Leading with Clarity: Mike Paton on Culture, Accountability, and Building Great Companies

Charles: Today I sit down with Mike Paton, or as I like to call him Paton. Paton was the CEO of EOS worldwide as the visionary for five years. He has been spending his time working with small businesses all around the world, helping them become better. He’s spoken in front of tens of thousands of people. He’s authored numerous books on the topic, and today he’s sharing with me all of the secrets of what it takes to be an incredible leader.

[00:00:43] What Makes a Great Company

Charles: All right, you guys ready? Are we rolling? Alright, we’re going to dive right in. Mike Paton, welcome to Cleared for takeoff. 

Mike: Thanks. Great to be here. It’s really good to have you. great to be here. 

Charles: I want to just start off by asking you what makes a great company. 

Mike: Oh man. so you, you asked me the easy question first.

you know, what makes for a great company? Promises made and promises kept would be where I start the conversation. having a clear sense of who you are at the core, who you want the organism that is your company to be at its core, where it can go and should go. Creating clarity and simplicity around that.

Sharing it with everybody in the organization so that everybody’s executing consistently well towards achieving that thing you’ve clearly defined. It just creates forward momentum. It creates a bias for action. It insists on accountability. It insists on achieving. Objectives of satisfying the client and achieving the revenue and profitability goals and being a great employer and attracting great people.

That’s what makes for a great company. 

[00:02:08] The Leader’s Primary Job: Creating Clarity

Charles: So something I heard you say with clarity. And that’s one of those things that you can never have too much of. So when you think about clarity, what does that, like, what does that mean in an organization? 

Mike: Yeah, I think that’s , a common. misperception of a lot of leaders who are working their tails off and trying to be really good.

And we get to the point where we feel like we’ve said what we need to say often enough. And the truth is humans need to hear it seven times to hear it for the first time. So, so a lot of leaders struggle with creating clarity in an organization because once. It’s clear in their own head, they just assume everybody else is clear.

Or they’d come knocking on my door and asking me what the heck’s going on around here a lot of times I have to explain to the people I work with that not a lot of employees, even folks that have been with you for years, are real comfortable knocking on the boss’s door and saying, Hey Charles, I know you’ve been saying the same thing over and over and over again for the last five years, but I’ve never really had any idea what you were talking about.

And so great leaders, this is a Patrick Lencioni quote that I love. Great leaders create clarity, communicate clarity, and over communicate clarity. That’s our job as leaders. And when you find yourself doing something that isn’t one of those three things, maybe go back to creating clarity, communicating clarity, and over communicating clarity.

Charles: So it sounds like clarity is kind of the job of a leader. Just being clear. 

Mike: Yeah. I mean, what you want is you want your people to come in and have enough of a sense of who you are, where we’re going, what we plan to prioritize in order to get there, what their job is and their role in helping the company achieve its vision so that you and the leadership team and the next level managers aren’t constantly being inundated by the what do I do next?

What’s, is this okay? Am I, are we, what are we, are we supposed to go this way or that way? The fewer questions you put people in a position to have to ask before they do the next thing to help the organization achieve its vision. The, the more effective you are at executing without you having to push all the buttons and pull all the levers.

Charles: So that leads me to wonder, as a leader, how do I, how do I come up with clarity myself? Like for me, 

Mike: S quiet time. Quiet time thinking time. My friend and mentor, Gino Wickman, the creator of EOS, used to call it Starbucks time. He would go to a Starbucks a couple blocks away from his house.

He’d bring nothing but a pen and a blank legal pad, and he’d take notes or he’d draw pictures or he’d. try and work out issues that he was struggling with. Most of us are so geared up to do the next thing. We don’t stop and think as much as we should. Hmm. And you can’t be clear and create clarity for anyone else.

When you’re not clear in your own head and it’s man Charles, it’s really hard to do when things are humming along for your business. It’s really hard to do when your business is struggling, because the temptation we have is to just jump in and grab a bucket and carry some water to wherever the fire is.

And, sometimes the best thing you can do is resist the temptation to do that and create clarity instead. So now all, all of a sudden you have 20 or 40 or a hundred employees who are grabbing buckets and helping you put the right fires out and focus time and energy on the right priorities.

Charles: So I would imagine in the world of social media and Instagram and even LinkedIn, that it’s harder and harder to have the discipline to. To have that quiet time. 

Mike: Yeah, and like anything, you have to make it a habit, right? If it, it, quiet time is not something you can wait until you have a moment available for, you have to schedule it.

We teach a tool in, in an EOS company called the Clarity Break. Where, and the, the to-do, to get your clarity break up and running is to go into your calendaring system, create an appointment on the day and time where you think you can make space every week or every two weeks or every month. Some of my clients do it every morning before they start, or every evening right before they leave the shop.

Go in and create a recurring appointment and make the appointment. You set with yourself the most important appointment of your week. And if, if you can’t prioritize yourself and you’re canceling an appointment with yourself for the other people who want a piece of your time, you’re just not thinking about it right.

[00:07:22] Understanding EOS: A Proven Operating System

Charles: So you mentioned a lot about EOS. You’ve used a few terms. What is EOS? 

