and Robert talk about value creation at multiple levels, what does it mean for a company to truly ADD VALUE, not just for their clients but primarily for their employees, their team. If you add value to your team, they will naturally add value for your clients.
A little bit about Karl...
Karl Yaacoub has worked in investment banking and private equity, completing deals and assignments worth more than USD 1 billion. He is the author of "The Game of Value Creation"
Karl currently leads KYVC, a Chicago-based consulting firm specializing in helping private companies implement value creation initiatives similar to those used by Fortune 500 companies.
Robert Peterson 0:34
Welcome to the add value to entrepreneurs podcast, the place where we help entrepreneurs to not hate their boss. Our mission is to end entrepreneurial unhappiness. If you dream of changing the world, but you're not sure where to start. The Add valued entrepreneurs podcast will help you transform your life and business. This podcast is for entrepreneurs who want more freedom and fulfillment from their work so they can live the life that they desire. You deserve it, and it is possible. My name is Robert Peterson, Former pastor turned CEO and the smiling coach. I believe that success without happiness is failing. But there is hope. Join us each week as we bring you an inspiring leader or message to help you. Thanks for investing time with us today. Today's guest is an expert in value creation. And he helps companies create value for their clients, their stockholders, and their employees. Karl Yaacoub has worked in investment banking and private equity, completing deals and assignments worth more than a billion dollars. He's the author of the game of value creation, called Yaacoub. And Robert talks about value creation at multiple levels. What does it mean for a company to truly add value, not just for their clients, but primarily for their employees, their team. And if you add value to your team, they will naturally add value to your clients. If you're an entrepreneur who started their business with a purpose and a passion that has been lost in the busyness of the daily grind, we get it. That is why we've opened up our free strategy calls. A lot of entrepreneurs probably including you just want a sense of clarity on the barriers holding them back, that you need to overcome in order to accelerate your growth and achieve your dreams. These short 30 Minute Calls give you a chance to work with one of our coaches without any commitment or pressure. Scheduling is easy, just go to smiling cole.com. Let's jump on a call and get you the help and clarity you need. Select a time and let's build your business. It's time for you to add value. Karl, I'm just looking forward to this conversation. Thank you so much for joining me today.
Karl Yaacoub 2:46
Thank you for having me, Robert. Well,
Robert Peterson 2:49
obviously we both have a desire to add value. And so I love that the title of your book and definitely know we'll get into some value conversation. But typically I have my guests just share their own entrepreneurial journey and what's led them to, you know, what they're doing now what they're working on?
Karl Yaacoub 3:09
Sure, yeah, I'd love to share more about that. If I could just begin by touching upon the word value to begin with, because the definition of value is a very fluid definition, and it often is in the eye of the beholder. I'll share my definition of it. So for me, the concept of value pertains to something that has a benefit or utility for the person receiving it. We all benefit in different ways, but there must be some form of exchange, whether monetary or non monetary for value to exist. So when we exchange time for fun, or relaxation, that's an example of a non monetary exchange. True Value often is present in exchanges where the benefits meaningfully outweigh the costs. So if you have gone for three days without you would gladly exchange your time for a good night's rest, because there would be true value in doing that. So corporations aren't really from that perspective. They're not very different from people, right, they need to continuously provide value to the market so that they remain relevant and continue to thrive. And the concept of value creation came to mind or at least to write about value creation and offer a service around value creation is because we often hear in business and in life, that you have to be a person of value. As long as you are providing value to whoever is on the receiving end. They're going to continue to want to deal with you. And entrepreneurship is all about that. It's about finding a way to provide value and to continue to provide value to your market so that you can continue get business and continue to act on your strategic aims. And so that's what I've been doing lately. And the end NGO that I focus on is specifically from having worked for big investment banks and private equity funds. So when they acquire a business, regardless of its size, they often implement a series of value creation initiatives. And that's like a standard playbook for any business you come in, you have a bag of tricks that you have to make sure you go through one by one, and try to identify ways to unlock hidden value in any business in any industry really. And so that's what I specialize in doing at the moment. And I get a lot of meaning from doing that.
Robert Peterson 5:35
Nice, well, I appreciate your sharing a definition of value establishes a framework for the conversation and certainly appreciate your background and investment. And in I liked that you even added fun in there and play like there's the the exchange of value and find play. So she tell me a little bit more about your desire to write the book you mentioned, you know, wanting to write the book, and, and then what, what's been the impact of being an author and, and putting the book out there.
