Transcript of Jack McGuinness' Guest Appearance on Cashflow Ninja Podcast

M.C. Laubscher:            M.C. Laubscher, the host Of the Cashflow Ninja Podcast, and also the President and Chief Wealth and Investment Strategist of Producers Wealth, where we help our clients integrate cash flow banking also known as infinite banking with their business and investments. If you're interested in learning more about how we create strategies that integrate cash flow banking and investments, to turbo charge them you can access a video series at yourownbanking system.com, that's yourownbankingsystem.com.

Speaker 2:                    Welcome to the Cash Flow Ninja. The podcast sharing how to create income streams and manage, multiply and protect your wealth in the new economy. Here is your host, inside the dojo, M.C. Laubscher.

M.C. Laubscher:            Hello Cash Flow Ninjas, M.C. Laubscher, welcome to another episode of the Cash Flow Ninja. I've a great show for you today and in today's show, we're going to look at how to evaluate the effectiveness of leadership teams. My guest today is Jack McGuinness. Jack has 25 years plus of experience working with leadership teams at organizations, big and small across multiple industries. After serving as an Airborne Ranger with the United States Army's prestigious 10th Mountain Division, he helped build a successful boutique management consulting firm where he served as a COO of for 13 years. Jack also served as the CEO of a contract packaging company where he developed a passion for unleashing the leadership capacity for teams throughout an organization. In 2009, Jack joined forces with a West Point classmate to form Relationship Impact, a consulting firm focused on working with CEOs to unlock the potential of their leadership teams. He also serves as a senior professional instructor at the Johns Hopkins Carey School of Business, where he teaches courses on strategic management and human capital. He's also a contributing writer to the Chief Executive Magazine.

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M.C. Laubscher:            Jack, welcome to the show.

Jack McGuinness:          It's a pleasure to be here, M.C. Thanks so much for having me.

M.C. Laubscher:            Can you please share a little bit more about your background and journey with my listeners? 

Jack McGuinness:          Yeah, of course. My background really starts from right after I graduate from college. I won't bore you with all the past before that, but I went to a Military College and so I wound up being an infantry officer with the 10th Mountain Division and got some great great leadership lessons right out of the starting gate as a 22 year old Lieutenant, leading a troop of about 35 infantry soldiers. And yeah, learned some great lessons right out of the starting gate. So that really serves as the foundation, learned a lot from some great officers, but mostly from some non-commissioned officers that were my platoon sergeant, and my sergeants in my platoon that were several years older than me that had a lot of wisdom and a lot of experience to share. From there I got very lucky and help start a management consulting firm in 1992, with a guy who was about 15 years older than me from Deloitte Consulting and started his own firm. I would wind up being his first employee and wound up actually being the Chief Operating Officer of a boutique management consulting firm. 

Jack McGuinness:          At our peak, we were around 50 employees or so and really great experience in terms of being a green consultant and being a green manager of a growing concern and so learn another great ripe, what do you call it? Sandbox for me to learn a lot about myself as a leader, some good stuff and some not so good stuff and also to help grow, the trials and tribulations of growing a professional services firm. From there I was looking for a new adventure, I had had 13 years in of that experience and then with a couple of partners I bought a contract packaging company near your neck of the woods, maybe a little west to you in Harrisburg Pennsylvania. And we had customers like Unilever, Godiva, Hershey and we packaged ... Did a lot of clubs store packaging, a host of packaging type services for big consumer product companies and again another set of trials and tribulations, we did a great job on taking a family run business and and turning it around and got a little too cocky and got destroyed in the financial crisis.

Jack McGuinness:          We were a little bit over leveraged, financial crisis hit in 2007, 2008 and we took a bath. So I learned ... I wouldn't recommend this to anyone else but I learned how to take a company through bankruptcy and I learned some good stuff. I had a CFO who was a little over 15 years older than me that helped me through a very, very trying period of time personally and professionally in my life. But a lot of great lessons from that as well. And then in 2009, I started with a classmate of mine from college that I met when I was 17. We started Relationship Impact, which is a consulting firm that works with growing companies works with the executive teams of growing companies to help the executive teams be staying sane, culturally, operationally, strategically, so that they can really help accelerate the growth and scale of their companies. 

