Are you pondering about managing yourself out of your consulting business? Then tune in to this episode today! David Henzel, a remarkable serial entrepreneur, sheds light on managing your consulting business with his blueprint to success. But you can only unlock the doors to success if you find someone who will hold you accountable, and David emphasizes the value of building your consulting team. His extraordinary talent allowed him to orchestrate success from behind the scenes, refusing the limelight on him. David also emphasizes the importance of running your business like your life. There are more insights you can unpack from this episode, so don’t miss this one!
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Joining Michael on the show is David Henzel. David is a remarkable serial entrepreneur. Originating from Germany and now residing in Turkey with his family, David has built, managed and sold numerous companies. Our discussion will shed light on David’s extraordinary talent for transforming creative ideas into productized solutions, providing a blueprint for you to emulate his success.
Before we get there, David emphasizes the importance of learning from others, whether it’s from a friend, a mentor or a coach. Having someone hold you accountable is truly the key to unlocking your success. That is where the consulting success team can help you. If you’d like to work directly with the Consulting Success team and receive personalized coaching and support to optimize and grow your consulting, business, marketing and revenue, visit ConsultingSuccess.com to learn more and apply now.
Let me tell you a little bit more about what you’ll learn from this episode with David. The first is how to transform a simple idea into a compelling product or service that resonates with your market. How to unleash the potency of recurring revenue streams. How to experience the thrill of orchestrating success from behind the scenes. Why you should run your business like you run your life. Why you should resist the allure of offering multiple things and instead, become a specialist. How content creation can fine-tune your offering and supercharge your pipeline. Be sure to focus in to uncover David’s formula for identifying stellar business partners and had to master the art of recruitment. Plus, so much more. Here to share with you his expertise is David Henzel. Enjoy.
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I am excited and have been looking forward to speaking with you, David. We have David Henzel joining us. David, welcome.
Thank you very much for having me.
David, you are a serial entrepreneur. You built, sold and still run multiple businesses. You’re originally from Germany. You spent time living in the US. You now reside in Turkey with your family and where I thought we would start our conversation is around how you’ve been able to take so many ideas. Many of us have ideas but you’ve been able to take these ideas and turn them into productized offerings or into systems or into businesses. I’d love to hear how you go about doing that.
I thought that maybe we could take one of your companies, one of your businesses as a bit of an example. We can change the example if you want but the one that I was initially thinking about here was LTVplus because that provides customer service support for eCommerce companies and a consultant might look at that.
Our audience and those that are joining in now, many are consultants. Either solo or they’re firm owners or thinking about getting into the world of consulting. A typical consultant might look at that and think, “eCommerce companies need better service and support. I can provide them with a plan on how to do that. I can create some strategic recommendations for them to do that,” then go about providing that service.
You decide to build a solution for that problem. I’m wondering why. Why do you do that as opposed to creating a service-based company or providing strategy or recommendations? Walk us through maybe that as an example of how you thought about that opportunity and why you built a business around it.
With LTVplus, the original reason why I built it was that in my last business, MaxCDN, we outsourced our support because we couldn’t find people in Los Angeles that are willing to work nights. Everybody we found was overpriced and horrible. We looked outside of the US and we found somebody in Serbia. It was amazing then we built a team around him.
I want to give the same experience that I had there to other entrepreneurs. This was like the original idea. The reason why I would not have a consulting business is that I do not want to create a job for myself. I have a not-to-do list and one of the items on the to-do this is, “Do not be in the org chart.” I like to be behind the scenes and build something that runs by itself. Often, as a consultant or as people say like, “I’m an entrepreneur. I have my own business.” You create a job for yourself to get to the point that you have true freedom when you manage yourself out of the business and put systems and people in place that can run this for you so you can work on the business, not in the business.
That’s the key thing why I like to build something like this like a service offering. We have lots of consultants. Also, that’s nothing. A lot for reoccurring revenue. LTVplus mainly with TaskDrive, we do lead research and provide SDR, and sales development reps. We have a lot of sales consultants that come in, do their work with clients and they recommend us, a TaskDrive. They leave at some point and they still get task service reoccurring revenue. They get a kickback from TaskDrive for recommending this.
Where did the idea that you want to be behind the scenes come from? You don’t want to be the brand. You identify ideas. Many of those are ones where it creates recurring revenue. When did that clarity come in your mind or that decision come in your mind that, “I don’t want to be the one doing the work. I want to develop the idea, build a team around it and be behind the scenes?”
