Creating Value – Lee Benson

Lee Benson:
How would you like to create value in the world? Let’s start with the family. How do you create value for the family? And how do you think about that? We really get it completely wrong, in my view, in k twelve education. The purpose of an education should be to create value in the world. And yet today it is. Get a good grade, get a diploma, get a degree, get a job. And in that environment, the kids are doing what they think they’re supposed to do and not what they were meant to do. And I wish we started out in kindergarten saying, hey, the purpose of an education is to create value in the world. How would you like to create value? And they get more and more engaged in what that looks like for them.

Dana Robinson:
Exit Plan is a podcast for business owners and those who want to be business owners. I’m always in search of the lesser known stories of entrepreneurship. In the exit Plan podcast, you’ll hear stories from startup to sale and hear from the professionals who helped business owners achieve their exit. Hosted by me, author and private equity manager Dana Robinson, along with my co hosts and guests, you’ll hear real stories, tips and tools that will help you plan for the exit you want, whether you are still working at a day job or running a business. Let’s get started with this episode of the Exit Plan podcast. Hey, everybody, it’s Dana Robinson coming to you with the Exit Plan podcast. And I have a wonderful guest with me today, Lee Benson. Lee, thanks for coming in, Dana.

Lee Benson:
It’s so good to be here.

Dana Robinson:
So, Lee is the CEO of executive to win knows a lot about entrepreneurship. And as a lot of you know, from listening to some of the guests that I’ve had, I’ve had a really nice flow of experts and consultants and investment bankers and people who help you optimize your business and think about what you’ve got at what you don’t know, you don’t know. And I got lucky with Lee because Lee has a history of entrepreneurship. And I, I do this podcast for my own curiosity more than anything, because no one yet has paid me to advertise on this podcast. So this is a listeners, I do this for you, but I also do it because I’m curious. So, Lee, I want to, before we get to what you’re doing now, I want to know, the info I got on you was that you took a company from two to 500 employees and 2000 customers worldwide. And that sounds like an exciting journey that couldn’t have been easy. And I’d love it if you tell us about yourself and then how you ended up doing that and take us through that journey.

Lee Benson:
Yeah, certainly rewarding and fun. So not easy at times and incredibly hard at times, no question. But one of the things I’ve figured out is, you know, you’re doing the right work when the harder it gets, the harder you laugh with the team. And boy, a lot of fun building this thing, you know, global business was incredible, but I back all the way up and getting kicked out of the house the beginning of my senior year in high school. Came from a low income family. Never felt like a victim. All of that, not the best environment. It was one of the better things that ever happened to me.

Lee Benson:
I was already financially independent by then. Working as a cook at a restaurant and teaching guitar lessons. So in two nights I had my own apartment. I slept one night in my truck. No big deal. And then in the eighties, the first half of the eighties, played over a thousand nights in clubs and concerts, playing rock and roll music. I sang and play guitar. Wow, that was a business.

Lee Benson:
I don’t count it as one of my businesses that I’ve started, but it really was. We had sound crew, light crew, rhythm sections, changing out. The crowds would range from just the cook and the bartender. Nobody showed up to 5000 people. It was all over the place. I just love the emotional energy value that we were creating on stage. It was so incredible. And I love that saying.

Lee Benson:
I’m sure most of your listeners have heard this, but music is what emotions sound like. And when I think about creating value in the world, I think about it holistically and I think about it every day. And I really, really live this and I feel better and better the more I live it. But there’s material, emotional and spiritual value to be created on the material side. Yes. I just started my 8th company from scratch. I’ve had exits from a few million to well into nine figures. So I’m good at the material side, the emotional energy value to be created.

Lee Benson:
I think that if I had a superpower of the three, is probably mine. Because the emotional energy, to me, positive emotional energy is the scarcest commodity on the planet. And it’s the x factor for leaders. It’s like you go in, I think a leader’s job, one, you have to get results, but create this environment that fosters this intrinsic motivation to create more value over time, you know, and that certainly includes empowering employees. And then on the spiritual side, for me it’s just pure connectedness. And that means something different to everybody. And, you know, a practical application of it in business. And I’ve done it with all of my companies.

Lee Benson:
What are we doing to help employees be more connected with themselves and then to each other and then all the communities we touch, the vendors, the customers, the locations around the world that we might be so intentionally creating value in all three categories if we want to talk about exits. Wow. Does it really increase the multiple of EBITDA on the way out the door? And I love being in the game. I’m still in the game. I’m on the front lines with my businesses. On the front lines with clients. Companies. Yes.

Lee Benson:
Execute to win or ETW. My company, the primary business today, which basically branches out at all these other cool things I get to do. It’s technically a consulting company. We do good work, though, which I’m sure we’ll talk about. But when I do the work, my team and myself, we’re literally on the teams creating the value within our clients. We’re not in there educating them on a few things and getting paid and walking away. We own the results and what’s going on. And I just love that work like we were talking about before we started.

Lee Benson:
I love being an operator. I have an investment arm of ETW, but I love being an operator.

Dana Robinson:
That’s great. Hey, I want to go. I don’t reverse people very often, but I think it’s a lot of what I’ve written and what I’ve done with podcasting is my view of giving back because I started my first business at 19, you know, didn’t, didn’t hardly know how to balance checkbook and had no resources and, you know, loved my parents, but was raised, you know, blue collar phone man, housewife, you know, didn’t have any resources, didn’t know anyone that knew anything. So I don’t know. For those, that for those kids that are disadvantaged, I have a, you know, pretty big place in my heart. And I’ll plug my book. I don’t know if you, if you checked it out when they booked you for the podcast, leave. But I wrote a book this year, published it this year called the King’s Fly Swatter.