Jack McGuinness:          And so that's really where I am right now. That's what I do now and lots of leadership lessons throughout the course of my journey and and I get to work with entrepreneurs that are pursuing the American Dream every day and putting their hard work and effort and growing employee bases and yeah, going through some of the same struggles that I went through and I try to impart some of my lessons and experience going through those challenges with my clients as well.So that's that's kind of my story, I'm sticking to it. Yeah any questions you have just fire away.

M.C. Laubscher:            Yeah I know. So leadership is obviously a crucial part of a business and a leadership team and it certainly is a journey with a lot of ... Entrepreneurship is a journey of self discovery, leadership is similar to that. Now, a lot of the leadership development that you had started with the military and it develops phenomenal leaders that come out into society. Often their their lives in the military is over and they always rise to the top within leadership positions in a lot of organizations. What are some of the things that you learned in the military with relating to developing leaders and becoming a better leader and growing as a leader?

Jack McGuinness:          Well, I learned very quickly that humility is one of the huge trait, characteristic, whatever you want to call it, that the best leaders have a strong sense of humility. And are able to recognize that they don't know everything. That they have a strength of character behind them, that enables them to admit when they've done something wrong, and they give credit where credit's due. And I learned humility very much out of the starting gate. I grew up in a humble background, blue collar area in New York. So I sort of had that as a base but to be honest with you, I went through West Point, and at West Point, they do some great stuff. But one of the stuff, one of the things they did that they don't do as much now, which is a good thing is that they give you the sense that you're the most important thing in the world and you're great, you're smart, you're talented, you're learning the tools and tricks of being a great leader. 

Jack McGuinness:          And I think a lot of that is true, but you come out and then you get stuck in a platoon or assigned to a platoon and you really quickly realized that if you don't have a sense of humility, you're going to crash pretty quickly. And very gently, if you have a good platoon sergeant, and the age difference between a platoon leader and platoon sergeant is about 10 to 12 years and they very quickly will put you in your place in a very respectful way. And fortunately, I learned a couple of those lessons. You think you're really in charge and you're trying to take charge and do the right thing, but you got to know what you don't know too.

M.C. Laubscher:            Absolutely.

Jack McGuinness:          Humility is a key attribute.

M.C. Laubscher:            Now in organizations and within companies, there's leadership teams, right? 

Jack McGuinness:          Yeah.

M.C. Laubscher:            You're part of the team. What are some of the characteristics that you've seen of great leadership teams?

Jack McGuinness:          Yeah. And so from our perspective, great leadership teams have a few key characteristics. First and foremost, they are these, what's that catchphrase? We call it force multiplier effect, right? 

M.C. Laubscher:            Right.

Jack McGuinness:          The individual contributions of any one team member are not as great as the contributions of the whole, of all the team members and so force multiplier effect is huge. They have impact way beyond the contributions of any one team member. I think the other thing is, leadership teams, executive teams are in place to get results, right? And so really great executive teams that we work we work with are really laser focused on what's most important. And then two other things, I think that are very important, that over time, great leadership teams build their capacity to solve increasingly challenging more complex problems over time, right? So they build that capability to entrust and the ability to deal with tough, have tough conversations with each other, and they build their capacity to deal with increasing challenges. And maybe most importantly, is that great leadership teams have a sense of resiliency and ability to get back on the horse when they fall off, right? And nothing's perfect, there's no linear path in growing a company. And so, having resilience is huge.

M.C. Laubscher:            How can the leaders set up these leadership teams for success? What are some of the things that they can put in place as far as an infrastructure? 

Jack McGuinness:          Yeah. So, that's a great question. Because from our perspective, there's two sides of a great executive team, two sides of the coin. The first side is the structural stuff like who's on the team? What are the roles of the players on the team? Simple blocking and tackling things like how well do they manage their meetings? Do they manage them productively or not? I know that sounds like a trivial issue. But in our work, we find that those teams that manage their meetings well, they have a structure they have an agenda, that kind of stuff, they really are more productive. And then, what kind of management rhythm do they have? Are they? Are they setting time aside to talk about the strategic things when they need to talk about strategic things and operational stuff when they need to talk about operational stuff? Or did they let the operational day to day dictate all the work that they do. And so there's a whole set of structural things that need that the team really needs to commit to, and then there's whole set of relational things. And there's a strong interplay between these two sets of factors, right?

