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D32 is a premium business growth network where business leaders and experts in Perth and across Australia form meaningful relationships so they can leverage the time, contacts and activities of a vast network. D32 supports the little guys (and gals) and the 7-8-figure businesses. We’re a community that has each others’ backs. This podcast is about all things business, entrepreneurship and connectiom.
D32_Part 1_Paul Claessen
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[00:00:00] All right. Welcome to the District 32 podcast, or welcome back to the District 32 podcast Today. We don't have dean in the studio. Uh, Dean's nowhere near the studio, but we do have someone, I'm gonna say he's a little bit better than Dean. Hopefully this message doesn't get to him. Uh, Mr. Paul Clayson. Mate, I am so excited that you've come on this podcast because what you've explained to me.
Is pretty much exactly how any novice or experienced person can make a business. Incredible. I think so. I hope so. Well, it sounds like you've done that a few times, both for yourself and for other people as well. Mm-hmm. Um, and, and I love the, the framework or the pathways, I think you call it, or the pathfinder, Pathfinder that you've put together.
So this. It's gonna be a series of four podcasts, uh, with Paul, uh, because just to cover the different [00:01:00] aspects of the Pathfinder and, uh, if you've got a business you're looking at, going into business or anything like that. Paul, uh, Dean's taught us a lot about sales, uh, and this is gonna be a whole new aspect of the whole business.
So, Paul, can you sort of introduce us to the whole, uh, I guess Pathfinder way for business owners? Sure. Uh, and look, I'll give you a, a super quick history, super quick history. Uh, a lot of people, when they start business, they're very, very, um, technically excellent at whatever the business is that it does.
They could be an electrician, they could be a recruitment consultant, an IT person, and I've been the person who has never been. Technically excellent at any of the businesses I've, I've been a, uh, an owner in or, or a, a manager of. So, uh, I've run a very large scale healthcare business. I've run a medium scale IT business, and I've run a cycling [00:02:00] technology business.
I've never been the, the technical expert in the middle of a business. So in order to be able to grow those businesses, I, I had to have something that allowed me to hire people who were technically excellent. But what I would be, would be the person who is good at the business part. So. Mm. Uh, I, I'm, I'm a little bit of a nerd.
You know what I'm, when I say I'm not a technical guy, I was a trained software engineer, so I need to, I needed to have it in a bit of a, a, a logical, um, I needed to be able to see it in a, in a logical sort of manner. So I built Pathfinder, and really Pathfinder was about understanding the four core pillars of any business.
So the four core pillars are people, you have to have a team of superstars around you. The next one is performance. Every business needs to perform. It needs to perform financially and operationally. Strategy, which is all about, uh, winning. Yeah. How, how do you win business at, at high margin? And finally is how do you find lots of clients?
In other words, grow. So that, that pathfinder model was really about. How to build a team of superstars, [00:03:00] how to make your business perform financially, how to win and how to grow that. That's really the history of Pathfinder, and that also just happens to explain the four core pillars of Pathfinder as well.
It's how do you solve those four core problems in a business? So these, it sounds like you actually come up with this, I guess partly by needing a strategy of how to run businesses in an area that you may not have known a lot about that business. Is that right? That's exactly what happened. Okay. And the, the, the businesses that I was running, um.
They, they all were very high growth businesses, so I didn't have time to make the mistakes. Like I didn't have time to make hiring or management mistakes. I didn't have time to, to sit down and kinda like work out how to make the business generate, you know, maximal profit. So I had to have something that almost had solved those problems before I bumped into them because they were both the two that I owned, which was the recruitment business and the IT business.
In three years, you know, one grew from [00:04:00] nothing to 65 million in three years. One grew from nothing to 8 million in, in three years. When you're growing at that rate, you don't have time to sort of stop and go, Hmm, I wonder how I can do this. You need to almost have the manual there ready. So that's why I built it.
Yeah. Wow. No, that's, that's very impressive. And it sounds like the, the, um, the HR side of things has really helped you along this way. Yeah, I, I mean, I would, I would predominantly say people, people are. You can talk about AI until the cows come home. I'm not a believer that AI will replace jobs. I'm a a huge believer that AI will mean that there are way more jobs.
