Episode Transcript
[00:00:06] Speaker A: Welcome to the Leadership window podcast with Dr. Patrick Jenks.
[00:00:10] Speaker B: Each week through a social sector lens,
[00:00:12] Speaker A: Patrick interviews leaders and experts and puts us in touch with trends and tips for leading effectively. Patrick is a board certified executive coach, a member of the Forbes Coaches Council, a best selling author, award winning photographer and a professional speaker.
And now, here's Dr. Patrick Jinks.
[00:00:32] Speaker B: Welcome to episode 158. Everyone, you're on the Leadership Window. Thanks for joining us. We are talking today with Maximos Lee.
He is an executive coach. He is a leadership consultant. His experience includes Google and Google Ventures along with work in some high growth startup space with companies like Uber and Slack and, and we're going to be talking today about scaling.
We could oftentimes in the, in certainly in the nonprofit sector we call it growing. But this is really more than just growing, this is scaling.
And you know, most organizations think scaling is a, is primarily a problem of capacity. Hire more people, create better systems, put more processes in place.
But growth, growth also creates a much deeper leadership challenge as well. The culture changes habits that helped a small organization do well.
Where decisions, for example, are really close to the founder, culture is carried through personal relationships, maybe the senior leader stepping into every conflict and that can eventually become the very thing that prevents the organization from growing well.
So we're going to talk about all those things. Growing people, growing processes, dealing with the leadership and culture field and how to navigate that when you're scaling. And that's what we're going to talk about.
I'd like to hear from Maximos particularly I'm interested in hearing what is it leaders have to do differently as an organization grows and scales and just talking about how leadership capacity gets built also throughout the organization because it can't just rely on one person anymore. How do you scale without losing the culture, the core values of the culture and the relationships that made the organization successful in the first place. So with that I'm just going to stop and say Maximos, thanks for reaching out and thanks for connecting with us and welcome to the Leadership Window.
[00:02:55] Speaker A: Thanks Patrick. I'm really excited to be here, really excited to be diving in and learning from each other and from all the leaders that are listening on this podcast.
[00:03:02] Speaker B: Well, I think I'm probably going to do more of the learning here today than you will, unfortunately. Just because when you say the word scale, it does mean it means different things depending on your scale, doesn't it? Like, I guess.
[00:03:16] Speaker A: Absolutely. Well, yes. And your industry and the nature of your business, very, very different. Talking about growth and scaling with regards to a nonprofit group which so mission oriented and growth and scaling. When you are growing a for profit business from 500 to 5,000.
[00:03:32] Speaker B: Yep. Yeah, and we'll talk about that because in a company that's growing from 500 to 5,000, I don't know if this is true, but that's almost like most nonprofits growing from five employees to 25 employees. I mean, it's that big of a ratio, dude. It's that big of a change. And I've watched it as I've coached. Many of the organizations that I'm working with have done exactly that. They've grown from three or five people to 50, you know, or even 20. And it's a different world, especially when you cross that 50 threshold. There's a, there's a whole different structure and feeling in place and. Definitely want to talk about those things.
Tell us right now what is it you're doing to help companies. Tell us a little bit more. I didn't go deep into your current work consulting other than, you know, you are coaching and helping organizations scale.
Give us a picture of what your work looks like with clients.
[00:04:33] Speaker A: Yeah, I would say I am privileged to be working in something that feels very aligned to my purpose as a leadership coach today because I have benefited from people who have been invested in and been coached previously.
So I start with the story as I get a lot of my leadership purpose and sense of call from the story of my grandfather who was an orphan who ran away to join the military when he was 17 years old and by the time that he retired had been promoted and grown to retire as a four star general.
And the amazing thing about that story as it's been passed down in my family is never was it considered to be a story of, oh, look at this guy who just worked himself to greatness and pulled himself up by his bootstraps. It would be such a.
I mean, it's a luxury that we couldn't afford to actually tell the story in that way because when you're in the military, you don't have free time. Everything that you do, you have to ask for permission.
And when you're 17 years old and an orphan, you don't know how to read, you don't know how to do math. He grew up in a small rice village. The earliest memories that I have having been born in China was don't run barefoot through the rice fields because snakes will bite you.
So somebody in his chain of command said to somebody else, we should teach this guy how to read. And invested in him and then somebody else volunteered and said, I will spend my precious sleep time teaching you to do math.
Right. Those are not classes that they regularly have when you're fighting World War II in the military. But somebody built a system that invested in somebody and that makes all the difference. Nothing about his potential changed, but he would have gone to become a very small person with very small self esteem had he stayed in the system of that small town and he became a general who then impacted a lot of people when he joined the system that allowed him to thrive.
And then we moved to the United States and I spent almost 10 years working in a company called Google Ventures, which as the name would imply, is the part of Google that makes investments into small companies.
And we make investments purely for capital returns. We don't make investments to try to acquire companies or get technology for Google. It took a long time for us to convince people of that until I think we wrote the first check into Blue Bottle Coffee. Then I could say, obviously, Google is not trying to buy Blue Bottle Coffee. Everybody just relax. I'm not stealing your secrets. We just want to make you successful so that we can all make money together. But I saw nest go from 50 to 150 people. I saw Uber go from 80 to five, six months. I saw Slack open its third office in New York and help them recruit for that. So I think that what is kind of makes me feel sheepish about today's conversation is I have clients. I would say 25% of my clients come from nonprofits, some of them religious, a lot of community oriented. But the majority of my playbook really comes from looking at these startups go from, you know, 12 people in a garage, all dudes, literally dudes, literally garage, into 8,500 people.
And the thing that I think is similar to nonprofits is all of them are started by founders who had perfectly great careers in other places and gave it up because they had a vision of something that could be possible.
And it's so real in the founder's mind that they're just waiting for everybody else to catch up.
And so then when you go from 12 to 50 people with such a clear sense of vision, but more complexity and more people, how do you actually manage to scale yourself so that you can actually drive the impact that feels so clear to you, but no one else sees it as clearly as you do.
[00:08:27] Speaker B: I don't want to oversimplify this because this is not a world in which I'm very well versed, but for the 12 dudes in a garage, that you talked about.