Doing this for a very long time and figuring out where I fit in best, what gives me the most joy and what’s my zone of genius. I like to systematize things. Also, I’m a recovering introvert. I once used to be very introverted and being in the limelight and being the front-facing person. I was always like, “Eh,” for me, a little cringe. Another reason why I like being behind the scenes is because I have this portfolio of companies and I cannot be the expert on everything. I want to start a new company, for example, Upcoach. It’s a platform for cultures to run the coaching business better and also businesses can run their business inside of Upcoach.
Agencies also use it as their portals where clients can log in. The point that I want to make is I’m not an expert coach. I’ve been coaching my team members for many years but I’m not a coach. I’m also not known as a coach. I partnered up with Todd Herman. He wrote the book The Alter Ego Effect. He is like a rock star coach and sold multiple coaching businesses. When we entered the market with this product, we have instant credibility because we have this poster partner. We have immediate trust in the marketplace.
It’s a great point. I do want to ask you more about how you go about the partnerships or as you said, you don’t want to be the one in the limelight. The reality is, you can’t do all these things anyways yourself when you have multiple businesses. One thing I’d love to hear your perspective on is you have an idea. How do you go about validating that idea? What does your process look like before you decide to make a big investment of not only potential money but also maybe more importantly, time into something? What is your thought process or the actual steps you go through to make sure that you feel very confident this is going to work before you allocate your time and money to it?
Positioning is one of the toughest things for an entrepreneur because it feels like you're leaving all these opportunities on the table. Click To TweetIt doesn’t work all the time but I like to start from the point of scratching my own itch. If I have a problem inside of my company, I want to solve it. I look out in the market and see what’s available. If I cannot find the thing that I want, then I enjoy building it. For example, Upcoach was for managing happiness. My program is to help people to run their life the same way you run a business like an EOS Entrepreneurial Operating System, for your personal life.
I couldn’t find something that was facilitating this. We built it and it’s naturally progressed. The process for this is getting an MVP ready. You want to understand the jungle. Let me explain how this works. It comes from a story where the US general was fighting Viet Cong after ten-plus years after the war was over. He went with the president to Vietnam and they united and talked.
The American General told the Vietnamese General, “How could you beat us? We had way better weapons, way more resources, and way more people. I can’t wrap my head around why were you able to beat us?” The Vietnamese General said, “It’s because we understand the jungle better.” Again, I can’t be an expert in everything so you want to understand the market and what’s in the market and the pain points there are.
I have this document, which is called Understanding the Jungle. It’s a set of questions that I ask people, what’s the objective, how do they run the business and which tools do they use to do certain functions inside of their business to get an understanding of the lay of the land? I show them my MPV or it can just be a PowerPoint presentation or whatever, to bring the idea across of what I’m building here. Once I’ve gotten this and that, I asked them, “What resonates with this? What’s missing? What is maybe not relevant?”
Who are you asking these questions to as part of this validation process?
Ideally, thought leaders in this space or potential customers. I feel this in this extra sheet at the end. I have like 50 or 100 people in there. The beautiful thing is I have, at the top, the name of the person, linked to a LinkedIn-like little information about this person. Below that, I have the three key takeaways that I got from this conversation.
This helps me to shape my decision-making. You can ask anything like price point and how much would you pay. In the end, I was asked if anybody else I should talk to that could that this could be of relevance. By doing this, it’s fairly easy to reach out to people saying like, “You’re the rock star in this area. I’m building X, Y, and Z. I want to ask you some questions.” Usually, people like to give their opinions.
How many people do you typically reach out to? What percentage of them would say yes to having that conversation with you?
It all depends on how known you are in a certain space, for example, WP Engine. That’s a WordPress company. This is where I have this concept. The Founder reached out to 90-some WordPress leads, bought into the space and asked them, “I would love to jump on a call. I’m happy to pay for your time. I just want to pick your brain on this.”
I think 80-some people had a call with him and none of them charged him. It’s a very high percentage. I did this coaching space and this didn’t work because coaches sell their time. Everybody wanted to get paid for this. This didn’t work. It works well. The beautiful thing is aside from understanding how the jungle works, you build these potential customers and referral partners but then you’re like in the market.
You’re building relationships with people.
