Business Operating Systems for the Auto Industry with Preston True

[Transcript]

Jan Griffiths: 00:08

Welcome to the automotive leaders podcast, where we help you prepare for the future by sharing stories, insights and skills from leading voices in the automotive world with a mission to transform this industry together. I'm your host, Jan Griffiths, that passionate, rebellious farmer's daughter from Wales, with over 35 years of experience in our beloved auto industry, and a commitment to empowering fellow leaders to be their best authentic selves. Stay true to yourself, be you and lead with Gravitas, the hallmark of authentic leadership. Let's dive in.

Jan Griffiths: 00:58

Hello, and welcome to another episode of the automotive leaders podcast. And today, we have a special episode. Every once in a while when I'm interviewing a guest, they will say something that triggers me that makes me want to go much, much deeper into a particular subject. And today is one of those episodes. And when I interviewed Mary Buchzeiger, CEO of Lucerne International, she said something that intrigued me to no end. And this is a quote from her interview. And she said, our business has an operating system. And we use this framework to really help build our vision to make sure that we're all rowing in the same direction in the same boat. And we all know exactly where we're going. And so we explored that on her interview. And what surprised me was that she has been working with a system that I typically would think that's more associated with a small business and an entrepreneurial business, because let's face it, that's the space I'm in right now. And I couldn't understand how not only had she had success with this system, but she has stayed with it. And she uses it to this day. And she is certainly a decent size automotive supplier. So, I wanted to go deeper. And we reached out and we contacted the actual coach that Mary used in her business. And his name is Preston True. And he is with us today. Preston, welcome to the show.

Preston: 02:34

Hey, Jan, Thanks so much for having me with you today.

Jan Griffiths: 02:38

So Preston, tell us, what is it about the system that I associate with a small business with being an entrepreneur that can transition and scale all the way up to providing meaningful benefit to a decent size automotive supplier? Tell us what's the Magic there?

Preston: 02:59

Well, it will be terrific if it truly were magic, Jan, because then those of us like me who are in this business could charge an astronomical amount more than we actually do. The thing is, it's not magic, which is actually the best part about it. It literally is organizing your business into some fundamental functional components, and then going to work on each of those functional components to strengthen them. So, the size of the organization probably isn't as dependent on the type of organizing framework or business organizing system, as it is just the number of people involved, the number of decisions, the types of decisions that are involved. But fundamentally, a three person company, when it comes to organizing itself isn't really that much different than a 30,000 person company. There's just different flavors of the issues and different flavors of the opportunity, but fundamentally, really boils down to a few core components that you want to strengthen. And that was certainly something that Mary shared in her podcast with you recently about how she used a system like that to strengthen those core components.

Jan Griffiths: 04:12

The audience right now is rolling their eyes, right? And they're going What do you mean, a three person business is the same as my business. It's nowhere near the same. So, audience I know you're doing it. I can't see you. But I know you're rolling your eyes right now. But don't worry, because Preston is gonna go a few levels down and explain what that is all about. And before you do press and one of the other things that really caught me was it's about this idea of working on the business and working in the business because so many of us right now in the auto industry, we're down in the weeds, right? We're gonna get so many crisis issues, whether it's supply chain chip issues, logistics, you name it, right coming at us, and we have a hard time getting our head out of the weeds. Give us those components that are the same whether it's a three person business or a large supplier, and why they're so important,

Preston: 05:06

I'm going to at the risk of oversimplifying components, I'm really going to boil it down to three. But I'm going to use some examples because there are frameworks that are available to all of us in business in the marketplace, some fantastic frameworks. I've found over the last nine years of being in the business operating system world, is that it really boils down to people, process, and priorities, it doesn't really get any more complex than that. Now, a system that I'm very intimate with currently, looks at people looks at purpose, people like finding the right people, getting them in the right seats. So cultural fit and productivity fit, purpose, having a clear vision for the future, but most importantly, having those that make decisions and then everybody else be aligned on that vision, like all moving in the same direction, playbook or process, making burgers, fries and milkshakes the same way every day, no matter what day of the week, or who is making those things. Performance, how do we actually have a communication cadence that has us check in and make sure that we're on the same page and have metrics and measures that tell us we're making progress on a regular basis? And then lastly, the fifth one in my world is profit, like how do we not just put more money in the bank? But how do we develop greater capability over time, I believe capability is one of the best definitions of profitability any organization can have. So going to work on strengthening all five of those is the work that I've dedicated myself to. It's certainly something that Mary shared with you. I want to back up for a moment. And again, if I step on some toes with the listeners, I apologize.