Karl Yaacoub 6:17
It's, the desire came from wanting to share these these, I want to call it I don't want to call them tricks. But this framework that has been tried and tested and tried and tested throughout the years. And it might change a little bit, but it's never really changed dramatically, because it relies on four key pillars for value creation, we call them enablers of value creation, and they're there. I mean, if you think about them, it's all about protecting your business, protecting your resources, protecting the outlook, of your business and limiting downside and the face of adversity. So that's something we call in technical terms, corporate governance, it's about procuring resources and allocating them in the right channels in an effective way. So it's about Strategic Finance. It's about growing and optimizing your business by leveraging existing, and yet to exist capabilities. So we call that corporate strategy. And it's about bringing all these enablers together, and cultivating the right attitude within each stakeholder group and a business. So it's about having the right leadership. And so when you bring governance, Strategic Finance strategy, and the right leadership together, you tune into an interesting frequency for value creation, because creating value then no longer becomes ridiculous to expect. You are able to break a business down into hundreds of pieces. And try to find those pieces that are likely going to have the highest impact if tweaked, and then go all in on these pieces, and then pivot as you go. So nice, methodical. Yeah.
Robert Peterson 8:06
So let's let's think of this methodology from a solopreneurs standpoint, who's running their business by themselves? And of course, you know, operating as the expert in their field, you know, say let's think of, I don't know, a service provider in your local neighborhood, maybe HVAC, right? So he's got a van and materials and goes to a customer's house to repair a furnace or replace a furnace. So let's break down these enablers for for a solopreneur.
Karl Yaacoub 8:42
Yeah. So I think it all starts with thinking about what are the needs of any business, right? That's the overarching framework, and then you can drill that into the specifics, but essentially, for any business to thrive, and to be a viable business and always continue to deliver value to its marketplace. It needs to be protected. It needs to grow. It needs to be operating in an optimized manner. It needs to procure and allocate resources effectively. And it needs to have the right people with the right attitudes for it. And the problem with it's not a problem, it's just an added layer of challenges for a solopreneur is that your energy is finite. And so you really have to figure out it's like allocation of capital, its allocation of energy, and then situation, you have to figure out what is the channel that I need to put the majority of my energy and so that I could get the highest impact possible and for the solopreneur it often lies within getting leads, which can then be translated into revenue because you need revenues. It's like having a stream of fish and without cat chasing fish, you're not gonna be able to do anything. And so building what we call recurring annual revenue is single handedly the number one priority for the solopreneur business model. And now you start questioning Well, what is the best way to do it? Well, it depends if you have a marketing strategy, or if you're doing organic marketing, which is, you know, using word of mouth, doing cold outreach, speaking to the community. And that changes the equation a little bit, because it all depends on how much funds you have allocated for such initiatives. But the idea is to not forget the needs of any business. So once you have that figured out, you want to make sure you have the right controls in place, right, you want to think about the customer journey, you want to think about what is their experience from when they first deal with you, to what you agreed to on the contract to then how you fulfill that service, and how you nurture that relationship so that they can continue to do business with you, and tell others about how good of a job you do. And so each one of these steps is the process on its own, that you need to be taking, quite seriously, if you want to be in a game for the long run.
Robert Peterson 11:17
Absolutely, yeah. Yeah, that's really good. Thank you. So one of the areas that we talked about, or you know, for many entrepreneurs is that focus of of niching, Down, Right, being able to find a target audience. And obviously, your target coming from that finance, space seems to be both corporate and larger. So tell me a little bit about your niche and who the target is for your book.