And then they're going to 80 or 500, like in no time that is due, is it not to the ability to sell to, to, to gain the confidence of an investor who provided the capital to help them scale, you know, in other words, and I'm saying this because in the nonprofit world it's, it isn't that simple to just go find investors. You got to find what we call donors. And we can use the word investor with the donor and tell them, we want you to invest in our mission, we want you to invest in our programs. But it's different because they're not getting a monetary return back.
And to go from, you know, a small nonprofit that's founded in a community with, you know, one or two staff and a board of directors decides they want to do this. It's not as simple as saying, man, our service is so good, we can go to some venture capital company and get them to invest millions in us and we'll scale this.
And that is such a big challenge when you talk about scaling in the nonprofit sector versus the sector that you're working in.
[00:09:48] Speaker A: Yeah, I definitely think the financing vehicle of a venture backed technology startup, especially for software, is a different and easier game. Now having been an investor, 85% of our companies fail. So I don't always expect to get, but I expect to get bragging rights, which when I'm looking at my nonprofit clients filing for grants. Right. Or applying to the Gates Foundation, I don't know if there's a lot of bragging rights that you can generate from being that check.
And then I think that what is interesting is that more and more now you're seeing people in the hardware space because of Nvidia's dominance, actually getting government funding, nonprofit funding for hardware manufacturing. And that's a different place as well, where you're just like, oh yeah, okay, so I get it. This is a very different kind of scale because the constraints make you so much more creative.
[00:10:47] Speaker B: Are you familiar with the concept of, of impact investing? There's a number of philanthropic foundations that have, you know, that are either impact investors or they at least have an arm of their work that is impact investing. I'm just curious. In your space you may not have. But do any come to mind as ones that you recognize and go, yeah, this. Do you have any stories to tell around that or you're just familiar with the concept?
[00:11:12] Speaker A: Well, they're. The Emerson Collective is one that's around my backyard that does a lot of impact investing. And I believe that is Steve Jobs as a widow. I think that's her, her foundation. But what they want to do is they want to buy shares or some sort of ownership into mission. Mission organizations are predominantly nonprofit, so there will be certain filmmaking. Right. To tell indigenous stories or we were trying, unfortunately unsuccessfully trying to get her that foundation.
Invest in a nonprofit that I work with called 1951 Coffee, which trains refugees to become baristas and yeah, that definitely creating a different kind of.
Yeah, I think it's like a very different philosophy around nonprofit fundraising and financing and it forces them actually to think a lot more in terms of metrics that I learned a lot from from knowing people who worked at the Gates Foundation. Whereas I think most government funding, the metrics tracking is not as tight as it would be. You have that kind of impact investing or that kind of tech background.
[00:12:22] Speaker B: Yeah. And then you know, there, there, there's also debt that you can use as a vehicle. But again that then that now the nonprofit is taking on all their own risk when they do that.
So what comes to mind for me. And we'll, we'll move to the scaling conversation in a minute. But it dawns on me that this scaling requires some selling to someone. And so for, for the nonprofit leaders, it's about making the case that the roi, not a bank account ROI or a portfolio increase, if you're investing, it's an ROI for your community, which is a win for everybody, including you. So for example, when we used to talk about investing in early childhood development, well, you know, I'm not getting a kickback for that if I invest in that. Not getting a financial plus as the, as the organization raises money.
But I am getting a better community because if kids are getting the kindergarten ready on time, they're more likely to thrive in school, graduate, become a part of my workforce. So if I'm running a business in a community and I'm struggling with hiring, boy, I want to look. What did they say? The, the biggest economic, the biggest workforce development initiative in any community is at least a 15 year time lag because it's early childhood development.
So, so if you can make that ROI and say, look, we save this much money in the juvenile justice system when we prepare our kids better, we, we create a better workforce, we raise, we raise wages, we raise civic engagement, everything happens. If we start a child off early in the right direction. But it's a harder, it's a different case to make for investors.
It's the same thing, isn't it? You're telling them why they should invest.
[00:14:17] Speaker A: I I think that what actually becomes a very natural segue into scaling is I do think the first thing that every founder needs to scale is their story.
Right. And, and I think that what I was working with a nonprofit recently that does homeless outreach, right? Or unhoused community outreach.
And I was talking with them about their leadership principles. And I was saying, well, if the government funding is drying up, then the people with the most disposable income that you need to tell an impact story to are people like me who work in tech.
And right now, your story doesn't hit any of the things that I care about, but you can bet I get 400 requests for money on a daily basis between Instagram, paper, mail, phone calls. Right? So are you actually scaling your story and even what you just described, right? Oh, this is a 15 year time horizon that feels really long. But if I'm doing it not for returns, then I don't care how long it takes. Right. I care about why any of this actually intersects with the things that I value and care about, which has a numbers component to it and then a this is the world that I want to live in component to it. And it's a very, very different kind of pitch, if you will, or a talk track than when you're speaking to people who already have a certain value system that we know for default in the nonprofit sector. So donor based outfit outreach, similar to recruiting based outreach, has to have a slightly different talk track to it.
[00:15:53] Speaker B: You know, now we're, now we're into fundraising 101 and understanding, understanding who you're talking to when you're asking for money. And it's like going into a company and understanding their corporate social responsibility platform, for example. What's the company interested in? Are they branded for being interested in workforce development or in early childhood development, for example? Can you give us a glimpse into what lights you up? What is the kind of story for someone in the tech world like you? Because it's a great point you make, you know, you can tell me. Oh, you know, we do housing and homelessness and we do domestic violence and we do food insecurity or whatever, whatever it is.
What are the kinds of stories that if I'm talking to someone like you in the tech world, do I need to be thinking about?
[00:16:44] Speaker A: So one thing that I would say does not work for myself or people like me or people that are involved in tech is any mention of legacy.
And I think that that's actually one of the things that I get a lot when I get fundraising reach outs it's like, do you want to think a lot about your legacy? And I was like, no, that feels like a very pretentious word. And I'm not actively thinking about that. And I think that that's a very dangerous thing to be actively writing checks out to. I would much rather have pitches that are involved exactly around this is the world that we're trying to create, or this is the world that we're trying to build. And if you want to live in that world, then to a certain extent, do your citizenship obligations to that world right now.