Mike: Yeah, EOS stands for the Entrepreneurial Operating System. It’s just a set of simple concepts and practical tools that have been around forever, going to be around for a thousand years, more that Gino Wickman packaged into a proven process, a proven model, and a proven toolbox that helps the people who own and run entrepreneurial companies get what they want from their businesses.

Charles: Hmm. So do, yeah. I, we have operated on EOS for well over a decade now. When you think about the, the organizations that EOS would apply to, I, is it every company? Is it small companies? 

Mike: Yeah. It most, what our philosophy is is that every organization needs an operating system that the people who own and run it agree.

We’re going to use to execute well on a regular basis. We don’t believe every company needs to be running on EOS, but we do think you need some sort of an operating system because. What I’ve seen when I’m working with new leadership teams to our operating system that previously had none, is there’s a lot of time and energy spent arguing about how we’re going to set goals and what do we call goals and how many are we allowed to set and who gets to decide when we don’t all agree on what the priorities are.

And those are the kinds of things an operating system kind of creates. Structure and framework around EOS was built for companies that are privately held have between 10 and 250 people whose owners and leaders are open-minded, growth oriented, want help. They’re more afraid of the status quo than they are of change.

That’s our definition of entrepreneurial. But there are lots of, when I started 18 years ago doing this work, that’s where. 95% of the client base was in that sweet spot. There are lots of companies today that are larger or smaller, maybe not completely privately held. I work with two publicly traded institutions.

and so, so EOS works for the leaders and owners of companies who want to run their business the way an EOS company runs. 

Charles: Hmm. That’s a, it’s funny, I’ve listened to, I’ve, I’ve read traction, I’ve listened to, what the heck is EOS I’ve read Rocket Fuel, which we’ll get into like that Cool. In a few minutes.

[00:09:56] Building Strong Leadership Teams

But when you think about a good leadership, like, you work with leadership teams every day, right? Yeah. And I’m, I’ve always been curious ’cause I, I only see my leadership team. You see a lot of leadership teams, what makes a good, strong, successful, maybe well-rounded leadership team and what makes one not so great?

Mike: Yeah, one of the things Charles is, leadership teams are like snowflakes. Everyone’s a little bit different. I’d say there’s a couple of common themes. a willingness to put the greater good of the business at the forefront rather than focus on your own needs, wants career aspirations, et cetera.

Selflessness, Hmm. a devotion to helping the company achieve its vision and helping the other people in that organization, not just. The employees who report to you, but also the other members of your leadership team and the people you report to in an organization, when you’ve got a lot of people in an organization who care deeply about the wellness of all of that, ugh.

Man, it is magic. Mm. And when you’ve got even one person on a five or six person leadership team who’s constantly focused on what I need and what the people who report to me need and, and isn’t really taking the time to wonder how fulfilling all those needs might affect the whole picture. that’s something I think that is a common thread.

Another common thread is accountability. We, we preach, our philosophy on leadership and management is that great leaders and managers lead and manage in a way where people who are naturally accountable. They, they feel bad when they don’t deliver on a promise that they made. Hmm. They, they’re pushing themselves to get better results without waiting for somebody else in the organization to push them.

Those naturally accountable people. If you can lead and manage in a way where they feel special and appreciated and challenged and like they have opportunity and like their ability to contribute to the organization is recognized regularly, you’re going to attract people like that in droves. And the folks who aren’t accountable will stick out like a sore thumb and will want to leave.

And I think that’s a win-win win. The company wins, the manager wins, and the employee wins because they got to go find a company where the way they want to show up every day at work is appreciated and it’s not going to be appreciated in a great organization where we’re constantly trying to get better every day.

Charles: Have you ever had to fire a client? Fire, and I don’t mean like, yeah. Fired. Fire, fire, fire. Yeah. Have you ever had to be like, they’re too toxic for me.

Mike: Fire. Fire. yeah. Fire is too strong a word for me. I want to help entrepreneurial leadership teams and owners who want. The stuff that EOS brings to the organization.

And the only time I’ve ever said to a client, Hey, I don’t think this is working. It’s because I want to deliver value every day. And when I show up to a session and I’m teaching the tools that I’ve seen 150 companies personally benefit from, and I’ve seen the 850 other professional implementers around the world have the same kind of impact on their clients who take the work we do seriously.

And I’m dealing with people who are just fighting me tooth and nail about why we shouldn’t have a weekly scorecard. We do everything monthly around here, and blah, blah, blah, blah, blah. You know, at some point you’re kinda like, man, you’re paying me a lot of money. And I keep trying to help, and you keep telling me all the reasons.

The help I’m trying to give you isn’t going to work. I think maybe it’s time for us to go our separate way so I don’t call it firing, I call it more of a amicable separation. Yeah. Yeah. 

[00:14:04] The Value of Professional Implementation

Charles: The diplomatic way to say it. Well, it’s just, I mean, the life’s too short, man. Yeah. It’s just too short. Oh, yeah. And if you think about how much time we spend in our work and how, how significant that is in the grand scheme, it’s like you, you might as well get it right.

That’s right. And be working with people you like. 