Jack McGuinness:          So, relational items are, is there a sense of trust on the team? Do the team members trust the intentions and the motivations of each other? And from there, are they able to have the tough conversations about the most important things they're addressing in a productive way that leaves minimal relational scars, they're not ... Yeah, defensiveness is always going to be there, but do they let that get in the way? Do they act in passive aggressive or are they able to deal with tough things head on? And if they're able to do that, we often see teams that are able to hold each other accountable without just the authority, the CEO, the General Manager whatever holding them accountable, they're really able to hold each other accountable. So those two sets of forces, the structural and relational, getting those things set up well, will really get a team off on the right track or re-energized or reset, focus on those sets of factors really enable teams to be the great leadership teams that we talked about earlier.

M.C. Laubscher:            You've mentioned the relationship border too, because we are dealing with humans-

Jack McGuinness:          Yeah, it's right.

M.C. Laubscher:            What are some other challenges besides that relationship factors that that teams need to overcome and quite frankly, potential challenges that could hold them back and impact the success and the impact that they have within their industry and business?

Jack McGuinness:          The understanding and not ... We see a lot of companies that have grown from an idea or a product or a service and then all of a sudden that service really works really well. And then they build another service and all of a sudden they have a company and now they have a team of people that have been running parts of that, everything from the finances to the products, to the service and at some point they need to step back and think about where are we going? Right? And so it's really stepping back and looking at strategically what are we trying to do here? What's our purpose as an organization beyond this product or service that we're selling? And taking a look at what the basic blocking and tackling strategic things like who are our competitors? What's the market we're serving? And are we going to market the right way? Are we tripping over each other? Going to market with services that may be complimentary but confusing to the market. So really stepping back and taking a look at strategically where they're going and what the market looks like, who the competitors are, who their strategic partners need to be, those types of things.

M.C. Laubscher:            You're listening to Jack McGuinness on the Cash Flow Ninja podcast. We'll be right back after a word from our sponsors. 

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M.C. Laubscher:            You're listening to Jack McGuinness, on the Cash Flow Ninja podcast and I'm back to our interview. How do you measure the effectiveness of a team when you're doing an audit? I guess for lack of a better better term. When you look at how the team's performing, is it difficult to measure the effectiveness? How do you find areas for improvement? what's the process for evaluation?

Jack McGuinness:          Sure. So there's two sets of metrics in terms of success of a team, right? The ultimate success metrics for an executive or leadership team, or the business results that the organization produces or doesn't produce, right? And so over time, the long term ... How a board or how a set of investors is going to measure a leadership team on or the CEO and his or leadership team is the business results, right? And so that's number one, that's clear. However, there's a set of factors that can be measured and diagnosed to make sure that we're on the right track to getting those business results, right? And so I talked a little bit earlier about the structure on relational factors. We start each engagement with a diagnostic, we work with an organization called Team Coaching International, it has great validated instrument. It's been around for about 12 years now, thousands of teams have been through this instrument. And so what it measures are seven relational factors and seven structural factors. And it gives a real ... And it looks at it from a systems perspective, the team's perspective. 

Jack McGuinness:          So we get the executive team to take it, we get sometimes the board to take it, we get the direct reports of the executive team to take it. So we have sort of a 360 view on how this team is functioning from a structural and relational perspective. And it gives some great insights into, okay, where are we at right now? So I'll give you a couple of examples, right? And working with a team right now, that in terms of their inability to communicate constructively with each other, they're challenged, right? And so it's also there's a correlation between that constructive interaction and their ability to make decisions well, and not repeat or turn on decisions over and over again because they're afraid to talk to each other about them, right?