If you want to live in a world where every child thrives, pay your citizenship dues now.
And I think that people oftentimes step back from that obligation. I think it's just about the integrity of putting your money where your mouth is.
Right. So I had a great conversation with a nonprofit founder who says, it seems to me that you believe a lot in generosity. And I said, I do. Right. I want to live in a world where everybody is generous. I wanted to live in a world that feels like it's more defined by abundance than it's defined by scarcity. And they said, have you ever thought about budgeting for that generosity?
And if you were to budget for that, where would you put that budget? And it was really transformative. Right. And in fact, then I had another conversation where I processed this with a friend, and she said, oh, you know, know what we actually did or lent last year? A fast from privilege, when we committed to living at the median income of my zip code and giving all the dollars in excess of that away for the 40 days of Lent. And that was how they budgeted for. And it's like, you see, these things are like.
And these are things also. It's sort of embarrassing to say it like this, but these are things that you can then, like, show off to your friends as an experience of something that is engaging, that is more than just wr a check or giving $20 to a homeless person that you see on the street.
[00:18:53] Speaker B: Man, that's powerful, Max.
[00:18:56] Speaker A: Amazing. No, yeah.
[00:18:57] Speaker B: No, go ahead.
[00:18:59] Speaker A: And I think it's like.
Like there's so much creativity in all the nonprofits because people are living in the different experiences of the class communities.
Right. Like, causes every day. And it reminds me of.
There's that movie that came out a number of years ago called Amazing Grace about the abolishment of slavery in Britain.
And they depict how the most powerful thing that they did to really change the perception of it in that time was they let these parliament people walk through an empty slave ship and just smell the smells.
Right? The experience of it made something that felt very.
Let me do you a favor about them into something that they are now part of the experience of. And so, you know, if you believe. Have you ever thought about budgeting for generosity? Have you ever thought about actually budgeting generosity and having an experience of it and then learning about the things that actually drive more empathy, more solidarity, more proximity to these causes that we care about? Like what is the median income of your zip code? It gave me such a different perspective. And then instead of writing a check, because this is a hot topic, right. That tsunami that came through my Instagram, let me write some money out to them. I can now go a lot deeper into a cause and actually become somebody that is part of that community rather than just a donor relation.
[00:20:33] Speaker B: Man. Yeah.
This. It's so funny because this episode just completely jumped the rails and switched over to a different topic.
[00:20:43] Speaker A: That is.
[00:20:43] Speaker B: I'm so loving right now. But I want to get to the scaling conversation. Let me just say this. I'm really interested that you talked about how legacy is not the thing that lights you up. As you were talking it, three things came to mind as a legacy gift.
One is make a. Make a million dollar contribution and get your name on a building.
[00:21:06] Speaker A: Right.
[00:21:06] Speaker B: The Maximos Lee Community Center. Beautiful legacy. Right. Some people care about that, not you.
The second way is to make a planned gift that become. That means part of your estate when you're gone.
It lives in perpetuity. And so that's what they call a legacy gift.
[00:21:26] Speaker A: Right.
[00:21:27] Speaker B: The third is that you do what you're talking about doing, and the legacy will take care of itself.
As people know, this is who you were. You know, you. You budgeted generosity.
Interesting. You talk about budgeting. Generosity is such. This. This profound thing for you.
It's almost how I would define the difference between philanthropy and charity.
[00:21:50] Speaker A: Yes.
[00:21:51] Speaker B: You know, charity is. Yeah, here. Here's a. Here's a gift. Sure, I'll leftover. I'll help the hungry.
But a philanthropic gift is an intentional budgeted.
Hey, this is. This is generosity and generosity that makes a difference. Not just charitable generosity. So that I feel good. I just love everything you said. They're very powerful. I hope people really pay attention to. To that because we go into conversations with potential donors with assumptions, assumptions about what will light them up. And just the fact that I asked you what's the kind of gift you want to make? You gave me tons of information there that I wouldn't have known If I just come. Oh, Maximos, he's, he's this rich tech guy. He probably wants his name on a, on a building, right?
Or he, he, he'll make a planned gift just because he wants his legacy is important to him. Not that kind of legacy is not right. Not the vanity kind anyway. So just super, super helpful, super valuable.
Let me, let me open the scaling question with, with or conversation with this question.
When leaders tell you Maximos, we need help scaling, right? A founder comes to you and man, we're at this, we're at this place. How do I scale?
What is the problem they normally think they have?
And what's the problem that you often discover they actually have in order to scale?
[00:23:23] Speaker A: I think you mentioned it a little bit already in your intro, Patrick. They think that they have a capacity problem, they think that they have a bandwidth problem. Sometimes they think they have a headcount problem.
What they actually have is a bottleneck and what they often have is a culture problem.
[00:23:40] Speaker B: Okay, say more then about the bottleneck problem.
[00:23:46] Speaker A: So I was working with the non profit and they went from eight people to working on intelligent investor election. And so they got some funds right before the last election, allowed them to scale their team. Really, really smart founders when there were eight people.
Like alignment, right? All hands on deck means everybody is in the conference room on a Saturday morning and they're all looking at the same thing and they're talking about what they're going to do together.
When you're 12 people, you try to do that. It's a lot harder to make decisions because now you have 12 different opinions and four of them don't know you very well.
And now you've got an old guard, new guard differentiation. You've got people who were there when you didn't have any money. And remember the old days when you only had two chairs in a conference room. To the people who came in after you got the 500k infusion and are now trying to find ways to be smarter and more efficient with the money that you have, you have so much more complexity. And when you're eight people, the founder or the CEO or the executive director, you are the escalation path. You guys don't get along. You tell the executive director you have questions you need guidance on. You tell the executive Director we have 12 people and you're playing tug of war between the old guard and the new guard. And two of the people that you hired are working in areas that you don't have any expertise in. You can't be the path of escalation anymore, but you don't trust them enough to completely release it either. That makes you the bottleneck because the decision making has slowed down with complexity and you actually have enough people, right? Like they had 12 people where they used to use eight to do the same things, but all of a sudden everything was much, much slower. And I remember it was the same comment that I sometimes will hear from my startups. I feel like my payroll has increased 50% but my productivity has not increased 50%.