Mike: Well, and, and, If you don’t, for the record, this has been a long time since I’ve had to have that conversation because I’ve gotten really good in the early communication with a prospective client at sniffing out whether they’re truly up for the journey ahead.

And, and part of that is the EOS process, was maniacal about creating the kind of initial engagement at no charge, where we’re kind of showing everybody what’s going to be, what if we decide to work together. And so it’s rare now that somebody shows up in the room and is surprised by what I’m asking the team to do.

And, and I’m grateful for the process creating a structure for me to, to, to have the kind of conversation when somebody does get through the filter and clearly doesn’t want what we have to offer. It’s really easy to say, Hey, I don’t think this is working for me. It must not be working for you. Let’s, let’s part ways.

Charles: So what would you say to someone who says. I can read the book. I don’t, why do I need to hire some implementer for, you know, 30 to 50 maybe grand a 

Mike: year? Yeah. So for some clients, I think that’s a perfectly good idea and I’m very supportive of that. I Gino built the system to self implementable.

And what I mean by that is it’s simple and I, and I think that’s why some leadership teams struggle with it because, there’s some really smart people who start entrepreneurial companies and, and they’ve been conditioned by the education system in this country, and by lots of other smart people that if it isn’t complicated, it must not be good.

Hmm. And so, I’m always supportive of somebody who says, I think I’m going to ask everybody on my leadership team to read the book. and, and then we’re going to start doing this ourselves. You’re expensive, Paton, or, we don’t really have the time to set aside to coordinate calendars with your schedule, or whatever the reason is.

Now, what I beg them to do is I beg them to, before they start doing that with their leadership team, I beg them to spend 90 minutes in the room with me and let me paint a picture of what. A company really running on EOS looks like at the end of the journey, working with a professional. And what I’m doing there, I, I refer to it as the photo on the cover of a jigsaw puzzle box.

I’m painting a picture for them of what the puzzle looks like when you’ve put all the pieces together. So if early on they’re like, oh my God, I don’t, this is supposed to be an ice cream cone and it’s turning out to look like a forest. We’re not doing something right. I’m always there for them if they, if they want to try and work with me.

Yeah. 

Charles: Yeah. It’s, it’s been amazing to, understand the differences between implementers as well, right? Yeah. Because every, every single person who does this is their own, and, and the book of. Businesses they work 

Mike: with completely different too. Well, that’s one of my favorite parts of the work, Charles, is I’m one day I’m working with your leadership team.

The next day I’m working with a bank. The day after that, I’m working with a machine shop. it, I’m doing the same work every day, but with a group of people that do different things and are completely different personalities and so, so that’s really fun. But yeah, I’m really proud of the way we’ve built this EOS implementer community and, that was kind of the fun part of being the visionary for EOS worldwide for five years is just attracting and training and supporting this, 

Crazy group of very diverse, very accomplished people. And one of the things I say when somebody’s shopping around for an implementer is, Hey, there’s a lot of variety here. Tell me what kind of person you think will resonate with you and your leadership team. And I’m pretty sure I can find an accomplished implementer who’s like that kind of person.

Yeah. And then, I kind of dismissed your earlier question. I would say the couple of things an implementer brings into an EOS company that it’s hard to get yourself is. First of all, it’s hard to facilitate your own meetings when you own or run the company. Hmm. Right? Because you’re constantly sitting there not wanting to overplay your owner or leader card.

Like you want your team to give the answers, but they’re looking at you like, is this a trick question? should I answer now? What if I’m not Right? Right. And so, so it’s helpful to have an outside neutral party facilitating the conversation because that frees you up to just participate and you can chime in when you have a strong opinion.

You can sit back and let your team wrestle with an issue when you don’t have a strong opinion. And, and then when. When I am driving accountability for my clients, it’s not always you or Mike driving accountability for your leadership team. It’s, Hey, maybe you completed two of six rocks this quarter and you were thumping your chest a little bit last quarter when you went four for four there, bud.

I mean, come on. You know, it’s nice to have some other stranger in the room doing that for you. Yeah. So, and 

Charles: plus you can advocate for the visionary not to have to take rocks. Uh, that is a strong recommendation. I mean, that’s 

Mike: worth the money in itself. I just did a session on Friday with a new, client who looked at me, first of all, like with daggers, like, what do you mean I can’t have rocks?

And then he goes, you could just see his, his realization, he leans back like this and he goes. Cool.

Charles: Oh, well, I have to say, there was always question in my mind, when we were self implementing if I need to take rocks and then our first, implementer was like putting rocks on me and I was, I didn’t have any time to think of the vision stuff anymore and it really started to wear on me.

Yeah. and when we started working with you, it was totally different. ’cause I was see, my gut was telling me that I shouldn’t be focused on these little things. ’cause a visionary can’t work in a quarter I, the way my mind works, we’re talking 

Mike: years and it’s important to say most visionaries when their life or the company’s life depends on it.

Can follow through as well or better than anybody I’ve ever met. Visionaries are often highly determined. People capable being really disciplined when something is really important. They are not the best project organizers or managers in general. This is a generalized statement, and so that’s why visionaries shouldn’t have rocks.

