Business Is Booming

Episode 11 - Business Is Booming - Stephen V. Smith
Narrator: [00:00:01] Business is booming, from the small mom and pops to the big industries. Our local businesses drive our economy and provide the products, services, and jobs we depend on. Our host Jennifer McCurdy brings us these stories as she visits with the business owners and leaders of Fort Payne and DeKalb County, Alabama. And now here's Jennifer.

Jennifer McCurdy: [00:00:25] Welcome back to the show. I'm joined today by my guest co-host Stephen Smith, for another episode of our Small Business Success series. We've covered some interesting topics in this series so far, and I hope you're learning something that you can apply to your business. Today, we're going to talk about a common pitfall that small business owners fall into. Sometimes it's referred to as the hub and spoke pitfall. Now, Stephen, I learned about this from you. Well, that terminology, I mean, I understand the concept, but calling it the hub and spoke was something new to me. So I'm really interested to kind of dive into that a little deeper and learn a little bit more about what that means. And are, are you the hub and spoke and how do I get out of that mindset. I guess I can call it a mindset. Would that be fair enough to say a hub and spoke mindset?

Stephen Smith: [00:01:17] Yeah, I think it starts with a mindset and then continues to impact the entire operation, you know as a small business owner, because you, you end up thinking, “Well, I'm the only one…” Well, often in the beginning you are the only person to do anything. But if you're starting out with a small team… “Well, I'm the only one who really knows how to do this,” or “I'm the only one who really understands this process.” Or one that always plagued me was, “Well, it will be quicker for me to just do it myself than to teach someone else how to do it and follow up, and I'll just do it and it'll be done.”

Jennifer McCurdy: [00:02:00] Guilty.

Stephen Smith: [00:02:01] Yep. Yep. But you think about, and the reason it's called the hub and spoke model is, you know, you think about a wheel and you know, all the energy runs through that hub and everything coming off of that, those spokes, they're all impacted by what happens with that hub. That's the center. That's what's spinning all the time. And so when you're in that hub and spoke trap, and it really is a trap because it's hard to get out of ... You ...there's a lot of, there's a lot of downside for your business to that.

Jennifer McCurdy: [00:02:38] But like you said earlier, oftentimes people start out as the only person in their business. And so, you know, you're, you're accustomed to doing it all yourself, and it's hard to let go. And then you grow and grow and grow and it's just difficult to get out of that mindset.

Stephen Smith: [00:02:54] Yeah, absolutely. It's you know, you start out small and, you know, you have, if you were to chart out an organizational chart of all the positions in your business, you know, your name would be in most of the squares. And that's okay to start out with. But if you ever hope to scale your business and of course, you know a passion of mine, Jennifer, is helping that small business owner who thinks that, you know, “What does my exit look like one day? Could I, could I build a business that would be of value that I could sell to someone at some point in my life?” Then the hub and spoke model is something you've got to break out of, because you can't scale your business if you're at the center of everything. In fact, if you are at the center of everything, you don't have a business. You have a job.

Jennifer McCurdy: [00:03:48] Oh, that's a good point.

Stephen Smith: [00:03:49] And so today's topic, I think, will help get people thinking about where, where in their business that they can begin to break out of that hub and spoke model. And I've also got a free resource for your listeners that we'll share at the end of the show, too.

Jennifer McCurdy: [00:04:06] Okay, good. All right. So what are some of the steps to take to kind of get out of that hub?

Stephen Smith: [00:04:15] Well, first of all, I want to say that if, if you were there, if that describes you, you haven't done anything wrong. You don't look at your business and say, “Well, I've, you know, I've messed up.” You just have to understand that there are implications of operating like this. So let's, let's look at a few of those implications. Okay? So if your business is tied directly to your personal identity, the brand of your business is you. You are your business. Like we said a minute ago, one, you can't scale yourself. There are 24 hours in a day, but you can't work all of them. You can't scale yourself. And so if you think, “Well, I want to grow my business” and you're already doing, you know, a large majority of the tasks involved in your business, then you're going to hit a ceiling. You can't scale. It really limits the growth potential of your business because you, I mean how much more new business can you take on if you're doing a lot of the work.

