That’s the way you’re going to work on doubling the growth of your small company, and obviously you can see a whole lot more about that in his Just Add a Zero, which is now out and it’s on all different platforms.

I also want to put in a note here for our clients and our listeners to check out Who’s On Your Dream Team, my latest book, which talks about how a fiduciary wealth advisory firm is necessary, particularly today when 94% of the financial advisors are not fiduciaries. This will be in the link in our show notes on how to get a copy of our book. We hope that today has been an extraordinary learning experience for you. I want thank Chad for being with us today and Chad, I hope your book is highly successful. I’ve found many, many interesting insights, not only from today’s conversation, but also from the book itself, so thank you very much for being with us.

Chad Jenkins:

Yeah, I really appreciate the time. It’s been very enjoyable. Thanks for having me.

Irvin Schorsch:

My pleasure.

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