Do I have a performance management issue? Did I hire the wrong people? And I would tell them you have a culture issue with the old guard and new guard and you have a bottleneck issue where you are at the
[00:26:01] Speaker B: center of every decision sometimes. Tell me if I'm wrong on this. This is my experience.
It is all of the, it can be any of those things that you just mentioned. Oftentimes it is the trust issue that you talked about. I'm not. I just can't let go of things. I have to control everything because I'm scared that someone's going to mishandle it.
And I often wonder how much of that is tied to.
I don't have competent enough. I don't have the right people to trust. I can't trust them because they're not the right people. When there were eight, they were all performers and they were good performers and I was hiring performers.
When I get to 12, if I'm going to let go of some things, I have to not only hire performers, I have to hire leaders.
And that's a different hire. And a lot of times they've got the performers and they assume that because they were great performers, they'll make great leaders.
And that's not often the case. So that lack of trust sometimes is well founded because they don't have the right people is. Do you find it more often they've ended up they don't have the right people. It's not about we need 12, we need 20, we need 20 of the right people.
Or is it you've got people that can do this, you're just not letting go.
[00:27:19] Speaker A: I think that it's always a little combination of both. And in fact, sometimes what I'll say to people is we have this bias, right? I'm accustomed to being a team of eight where I have eight coordinators that are predominantly doers and executors and they're kind of like high level assistants because I tell them what I have in mind and they execute on my vision and then I look at hiring 12 people. And I as an executive director already know I have the self awareness to know I can't be managing 12 coordinators.
So let's open a role for a program director and we'll hire that person instead.
And now you've hired in a new person that you don't actually know very much about and you don't know how to manage because you've never managed a director before.
Right. And that person is going to come in and I think we talked about this a little bit Patrick, in our first call into your office where the finance is a bunch of post its that are attacked to your calendar and your software system is still running on Windows 98 and they're going to be completely shocked and they're going to try to rip out everything to bring you into the new age, which is sort of what you hire them to do.
But not in that way. Not in a way that makes you feel bad about what you've already built or how hard it was to get to the system that you have in the first place. And so sometimes I'll say like oh, this is the system that's broken. But I still always have to come back to you didn't scale yourself because you don't know how to manage directors. You haven't scaled yourself in that way. And I would rather take a coordinator, coach them to become a director because you already know you trust them. And there's a lot more room to navigate that manager managee relationship to the next level than to bring in a totally new executive person who's used to seeing it at a 50, 100, 500 person company because we are biased towards resumes that have those shiny things and then bring them into your eight person company and say oh like make it work for us or change us because you're not ready for that. And it's never the friction of that. Once again it makes you the bottleneck. And what feels like a performance management issue is in fact a management issue that reflects more on your management than maybe their ability to step into that role.
[00:29:39] Speaker B: Dan, that's also well said. And I, I also think it's the difference between management and leadership.
[00:29:44] Speaker A: Yes.
[00:29:45] Speaker B: Because it's not, it's, it's you, you might, you might feel more like a manager if you're working with coordinators.
When you start working with directors, there's a little more of a leadership role that takes place there. Right. Because you're trying to create autonomy and ma trust. And it's almost like having a leadership partner now that you're working with rather than an assistant.
[00:30:14] Speaker A: 100%.
[00:30:15] Speaker B: So it's a whole different mindset. When you and I talked earlier a few weeks ago, you talked about the difference between scaling people and scaling processes.
I would love to hear a little bit more about that. And if I remember right, you put a number on it. I think you said when you're scaling from this to this, it's it's people. When you're scaling from this to this, it's processes. I might have that wrong, but there was some distinction between those two things I'd love for you to refresh my memory on.
[00:30:44] Speaker A: Absolutely. I see most of the life cycle of a lot of companies really go from people to systems and then to process processes last. And I think that a lot of the McKinsey best practice business books, especially the ones that were created pre AI, tended to optimize for process and I tend to say actually be very, very slow to scale process because process is what you have when it doesn't even matter who the people are. You send them into this five step system and so long as they do every step the exact same way, the results will always be the same.
So if you have enough certainty and predictability to create a factory where you want everything to generate a certain way, and it will generally be at the quality of the lowest common denominator, because factories don't surprise you with innovation, then you scale process.
So if what I'm trying to do is to go from six countries to 12 countries, I probably have a process based system.
And the process based system is get the office running, get the people staffed, don't break any laws, try to break even as quickly as possible.
But if you're not in a place where you have a lot of predictability and certainty, you're either scaling your systems or you're scaling with people.
I think that if the equivalent of less than 80 in a startup world is scaling with people, then it's probably the equivalent of anything less than 30 or 40 people in a non profit ecosystem. You're scaling with people and what does that mean? I'm bringing in people who are going to do things very differently than how I would do it, who are supposed to own and generate their own project plans for how to deliver onto a vision.
And those people will allow me to add complexity without losing quality or speed.
And so I'm not expecting anything to be the same next quarter, much less next week. What I am expecting is that the quality standard doesn't change and hopefully we don't slow down too much.
[00:32:51] Speaker B: Yeah.
[00:32:53] Speaker A: As far as the skill complexity looks.
[00:32:55] Speaker B: Hard was the word that was sitting in my. That sounds hard. Maximos, all that sounds hard.
Yeah, it absolutely is. And. And again, you know, the leadership piece, trying to think about, you know, a founder.
You mentioned. Okay, someone's executing on my vision. Yeah, well, okay, that's a founder's vision.
What's the alternative to that?
If I'm scaling and I'm scaling the. Even the leadership system and structure in the organization, do I have multiple visions going on? Now, one of the things that. That I've said, I'm definitely curious as to your experience on this. I've coached leaders who.
Have a. Have a difficult time distinguishing between agreement of outcome or agreement of process.
