The Entrepreneur’s Blueprint For Inspiring Leadership Over Management

Shannon Waller: Hi, Shannon Waller here, and welcome to Inside Strategic Coach with Dan Sullivan. Dan, we had a fabulous team event a little bit ago, and out of it, you made a comment. You said the number one skill for having a Self-Managing Company is profound ignorance, which I found controversial and hysterical. So I'd love to know what you mean by that. So, you know, what was the experience? What provoked you or prompted you to say that?
 
Dan Sullivan: Yeah, well, we do have a central concept in Strategic Coach, which is called the Self-Managing Company, but there's a dimension that exists before a Self-Managing Company is Unique Ability and Unique Ability Teamwork. So right from the beginning in Strategic Coach, we established a basic organizing structure for each individual and for all the activity that takes part within the company that everybody should be in the activity that they're great at, that they love doing, and which produces the best results for themselves and for other people. We're kind of passionate about this, okay? Because I think if you don't get that right, you don't get anything else right. You know, it's an axiomatic foundation stone. Axiom being it's a self-evident truth. I'm a risk taker in this sense that I believe that the concepts that we come up with in the Coach work.
 
Shannon Waller: Yep.
 
Dan Sullivan: But in order to have them work, you've got to let them work. And therefore, you can't try to influence them. So we had that team meeting. And one of the activities in the team meeting is that we have 12 teams that the whole company operates according to 12 teams. Everything that the company needs to be is organized on teamwork. And then we have them divided up. So there was about a two-hour period where a spokesperson for each of the teams got up and said all the current projects that they were working on, some of them short-range, that had already started, but a lot of them were for the next 12 months. I didn't keep rigid account here, but I got the feeling that by the time the 12th team had reported in that I knew about 5% of what had just been conveyed, presented by the other people. I said, this is cool. This is really cool. This is really getting out of hand. That's a great compliment. You know, it's getting out of hand. What I mean is great things are being created by the teams using their Unique Ability and great things are being executed because of Unique Ability Teamwork. And the sum total of that, it's a Self-Managing Company. And my 95% ignorance is that's like five stars.
 
Shannon Waller: Now, it seems to me that there's a high degree of trust. I love what you said. You kind of have to let them work and not get in the way, which, again, most people don't really think that way. But does trust enter into it or is it just knowing that Unique Ability, Unique Ability Teamwork?
 
Dan Sullivan: Confidence. It's more confidence than trust. Okay. I mean, trust conveys that you're taking a great risk. I'm not taking a risk on the people. I'm taking a risk on whether our concepts work or not.
 
Shannon Waller: Nice.
 
Dan Sullivan: And I'm confident. Until I'm proven wrong, I'm confident.
 
Shannon Waller: And are you proven wrong often?
 
Dan Sullivan: No.
 
Shannon Waller: No.
 
Dan Sullivan: And less and less as we go forward. You know, I mean, in the early days, you haven't really established the critical center of leadership and teamwork, that it's hard for them to fail. And there's great habits. We have great institutional habits and we have great institutional wisdom in our company. So that day was one of the proofs of it, but two or three weeks before that, we had had our first really big outside event, which was called CoachCon in Nashville. And it was for everybody who was in Coach It was two days of really great breakout panels and presentations and lots of parties mixed in, lots of mixing time mixed in. When we got to the final party, and that was one of my contributions to the design of the conference. I've said, you have a party at the end of the first day, but at the end of the second day, you're just ending and you're sending them out to the world. And I said, you've got to finish with a party on the second night. It's got to be a bigger party than the party on the first night. And I was sitting at the party enjoying myself immensely because I had done so little work in the convention. I said, geez, you've really breezed through this one, you know, and everything was planned. Everything was structured with great care, great thought. And I reckoned that on a huge project that my total time involved in any aspect of the execution of the conference, you know, the completion of the conference, is about five hours over a year and a half. And I said, this is cool. Again, it's out of hand, you know. I'm going to use that phrase out of hand. I'm thinking that why have I said that twice? Because entrepreneurs that I know pride themselves on being hands on everything that happens in their company.
 
Shannon Waller: Yes. They do. Yeah. And what you're saying is in stark contrast to that. So I love the word confidence more than trust. And you've made a guess and a bet very successfully on Unique Ability and Unique Ability Teamwork. What's evident to me, Dan, is that your ego is not involved in this. In fact, you take pride in the fact of how little you either knew about the cool projects or needed to be involved in CoachCon. Celebrating your birthday was the second party. It was super fun. But you actually take pride in that rather than going, oh, I need to be in control. So again, that's a mindset shift that I'd love to dive into a bit more.
 
Dan Sullivan: Yeah, well, I think it's a couple of things on my part. You don't know it's real until it happens apart from you. I mean, you don't really know that something's real until it's independent of you, that it operates successfully independent of you as proof that it's real.
 
Shannon Waller: Yeah. You don't know it's real until it can operate independent of you.
 
Dan Sullivan: Yeah. If it depends upon your presence and your oversight, you don't actually know if it's real without you.
 
Shannon Waller: Yeah, so this is actually the goal.
 