Lee Benson:
I’ll check it out.

Dana Robinson:
Thank you. And if you’re listening to this, I’ve had two sets of feedback, three this week. And I wrote the book to young me in a way, and it’s my story. It’s a parable as well. But the, the feedback has been from two recent high school graduates that said, I read it. I love it. I get it. Can we have coffee? Sort of blowing the minds of young danas, I guess.

Dana Robinson:
And I’m excited to sit with them and learn how did it strike them? And then a friend of a friend had the book and was new, the concept from just conversation with my wife. And he said, I read the book because I knew I wanted my daughter to read it as she heads off to college because I think the concepts, they struck a chord. But I read the book. It’s incredible, you know, really praised the book as a tool that he wished he had when he was young and was excited then to sort of evangelize it to his daughter. So I want to stop for a minute on the young entrepreneur. The young 18, 1920, you know, out of college, dropped out of college, didn’t go to college, not going to go to college. What made young Lee Benson a force of nature to do what you did?

Lee Benson:
Yeah, good question. I’ve actually put a fair amount of thought into that. And on this subject, I’ve actually spoken to close to 4000 high school, mostly seniors, about the virtues of entrepreneurship and in smaller groups, 25 to 50 at a time. And it’s sort of a facilitated discussion, my home environment. And I figured out really early on that my parents probably weren’t that capable of raising themselves, let alone five kids. So where I got that thought, I don’t really know. But I go all the way back to literally six years old, a neighbor unsolicited asking me, hey, would you pull weeds in my garden for 25, $0.25 an hour? And you know, back then, you know, dating myself, I’m in my sixties now, you could buy two candy bars and have change. It was a big deal.

Lee Benson:
I thought that was really cool. I could trust that it was an exchange of value. And I was like, okay, well, I wonder how I can do more. And then I started shoveling snow. I grew up in Spokane, Washington mostly. And I could do a sidewalk in a driveway in 30 minutes and I would get fifty cents. And so, wow, I just four folded my money and then I got a circular paper out. Then I had four paper routes and we moved to Arizona.

Lee Benson:
I got a job at a restaurant, became a dishwasher, then a busboy, then a cook. And what was interesting is I had not the best environment at home. Toxic and in a lot of ways quite dangerous. Family members in and out of prison. It was not great. Taught me a lot about who I didn’t want to be. And in a way it was a great lesson. Those interesting struggles were great.

Lee Benson:
This outside world I could trust and I just kept building on it. So I would struggle to get a capability and one struggle is finding a job, asking for something, but those are healthy struggles. And then it would build my confidence. I would leverage it to create value, and I would just keep taking additional steps. And then I’m teaching guitar lessons, and I’m playing in a band, early eighties, I don’t know, whatever, making 60 grand a year playing music, which. Which was really good, and then going forward from there to make extra money during the day. I became the general manager of a small electroplating company, and that’s the one that lost all of its business essentially overnight. My boss said closer to sell it.

Lee Benson:
She got 30 days, and I couldn’t find anybody to buy it. So I just said, let me assume the $600,000 in debt. I want to go this direction that I believe in, that you don’t.

Dana Robinson:
Wow.

Lee Benson:
And that worked out. But let me back up a little bit. You know, you talk about kids being in disadvantaged situations. When I talk to these high school kids, I always like to ask questions up front to get the temperature. Do you think you’ll have a business someday? Do you think you’ll go to college? Will you be successful? All of that, and the mood is pretty low. Like, if you can meet anybody in the world, who would it be? And they would all light up with who that person would be. What do you think the chances are? And they’d all say, basically, same answer, zero. And then I start walking through it, having this guided conversation, and I, you know, I talk about how we came up super low income.

Lee Benson:
I mean, there were meals that were, a lot of times just out of dumpsters behind grocery stores. That’s all my parents could do. That’s fine. You know, we always had food one way or the other and how challenging things were. And I’d ask the kids, do you think I had an advantage or a disadvantage? And a couple of them got the right answer. Most of them got it wrong. They said, oh, a huge disadvantageous. And I said, well, it actually gave me the intrinsic motivation to build value on my own, like build my own legacy and keep going.

Lee Benson:
Whereas a lot of kids that come from upper middle income families and above, they’re more in the entitlement camp. There’s no real motivation to do it. And by the end of those 90 minutes, sort of guided discussions that I facilitate with the kids, they really get to a place where, wow, you can start anywhere and go everywhere. It literally doesn’t matter. When I bought that small electroplating company for its debt, which, thinking back, that was really dumb of me to do. The owner was kind of bragging about how he stuck this kid with debt and walked away from it, and, well, it certainly worked out. It was a good deal for both of us, no question. I’m not complaining any way, shape, or form, but when I did that, 100% of our business was this electroplating.

Lee Benson:
When I sold the company 23 years, well, I guess it’d be 2025 years later, it was less than 0.2% of what we did. We started there. We went all these different directions, just kept adding more and more capability. In fact, that actual company I closed in 2004, I started another company, able engineering, and then able aerospace and able systems and technology and a few others along the way. I combined two of them into one, able engineering and able aerospace, that I sold for nine figures in 2016.

Dana Robinson:
Wow.