So they'll hire a vp and they want to be the kind of leader that says, I've got a vp. I trust you. You do this, or a chief operating officer. Right. Chief of staff. You run the internal stuff, I'll run the external stuff, whatever that might be.
The problem occurs when the new leader does it that sees the vision that, you know, efficiencies and effectiveness and all of that, but has a different way of doing it than the way the founder would have done it.
And so the founder is concerned that they're going to lose the outcome, but what they're really stressed about is this leader's changing my process.
[00:34:37] Speaker A: Right.
[00:34:37] Speaker B: They're thinking about it differently. I can't have that because it doesn't feel comfortable.
Does that relate to your work?
[00:34:44] Speaker A: Absolutely. Right. And I think that is the difference between scaling with people and scaling with systems, which I didn't talk about earlier.
But I think scaling with systems is what happens when you can generate same, if not better outcomes without you being the driver of activity.
So how does one thing that you're doing multiply itself when you leave the room? And I think we go back to what we were talking earlier about fundraising.
I can have 60 conversations every year with every single donor, and it could stop there. Maybe I have a really good batting average, and I get 80% of those to come back with checks.
Right. That's a scaling with people because it's a linear. Right. It's like managing doers. So then if I want to increase 60 to 80 donors, I gotta make 80 calls. That takes 80 hours. And maybe my batting average increases a little bit when I get a better story.
[00:35:33] Speaker B: Or you assume that if you hire a second person.
[00:35:37] Speaker A: That's right.
[00:35:37] Speaker B: That second person will have the same batting average. And so you're going from 80 to 160 now. Because you hired a person.
[00:35:43] Speaker A: That's right. And I buy Chris Voss's book on never split the difference. And I train them to use exact same talk track and we're just running the same calls. And it's not linear when you scale with systems. That's what happens when you have a really good conversation with me and you get me thinking about budgeting generosity, and I go and tell five of my friends I had this amazing call about budgeting with generosity. Is that crazy? Like, we've never thought about it before. This is exactly like when we get around the table and we have cigars and we talk about what we want to do with our lives and like to not just be indulging in our privilege. We talk about generosity all the time. Never thought about the difference between that. Right. What are the different organizations that we could be investing in? And by the way, the one that told me about it was this one, right? There's no process there. They didn't say, hey, and if you choose to write a check, I really invite you to tell five of your friends and generate five referrals on my account. If you asked me that, I would never do it. That's a one more ask in addition to the money ask. Now you're asking me for two things, right?
But you create a system where it's like, oh, what I actually want. The outcome of the conversation is something about values alignment, which I think is how you scale systems.
Then there are ripple effects that could happen when you're not in the room. And it's the same thing with leadership. You could go in a room and say, our value is sustainability, 150% increase in literacy, and seven new partnerships with schools about early childhood development.
Those are the things that we really care about. Those are our values and those are our outcomes. Do it however you want, right? And then for them to be, when they are up at 4 o' clock in the morning, stressed out about early childhood development, thinking about it, they are still executing towards the same purpose, but they're not executing on the thing that you delegated them.
So I think the systems become so interesting because it has to start with scaling people first, because you have to learn to scale yourself and be comfortable scaling yourself first.
And then you can start to think, all right, well, what then are the values that I want to use to drive the outcomes? Especially in nonprofit world, how we do things matters just as much as the results that we get. It's never the case that ends justifies the means purely. But if you have means and no ends. That is also not very effective, and that's a very bad story to tell your donors. So I think that that is the order where you're like, okay, I'm going to scale myself and I'll build a team that allows me to scale myself to your point, and then I can give them North Star principles to then go forth and generate our purpose together.
[00:38:20] Speaker B: I. You made me think of a new term here that I got to play around with. When we talk about delegation for a leader, I always say, don't delegate tasks, delegate opportunities.
You're inviting someone to, you know, take an opportunity to do something. And, and, and then I, you know, coach and mentor of mine, Dr. Jim Smith at Leadership Systems, he helped me think of this. To say delegating significance. How do I delegate significance?
[00:38:50] Speaker A: Yeah.
[00:38:50] Speaker B: Well, you just gave me a new term to think about. How do I delegate systems?
So if I always said when I was leading an organization, I wanted people in positions that were better at their jobs than I would be at their jobs, up.
I don't want. I don't want to be the best at every, you know, I want people who are better than me, and if they're better than me in finance or marketing or fundraising or whatever it is, I want them developing the systems.
I don't want. You don't want me in that room.
And so I'm actually delegating system creation.
[00:39:24] Speaker A: Yes.
[00:39:26] Speaker B: That's a harder thing to do. And we're back to, I got to have the right people. I got to know I have the right people who can handle that. I think of. I think of Covey's book on trust and his formula, when trust is high, speed is faster and cost is lower.
[00:39:41] Speaker A: Yes.
[00:39:41] Speaker B: And when trust is low, it's the opposite. Things cost more and they take longer.
[00:39:46] Speaker A: That's right.
[00:39:46] Speaker B: And when you have low trust in that leadership formula, things take longer just to. Just to even agree on a system.
Takes longer to do. I don't know, I'm starting to ramble now, but delegates delegating systems was a concept I just. That came to mind as you were talking about that.
[00:40:05] Speaker A: Absolutely. Because I think we talk about this flywheel effect, Right. Or we talk about escape velocity, depending on what if you're marketing or. But that idea that when you're sending. Send a rocket out into space at some point.
Right. Every ounce of additional energy you put behind that rocket is generating 400 propulsion, exit propulsion, so that you can get through the atmosphere, but you have to actually get to a place where you're ready for the escape velocity. Everything else before that is basically like pushing a car. Right. You're overcoming gravity every single time. So I think it is that sense of right. If you are actually in a place in your leadership when you have your heart to heart at the end of your week and you look at your calendar and first of all, you look at your calendar and you ask yourself the question, how much time am I spending on the things that really move the needle and make me light up versus how much time am I spending on stuff that is about checking work, quality control, cleaning up?
Then your scale has not generated any escape velocity, it has not generated any systems, it has only generated leaks because every additional hour of manual and linear supervision is an hour that is very expensive. That's cost too. Right. If I'm spending X number of dollars on my hourly wage supervising a junior reception because I don't trust them to be able to do their job well and I got to manage the quality of everything my company and the receptionist is the first face of the company for anybody who comes in. Well, that's a very poor roi. That's a very expensive.