Jan Griffiths: 07:00

Oh, no, no apologies necessary. Step on all the toes you want. We're raw and real here. Don't worry about it.

Preston: 07:05

Love it. Thanks, Jan. One of the most common statements I hear, almost a declaration. Jan, here's the thing. We're unique. Our business is different.

Jan Griffiths: 07:22

Oh, it's so true. Yes.

Preston: 07:24

So, I completely understand the intent. But what I've discovered, I'll start with a real bad news first, and then I'll back back into how that's an opportunity. The real bad news is, fundamentally, that's nothing more than a justification for underperformance.

Jan Griffiths: 07:44

There it is.

Preston: 07:45

I have worked with well over 150 organizations the last nine years, they have all said to me, yeah, but we're unique, or we're different. The thing is the reason they're saying it turns out the exact same every single time. We just don't want to do the heavy lifting required to make ourselves stronger, faster, and smarter. And it means making difficult people decisions, it means getting ourselves out of businesses we probably shouldn't be in, it means we need to make more challenging, or rigorous requests of our clients or customers of the suppliers or vendors that we have. Unfortunately, there's a bunch of hard work that needs to be done. And I hear that a lot. I'm just gonna say it up front and say it's 99% of the excuse. Now, how do we leverage that as an opportunity, if we can get beyond that idea that we're unique and we're different. We actually can get healthier, or in my world I like to call become a more fit organization a lot faster, because we really can dumb things down to three to five components of the business people process priorities, or profit and purpose put those in as well. It's not complex, and it's definitely not rocket science, which means it's accessible by anyone in any size organization.

Jan Griffiths: 09:11

And that's so refreshing to hear. And first of all, you know, on this idea of it being unique. You're so right. I can't tell you how many automotive companies I've worked for all think the industry. Oh, but we're automotive. They don't they don't understand this, that. And then this the Oh, and we Company X way unique because we're XYZ, you're absolutely right on with that statement. I couldn't agree with you more. During my career. I've worked with so many different operating systems. Throughout my entire career over 35 years in this industry. It's the simplest things that are the most effective. And you you say dumb it down and people would go, Oh, they might take offense to that goal. But yes, because you've got to get a whole crew of people on board with your idea. So the simpler the process, the simpler the idea, the simpler the purpose, the better.

Preston: 10:03

That's where, over the last nine years, Jan, I've, through my own experience and own journey, frankly, because I have been blessed with much success. Over the last 20 years of being in the coaching, consulting, strategic guidance business. I've also had some really, really dark moments where I have not eaten my own dog food, so to speak, and I have gotten completely off track and it has not turned out well. That's not to say that I've experienced every possible scenario that a an organization or a leadership team would experience. But it is to say that, yes, I've gotten a tooth knocked out. And I've gotten my my shins scarred up, as well. And if I go back to the beginning, at the risk of oversimplifying that people, priorities and process those three P's, maybe a different way to look at the PPP, that we have been experiencing the last few years, is that I always start with the people. Like fundamentally, I have got to have the right people in the right seats. Now, what does that mean? Right people, their culture fit, cut, what's what's culture fit mean? It means they're actually humans, who wake up each day and make decisions based on a small set of core values or guiding principles. And whether they're in your company and working or they're out of your company with in the rest of life, they actually wake up and live their lives through those guiding principles. Here's why that's so valuable. When times are great, I want to have a strong team behind me. But especially when the storms arrive, I absolutely want people who will stick by my side who aren't going to go off on another tangent and the productivity piece, the second half of that equation, the right seat. So I've got to have a clear definition of structure for my business. So if you think of an organizational chart, we look at things a little bit different. We look at it more as like, how does business actually flow through your system? How does it transaction flow through your system? Well, last time I checked, no matter what kind of business you are in, no matter what size there's three components of kind of the the operational pipeline, you get work, you do work, and you get paid. I mean, it's really that simple. So its sales, its operations. And its finance, we could simplify it that way. Making sure we've got crystal clear expectations structurally, is going to lead to that right seat components. So when I have right people in the right seats, and I believe Mary even mentioned that there was some overhaul in some changes that she made to her leadership team. And that's exactly what she engaged. And she realized, you know what, we've got some really amazing people, they're just not in the right functional seat, and I need to coach them up, to perform better in a seat, perhaps move them to another seat they are better fit for, or sometimes coach them out of the organization, because there just isn't a place for them. So that's one that I will always overemphasize is making sure Jim Collins has said in his good to great book, you have to get the right people in the right seat on the bus, then let's figure out where that bus is going. I'm of the opinion, I want to do both simultaneously. I don't want to be driving aimlessly. However, it's so important to make sure we've got those those right people, the here's the thing, I'm going to take it back to the on the business versus in the business. The number one reason leadership team members are sucked into the day to day operations is because they haven't done the sometimes difficult but absolutely necessary work of really dialing in to ensure they've got the right people in the right seat. In other words, if I'm not doing my job, Jan, and you have to do my job for me as my manager, like you, I'm bringing you right into the weeds of my role. I'm costing the business an enormous amount of money. And probably most dangerously, I'm robbing you of the time to work on the business.