Lee Benson:
And because that’s the one that collectively was over 500 employees, we had 2000 customers in 60 countries around the world and growing very profitable, $100 million ish company. And because of how we thought about holistic value creation, our positioning, the right strategic buyer, I mean, all the elements that you’re super aware of, and a lot of our listeners, I’m sure are, we got a 21.6 x multiple of EBITDA. I can’t say what the number is because I agree not to, but it was really good and they got a really good deal. Like, we got a good deal. They got a great deal. They’ve been amazing stewards of the brand able aerospace. It’s still out there. Everybody that wanted a job got to keep their job.

Lee Benson:
Such a cool journey to get here, and I just keep going. It’s like breathing for me. I just love the game. This isn’t, let’s check out and go sit on a beach somewhere. I wouldn’t know how to do that.

Dana Robinson:
Yeah. Yeah. So I’ll say some parallels, and maybe you can tell me whether think there’s a way for adults or even youth that are ambitious to engineer the experiences. I sold the neighbors chicken eggs. It was like we had chickens. We ate the eggs, there was too many. And neighbors said, well, if you bring me some eggs, I’ll hand you some money. So.

Dana Robinson:
And then, of course, mowed the lawns all over the neighborhood, pulled the weeds, and looked for any opportunity to be resourced. I made surfboard bags and sold them to surf shops in San Diego, where I lived. A little easier than shoveling snow. Lee. But still, the economic lessons that we had, I had a hard time. My daughter was raised with more privilege, and as much as I didn’t want her to be spoiled. I wanted her to get good grades, so I did what all of us modern parents do and said, just focus on school, get good grades. You know, she worked at a gelato shop and was excited to have tips in her pocket.

Dana Robinson:
I tried to help her work on her car and say, this is what you had to do. If you raised poor, you want a car that works. You learned to work on a car. And all of those things were advantages, even though someone might look at them as disadvantages. I didn’t have the privilege, I guess, of what kids with money had, but all of those made me the resourceful entrepreneur that I am and touched that connected me to that. That feeling you get when you do something to create value. And you get that value, whether it’s selling an egg to the neighbor or shoveling their snow or pulling the weeds. Right?

Lee Benson:
Yeah. That’s the internal fulfillment and self esteem that climbs from accomplishment like that. It feels amazing.

Dana Robinson:
Yeah. And, you know, for the kids you’ve talked to, is the lesson that you need to engineer this thing that we had by necessity, by doing a thing that you think might be hard and creating the value, receiving the benefit, and then feeling what you should feel as a result of that, whether it’s small or large.

Lee Benson:
Yeah. My message there is essentially asking the kids, how would you like to create value in the world? And let’s start with the family. What’s your job for the family? How do you create value for the family? And how do you think about that? And if I back all the way up, we really get it completely wrong, in my view, in k twelve education. And that the purpose of an education should be to create value in the world. And yet today it is. Get a good grade, get a diploma, get a degree, get a job. And in that environment, the kids are doing what they think they’re supposed to do and not what they were meant to do. And I wish we started out in kindergarten saying, hey, the purpose of an education is to create value in the world.

Lee Benson:
Holistic value creation. It’s material, it’s emotional energy, it’s spiritual or connectedness. How would you like to create value? And they get more and more engaged in what that looks like for them. And now they’re discovering what they were meant to do in terms of creating value in the world. And it’s all about creating value, not doing what you’re supposed to do and going down this, you know, college machine road, if you will. And even in college, I think they’re completely missing it for most programs, not all, but for most programs, you’re there to create value. Now, the colleges get a ton of money, and the kids go out into the world. Now, how do we apply it to actually make money? And that’s a challenge.

Lee Benson:
I’ve had tons of examples like this, but just one I’ll share. Engineer comes out of Arizona state University and says, hey, mechanical engineer. And I was at the time, I was employing about 50 engineers, different disciplines. And I said, that’s great. And he said, well, I need to make I forget what the number was, like, $108,014.18. I said, where’d you come to that number? I said, well, they told me this is what my degree should get me. And I said, okay, that’s wonderful. How will you create value for able aerospace to justify that? Because you’ll have to create more than that to justify you being here, because there’s another 23% on top of that.

Lee Benson:
And then we have to have some profit to be a going concern. And his immediate response was, that’s not my problem. It’s yours. If you want me, you have to pay that. And I said, I get it. Okay, here’s a list of my competitors, and let me know if you want a reference letter that you and I had a conversation and go over there. The employees, prospective employees that would come in and say, here’s how I can create value for your business. Here’s how I think about it.

Lee Benson:
Or ask questions like, what’s your business model? How you guys make money, and how do you price expenses, profit? What’s the potential for growing all of that? It’s like, please come on in. They’re unicorns, right? And we want them involved with what’s going on. So I go back to, we want to create value in the world, and how do we create that environment? Dana? One of my current shorter term projects, and I’ll be doing this for another, probably three or four months, is I’ve taken over as interim CEO of a company called Dinner Table and the website dinnertable.com. and this is about basically taking families on holistic value creation journeys together so they can raise kids to create value in the world. It’s a place where parents can go to be with other communities of parents to build on practical family wisdom, like what works and really doesn’t work in the real world with real kids at all different ages. And I’m loving this because my work up to this point, I’d say the last six, seven years has just been all in to help other companies and for profit, nonprofit, public private doesn’t matter. Create value faster. And this is basically taking, in a way, operationalizing value creation within families.

Lee Benson:
And that’s the biggest part of what we’re doing, is to instill this family value creation attitude or mindset and get that going. And it’s been a lot of fun. I’ve got close to 30 licensees by the end of the year. I think we’ll be at around 100 licensees that are building their own communities and guiding these families on these value creation journeys. But it’s getting exactly what you’re talking about. How do we get kids on that track? And I theorize you got on the track, I got on the track. Once we do, you’ll literally never get off. And we just keep stacking on that value that we created.