You’re building relationships with them, then you can keep them updated, like, “This is the process. This is what we’re doing.” Maybe you make one of them your advisor or whatever but this has been like a proven thing.
To summarize for everyone what I’m hearing is, in your case, you identify a problem that you know is relevant for you or something that you’re thinking about. You then research the market to see does something exist to solve this problem. If it doesn’t exist at a level that you feel is satisfactory to solve the problem that you have, then you or somebody on your team do some research to find who are the different thought leaders or people that I could get some perspective on. You go through the understanding of the jungle process by having all these conversations. That comes into a bunch of summarized documents or your notes. From there, you all move forward and decide whether it makes sense to build out this product or this offering. Is that correct?
Correct. To give a little more detail to the task rep, we do lead research. Always use task rep with this and they build me my dream 100 list of people that are in this space. We do some pre-targeting to show them ads like you upload the email list to AdRoll or whatever. You show them some videos or some ads about me and this idea. It doesn’t come completely out of the blue. Do some connecting requests on LinkedIn and other social networks. It’s like a whole process of getting known. It doesn’t come too cold of an outreach once you then respond.
That makes a lot of sense. I love that. You then move forward building out the concept. What are you looking at in terms of metrics to decide if is this something that you want to plow more resources into or build? Is there a certain amount in sales or a number of clients that you want to see before you decide, “Is this something that we’re going to scale up and put more fuel on the fire?” Is this something that doesn’t seem it’s clicking as you look at it?
It’s like clicking. It’s like, “Does it grind or does it flow?” It’s the easiest way of saying it. Things are meant to happen, they happen. We just did one QUI, like a Quality Assurance Idea and we built a whole software out and all that jazz. People were excited about the idea. While interviewing them, they signed up but then they didn’t use it. We couldn’t figure it out then we killed it. Sometimes it also doesn’t work.
What was the period between when you launched it and when you killed it? How much time did you give it to see?
It was like 6 to 8 months or something like this.
In a situation like that, how do you, in your mind, decide or how do you think through the idea of, “maybe we just need to work harder at it or try a different approach or tweak things?” I’m wondering from the perspective of some people who say, “You need to know when to quit. You need to know when you’re spending too much time on something that isn’t working as well, so you can allocate your time to something that would work better.” As you said, in flow or more natural but sometimes people are concerned that maybe they’re missing something or could push a few more buttons.
It depends like what’s your personal mission and vision. If the thing that you’re doing is in line with, for example, Upcoach is hardcore in line with my mission and vision. It’s a transformation platform. It helps people to transform other people’s lives. I’m super crazy about this. Even if the process takes way longer, more money, more resources, or whatever, I don’t care. With doing QA for people like meh. Does this make money? Does this work? Is it running by itself? If not, doesn’t matter. Also, the technology we’ve built there, we’re going to use in other projects, so it’s not a complete waste.
Does that come from your experience? Is that how you would’ve viewed things even in the early days when you maybe tested an initial idea or is that the result of building multiple things, seeing that some things won’t work or others will? How did you arrive at that belief for the operating system for making those decisions?
Over the years, gut feeling. I can’t give a good systemization answer to that.
What’s one of the big or biggest mistakes that you see people making when they have an idea between having the idea and successfully getting off the ground? What are some of the big ones that are out there?
One thing from experience or sharing from experience, Shortlist.io is one of my companies. We do backlink building. This was the core offering and backlink building. My business partner wants to do a bunch of other things like website design and web development and a bunch of other stuff like blog posts and writing.
An agency for all things.
Yes, like marketing agencies like ads and all addresses. The big problem with this is then you have a bench. You have people sitting on the bench. If you do one thing really well, it’s like rinse, repeat, and hammer. Once you dilute your positioning, it’s a problem. People come to your website. They don’t know what to do before. Back in the building by the boom, I want this then you have this big team. We lost a client. We hired this guy to do the Google Ads and now we lost this big client. This guy’s chilling there, eating a few thousand dollars. This was like crapping a big problem. Not to stick to the core thing and know when to branch out into other areas. Those are the big learning.
AI will not replace you. But somebody using AI will replace you. Click To TweetWhat you’re speaking there is so important in the world of consulting is specialization and focus.
It’s so much easier.
For many, it’s counterintuitive. They feel like they’re giving up opportunities by narrowing in.
