Does implementing more processes in your business cause less flexibility?
The answer may surprise you, and it’s part of the discussion host, Terri Hoffman has with Rusty Smith. Rusty is a seasoned EOS implementer, and they discuss stories of companies that underwent pivotal shifts, from market expansions in sewage treatment technology to strategic pivots in the rubber industry.
Terri and Rusty talk about the necessity of adapting to change and the incredible value of structured systems like the Entrepreneurial Operating System (EOS) in driving flexibility and fostering team-driven success. Terri shares how she had her own reservations about EOS, but the experience has been transformational in her own business.
Rusty also discusses how, although transparency can be terrifying for business owners, it can be significant in creating a thriving company culture. They also discuss how prioritizing B2B marketing, even on a tight budget, can become a much easier exercise when EOS is implemented.
If you’re interested in learning more and connecting with Rusty, visit: https://www.thecenter4growth.com/.
To connect with Terri at Marketing Refresh, visit: https://MarketingRefresh.com.
Key Topics:
- The Success of Technology in Different Industries
- The Power of Adapting to Change
- Discussion on Entrepreneurial Operating System (EOS)
- Challenges in Business Operations
- The Power of Transparency in Business Finances
- Overcoming Business Obstacles and Change
- Setting Priorities in B2B Marketing
Full Episode Transcript
Terri Hoffman:
This is B2B Marketing Methods. I’m your host, Terri Hoffman, and I’m the CEO of Marketing Refresh. Let’s face it. Embracing digital marketing is daunting. This podcast was created to make it more approachable. Join us as we talk to CEOs, sales leaders, and revenue growth experts who will share lessons learned and tips from their own journeys. So welcome to B2B Marketing Methods. We’re very excited today to have a special guest with us.
Terri Hoffman:
He is not a VP of marketing and sales for a B2B company. He’s even better than that. He is a professional EOS implementer, and he’s gonna explain what that means in just a minute. But his name is Rusty Smith. Rusty, thank you so much for being with us today. Why don’t you start by introducing yourself? Yeah, you’re welcome. I’d love it if you could just start by introducing yourself and telling our audience what that means to be a professional EOS implementer.
Rusty Smith:
Okay. Well, EOS stands for entrepreneurial operating system. And EOS is a management process that really helps businesses get more of what they want from their business. And we do it basically with 3 things. Right? We call them vision, traction, and healthy. Vision from the point of view of knowing where the business is going and how you’re gonna get there. Traction in terms of getting everyone working with accountability and discipline in order to make the vision happen. You know, a lot of consultants will help you create a vision and a plan.
Rusty Smith:
But the hard part is actually implementing that plan built into our process is that discipline and accountability and healthy, meaning getting the leadership team to work in a healthy, cohesive fashion, because quite frankly, most don’t. Right. If we get the leadership team working in business traction and healthy, then so goes the rest of the organization. Ultimately, everyone in the organization knows where the company is headed – how they’re gonna get there. They’re working in a disciplined accounting and accountable way, and they’re functioning as a healthy cohesive team.
Terri Hoffman:
Right. Okay. Yeah. So we we actually implemented EOS at our company at Marketing Refresh last year, and I always joke to my team, nobody told me I was gonna have to mature and grow up before I started it.
Rusty Smith:
And actually do what I say I’m gonna do.
Terri Hoffman:
Right? Exactly. Yeah. It it has really transformed the way that we think and operate and function together, and I absolutely love the system, and I’m a huge advocate for it. And, I mean, really, one of the main reasons I wanted to have you on is because I can see such a clear connection between how we now think and operate as a company and how that connects to our own revenue growth strategy. And I was really excited about having you on so you can kinda educate our audience about that connection.
Rusty Smith:
Yeah. You know, one of the things, Terri, that you’ve probably learned in the program is one of the things we talk about is when companies are growing, they tend to hit ceilings. Right? And so something that’s worked in the past no longer works. Maybe it’s an employee, maybe it’s, software, maybe it’s the facility. Something happens, right, they hit that ceiling. Unless they could break through that ceiling, then they’re either going to plateau or worst case, they’re gonna start to drop off. If they can hit the… if they can break through that ceiling, then, you know, they’ll continue to grow. And one of those 5 leadership abilities is the ability to predict.
Rusty Smith:
Right? The ability to say, here’s where we’re going. This is our goal. And then put the plan in place to actually make it happen. And so that prediction piece is huge because if you just say, well, let’s just grow as fast as we want, right, then nothing’s gonna happen unless you have a plan in place to say, hey, here’s our target. Here’s how we’re gonna get there and then actually put the things in place to make those things happen.
Terri Hoffman:
Yeah. Yeah. Exactly. So tell me a little bit about the types of companies that you work with and, you know, everything from the size that they might be from employees to revenue to industries. Like, what is kind of the typical type of company that you help?
