The short answer
The CEO Mandate is a sixty-minute live working session for CEOs and presidents carrying a number somebody else set. Not a webinar you watch — a session you bring your own deal into.
The premise is that most CEOs in a sponsor-backed seat have never actually reconstructed the arithmetic they are being measured against. The board speaks in MOIC, IRR and exit multiples. The team speaks in headcount, roadmaps and this week’s fires. The CEO is the only translator in the building — and the average board member spends roughly 24 to 30 hours a year on your company, which means they are not going to do the translating for you.
So the session does it in front of you. Bill reconstructs a live LBO on screen — entry EBITDA, entry multiple, debt at close, target MOIC, hold period — and solves for the exit EBITDA the sponsor already has in their model. Attendees drop their own numbers in the chat and Bill runs them live. Then he takes that number and walks it through the four gates that turn it into a hundred-day operating plan: the number, the strategy, the structure, the cadence.
The stakes are not rhetorical. More than 70% of PE-backed CEOs are replaced before exit. You get less than six months to establish credibility with your sponsor, against an average hold of about seven years. You are statistically more likely to be fired than to cash out — and it is almost never for capability.
Attend live and Bill mails you a hardcover copy of The Rule of Three.
What you’ll walk out with
- Your own required exit EBITDA, solved live from five inputs off your CIM — entry EBITDA, entry multiple, debt at close, target MOIC, hold period.
- The gap. Your number minus today’s EBITDA, and what that gap is worth in enterprise value at your multiple.
- A sensitivity read. What the number becomes if the exit multiple slips a turn — 11x, 10x, 9x, 8x — so the plan survives a market you don’t control.
- The Board’s Number memo, page one. Target, timeline, five named assumptions, three declared unknowns. One page, signed by you, acknowledged by your chair.
- The five-lever EBITDA bridge — price and mix, cost, organic growth, M&A, working capital — with the rule that every lever carries exactly one accountable human.
- Your Right-to-Grow ratio, at least as a rough number: material margin divided by total employee cost, and what it says about whether you have earned the right to grow yet.
- The Four Commandments as a usable standard for command, not a slogan.
- A hardcover copy of The Rule of Three, mailed to you — for attending live.
What is the CEO Mandate session, exactly?
It is a working session, and the distinction matters more than it sounds.
A webinar is content delivered at you. A working session is sixty minutes in which you are expected to produce something. Bill asks people to bring their P&L and the number they are afraid to say out loud, and then he asks them to type it into the chat. Some do. The ones who do get their own deal modeled on screen in front of a room of peers, which is uncomfortable and is exactly the point — because the discomfort of saying the number to forty strangers is a rounding error next to the discomfort of not knowing it in a board meeting.
The session is built around one artifact: a single document Bill calls the CEO Mandate. It is really a board memo. It exists because the board and the team are running on two different languages and only one person can translate between them, and if that translation lives in the CEO’s head instead of on paper, it dies the first time a quarter goes sideways.
Bill has watched this fail from the inside. His own version of the mistake: getting frustrated with the process and writing the strategy himself, late at night, on weekends. “When you’re doing the strategy yourself, the one thing that is for sure not happening is no one’s buying into it.” Nobody has seen it. Nobody has pressure-tested it. And when it starts to slip, the team’s honest reaction is I never thought it would work anyway — because they were never asked.
The mandate is the fix. One page the chair signs and the team owns. Everything in the session is in service of building it.
What are the Four Commandments?
Command has a definition. Bill’s is four items, and the standard is all four or none — three out of four is activity, not command.
One — No surprises. Your chair never hears bad news first in a board meeting. Bill’s line: bad news, fish and relatives all stink after three days. If you are not telling your board what is actually happening — even when you are doing a good job — it will not go over well. The surprise costs more than the miss.
Two — Be on pace. Every quarter has a gate, and you know by Day 30 whether you are through it. Pace is a real variable with a wrong answer in both directions: go too fast and you leave your team behind; go too slow and you become the bottleneck. There is a right speed, and you should be pushing at the top of it, because it is shocking how fast the time goes.
Three — Data-driven. The bridge is math, not narrative. Bill’s working rule on how much data is enough: under 20% and you are simply guessing; over 80% and it took you so long to get there that everyone else has already passed you. The job is operating inside that gray band — enough data to be right more often than not, not so much that certainty becomes an excuse for delay. Your gut still matters. It just doesn’t get to be the only witness.
Four — Results matter. This is the one Bill calls the most important, and it is aimed at a specific sentence: I did the best I could. We are not a best-efforts company. Bat .300 in baseball and you go to Cooperstown. In business you have to be right more often than not, and comp has to be tied to the number — because if your incentive plan doesn’t pay for the mandate, you don’t have a team, you have an audience.
What are the four gates?
The hundred days is broken into four gates, each with dates and a deliverable that either exists or doesn’t.
Gate 1 · Days 1–14 — The Number. Reconstruct the LBO. Read the CIM and the underwriting model the way the investor who wrote the check read it. Run a structured MOIC conversation with your chair and lock the target before you commit to it. Then put it on one page: the target, the timeline dated to the sponsor’s clock, five named and testable assumptions, three unknowns declared up front. Signed by you, acknowledged by the chair. If this number is wrong, everything downstream is fiction.
Gate 2 · Days 15–45 — The Strategy. Before you grow, earn the right to grow. Run the 80/20 cuts: rank every customer and every SKU by material margin, find the core that actually funds the plan, and build the kill list of products and customers quietly destroying margin — each one flagged grow, hold or kill. The Right-to-Grow ratio (material margin ÷ total employee cost) replaces a guess with arithmetic. Most CEOs are told to grow. Half of them shouldn’t yet. The deliverable is the EBITDA bridge: five levers — price and mix, cost, organic growth, M&A, working capital — each sized, sequenced and owned by a named human. A plan without an owner on every lever is a wish list.