[00:41:39] Speaker B: Yeah. You've more than doubled the costs.
[00:41:41] Speaker A: That's right.
[00:41:42] Speaker B: Because you've got the extra person, plus you're adding, you're changing your own bandwidth and what you're being paid to do.
[00:41:50] Speaker A: That's right, yeah. So not only have you not built a system, you've not generated any capacity, you've taken away from your capacity and you. It's just this massive energy leak. Right. And you, you end the day not liking your job. And I sometimes will say, you know, if you're used to building a company like a hero, it's a very, very short distance to go from I'm a really good hero because I solve problems within 15 minutes of identification to I go into meetings and I ask everybody on my team, where are the problems? And I fix it for them to. I have a team of people who generate problems for me, me to fix. Right. It's a very short distance psychologically to hop between one and the other. And in those cases, you are definitely not building systems. You're trying to scale people when you haven't scaled your own ability to manage.
[00:42:37] Speaker B: I want a team that solves problems without having to come to me.
[00:42:40] Speaker A: Yes, yes, exactly.
[00:42:41] Speaker B: I don't have to be the hero at all. The hero then is in the leadership that I've built a company that can do that.
[00:42:46] Speaker A: That's right. And it's the same thing. Sometimes I'LL tell my companies, right?
You are in the business right now. The CEO comes in at the end of every deal to close every deal and that's how you get sales. What are you going to do when you collect logos in your sleep?
There are no heroes when you're collecting logos in your sleep. But isn't that much, much better? And they're just like tears in their eyes. Like then I get to sleep and it's the same thing, right? And we go back to fundraising as a proxy for sales, right? I have to make 150 calls to make our budget, but I get it done because I am such a strong believer in this company and I don't want to let my people down. I'm the hero every time fundraising happens to. I can see people that I've never met write checks to this company and I'm asking the question, like where these checks even come from?
Because the people who I've had conversations with are going out and expanding that, right? Building systems that expand in a missional way, right. In a values oriented way to the people in their community. And it's generating outcomes. Or I have a head of finance and ahead of community outreach that's going out and saying when we started to call them not clients but heroes and then create an ability for the people who are coming to this food chantry to pick their own baskets based off of things that they like and then recommend three people from their community that maybe needs this more than they do. The dignity and system of that creates so much more outreach that it has brought, brought, you know, different communities together in different languages with no need to hire translators because of the system that I built around these values for dignity and sustainability.
[00:44:26] Speaker B: I wonder how much of.
So let's take us, let's take a smallish to medium non profit who's wanting to grow. I mean we, we do a lot of strategic planning with non profits and they all want to grow. You know, we want to expand our reach, want to reach more people, create more outcomes.
And for them it's always, I mean you're talking about capacity, process, which comes first for them. It's well, I need money tire more people. That's the, that's the first thing I need. I need money to hire more people. I need foundations who will just give me unlimited, unrestricted, I should say not unlimited. Give me unrestricted funds and let me go out and hire this, you know, major gifts officer or whatever it is.
And so it's always the money I need. I don't have the Money, it always comes down, I don't have the money. If I had the money, I'd get the people. Boy, if I had the people, I could do anything.
And I remember two things about. You've alluded to one of them already, but I remember two things back in my United Way days. So I spent 20 years in the United Way network before I launched my coaching business. And I remember a leader in the network saying, you can create a volunteer center and you can put it online and make, you know, make matching programs where volunteers can volunteer in their community, do all kinds of things, but when you build it, you better be ready for them when they come.
Yes, right. Or, you know, or it's going to fail miserably.
So the question becomes not how do we get more volunteers? The first question is, if we had more volunteers, could we handle them? And how would we.
The other one that I heard is that a lot of nonprofits think, oh, we've got this, you know, we're a, we're a $500,000 annual organization or a million dollar annual revenue. But there's this grant out here for, you know, $20 million. If we could just get that.
Not realizing that, no, if you don't have the capacity to pull off what the Grant requires, like $20 million comes with grant management stipulations. And, boy, you better have the people ready to go, ready to hit the ground. You better have the capabilities of hiring, even knowing what to hire for, and have the systems to hire them on time and get.
You think that just by getting a $20 million grant, your problems are solved, when really it could actually backfire on you if you're not thinking first about what's the system I'm bringing this $20 million into, what's the system I'm bringing all these volunteers into once the system goes live.
[00:47:15] Speaker A: Yep, absolutely. And what I generally say to clients that come in with that kind of problem is I'll say one, I don't think that you need people. I think that you need time, which may not be the same thing.
[00:47:31] Speaker B: And nobody wants to hear that.
[00:47:33] Speaker A: And I think that today we are, and this is my AI segue, we are uniquely in a place where you can use AI tools to test your ability to get back time and also stress test where your bottlenecks are.
So if I think about the client that has 12 people on staff, every single one of those 12 people does everything from janitor manual data entry all the way up to board level, you know, functional strategy. They do all of that. Right. So the first question when you say I need more people, I need more capacity, I need more strategy, I need more leaders is I'll say like, do you as their manager know what their strengths are?
Because some people, their strengths are execution. And some people, if you gave them the time to do strategy, they would scale your complexity and build systems for you. So first of all, do you even know that? And then for the people that you think you have that can we give them AI tools that take away 20, 30% of that manual data entry to free them up to test that strategic thinking? Because if I think about the stuff that my nonprofits are doing, it takes three to seven hours to make a PowerPoint presentation for any event. Three to seven hours to make a good one. Yeah, I can cut that down to 30 minutes. With AI, absolutely. You just talk into your voice recorder and say I want the colors to be this, I want there to be no more than eight words and a picture on each slide. And then only have to do is edit it. By using AI, I've given back five hours of time.
What are they going to do with that time? Are they going to do tactical things? Are they going to do more data entry? Probably not your strategic leaders or need a lot more coaching to get the strategy.