Dan Sullivan: Yeah. How do I know this company is real? How do I know these concepts actually work? Well, you got to give them the freedom to operate the way you think they're going to operate. In science, the experiment cannot depend upon the experimenter.
 
Shannon Waller: It's interesting, Dan, because that idea of freedom is actually very prevalent in our company. People have freedom to do their Unique Ability, freedom to contribute, freedom to innovate, freedom to try new things. I thoroughly enjoyed that freedom, as you know, and that is not a word that is in most companies.
 
Dan Sullivan: And I have the foggiest idea of what you do.
 
Shannon Waller: I know, right?
 
Dan Sullivan: And you've been here for 33 years. What have you been up to?
 
Shannon Waller: Well, a few things here and there. Talking to you. So, Dan, let's talk about being in control versus being in charge, because I think that's another great distinction that comes into this, you know, number one skill for having a Self-Managing Company is the willingness to be profoundly ignorant or in letting it get out of hand. So let's talk about in control versus in charge.
 
Dan Sullivan: Well, I'll make one simple distinction. I think being in control is management, and I think being in charge is leadership. I study a lot of military history. I was born during the Second World War, and that might have worn off, but I've always been interested in military leadership, how armies succeed or fail. And I remember reading about General Patton, who was very famous Second World War general, and probably the best combat general in the Second World War, certainly in Europe, Pacific was mostly admirals, not generals. But he was asked what his strategies were for having his troops at top fighting strength, having them at top morale. And he says, there's three things you have to do every day to get that type of energetic, forward-moving, successful army. And he says, first thing is, every soldier has to have a hot meal before he goes to bed at night. Okay. Second thing is he has to have a clean pair of socks on every morning. And number three, he has to have unlimited amount of bullets. Shooting and walking forward as you're shooting. Okay. No strategies, you know, I mean, none of the other things that people talk about, well, you got to outflank them here and you got to make sure you have your artillery here. Never talked about any of that stuff.
 
But when you think about what kind of organization you have to have supporting your army, that everybody gets a hot meal every night. Number two, that they all have to have clean socks in the morning. And number three, they have to have unlimited amount of bullets marching forward. The logistics of that are extraordinary. The back stage that you have to have for that army is extraordinary. Okay. These are not tough ideas for everybody in the army to grasp, you know, these are, you know, and you know when you failed, you know, I went to bed without a hot meal. The socks didn't show up, you know, I mean, you've got some really, really daily indicators of whether you're on the right track or not. And I liked looking for those sorts of things, you know, make sure the little things that have to be there every day are right, and a lot of other stuff takes care of itself.
 
Shannon Waller: Just out of curiosity, Dan, what are some of those things? What's the equivalent of a hot meal and socks and bullets for us?
 
Dan Sullivan: Well, we're unusual in the amount of free time that our team members get. We have some measurements about how we're operating on a daily, weekly, quarterly basis. And one of them is that when you join Coach, there's a three-month trial. Everybody has a three-month trial. But from the moment that you pass your three-month trial, in the first 12 months, you get six weeks of Free Days. Well, some companies, there are people in their 20th year, and they're getting four weeks of Free Days. So I think that with the progression and evolution of technology that supports entrepreneurial activity, it's not how many hours people are working, that's the crucial thing, is that when the hours that they are working, do they feel refreshed and rejuvenated? So we want to make sure that they don't get exhausted by their work. We don't want them to get burned out. The other thing is that you should be able to get all of your work done by 5 o'clock. None of the work of the company should happen after 5 o'clock, unless it's a special occasion, and then the person, whatever hours they have to work, either late or perhaps on a weekend, they get those as Free Days somewhere down the line. If they have to work on a Free Day, then on a work day, they get another Free Day. Okay, and that's guaranteed to everybody. And you shouldn't be working late. You shouldn't be working on weekends because my sense is one of two things. You're not capable.
 
Shannon Waller: Good point.
 
Dan Sullivan: Or two, it's a badly designed job and teamwork. And I prefer to look at the second one before I look at the first one. So you should be able to, you know- and when you're working, be completely committed. And one of the guarantees for that is that we're not asking you to do things that you're not good at. We're not asking you to develop capabilities where even if you develop them, you're not that great. So we're very, very careful at the beginning, get the right people in the right spots and get them all working in a very, very clear cut teamwork that everybody knows what everybody's doing. There's no infighting. Well, that's my job and that's your job and everything else. Get everything really clear. But again, get it clear right from the beginning. It's hard to correct if you've made a mistake at the beginning.
 
Shannon Waller: Yes, it's much harder to correct later on, get it right at the beginning, absolutely.
 
Dan Sullivan: Put all the effort in getting it right at the beginning.
 
Shannon Waller: I love that. So Free Days, making sure people are in the right spots, getting them right from the get-go. And I think you're right, Dan, like people knowing the expectation is you can get it done in 35, 40 hours a week, that you can end at five. And if it's not, then there's something wrong with the job, with the teamwork, with the process, not necessarily with you, because we've got it right at the beginning. Those are great three things.
 