And thirty days is not too fast for this, because you are not starting from nothing. You already have an operating company. It already has customers, margins and a shape. You are reading it, not inventing it.
Gate 3 · Days 46–70 — The Structure. Lock the team to the number. The Rule of Three — Visionary, Prophet, Operator — named, not implied. Comp that pays for the mandate rather than for activity: if the exit is priced on EBITDA, pay on EBITDA. One accountable owner per lever, a RACI where exactly one person carries the A, no committees. And a stay / develop / exit call on every direct report before the plan ships, not after it fails.
Gate 4 · Days 71–100 — The Cadence. Install the rhythm. The operating calendar goes live — the cadence that runs without you in the room. The monthly business review runs against the bridge, not against a narrative. Redline triggers fire countermeasures the moment you are off pace, and a countermeasure is a different thing from an excuse. Then the Crucible: thirty hard sponsor questions, answered before they are asked.
On Day 100 you run the MBR. That is the test — not a certificate.
Four things exist at Day 100 or they don’t: a signed Board’s Number with the chair’s acknowledgement, a bridge that reconciles to it with an owner on every lever, one live MBR run against that bridge, and a board presentation delivered and survived. All four and you have command. Three of four and you don’t.
Why is day one the day you decide, not the day you were hired?
This is the idea the session opens on, and it is the reason a CEO on Day 600 belongs in the room as much as one who starts Monday.
Bill borrows the frame from Zero to One. Wherever you are standing right now — new in the seat, three years into a hold, running a company you founded — if you have a problem you haven’t solved and a plan you can’t defend, that is day zero. Day zero is not a date on a calendar. It’s a condition. You can sit in day zero for years, working extremely hard, and never leave it.
Day one starts when you make the decision. When you choose the number, name the plan and put your hands on the controls. “When you make that choice, when you make that change, now you’re at day one.”
Which means the clock the sponsor is running and the clock that governs your outcome are two different clocks, and only one of them is yours. Your hire date bought you a title. It didn’t start the work. Plenty of CEOs are on hire-date day 400 and decision day zero, and the board can tell — not from the org chart, but because the plan keeps arriving as a narrative instead of as math.
The unaimed arrow never misses. Drive from Sarasota to Chicago without a route and you can make outstanding progress toward California. That’s most of the failure mode: not laziness, not incompetence, just velocity without a bearing. The session exists to set the bearing, which is why it starts with the number and not with the tactics.
Who is this session for?
It’s for you if:
- You’re a sitting CEO or president carrying a number you didn’t set.
- You’re PE-backed, privately held, or public — the session is built on private-equity math because that’s where the clock is hardest, but the structure holds anywhere there’s a board and a target.
- You have a board meeting inside 90 days, or a plan that has drifted mid-hold.
- You’re willing to make talent calls. Gate 3 is not survivable otherwise.
It’s not for you if:
- You want frameworks to read. This is a working session; you will be asked to produce numbers.
- You’d hand this to your CFO. The translation problem is yours. It doesn’t delegate.
- You won’t change your comp plan.
Bill is candid that turning people away is the most persuasive thing he does in the hour, and it’s worth naming why: the session ends with an invitation to a paid program, Command 100, and he’d rather ten people self-select out on the call than one person buy the wrong thing. Nothing in the sixty minutes is gated. The LBO math is run live, the gates are laid out in full, and the memo structure is on screen. If you take the framework and never speak to him again, that’s a legitimate outcome.
The reason to attend live rather than watch this recording is the part that can’t be recorded: your numbers, run on screen, with your gap named out loud.
Full transcript
[00:01] going to walk through what the first 100 days looks like when you are a CEO or coming in as a CEO. Now, I like to think of if you any of you have for me like Peter Thiel’s book that talks about zero to one and then everything that comes after it. No matter where you are in your journey today, I think of that is day zero. So, you’ve got something going on, you’re having challenges, you’re not sure how to deal with those challenges. And so, it starts you’re wondering and my bet is if you’re all here, you’re all thinking the same thing. How do I solve the problem that I have? So, I think of you at day zero. When you make that choice, when you make that change, now you’re at day one. You can start going and this is what we want to talk about today is what does that look like and feel like to make that change? So, in command getting command of your company is about really four very simple steps. So, step number one is no surprises. I talk about this all the time. If you’re a sitting CEO today and you’re struggling to go through it, your job is to be that connection between your board and your team. And the four things I always tell everyone is exactly the same. First is no surprises. You know, bad news, fish, and relatives all stink after 3 days. And if you are not communicating with your board about what’s going on, even if you’re doing a good job, it’s not going to go over well. Second is be on pace. I think about it in a thousand days going from day one, you’ve got your hands around the controls or you made that decision. I now know what I’m going to do, even if you’re in your 10th year. There’s a pace for you to get there at the right speed. If you go too fast, you’ll leave your team behind. If you go too slow, you’ll be the bottleneck. So, there’s a right pace and you want to push that pace as fast as you can. It’s shocking how fast time goes by. Data driven, I I this is the heart of it all. It’s really looking at, do you know what’s going on? Do you understand exactly what’s happening? And the way