Jan Griffiths: 14:27

Oh, hold it, hold it. You know, as I think back on my career, I can't tell you how many times I've seen that happen, where you've got a director operating as a manager, and you've got a vice president operating as a director, and you've got a CEO in the weeds, doing all roles getting down into the nasty stuff. Well, I'll just be honest and tell you in my last role, I was judged because there were occasions when I would not get on the calls and get down into the weeds, I would support my people before the call and after the call. Because when you get on a call as a vice president, and you're right down into the into the detail, then it becomes a conversation between three vice presidents with 14 people listening. And usually those calls aren't nice. They're tearing each other apart. And what good is that that is not leadership?

Preston: 15:25

No, it's micromanaging bad behavior. And not that it's malicious behavior. It's just not the right behavior that's going to lead us to results. When you think of priorities. We talked a little bit about people a moment ago, when you think about the priorities of what's most important. There's a few different versions of that I know, Mary mentioned her framework that she use a business operating system can help really clarify that vision what Lucerne, like, who they wanted to be and what the impact they were gonna make on the on the marketplace? Well, you're walking back from the future back to today, the process that, by the way, this is why there's no magic in this whole process is that it's really just reverse engineering. I want to ask the question, what do I need to do today? That's going to give me the result that I want 10 years out? So how about we just create a big, hairy audacious goal? Be heck, but I like I like I love 10 years, far enough out that I've got room to really be bold, but not so far out that I can't see it, or even even kind of taste it. But then I want to back into three years. What are what are the first 30% Basically, that I need to get done over the next three years that will give me that 10 year goal. And then one year out? What's the first 33% of my three year vision I need to accomplish this year? And then 90 days, what's the first 25% of each of my annual goals. I literally can back into what's my priority this week, based on project planning a 90 day goal. So here's the thing, I have confidence that this week, I'm spending at least some time, maybe it's 10%, maybe it's 15% working on my business, that's going to help me deliver on a 10 year goal out there in the future. So a lot of times we have those calls that you just mentioned, because there's simply a lack of clear vision of where we're headed. So rather than getting upset at people for not doing something that they should have done, or for doing something they should not have done it I don't have any context for does that behavior, get us closer to our goals? Or does it take us away, then that's probably a lot of wasted time and a lot of wasted emotion and upset that we didn't need to have.

Jan Griffiths: 17:52

Absolutely right on. When you say you're working on the business, and you're working on strategic initiatives, you're keeping that line of sight to where you want to be one year, five years, 10 years from now, in a lot of automotive companies, that's a strategic planning meeting, strategic planning session, and they may have it once a year, twice a year, maybe even once a quarter. But what tends to happen is they talk about it in the room is a nice PowerPoint presentation. And then, they forget about it until the next meeting, and then everybody's scrambling a week or two before the next meeting to try and update the PowerPoint and show like they actually did something. That's landing with my audience right now I can tell you. But Mary, has managed to figure out how to keep the Strategic Initiatives top of mind and to keep them alive and well. And it's this framework that you have that allows her to do that. Tell us please, how do you do that?