Lee Benson:
And it’s not about, look how much money I have. The money is wildly important. We need to sustain our lifestyle. But how it feels going through life, the emotional energy and the spiritual connectedness, piece of it with family, friends, could be God for you, whatever that is. All of it combined is wildly important. So I’m leaning in hard to do this. And it’s even really the primary focus of my podcast, which is titled show your value the art of value creation to drive holistic value creation behavior and thinking out into the world. And I launched it early February this year, and it’s going pretty quick.

Lee Benson:
And this language is resonating.

Dana Robinson:
I love it. I love the sort of framework that you’ve got, because I’m not sure I’ve entirely put my pitch. Whenever I can bend the ear of a young entrepreneur. Entrepreneur. Someone who’s thinking about who they are and what they want to do, you know, I go on and on about the stuff we’re talking about, and then I finally shut up and say, all right, thanks for coming to my TED talk. But the, you know, the way to describe this action feedback loop is, you know, in business, you do a thing, it creates value. You get a reward, is sort of the, I think releases all the good chemicals that people are looking for from everything else. Right.

Dana Robinson:
I did something, especially when you’re doing things in community, like, whether it’s with your family or your coworkers, you have these, you got serotonin going on, and you got dopamine, and you’ve got, I forget the other, you know, you got all of these things creating this flywheel that, that gives you this positive feedback loop, which is why, as you said, we got on this track and we never got off this track. Right. Because once you have that going but I’ve never really thought about how do you transmit that to somebody, you know, that someone else and just, you know, not to, like, criticize kids these days, but is it possible that kids are somewhat flat and muted about, you know, they’re not highly enthusiastic about the sort of the world that they’re in? Is it possible that that are the go to school, get a degree to get a diploma, or get a diploma to get a degree to get a job pathway, just doesn’t have any of that. And if they had, if we had given them that, then they would, this little flywheel would be spinning where they would have this constant feedback loop of, like, I learned a skill, I did something good and creative value, I got rewarded for that. That maybe our unhappy youth are one of our TED talks away from getting on our track. Dana Robinson here. Quick plug for my book, the King’s Fly swatter. You can see it here behind me.

Dana Robinson:
If you’re watching this, I’ve got it in my hand. It’s a beautiful hardcover book, printed to make it giftable, something that you can share with a family member buy as a gift. So this latest book, it’s a fable about a person who has a really crappy job. Let’s just start there. This is a book that most people can relate to because we’ve all had crappy jobs. This is the story of Ubar, a servant in the court of a babylonian king who masters his boring, monotonous job and then learns to listen to the king, hearing him rule the kingdom while quietly swatting flies behind a cane. Eventually, Ubar becomes the wisest and most successful man in the kingdom. The story is fun, and it’s easy to read, but it’s not mythology.

Dana Robinson:
It’s my story. And as I shared the idea with colleagues and friends, I learned that it was their story. And guess what? It’s your story if you’re at a job at the of any kind, one that you love, one that you hate, one that’s just enough to get by. This little book gives fresh perspective on how to leverage that job to get you something greater than a paycheck. The lessons in this parable are entrepreneurial lessons, but not what you might think from the current entrepreneurial zeitgeist. If you or someone you know are looking for a real pathway to entrepreneurship, here’s the secret. Your job is the way out of your job. It’s counterintuitive, but once you see how it works, you can’t unsee it.

Dana Robinson:
Learn the way of the fly swatter from the parable of Ubar. And from the stories I share from my 30 year business journey, you can get a free copy of the king’s fly swatter by going to danarobinson.com.

Lee Benson:
Yeah, well, what you’re describing is what I talked about earlier. They’re doing what they think they’re supposed to do. If you want to be successful, you have to go to college. To me, in a really big way, this is my view. But I think higher education in this country is one of the worst crony capitalistic games going on. Like, let’s get everybody in this darn thing and let’s have them come out with all kinds of debt and it’s, and most of it can’t be used now, some of it wildly valuable, some of the engineering, medical programs, we want them going through that. But for most of them, you know, not so much. And yes, they have to create the value.

Lee Benson:
It’s got to be theirs. We can’t do it for them that they’re not going to have just sort of laughing as you were talking about the brain chemistry. I just lumped them all in for the first time ever called feel good amines. You know, they have all this going on, but in the simplest way, where does self esteem come from? And it comes from accomplishing challenging things and making that happen. So they have to do it. And one of the things that I fully believe is that for the last, I’d say, 5000 years of recorded history, there’s been no change in human nature. The kids are exactly the same. The only thing that’s different is the environment.

Lee Benson:
And you and I, when we’re building our businesses, the most important thing we can do, in my view, is create the conditions from which everybody creates value. The rules of engagement, the culture, the operating methodology, you know, all of that. And, and from there, they create value. So now for the youth today, we’ve created this environment where the parents are taking as much struggle away as possible because they think it’s good, most of them with the best of intentions, and it’s actually bad because we’re not stressing them and it’s forcing them to take another extra ten years past 18 to become an adult. So that’s not really good. So the environment’s completely changed. You won’t be successful unless you go to college as a, you know, message that a lot of the youth hear. Absolutely not true.

Lee Benson:
Absolutely not true. You decide how you want to create value based on your value creation superpowers. And maybe it’s music. I mean, I still do music as a power hobby. I just finished recording an album with a recently formed band of mine. The music’s amazing. And imagine, you know, let’s say this, people really love listening to this. It could be a place.