Jennifer McCurdy: [00:05:01] You're already overwhelmed.

Stephen Smith: [00:05:03] It creates operational log jams. If any of my former employees are listening to this, they're going to roll their eyes and go, “Oh, I know what he's talking about.” When you, when everything has to flow through you, then things come to a standstill because employees are sitting there thinking, “I can't continue to do my job until he does this thing, until he answers this question, till he gets this information for me, until he comes back with something, a decision that will allow me to move forward.” And so you're the log jam.

Jennifer McCurdy: [00:06:01] This goes back to something else we've talked about, giving your, empowering your employees to make their own decisions.

Stephen Smith: [00:06:06] Absolutely. I mean, you're robbing your employees of an opportunity to shine and to do good work. I mean, if they're just sitting there taking orders from you and they, they aren't empowered to make those decisions, you're robbing them of an opportunity to grow. And eventually, if you've got a really good employee who has a lot to bring to the table and you're not giving them those opportunities, they will find somewhere to go to work that will give them those opportunities. So you're putting your workforce at risk too. You're also teaching your employees that they don't have to make decisions. And so, you know, we talked about in a previous episode, those employees who are actively engaged and who are are actively disengaged and the ones who aren't engaged, you're going to have a whole group of employees who are just not engaged, because they're just showing up and doing things. You're not challenging them.

Jennifer McCurdy: [00:07:07] And part of that just keeps the circle going. You're thinking they're not capable when you really haven't even given them the opportunity.

Stephen Smith: [00:07:14] Absolutely. So you can't say, “I can't trust so-and-so to do this or that if you've never given them the opportunity to do this or that.”

Jennifer McCurdy: [00:07:24] And people will make mistakes. I mean, you have to give them that. There's going to be mistakes made. You make mistakes. We're all human. So don't just give up if they make a mistake and say, “Well, they can't do it, that's it. I've tried.” That would be, that would be a pitfall for you.

Stephen Smith: [00:07:38] Absolutely. I mean, you're putting your entire business at risk because, you know, there's this old adage about the "hit by the bus principle." OK, if you were hit by a bus, what would happen to your business during the time that you're recovering?

Stephen Smith: [00:07:55] Um, when you really think about that. People say, ”Oh, my business would do fine.” Okay, you tell me the last time you took an entire week off on vacation. And tell me how many times you talked back to your staff, you connected with them during that time. How many times you checked your email? How many client phone calls you took while you were driving to the beach with your family or whatever? Did you fully separate for a week? And I'll tell you, a whole lot of business owners will tell you, “A week? I don't remember when I've taken a week off work.”

Jennifer McCurdy: [00:08:34] America is the only country that can't relax. I feel like I mean, if you hear people, other countries have mandatory time off and but even when it's a study has proven that even when we have time off that we choose to take and we've earned our vacation time, that we're still engaged in our work and we're not able to relax and just have a true vacation. So that's a cycle we have to, we have to break as well. We, we deserve that. You work hard. You should be able to. Why are you working? Why are you working if it's not to spend your money doing things that you enjoy and having a good quality of life?

Stephen Smith: [00:09:12] Absolutely. And, you know, let's, let's zoom out a little bit and look at, let's look at the seasons. You know, there are seasons in a year for a purpose. You know, the, you go back to agricultural roots and there was a time for planting. There was a time for harvesting. There was a time for allowing the, the soil to rest and get ready for the next planting season. Um.