Mm-hmm. Yeah. But you know, like you, you need people, any, any commercial pursuit is going to need people. And I think as small business owners, we, we tend to kind of have this almost impoverished view that, oh, the corporates and the big businesses get the great people, and we just deal with the people that are left.
I don't believe that I, I think it's very important as a small business owner that you equip yourself with a [00:05:00] team of superstars because it'll make the job so much easier. So, to me, people is such an important part and it, and it's the foundation. It's the foundation block of foundation blocks. That's probably a real big relief for a lot of small business owners to know that they can actually have the core, the key people that are gonna take their business where they want it to go.
Yeah. In part that sort of philosophical, in part it's mechanical. Yes, of course you can, even as a small business owner, you can get access to those people. But I think the philosophical thing is small business owners need to actually like flick that little switch in their mind and say, I deserve great people.
I think a lot of times small business owners might think, oh, I don't deserve them because I don't have anything to offer them. A small business owner has an immense amount to offer. Really talented people and really talented people love working close to the coalface. So I think just this whole idea that you deserve great people is an important decision to make in your own mind, and then [00:06:00] at least you're giving yourself a chance of finding them.
I love that. I I absolutely love that. That's fantastic. So Paul, as we go through, we got, like I mentioned earlier, a series of four different, uh, we're gonna take a series in this mm-hmm. Four different areas on the, on the pathfinder. And the first one, which we've been talking about is people. So can you step us through this, um, three different aspects to this is find, manage, and lead.
Can you step us through those three different areas, please? Yeah. Well, I, I guess that the, the, the first part of, of any, um. If you're building a team, you've gotta find the team. So recruiting, recruiting great people is an extraordinarily important skill. So first skill and second system, or first system, then skill.
I don't, I don't really, I can't put put a sequence on that, but you have to both be skilled to do it, and you have to have a system to do it. So finding those people. First of all, designing those roles. Second of all, finding those people. Third, being [00:07:00] able to select those people that you know, you're gonna get a, a wide array of, of applicants.
And finally, being able to sell your business and sell that opportunity to these, uh, like unicorn A players really important things. So just going through those four things, you have to define the role, a really important thing to do. Second of all, you have to source the right amount of applicants like you need to, if you're looking for A players, you're looking at the top 10%, so of 10 applicants only one is viable.
So you stretch that out. You probably need to be looking at a hundred applicants. So sourcing applicants becomes important. Finally, being able to select from all of those people that come in. Uh, sorry. Then being able to select and finally. Having the skills to be able to sell this role and the company and you as a leader to that applicant is a very, very important part of a system.
So you've, it's almost, it's very different now, isn't it, where you said you've gotta sell you and the company, or used to be them having to the, the person you are looking for having to [00:08:00] sell themselves. A bit, a bit of column A, a bit of column B. I mean, they've gotta sell themselves, but they, they don't really, I mean, really as the, if you're a, if you're a skilled recruiter, you're simply looking to build a set of facts that support that person's, um, validity or, or suitability for a role.
Not like that. If you're skilled, you'll do that and you probably don't want someone to sell because in that, in that context, if they're selling, they're, they're probably, you know, telling mistruths or half-truths. So. Just helping somebody put, put all the facts on the table and then yes, you do need to be able to sell yourself as the leader.
People work for leaders, they don't work for companies. You need to sell the opportunity because that's the future. That's really what they're looking at is the future. Where does my career take me in five years with this business and then sell the company, which is just about the environment. Like who else are they working with?
Like a players don't like working with people who aren't A players, so unless they can be very satisfied that there's a team of A players. They're likely not to take your opportunity. [00:09:00] And in this current, you know, low unemployment market, which by the way has been around since about 1995, this isn't a new thing.
Mm-hmm. Um, in this current very low unemployment market, you know, the 25 year, uh, low unemployment market, these o players have an abundance of choice. You have to do everything you can to sort of leave all the competition here, and you set yourself here. And that sort of leads into the next, the next point, doesn't it?