Karl Yaacoub 11:50
The target is really any person who has an interest, and how the big companies go about running their businesses. Because when you deal in the private space, oftentimes you think about, you know, one day the dream is to list on the stock exchange or do an IPO. And that's the dream of every startup. But there's also a different way to look at it, because these companies be it you know, due to the regulator or because they want to attain a very high or that they want to maximize share price. They go about the about business in a very systematic manner. And in this, think about it, the most successful companies in the world approach business in a very interesting way. And what is interesting about that model is that it does not depend on key people in such a way that when those key people leave, the business falls apart, you could let people leave New people come in, you just plug them into all the systems that you've created. And if they have the right attitude, and they have the right skill set, the business is going to continue to thrive. And so I thought it would be interesting to avail that process and to avail these enablers and go deep into each and every one of them. And talk about the benefits of having each of these enablers and its constituents. And even go further by suggesting action points. Any business can take today, for example, we often hear a lot about the idea of scale, and scalability. And I think it's one of the most overused terms in in the marketing space today. And if you really drill down into what Scalability means, it means having a business that has its revenue, growing at a faster rate than its costs, that's it. And so, when you confuse scalability with growth, then it becomes a little bit confusing, because the business could be growing. But if its revenues are not growing at a rate that are faster than its costs, then it's not going to be able to scale. And so knowing that, and being able to put that as a goal, and then try to pinpoint what are the drivers to reach that goal, so that you can reverse engineer from that position is gonna get you a little closer to that position of scale than if you're just going through it by trial and error.
Robert Peterson 14:21
It's an interesting take on on scale, because, obviously, in the online business space, especially personal development space, there's there's many talking about, you know, oh, I generate $100,000 a month. And, you know, the question never is shared typically, you know, that's top line or bottom line, right, like so there. So there might be generating 100,000 But they're spending 80 on ads are more so so there's, yeah, there's there's definitely a difference is their revenue growing faster than their costs is is definitely a cut and a black Good white way to label you know. And most of the time when people talk about scalability, especially in the entrepreneurial space, is, is the idea of, of multiplying your growth, right, being able to being able to outsource being able to stop exchanging dollars for hours, like in the example of our, our HVAC company, a solo technician, in order to, in order to scale would have to consider hiring other technicians would have to consider hiring office staff would have to, you know, make make some changes, but at the same time still has to generate more revenue than costs. Exactly. So that's a great, that's a great delineator.
Karl Yaacoub 15:46
Yeah, and it's funny, you mentioned about the online entrepreneur thing, because when you talk about the cost of ads, and how do you go from that top line to the bottom line, that's not a cost that is entirely within your control? Right, so how can you know for sure that one year from today, your rate at which your revenues are growing a that the market is still really demanding your product? So there's a need for it consistently, but be that the price of ads is not going to go up? How can you know?
Robert Peterson 16:15
Or the platform that you're that you're being successful on even exists? Exactly. Yeah. So there's that that's definitely a challenge, right? Because obviously, these platforms on the on the platform and they can boot you off, it will?
Karl Yaacoub 16:32
Robert Peterson 16:33
at least at this point. So let's talk a little bit about, obviously, your your journey in finance, in doing acquisitions, and in some of these things led to your desire to break down into these these enablers. And wanting to share that, so that people understand value creation. How do these enablers help determine value in a company when you're looking at it is if you're evaluating a company from the outside and the value proposition that they have?
Karl Yaacoub 17:13
Yeah. So for for the corporate space and the corporate world, the way they like to define value the most is by what the intrinsic valuation of businesses. So if I am a owner and a business or it, let's say I acquire business, and I want to make your business more valuable, the way I'm going to make it more valuable is to create value in that business. And the way I will know whether or not my business has become more valuable, is I would bring a third party and tell them, why don't you give me a fair value assessment of what you think my business is worth, because that's ultimately going to tell me what the market would be willing to pay for that business. Now, you could value a business using 10s of methods. And the valuation of a business is oftentimes why deals between buyers and sellers fail, because initially, they'd bid say, x on a business, but then once the books are open, and they have to go through a due diligence process, and they bring in all these fancy advisors that they're paying millions of dollars to, for red flag reports, and they tell them oh, hold on a second, we've identified five red flags within the accounting space, five legal red flags, and five red flags within the commercial space. And you're going to start questioning whether that business was worth what you initially discussed with the seller. And if you want to adjust the valuation, the seller might not be very happy with that adjustment. So he might decide to say no, go to the deal. And so you want to implement value creation initiatives, assuming you do go ahead with the deal, because you want to get your money back. But be you want to make money you want to create money from money and value for you as an investor is the underlying value of the business.