Positioning is one of the toughest things for an entrepreneur to do because it feels like you’re leaving all this opportunity on the table. What you’re not seeing is there’s so much noise and you want to stand out. If I would have a heart problem, I’d like a doctor that’s specializing in 46-year-old White dudes who are in good shape.
That’s like the ideal person. I’m a doctor. Screw you. I don’t want you. Also, so much noise in the marketplace. It’s way easier to stand out. Also, defining what’s your real ICP or your customer profile. What’s your avatar? Who are you building this for? To build the best possible product for this one avatar, there are so many solutions out there. I focus. It’s like the big thing.
More than ever before, people have choices and there are options. Now, not only do you have multiple people in probably your area that are doing something similar. You have people all around the world that are accessible to those that you want to serve. It becomes even more important to specialize. You have all these different companies, brands, and businesses that you’ve developed or you’ve been a part of and are part of the portfolio.
One of the biggest challenges that people have is around marketing, how to go to market effectively, how to generate leads, and how to fill the pipeline. In the world of consulting, it’s about creating conversations. I’m wondering for you specifically, David, when you think about launching a new business but even so with your existing businesses, is there a marketing playbook? Is there something that you find you do consistently as a way to get initial traction and build up? What does that look like?
Yes, there is, but different things work for different businesses. We have SOPs for a bunch of things for SEO work and all that stuff. For example, TaskDrive, where we do lead research, SEO works well. People do not need to know you that well because there’s no risk involved. You go to this company, you go to this website or you ask them to build you a lead list. What’s the worst thing that happens? The lead list is garbage and you throw it away.
You’re not going to find to work with a specific person to get a lead list. You want the lead list. You don’t want the knowledge of a specific person.
That’s not even the point. The point is that, for example, if you engage with LTVplus, we will talk to your customers. We’ll do the customer support for your customers. It’s like way more trust is needed in this environment. For LTVplus partnerships, it’s like the name of the game for us. It works like a charm. For LTVplus, it’s partnerships and for TaskDrive, it’s SEO.
How do you know that? How have you found, decided, or come to the realization of which is the right channel for which business? With LTVplus, it’s partnerships.
In these businesses, it was trial and error too.
You tried a bunch of things, you found something that worked, then when you find something that works, do you tend to go hard on that one thing?
A friend of mine was growing a very large business in the US. He’s still doing it. He was in a Shopify marketplace and had an application there. He was crushing it, a billion-dollar valuation thing. I asked him like, “Why do you stay in the Shopify ecosystem? Why don’t you branch out? Why don’t you internationalize?” He’s like, “I’m still growing over 100% year over year. I like to stick to this thing.” It’s again positioning. It makes it so much easier. It’s like going hard in this one realm.
When you hear people who say things like, “I’m trying to work on content. I’m doing social media. I’m trying to do some ads.” They’re doing a lot of different things, yet their business is still sub, $1 million, $2 million dollars, or whatever it might be. How do you view that? What do you think about that? Do you think they’re too scattered? What’s your take on that?
Especially when you’re small. I can do SEO because I like to hire a bunch of people. Their sole job is to focus on this. If it is just me, I’d just probably do outbound stuff or see what can I systematize and have somebody like a VA or an assistant development rep can do it on a regular basis. I’ll stick to one thing that works. You read Google Ads or whatever. That’s the thing. You hear all these successors but it’s like what’s uniquely fitting to you personally. I lean into this.
That’s so important. naturally, I’m not the natural social media guy. I live more in the moment. I often think to myself like, “I should have recorded a video there afterward. I should have taken this picture and done something.” We could be doing more business and there are a lot of benefits probably of doing that and being much more active on social but it’s not natural and how I operate. I try and focus on the things that I tend to do better or that are more natural to me. I know that 1) I’ll probably do better at them but 2) I’ll do them for a longer term like being more consistent.
Consistency is everything by the way, in general.
I’ll come to my question, what do you mean by that? Tell me more about the consistency. Where do you see people going wrong?
Let’s say, I’ll do YouTube videos. I do like 15 videos or 20 videos. It doesn’t work like, “Let’s do Twitter. I’ll write on Twitter.” If I look at the videos that I recorded 10 years ago or 5 years ago, they’re horrible but I got better over time. You do one thing and you get rewarded for two reasons because of the algorithm. If you post a blog post every other day, Google treats you differently. If you post like six times a day on LinkedIn, they will treat you differently. Aside from this, you get better at your craft. That’s the thing. You have to do things a lot to be good enough to stand out.