The whole managed side of things, managing a player. So they want to stay and give her their best. So how do you do? Yeah, well, well, if you've defined the role really well, it's very important to manage, manage those people. I expect to be managed. I, I, again, I think. Small business owners can like let this pressure, a pressure point of I don't wanna micromanage people, they can let go of it.
It doesn't, it's not a real thing in the context of how it's often portrayed. I, if you think about boil the, the science of management down to the most [00:10:00] basic component parts. It's managing activities, managing outcomes, managing behaviors. Managing when problems arise, they're the four things that you would do as a, as a manager of a person.
So what activities do I need to see you doing? So it's both volume and quality. You just gotta think about that. It's managing the outcomes, like, you know, and I'll use sales because you mentioned Dean talking about sales. You know, it's all well and good to say to a salesperson, I need you to make, uh, 50 outbound calls this week.
There's an activity from a volume perspective, from a quality pers perspective, here is the playbook that we operate by. So that's managing activities and volumes or volume of activity and, and uh, quality of activity. But at the end of the week, if you made those 50 calls and you didn't secure, that's just, and I'm picking random numbers, Kingsley, so you, you know, you would want to see that they, [00:11:00] um, secured prospectively 10 sales meetings.
Yep. Well that's managing the outcomes. So lead indicator, lag indicator behaviors are really about good, bad, and, and unwanted good behaviors You reinforce. So good behaviors are things like working well with other team members, um, problem solving, looking for a service improvements, so good behaviors. So it's about re rewarding and reinforcing bad behaviors.
It's about dealing, dealing with, um. Bad behaviors. Uh, and that's really about explaining to somebody, you can't behave this way, and this is the behavior that I want you to exhibit instead. And then unwanted behaviors. I, I guess that's just, you know, like annoying but not damaging behaviors. That's, it's learning how to deal with those.
So that's managing activities, managing outcomes. Managing behaviors. And then the final part of of management is managing things. When problems arise, [00:12:00] you need to be able to teach and train your staff to solve a problem in their own mind. Present one, two, or three, you know, prospective solutions and workshop that with you.
Otherwise, your desk becomes the dumping ground. You as the manager, becomes the dumping ground for every problem in the business, and instead of hiring brains, you've hired fingers. And fingers are not that valuable. Now that's, that's actually the way you've just defined everything like that is, is brilliant.
I love how you've got the big overall and then you put all into little buckets and then you take them and put 'em into little buckets. It's, it's really, uh, your system really is follow the bouncy ball really, isn't it, when you think about it. Very much so. And it's, it's, it's, to me, you, you, you run a small business.
You are literally. Either willfully or uh, subconsciously you've chosen the hardest thing on the earth to do, and [00:13:00] I would challenge anyone to tell me something harder than running a small business. Someone might say, you know, the president of the United States, sure, that's a damn difficult job. They've also got a team of 1500 people supporting them.
Mm-hmm. And they've got, you know, presumably endless money, you might say. A brain surgeon. Yeah, a brain surgeon's a very, very difficult job. However, they've got masses of support around them. Now, stick yourself as a small business owner. Your staffed of expertise, you're staffed of capital. Banks don't lend small business owners that much money and your staffed of liquidity, they're very difficult to sell.
So I look at this and I go, well, what's the most reasonable thing for these? You know, and I love small business owners, I have to say it is. It's my tribe if they're starved of expertise, capital, and liquidity, well, I can solve one of those things by getting all of these systems, turning it into something that's very, very easy for people to look at and go, yes, that's, that's something I can do.
I can pick that system up and I can [00:14:00] apply it in my business. So I try and turn it into a follow the bouncing ball system. I love it. I love it. And um, the third one there, uh, we've got find, manage, and lead. This is a big, big thing that a lot of people have issues with ex and I think the, um, what's the word, the poor assumption or the uneducated assumption that 99% of people make is that leadership is all about charisma.