Jack McGuinness:          And so it gives you a baseline for identifying what are the key routes that are getting in your way and then really being able to attack those. Some might be structural, we don't really manage our meetings very well, so we're going to really do a good job at being more structured in how we manage our meetings or we don't manage conflict very well. So we're going to do some basic blocking and tackling work to repair or to improve trust on our team. So we're able to talk to each other more directly without defensiveness, right? And so that baseline instrument gives you an ability six to 12 months from now to take a look again at how are we doing with those things? And these are really predictive. It's really what we call an objective way of measuring a fairly subjective topic, right? That gives you some predictive metrics on how well you're going to get to those business results. Right. And so that's, that's how we work with companies to measure their effectiveness as our executive teams measure their effectiveness.

M.C. Laubscher:            I like it that there's many different metrics because you could be almost ... Yeah, you could almost have a false sense of security because in a rising tides boats usually float up to the top, so usually when there's an explosion within an industry, yeah, the company's doing well, the numbers looks fantastic and you can't keep up with all the orders for instance, that you have and then all of a sudden when the tide goes out as Warren Buffett would say, then you see, really who's been swimming naked. And all of those little things that were out of check, were out of balance within a team or an organization, that's really under the microscope.

Jack McGuinness:          That's right. And because obviously, the work that we do, we're working with executive teams or leadership teams of growing companies right now. Our premise is that if the leadership team is humming, the likelihood of the rest of the organization humming is a lot greater.

M.C. Laubscher:            Right. Now a couple of tactical things, because we have some business owners, we have entrepreneurs, investors, what are some of the steps that they can do and implement within their own business as far as looking at, "Do I have the right leaders in place basically?"

Jack McGuinness:          Yeah.

M.C. Laubscher:            That would be the first question if you go into your organization. Yeah, maybe business is okay, but is my leadership position or my leadership team, rather, do I have the right members in place? 

Jack McGuinness:          Yeah. And so the first thing you do is define what it is that you want your team to be doing. There are many organizations where the leadership team or the executive team is a compilation of the CEO's direct reports, and really it's a communications and reporting function. And that is one way to manage, there's no question about it. But if that's the case, then the definition of who's on that team and what their capabilities are, are markedly different than an organization that has a set purpose for their executive team. And what I mean by that is businesses go through different business cycles, right? And so what we typically see is executive team is laser focused on collectively addressing the issues that are facing it at that point, in that juncture in their business cycle. 

Jack McGuinness:          So give you an example, there's a, there's a a professional services firm I'm working with in New York or I worked with last year in New York, that had a huge customer concentration, about a $75,000,000 firm, about 80% or more of their revenue was with one customer. So obviously, they had grown very quickly with one customer, and that's a great thing. But now, at the point we were working with them, their focus was laser focused on how do we reduce that customer concentration? How do we approach the market and go to market in our different lines of business in in a strategic way, so that we're not tripping each other over each other when we're going to come customers, for example. And so that team has to have a set of executives or leaders that are really in sync, aligned collaborative, able to play, able to disagree with each other able to understand other's perspectives versus the other team that's more of a reporting out, really more of a one on one relationship with the CEO who's driving the ship.

Jack McGuinness:          So getting a sense for were your organization's at and what your team, what your executive team is there to accomplish, is a very basic starting point for the types of people you need on the team and the types of leaders you need on a team. I hope that makes sense?

M.C. Laubscher:            Yeah. And if you hire though, also what's your philosophy on bringing in folks? Is it bringing in the right people and finding a role for them that suits their strengths? Or is it hiring specific for a position and a role to fill that within that team?

Jack McGuinness:          That's a hard one to answer to be honest with you. I guess, I hate to be evasive. But it sort of depends, but I'll just tell you my experience in running two companies now. One as the COO and one is the CEO. I would definitely hire for leadership capability and potential and smarts and talent versus necessarily a specific expertise, if that makes sense. Obviously, there are positions, you can't hire someone to be a CFO that doesn't have good finance experience. But I would definitely lean on the side of someone that has values that are in sync with my organization's values. And that has smarts and talent.

M.C. Laubscher:            Got you. Now, one habit I've observed from very wealthy and successful people is that they're always studying new subjects and learning new skill sets. What are you currently studying and what new skill sets are you currently learning?