Visionaries are usually a really valuable asset to all the other people on the leadership team who have rocks. What’s really important is those other people on the leadership team have to be the project managers and manage time and energy throughout the quarter to get the rock done, which means they have to be really good at saying to you a week into the quarter, Hey, Charles.

I need to schedule a meeting with you three weeks from now because I’m going to have a draft of this thing I’m working on. I know you’re going to have strong opinions. That’s what we mean by visionaries shouldn’t have rocks. You should play a vital role in a lot. You just shouldn’t own the project management side of rocks.

And there are exceptions. Like every quarter, a third of my visionaries have a visionary style rock. It’s a merger and acquisition conversation, or a non-organic growth opportunity. Or we want to start up a new product or service or offering or expand geographically. And it is totally not an execution thing.

It’s an ideation and research thing and, and that’s where visionaries are much more capable of following through because they’re working in their sweet spot. Mm-hmm. 

Charles: Working in the middle of the night sometimes. 

Mike: Yeah. Well, there is no such thing as day and night, for most visionaries. 

Charles: I don’t even, so half the time I don’t even know what day it is. I’m like, I don’t know. Is it Wednesday? Is it Tuesday?

Mike: Is it Charles? You said that out loud. I think you just meant to say that in your own head. So I think we move on now. 

[00:22:44] Toxic Leadership Traits to Avoid

Charles: Okay. So I, I want to understand, you’ve seen a lot of really interesting things, and I want to move on to some other things about, great versus terrible and more, more specifically, what, what are some toxic traits you’ve seen in bad leaders, you know, where you’re like, oh my gosh, that is like, 

Mike: well, I, I think a, a lack of self-awareness I would put at the top of the list and maybe a lack.

Either a lack of self-awareness or what might be even worse than that is using your self-awareness as a weapon, right? And what I mean by that is, yep, I have a bad temper. I’m not going to moderate my behavior at all. You all just need to learn to deal with my really crappy tempered. So, you know, using self-awareness as a weapon just scares away people who want to evolve themselves.

And so, again, if you want to attract independent thinkers, driven leaders, you know, people who are comfortable, accepting accountability for something, and you are not willing to evolve and grow yourself, it’s pretty tough to expect your leadership team to do that. So I, so I’d say that’s one thing. and.

a lack of empathy would be another toxic trait, an inability to view the world through the lens of anything other than how it affects me. you know, not understanding why someone’s different than you and their needs. Don’t feel appropriate to you because you don’t have the same needs.

That’s kind of what I mean by a lack of empathy. And so maybe kind of what I’m inching towards is I think great leaders are really good at recognizing the unique nature of each of the people on their team and adapting a little bit their communication or management style to the unique nature of each member of those teams.

There’s no one size fits all. 

Charles: Yeah. I mean this, this is interesting because when we, when we sat down with Chris Lindahl, a big topic of conversation was about intuition and everything you just said about toxic traits. All of those things wrap back into intuition. Yeah. That’s interesting. Yeah. And, and your spidey senses or ability to understand yourself, but also see other people.

Mike: Yeah. Yeah. I think that’s a nice little wrapper for those things like sensing. I think there’s a sensing involved there. Good leaders have good sensing ability. I also think, creating clarity for people doesn’t come naturally to a lot of leaders. Well, nobody ever made it clear for me why you should figure it out yourself.

Yeah. Why is that? didn’t have a process manual. I didn’t have anybody standing up every quarter telling me what my company was all about. I’m going to hire smart people and they’re going to figure it out. Right. Like, again, that’s this attitude of, hey, everybody needs to be like me and my a hundred person company.

I mean, company with a hundred visionaries in it would be hysterical. It, it would either be killing it. Or crashing and burning, there would be zero in between. so, God, you got to recognize that as you grow and scale a business, you’re going to be working with a bunch of different people. 

Charles: It’s been a journey for me to learn for sure. Yeah. You know, ’cause initially when you’re just got your first five or five or 10 people, think everybody’s got to be like you and be just the way you are. That 

Mike: you reminded me another thing. So I think great leaders focus on results, not methods.

And so the toxic trait here is if you’re more interested in proving that you’re right or the smartest person in the room than you are, and the people on your team independently getting great results, that’s selfish. And it’s toxic. Yeah. And people who want to be creative and innovative and, and work in a manner that’s comfortable for them and are willing to sign up for great results are going to quit when you manage that way.

And you’re going to be left with a bunch of people who just wait for you to tell them exactly what to think and exactly how to do stuff. And you’re going to be exhausted for the rest of your life because you’re a genius with a thousand followers, and there’s no way you have enough time to help all 999 of those people figure it out every day.

Charles: That’s like one of the hardest things to do 

Mike: because so frequently we are either sensing or have more experience than the people who work for us, and therefore we actually know the right answer a lot. And the ability to resist the temptation to give someone an answer when they’re learning how to think for themselves on the job is excruciating.

It helps that I’m a parent for some strange reason. I’m slightly better at home at doing that, although if any of my boys are watching this podcast, they’re going to phone in immediately and will want to talk to the host. you know, it’s just like parenting. you got to let the people in your organization think for themselves and learn from failure because failure’s the best teacher.