[02:03] that you do it, you got to look at your data. If you have less than 20% of the data, you’re simply guessing. If you have more than 80% of the data, you probably have taken so long to get that 80%, everyone else has passed you by. So, it’s working somewhere in that gray, in that ambiguity about how you’re going to take it from today’s numbers into tomorrow. Exactly where you want to be. The number you signed up for, your team signed up for, what the glory looks like for you. Then the final one, I think this is the most important. And I bet we’ve all experienced this, the team goes, I did the best I could. Well, we’re not a best efforts company. Results going to matter. And if you’re going to be successful, and if you’re going to have people who if you’re going to make this company work, you got to score some points, right? So, results matter. So, it’s great to say I did the best I could. You know, if you bat 300, it gets you in the in the Cooperstown, right? Gets you in the Hall of Fame. In the business world, you got to be right more often than not. You got to be successful. You got to drive the results across the organization with it. So, these are the four things that I think what it means to actually have command and control of a company. People know what’s happening. You’re moving at the pace that it takes to achieve the plan that you’ve all signed up for. You’re using data. You got your gut, that’s important, but you need data to really show you where you’re going. And finally, you actually got to go win sometimes. Okay, so one central question here is can you state the board’s number and the five levers that got you there right now without opening up a file. Now, let me tell you what I mean by that. When you took your job, and there’s three different types of companies, there’s a public, there’s a private, and there’s a private equity. Today, we’re going to primarily talk about private equity, but honestly, it doesn’t matter. It’s important for all of the businesses. With it, it there’s some goal that you’ve got to Typically in private equity, when they buy the company, there’s a thesis. In other words, they say, “This is what we’re going to go do. This is how we’re going to make our money.” And generally,
[04:04] they’re looking for the equity that they invested. They’re looking to get a return somewhere between two, two and a half to four times. But the most common that I’m familiar with around three times. So, if they put in $50 million of equity, just using that as an example, they’re expecting to get 150 out. Do you know what that is? Does your team know what that is? And do you know the levers that you’re going to pull and in what order? If you don’t, you’re just running enthusiastic. If you don’t, you’re not sure how you’re getting there. And the unaimed arrow never misses. You know, to make a metaphor, if you’re drive, you’re sitting today in Sarasota, Florida, and you’re going to drive to Chicago, Illinois, if you just randomly start off, you might be making great progress totally in the wrong direction. Maybe you wind up in California. You want to get where you have said you’re going to get. And in order to do that, you need to know the plan. Otherwise, plan failure. Okay, now the math for the people sitting in the CEO. This is factual, you can look it up. 70% Now, fact In fact, I think it’s about 71.6% of all CEOs get fired before they achieve the final goal. 70% over 70%. You generally get less than 6 months to establish your credibility. That means you go through at least one board meeting. You have them typically on quarterly basis. You get less than 6 months to do it. And the average hold period is 7 years. Wow, that’s a lot coming at you pretty quickly. So, the odds are against you. You are You are absolutely more likely to get fired than you are to actually see the number that you signed up for. That’s important. We’re going to tell you what to do about that and how to avoid that happening. They typically don’t replace you for capability. When you go through the hiring process, again, regardless of what type of company, you’re generally very well vetted. They’ll have you take tests, they’ll meet other board members, you meet the team, you do all of this type of stuff that you’re going on. You’re capable. You wouldn’t be in the job if they didn’t think you had the
[06:05] capabilities. The real question is, can you deliver the result? And because the result takes so long to get there, on average, over 7 years today, it’s the belief that they have in you as you go. And you generally get 90 days to get your feet under you, 6 months to have the plan clearly and start executing on it. And if you don’t have it after 6 months, the board behind you, after the executive session, is going to be talking about, what are we going to do about it? Bill’s not working out. How are we going to make that work for you? Now, the issue with your job, the challenge with your job, is you are the only translator in the in the in the building. And what that means is your board is talking returns. They talk about things like MOIC, multiple on invested cash, IRR, internal rate of return, EBITDA, exit multiples, all the math, because that’s what they put in. They don’t They don’t know this company. They got the thesis, they went through the deal, maybe they’ve been sitting on it a while, but the average board member spends about 24 hours a year. Board meetings are about 3 hours long, there’s four of those a year. They have a monthly financial call about an hour, so if you do all that math, that’s going to put you right about 20, 24 hours. That’s not including travel times and all that, but actually working on it. 24 to 30 hours a year. They do not know your business. They’re just going to go off of what you’re telling them and what the results are telling them. Now, your team speaks in tasks. They get the go-dos. How are we going to achieve this? How are we going to get this this multiple on invested cash? They put a hundred million dollars in, they want 300 million back. How do we achieve it? You’re the translator. You’re the decoder ring. You’re the one that has to set the goal, set the goal of what good looks like, and that team has to build a strategy to get there. If you can’t translate numbers into task, that’s not going to go well for you. Okay, one document will solve all of these things, and I call it the CEO mandate, but it’s really a board memo, and the reality of it is, and you
[08:05] probably have gone through this yourself already, is when you start out and the board tells you this is what they’re wanting. So, we’re at $100 million. We need to get it to $300 million. I’m just making up numbers here. $300 million being an extraordinary uh piece uh particularly in organic growth. But, whatever whatever that number is, uh then in order to get there, you have to be the one that will define that plan. Now, the the thing is, since you’re only with your board such a little amount of time, you need to show them the documentation because I will assure you, whatever you think your plan is, it’s not the way it’s going to get there. And so, you have to bring them along. You have to have conversations outside. You have to have very purposeful ones. Lot of times they’ll be social, and we’ll be talking to them, and they’ll be happy, and it’ll seem good. But, if they don’t understand how you’re going to get there and then see it and take that journey with you, it can go bad pretty quickly. Same time, your team, the things that they’re doing, the strategy that they’re developing, they have to understand, and it has to make sure that it’s getting to that number. Now, I’ve sat in the chair many times, and sometimes I’ll get frustrated. I’ll just do the strategy myself. When you’re doing the strategy yourself, the one thing that is for sure not happening is no one’s buying into it. You’re doing it late at night. You’re doing it on weekends, off hours, whatever. People haven’t seen it. They haven’t pressure tested it. That is going to be your strategy, and when it starts failing, you know what they do? They start saying, “I never thought it would work anyway.” And your board was, since you you brought them along, they’re like, “We don’t know what this is happening. You sometimes when you take over a company, you actually have to shrink the thing. You actually have to get it smaller in order to get it bigger because you got to get away some you got to get rid of some of the lack of focus, the things that are not working. So, the goal here is within the first 100 days you take that board mandate, what they’ve told you they want to get, you translate that into an operating plan that your team owns. And between those they need to match. So, if your team