Rusty Smith:
So our sweet spot is really companies 10 to 250 employees. And the industry doesn’t matter so much. I mean, I work with professional services companies. I work with manufacturing companies. I work with healthcare companies. I work with – I have 2 healthcare clients. I work with distribution companies.
Rusty Smith:
And so the type of company doesn’t really matter in terms of the industry they’re in. The most important thing that does matter is that the leadership team is more afraid of the status quo than they are of change. And so it’s a mentality, if you will. You know, those that say, look, we’ve gotta stay on the cutting edge of our industry. We’ve gotta make sure that we’re developing our people. We’re developing our systems. And we know that that’s gonna be change. You know, those are the people that we like to work with or those that embrace change are willing to put the work in to make it happen.
So, it’s more about the mentality. We call it the psychographics as opposed to the demographics of the company.
Terri Hoffman:
Oh, man. I bet. I wonder too, like, do you see some common, maybe, challenges that they’re facing? And you mentioned a couple of them earlier, whether it’s hitting that plateau or maybe they’re even starting to see a decline. Are there just some common, maybe, symptoms that you encounter pretty commonly?
Rusty Smith:
Yeah. Yeah. So it’s interesting that you asked that question. The EOS model that we introduce people is one of the things that Gino Wickman, who developed the program way back when he said, look, there’s 130 something, you know, issues that companies are dealing with, but they all fall into 6 buckets. Right? Vision. Does everybody know where we’re going? And does everybody share in that vision? People. Do we have the right people in the right seats? Data, are we managing the company based on information or are we managing the company based on gut feel? Because a lot of entrepreneurial companies run their companies based on gut feel. So putting a scorecard in place, having metrics for everyone.
Rusty Smith:
Process, making sure you’re doing the same thing the same way all the time so that you’re delivering a consistent customer experience. You’re eliminating mistakes. It’s easier to onboard people. Process is a huge part of what we do. Issues, how you solve issues. And traction, meaning you’re communicating, you’re getting together, you’re collaborating with each other on a regular basis in a structured way. So all of the problems that you have, a lot of them are people issues. A lot of them are process issues.
A lot of them are data issues and so on and so forth.
Terri Hoffman:
Yeah. Well, being a digital marketer, I love data. And our company really that’s a big part of our company culture is making sure that we’re using data and research to guide our decisions as opposed to just being those creative marketers who kinda go off of colors and feelings and emotions. Right? Like, that’s definitely an important part of marketing, but the data and the digital marketing world is just it’s everything. Right?
Rusty Smith:
It’s huge. It’s huge.
Terri Hoffman:
Yeah. Yeah. Can you talk a little bit about that accountability piece of the pie and how you coach your clients on connecting that to their sales and marketing programs.
Rusty Smith:
Okay. So like I said, our process, the EOS system, has accountability built in in every stage of the system. Right? One of the things that we do in the very first meeting, that we do with our clients is build a scorecard. You gotta have a scorecard so that you’re tracking on a weekly basis how things are going. It’s kinda like the canary in the coal mine, if you will. And how that relates to marketing. Right? Many things on the scorecard. Yeah.
Rusty Smith:
You’re gonna put revenue on the scorecard. You’re probably gonna put some profit goals on the scorecard, but you better be putting some lead generation items on the scorecard as well. So, you know, I was talking to a client earlier this week, and one of the things that he said is their leads coming in dropped pretty quickly. Right? And they knew because they look at that scorecard every single week that they knew right away that their leads (incoming leads) had dropped. And so they immediately made some changes to their keywords and got those leads back up again. You know, most companies wouldn’t recognize that for 3, 4 weeks, you know, revenue. Hey. The revenue last month wasn’t that great.
Rusty Smith:
What’s going on? You know, so having that scorecard in place is crucial. The second thing, that builds that accountability into the system is what we call rocks. So every quarter, we set rocks. What are the 3 to 7 most important things that you need to get done in the next quarter? And oftentimes, as matter of fact, I would say, is the exception that you wouldn’t have at least one marketing-oriented rock on the list. Right? You’re looking at those rocks every week. Are they on track? Are they off-track? And then at the end of the quarter, are they done or are they not done? Right? So there’s accountability built in there. If that rock gets off track sometime during the quarter, right, then you recognize that, and you put in place the things that need to happen to fix it. Right.
Rusty Smith:
And so there’s weekly accountability in terms of getting those rocks done. And like I said, many of those rocks are in the business development area of the company. The third thing I would add is as you’re holding your weekly leadership team meetings and you’re solving issues, you’re reviewing your rocks, reviewing your scorecards, you’re constantly adding issues to your issues list. Right? And the discussion of those issues typically lead to to-dos. Right? Hey, marketing owner. Right? You need to go, you know, make this adjustment. Or the salesperson, you need to go call on this account or you need to go work with us.