[00:28:38] When to Insist on Your Way vs. Staying Curious

Charles: So how do you know as a leader if, something needs to be done? Your way versus the result that needs to get Like, like I’m sure that process is one of those things. Process is like, you’re going to do it like this. Yeah. Right. But there’s nuance to that. 

Mike: Yeah. what I, what I would say to the first part of your question is you don’t know, and that’s why it’s so hard, right?

So I, what I try and lean into is curiosity. And what I try and help my visionaries and integrators lean into is curiosity. So if you think somebody can get the best result doing it this way, and they’re hell bent on doing it that way, you got two choices, three choices really screw you, you’re fired.

That’s probably a terrible choice. Unless they do this 12 times and fail 12 times, the other two choices are. I really want you to do it my way, ’cause I’m sure I’m right. And sometimes that is the valid choice, right? The high stakes gambles where you’ve seen the right answer play out eight times and you’ve seen two attempts to do it their way fail miserably.

those are the ones where you probably need to document that. That’s why you feel so strongly about these things. And look the person in the eye and say, this is a career defining decision you’re about to make. You make it. I’m eight and two, based on my observations, you’re o for O so far you choose, right?

Might be a way you can get around telling them to do it your way. The other thing to do is say, listen, tell me why you feel so strongly the way you want to do it is a better way. And you might learn something and one of the things I’ve, I remember when I was hosting my own podcast and interviewing a leader.

Uh, I can’t remember who it was. I wish I could give credit where credit is due, but one of them said, I found one of my best attributes is a toddler’s mindset. And I was so overwhelmed by the vulnerability and the lack of ego in saying that there are a lot of leaders who would never publicly say, I’m good at leadership because I behave like a toddler.

Like, that’s the opposite of what a lot of people would say. But what he said was, I, I don’t want to lose my sense of wonder. people positively surprise me all the time, and if I never give anybody on my team an opportunity to positively surprise me, what kinda leader am I? I was like, that is some good stuff right there.

That’s deep. Yeah, it was really good, 

Charles: the sense of wonders. So I have found that over time I can’t help but become a little bit jaded. 

[00:31:31] Handling Disagreement: Curiosity Over Defensiveness

Mike: Well wait until you’re my age, Charles, welcome, welcome to Aging, right? Of course. We’ve seen the same things over and over and over again. I mean, one of the reasons I feel really comfortable having this deep, complex conversation with you is I’ve been in the room for almost 2000 full days with leadership teams averaging five or six people.

So 2000 times, eight to nine hours a day times all those people. I mean, I’ve seen a lot of people playing the Game of Leader, and I’ve seen a lot of people succeed in, a lot of people fail, and so you just start to notice patterns and trends, and it makes it easier to point out to people without hurting their feelings that, Hey, let’s back that truck up a little bit there.

That if, here’s what I observed is what I try and say. Every once in a while I just yell at people and I feel guilty for a couple of days afterwards, but what I try and say is, I want you to look around at the eyes of the people in the room and the expressions on their faces when they hear you say something like that.

Mm. Right. And that’s the fun part of this work because now I get to teach people how to acknowledge that they may have some occasional toxic behaviors. And if I don’t believe anybody has a toxic trait, I think they have toxic behaviors. Mm. And it’s only a trait because they repeat the toxic behavior over and over and over again.

And they’ve proven to be uncoachable. But man, most people are pretty coachable if you just find the right approach. How often 

Charles: do you have, a member of a leadership team just straight up disagree with you? With all the background you have and everything, and they’re like. I disagree. 

Mike: Yeah, I, I would say if I, if I’m running three sessions in a week, it would surprise me if somebody didn’t disagree with EOS or with me. In the session, and I’m wrong a lot. And EOS keep that in mind. 

EOS if you, I got a couple phone numbers I can give you if you, you need bolstering there, but EOS isn’t real. Sometimes I think an EOS tool is going to fix a problem with a different root cause. And so I’ll go down the pike of teaching something that isn’t really going to solve the real issue.

And I just really celebrate when my client has the courage to say, Hey, Paton, you’re missing the point here. This is the real issue. again, I, I’m trying to be a facilitator with a toddler’s mind too, so. what my emotions are trying to do in that moment is be curious, not defensive, right?

It’s, it’s a bad look for a facilitator to get into a hip to hip battle with somebody who’s got a genuine problem, understanding why we’re spending time on X. And so, you know, that’s part of my learning journey too. So when 

[00:34:37] Biggest Leadership Mistake: Tolerating Poor Culture Fit

Charles: you think about the biggest mistakes entrepreneurs make, just shifting gears, what are the two or three biggest mistakes that somebody can make in their entrepreneurial journey?

Mike: Uh, number one, tolerating. Poor culture fit or poor performance when everybody in the organization knows that’s what’s happening Hmm. Is number one. And there are all kinds of bad consequences to that up to and including a horrible story that one of my colleagues in another major metro, I don’t even want to say the city for fear of, of revealing something that I don’t want to reveal.