[10:06] plans too little or maybe too much, if it’s not achievable, if it doesn’t deliver that number, it’s not going to work. If the board has an unrealistic number and it cannot get there and your team can’t do it, it’s not going to work. You’re the person in the middle. Your job in that first 100 days is get the goal, you’re going to work that with your board, take that goal, tell the team about it, get the team to build a strategy to go achieve that goal, then the next step is you organize your company all the way around it and in the final third step is you start executing on. You get about 100 days to go do that. Okay, so what’s the board’s number? Where does that come from? It comes from the LBO or leverage buyout. So, when they buy this company, typically today, 50% is going to go in equity, in other words, the cash they put in, 50% is going to be in debt. You need to understand exactly what that number is because not only you’re going to have to defend it, you’re going to make sure that that plan delivers that. You’re going to need to run the MOIC or the multiple on any cash conversion. So, you’ve got to understand what it takes to only get the number, you then got to decide is that payoff going to deliver what everyone’s expecting, which is your team, which is going to have very high expectations, and the board, which is going to have very high expectation. Are you guiding them into the right place? And then you’ve got to get it all locked in on the one page that everyone blesses. This is really important. If every if it’s wrong and it doesn’t work, what happens is uh you now got to disconnect and you will spend more time going back and trying to figure it out. >> I’ll tell you a comment about this. You guys so the main use of this calculator and the purpose of being this showing it is because this exercise is really helpful especially at the beginning when you are taking control or being on board in this uh newly acquired company or you’re coming in to fix things because this will help you get aligned with the board
[12:09] because once that you have the clarity on the numbers that you need to get and uh have an idea of what are the levers that you’re going to pull to to get there, it’ll help you really really have a better plan eventually to actually have a better chance to to achieve it. And as Bill said, uh we have to do what we can do, do it the best we can, and then if we have a little bit of help with the market, that’s how you’re going to make a a lot of money. >> Before you start growing, you need to earn the right to grow. And what does that mean? That’s not some secular piece that says you got to be a good person and all that. No, no, no. If you have a broken business and you start trying to bring new customers or acquisitions in, you’re just going to upset them. You’re just going to get someone in, you’re going to over-promise what it was that you wanted to deliver for them, what they signed up for, and then you can’t deliver. So if you can’t ship on time, adding more customers will not make you ship on time. You’ve got to go and look at your business and make sure that operationally you’re getting this thing up and going. You’re standing it up on its skis. So what are the five levers? Remember before I talked about do you know your number and you know how you’re going to get there. One thing you cannot count on at all is the market. There’s always going to be some war, some fire, some heat wave, some flood. Market’s going to do what the market’s going to do. And people will come in and say, “Well, you know, it was not a good month. It was not a good quarter. I did not expect the war that is going on in Europe to continue.” You’re like, “Well, can’t do anything about that.” Yeah, it rained too much. So, I we’ve got a business that does outdoor power equipment. Too much rain Too much rain hurts us. Too little rain hurts us. Don’t You can’t control any of that, so don’t pay any attention to it. What you can control are these five levers that you see right here in front of you. So, price and mix, I put them together. It’s really price, but you also want to focus as much as you can around on the on the mix with it. Okay, so price and mix is one. Second
[14:11] one is cost. Organic growth. I saw the thumbs up. Way to go, buddy. M&A and working capital. All right, now, why in this order? And this is a real order. You go with price first because [cough and clears throat] it is the fastest lever you can pull. Uh yeah, excluding contracts. You may have someone that’s giving you a contract that says, “You can’t raise it for, you know, a year or something.” Very common, but but you can raise it. Uh and it’s frictionless. So, if you change your price tomorrow on a product, it’s going to flow right through the P&L. You don’t need new buildings for it. You don’t need new people. You might have to pay a little extra commission. Otherwise, there’s no other friction in it. Cost is the second one, but it takes time to get through cost. You have to negotiate contracts. So, some are direct costs and some are indirect. So, indirect would be something that’s not used in the direct making of the product. The example would be like your phones or the hotels or rental cars or things like that. You can renegotiate your freight con- freight contract. That’s one of the most popular with FedEx or or UPS or whatever, you know, trucking firm you’re doing. You can do that the moment you have it goes in. If there is friction involved with it, there will be some switching calls. There will be something it may not go all the way through and it takes longer. So, cost, you can typically get most of your pricing in within 6 months and then it flows through sometimes very quickly within 30 days. Cost generally it takes you at least 6 months before you even start seeing it and if it’s a direct cost, if you’re making a a a a if you’re making a highly engineered product that sometimes takes longer. Maybe you’re getting castings out of India for it. It will take you a year to 2 years to get a a new source of casting. It’s a lot. So, so that’s going to take longer and direct cost is harder to do because if you get the casting wrong, you’re in trouble. No one’s going to buy your product. It won’t work. Organic growth is the one that comes after that. So, first 6 months through the year, you’re