What do you say to people whose marketing is not yet kicking in the way they would like it to? They’re working on trying to build their pipeline. They hear that idea of, “I need to be consistent,” but seeing the results from certain efforts like let’s say recording videos and putting them on YouTube or being active on LinkedIn or writing content for SEO to be ranked high in Google, that can take time because sometimes to see the results of that.
It’s not an overnight get-rich-quick thing that so many people would like you to believe. What do you say to those people who are attempting this but they’re not getting the results? What’s your encouragement or suggestion if somebody’s working through this but they’re not getting the results they want as quickly?
Go to somebody who’s been there and done that. Get a proper SOP, get a mentor or a coach, join a mastermind, peer-learning, and learn from others. You don’t have to reinvent the wheel and ideally talk to people who are doing this because so much content on the web is written by writers that have no real hand-to-hand comment experience on these things. Especially in marketing, people don’t share on the web the stuff that works. The stuff that currently works is shared in masterminds because marketers ruin everything. You want to make sure you can capitalize on this thing before it doesn’t work anymore.
This is so relevant now, especially in the world of AI. I’m wondering what’s your take on AI and its impact on content, especially for consultants and those who are selling their expertise. There’s a lot of lure or allure of using AI to push a couple of buttons and get an article and put that online. What’s your take? What are your thoughts when it comes to AI and the business of expertise?
The AI will not replace you. Somebody using AI will replace you.
What do you mean by that?
How you do one thing is how you do everything. Click To TweetI’m thinking about like building a tool. They already respect that I can see who’s using it inside of my company, which prompts, and how often. If you’re not using AI while doing the work for me, you are wasting my time. It’s such an amazing tool. It’s the power drill for a knowledge broker. I don’t want you to use your screwdriver in your hand. I want you to use the latest stuff that’s out there.
What would be an example of that? When you talk about your team, how would you want them to be using AI? Give me maybe a couple of specific examples of what that might look like.
Writing an article is like doing your research. Write an article or whatever. Get the outline done. A cool tool by a friend of mine is built called AIPRM. It’s a Chrome plugin that lives inside your ChatGPT. You have all these prompts, pre-written prompts that you can use. It’s phenomenal if you know how to use these things properly. A lot of people write something in one sentence into GPT and they expect a good result. It’s already not bad. Once you learn how to drill into it and they set up that it’s like a question-answer thing that asks like ten questions before that spit something out. It’s pretty phenomenal.
You said that AI won’t replace you but people using AI. Explain that a little bit more detail.
Let’s say you are a farmer and now you’ve been firing with a rake in your hand and all of a sudden, somebody invents a giant tractor that does this fully automate. He’ll replace you. There’s still the guy sitting in there driving it like a guy is holding this.
It’s the person using the tools, using the AI that will replace you but not just the AI by itself. The robots aren’t taking over yet but it’s somebody.
In certain businesses, this also can be problematic but it’s going to take a while. For example, the self-driving car. It’s almost all the way there but the last 2% are so hard to crack. That’s going to take a while until it’s going to be there. I would like to support you massively in all the things that you’re doing and would probably like to remove or kill a lot of jobs but there’s still going to be somewhere operating this.
Much of your business life or your portfolio what you have set up and the companies that you manage are driven by partners. As you said, you’re not the captain behind the wheel steering the ship. You’ve worked or you’ve put people into those positions. Partnerships are so key for you. I’m wondering, what have you found are the key attributes or characteristics that you want the partners to have? How do you view finding partners? What are the things to look out for? What are the things that are important for you to see there in order to feel confident to move forward with a partner?
The most important thing is how you do one thing is how you do everything. For example, if you are sloppy in this area of your life. You’re going to be sloppy over there. If you are mean to the waiter, you are also going to be unpleasant to your employees. I had one business partner who decided that it was a good idea to have a relationship with his wife’s best friend. They had this crazy divorce battle and ended up embezzling money from the company and it was like crazy.
It was a crazy mess. We got them out. We bought them out of the company then we were looking for a CTO for this same company later on. The guy was like perfect. From knowledge, from everything, we got along with him well. We had everything drafted already. We said, “Let’s meet at my business partner’s house. Let’s hang out on the weekend likes to hash the details out. Let’s have some fun then we’ll start rolling.” He comes to my business partner’s house with a woman and he is like, “Who’s this? That’s my mistress.” I’m like, “It’s over. I can’t do this.”