[00:49:12] Speaker B: If they're like me, they're going to spend some of that time going, this was so cool to figure out, what else can I figure out with it? So I spend time trying to figure out new things. Yeah.
[00:49:22] Speaker A: And if really systems oriented ones you give them like the AI tool, they figure it out, they get completely blown away and they say let me lead a lunchtime 10 minute session to teach everybody else in the company how to use the AI so that they can save time too. And that's your systems person.
[00:49:36] Speaker B: Yeah, right. Yeah, yeah, yeah, yeah. And then you ask AI to design that 30 minute lunch workshop.
[00:49:43] Speaker A: But it's like, oh yes, you can see how you gave them like a gift. And then they turn around and try to extrapolate that without you being in the room to multiply the impact to everybody.
[00:49:51] Speaker B: I'm spending about close to to $3,000 a year in my little solopreneur coaching business on AI tools. And I've had people ask me $3,000 chat GPT is free and Claude, you can get a Claude plus thing for 20 bucks a month. What are you spending all this dollars on?
And my answer is, well, yeah, if you're it's free and it will do so much for free.
Or you can develop AI systems and agents who will function and turn $3,000 into at least a $30,000 part time admin assistant.
[00:50:33] Speaker A: Assistant.
[00:50:34] Speaker B: Or better yet, a strategic thinker.
You know, when you take that PowerPoint you're talking about and instead of doing that every time you need a PowerPoint, you upload your brand guidelines and your logo and a slide template and you say, every time, this is the template you're going to use. Now here's the content I need. Yeah, it is incredible. In the large maximos, we, we don't have time now to go into AIs. We'll wrap the show here in a minute. But I am curious.
When you talk to a small organization, it's chat GPT, maybe it's Claude Copilot. All, you know, the ones we know that are basically chat bots that'll answer questions for you and maybe they'll format a document for you.
Then. Then there's the agentic AI, like some of the stuff we're talking about here.
What are the big companies when they think about using AI in scaling?
What's the number, what's the, what's the big systems thing AI is doing for them?
[00:51:35] Speaker A: They are building the essence of a company brain that holds all of the context and institutional knowledge.
And that brain gets only trained by the highest performers.
And that brain then is the supervisor that distributes agents out to new hires for onboarding, quality control for correction, code review, sometimes for companies that are doing coding and prototyping so that you have. It's almost like, hey, AI, I want you to make this presentation for my upcoming big donor meeting. I want you to adopt a Persona of, you know, nonprofit leaders who raise 10 to 50 million, you know, dollars a year and like drive this content based off of the numbers and story of my nonprofit and make that for me, use, you know, valid resources and data and all these things. But 25% of the time they will be hallucinations or they'll be typos and they'll be whatever. And then you add a prompt that says, hey, AI system for every presentation, documents, right?
Raid the quality of the output on the scale from 1 to 10 or A through F, anything that is C to F, just correct it for me and then send it back and run the test until it's an A.
If it's a really hard problem, you haven't seen this before, then send those to my VP of development or my VP of content or my brand manager to review and then then implement their right feedback into the next iteration of the system. So you're Running the quality test within the AI harness.
[00:53:17] Speaker B: Yeah.
[00:53:18] Speaker A: Which is like level two. Right. But I think that and, and a lot of, you know, nonprofits, there's so much stigma involved with using AI as well.
[00:53:26] Speaker B: Yeah, yeah.
[00:53:26] Speaker A: So it feels like, oh, you didn't do your own work, you just cheated by using AI.
[00:53:30] Speaker B: A lot of fear, a lot of ethical questions. And I think we're, I think we're getting, getting, we're definitely getting closer. But what you're describing, when you say the brain, it's almost, I mean, it's like an enterprise resource platform reinvented, you know, erps. Wasn't that the term that was being used so much, Very much like that.
Yeah. Or now it's eos, which is what's your, what's your entrepreneurial operating system. Right. And now you have the AI version of that. I mean, when you think about the eos, is that what you're describing? AI can almost handle for you a little bit.
[00:54:06] Speaker A: There are things that AI can't do. For example, it's not always good at resolving frictions or tensions that are interpersonal or it will miss gaps. You know, if I send it like seven department goal reports, it'll just rate them individually, but then it will miss that. Oh, I have this cross functional dependency. But the what the brain, the company brain is really useful for is when I've had clients just, oh, let's just Give everybody a $500 ChatGPT budget, go forth and make yourself more productive.
Once again, if your judgment and decision making is not very good and you do that at fast speed, you will end up conflicting with each other. So then the agents end up fighting with each other in a way that's actually not helpful for the business. And so when you have at least an accountability layer, that's only the best human judgment that I've identified within the company at this time that's generating the training mod.
You don't end up with mistakes actually making the model quality bad.
And I think that's, that's the difference.
[00:55:09] Speaker B: Very good. Because even in old database systems we used to say data in, data out, you put trash in. You getting trash out. AI is the same way. If you don't know how to build it, structure it, prompt it, regulate it, vet it, you know, all of those things, you just, you're going to get bad stuff. We could do a whole nother episode on AI, but we won't let, we'll, we'll wrap up our time and this is great. Let me just ask you this, is there Anything else else you came to this show wanting to share or hit on that we haven't been able to yet?
[00:55:41] Speaker A: No. I would just emphasize again, I think that so much of what you want to do as a leader, especially of an organization where the culture is so important, is to learn to scale yourself first.
[00:55:55] Speaker B: That's good.
[00:55:55] Speaker A: And be very, very clear about where are your weaknesses. And you can even run the experiment with yourself as the test subject first. Right. Where am I doing manual data entry? That's taking away from my ability to do strategic thinking and forward thinking for my team.
All right. I mean, let's just use AI to build the slide decks and give me back five hours of my time.
What am I doing with that extra time? Right. That's a really good proxy for taking some of the stigma away. It's literally just helping you write emails that you review. It's literally just helping you make presentations that you do the final touches on. You could give it seven different copies of emails that you've written that you're proud of and say, use my voice to approximate it as much as you can and don't never lie to me. Right. I appreciate if you care more about accuracy and precision than about pleasing me. Right. And you will get the time back. And that's a real good test because if what you do with the extra time is more problem solving, more heroics, then even if you hire more people, it's not going to help you actually scale yourself.