Robert Peterson 19:00
So one of the recent things I've become familiar with is that I can remember the organization that evaluates corporations based on who they're serving, right, so So obviously, corporations are responsible to their shareholders, right, the CEO gets a chunk and so he's he's pretty concerned about performance, but also how they treat their employees and, and how their employees feel about working there, especially recently with with so many employees, you know, leaving workplaces, because because they're not satisfied and and then of course, there's the customer. So there's four, really potentially four stakeholders in in any, in any entity that's, that's serving others. And of course, not all of them are very good. In fact, very few of them are very good at satisfying all four at the same time, I understand Costco is at the top of this list. People don't quit Costco they work there for for a long time they like their jobs and, and, and so the employees are happy customers are obviously you know, happy because Costco is you know, continues to, to thrive and have lines and have people wanting to join in and be a part. And so when it comes to value, obviously they're they're putting value in all four of those spaces right there. They're creating value for the stockholders, they're creating value for the leadership, the CEO and the C suite. They're creating value for their employees that their employees want to stay. And of course, they're creating value for their customers. And that's what makes the whole thing work is because customers come and continue spending their money there. How How can companies how can especially small business like entrepreneurs focus on on value in in all in those four spaces? In a similar? It's a really
Karl Yaacoub 20:59
good question. That's a really good question. And I think it goes back to the point of observing what the big guys are doing, and taking note of what they're doing right. And then try to, to the extent possible, replicate what they're doing right and your smaller setup. But I think what ultimately needs to happen is a sort of alignment of interest, or at least the reversion to a mutual alignment of interests that serves all stakeholders, and not just focus on the most powerful stakeholder group, which often is the shareholder. And there's a temptation here, it's a double edged sword, because when you try to bring a alignment of interests between conflicting stakeholder groups, if you're thinking short term, you're not going to do a good job. But if you're in it for the long term, if you have a share price, and you have trust from the market, and you know, you're not going anywhere, and you're willing to make sacrifices in the small to medium term, so that you can prevail eventually and reap the rewards in the long term, the game is going to change for you, you're going to do things differently, because as much as you can differentiate interests between those four key stakeholder groups, there is more overlap than you can think of. Like you said, if your employees are happy, inevitably, they're going to reciprocate the way they perceive they are being treated, to the way they treat customers. And the opposite is also true. If I am an employee, and I feel I am giving so much more than I'm getting from my employer, and my employer doesn't care. How do you expect me as a human being, to care so much for customers who are not the nicest of customers, or who are difficult to serve, it's going to be significantly harder to care in such instances. And so it's the concept of reciprocity that you need to lead with, they're going to treat customers the way they perceive to be treated. And it's as simple as that.
Robert Peterson 23:19
And, of course, the challenge comes, you know, when the CEOs, when the shareholders placed certain expectations for growth or performance on the CEOs, and the quickest number two, to make sure you meet the revenue numbers is pink slips and cutting staff. And so corporations, like how you mentioned, it's it's the long game, right? And the challenge, I think, is that CEOs are set up to play a short game typically. Because they, the expectation is, we want you we want the numbers to improve now, right in today's terms, and so the CEOs contract is written in such a way that his performance is tied to short term numbers, versus the stockholders who want long term success. And I think, and I think it's shifting, I think there's some recognition that, you know, some of these changes in the market that happened, you know, in the 80s, that really set up it changed the marketplace, it changed, it changed employee loyalty, right when my dad worked for a company for 30 years and and that's just, that's just not the case. Typically, anymore. People are willing to leave jobs and their, their loyalty is no longer longer term. And the company's loyalty to employees isn't isn't long term, right? They're willing to lay off employees. We've seen that over the last three years that, you know, corporations cutting 500,000 2000 people, you know, willy nilly here and there. And so I think you talked about that alignment. And and I think the the shareholders don't but they get a vote, but they don't have they don't have a direct connection to the contract that the CEO ends up with. Right. And, and so I think the, this, this idea of creating a long term alignment can be really challenging.