Did you tell him at that moment as soon as you showed up or did you save that for a little bit later on? How do you deliver that news because this is a good story?
I talked with my business partner. He came and we were in shock then we talked about it like, “Yes, doesn’t fly. We can’t do it.”
You look for little red flags like that or not so little.
It’s going to be like being politically correct or whatever. People can see this very wrong. In Germany, if you are late on a regular basis, I don’t do business with you. If you are extremely obese, there can be health reasons for this but most of the time, it means that something in your life is not in order if somebody has PO issues, cheats on his wife like crazy, takes too many drugs, or drinks too much. If something’s an off-balance here, it’s going to be off-balance there. For me, it’s the best way to measure if I want to be with somebody or not.
What about terms of experience? When you’re looking for partners to put people into the companies that you run, how important is it that they have experience in that specific industry, compared to what they have? What are you looking for? Tell me more about like the skills.
It depends. For example, Todd brings trust and knowledge to the marketplace. If he’s like the CEO type operator, an implementer, they have business experience, ideally like having this role we’ve done before, and ambitious, smart head in the shoulders. That’s what matters. It helps if they have been there and done that. This is always the best scenario. It’s not necessary.
You put somebody in the driving seat. You are observing them and you’re there to support them. Businesses though have a lot of different data points. There are a lot of different metrics or interactions. I’m wondering what you look at. You’re not the one driving the bus or driving the boat, that captain metaphor, but you want to make sure that you’re on the right course going to the right destination. What are you looking for, David on a day-to-day, week-to-week, quarterly basis, or whatever it might be? What are the metrics that you’re paying attention to and focusing on to make sure that things are moving forward? There are a lot of metrics and data out there. What are the points that you care the most about?
It also depends on the business. For example, there are a few activity metrics and results in metrics or leading and lagging indicators like new revenue, churn, and all these things. That’s probably the pipeline, MIR, churn, and activity metrics that lead up to these things. How many outbound emails are we sending or whatever is the right metric to measure?
How granular do you get when you’re reviewing?
Everything should be granularly listed for the occasion that there’s a problem and you have to drill in. I’d like to see a high-level overview of like 5, 6, 7, or 8 things.
How often are you reviewing that data?
I switched up my MO. We switched to monthly sprints in the businesses. It’s like a mix of EOS, the Entrepreneur Operating System with these level 10 meetings mixed with the 12-week year type of thing. The idea is that they build a 90-day or 12-week, then they have these month-long sprints and I join once a month. I join each company. Not the leadership team to see what’s going on, then they present how they did the last month and what they plan on doing the next month. That’s not the cadence.
You have a lot of experience in building teams and companies with teams. It’s not just you or not one person typically. I had a conversation with a bunch of consultants. One of the things that a few people brought up was the fear and hesitation around hiring and building the team, especially in times when maybe revenue isn’t coming in as quickly as they would like or things are a little bit slower than they would like.
They are spending time doing things that aren’t helping to build a business. It might be doing things at their house or they’re trying to do more invoicing, bookkeeping, research, or whatever it might be. They know it’s not high-level value-producing work but they’re hesitant to hire somebody or bring somebody on to take that over because they see that as money coming out of their pocket now. How do you counsel somebody in that position? What’s your mindset around hiring, even when the resources may not be as abundant as people would like?
I read the book of a friend of mine called Buy Back Your Time by Dan Martell. He has this exercise in there where you write on fifteen-minute increments, your day, what you’re doing, the task, and behind this task, write from $1 sign to $4 sign how valuable is this task. You write and you market with the marker. It’s like green, does it give this task? It’s giving you energy or does it drain you?
After you’ve done this thing for a week or two, you know the things that you could whatever the $10-an-hour things you should outsource and have somebody else do it so we can focus on things that are bringing more value to the business. That’s always the way I’m looking at it. I always do my best to manage myself out of the day-to-day as fast as possible like starting with the task that I do not like and that trained me because I operate my zone of genius.