[16:11] going to see pricing comes in, comes in quick. Costing generally takes between 6 months and 18 months before you see it depending on direct versus indirect. Organic growth, if it’s an existing customer, you can go win that new uh customer and but if it’s if it’s an existing one, you just got to win the new product. If it’s a new customer, you have to take them from someone else and they’re going to fight you for it. So, that generally we say comes after year one, typically in year two for if you’re selling like Caterpillar. Caterpillar’s a wonderful company. I’ve sold them most of my career. They have a product road map. And if you’re selling them a say a piston for their engine or a scavenger pump for for the the the do the oil out of the sump that’s 4 years before they even change it on their a before they change it in their drawings, right? So, recognize that’s your third one. Typically we say that comes year two to year three unless you’re a current customer and you’re already in the gap, right? If you’re selling commodity items, you can get it pretty quickly. Engineered items takes longer. M&A, you need to start right away, but you need to be tempered uh with it and make sure your business can handle it. Now, the honest-to-god truth is in private equity, you want to start dealing doing deals your first year. And the reason is you need time for traction to happen so you can get a real return. And there’s two times that you will do the deal. So, the first time is early in the hold, that first year into that second year. So, you got time to get them in, integrate them, and all that so you can get the benefit of. The second one is you buy them just before you sell the business. If you buy them just before you sell, you don’t actually have to do anything, and they will carry the same multiple that you’re selling the business for. So, if you’re buying a three or four or five term small business, and yours is going to sell for 11, 12, 13, you’re automatically getting that step up. And that’s important to
[18:12] know. So, it’s in the middle that is really hard, and you typically don’t get a payback on it. So, if you buy it in the middle of your hold, it’s close to the multiple you think you’re going to get, you don’t have enough time to get the synergies uh uh for it. And then the final one is working capital. That is releasing capital out of the business. That’s getting rid of those inventories, those excess footprints. So, the working capital, you want to work on that, but a lot of times in industrial, you come in, you’re looking at two turns, three turns, sometimes four. Whatever it is, you want to be in the middle single digits and beyond. Now, it totally depends on your business. If you’re If you’re selling software as a service or a SaaS company, there is no inventory. It’s a negative working capital business. Many of you may know like a Roper Technologies. It used to be Roper Roper Pumps back in the day. Today, they’re negative working capital, it’s infinity. That’s where you want to be if you can get there. But if you’re selling a product, most product companies are going to be in the mid single If they’re running good or well, the mid single digits all the way up to maybe you can get into double digits, but it’s hard. A good running company in industrial products will be five or six times, and you’re pretty pleased with that, and you’re always trying to get it. Now, the reason is that is stacks of cash sitting on your shelf. And you go out there, and you see, “Oh my god, I’ve got 2 million, 3 million.” The last company we took over, uh we had $800 million in working capital. We took out $350 million in year one. We we had to do it to save the business. Freedom so much capital. Not only do we get the money back, but we could exit the buildings. We didn’t need that anymore. We didn’t have to do the care and feeding of it. And so, that’s the fourth lever that you pull. And the re- or excuse me, the fifth lever. The reason I put it there is you start working on it in day one, but if you’re putting new products in, if you’re collapsing facilities, if you’re adding facilities, all that, it is hard to get your working capital. But you can do things like AP and AR really quickly. You can get those negotiated. You know, that’ll help you get towards that, you know, proverbial land of of plenty of negative working capital. I’ve never had a negative working capital business
[20:13] because I always made products, and I got to have the material to go do it. But anyway, those five steps are the main levers you can control. You can decide what you’re going to do on price. You can decide how are you going to get your cost in, and you can fight your way through it. The organic growth, you know, if you look at a typical industrial company, you know, we’ll say, “All right, we’re going to get inflation, whatever that is.” And historically, it’s been 3%. Now, you can’t look back the last few years and say what the heck is a historical mean. But historically, it’s been that. Then you get pricing, and maybe you get 3% pricing. So, if I get inflation, call it two, I get my 3% on pricing, I’m at five, and I get my initiatives, my key things I’m going to do. Maybe that’s going to add another three points or four points. Heck, I’m looking at nine points. That’s how you stack that stuff up. In private equity, the the the the holy land is 10% on the top, 20% on the bottom. That’s what we’re we’re for. Grow at 10% top, you get leverage coming through. In other words, you don’t have to add people, facilities, PP&E, any of that stuff, and you want 20% on the bottom. You know you’re running a good business when you get flow through your P&L, and it comes out at a greater percentage than it goes in in. That’s the key. That’s the magic right there. All right. First step on this is So, now you know your levers, the board’s told you the number, you know what levers you’re going to pull. You got to lock that number in with your team. So, you’ve got the goal. You think you know where you can go get it. You have an idea. You and the team have to translate that into a strategy that you can execute on, that you can own those numbers. This is critical for you. Now, what are we looking at? The first thing is do you have the right team? And I think of the three people, the last book we just put out called the Rule of Three, it talked about the visionary. Typically, that’s a CE- CEO. They’re going to own This is where we’re going. This is the vision. All right? Then there’s the operator. They’re the actually the one that’s doing it. They’re the people showing up and They’re the president, the vice president, the directors, the managers. They’re the one that makes it happen.