Karl Yaacoub 25:17
Which is, which is what? You're absolutely right, which is why the concept of governance becomes very important. So when you have a board of directors, that is composed of a healthy number of non executive and executive directors, who are working to represent shareholders, but also have insights into the day to day challenges of the business, who are able to manage shareholder expectations, because shareholders once they understand the why behind a certain strategy, they are more likely to embrace it. So I mean, what shareholder would say no to a strategy that is going to create happier employees, and in exchange happier customers, which means a higher average transaction size, which means higher revenues and higher recurring business figures, and ultimately, a higher bottom line and a higher share price. If you tell them that's the strategy, and this is how we're going to execute it. And we believe we have a probability of success of x and we expect it to take X number of months. And we'll know before that, because we'll start seeing signs pretty early, then it becomes easier to influence and persuade,
Robert Peterson 26:31
we will be right back after this short break. This episode is sponsored by perfect publishing a different approach to publishing a book. Perfect publishing carefully chooses heroes of Hope, who exemplify living a life they created through faith, hope, patience, and persistence. No matter what page you open to, in this mini cube of hope, you will find a leader with a big heart, you will see you are not alone. The authors may share similar challenges that only hope and action could result. Get your free ebook at get a dose of hope.com Welcome back, let's get back to more greatness. I think it's, it's, I think, more and more companies and the companies that that we're going to recognize 10 years from now, 20 years from now. Obviously, it's, it's shifted a lot and in my lifetime, right, because the big player was was Sears and Kodak and, and some of these companies that, that have made decisions that caused them to disappear. And it's intriguing to me, because obviously, Sears Sears was the biggest catalog business in the country. And it seems to me like the catalog business was a natural transition to the internet. And yet, they they failed to make that work. And so it's, it's intriguing to me that it doesn't take much for a company to, to mess up these, this value creation idea. Yeah. And, of course, the, you know, that hurts their profitability, which of course, hurts, you know, their ability to stay afloat. And, and sometimes the mistake is trying to grow too fast, too, too far too fast. And we, I think we were going to see the results of some of that with with some of these companies that have yet to be profitable in in the, they're making a huge splash through COVID, like Uber and DoorDash. And some of these but, but yet, what people don't realize is many of them are not profitable, yet. They're still spending investors money. And not they haven't turned a corner where these investors are going to benefit. We work is a huge example, which I don't you know, I don't know how much office space is coming back yet. It's not my realm, but but but I imagine it's slow. And so they have to play a long game.
Karl Yaacoub 28:56
It is it is and the the the market, the liquidity is drying up too. And so yes, you can still operate a business if your loss making but the second you run out of cash, banks are not going to lend you money if your loss making and if the investor appetite is going down because of all that's happening on the macro front. You're going to be out of business the second year of cash.
Robert Peterson 29:24
So in creating these enablers and creating systems to support so we talked a little bit about governance, talked about finance. So let's dig into that procurement idea and how can that help create value?
Karl Yaacoub 29:42
The procurement of also
Robert Peterson 29:45
what just as I maybe I got your four enablers wrong. So I had governance finance.
Karl Yaacoub 29:53
Oh, the capital procurement and allocation of capital. Yeah, it's about finding what Your right funding structure is going to be. So are you going to put in equity? Are you going to? Are you able to take on that? Is the equity that you're putting in your own money? Or are you going to be getting money from the market? And then the question becomes, what is your investor base going to be like? What are their demands? Are they going to be restrictive to what you're able to do and what you're not able to do? Do you have certain authorities that allow you to use that money without having to go to your investor base each and every time and come up with a detailed presentation and ask for the right approvals to spend that money. And so procurement is one side of it, because it could create a lot of headaches or the opposite, it can make your life significantly easier. But then you have to make sure that you allocate that capital in the right channel. And ideally, you want to allocate it in such a way that allows you to act on your strategic aims. But then you have to make sure that you are doing what you think you are doing. Because the last thing you want is to allocate capital that ends up being stuck in certain avenues, such as inventory that you're not able to sell quickly, or leases that you're not using, because your employees don't want to come to the office, or you're having a hard time convincing them to come to the office, or in real estate, sometimes when you operate a business and you'd like to own the commercial property in which the business is operating. That's all gonna trap capital, and it's gonna create liquidity issues. And so you have to make sure that you have that capital management process going on based on your short term business needs, your medium term business needs and your long term business needs. Because the second you run again, the second you run out of capital, is when it's game over.