Jack McGuinness:          Yeah, that's a great question. I am a junkie, right? As I'm looking at my bookshelf here I got books basically from leadership to psychology to engineering, right? And in terms of how you put all those concepts together to help a leadership team best be the best they can be. I guess one of the things I'm really laser focused on right now is the topic of self awareness, and there's a great book by a young organizational psychologist named Tasha Eurich called Insight that has gotten me over the last six months to do a lot more reading on self awareness and it's some of its very thick and I wouldn't recommend reading a lot of, but Tasha Eurich's book on self awareness is huge because at the at the heart of a great leader and a great leadership team member is the ability to be self aware and there's two sides of self awareness, there's my understanding of who I think I am, but the most important part is what other people think. Am I self aware enough to know how my teammates see me? Do I ask for feedback? Do I asked the next question to understand, to get a sense for where folk see me, right? And so I'm sort of in that continual search for more on self awareness at this point.

M.C. Laubscher:            Now, a core message in our show is to leave our families, communities and the world better than we found it by passing down a mindset, values and principles to future generations, not just money. So if you cannot pass on any money to future generations, and we're only allowed to pass on three principles to them to build wealth and achieve happiness and success, what would they be? 

Jack McGuinness:          Number one would be humility. And we talked about that earlier in the discussion. Number two would be what Carol Dweck calls a growth mindset. Which means that I have a curiosity behind me, I have a sense of wanting, that my experience is great, but it's not all that's out there, that there are other people with other perspectives. And really, a growth mindset is a really a learning mindset. And I'm pretty passionate about that. And then the third thing is basic integrity. Again, I grew up in a pretty blue collar area, and it was pretty black and white in our house. And so integrity is huge. So humility, a growth mindset and integrity are huge values. And I think, boy, if more people had those three things, the world would definitely be a better place. 

M.C. Laubscher:            Absolutely Jack, anything that you're excited about, for the rest of 2018, any projects that you're involved with?

Jack McGuinness:          I'm in the very, very early stages of a concept for a book that I'm spending my free time just jotting down notes and organizing my thoughts and I'm probably a year and a half, two years away from it. But just in the last couple months I've gotten myself, I'm really on vacation, I started getting myself focused and organizing my thoughts around how do I how do I get this new concept or this book, sheet so I can start writing it in 2019?

M.C. Laubscher:            Very exciting stuff. Jack, where can my listeners learn more about you, what you do, your company and stay informed of all the projects that you're involved with?

Jack McGuinness:          Yeah. So my website is relationship-impact.com. And for those folks that are listening to this show, I have a complementary offer for General Managers, CEOs, C-Suite Executives that want to take a team diagnostic on their team, so it gives them a point of reference on how well they see their team working. I'd be happy folks come to my website, there's a complementary offer leadership team assessment on the website. 

M.C. Laubscher:            Great, well thank you for making that available, Jack. Thank you so much for coming on the show and sharing your journey and your knowledge and providing so much value for my listeners.

Jack McGuinness:          M.C. Thank you so much for your time. I've listened to a whole bunch of your podcast in preparation for our talk and I'm really impressed with the work that you do and boy, you got some powerful guests on there.

M.C. Laubscher:            Thank you.

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M.C. Laubscher:            Thank you for joining me again on the Cash Flow Ninja. Thank you for all your support, you rock. If you like what you hear and appreciate what we're trying to build here at the Cash Flow Ninja please subscribe, rate and review our show on iTunes and share our show with family, friends and your network. If you're not a subscriber to our newsletter, you can sign up for our newsletter at cashflowninja.com or text Cash Flow Ninja to 44222. I'm also posting daily videos on Facebook and YouTube and will live stream weekly starting May,2018. To make sure you don't miss any of the live streams, please like and subscribe to my Facebook and YouTube platforms. I'm also dropping content on Instagram daily. Be sure to follow us on Instagram to get in on the action. I want to thank you for spending your most precious resource with me today, your time, that's our show for today. Until next time, live a life of passion and purpose on your terms.

M.C. Laubscher:            This presentation is for educational and informational purposes only. The information being presented and considered does not consider your particular financial objectives or situation and it does not make personalized recommendations. This material is not intended to replace the advice of a qualified tax and legal advisor or other qualified professionals and you should not use the information in place of a customized consultation with a licensed professional regarding your specific personal financial objectives, situation and needs. We believe the information provided is reliable but we do not guarantee its accuracy, timeliness or completeness.