Lee Benson:
We perform, we elevate the emotional energy in the room of 100 or more people, or maybe a lot of people like it in a billion people, it elevates emotional energy. So that’s emotional energy value created on top of it. So I think that’s the challenge the youth have to do it. And so I just put them in that mindset, that way of thinking about things, holistic value creation. And a lot of these kids completely change course. Was going to be a lawyer, but was really social, figured out, was going to drive her nuts just to sit there reading documents and doing that kind of work. And now she’s doing event planning and will likely have her own event planning business pretty quick and is having the time of her life. That’s your early twenties going through.

Lee Benson:
So that’s how I think about it. It’s the environment that we create from which we, all of our team members, family members, create value.

Dana Robinson:
Yeah. Let me move this from what feels like a conversation of two old guys talking about the kids these days. This is incredibly relevant to us as business owners because we’re just talking about the people we hire. Right. We have the opportunity to take what we’re talking about, of what we could create as parents, if we have the right tools and resources in a home, create those in the workplace, and elevate the people who work for us. At the same time, elevate the company, because we’re doing that. We’re giving them the opportunity to create value and helping them along their own journey.

Lee Benson:
Yeah.

Dana Robinson:
Talk a little bit about as a leader, you need to be a nuclear reactor of positive energy. Right? I mean, you have to be somebody who’s capable of understanding emotional energy and invigorating and getting people to kind of get theirs going. As you said, there are people who walk in who are ambitious and curious, and they’re unicorns, and then the rest of them are people that are. It’s sort of up to us if we want to grow a company to figure out how do we help them become the best version of themselves, to go from two to 500 employees, and I’m sure in the roles you fill in consulting and in operating, what’s a business owner to do? Who I’ve heard in the last week, I’ve had three or four of these conversations about 20 year olds who are 24 year olds or 28 year olds who just quit or just call from France and say, I had a lot of stress and so I’m on a trip and I won’t be in the sort of horror stories of people who begin to rely on the next generation. Given what you’ve just talked about, I’m looking for some advice for myself and my listeners. How do we handle it?

Lee Benson:
Yeah. What I’m finding, I’m making some assumptions here, but the youth that you’re talking about that had the stress and couldn’t deal with it, they don’t go into adulthood with a lot of personal responsibility, maturity around that and what it should be. It’s entitlement mentality. There’s a lot of stuff, but it’s from the conditions. And what I’ve seen is youth like that in the right conditions, within our companies, within six months, they’re leaning in and acting like the CEO of their.

Dana Robinson:
Own role because I knew you’d have something good to say like that so you could finish. But I want to know, like, I want, I want an anecdote or a.

Lee Benson:
Method to get there because of the environment that we create. Right. And first and foremost, when they come on board, we have to describe why we’re bringing them on board. So here’s your role, here’s the outcomes you’re going to be held accountable to. This is how it’s going to be measured. And do you think you can do this and always, oh, yeah, I’m sure I can do that. Great. Do you also understand if it falls below this line, it won’t work, but we’ll appreciate that you gave it a shot.

Lee Benson:
Oh, yeah, of course. If that happens, something’s wrong with me. So whenever that does happen and we part ways, nobody’s surprised.

Dana Robinson:
Right.

Lee Benson:
But let me back up and talk about the environment just for a couple of minutes. So if we’re running a business philosophically, I believe the CEO’s job is to continually and responsibly increase the value of their business. That’s it. And there’s a lot that goes into that. And by proxy, their senior team’s job is to do that collectively. Now, it’s just a fact. When you look at value in the for profit world, it’s going to be some multiple of EbitDa, could be cash flow early on. What’s most important might be revenue for a startup, but ultimately you’re going to have to get a return.

Lee Benson:
And so that’s how we measure it. So we want to responsibly and continually steadily grow that over time. That’s your job. So what’s your operating methodology for doing that? How do you get everybody aligned to improving that most important number for the business and getting culture right, people right? All the other stuff has to be right to continually increase that and get higher multiples right. Everything else is subordinate to it, not more or less important, but that’s what we’re all aligned around to show that we’re creating more value as an organization. And I wrote a book titled your most important number that outlines what I’ve developed over decades. Something called the mind methodology, most important number and drivers. So imagine the entire senior team is aligned around a most important number for the top of the business, and it has to also drive the majority of the right behaviors.

Lee Benson:
That’s the litmus test for each most important number to make sure we got it right. And then every function, HR, legal, engineering, sales, marketing, operations, customer service, all of them will have one number that reflects above all others the value they should be creating for the organization. Where did they start? Where are they going? Are they on track at any point in time so we can see it and that can cascade out whether it’s only one team, ten teams, 1000 teams or more. It’s super elegant. When I presented this to Jack Welch, back when I was still leading my aerospace business, he told me it was the best business management system he’d ever seen. And you know, Jack and his heyday had over 400,000 team members. He and I became great friends, by the way. We were just like, it felt to me like we were two scientists solving for the same problem, continually finding better ways to create value.

Lee Benson:
So we’ve got this operating methodology. So I think that’s foundationally important. Everybody’s aligned to what is most important. And then, and there’s a lot of popular operating methodologies out there. I prefer mine. It’s simple and elegant, works way better than the others. It doesn’t make process more important than what is most important, but it doesn’t matter what it is. It could be okrs, could be scaling up, could be 40 x eos with small companies seems to be popular.