Rusty Smith:
Whatever it is. Right? Well, those to-dos also get reviewed every week. Hey. Did that to-do that you took last week get done? So that accountability is built into the system. Every week in the level 10 meeting, you’re reviewing your rocks, you’re reviewing your to-dos so they get done, you’re reviewing your scorecard. Are you on track or are you off track? Every quarter, you’re setting those business development goals along with the other goals in the company, the financial goals, the operational goals, and so on and so forth. And then every year when we do the 2 day planning meeting, every year, you’re resetting, you know, your 1 year plan. You’re resetting your 3 year picture.
Rusty Smith:
You’re resetting all of those things. And obviously, business development marketing falls into all of that because if you’re not generating the leads that you need to drive your business, you’re not gonna achieve your goals.
Terri Hoffman:
Right. Exactly. So you mentioned a term called the level 10 meetings. Can you expand on that and explain what that is?
Rusty Smith:
Patrick Lencioni talked about this in his book, Death by Meeting. Right? People talk about having too many meetings every week. Right? It’s not that meetings are bad. It’s that bad meetings are bad. And so we have a process that we call a level 10 meeting that we have every week. And there’s a set agenda for it. We always insist that it starts on time, ends on time.
Rusty Smith]:
We have a set agenda for it. The first part of that meeting is all about identifying issues. And then the second part of that meeting, the first third is about identifying issues. The second 2 thirds of that meeting is all about solving those issues, assigning to-dos, putting a plan in place to solve those issues, once and for all. The reason we call it a level 10 meeting is the last part of the meeting is we review the to-dos that have been assigned, and we talk about any messages that need to go out to the rest of the organization that aren’t in the meeting. But we also write the meeting on a scale of 1 to 10. How effective was this meeting this week? And by effective, we mean was it a good use of our time? Because especially when we’re talking about the leadership team, you know, you’ve probably got the 4 to 6 most highly paid people in the company in this meeting for an hour and a half every week. It’s an expensive meeting.
Rusty Smith:
If it’s not an effective meeting, then we need to be doing something different. Right? And so we call it a level 10 meeting because that meeting being effective means we’re identifying issues and we’re solving them once and for all. That’s a good meeting. Right?
Terri Hoffman:
Right. Yeah. That’s, I mean, that is something that I really appreciated is the amount of structure and discipline that it brings. Mainly because sometimes you can get into those issues and there’s tension. Right? It’s there you have disagreements. You’re not on the same page, and those discussions can be so productive and helpful because you really start to understand why you’re not on the same page, how you’re holding each other accountable, especially if the CEO is in that meeting and the direct reports are in there. You know, I’ve noticed that it has. It’s really important for the people who are on that, like, VP level or director level to be comfortable professionally challenging the CEO so that it leads to, like, a healthy outcome for the organization. Right? But then the CEO has to be ready to hear those challenges.
Rusty Smith:
So so I’ve gotta ask you, Terri. Do you have the EOS toys?
Terri Hoffman:
No. I don’t know anything about this.
Rusty Smith:
So there’s a there there’s a toy kit. I’ll send you one, actually.
Terri Hoffman:
Okay.
Rusty Smith:
But there’s an EOS-branded toy kit. And in there are little animals. Right?
Terri Hoffman:
Okay.
Rusty Smith:
One of the animals is an elephant. Right? Are we addressing the elephant in the room? Mhmm. Right? 1 one of the toys in there is a cow. Alright? Are there any sacred cows that we’re not talking about? Right? That we’re awarding talking about. Right? There’s a squirrel, of course, squirrels for tangent. Right? There’s a horse. You know, are you beating a dead horse? Are you starting to repeat yourself right when you’re solving problems? You know, say it once. Don’t don’t keep repeating yourself over and over again.
Rusty Smith:
You’re beating that dead horse. And then the last one is the bull. Right? And you can guess what the bull is for.
Terri Hoffman:
Yeah.
Rusty Smith:
You call B.S. on someone. Right? And so I’m gonna send you a set of the EOS toys.
Terri Hoffman:
I love that. I mean, you just hit on so many kind of unhealthy and unproductive things that happen in meetings, every type of meeting, but especially leadership meetings that don’t get you to the place that you need to get to actually take action and make progress. And I love that. And make putting a little humor on it always makes it a little bit more palatable and kinda breaks the tension.
Rusty Smith:
My clients. Yeah. They’re they’re old rubber toys. Some of my clients throw the toys at each other. I’m like, don’t throw the toys. Just hold them up. Right?
Terri Hoffman:
Yeah. We don’t taking it to the next level there. That’s like a level 25 meeting. That’s not level 10 anymore. Oh my gosh. Well, what are like, as it relates to you know, since our podcast is designed to help people who are in marketing and sales roles really understand how they can connect that to business value and what some of the challenges are in doing that. Like, what are one of the biggest things that I think the B2B market in general struggles with is how do I set priorities with my sales and marketing programs? Right? There’s nobody in the B2B world other than, like, a 100 or so companies has a $200,000,000 marketing budget to do all of the things they need to do. Right? And so most small to midsize businesses have to have a way to set priorities.