Stephen Smith: [00:09:39] There are. There was that time of year when it was cold and it got dark earlier. And we rested more. The, the seasons dictated how our work was was managed, how our work was, was framed up, so to speak. So the framework of how our vocation was dictated by the seasons, well, we don't have that when most of our work anymore. And it's go, go, go, go all the time. And you know, there are, there are lessons that we can learn from that. So that's a little high level. But what I want to do today, in the short time that we have is to give your listeners a couple of very concrete actions that they can take. Right. So first, I'd like for you to take some quiet time. And take a pen and paper and just write down the things that come to mind that you're responsible for in your business. It can be high level like sales, HR. Uh, down to, you know, I change out the mop bucket and make sure there's toilet paper in the restrooms. I mean, everything you think of, you jot those things down. Just make a list as it comes to mind. No right or wrong answers. Just, just get it out of your head. And then maybe then or maybe in another quiet time, maybe let that rest a day or two come back to that and start categorizing those. Now you're going to be overwhelmed. When you look at that list, you're going to be like, “Oh my gosh, I'm doing everything.” But um come back and start categorizing those things. And what I love to do is have people to, to draw out an actual matrix. Draw a big square with four squares in it. Okay. And so your, your columns are going to be, your left column is going to be “things I'm good at,” and your right column is going to be “things I'm not good at.” And in your, your top row is going to be “things I enjoy.” In the bottom row is going to be “things I don't enjoy,” and start plotting those things. And initially you're going to think, “Oh, that sounds like a lot of work, and I don't want…” You do this exercise, and I guarantee it's going to be eye-opening for you. You're going to begin to see that there are things in your business that fall into a category that make you start to question, “Why in the world am I doing this?” Because that bottom right square, you're going to find things that you're not good at and you don't enjoy doing them.

Stephen Smith: [00:12:24] Why on earth would you still be doing those things if there's an opportunity to pass those on to someone else? Now you're going to find things that are in that upper left square, that you're good at it and you enjoy doing it. And most of the time those are the things that bring the most value to your company. Why wouldn't you be focusing on those things? So it's going to help you understand where you bring the most value, and then it's going to help you discover the things that you don't enjoy, you're not good at, and it gives you a starting point for delegating. Now, if I walked into a business and spent time with the owner and interviewed employees and got a good grasp of what they were doing, how their workflow went and say, “OK, this is a list of 10 things that you can delegate,” it would be overwhelming. You know, they couldn't tackle all those at one time. It would be too disruptive to the operation. So this exercise gives you a starting point.

Jennifer McCurdy: [00:13:22] I think it would be good to also ask your staff to do this exercise.

Stephen Smith: [00:13:25] Great idea.

Jennifer McCurdy: [00:13:26] And then you can take a look at it and see, “I didn't know that they enjoyed doing this, and this is something I hate doing. This is the perfect person to do this. That's something they love to do.” So I think encouraging your employees to also take a look at tasks that they do and they like or don't like would help you delegate better.

Stephen Smith: [00:13:43] That is an excellent, excellent idea. And yeah, they should do that. There should generally be more communication like that in a company.

Jennifer McCurdy: [00:13:52] It's easy to say. It's really hard to do, but we've really got to start making a better effort at that. All of us do.

Stephen Smith: [00:13:58] Yeah. When you start delegating, um, there are different degrees of delegation and at the end of the show, I'm going to share a resource to help people really dive deep, much deeper than we have time to on the show. But when you begin to delegate, you want to train people and you want to empower people and you want to talk to them about outcomes, not, “Do this. Here's, here's the way…” I mean, share with them, “Here's the way I do this,” but give them an opportunity to make that process their own. They might find a better way of doing it. They might take your 10-step process and come back and say, “Look, I can do this in four steps. That'd be awesome, because I've eliminated this and that. And you know, this works with….” Give them that opportunity, because what you really want them to focus on is the outcome. I heard someone say in an interview the other day that when they bring on, they were bringing on an executive assistant. And they said, “I told them everything that needed to be done during the course of my day. And I explained what outcomes I wanted, but I didn't hand them a you know, an operations book. I didn't hand them the step-by-step. I said, Here's the outcome. You help me develop. You come back and tell me what steps are going to get us there.”

Jennifer McCurdy: [00:15:22] That's excellent. Yeah.

Stephen Smith: [00:15:24] And then they're invested in that. You know?

Jennifer McCurdy: [00:15:26] They're part of the process, and that's so important.

Stephen Smith: [00:15:29] And they're going to be, back to what we said earlier, they're going to be an engaged employee. Now, what's going to happen when you start delegating even the little things you are, slowly, getting time back in your day. You're slowly getting, and maybe more important than time, you're getting energy back, especially if you're doing things that you don't enjoy doing and you're not good at, and those things start coming off. Just the mental capacity.

Jennifer McCurdy: [00:15:57] I'm just seeing a weight being lifted off my shoulders as you talk about this and just think about your attitude in general with your family and your friends, that's all going to change. I mean, it impacts your entire life.