Preston: 18:53

So there's a few components. I'm gonna explain three of them. So there are so many complex plans that I've seen. And I want to distinguish something, there's a business plan that I might present to investors, there's a business plan I might present to a funding organization. Then there's a business plan that I want to communicate to my operational team that's going to deliver on the work that needs to be done for us to succeed. I want to keep those worlds very different. So, investors, finance, your plans I would create there. I think it's absolutely appropriate to have nitty gritty detail, like all the weeds of everything that we need to have to satisfy the requirements for investors, for financiers. However, when running day to day operations, I don't know if everybody needs to have that much detail. So actually want to have a really simple plan. One thing Mary did really well is she dumbed down what we might consider a strategic plan, which meant it's two pages, it's the core initiatives are what we need to be working on in the context of 10 years, three years, one year in 90 days. But like, that's just the compass that we needed to make weekly, and even day to day decisions on. So having a really, really simple plan. That's clear, that simple, and it most importantly, can be understood by anyone in your organization. I had one client manufacturing company, quite large one whose CEO said, reason we're implementing a business operating system. I want the person who's sweeping the floors in our most distant warehouse to know exactly why this business exists to know exactly what our core values are to know exactly what our 10 year goal is, down the road. If that's the case, then I know everybody is on the same page. Second, having a simple and regular meeting cadence. So what one thing Mary did is she employed a weekly tactical meeting, I believe she called it a level 10 others. As I mentioned, there's a few operating systems out there, Eos, the Entrepreneurial Operating System is a great one. There's pinnacle, there is gazelles scaling up great game of business are some wonderful programs out there that will have many of these tools. But one of the things that she employed was this weekly meeting where we would review the strategic priorities. Those are the 90 day goals, we'd review our scorecard metrics, the core behaviors that communicate progress each week for what's most important. And then an opportunity to solve issues and obstacles that are in the way. And if we're getting together as a team, finding out where are we on track with our priorities? How are we doing on progress with our metrics, and solving the key issues that are in the way? Well, we're going to be, we're going to be very clear, we're going to be very aligned, and we're going to be moving obstacles out of the way. The third is really this file called a functional ownership chart. It's an organizational chart on steroids. It's different, it does not communicate. I'll call it title or authority, it communicates the core functional structures. What is most important, like how if we were going to start a brand new business together, Jan? And we know there's a sales component? How would we organize that sales function? We know there's an operations production or delivery component? How would we organize that? We know there's a finance, accounting, information technology component? How would we organize those and making sure that we've got absolute clarity on the organizational structure because that leads to crystal clear expectations? I believe I need to give this quote, attribution to Dan Sullivan, a gentleman that runs an organization called Strategic Coach. "The root of all unhappiness is uncommunicative expectation." And so when you think of it, like if I'm unhappy, there's always expectation, but it hasn't been communicated. So those three things, simple strategic plan, regular weekly meeting cadence, and a functional ownership chart, create absolute clarity of expectations throughout the organization.

Jan Griffiths: 20:36

I love how simple that is. I realized that in practice, it's not that easy, keeping the basics, the basic fundamentals of the business in front of you. And then we come to this idea of execution and holding people accountable. And Mary said, and I quote, our team holds each other accountable. Okay, how Preston, how do you do that?

Preston: 23:49

Two things come to mind. What one of them I promise is not a rubber mallet on the head. That doesn't work.

Jan Griffiths: 23:57

Oh come on. We like that in automotive, we have to beat people up.

Preston: 24:01

I should back up and rephrase that because Mary did say she's got her foam animals on the table for her weekly meetings, in which case, sometimes they end up being projectiles. Fortunately, they don't have sharp edges in there. They don't hurt. But they're a great example or analogy of, of what might not be working in a conversation. But there's a few things. Number one having metrics. So let's say you hire me to put me in a business development seat. I'm charged with let's say $5 million of annual sales, the annual goal that I'm ultimately accountable for the sitting in the in the business development seat. Well, what are the two core behaviors that I can exemplify each week that will help produce those sales or revenue goals? So it's one thing to measure the revenue but that's a lagging indicator. You're going to want to say Preston, hey, here's to behavior. So let's say it's quotes and purchase orders. And, in if we can track that on a weekly basis, we have a weekly goal in those weekly goals, give us or deliver on the annual goals that we're looking for for revenue. You and I are on the same page. Like, Preston, where do you need to be spending your time? If you're going to organize your week organize it. So you invest in that behavior first, then handle everything else second, when you come to a weekly meeting, which is the second component of holding folks accountable, you're going to review that along with me. How Preston due on his quotes metric for the week and his purchase order metrics for the week. Jan, it's funny. Peer pressure works. So, I show up, and I'm knocking it out of the park against my weekly goal. We're all celebrating. I show up and I'm not knocking it out of the park on my weekly goal, I'm a falling behind. You can immediately step in, and say, Preston, what support do you need? Are you distracted by something? Do Is there some training involved? Like let's figure out how to solve this issue. And because of that weekly meeting cadence. And that's one thing that clients have a knee jerk reaction. What? You want me to do you want us to get into another weekly meeting. Here's the thing. Last time I checked, when I flew from Detroit to Tampa, that plane did not fly a completely straight line. It was the flight was literally nothing but a series of small course corrections in staving off gravity. Like that's how we made it to Tampa. So think of it this way each week, if we course corrected this team, there's an opportunity to hold one another accountable. Because we have the metrics, and we have the conversation. And we course correct every seven days, on our way to fulfilling on our vision.

