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Guest: Jon Hyman, a coach at CEO Coaching International. Jon is a four-time entrepreneur, a seven-time CEO, and an accomplished business leader with over 30 years of experience across various industries, including consumer products, construction materials, sports and entertainment, investment banking, and manufacturing.
Quick Background: So you’ve built, grown, and sold your first company. Ready for your next entrepreneurial adventure? Many aren’t. To get back to the top of the mountain, entrepreneurs have to be willing to learn from their failures as well as their successes, and stay focused on the leadership principles that helped them Make BIG Happen in the first place.
On today’s show, Jon Hyman explains how he was able to lead an eclectic group of companies toward the same goal: a BIG exit.
Keys to Building Great Businesses from Jon Hyman
1. Focused leadership.
Jon Hyman played basketball for Coach K, was mentored by General Colin Powell, and was recruited by FedEx founder Fred Smith to run one of his personal businesses. All three of these men instilled in Jon a vision of simple servant leadership steeped in their own individual experiences of military tradition.
“At the U.S. Military Academy at West Point, we learned basic primers for leadership,” Jon says. “Discipline. Being a servant to your men and women, or your organization. They become your primary focus. You set the example, you set the course of action, you set the plan, you brief them on the plan, you communicate to your top leaders, and they then communicate to their people. And then you hold them accountable for the success of the execution of the plan. And you reward them. You celebrate. Be the North Star for how things are supposed to be within the organization and people will follow.”
Easy, right?
Then why do so many business leaders get this wrong?
Because when you’re in the middle of the whirlwind, it can be incredibly challenging to maintain focus on what really matters. Potential disruptions are coming at you from every angle. Technology is advancing faster than you can keep pace. And you’re never more than one bad social media post or one disgruntled employee away from a crisis.
The most effective leaders learn through experience, mentorship, and coaching how to maintain a 30,000-foot perspective. They work on the business, not in the business.
“As the leader, you set the vision, you’re in charge,” Jon Hyman says. “You take care of your people, tell them what they have to do, hold them accountable, and things take care of themselves. You’re not there to do their work. You’re only there to set the example, provide direction and accountability, and allow people to execute. You don’t micromanage. And if people can’t do the job, you replace them. It’s almost that simple in my mind.”
2. Put the right people in the right jobs.
“People are the lifeblood of the organization,” Jon says. “The leader is the heartbeat. And no matter how talented the leader is, the company will underperform without great people doing the job they’re best suited to do. Jim Collins said in his book, “Good to Great,” that having the right people in the right roles is fundamental to building a successful and enduring organization. You need talented people who understand the vision the leader has provided and the mission and can effectively communicate those things to the employees and successfully execute the plan. A well-rounded team brings diverse skills, perspectives, and strengths to the table and they foster innovation and drive the business.”
From a personnel perspective, the only thing more expensive than hiring the right person is hiring the wrong person, especially for an executive position. Jon devoted as much time as he could to a multipart hiring process, which included interviews, personal visits, dinners, and meeting with family members to get a better sense of a candidate’s values and work ethic. And after making a hire, Jon enforced standards of accountability for not only “hitting numbers” but also contributing to the company’s core culture in a positive way.
“You have culture in the organization,” Jon says, “and that culture is something you defend. And so if you have a leader who, although successful, is disrupting that culture, and creates problems and animosity within the organization, then that’s something you have to address. Because there will be a breakdown at some point, even if you turn in good numbers for the quarter or even for the year. There will be turnover in your organization. People vote with their feet, walk out. You have to understand how they’re managing and protecting your culture and taking care of people, because if you don’t have that, you will lose at some point.”
So what do you do about a high-performing, low-culture employee? Again, the principles of good leadership lead to a simple solution.
“I get rid of them,” Jon says. “I can find somebody else that can do the job. They have to fall in line with our culture, our values, how we make decisions. And so to go counter to all that, even though you hit your numbers, they can’t stay. So there would be a very easy decision to let them go.”
3. Sell “one to many.”
To get BIG you have to sell more. SaaS and other tech companies have an obvious advantage when it comes to rapid innovation and growing their customer bases. But if you’re following an AI Roadmap that’s collecting and analyzing the right data, and if you identify sales channels that are further upstream than a typical consumer, just about any product or service can be meaningfully scaled.
For example: golf shoes with soft plastic spikes.
Given that golf is a relatively expensive hobby, and that the limited number of folks who play it probably don’t buy new shoes every year, you might assume there are only so many units a company in that space can possibly sell. But Jon took an innovative approach to selling the innovative new product his company had developed.