Stephen Smith: [00:16:11] Absolutely. Because work is such a central part of our lives, we can't separate that and put it in a bucket and you know, it not impact those other relationships.

Jennifer McCurdy: [00:16:21] When you get home. Your day at work determines how you're going to feel in the afternoons as well at home with your family.

Stephen Smith: [00:16:27] So what are you going to do with that additional mental energy that you have, and time? You're going to start devoting that to those areas that you're good at and that you enjoy and you're going to create more value for your business. And so as that ball continues and you begin delegating other things, you begin focusing more over here, your business is growing. This is down the road. But there's going to come a point where it's a vital step. If the end goal is, I would love to build something of value. I'm building a business. I'm not working a job. I want to build something of value that will be an asset that I can sell at some point. The critical step in that is finding that 2IC, that second in command, that person that is your right arm in the business. That person who is becoming ... now you don't want to replace and make them a hub, but there will come a point where you see that a lot of the delegating that you've done, you've done as much as you can do without having that second in command that can take, that that operational element to another level for you. It's a turning point in your business when you've delegated to the point and you've organized your business to the point that you can bring in that person, and it may be someone you have on staff, and it may be an outsider. I mean, there's, that's a whole other conversation. But at that point, it dramatically escalates the growth and the success of your business, because then you'll be free to focus even more of your time and energy on those things that drive the success of your business. And that's really where you want to be, is operating in that sweet spot most of the time. Right?

Jennifer McCurdy: [00:18:28] So, Stephen, I know you had a transition in your business and it probably wasn't the way you had hoped it would have happened. And maybe that's why you're so passionate about making sure that other small business owners have set themselves up for crisis situations. Can you talk a little bit about what, what was the turning point for you to get out of that hub and spoke mentality or hub and spoke?

Stephen Smith: [00:18:53] Well, I would love to say that this model works. Do this model because I did this model and this framework that I just talked about. I went through all that process and it works well. That is not my story. And you're right.

Jennifer McCurdy: [00:19:07] It's a hard lesson. You learned it the hard way, right?

Stephen Smith: [00:19:10] It's yeah, I guess that's like you say. That's why I'm so passionate about it. I was running an operation that, even though we were working with major clients across several states, had a solid staff it was still Stephen and his support staff. And all those limitations and problems that we talked about a minute ago, all those applied, we were dealing with all those. Now, mine wasn't a bus. Mine was a medical crisis that hit me very surprisingly, out of the blue. And so I ended up in 2015, the first part of 2015, I had a medical crisis that put me in the hospital for right at seven weeks. Now, think about that one-week vacation I had a hard time taking. A long weekend was about the best I could do. You know, seven weeks in the hospital, most of that in ICU, 12 days of that on a ventilator. I had to come to the point where, we didn't know how this was going to play out, my wife and I. So Michele and I called our staff down to the hospital in Birmingham and said, “Guys, you've got titles, now I'm giving, I'm empowering you in these areas.” And that was 2015. That was a major turning point in our operation. Major turning point. I'm not going to say that when I got back ... up to ... I mean it took about a year when I really got back into full swing. I'm not going to say I didn't start coming in and pulling some of those things back in just…

Jennifer McCurdy: [00:21:40] Default.

Stephen Smith: [00:21:41] Yeah, it's human nature, you know. But, you know, for the most part people were empowered. They did their jobs. We grew on that framework. And, you know, and in the next few years, those five years marked the most significant growth in the history of our company. We made the Inc. 5000 list. We sold our company to a strategic acquirer in the middle of a pandemic. It was located on the other side of the country. None of those things would have happened if I had not broken the hub and spoke model and gotten out of that. So I'm living testimony of that. This, this, this, this works. You get out of this, and it will change the trajectory of your business.

Jennifer McCurdy: [00:21:50] I hate that you had to learn that the hard way, but I'm so thankful that you're, you made a recovery and that your team carried the torch for you when you couldn't.

Stephen Smith: [00:21:53] Absolutely they did.

Jennifer McCurdy: [00:21:55] You had a, you have a good team or had a good team around you, for sure.