Robert Peterson 31:46
Early, you mentioned the company, maybe we were talking about scalability, and knowing what's the really important thing, you know, for a company and I thought about FedEx, and of course, you know, FedEx is logistics, right? It has to be there overnight, and not necessarily customer service. So FedEx can have bad customer service, as long as they continue to have excellent logistics, and they deliver everybody's package overnight, and they know exactly where every package is. But if they switch that, and they, they try to focus on customer service, and have really, really good customer service, but terrible logistics, and now they've got packages, who knows where all over? Right? People aren't going to say, Well, you've got really good customer service. But you're, you're nobody knows where any of the packages are. But they were really nice to me. I think sometimes companies can get lost in, in in losing their, their primary
Karl Yaacoub 32:48
Robert Peterson 32:51
And so, I guess knowing what your biggest value, right, I think that would have to be like the biggest value or the I don't know, what would in your, in your description. What would you call that? That centerpiece that core role of a company, like you met, we talked about the HVAC guy and and with most entrepreneurs, it's lead generation, right? They have to have a lead generation process. Even though their primary job is installing furnaces or repairing furnaces. They can't do that unless they have customers that are willing to let them in their house.
Karl Yaacoub 33:24
Absolutely, I think it's the customer journey. And not and I think customer service is a subset of that. But ideally, it's customer journey. And what you want to do is map out everything, your prospect and your customer. So from the time they are a cold prospect to the time they are a returning customer, what are all the steps they go through? What are the obstacles they go through? How is fulfillment? What are the reservations, what is their feedback? What is there a driver behind every decision they are making, on their business journey with you. And once you are able to map out these drivers, and the more you get feedback, you can focus on improving these drivers step by step. So if you are having bottlenecks and fulfillment, because say your team is getting times that are not accurate, and that's the feedback that you're getting, you can spend energy on fixing that or at least improving that so that they can see progress. And they can be happy because they're going to feel you listened to them. So I think it's the customer journey. And being able to because it's hard to think about it like anything on your business model. Really mapping out your customer journey and breaking it down into pieces and then for every part from cold prospect to the sales process to when you convert them to a customer to then when you do the fulfillment to when you see whether they're happy or not with your product or service to then when they return to you each each of these phases has different drivers. for their psychology and their behavior and their decision making, and you want to be on top of those drivers, and you want to try to keep them as happy as you can, without spending all your energy on it. So you have to create a system. That's where a system comes into play, when you have that map, clear in front of you, you are then able to delegate on the right channels, you are then able to allocate authorities to the right people who can take care of the different components of the system. And if you're very familiar with it, you're able to step in whenever you're needed. But you don't need to be the day to day person on each and every step of the way.
Robert Peterson 35:39
Well, I think that's the power of mapping it right is because then you can make decisions about is this something I have to do? Is this something I can delegate is this something that, that that I, we don't need to do at all, because it's not helpful in the journey, right? It's actually a roadblock.
Karl Yaacoub 35:54
Robert Peterson 35:57
All right. So in, in value in one of the things that I, I think of in value, mental health and, and play in the power of the power of play, and, and over the last 10 years, we've seen, you know, companies like Google that has lounge space and nap space and play space and, and, and had a recent conversation on the show. They talked about how they show all the new employees this big game room and and and yet, there's nobody in there playing because the corporation has given them a game room but hasn't allowed allocated the space or the permission to be able to use it. So in the mental health and play space, how can how can corporations lean in value for their client? I mean, obviously, it's further their employee experience. But of course, that translates to customer experience. Sure, as we've already talked about. So how does mental health and play impact value?
Karl Yaacoub 37:03
It's everything. That's, that's one of the intangible assets of a business. And I think that could be a part of a business culture. And I think culture is something that every executive management team is responsible for. Because it is not an asset that is fixed. So it's not something that you could quantify on a balance sheet, it's an intangible, for me, at least I see it as something intangible. But when done, right, it is probably the most important part of your strategy. Because culture is, is gonna is gonna dictate your ability to execute on any initiative or any strategy within value creation. So if your culture is one of a culture of collaboration, where people who are doing the day to day tasks, look up to and respect their management and their leaders who are leading by example, and they feel cared for, and they feel heard and validated, and they feel that they matter. They're going to do a good job at executing, for if they feel that they're being told conflicting news every day. And priorities keep changing. And they're on a need to know basis. And they're not treated with respect. As much as they tried to execute, their ability to execute, it's not going to be met with the right attitude, and their performance is going to is going to take a hit. And it's just a it's not because they are bad performance. It's just they're human beings. And again, going back to that principle of reciprocity, if they feel undervalued, they're not going to give it their everything, because they're not going to have the mental energy for it. And, yeah, it I think I heard that saying once culture eats strategy for breakfast, but I think it's it should be a part of your strategy, because it's something that your executive team who's involved in day to day operations of the business can dramatically influence.