Being some swashbuckling leader that. Leads the troops into battle and all these sorts of things. And in more, you know, more often than not, leaders are not that charismatic. They're a hell of a lot more inclined to being quite systematic versus charismatic. Um, when you look at a guy like General Patton, you know, like a great US military leader, he wasn't that charismatic.
So, you know, fair. Some of the leaders in history [00:15:00] have been very, very charismatic people. However. It doesn't have to be, leadership is a set of disciplines, not a, you know, psychological propensity. It's not like someone that can wake up and, you know, give these, I have a dream speech. It's, it's just a, it's a, um, it's a set of principles that you need to abide by.
And I think the important thing to understand as a leader of a business, you're on show 24 7. Mm-hmm. Very true. So, yeah. And you, you're never, you're never not on lead, on show as a leader. Yeah. So, so, you know, like, carry on. No, I was just gonna say that opens up a whole range of, uh, topics we can go into, which obviously can't do today, but I, I'm glad that you, you did bring that up.
Yeah, and a lot, those five principles are actually pretty simple. I mean, you said like I get a big bucket and turn it into a smaller bucket and small, a smaller one. There are very five very clear principles, and if you think about it as a parent, you probably follow these things all the time. If you've got children, you just don't know, you do it [00:16:00] one.
Number one, the most important one is modeling the way people follow. People. Follow what you do. You know you're a leader. Yeah. If people don't follow what you do, you're not leading like that's in the dictionary. Right? So modeling the way is really important. This is what I mean about being on show.
Inspiring a shared vision, you know, leadership, if you wanna break it down to like a really simple thing is saying to the team, we're going that way and, and this is why we're going that way. Uh, another aspect or discipline of leadership is challenging the process. Don't just accept the status quo. Really important to challenge the process.
Um, enabling others to act, which probably contradicts my thing about micromanagement. It still doesn't mean that managing people as micromanagement, enabling others to act is like extracting from them what's between their ears, not what's at the end of their fingertips. And I think finally it's just encouraging the heart, which is like letting people know that what they do is important.
So if you can [00:17:00] enact 1, 2, 3, 4, or five of those disciplines, irrespective of how charismatic you are. If you're systematic about it, you can be a great leader. But the best thing about leadership if you are a great leader, is you get more of your staff. It's never a guarantee, but you get more of your staff into what's called the discretionary effort zone.
And if you think about great sports teams, if you've ever watched a great sports team. You know those a FL teams that have dominated in, in, in any given like season or, or groups of seasons? Hawthorne, I think was one. Richmond was one. The Eagles had their patch for a period like Sydney Swans. You look at those teams and those players don't just play for statistics, they play for something more.
Mm. And when you see the way they play, it always looks like they've got an extra player or two on the park. It's very true, and that's exactly the same as soccer. I'm a cycling freak. I love cycling. You watch how cycling teams operate in these grand tours, and some of the riders go out there [00:18:00] and completely destroy their themselves physically and mentally just to get one, one person across the line before everybody else.
That comes from leadership. That doesn't come from management. So management is really getting people what they're paid, getting people to do what they're paid to do, and there's nothing wrong with that. That's an important thing to do. Leadership is explaining to people why what they do is important with the aim in your mind of getting people into that discretionary effort zone.
They'll do more for your customers, they'll do more for your business. They'll, you know, do more for each other. All of those things are really, really important aspects of of a a, a world class business. Paul, that was absolutely fantastic and so brilliantly articulated. Hopefully everyone has already taken a lot away from that.
Go back and listen or watch this podcast again because you're gonna want to, uh, catch more of it. Uh, and as I said earlier, this is, uh. Uh, the first in a series of four, uh, that we are leading and really how to [00:19:00] run any small to medium sized business. Exact step by step as you just heard, Paul, thank you for that.
Uh, and I wanna encourage anyone listening, make sure, stay tuned for the next one coming up because the next one is all about performance. Everyone of us wants to be able to, a, perform ourselves, but also make sure that our team is performing as well as possible as well. Paul, again, thank you for joining us on the District 32 Podcast.
Look forward to catching you next time. Thanks.