[22:14] And then the final one, the one I see the fewest companies having, is a prophet. Now, I use that term because I think it gives two connotations. One, prophet as in money, that’s where the money’s at. And two, prophet as in they have the wisdom to tell you the operating system that you will use. It is not unusual in a small company, or any, candidly, any size company, to have them where they’re doing all three. It’s hard to do all three. It’s almost impossible to do all three. It’s common to see the visionary and operator together, though. So, your CEO owns where we’re going, the operators drive the car to get us there. They uh they put together that map, that strategy of how we’re going to do it. The prophet prophet has the wisdom, the training to show everyone on it, right? These are how it goes together. Second thing you got to do is you got to make sure that the compensation plan that you have aligns with it. I come in typically salesmen are paid on revenue. I’ve certainly dealt with that every time. If you’re going to be selling this off of EBITDA, in other words earnings, you need to get everyone aligned around EBITDA. That’s what you should be paying on. Not 50 some different metrics, not some hey, we got a top line and a bottom line and all those. The fewer you can have tied to the same thing that the board has tied you to, the more likely you’re going to get it. Let’s be honest. They’re all coin operated. And you’ll tell a salesman or you’ll tell an operator do this. Isn’t that great? And you’re going to But if you’re paying them to do something else, they’re going to do something else. They’re going to do what is not only good for the company but what’s good for themselves. As they should. You’re telling them what you want and you’re showing them that by rewarding it. Julio just took and put in the uh rule of three. You can see all about that book if you like. Uh you’re going to need to make sure that you have one owner per initiative. One throat to choke to use an old term. But what that means is are they doing everything? Of course not. But someone who’s owning the initiative to go that you can talk to. You can use the RACI chart, right? We have all those kind of materials. You can look it up on your
[24:15] internet if you’re not familiar with it. But one owner that is showing up on your quarterly meetings, on your monthly meetings saying this is where we are. This is the date it’s going to be done by. This is who owns it. This is the number. This is how we’re tracking. Then you’re going to take and look at everyone around it and you’re going to ask yourself are we are we keeping it? Are we doing more of it? Are we going to take and get rid of it? Or are we going to develop it? It’s the same way with the team. It’s the same way with the initiative. Do I have the right team to get me there? Do are we focused on the right pieces? You have to go through all of these. Starts with you setting the goal, they building the strategy, then you organizing around that strategy. They have to own that. All right. Then you got the rhythm. That’s your monthly, quarterly, weekly, annually, all these meetings with it. You got to bake this stuff in and you want to put it in early. I like to have my calendar being a rolling 18 months. Rolling 18 months. Why is that? Because if you put these big rocks in, these quarterly means, these monthly meetings, that means people know when they’re coming. I use week three, I’ll tell you why in a second, but then they can plan vacations. People got to have a life. And if they can’t be there for it, then they can have a proxy. You don’t move those once you get them locked in. It will drive people crazy. So, your monthly meetings, you put them out there for a quarter. The MBRs or monthly business review, those are backwards looking. They’re looking at how did we do against our plan? The QBRs are looking at forward. It’s a strategy meeting. Given what’s happening in the monthly, is our strategy right with it? So, you have those meetings baked in, so people will come and you’ll measure and monitor what’s happening. It makes all the difference in the world off of it. And then finally, the uh crucible is that before you go deliver your plan to the board, you want to make sure someone’s looking at someone like myself, Tulio, someone like Jeremy on here, right? Is to make sure that someone is going through and asking you
[26:15] the tough questions before you get in front of your board and you’re not prepared off of it. So, the operating rhythm is having a calendar, everyone’s on it, you’re looking for it. I choose week three, here’s why. The first week we’re just trying to close the month, get the numbers. Week two, you have chance to study them numbers, understand what happened and why. Anyone can report the news, that’s the insight. Week three, you can talk about it. Now, here’s what I’m going to do, here’s my counter-measures. Week four, you got to get ready to close the month. So, the week three is the best one. If you schedule all these meetings in there, that’s the week they don’t travel, right? That’s the week they can stay wherever they’re at, they’re working out of their home, they’re working out of their office. Week three is the best one for me. You can decide what works for you. So, you’re getting ready to go show your board. You’re going to show them the CEO mandate, right? You’re going to show them this is the board mandate that we put together. And there’s two ways to show up here, right? So, the first way is you can do all this yourself. And it honestly, the plans I’ve seen out of CEOs that did themselves, they were actually outstanding plan. The problem is they couldn’t get anyone to buy in. Nobody understood it and they didn’t follow it. So, without going through a program to help you get ready for it, working with someone outside of your company, working with the people inside of your company, you’re going to show up with this in your head and you’re going to be defending. But by going through and having someone ask you the tough questions, then this is how you have command. If you understand, they’re going to ask you questions you’re not prepared for. I do this before every board meeting. I get myself, my CFO, my strategy leader, you know, my operators in the room. I go, “All right, what kind of questions are we going to get asked?” What and we have a lender call. What kind of questions are they going to ask? We have a lender call every month updating them exactly where we are in our journey. There’s a lot of money riding on this. So, it allows you to go back to those four things and avoid surprises. And if you need to make corrections, since people are owning it, it’s really it’s never easy, but it’s it’s it’s never simple, but it’s pretty easy to keep going because you’re making small changes as you go. This is a super important point out for this.