Lee Benson:
We get a lot of eos converts over to the mine methodology virtually weekly coming into it. But why is it that it sometimes works and sometimes doesn’t? Right. And some will say, well, it’s the best thing ever. And here’s what we did with it. And others, oh, we threw it out. It was terrible. And I think it comes down to four things. When I look at leaders, yes, we have to agree on what our job is.

Lee Benson:
We increase the value of the organization responsibly, continually over time. But we need to be clear on what is our business model, what’s our strategy, what’s the actual value of our products and services and what’s the intentional culture we want. So on the business model, do we understand pricing, expenses, profit and potential for future profits? And does every leader in the organization understand the business model as it relates to their function and understand how they can better and better align to it and improve it occasionally if it can be improved, and then on strategy, to me, it’s just nothing more than approaches to increasing the value of the organization. So when we do that, does every leader understand in their role, their seat, how they can ensure we get those things done and why we’re doing it, and can they improve how we’re doing it? And then when I look at the value of the product or service, does everybody really understand what the market’s saying about what we have and in their role? All the leaders in your organization, do they understand how they impact it? And they, they can continually improve that over time. And then culture to me is just simply attitudes and behaviors that cause the best results to happen or another way to say it, the most value to be created. So the superpower for leaders, when you have this foundational operating system, is constantly nudging around business model, strategy, value of what we have and culture to get everybody making decisions and taking actions more and more perfectly and aligned with it. You know, you, you’ve won. When the leaders that report to you are now doing it with their teams and other leaders, you know, going out in the organization.

Lee Benson:
So this constant alignment nudging, I think is the, is the biggest difference because without it, I mean, how many of us have been in meetings where people are doing a ton of work, but they’re going five different directions and it’s not really moving the needle. They’ve got a bunch of KPI’s that they’re measuring and they’re improving, but the most important number isn’t moving or it’s going down and it’s getting worse. And that’s because they’re not aligned, again, to the business model, the strategy, the value of what we have and the culture that we want to have, the intentional culture we want to have to create the most value. And I outline this stuff in my book, your most important number. And a big part of the work that I do with my team at ETW is help companies launch with us. I get messages weekly from companies around the world that are diying the mine methodology. They read the book, they’re doing it. They changed the language around most important number and the results significantly change.

Lee Benson:
No surprise, happens all the time, but we’ll actually help companies implement it. And I also lead something called execute Masterminds, where these are CEO mastermind groups, limited to eight. We know so much about each other’s business, but you’re getting over 80% of the brainpower in the room to help you increase the value of your business. And all of them are invested in each other like it’s a conglomerate that we’ve got half or more of our retirement money in it. And it’s applying these principles and it’s different than vistage and YPO and EO. And I’ve been part of so many different groups out there, they lose their evergreen value creation. But applying the things I’m talking about here and more, keep the evergreen value going and all of this CEO wisdom around value creations just keep stacking and getting better and better. And you know, last year for the three full groups that I have, and I have certified shares that build their own groups, the lowest performer increased the value of their business 38%.

Lee Benson:
The highest performer 1100% last year. And that’s just normal. It’s just, this is just normal for what we do. I call it full contact value creation. We go for it. You don’t bring a little issue and we deal with the issue. If it’s a symptom, we go right for the root cause, we go for it.

Dana Robinson:
Let me ask about that. My feeling about Emyth, and I’m an enthusiast, I did Michael Gerber’s legal work for a number of years, is that it’s to me like an entrepreneur mindset shift, but lacks methodology. Then Gina Wickman came along and said, I love that stuff, and took Emyth and created a methodology. But you need nine employees, I think, for the minimum kind of EOS implementation. Talk about your like, you know, I would guess that more of my listeners have less than nine people and maybe have read Emythe and the looking for method is your something that a startup or a four person company can implement with and be effective and then to the point of your mastermind is because those are people implementing, is that a place that they can create? Some get involved with masterminds as well?

Lee Benson:
Yeah. The mind methodology was designed from the startup, one person to really organize the thinking and the work around value creation. And it’s never one person because you have contractors you’re working with, right to get stuff done. It aligns all of it. And the largest that we’ve worked with directly, $60 billion market cap, tens of thousands of employees. It really works at any size, anywhere. And I designed it to be fairly easily Diy’d going in. So if you read the book, your most important number, it’ll give you all that information, how you do it.

Lee Benson:
Or you can just simply go to our website, etw.com and you can learn about it. I believe a great place to start for a CEO and the only leaders, founders, CEO’s, presidents that we allow into a group. They have to have a mindset of continually and responsibly growing the value of their business. In other words, you can’t come in and say, I’ve got a half a million dollar a year or a $2 million a year business just like where I’m at. I want to hang out with other smart people. This won’t be for you. And I can recommend all kinds of great leadership groups to be part of that. That’s more what they are.

Lee Benson:
But this is good for anyone that wants to significantly increase again responsibly the value of their business.

Dana Robinson:
It sounds like it’s agnostic to subject matter. So it’s not like joining a best practice group where you’re looking for some industry cohesion or something. You mix up eight people in your cohort and you’re all over the industries.

Lee Benson:
Yeah. My only rule, or our only rule for execute and all the chairs that are building groups is you can’t have two competitors in the same room. But I love the difference in size. I look at my groups personally, they range from probably a million and a half to million bucks in revenue. Really good plan to get to 5 million, 25 million in that range. One of them wants to get to 100 million and he’s at 2 million right now. I think he’s got a good plan to get there and we’re all there to help him do it. And the biggest one is north of 300 million with a plan to get to a billion.