Terri Hoffman:
And I want to hear your thoughts on how you coach your clients in setting those priorities and figuring out what the right path to the solution would be.
Rusty Smith:
So the priorities really comes down to what we call the rocks. And I mentioned the rocks a little bit earlier. Right? So every quarter here, we get together and we say, what are the the 3 to 7 most important things that need to happen in this company in the next 90 days? Right? And the sales guy on the team, you know, he always will say, oh, well, my rock is to hit this revenue target. No. That’s your goal. That’s your job. Right?
Terri Hoffman:
Mhmm.
Rusty Smith:
What are you going to do to hit that revenue target? Right? And so it’s it’s activity-based. What are the things that you need to do to hit that revenue target? And the marketing people are the same way. Right? What are the 3 to 7 most important things that you’re gonna do this quarter, right? In the next 90 days to hit the revenue targets or to generate the leads that you need to generate or whatever. So it may be our marketing person is great, but they don’t know one thing about digital marketing. Hey. You need to go out and hire Marketing Refresh or, you know, we need to put on an event or we need to whatever those big priorities are that are going to help you generate the leads that you’re gonna need for to hit your revenue target–are the things that turn into rocks. Right? The other piece of it is, you know, I mentioned earlier when I talked about vision traction and healthy, is that healthy piece, right? For the business development person or for that matter for the operations person or the finance person, you know, in the company to sit and think about their priorities in their little world.
Rusty Smith:
Right? It’s not the most efficient way to actually talk about it as a team and say, hey, what do we as a team, as a leadership team think the finance goals are for the quarter? What do we as a team think that the operational goals are for the quarter? And then what do we as a team think are the, you know, marketing and sales goals for the quarter? Right? Yeah. And so get the team to work on it as opposed to, you know, sit in your little silo and come up with your priorities yourself because then no one’s gonna be holding you accountable. You may be setting priorities that aren’t supporting the overall goals of the company. Whereas if you do it as a team, approach, you know, it’s it’s gonna be much more effective, and you’ve got the accountability piece that’s built into it as well.
Terri Hoffman:
Right. Yeah. So in the companies that have our higher, number of employees, like the 100, 200, 250 employees, do you then see that same concept carry down into their different departments? And do you work on departmental rocks?
Rusty Smith:
Absolutely. So Okay. So we always start with the leadership team. Right? And we, you know, some of the clients wanna be very proactive in terms of pushing the system down. What we say is our role in any EOS session that we do with the client is we have 3 roles. We’re teacher, facilitator, and coach. Right? We’re teaching the system to the leadership team. Right?
Rusty Smith:
We’re facilitating their conversation, and we’re coaching them through the rough spots. Right? Now when you have a larger organization, you wanna start doing you know, you wanna start pushing EOS down into the organization. Right?
Terri Hoffman:
Mhmm.
Rusty Smith:
And so the members of the leadership team are now going to have to become that teacher, facilitator, and coach.
Terri Hoffman:
Okay.
Rusty Smith:
Got it. You need to be using the system for at least a quarter or 2 before you know, so that you’re familiar with the tools, you’re familiar with how it works, you’re familiar with the flow, and then you push it down to the next level. And then for a large organization, once they have used it for a quarter or 2, then you push it down to the next level. Well, what do we mean by push it down to the next level? What we mean is so, you know, on the vision piece, everybody’s probably gonna have the same vision. Right? You’re gonna have the same core values for the company. You’re gonna have the same long-term targets and so on and so forth. But every every division or every department in the team can have their own scorecard. Every department in the company can start having their own rock setting every quarter.
Rusty Smith:
Right? Yeah. Ultimately, what we wanna get to is where everyone in the company has 2 things that they’re responsible for. 1 is we call it immeasurable. So we talk about that scorecard. So you have a departmental scorecard. And ultimately, everybody in a 200-person company. Right? Think about this. A 200-person company. If everybody in the company has at least 1 rock every quarter. That’s 800 things that are getting done every year.
Terri Hoffman:
That’s a lot. Yeah.
Rusty Smith:
That’s a lot. And some of them, you know, when you talk about low-level rank and file employees, it might be clean up this area of the warehouse. Right? It might be repaint the safety stripes in the you know, for the forklifts running through the factory or whatever. Right? And so it may be something that is at a different level from what’s happening at the leadership team level, but it’s ultimately making the company safer. It’s making the company more efficient. It’s making the company a better company. It’s making the company more profitable, really.
Terri Hoffman:
Right. Yeah. But it it sounds like you’re able to then draw a really clear line between how a rock for a frontline employee connects to a measurable
Rusty Smith:
Absolutely.