“We used a concept of ‘sell one to many,’ Jon Hyman says. “You typically have limited resources in startups and you want to use those resources wisely. Selling one account at a time, it’s like your feet are in quicksand. We looked for opportunities to sell our products to what we call ‘prescribing groups,’ group influencers, an authority that could direct the behavior of a large group of consumers to the product and cut our costs. I convinced the NCAA chair for the NCAA golf championships, divisions I, II, and III, men’s and women’s, to ban the use of metal spikes in the end-of-the-year tournament. And this ultimately forced the college teams to adopt our product as they played during the season. And so each year we converted more than 6,000 of the best players in the country to our products.”
Then, Jon went to another “prescribing group” for whom his product would solve a serious problem: the Clubhouse Managers Association. Jon knew that clubhouse upkeep was one of the major expenses for any golf course, many of which had wooden floors. No more metal spikes would mean less wear-and-tear on those floors. And if your favorite course was one of the 15,000 in the U.S. that decided to ban metal spikes, you could either change your shoes every time you walked inside, or you could buy Jon’s product.
Sometimes broadening your SKU range or building a revolutionary product isn’t enough. Great CEOs also look for ways to change their markets and their customers’ buying habits as well. Don’t just create products and services, create a need that your company alone can fill, and your “one” solution will attract “many” new customers.
4. Learn from your mistakes.
“Obviously, I enjoyed the successes from the successful exits more than the failures,” Jon Hyman quips. “But I learned more from the failures.”
One of Jon’s most powerful learning experiences came when, after two successful exits in the sports consumer products space, he started a company that developed a carbon-neutral cement system. Despite being a BIG, bleeding-edge idea, Jon says the company failed for four reasons:
- Hubris: “Given my recent entrepreneurial success, I believed I could do anything. I was Superman. And I fooled myself into believing that there are no obstacles too big to overcome. I failed to do the necessary homework to understand the industry dynamics. What I learned is you can’t short the fundamentals associated with standard market intelligence. You can’t ignore critical market dynamics, no matter how good you think you are.”
- Rushing into a partnership: “We were struggling with distribution. I formed a joint venture with a Colombian company without fully vetting them. Goal alignment, core values, ethical standards, decision making — I didn’t do a very good job of understanding it. And regrettably, we weren’t aligned on any of those critical issues. And so around the fourth year into our joint venture, they just walked away without an explanation, leaving us no way to service our projects. Ultimately, they forced us into bankruptcy. I could hear the famous words from my friend, John Wooden, the legendary UCLA basketball coach, echo through my head: “Hurry, but don’t run.”
- Bad timing: “Our cement system was a leap ahead of anything that’s ever been done. The only problem was the market really wasn’t ready for it, no matter how technically superior it was to the industry standard, or how well it fit into the green political rhetoric at the time. Today, all that’s changed. All the stars have come into alignment — consumers, politicians, and environmental groups — and a variant of the product that I developed has become a very hot product now. We were just early at the time, and a failure to align with current consumer trends can result ultimately in an irrelevant product.”
- Poor board selection: “In my other businesses, I had really good boards. And you present to them, you have oversight, and they will challenge your ideas to make sure what you’re doing makes sense. And you have to have that because we all have blind spots. When I played for Coach K, I was doing a drill underneath the basket, and I failed every single time. I just couldn’t get it right. And Coach K called me over and said, ‘Do you realize that every time you make that same move, you lead with your left foot? So the defense knows exactly what you’re going to do. So until you learn to disguise that move, you will never succeed.’ And the lesson to me there was a good coach will turn failure into success by pointing out what you don’t see, what you don’t know. And that’s the same for a board.”
Jon’s CEO coaching clients have the benefit of his diverse experience and his humility as he helps them steer around these and other obstacles. Without that perspective, it’s easy to rest on your laurels or drift away from what you do best. But entrepreneurs who are willing to lead the right way and pivot fast from wrong turns can learn to Make BIG happen, again and again.
Top Takeaways From Jon Hyman
1. Serve simply. Don’t make your leadership responsibilities more complicated than they need to be.
2. Put your people first and they will be willing to follow you from one BIG goal to the next.
3. Everyone fails but only the best leaders are willing to admit defeat, learn, and move forward.
Links:
9 Things That Could Derail Your 9-Figure Exit – To maintain excellence through a successful sale, the CEO and supporting team will have to keep pushing the business forward while also steering clear of these common pitfalls.
The Top 5 Leadership Qualities of CEOs Who Have Led Their Companies to Successful Exits – A successful exit is not an end. It’s a culmination of everything that your company has accomplished so far, and of all your skills as the CEO.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average revenue CAGR of 31% (2.6X the U.S. average) and an average EBITDA CAGR of 52.3% (more than 5X the U.S. average).
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