Lee Benson:
I love having the stratification in there because even the larger company CEO’s are going to be launching new products, services and all that. And it helps them develop their value creation capabilities by helping another founder build a new product or service off into the wild. A lot of the ones that have sort of made it to a higher level, forget what it was like to do it bootstrapped, you know, from the front line. And no matter who they are, they come in with a ton of experience in life. And other things. Right. So they all help each other that way going through. But, yeah, all industries doesn’t matter.

Lee Benson:
For profit, nonprofit, no issues. I’ve started working with a couple of states. They’ve asked me to give presentations to their leaders. Last year, Vermont had me speak to 800 of their leaders about value creation. And so I’m toying with this idea of putting groups together for a state. And I’ve got a couple of states here. I’m looking. I think it’d really be a great idea of the agency head leaders, like the top eight, maybe ten max, in one of these groups, to continually increase the value that the agencies collectively create.

Lee Benson:
And that’s really simple. Our elected leaders, in my view, should be creating better conditions to work, live, learn, and play for the citizenry at a lowering relative cost over time. And I remember when I started the presentation for Vermont, I said that it’s like, okay, well, I’m just looking at it sort of practically. I didn’t know how they would react. Right. But I just, all these heart and celebration emojis just, just flying across the Zoom screen. They want this. And so wouldn’t it be cool to align all that? But, yes, it doesn’t matter what the industry is, for profit, nonprofit.

Lee Benson:
What does matter is the mindset of the founder, CEO coming into the room.

Dana Robinson:
Talk a little bit about the most. I see now how much you know that we don’t know from all of the experiences, not just your business experiences, but now you have visibility into, you know, the, all of the people whose masterminds you’re involved with that, you know, what are the, what are the big challenges? What are the common challenges? What are the things that, you know, someone who’s trying to figure out, how do I, I got a business. I’m listening to Dana. I want to exit someday. What are the most common challenges that you can speak to that you’d want people to hear?

Lee Benson:
Yeah, the first one I’ll speak to is something you just said about, I want to exit someday. There’s such a difference, and I’m not saying any of your listeners are this way or some or all or not, but there’s such a big difference between those that want to get this thing going and flip it and make a bunch of money, between those and those that really want to solve a problem in the real world and create real value. Those are the ones that make it literally 90 plus percent of the time. Right. The other ones that this is hard. They act like a victim. And how come this is going on and why can’t I just get it to here where I can sell it someday? That’s not a healthy mindset around that. So I think that’s a big challenge out of the gate.

Lee Benson:
And I spoke last year to a startup group here in the Phoenix area in Arizona, and there were probably 40, 45 founders in the room. The title of my talk was the difference between why 90 plus percent fail and how 90 plus percent could actually succeed. And it was just going through these differences. And one of the questions was asked me after I finished, what do you want to see in my pitch deck to make you give me money? Because I invest. I’ve got a ton of money out there. And invested. You completely missed the point. And I said, look, I’ve talked to most of you, and there’s literally only one person in this room that I would consider investing in.

Lee Benson:
She was so passionate about solving this problem, and I could see her just beaming in the corner of the room as I was talking, because she knew who she was. And the other ones, it’s like you’re playing startup, you’re finding dumb money. I call it people that aren’t doing their due diligence, and you’re just trying to keep your salary going and you like playing the game. Look, I’m a startup founder and all of that. So I would say, first and foremost, let’s create real value in the world and have an equally good, if not better, option keeping your business when somebody comes in with an incredible offer. Because when Textron came into buy my aerospace business, I walked away three times like, no, no, no. I even believe I could have. Had I kept it, it would be bigger today than what they’ve done with it.

Lee Benson:
It would have been an equally good, if not better option keeping it. What I love about selling it is we made 13 other millionaires. A whole bunch of employees made a ton of money below that. And now I get to take this to the world because my baby wasn’t the aerospace company. My baby was the culture, the operating methodology, holistic value creation, you know, all of it. So with that said, it’s the mindset of the CEO, and that’s why I like being in this format mastermind group that I’m describing here, the execute mastermind. And again, listeners, you can learn about it, go to the etw.com website and you can read about it, and we’d be happy to talk you through what that looks like. But it’s the mindset of the CEO’s.

Lee Benson:
That’s the primary thing. It’s not that something weird happened in the market or conditions and all of it, it’s that all the common things, they hang on to people way too long. They weren’t clear about we need this structure with these roles filled within the structure to be able to achieve creating more value and or profitability as a company. They would just let people sit there too long. They didn’t design the structure properly. They would get a bunch of sales coming in the door and they go, ah. And they love doing the work and they’re into the work and oh my gosh, the sales isn’t happening. Let’s go do sales.

Lee Benson:
Oh, now we got to go do the work. Rather than saying structurally, we need somebody full time on sales, somebody full time on doing the work, obviously somebody full time in marketing, generating true qualified leads and playing a game of the rest of you need to keep up with me. Right. It’s just such a fun game internally within a business. So I could go on and on. There’s so many different reasons for it, but it comes down to the mindset of the founder, the CEO, the president, whoever has the top responsibility for creating value for the organization or as an organization. And think about the four things I said earlier. Do you really understand your business model? Because a lot of CEO’s really don’t.

Lee Benson:
And then if they’re not super clear on it, what’s everybody else aligning to? Right. You know, again, revenue, expenses, profit, potential, future profit, getting excited about it. And then your strategy, you know, don’t, don’t have strategies that just sit on a shelf. We had really interesting and stimulating conversations. We wrote a bunch of stuff down, usually not based in reality, but strategy, again, is just simply approaches to increasing the value of your business. So that’s the mindset you go into. Just do one thing to do that and do less better as you’re going through it. And then the value of the product or service.