Terri Hoffman:
That is important to the company.
Rusty Smith:
And so what tends to happen is the members of the leadership team will take a rock. Right? And then they’ll go back to their team, and they’ll say, hey. Here’s the rock I took for the leadership team. You know, one of the things I always tell my clients is when you take a rock in the quarterly meetings, right, you’re taking the responsibility for making sure that rock gets done. You’re not taking responsibility for doing it. Right?
Terri Hoffman:
Right.
Rusty Smith:
Because you’re gonna probably take it back to your team and say, okay. I took a rock at the leadership team level for this quarter. How are we as a department gonna get it done?
Terri Hoffman:
Mhmm. Yeah. Yeah. It’s so one other part of EOS that we haven’t really talked about yet, but you’re very transparent through this process. Right? Not you as the teacher, facilitator, coach, but as a company, you are very transparent with the whole team and that can make you feel a little bit uneasy as a leader, but talk about that.
Rusty Smith:
I wanna tell you a funny story. So one of my clients that I have been working with now for, several years, I think they’ve been with me 3 years. The first time we… so our process is that we do what we call a 90-minute meeting to kinda get everybody oriented, and then we do a focus day. Right? And one of the things that we do in that focus day is that we set the 1st set of rocks. And on the rock sheet, as you know, but maybe some of your audience members don’t know, the first thing on the rock sheet is target date. Right? Revenue target, profit target, any other key measurables, and then your 3 to 7 rocks.
Rusty Smith:
Well, the owner of the company was a family business. The owner of the company got really nervous when we started talking about this. And afterwards, he took me aside. He says, I have never shared revenue and profit with anybody in the company before this. He said that caught me off guard. That was something I wish you’d warned me about beforehand. So now I do warm up. I said we’re gonna do that from now on just to make sure.
Rusty Smith:
But he was very–he played the financial part of the business. He played very close to the chest. Right? But with with EOS, it’s transparent. Right? Here’s the target. Here’s the goal.
Rusty Smith:
Here’s what we’re all trying to achieve as a company. One of my clients set a goal for his company. He said, if we achieve a certain amount of EBITDA in 2023, I’m taking everybody as the guest on a cruise. And he has about 40, 45 employees in this company. Right?
Terri Hoffman:
Okay.
Rusty Smith:
And he invited some of his key advisors. So I got invited. And so I’m going on this cruise in about a month with them. But he basically said, hey, team. If we hit this EBITDA number, this earnings number, right, I’m taking everybody on a cruise. And so everybody in the company was focused on it and they did it. And so everybody’s going on a cruise at the end of March.
Terri Hoffman:
Well, that’s awesome. I mean, he sounds like a very generous person too and understands how to motivate people as well. But, you know, I wanna dig into that topic of transparency a little bit more because I think there’s–it may be obvious what people’s fears would be in being more transparent. For example, wow. Now everybody is going to know what the company is making. Jealousies could form. Resentments could form. Judgments could form.
Terri Hoffman:
But there’s also a positive to that. Like, the cruise is a positive outcome, but talk to me more about how that impacts the company culture when you’re more transparent.
Rusty Smith:
I wrote an article actually a couple of years ago now, and the title of the article is the boss must be getting rich. Right? And so it talks about profit. Right? And some people find talking about profit to be a taboo subject or at least a sensitive subject. Right? And the point of this article is, look, you have to put it into context. Right? When we talk about EBITDA, so the acronym EBITDA means earnings before interest, taxes, depreciation, and amortization. Right? So what is not included in that? Well, interest payments. Well, interest payments kind of imply that you have some debt, right? You’re servicing that debt after EBITDA, right? So if you’ve bought some equipment or if you’ve expanded the facility or if in some cases you bought the company and you’re still paying off the previous owner of the company. Right.
Rusty Smith:
There’s debt that you’re servicing, right? Yeah. That comes after after profit, right? That comes after EBITDA. The interest that you’re paying on that, the taxes that you’re paying, all come after EBITDA. The investment in capital equipment is a balance sheet issue, not a P and L issue. Right? And so where’s that cash going? Well, gosh, the cash is going to buy the equipment, even though it’s going to be reinvested in the company. And so just because a company shows 2,000,000, 3,000,000, $4,000,000 worth of profit, right, doesn’t mean that the owner’s putting 2, 3, $4,000,000 in the bank. Right? They’re probably paying off debt. They’re probably, you know, paying taxes.
Rusty Smith:
They’re probably buying equipment. They’re probably investing in marketing programs. Well, that would hit the P and L. But, you know, they’re probably investing in other capital equipment and so on and so forth. What I tell my clients is it’s important to be transparent. Sometimes you do have to explain to people what profit really means.
Rusty Smith:
It means it’s the money that we’re gonna be able to invest back in the business for the most part and to service debt.