You should outsource and have somebody else do it so you can focus on things that bring more value to the business. Click To TweetYou’re a systems guy. I know you love systems. When you identify saying that you want to get off of your plate and delegate to somebody else or bring on another team member, I imagine that you do a specific process for doing it. Is it as simple as let’s say recording a bunch of loom videos, turning that into an SOP hiring somebody passing it over to them or is there something else maybe a little bit more nuanced that you do that you find helpful in getting something that you’re doing off of your plate and over to somebody else?
It’s SOP and also defining this person’s understanding like, why we’re doing this, what does success look like, and what does failure look like?
Do you define that for the SOP or do you ask them questions like, “What would failure look like for you here?” What does that look like?
Usually, I define this for them. Also, other things like the good, better, and best. Good is what I expect. This is better. This is best. I give them some stretch goals for doing so, but the main thing is, I don’t tell people how to do this. Tell them why you want them to do this and the reasoning behind it so they can put in their own. Another thing with delegation, I want people to fully own things so they don’t come to Daddy to like, “Please fix this.” They use their full capacities. It’s on them. I want them to understand, “This is your thing now. You got to own this.”
The big a-ha moment for me was when I sold my last business. Initially, I want to leave but then I saw they bought three businesses and they didn’t have good marketing leadership so I stayed and became the CMO and put together the brand. In this process of putting together the brand, I pulled the CEO to meetings to show him the progress.
In the first meeting, he sits through it, looks at it, and says, “The end.” He doesn’t say a word but it ends like, “It’s good,” then leaves. I’m like, “Okay.” The next meeting is the same and the third meeting is the same. I pulled him to the side and I’m like, “Am I screwing up or don’t you care? What’s going on? What are we doing here?” He said like, “I see you. I have to do only three things. I have to reach the mission and the vision of the company like a parrot to the outside world and the inside world, to the market and the team.”
“I have to make sure money’s coming in like at the fundraising or making sure the money machines working. I have to hire smart people that are smarter than me in certain areas and leave them alone and manage my KPIs or whatever. I give them the, ‘This is your thing.’” There’s proper delegation. Before, I always like parachuted and stirred everything up then left. Often, it did way more damage than good.
What you’re sharing means it’s so important. I love how you’re communicating or defining this in terms of you’re setting very clear expectations. You’re letting them know, “Here’s what failure looks like and what success looks like.” You’re letting them know that they now own it. They need to do their best work and you define what that looks like. That good, better, and best type of scenario. You’re almost showing them and challenging them by saying, “Here’s what the ideal would look like,” and not telling them that’s what they have to do. You’re painting it there for them.
In this regard, I talked this through them because I don’t want to put something on but they think it’s unrealistic. Another thing is like when they come to me with an issue like, “Something doesn’t work. There’s something bad. Something’s not good,” I always wanted them to come to me with ideally two solutions like, “This is a problem and we could do this or that. We should do this because of X, Y, and Z,” then they use their full capacity where it’s like, “It doesn’t work. You fix it.”
Here’s a question that I’d like to get your thoughts on. Especially when you’re working with a smaller team. In some cases, you know what that person needs to do. You know what the best course of action is but if you tell an employee and a team member what to do, they’re not learning. In some cases, they don’t feel like they have the freedom to own that.
If you ask questions, they may or may not see that or maybe they propose something that you don’t feel or maybe even in some cases, you know won’t work. What do you think about that? In terms of asking those questions of people, giving them the opportunity to maybe make mistakes versus you saying, “Here’s what I believe you should do?”
I believe that people are allowed to make mistakes because they want to grow into this and it has to click for them so they can crush it. I used to suck at delegation and management. My management mentor told me this thing, you have to wear four different hats when you match somebody. The first hat you wear is the leader. You set expectations. This is what I want.
The second hat is the inspector because you have to inspect what you expect because people only respect what you inspect. The first hat is the leader. The second hat is the inspector. The third one is the coach. Based on your findings on what you saw and what you inspected their work, you give them coaching and counseling to help them to get better.
You run through these three over and over. From time to time, you bring in the judge and deliver rewards or consequences. It made all the difference to me. The thing where I always screwed up was the inspector. I said like, “This is what I want.” I let them do their work and two weeks later, I look into this. It’s like, “What did you do?”
After 10% of the work is done, I always have them come back to me. I cannot inspect their work while they’re working. For example, let’s say you have somebody paint your fence. You don’t come and look over the shoulder. You walk out, go to the mailbox, walk back, and check while you do that. They have access to their work like Google Spreadsheet or whatever they can check.