[28:15] Okay, at the end of day 100. So, you came in, you’re at day zero now. I’m not sure what to go do. I need a plan. We will help you get that plan. We get you to day one. That’s the day when you’re starting. And over the course of the next 100 days, these next 12 weeks, you’re going to be every week having a deliverable that you’ve got to go do. You’re going to wind up at the end with a signed board document. Now, are you really going to get a signed? Up to you. The board will sign it, but you want to make sure that you’ve built the plan showing the board before you get to that meeting. Hey, you told me what it is. I signed the contract. Is this really the number? This is what happens. Did I misunderstand this? Is this great? You’ll be shocked at how powerful that is talking to you and your chairman or you and your board members, whoever they may be, on it. Same thing with your team. This is what I understand. You said you could deliver nine points of growth. I’m looking at your plan and we’re going backwards. How are we going to get there? You’ve got to make sure that people are aligned. You put it down. They can do it. Then you need a bridge that gets you from there with those five levers. Don’t put the market on there. You can have the market. The market’s just going to tell them what you think’s going to happen. Whatever it is, it’s going to be different than what you put down. But what are you doing in pricing? What about what are you doing in cost out? Your purchasing. What are the initiatives? And you can say, “I’ve got a purchasing initiative.” But if you can’t articulate it, you don’t have a purchasing initiative. You can say you’ve got deals you’re looking at, but if you don’t have a pipeline follow them, then you don’t really have a wish list, right? It’s one thing to put a Here’s my list of 50 targets. Have you talked to any of them? The answer would probably be no. Or have you talked so much to them you haven’t got the operating capability going. So, you have all of that. You’ve got your monthly MBR. Some people call them MORs. Doesn’t really matter. Monthly operating reviews, monthly business reviews. You have been running it and you’ve ran it at least once against it with the people on there who own the initiatives going to be delivering. It’s super important you do that. Then you’ve got your board deck. Now, um there’s different theories
[30:16] around the board deck. I like my board deck to not be particularly pretty. The reason is I’m an operator. I’m not a consultant who’s selling these things. I’m going to show up and I need absolutely truth and transparency. And my style is I want to be cautiously optimistic. I want to say, “This is not going well. Here’s what we’re doing about it.” With clarity, with real action items with names and times and what we’re going going when we get there. And then I want them to fully understand it, and I’m going to talk to them offline to make sure I’ve answered those questions. So, these board meetings are straightforward with it, right? So, I show up, they’ve already seen it, it’s already done, they are happy. I do the same thing with the team. I talk to them regularly, both in a group and individually, so we’re all aligned. It take You go from these big whipsaw changes where things aren’t working to small incremental changes, and you will have small changes with it. Okay, so what is our program that we’re here to to talk about? The things that we can help you with, and you know, whether you work with us or someone else, you’re all here for a reason. This is the way our program works out, right? We call it the Command 100, that’s 100 days. In 100 days, we will take you where you are, which is day zero today. We will immediately get you to day one. This is the plan that we’re going to go through to do it. It is laid out with training, with weekly meetings, and everything else. You and your team working through this. This is critical with it. Getting you ready, helping you be ready to talk not only to your board, but to the team to be that translator between it. The first 14 days, you’re going to get that number. You’re going to make sure that number is right, you’re going to pull the deck. If you are in private equity, you’re going to pull that out, and it’s going to be clear about exactly what’s happening and where it’s going on on this thing. The second thing, days 15 through 45, getting the strategy. Like, how can I get a strategy in 30 days? Actually, you won’t even need 30 days because you already have an operating company. It already is in doing something. So, if you are in manufacturing of industrial switches, you don’t need to go out and study the
[32:16] restaurant market. You don’t need to go out and study what’s happening in the market. You need to make sure you are getting depth and breadth into where you are. So, it’s putting the rigor around what you’re already doing, and deciding where are you going to focus. The problem for most of us is not that, the problem is we have too many focus areas. It’s getting it down, we’re going to run the math, help you do it. So, 14 days, you got a number. I am going from X to Y. I know what it is. I own the gap. Days 15 to 45, I need a strategy to deliver that gap. That’s what we’re here for. It’s how you’re going to get paid. All right. 46 to 70 is the structure. How do I organize my company in order to do it? Now, here’s the key point. You’re not doing this by yourself. You’re doing it with your team. We will show you how to do it. We’ll give you all the documents, all the training. But, it’s you and your team coming together to go out there and actually do it. If you’re a solopreneur, you still got to do the same thing. You are the team. If you’re running a billion-dollar company like Tulio and I are, then guess what? Then you’re going to have a bigger team. But, you have to show up in that meeting and guide them to getting it. Not force them. We’re not the military. It’s not a command and control and you’re going to do it my way. No, no, no. It’s getting buy-in. So, that when you’re not in the room, they’re still on board because it’s their plan. And then 71 to 100, that’s the cadence. That’s getting aligned with it. So, our program, the way it runs is it’s 12 me it’s 12 90-minute meetings every week. We’re having one. Uh they’re on Tuesday. Sometimes we change it and things like that. Uh there is uh in this case with uh we’re getting to the end of the year. So, you got Thanksgiving and Christmas. All those things are taken into account. So, it put you into mid-January. By the time you get to January, which sounds like a long ways away. It’s 90 day 90 days until Christmas. If you haven’t got your wife or your husband a Christmas, you better get on it cuz your kids are going to be disappointed and she’s not going to be happy. So, I highly recommend you do that. So, it takes all that into consideration. You have private ones-on-ones with me. It’s myself, Tulio. Others, we got a whole team that I help you go through this.