Stephen Smith: [00:21:58] And, and we're growing another good team. Our new agency, Rare Life Media. We're doing, you know, some, some good work locally. And coming off of that, we've got a coaching practice and the free resource that I mentioned earlier, if your listeners will go to RareLife.coach and scroll all the way down to the bottom of the page, they will see a button for a free e-book called The Four Degrees of Delegation, and we didn't really dive into that. We were just talking about delegating earlier. But this book takes you through what the degrees of delegation are, so it helps you understand deeper what delegation looks like. It's not just, “Hey, go do this thing.” There are different levels of delegating, and if you walk through those levels intentionally, you'll be much more successful.

Jennifer McCurdy: [00:22:49] I'm excited for that. I'm going to download the e-book for sure.

Stephen Smith: [00:22:52] Go get that.

Jennifer McCurdy: [00:22:53] It's hard to say. We're all so rushed. You know, I'm thinking about the outcomes that you mentioned earlier, being able to say, “I'd like for you to help me do this, and this is kind of the outcome I'm hoping” for versus just, and I'm guilty, “Here do this. Okay. Thanks. You know. What are we doing here?” So I've certainly learned a lot today, Stephen.

Stephen Smith: [00:23:17] Well, good. Good. I'm going to tell you, just from a business owner standpoint, I am, I'm now a certified value builder advisor, and I can coach companies through the eight drivers that build value in your business, but none of them for me personally, am I more passionate about or believe that they have greater impact than this hub and spoke. You've got to get out of that because it's you know, for me that was the big change in our business when we were able to escape that pitfall.

Jennifer McCurdy: [00:23:56] Well, good deal. Thank you so much, Stephen.

Stephen Smith: [00:23:58] Yeah, absolutely enjoyed it.

Jennifer McCurdy: [00:23:59] I think this has been my most favorite episode with you.

Stephen Smith: [00:24:03] Well, I think so too. They've all been good, but I think we're trying we're kind of hitting our stride here.

Jennifer McCurdy: [00:24:08] I know. I'm, absolutely they've all been good. I don't know. This one just seemed to be also, I feel like I'm passionate about this as well, so.

Stephen Smith: [00:24:16] Right. Yeah, we've talked about this before and yeah, this is something I think that one of the reasons it's probably one of your favorites, and mine too, is that this has such practical takeaway.

Jennifer McCurdy: [00:24:21] It does.

Stephen Smith: [00:24:22] And what if people will apply what we've talked about today and download that e-book and dive into this and do that exercise with, you know, trying to figure out what, what are you responsible for and fill out that matrix.

Jennifer McCurdy: [00:24:41] Can you put the matrix on your website?

Stephen Smith: [00:24:44] Yes. Yes.

Jennifer McCurdy: [00:24:44] And that way they can kind of have a visual.

Stephen Smith: [00:24:46] That's a good idea.

Jennifer McCurdy: [00:24:46] Okay.

Stephen Smith: [00:24:47] We can do that. We'll put a little download there too.

Jennifer McCurdy: [00:24:49] Okay, perfect.

Stephen Smith: [00:24:50] Or we can include that in the show notes.

Jennifer McCurdy: [00:24:51] Oh, good. Do that. Okay.

Stephen Smith: [00:24:53] So, yeah, it's something that if people will do this, it will have a real impact, not just on your business but on your quality of life.

Jennifer McCurdy: [00:25:03] Which is something, we all want a better quality of life. Absolutely. Who doesn't? Yeah. Thank you so much, Stephen, as always. I appreciate it.

Stephen Smith: [00:25:09] Absolutely enjoyed being here today. Yeah.

Jennifer McCurdy: [00:25:12] Thanks for listening, everyone. We'll see you on the next episode of Business is Booming. Be sure to check out all of our resources to help your business at Fort Payne Chamber.com. Thanks again and we'll see you on our next episode. Have a great day.

Narrator: [00:25:25] You've been listening to Business is Booming, a podcast brought to you by Fort Payne Chamber of Commerce. The host is Chamber Director Jennifer McCurdy, executive producer Stephen B. Smith with assistant producer Emily Kirby. Our engineer is Lucas Smith of Lucky Sound Studios. Business is Booming is a production of Rare Life Media.