So run that experiment and see for yourself. Right. Am I actually somebody who's ready to be scaling, or do I actually need to make that person change? That identity shift first?
[00:57:15] Speaker B: Wow.
A whole bunch of themes here. You know, scaling your story. I love the concept of that. That's something we should all just pause and go, what does that mean? What does that look like for us?
Determine your escape velocity.
That is a really.
That's a really good one. Delegating systems was a new concept that came to mind through your. Through your. Find the bottlenecks and find them in advance of scaling. You know, find where they might be. This is all. This is rich. This is really rich maximos. Thank you for all of it. I want to point people to where they can learn more about you. And I think that's Your probably your LinkedIn page, is it not?
[00:57:55] Speaker A: Yes, that's correct.
[00:57:56] Speaker B: So Maximos Lee, and that is M A X I M O S Maximos, not Maximus and Lee tell a funny, fun story.
[00:58:08] Speaker A: So I was born in China, so I did not receive Maximus as my birth Name. That was a name that I acquired when I was in graduate school and applying for my citizenship. And literally at the time, people were kind of teasing me a little bit about getting an easier to pronounce English name.
And my professor, a man who became very much a father figure to me, said, you don't have to. And I think your name is great, but if you decide you want to pick up an American name, talk to me, because I think names should be given to you by people who have hopes and dreams for you.
And he gave me the Greek spelling of the Roman name Maximus, because I was in the Greek art of classical studies.
And he said, you're very smart and you are very impatient to make the world a better place, but you need to remember to slow down and remember there is time to make room for everyone.
And that's why he named me Maximus.
[00:59:04] Speaker B: That's so good. Maximos. And it's Maximos Lee. And Lee is Lih. So look him up on LinkedIn. We'll have his LinkedIn page linked to our podcast page on our website for those that want to see it. Maximos. There are two questions I like to ask all my guests before I wrap a show because I love the stories and it's always inspiring. And the first one is who comes to your mind as a leader in your life who you would say has had profound impact or influence on your leadership and the way you think about leadership? And this can be someone you know, you've worked with, someone from the past, someone you've never met, but a leader in your life who has had that profound influence and why?
[00:59:51] Speaker A: I'll name two and I can give you both of them. And the things that come to mind about why they're the two that I've chosen is also probably the answer to your second question, which is, what advice would you give?
So the first one is my first leader. The CEO from Google Ventures is a guy named Bill Maris.
And Bill was an extremely values oriented leader. He would go into every investing conversation and it would almost be as if he was forcing us to say, if we can't write this check, then I'll quit my job.
And it was because he felt so strongly that we had people who were coming in and were asking us for investments that came from this person's pool party or this person's Harvard network. And so you would end up making investments based off of how much you like somebody as opposed to conviction for the product.
And so he's like, no, no, I want us to be making investments out of conviction. And his best piece of advice to me and the way that he very much lived in his life was, there is a difference between everything that I can do and the things that only I can do. And that is something that you need to take very seriously. And so we did that for the money that we were privileged to invest, as well as for how he thought of his time as a CEO of the company.
The second person is somebody that I met quite recently, and her name is Jacqueline Fuller. Jacqueline is the recently retired CEO from google.org and I met her in a completely different context where she had gone on a pilgrimage to walk in Spain.
And I was sort of like watching her photos and talking with her. And what she really taught me when we started to get more close and get to know each other was be just as aware of the things that you need to pick up as the things that you need to put down.
And she has this great story of being on the Camino, where these people are supposed to put down something at the cross for this one station, and she couldn't think of anything that she really wanted to release. But then as she was walking towards the cross, she saw this little piece of rock that had the word Joy painted on it. And she was like, oh, that was a moment where I was supposed to pick something up. And of course, to make space for the thing that I paid pick up, I have to remove other things. But it was actually the act of picking up the thing that I wanted that then made it worthwhile to think about the things that I wanted to push aside. Wow.
[01:02:17] Speaker B: I. I heard something a long time ago and I don't. I never. I don't remember the exact quote, and I've even tried to look it up and I haven't been able to find it. But something like, you can't. You can't.
You can't take something away if you come with your basket already full. Yeah, I think that. I think it's something like that. You got to empty your basket, I appreciate. And then you know it. There's. There's two blendings to the two stories you just told.
I love the. Not only what are the things I can do, but what are the things only I can do?
The second one almost adds a third component to that, which. What are the things I should do and shouldn't do? Just because I can do them doesn't mean I should do them.
[01:02:56] Speaker A: That's right. Yeah, absolutely.
[01:02:58] Speaker B: Yeah, man, that's really good. Well, my last question, as. As you. As I've already tipped you off a little bit, and you may have answered, and if you have answered again, but in the framing of the question. And the question is you're standing at the top of a mountain, you have a megaphone, and you're talking to all the leaders at the bottom of the mountain, and you're giving them the Maximos. Lee 15 second sound bite on leadership. What to you is the most important thing that all the leaders of the world should keep in mind as they lead?
[01:03:26] Speaker A: Be the leader of the company that you're trying to build, not the one that you're trying to grow out of.
[01:03:32] Speaker B: Say it again. That was so good.
[01:03:35] Speaker A: Be the leader of the company that you're trying to build, not the one that you're trying to grow out of.
[01:03:40] Speaker B: That's good. That's good. That's, you know, it's the. That's the ramped up version of, you know, dress for the job you want, not the one you have.
And. But we're dressing our minds. We're dressing our mindsets.
[01:03:51] Speaker A: Yes.
[01:03:51] Speaker B: For those kinds of things, man, this is rich. Visit Maximo's LinkedIn page.
Learn more about what he's doing. And if you're serious about getting scaled and you're. You think you're ready to have that conversation, man, I think. I think Maximos is the guy to call.
Thank you so much for the generosity. I think people would have paid for this episode. So that's. That's what we want. Thank you so much.
[01:04:16] Speaker A: So much fun, Patrick. I learned a lot.
[01:04:17] Speaker B: All right, everyone, lead on.
[01:04:22] Speaker A: Sam.