But, somebody who was allowed to, perform poorly and not fit the culture for a long, long time without getting coaching, without being helped and supported, there was just a really bad outcome. I, I don’t even want to say what the outcome, but it was really bad. And, and so, a lot of leaders, Charles, think that they’re doing employees a favor when they are a poor culture fit. They don’t consistently exhibit the company’s core values. Their attitude or behaviors or their, the way they interact with other members of your staff is poor when that’s a problem. It’s a, it’s a cultural poison, right? And, and so when that poison starts spreading, I mean, all kinds of really bad things happen.

So good people leave and so on and so forth. And, and if you think you’re doing that person a favor by waiting to confront them until you’re ready to fire them, you’ve lost an opportunity to help them self correct. And so one of the things we teach. Violently is we want you to have conversations early and often with everybody in your organization about the gap between being a great employee, a right person who shares our core values and consistently exhibits them in and outside the business.

Who’s in the right seat, great at your job? And if you got eight people who report to you, and one of them’s great at his or her job, and five of them are good at their jobs and two of them aren’t very good at their jobs or don’t fit the culture, most leaders and managers are only. Mustering the courage to have a conversation with the two that are struggling.

And I think the five where there’s a gap between right person and right seat need to get coaching too. And so that’s what we’re teaching is I want you to serve your employees well by helping them understand the perspective that you had. It doesn’t mean you’re right, but if you can help them understand the perspective you have, that they could get better at exhibiting one of your core values or performing some aspect of their job or getting consistently better results, or bringing issues to the leadership team, or wherever you feel the gap is, now they have a chance to improve.

That, I think is number one on my list, is this fear or unwillingness to confront gaps between great. And where every employee on your team is until it’s too late. 

[00:38:01] Leading by Example: Follow Your Own Rules

Charles: What’s number two? 

Mike: Number two is expecting other people to follow the rules when you won’t follow them yourself. Well, that’s one. That’s rough. Yeah. Yeah. Tell me more, you know, core value of, accountability and you complete. 22% of your rocks every quarter when our goal is 80%, and you’re losing your temper with the people who report to you, but you’re not completing your rocks, pointing fingers at your team as the reason your rocks aren’t completed when it’s your job to help them set the right rocks and be accountable for completing those rocks.

Like that’s an example of saying, Hey, we. Treasure and value accountability around here, but that applies to all of you, not me. And if all of you are accountable, I’ll be more accountable. That drives me nuts. Hmm. And it is often a blind spot for people. And, and, you know, nobody’s intention is to be that way.

The truth of the matter is, on an entrepreneurial leadership team, most of the time the accountability problem is over commitment. You know, most entrepreneurial leaders are high achievers. And so you want to motivate a team of people like that. You tell them something is impossible and they keep signing up for stuff specifically because they’ve been told it’s impossible.

I’ll prove to you it’s not impossible. And so you just got to get good at setting more realistic objectives because trust is eroded when team members don’t follow through. So 

Charles: it, reminds me of this idea that. I think you will be very good at explaining and answering, and 

Mike: that is, it really helps when you lower expectations before you ask me a question, but I’ll give it a shot.

Charles: So if you’ve got somebody in your company, let’s just take a sales person, and they’re incredible. They land deals like nobody else. They are beating goals, they’re exceeding expectations, but they’re. Rude and disrespectful, and they don’t, they’re not kind to people and they show up late and they act like they own the place and they have no regard for their team.

What do you do? 

[00:40:26] Culture Trumps Performance Every Time

Mike: Yeah. In an EOS company, the leadership team has created a set of three to seven core values that define the cultural attributes we expect out of every member of our team. Whether or not they perform at a high level or they’re average or below average, doesn’t matter. You got to fit our culture.

It’s even more important than performance. Okay. So what culture, wait a minute. Culture is more important than performance. Culture is more important than performance when it comes to evaluating people. And you have to believe that because one bad apple can spoil the whole lot. And this experience that you’re describing, this setup that you’re giving me, I see all the time.

And it leads to unbelievable negative consequences. So you’ve established a set of core values that say, people who behave this way fit our culture. We’re going to celebrate that. You’re going to help perpetuate that culture with everybody else. We want you each to hold one another accountable. If you are in the warehouse and you have an interaction with an employee and it doesn’t go well, don’t be afraid to say, hey.

Sam that didn’t really feel like help first or grow or die or whatever the core value is to be, be comfortable speaking up, right? Hold one another accountable. Likewise, if you’ve got a coworker who’s killing it culturally, please let them know, Hey man, what you just did for me is exactly what our core values demand from every employee.

I’m going to let my boss know. I’m going to let the leadership team know. I just think you ought to be recognized for that. Like that’s what we’re teaching. So what ends up happening is, first of all, a lot of those people who aren’t aware that their brashness might work in closing deals, but rubs everybody else the wrong way.

Sometimes those issues get solved by the people they’re steamrolling in order to get the stuff done that they want to get done because they’re confronting those people directly. If it gets elevated to a boss, that boss should be having a quarterly conversation with that employee every quarter. And in that quarterly conversation, they’re going to get open and honest feedback about what’s working and not working from a culture fit and core values standpoint.

And I hope that manager is saying, Hey, Sally, or Bill, you’re great at your job. Top performer, I wish I could clone you and get all that performance, but you’re really struggling to exhibit these core values every day. And then we asked the manager to give three specific examples of the behaviors that led the manager to, to rate the person below the bar from the core values.