Terri Hoffman:
Right. And to also be in a healthy position. Right? Because cash flow is…
Rusty Smith:
Absolutely, you know, everybody wants to work for a profitable company. If the company is not making money, right, everybody worries about their job. And so everybody wants to work for a profitable company. And so the fact that my client can take his entire team on a cruise, right, that’s a good thing.
Terri Hoffman:
Right. Exactly. Yeah. And I think that, you know, it does feed into the culture and the environment that you’re trying to create is that that education is the important part. It’s being transparent, but then following that up with communication and education and helping people understand and be also willing to ask tough questions back to leadership that you that really just provide a good platform for educating them about why something may be the way that it is and why it’s that way and, you know, how you’re managing that. I think it’s awesome. I love what you said at the very beginning about somebody who’s more open to change than they are.
Rusty Smith:
Yeah. They’re more afraid of the status quo than they are of change.
Terri Hoffman:
Okay. Yeah. And that’s, I mean, that’s the exact type of company that I think is well suited to being open to digital marketing as well is there’s a lot of scary vocabulary and intimidating vocabulary in what you’re coaching and training. And we have that same scary, you know, vocabulary and training in what we’re doing. And it’s like you just can’t continue to be afraid of those things, because if you are, it’s going to hold you back at some point or another. And if you find the right people to work with, those aren’t difficult obstacles to overcome in reality. Right?
Rusty Smith:
You know, I’ve got two examples of that if I can give them. One is, I had a client, this is a few years ago, who had 85% market share in their target market. Right? 85% market share.
Terri Hoffman:
Sounds pretty awesome.
Rusty Smith:
No. It wasn’t awesome.
Terri Hoffman [00:28:36]:
Oh, it’s not. Okay.
Rusty Smith:
If you have 85% market share, where’s your growth gonna come from? Right?
Terri Hoffman:
Oh, I got you. Okay. Got it.
Rusty Smith:
And so if a company…and they were looking, to actually, transition the company as well. Right? But nobody was interested in them because where’s your growth gonna come from if you have 85% market share?
Terri Hoffman:
K.
Rusty Smith:
Well…
Terri Hoffman:
See, Rusty, this is why you do what you do. And I’m like, I didn’t even know that was bad, but good.
Rusty Smith:
So the technology that they use, right, with they sold it into sewage treatment plants. Very sexy business. Right? Sold into the sewage treatment plants. But the product was basically to eliminate biogases. Right? The nasty gases that are generated in sewage treatment plants. Probably more information than you wanna know. Right? But they had 85% market share.
Rusty Smith:
So they looked around and said, well, where else can our technology be used? Where else are these gases being generated? Right? And so they looked at food and beverage manufacturing. Right? There, they had 5% market share, but they didn’t have any salespeople that knew anything about that market. Right? So they had to go out and put a marketing plan in place. They had to do their digital marketing to start to address because all of their marketing up to that point had been to municipal sewage treatment plants. Right? And so that’s what their salespeople knew. That’s what their marketing people knew. And so they had to put together a kind of a new marketing strategy to go after this new segment. I have another client who actually is a joint client of ours.
Rusty Smith:
And his one of his previous companies, he sold rubber products. Right? And primarily to the oil and gas industry. Well, gosh, you’re tied to one specific industry, you know, and it has a little bit of a hiccup. Well, your company is at risk because the industry has a hiccup. And so he also said, where else are these types of rubber products used? Right? And decided it was the transportation industry. It was a big user of these types of products. Right? And so he had put together a brand new marketing strategy, you know, hire salespeople, to target that industry because all of his people knew oil and gas. They didn’t know, transportation. Right? And so he had to put together a new marketing strategy, had to reach out to somebody like you, somebody that is able to put together a marketing strategy for this whole new segment that that their people knew nothing about.
Terri Hoffman:
Yeah. And I mean, it’s just kind of part of businesses. You constantly have to be looking at how you’re evolving and then how you’re…
Rusty Smith:
And that change for a lot of these people, that change was hard. Right? But, hey, we only know oil and gas. Why are we why are we going off and doing that? Or we only know sewage treatment plants. Why are we going off and doing, breweries? Right? You know, and that change is scary for people when they’re in something that they know and love and do every day. And all of a sudden the company’s changing.
Terri Hoffman:
Right. Yeah. No. It is scary. It’s scary at every level. Right? Yeah. But I think a system like EOS, it definitely gives you so many measurables and so many systems to follow that the fear starts to take a back seat. You know, that’s what I really love about it.
Rusty Smith:
You know, having a plan removes that fear. Right? One of the pushbacks that I often get from entrepreneurs, right, is, oh, if I’m gonna put together some sort of structured system like this, it’s gonna tie my hands. It’s gonna reduce my flexibility. Right? The opposite is true. It opens up your flexibility. Right? It gives you the ability and it gives you a forum and a process to discuss what should we be doing. Right? How should we be doing this?