[34:16] But, you’re going to own it. There’s templates in there. You fill them out. Do you need to use our templates? Like, of course not. You can use whatever you want. The deck you build should be the deck that your board expects you to build. Uh not not using my template. But, we do have all that for you. So, the next cohort begins uh the first of uh cohort number one begins October 6th. And the second one is in January. So, we run these once a quarter. We only take 10 CEOs per course. That’s all we can handle. And we’re all in it together. So, there’s no one competing against any anyone, and it’s everyone doing the same thing. Um Okay, we got a call we got a question from Moses. My industry does not have material costs. We are contracting service. Would make our material costs be equipment purchase a material cost? I’m a bit confused how to factor in employment costs as a percentage of revenue. Okay, that’s a great question. You’re a service business, right? So, the services you’re providing is you’re doing uh in this case building something or engineering. You use that service. So, you look at what it is cuz today you’re pricing it somehow off of that. So, you use that with it. It will skew your costs. It will make your labor cost seem higher. That’s perfectly fine. And so, instead of you being great at 2.5 and average, you might be great at 1.5. I have In one of my businesses, we have 1,000 service contracts. We do uh pumps and compressor services all over the country. And so, when we’re at a 1.5, we’re doing really well because all our cost is labor. So, you’re really using it looking at the material piece going in there. The other thing, Moses, you want to do is your answer the thing that gets you there is you need to sell subscriptions. So, if you’re in there doing contracting the service work that goes behind If there is any, there’s not, could you look at Otherwise, it’s a project business. And if it’s a project business, we look at that differently. So, we can handle all of it. Point being is we have those types of businesses. It works the same in all of it, but the numbers are slightly different uh with it. So, if you can cost your jobs today,
[36:16] and I’m sure you are because otherwise you wouldn’t be in business, we’ll use that same costing structure with it, right? We just try to get the noise out of it and think of it from a contribution margin, uh which is uh you know, without putting all the SG&A stuff in it. We try to get that SG&A piece out. Hopefully that that worked, Moses. Let let let me Let me know if it’s done. So, that’s the Command 100 uh program that we have. Where is four sections that we go through that people that work with us over time really seem to enjoy. So, the first one is getting command and control of your business in 100 days. This is the piece that saves your job. This is how you avoid being in the 70%. It’s not because you’re not capable of doing these things. It is because you haven’t got a plan that can be articulated. Now, maybe you own the business. Maybe Moses, this is your business. You do whatever you want. But, no matter if you’ve been in the chair for actually day one or you’ve been in there and this is year 15, once you have a plan, think of that as your day one. In 100 days, you will everybody organized around what you’re doing. And in this case, you’re a service company or a contracting company. And you need to organize with that we work with tons of them. So, we have great case studies with Once you get the business ready, so you’re sitting on the other side of the 100 days, you now need good to go grow it. As I said earlier, growing a business is in chaos only invites more chaos and the customers will leave you. If you don’t take care of them, they will leave you. Now, you’re growing. You’re past that. You’re past your first year. You want to scale. You’re going to double down on what’s working. You’re doing the flywheel. You’ve exited things that are not working. You’re re-deploying your capital in that. That’s going to get you through the next year. The final year, you are preparing yourself to exit. Now, are you going to exit at 1,000? Probably not. We already know that the average hold period is 7 years. Sometimes quicker, sometimes longer, but that’s your average. Somewhere in that three or four or fifth year, companies are getting ready to exit. You cannot solve your issues in the 100 days when you hire the banker.
[38:19] You you get ready to go. You’re going to six months out. You’re going to say, “Okay, I’m ready to go.” You hire a banker, he gets you ready, he does his thing. They’re just going to polish it. I have seen companies that have the best deck, the absolute perfect data room and all that, but it’s all theater. They don’t have succession plans, it’s all on the owner, their costing is out of control, they can’t explain what they’re doing. You can’t fix that in that last year. You must fix all this in that first 1,000 days, so it has time to soak in, become part of the culture, so it’s real. Cuz they’re going to look back at whatever has been and said, “Do you have good quality revenue?” So, you may have did 10 times more revenue, but is it junk revenue? Is it repeatable revenue? Do you have contracts? Are they on a subscription? Is it a one-time thing? Were the margins bad? How much did you get add back on it? What are you carrying in add backs? So, all that first 3-year program is really to get you so you can run a really real company. You should run the company like you’re going to keep it forever, because you want to do the right things, and people will pay it forward. If you don’t, it’s just theater, you’re just doing kabuki here, and people will discount, they’ll take a turn or two off of it if you’re too important. Uh okay, Moses gave a project-based contract paid solely on production. It’s timber harvesting logging industry, long-term ownership, family business, second year. Perfect. We work with stuff like that already. We’ve got a business very similar that goes and does the uh re-upfitting around oil platforms. They come in, they have to win and all that. Same idea, we just take your cost structure and work with it. So, you it will be no problem at all, Moses. And that sounds like a really cool thing. I logging stuff the country was built around that, so that’s fantastic. So, this gets you set to go and grow from it. You will have growth coming out of it. Our average piece coming out of this that first year will see about 30% profit improvement because you’ve taken action around pricing and all these other things. It’s generally what you get in that first 100 days, You really start pulling that lever high. I hope that answered your
[40:20] question, Moz. If not, we can set up a call to chat. So, what happens in real companies that work with us? We generally see about 350 bips, so basis points. And those of you don’t think about that, it takes 100 basis points to equal 1%. And so, if you tell someone I’m going to grow your business by 5%. Is that 5% or is that 5 percentage points? So, am I going from 10% of EBITDA to 15% or am I growing 10% by 5%, which is a very different number. So, when we talk in basis points, it’s just really saying 3.5 points of growth are going to go on there. That generally translates into about 30%. And the margin in is about 4.25 to 4.2% points over 6 months. So, uh $75 million service firm. And Moz, we work with primarily service firms and manufacturers and distributors. That’s what we do. Of people who have real products like trees. Like this is a really cool piece of it uh with >> You’ve been listening to the 1,000 Day CEO with Bill Canady. Follow the show for more decisive leadership, sustainable growth, and strategies that build enduring businesses. Until next time, make every day count.
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