Lee Benson:
I do find a lot of, you know, business owners and leaders, they just love their stuff way more than the market actually does. They don’t have feedback loops. They don’t really, really know. They can’t passionately talk about it. It’s like, well, that’s going to be an issue. And then culture. You know, if you surveyed all the employees and said, hey, what are the best performing employees we’ve ever had on their best days done? Or how did they behave on their best days? Let’s write all that stuff down and let’s distill out what were their winning behaviors and what were their winning attitudes. And those are the things that if you intentionally communicate that and nudge towards everybody moving in that direction and living and being those things will cause the most value to be created within your business.

Lee Benson:
I hope I’m not overly simplifying this, Dana, but I always go back to the foundation. There’s no silver bullet. People will install eos and go, oh, the world’s going to change. We better. It’s like, gosh, it’s going to be tough because you have to learn a whole new language. And I know Gino, by the way, in my methodology, you don’t learn any new language. You call it what you call it, but new language, it becomes unfortunately, a lot about process. Same thing with okrs and, and scaling up and others.

Lee Benson:
Here’s all these processes. Am I doing this right? It’s like, stop that. Are you creating more and more value over time? That’s the question. Not am I running an l ten meeting correctly or spending five minutes on this and twelve minutes on that? And it’s like, no, it’s not about that. And so when you align to value creation and every single leader is taking actions around increasing the value for the organization, all three buckets, material, emotional and spiritual or connectedness, that’s where I see they really win.

Dana Robinson:
I love that. I love the simplicity. I would encourage listeners to get your book and to check out themastermind@etw.com. that’s a great three letter domain name. Good job on who has that lead.

Lee Benson:
I think 14 years ago was a little over a hundred thousand dollars to buy it. Somebody just gobbled up a bunch of three letter domains.

Dana Robinson:
Yeah, and the simplicity. Because I do think it’s easy, especially if you’re a small business that wants to grow into a bigger business and you see all of these resources, the methodologies and frameworks can get overwhelming. I think of the, when I was with the plumbing and air conditioning business, we used map management action.

Lee Benson:
Yeah, I’m very familiar with that. And the guys that started it.

Dana Robinson:
Yeah, it’s a fantastic system. But you know what? From a management standpoint, the thing that actually moved the needle was when they put some simple goals and control software in front of us. And you just say to employees like, let me help you set a goal for yourself and then let’s measure it. And then the framework, all of the framework can, could go away. If you’ve got, as you know, sort of distill it down to the simple, you have a target. We have, you know, framework for culture. You don’t have to learn a new vernacular, and you empower people to show them how to create value. And in the case of my observation about maps, goals and controls, was not that their whole system isn’t great, they’re great facilitators.

Dana Robinson:
But to empower an employee to say you get to set a goal for yourself and you get to measure that and we get to come back and talk about it is simple and empowering and helps them own that piece of value creation.

Lee Benson:
Yeah, let me just say a couple of things about that to add to it. No matter what somebody picks, if they’re intentionally trying to create more value in their business, whatever system, I applaud that. Fantastic. You know, absolutely love it in the mind, methodology, the simplicity, I think, is really the huge value. So think about this. We have every team. We’ve designed the structure, all the functions that are required to keep in a certain balance to create the value we want. Then you look at every leader in their team and you get to see the most important number for that team.

Lee Benson:
That is, how is your team designed to create value? And the leader says, well, this is our most important number. Here’s where we started. This is where going. We’re slightly ahead of plan, and this is the best work that we’re doing to continually improve that number. And you could ask any team member that works for that leader, you know, how do you create value for the organization and those applying the mind methodology, they said, well, I’m on this team. This is our most important number. This is my role. These are the outcomes I’m responsible for, and this is the best work that I’m doing to contribute as a team member to improve that most important number.

Lee Benson:
Could you get any simpler than that?

Dana Robinson:
Right?

Lee Benson:
It’s elegant, and that’s all we want to know. Are you creating the value, yes or no? Winning or losing as a team, and what’s the best work you’re doing to continue to win or get back on track or whatever that is fantastic.

Dana Robinson:
But Lee, I want to keep talking because you’re one of the funnest guests I’ve had this year. No offense to everybody else. I hope none of you are listening to me insult all of you. Bye. By saying, lee, I got to get you back on with some more specifics on things, but keeping these under an hour is important. For some reason, people like to know that they can not have to listen to me talk for 2 hours. For as much as people say they love to listen to my voice, it’s too much. Lee, if people want to connect with you, you know, you have a site that’s got your books and the links to your mastermind and all of that.

Lee Benson:
Like, let’s put that, absolutely. Please go to etw.com. you can learn about the masterminds. You can get the book there if you’d like. You can get access to a lot of free content around the mind methodology. We have a mind methodology course that you can take, your team members can take to go through. So everything we do is right there at www.etw.com. awesome.

Dana Robinson:
That makes it easy. Lee Benson, thank you for coming on. And everybody, remember, reach out. Tell me what you want to hear about. Give me feedback. Hello@danarobinson.com. lee, we’ll have you on again. Appreciate it.

Dana Robinson:
Thank you.

Lee Benson:
That sounds great. Look forward to it.

Dana Robinson:
Dana, thanks for joining me on this episode of the Exit Plan podcast. I’d love to hear from you. Feel free to hit me up with questions or comments by emailing me at hello@danarobinson.com. or leave comments and questions by calling 858-252-7785 call 858-252-7785 and leave a message.