Terri Hoffman:
Yep.
Rusty Smith:
Right? It, you know, frees up, you know, the time generally of the of the owner of the business. And quite frankly, if you ever wanna sell your business and the business is really dependent on you, then it’s not worth this much or not maybe not even sellable if the business, you know, if everything goes through you. And so the EOS program makes it all about the team. Right? It’s not about one person running everything. It’s about the team running things, which is really freeing for the entrepreneur, which is, you know, we call the entrepreneur in, in our program, the visionary. Right?
Terri Hoffman:
Yep.
Rusty Smith:
It gets that visionary the time and the space to be able to have those big thoughts, to be able to think about the future of the company, to be able to form new relationships, and to deepen the relationships that they already have. It’s actually a freeing thing as opposed to a constraining.
Terri Hoffman:
I can 100% attest to what you’re saying because that was really my number one fear in embracing the system. Because I’m in a creative field, and that was what initially got me interested in being in the marketing field was having that ability to be creative and thinking more freely. And I definitely thought that any type of system is gonna limit that, and, actually, it gives me so much more time to do that and come up with new ideas. And then bonus: that I wasn’t expecting, leveraging what my team knows about any idea that I have and making it more of, like, a crowdsourcing exercise where they’re like, no, Terri. That’s not going to work, or that’s a great idea, and here’s something that I would add on to it from what I experienced that just takes any idea you have that could be great, and they take it to a whole other level. I just, I love that.
Rusty Smith:
And it develops those leaders as well. So as those leaders are taking on those rocks, what they’re really taking on is responsibility. Right? And so you’re developing them and getting them to start to think bigger, to build that discipline and accountability into everything they do so that you don’t have to micromanage them. Them. You don’t have to look over their shoulder every day because you know that every week in that level 10 meeting, right, that weekly leadership team meeting, you know, you’re gonna be reviewing that scorecard. You’re gonna be reviewing the to-dos. You’re gonna be reviewing the status of the rocks. Right? That’s very freeing for a business owner not to have to micromanage everyone because the system is the one that’s managing the accountability and the discipline, not the manager.
Terri Hoffman:
Right. Yeah. No. I yeah. I love it. I don’t think I’ve ever asked you this before, but how did you first get involved with the EOS? How did you get introduced to it and then interested in becoming the, you know, professionals implementer?
Rusty Smith:
So I’m gonna do a call out to my friend, Kevin Armstrong. So, as you know, one of the programs that I’ve run now for 18 years is the alternative board, and I’m wearing my TAB shirt today as opposed to EOS shirt. So I should’ve worn my EOS shirt today, but bad branding for Rusty. But I was at a TAB conference back in I think it was 2014. And Kevin, who is the TAB guy up in Vancouver, British Columbia, he knows me quite well. We’re really good friends. He came up to me, he says, Rusty, he knows my DISC profile. He knows that I’m a very process-oriented person.
Rusty Smith:
He came up, Rusty, I found this program. He says, I’m starting to offer it to my clients. He says, it’s right up your alley. And it’s called EOS. I said, what in the world was EOS? And he gave me a copy of the book Traction. And, I read it and I’m like, woah. This is great. And so that’s when I first started offering it was back in 2014.
Rusty Smith:
Now at the time, I was only offering it to my TAB members. So I was kind of under the radar for the first several years. I only had a few clients every year because they’re all my TAB members. But then about, what, 3 years ago now, I actually started to offer the system to other people outside my TAB membership.
Terri Hoffman:
Okay. Got it. Now you might have to also explain what TAB is. Just in case anybody doesn’t know what TAB stands for and how to organize this stuff.
Rusty Smith:
So TAB stands for The Alternative Board. So we refer to it affectionately as TAB. It’s CEO roundtables. Here, we call them theory advisory solutions for business owners. It’s kinda like CEO roundtables and business coaches. And the interesting thing about how TAB and EOS fit together is with the alternative or with TAB, we focus on the business owner. We’re focusing on the person. The business owner. With EOS, we’re focusing on the leadership team. So the business owner and his or her leadership team. And so they fit very well together. And many of my clients are both TAB members and EOS clients. And then I have some…
Terri Hoffman:
I am, too. I get so much value out of both.
Terri Hoffman:
For my listeners, I can’t be in Rusty’s TAB group because we don’t live in the same place. But I cannot speak highly enough about the value that I get out of both. And TAB is, like, when you anybody who does any job and, really, any component of your life, community is so important. Right? So just being in a group of people who understand what you’re going through and they’re going through it at the same time as you, and you can share those lessons learned. TAB is a very strongly facilitated group. And, you know, speaking from the CEO point of view, it’s so valuable to get lessons learned and feedback from people who are not in your business every day who also have the same concerns and and stresses and worries that you have as a business owner or a leader in your company. And it just adds so so many really valuable points of input for how I run my company, for sure. Learn a lot from it.