Robert Peterson 39:07
And obviously, mental health issues are becoming more and more to the forefront. And I think responsible corporations are creating space for mental health to be to be an important part. So how does culture play the role in value, and obviously, it's intangible and so it's one of those things as you know, you want to come in and do this value creation. This this intangible seems pretty powerful in in the impact that it can have. And so, how does that play a role in the value creation if you were coming in to to create new value?
Karl Yaacoub 39:50
It's it probably is the first thing I would approach. Hands down, it's the first thing I would look into because The impact underperformance has, or the value you stand to unlock from just taking your employee base from a position of resentment or an engagement to a position of ownership with the right attitude is tremendous. You could you could, you could get much more output and so much less time, you could get more ownership, you could get collaborators, you could get an alignment of interest very easily. The problem is when it's the problem, the good thing you have, as an outsider, when you come in is that you, you are perceived as a hope, or someone who is going to bring positive change, if you want to. The disadvantage the existing leadership has is they've had their chance to demonstrate their goodwill, but they haven't. And so you have to be very careful when you come in, to convince them through example, and through action, not just lip service, that we're going to, we're going to do some changes here. And here's how those changes are going to benefit you. And here's why we've decided to do these changes. And if you have any reservations or feedback, we're open for discussion, we want to hear what you have to say. And perhaps maybe take it into account and change the course of our decisions. Because it would serve all of us. Because remember, the first thing whenever a change of any sort is going to happen, especially in cultures where there's a mental health concern is, how's this change can affect me? This is the last thing I need it I can barely get by coming to work, what am I going to do now? But it doesn't have to be that way. If you approach it from that angle. And I think things like, alright, we want to we want to make sure we take care of your mental health. Tell us what are your biggest pain points today? What can we do to make these pain points less painful, and actually doing them because sometimes it can be very, very easy stuff to fix. It could be things like, I need to be able to pick my kid from school, when whenever there's nobody to pick them up. I can't do it, there's not something I could change about that. And I need that flexibility. Right, it's these things can create a lot of stress, and can really trigger mental health issues. But I'm not saying give them everything they wanted at the expense of the business, I'm just saying show that you are in it with them, that you're listening, that you're validating, and that you are giving everything you are able to give and see what happens. I think that will I know that will change a lot of stuff. And it will really help with the mental health stuff, too.
Robert Peterson 42:50
Oh, well, I think that that's the big challenge in corporations, both on the customer experience side and on the employee experience side is we create guidelines and rules and and then we put management in place to to make sure the employees adhere to these rules, right? They showed up at nine they left at five, they took the right break. They they're you know, they're not wasting time at their desk. They're not playing Tetris. And the same thing on the customer journey, right? We we create these guidelines that that, you know, our customers are always right, except if they're asking for too much. And then and then we don't have the flexibility. So we have to be able to say no, nope, manager said no, no, I can't do that. And, and I like how you just said, you know, first let's just be curious, let's just let's just ask for, what are their pain points? What are their struggles, and then have a willingness to have some flexibility that says, you know, if you if you come in 15 minutes earlier, you could leave 15 minutes later, that's that's no big deal. But nobody ever asked, right? And we didn't create a space where it was safe to ask. And I think the same thing can be said for customer experience. If a customer needs something simple, like oh, you want you want to check out an hour later. Oh, yeah, that's that's no problem. Right? Our, you know, our staff can't clean every room at the same time. And so it's okay to extend something outside of the rules. And and I think giving middle management giving people that flexibility a to extend the curiosity right to ask the right questions, and then be willing to create solutions that honor the employee and still get the work done.
Karl Yaacoub 44:34
Absolutely. And you rightfully said, it's the policies and procedures and, and the processes and the systems of a business that often act as a hurdle to toward change. That is good for everybody. And I think oftentimes the fix is easy. The policies have not changed in a decade or two decades or three Dec gets, right because it's hard to change policies, you need to get Board approval, sometimes you need to go to shareholders. My advice is Focus, focus on what really matters? Does, does looking everyone in office from nine to five matter more than getting the work done? Or is the work being done before the deadline? What matters most, and if you are able to transition, because again, I think the majority of these policies and procedures and processes and systems have been made for different times. And I think they were looking at different metrics and different drivers. And I think you need to update those for our reality today, and the requirements of everyday life today, and focus on what really matters and from there, work your way backward.