And usually when you give somebody three specific examples and they care, that person says, wow, I would never have assigned that core value to that behavior of mine. You got people complaining about the way I’m behaving. I’m just trying to get stuff done. Help me. Help me figure out, I need to work on this.

Help me. Now, sometimes you have somebody who just doesn’t care. I’m more important. I sold all this stuff. You’re telling me what to do. Screw you, that person, if you can’t coach them up, you got to exit from the organization. As painful as it is, I ran sales and marketing in all the companies I ran and it is really hard to see numbers go out the door, but man, I’d rather have 10 good performers who are culture fits than five middling performers and one superstar doesn’t fit the culture.

So you’re saying. You got to cut them loose. Even if they’re crushing. Even if they’re crushing it. Like really crushing. Yeah. Yeah. And for the record, you wouldn’t be the first person who says, you got to be smoking something, Paton, that you wouldn’t do that. And I would. And I would. Because I’ve seen the pain caused by not letting this person go.

Yeah. Okay. For everybody else. Yeah. First of all, they need to learn that no amount of performance gives you permission to be a jackass. They need to, they’re going to become a better person if they understand there’s a boundary over which they shouldn’t go. I know some kick ass salespeople who are the nicest, most grateful, most genuine people you’d ever want to meet.

They’re out there, I promise you. Just got to go find them. Okay. So what? 

[00:45:11] Rules for Giving Good Feedback

Charles: I know you’ve got some rules for giving good feedback. Yeah. Right. What are the rules you follow? About giving good feedback, obviously don’t, don’t do it in front of other people. Don’t 

Mike: Yeah. Well, the first one I would say is clarity is really important.

So one of the things I think that makes that conversation way more possible. For a mid-level manager, or even somebody who owns an entrepreneurial company, is we painstakingly de define what the cultural norms of a company running on EOS are, and we ask the visionary or a member of the leadership team to create a core value speech outline that defines exactly what kind of behaviors we’re looking for in order for somebody to earn our trust for that core value.

And so because we create that common language, now all of a sudden you got a hundred people in your company wandering around defining these core values the same way. So that clarity and simplicity is really important. What that does is it opens the door for a conversation that’s more specific than, Hey, Sally.

you’re really good at your job, but there’s something about you that just pisses everybody off, and I can’t quite put my finger on it. I mean, that conversation doesn’t go well. That’s the Mike Paton way of having that conversation, and I’ve tried it that way many times, and I’ve failed spectacularly every time.

So when I read about that in the book Traction 18 years ago, I was like, oh my God, I could see that working. So now I’ve got four or five core values and I can say, Hey, Sally, core value number one, competitive wins you plus, plus, plus, plus, plus. You’re the living example of that core value collaborative.

You’re a minus. You couldn’t care less what anybody else thinks. Nobody’s ever done anything as good as you. The Olympic champion of something. Ice skating. You’ve never ice skated before. You think you’re going to beat them in the next Olympic games. Okay? You, you got to appreciate and value other people.

Sally, you got to learn how to do that. Let me give you three examples. And so you see what I’m saying? That specificity and that clarity really helps managers get right to the root of what needs to change in order to fix the problem. If you just tell somebody they suck culturally, they’re going to brush up their resume and look for another job.

If you tell them they’re good at two of your five core values, they need to get better at three. Here’s a path to do that. They might, they just might start working to get better at that. 

Charles: When you think about things people should unlearn, that they thought, oh, growing up, or, you know, early on, this is how it should be done.

If there was one thing you wanted every leader to unlearn or stop doing, what would it be? 

Mike: Well, this is my great failing as a young man, I would say. Nobody gives a shit if you’re right or not. There are a lot of really smart, really hardworking, really talented people who are so interested in proving they’re right that they don’t take the time to learn how to be effective.

Being effective is way more important than being right. I heard a great quotation the other day from Keanu Reeves of all people, and he said he has gotten to the point in his life where he is no longer interested in arguing. And he said, if I’m talking to somebody and they’re trying to convince me one plus one equals five, my attitude is fine.

One plus one equals five. Good luck to you. Have fun. and God, I wish more leaders would quit worrying about it. Say your peace, express your opinion. Share the information that you think will educate the other people on your team. So they might adopt your position, but then when they don’t agree with you, it’s okay.

It’s okay. Figure out how you’re going to be successful pursuing a path or a strategy that maybe isn’t the one you would take, because nobody cares whether you’re right or not. And most leaders, if they did make the wrong choice and you were graceful about the way you accepted that choice will come back two months later and say, God, turns out you were right.

Man. We’re going down this other path. It’s not going well. I want to loop you back into the conversation. Let’s figure this out. And now all of a sudden you’re like, oh, now we can be effective. And you didn’t have to win the argument to be right is 

Charles: . So you’re saying the desire holding you back. 

Mike: It is and it’s  toxic. Nobody likes it. Stop it. Yeah, stop it.

[00:50:16] Visionary vs. Integrator: Two Essential Roles

Charles: Okay. Shifting gears to talk a little bit about the, the two different animals that run an organization, the visionary and the integrator, because these are terms that you, have been teaching for a long time. Yeah. Gino put them in traction. Tell me. What the heck is a visionary?