Jan Griffiths: 26:47

There's a few things that come to mind there with what you just said. And that is, there has to be a safe environment in which to operate. There has to be transparency to those metrics. And there has to be trust. In so many organizations, if I'm missing my metric, I don't want to tell you because I don't want you to jump on me. So if I can delay it, or even worse, if I can blame somebody else for it. That's some of the culture that's that exists out there today. It takes a very strong leader to create that environment of psychological safety, and also promote trust. And to promote this idea of what can we do as a team to help you. It's a very different discussion than we see going on in a lot of companies today. If you were to describe some traits of a successful leader in the auto industry, because you've touched several auto companies for the future, knowing that our organization has gone through tremendous change and transformation right now. What are some of those leadership traits, Preston?

Preston: 27:55

I'm gonna boil it down to three. And I'm going to use one that Mary used in her podcast with you, I believe she chose resiliency. And that is one, I'm going to share how I interpret it. It's not just like, I can weather each quarter, or I have the stamina to do great work over long periods of time. It's actually in that moment, Jan, you and I may have a disagreement, in which case, I can actually not fall victim to all the stories that are being manufactured in my mind about well, Jan doesn't like me anymore, or oh my gosh, is my job in jeopardy. Right? It's like you're offering me feedback, it might be a little tough. But I have the resiliency to bounce back from my story that's going over and over in the back of my mind to say, oh, no, I need to be present with Jan, she's offering me feedback, what a great opportunity and a gift. Now, for me to interpret it that way. We absolutely have to have two things present, empathy for one another. So think of it this way that when relationships go sour, it's almost always because there's a lack of empathy. In other words, just having empathy for the humanity of one another. Like, last time I checked, I'm not perfect. And although most days I wake up convinced I am my family tells me otherwise very quickly, that I need to have empathy for the imperfection of everybody else around me, for my teammates, for my clients, for others in the marketplace. If we have empathy for one another practice empathy, meaning I actually care about you and I care that you win. I care about helping you win. Like that's about as simple as I can express empathy. Lastly, is the challenge. I could call it maybe feedback. And that feedback is, you are willing to actually offer me an opportunity to be better in the next moment than it wasn't the last moment. And imagine if we did that with one another, we're consistently challenged each other, not to just be better generally. But say you have a goal, you have a desire, you are working on a development plan in some fashion, or you're working on a project, how can I help you and challenge you to be better at what you're doing in the next five minutes than you were the last five minutes. So when you think of resiliency, when you think of empathy, and you think of challenge, I want all leaders that I work with to have those three core traits to really help grow their business.

Jan Griffiths: 30:49

That's so true. Well, Preston, whatever you did, at Lucerne International, it's working. And what strikes me is that Mary is staying with this operating system, it is working for her she is getting the results. And I absolutely love that and you've opened my mind in hopefully the minds of our audience as to a simpler, more effective way of running your business. And for that, I can't thank you enough for your time today. Thank you for coming on the show.

Preston: 31:24

Jan, this has been an absolute treat. Thank you.

Jan Griffiths: 31:32

Thank you for listening to the automotive leaders podcast. Click the Listen link in the show notes to subscribe for free on your platform of choice. And don't forget to download the 21 traits of authentic leadership PDF by clicking on the link below. And remember, stay true to yourself, be you and lead with Gravitas, the hallmark of authentic leadership.