Robert Peterson 45:49
Well, that's so good. I'd like mapping out that customer journey, right? If we map out our employee journey, and in play experience, what is the primary role? How can that role be satisfied? How can that role be compensated for I think is, is another I have a friend who's, who's an ex, just he's an expert in Excel, he knows Excel, probably better than most of Microsoft people. But he gets fired from every job because he goes in and he can do the work that the average employee in his row does in eight hours. And he does it in two, and they expect him to do the work of three other people, instead of compensating him for the work that he's actually getting, he's actually able to accomplish, and it's simply a matter of changing the pay structure, instead of an hourly, we create a productivity structure. And then he would be compensated fairly for his work, but but the policy doesn't have room for that. And, and he ends up getting fired, because he doesn't want to do three times the work of the person sitting next to him. And yet, he's three times as productive. And they're limiting his productivity in not taking advantage of his expertise. Because they're worried about productivity in a different way. And I think, yeah, with a company's just need to have an openness to mapping it out and asking, so I love that you use curiosity, right? Let's just ask some more questions and be willing to find some places where we can be flexible, where it can make some changes, and being open to that. And that's, that's just another huge area where you can create value for your employees. And of course, when you create value for your employees, they feel loved and who doesn't work harder when you feel love?
Karl Yaacoub 47:30
Absolutely. And selfishly, it is in your interest to ask all these questions, because there is no better way to get down to the problems and leave no stone unturned and figure out every single problem you have no matter how big or how small, other than asking the right questions, and oftentimes asking the same questions in different ways. Because they're going to be hesitant, they're going to, you're going to need to build trust and rapport first and make them and give them a safe space to tell you what they see the issues to be. And who better to tell you what the issues in a business are than those who are operating the business day to day.
Robert Peterson 48:10
Oh, absolutely. That's, that's so good. All right, Carl, what inspires you?
Karl Yaacoub 48:18
Meaning, meaning and a sense of purpose. And to know that I am creating value for those I'm dealing with, because that's going to be reciprocated back to me. And it's going to give me a good feeling where I feel that what I'm doing is the right thing to be doing that. Body, mind and soul. I'm in harmony with who I choose to be today. And that I am living with integrity to myself, so I can sleep better, I can be more present with those that I love. And I don't have to worry or have any anxiety.
Robert Peterson 48:55
That's very powerful. All right, Carl, what's what's your big dream?
Karl Yaacoub 49:04
The big dream is to help as many businesses as I can. Because ultimately, these are run by human beings. And I think we are all connected in one way or another, if not through our successes through our struggles. And again, the more I am able to help others with their struggles, the less my struggles get, and so pretty much to achieve that.
Robert Peterson 49:30
Alright, so our our business owner entrepreneurial audience has been listening to your wisdom and information about your book for the last 40 minutes or so. You want to leave them with Karl's words of wisdom. What would you share?
Karl Yaacoub 49:49
I would share that it is hard. It's been hard. I think it's been unfairly hard for a lot of people in the business Old, I think it's been almost feels like the system is rigged against them that they can't seem to catch a break. And they keep putting off one fire after the other. It sucks. And it's not supposed to be that way. But that's the reality of it. And it's unfortunate. But there's always a silver lining and struggle. And that is resilience and a element of evolution, both as a human being as a business person. And I would like listeners, if they choose to remember that perspective, which is, it might feel like it's dark, and it might feel like you don't know where you're going. But because you don't know where you're going, you could end up in a really, really good place. And so you need to have that faith, that it is always going to work out at the end. And when you lose that, there is no point. So don't ever lose that faith that it is always going to work out. In the end, especially when you don't know what the future holds. One way to find out is to keep going, knowing that it is all going to work out in the end.
Robert Peterson 51:21
Carl, thank you so much for joining me. Thank you for sharing so much great value. With me with our audience. I sure appreciate you.
Karl Yaacoub 51:29
Thank you, Robert Sameer.
Robert Peterson 51:31
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