What does that look like? I love the way you’ve broken that down. A lot of people will find that to be helpful, myself included. Give me a little bit more detail about the leader in a role or that hat and initiative setting the expectations. How much detail would you give in your experience to somebody in terms of what you expect? Are they involved in that conversation at all or are you setting the expectation? Initially, what does that look like?
I like people that buy in. It’s not just coming from on top like, “Do this.” It should be conversational. I involve them in what this should look like. I have a clear idea and I like to guide them to this. The ideal scenario for me is if you come to me and I have somehow influenced you that you tell me the thing that I had in mind and you think it’s your idea, you influence your idea. Roll with it.
Would you ever say to somebody or you found that you can say, “Here’s what I expect?” Based on what we’re talking about, do you say that or is it more, you’re trying to get them to tell you what you expect but they’ve arrived at it through that conversation?
Through conversation. It’s not that blunt but if they’re completely off-target, then it’s like, “No, I expect you to do this.”
In terms of frequency, once that expectation has been set or agreed to, how often are you finding that you are inspecting? Is that what you said?
It depends on the task. On some lead research or task, I like to say, “Once 10% is done, come back to me, and ask. I’ll give you feedback so you’re not doing the wrong thing over and over.”
That’s helpful. I love that framework there. We’ll bring that.
It’s all about the systems.
David, I know there’s so much more that we could talk about. I have a bunch more questions. I want to respect your time though, because I know we’re getting here to the top of the hour or at least to the hour or so mark. Maybe before we finish off, I know you talked about Dan Martell’s book, which is a great one. Is there another book? It could be fiction or nonfiction, but something that you’ve read or listened to in the last months that you would recommend to people.
I haven’t read them in the last few months but the ones that I can see consults, especially when you want to take your business to the next level and not become an entrepreneur that you work on the business, not in the business, From 6 to 7 Figures, I enjoyed that, and then Built to Sell by John Warrillow.
It was also a good one. The EOS Life, the Entrepreneur Operating System. By the way, there’s another one called Traction, which is written by the DuckDuckGo Founder. I have to be specific. It’s Traction by Gino Wickman because with Dave, who runs Shortlist, I told him like, “All the businesses are running on Traction. Please read Traction.” He said, “Cool.” “The next time we met, I asked him, “Did you read it?” He’s like, “Yes,” then he starts talking. I was like, “What have you been smoking? What are they talking about?” There’s another one.
Inspect what you expect because people only respect what you inspect. Click To TweetIt’s a different book.
These are the books.
All great recommendations. Finally, where’s the best place for people to go to learn more about what you’re up to, David? There’s a whole bunch of portfolio companies and I’d prefer to get maybe one link as opposed to all the different ones. What would you suggest to people where to find?
You can go to Henzel.com, which is my DavidHenzel.com, which is my website. You can connect with me on LinkedIn. Please tell me that you learned about me on Michael’s show then I accept the request. If a random request, I do not accept it. It’s for your audience. Upcoach may also be relevant for you to check out.
Again, for everybody, the reason I was excited to have you on is that you’ve been involved in building so many different businesses, taking ideas, productizing them, implementing systems, and building teams around them. Often, this is something that consultants, as they continue to grow or scale, need to get better at. David, everyone has a wealth of knowledge in this area. I highly recommend checking out what he has going on across all the different companies and connecting with you on LinkedIn. David, thank you so much for coming on here. I appreciate it.
Thank you for having me.
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I hope you enjoyed the episode between David and Michael. If you did, then as always, be sure you hit that subscribe button wherever you listen to your favorite shows. If you want to help support the Consulting Success, you can do so by either heading over to Apple Podcasts and leaving a rating and review or sharing this episode with a friend or colleague who you feel would truly enjoy reading this conversation. Again, if you want to work directly with the Consulting Success team and receive personalized coaching and support to optimize and grow your consulting business, marketing and revenue, visit ConsultingSuccess.com. That’s the end of the line for us in this episode. Until next time.
Important Links
- David Henzel
- ConsultingSuccess.com
- LTVplus
- TaskDrive
- Upcoach
- The Alter Ego Effect
- WP Engine
- Shortlist
- Shopify
- AIPRM
- Buy Back Your Time
- From 6 to 7 Figures
- Built to Sell
- The EOS Life
- Traction
- David Henzel – LinkedIn
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