Dan Sullivan: And I think the other thing is we've really been tested. You know, during the COVID years, we were really tested. that people could be in great Unique Ability Teamwork not being in the same space, that they could use Zoom to be really, really effective. And I think it's because of our basic principles that we were able to accommodate virtual work, virtual learning as we are, because the same rules apply to the virtual situation. If you make the job right and you got the right people, people take total ownership for the work and they'll work it out how it's going to be done. If you have a pandemic type challenge, as far as I can tell, I think we've done a really good job and we've made some adjustments too that we have to have special meeting days to make sure that everybody feels part of the team. They're connected with the mission of the company and everything else. But that's being in charge. That's not being in control. That's being in charge. You created the context for this discussion about Self-Managing Company. But the self-managing has to be built in from the very, very beginning. And I would say the third one, and I'm a master at this, I'm not a rescuer.
 
Shannon Waller: Right, very true. Talk about what, what does that mean to you?
 
Dan Sullivan: Well, something's not working, I'm not going to rescue the situation and insert myself into the situation. Okay, let's get it all together here. Because what I've done is I've disenabled all the existing leadership in the situation. And I would rather them go through a failure and then regroup and work it out. You know, what worked, what didn't work. If we were doing it again, the Experience Transformer approach, because then they get stronger, they get smarter and they take greater ownership of the situation without any involvement on my part.
 
Shannon Waller: Dan, the other definition of in charge that I really like to use is charging up the company with energy. Can you reference that too?
 
Dan Sullivan: Yeah, charge has an electrical definition. The other thing is I think our company has a great vision about where it's going to be. And I have one that 20 years from now, when I'm a hundred years old, we're going to have 10,000 entrepreneurs in the Program. And those 10,000 are all going to have what we call Free Zone skills. So we have three levels of the Program now. We have Signature, we have 10x, and we have Free Zone. But more and more, the Free Zone, which are the most advanced of the Strategic Coach clients, they are the people with the most Self-Managing Companies. They have Self-Multiplying Companies, and it's the thinking of that top level that's being sent back to the first level and being sent back to the second level. So that more and more, 10 years from now, 20 years from now, when the kind of coaching they're getting when they join the Program and the kind of progress they're making 10 years from now is equal to the progress they're making at the very top level.
 
Shannon Waller: Wow. I love that vision. Free Zone, if anyone's not clear, is free from competition. It's all about collaboration versus competition. And having just spent lots of days in Free Zone.
 
Dan Sullivan: And I think if someone says, well, who's your Strategic Coach? Who's their competition in the marketplace? And I said, If I'd given any thought to it, I might have an answer for you, but I haven't. Probably it's been 25 years since I even had a thought about who's competing with Strategic Coach. I know they're not operating it. I don't care who they are out there. I know they don't have the kind of organization that we do. So I have tremendous confidence. I'm so confident about our organization that I don't have to think about any other organization.
 
Shannon Waller: Which frees up a lot of mental energy for creative people.
 
Dan Sullivan: I'm a Freezoner.
 
Shannon Waller: Exactly, you're a Freezoner. I love it. So Dan, some of my takeaways for this is let your ideas play out, give them room to breathe, have confidence in them. We keep learning the leadership structures to kind of help reinforce those ideas. Get it right at the beginnin, I think, is really powerful. Make sure that people know what their working hours are and that Free Days are really important so that they can be rejuvenated and never get tired, as we talked about in our last podcast, and charge up the organization with your context and with your vision. And that's what people rely on you for as a leader, which I think is just a really key point. The one other thought that comes to mind to me in terms of having a Self-Managing Company is, especially when you start with Unique Ability as you did, people become self-managing. Unique Ability without a vision, without a goal, can go anywhere. It's not necessarily going the direction you want. But when you've got clear goals and targets to hit for and a vision to accomplish, people are very, very self-managing. It's when they're not doing what they're great at that requires a heck of a lot of hands-on. So it makes sense to make that investment at the beginning that you were talking about. Any other practical takeaways for people who are kind of like, still got that death grip on wanting to control things? Any other words of wisdom to help them realize that they're in charge, not in control? And that's okay to be ignorant of certain things.
 
Dan Sullivan: I think I'm a confident person. I think one of my confidence is not so much that we'll always succeed, but when we fail, we'll actually transform ourselves. And I'll play a part in that, but everybody else in the company will play a part of that. But I think the big thing for me is that I don't like thinking about business when I'm not working. I like sleeping through the night without thinking about business in the middle of the night. And when I'm on Free Days, I don't want to be thinking about what's going, you know, and it's a growing skill. I mean, if you had tested me on this 25 years ago, I wouldn't be as confident about it, but we have 25 years of it working. So, you know, I have a confidence that it'll work more and more in the future.
 
Shannon Waller: And to your point, you now know it's real because they can operate independently of you. Just such a great point. Awesome, Dan. I love it. Thank you for sharing your mindset.
 
Dan Sullivan: Make sure everybody has that hot meal before they go to bed. Make sure they got clean socks in the morning and unlimited bullets marching forward.
 
Shannon Waller: Great words of wisdom. Thank you, Dan.
 
Dan Sullivan: Thank you.