Terri Hoffman:
Okay. I’m gonna transition into some rapid-fire questions. And if you didn’t read these over ahead of time, Rusty, get ready, but they’re all fun. So what is your favorite trip that you’ve ever taken?
Rusty Smith:
I lived abroad for a number of years. I lived in Germany. So I’m sorry. I’m not a rapid-fire guy. So I went to China. That’s my rapid fire. I went to China with the Greater Houston Partnership. A group of us went over there. I think it was, like, 90 of us with the Greater Houston Partnership. It was a wonderful trip, and it’s a fascinating country, and I really enjoyed it.
Terri Hoffman:
Okay. That is definitely on my, places to visit list. Okay. Switching gears to the second question. Is there any, like, musical artist or group that you could if you could see them, they would be, like, your dream? Dead or alive, right? So from any point in time.
Rusty Smith:
When I saw this question, the first thing that came to my mind is I better say, Taylor Swift because if I don’t, then I’m we’re gonna cut off a lot of the audience. Right? But in reality, it’s it’s it’s Bruce Springsteen. Right? I’ve seen Bruce Springsteen. First time I saw him was when I was in college, which is ancient history. Right? He was a lot younger. I was a lot younger, and Clarence Clemons was still with the band. But I’d still like to see him again. So now that he’s matured.
Terri Hoffman:
And I’m matured. I’ve seen him before, and I saw him at a little theater in Houston.
Rusty Smith:
Amazing concert.
Terri Hoffman:
Oh my gosh. He’s amazing. Yeah. He’s amazing. What is–I bet you I know the answer to this, so maybe you’ll surprise me. But what’s, like, the number one book that you’re constantly finding yourself recommending to people?
Rusty Smith:
Well I have to say Traction, right?
Terri Hoffman:
Yeah, that’s what I figured you’d say.
Rusty Smith:
Traction is…Gino Wickman developed the EOS system, and he wanted to take it out to a larger audience. And so the way that he did that was 2 fold. 1, he wrote the book Traction to describe the system, but he also started hiring, you know, bringing on people like me who… because he couldn only implement a certain number of people at a time. And so Traction has to be on my list. Right? But, yeah. Other than that, couple of the books that I really recommend to people is The Gap and the Gain. Okay. And it’s about viewing things from a point of view of how far we’ve come as a foe as opposed to what we’re missing. And the other one is Atomic Habits.
Terri Hoffman:
That’s a great book.
Rusty Smith:
Atomic Habits is really about, you know, making the important things in your life a habit and replacing the bad habits that you have with good habits. Right? And one of the premises of the book is that you can’t stop a habit, but you can replace it. Right? So if you, if you overeat for instance, right, it’s hard to say, okay, I’m gonna stop overeating as opposed to saying, hey, I’m gonna eat healthy. I’m gonna eat fruit instead of candy or whatever. Right? And so Atomic Habits, and it’s great for business development. It’s great for business. It’s great for personal life. It’s great for your relationships.
Rusty Smith:
It’s great for everything.
Terri Hoffman:
Yeah. That is an awesome book. I’m gonna have to check out The Gap and the Gain. I haven’t heard of that one yet or read that yet. Okay. The last question is, what is the best job you’ve ever had?
Rusty Smith:
I had an answer for this. Obviously, what I’m doing now is the best job I ever have. But I mentioned a few minutes ago, I’ve spent some time abroad. I was working for Compaq, and I had the opportunity to go run our storage business for Europe. And I was over there for 5 and a half years, and it was wonderful. The job was great. Living in Germany was great. The travel I got to do while I was in that position was amazing.
Rusty Smith:
So, yeah, if they hadn’t made me come back to the States, I would have stayed. But they threw money at me, and I took it. And a huge promotion. So that’s what that’s what it took to get me out of that job with a huge promotion and a lot of money. And so they brought me back to the States.
Terri Hoffman:
Yeah. That sounds like a pretty exciting adventure though. Like, to get to live in a different place and do all that kinda roaming around and exploring stuff.
Rusty Smith:
One of the highlights of my life.
Terri Hoffman:
Yeah. Yeah. Well, Rusty, thank you so much for spending the time with us today. I really appreciate it.
Rusty Smith:
Thank you so much for having me.
Terri Hoffman:
You know, I know I know we didn’t talk 100% marketing the entire time, but I really hope that the listeners kind of understand the connection between what you do and how that just sets a business up to have a more structured and disciplined approach to their sales and marketing program so that it can be measured and tracked, and those things are so important. So thank you. Thanks for listening. Please be sure to follow us on your favorite podcast channel and leave us a review. We’d love to hear from you. You can connect with me on LinkedIn or visit our website at MarketingRefresh.com.