What is an integrator and what the hell do they have to do with each other? 

Mike: Yeah. So, so a little context, Charles. the origin story here is that most of the times Gino was in the room with entrepreneurial companies in the early days. Also true of my early, we were almost always in the room with the founder of the company and the group of people that have been assembled as a quasi leadership team, and most founders are fearless, disrupting innovative thinkers, challenge the status quo.

Those are visionaries, they’re creators, they’re risk takers. they don’t sit still. Well, is is a thing to say, okay, but, but just because to start your own company and then start taking on employees and take on the responsibility for the financial and emotional wellbeing of other people who look to you for direction.

It just requires a certain type of hardwire. Okay. And so most founders grow their organizations to some point. Maybe it’s six employees, maybe it’s 26, maybe it’s 50. And then they start realizing their job has changed completely. Their day-to-day managers. They’re getting sucked into the weeds all the time.

Their job is creating clarity and holding people accountable, and they’re not good at, and they don’t like creating clarity and holding people accountable. I’ve heard from 85% of the visionaries I work with, and this is a phrase I used all the time back in the day. Well, Paton, you’re being a little hard on me as a visionary.

I, I’m not a terrible manager. I’m really good at managing people who don’t need to be managed. What the fuck? That’s not a thing. Right? So, so again, it’s not intention, it’s just, it’s, this is a term you use when you’re evaluating real estate all the time. They always talk about what’s the highest and best use for this piece of ground.

Your grandfather, the land developer, knows that term really well. What I can’t figure out is why we don’t ask that question more often of people. Hmm. Okay. So the highest and best use of a visionary mind and spirit and energy isn’t driving accountability at the next level of the organization and using logic to eke a half a point of additional gross margin out of the way we’re operating.

Somebody else who’s hardwired differently would be better at that. So that’s an integrator. An integrator is somebody who drives the day to day in a business who enjoys, maybe even looks forward to difficult conversations, who, who wants to get in the trenches and help problem solve as a teaching exercise with their people.

Rather than saying, why do you keep asking me this question? It’s your job to figure it out. Go figure it out and then come tell me what you’re going to do. So it’s just two different personality and leadership types. Integrators are. The people who keep the trains running on time. Mm-hmm. Visionaries are the people who invented the trains or are turning the trains into bullet trains or wonder why we’re on trains at all when we could be flying around in individual cars and getting everywhere we want to go.

Like the Jetsons did. That’s the difference. So can someone be both? There are a handful of people on the planet, Gino and Mark Winters, the authors of Rocket Fuel, which is the book about this concept. Um, say 5% of the population is capable of being good at both. What I found, Charles, is that. Even the people who are capable of being good at both derive more pleasure from and add more value to the organization in one of those two roles.

And so I even ask the people who are capable of filling two seats where they’re going to add the most value enjoy the ride the most. And that’s their seat. And they ought to bring somebody else in to augment their leadership style. And then the last thing I want to say is I work with a lot of companies who are led by an integrator.

Okay? There are no visionaries. And that’s the company doesn’t have visionaries. the company has vision. It doesn’t have a visionary in the visionary seat, really, most of the time. That’s because the founder is long gone. And it’s got a CEO type leadership structure where the person running the organization is an integrator, and most integrators are capable of strategic vision and good at leading meetings with a great leadership team to help set the right strategies and craft the right vision.

Sometimes they’re part of an organization that has a board of directors and the board is offering vision into the organization. So what I’ve learned to teach is every company needs vision, and if it doesn’t have a visionary on its leadership team, it doesn’t need to go hire a visionary. It needs to make sure the vision is coming from somebody at the leadership level, be it an r and d leader, an industry expert, whatever it is, chief technology officer and a technology company.

So that’s, every company needs a visionary. Not every company has a visionary. 

Mike: I I actually didn’t know that. I thought it was you have to have both. No, and that’s a misconception, happens is it turns a lot of people into aspiring visionaries that are not hardwired as visionaries.

There are a lot of people on leadership teams of companies running on EOS right now who think, okay, if I want to get a promotion, my next job is going to be integrator. And then when I’ve hit that out of the park, then they’re going to promote me into the visionary seat. And that just doesn’t make any sense.

That’s like promoting an offensive lineman into wide receiver. they’re just two different roles. So, 

Charles: yeah. That’s really interesting. The, the other appeal, I’m sure is that visionaries don’t have to take rocks. 

Mike: Well, that’s it. There are a lot of integrators who would prefer to have a seat where that was the rule.

[00:57:15] Keys to Better Leadership: Curiosity and Vulnerability

Charles: You got that right? So. Despite where someone’s at in their journey of being a leader. Help me understand. What advice would you have for someone to become better? What are your mantras about if you’re going to be a great leader no matter who you are? Yeah. If you’re the CEO of a monster company, or just getting started.

Mike: Yeah. I, I would say be curious and vulnerable, right? If you’re in a leadership role now, regularly ask the people you’re leading what they have to teach you, right? What do you have to teach me about this organization, about the way I’m leading and managing? What could I get better at? How could I be a better boss for you?

How could I be a better leader of this leadership team? I find that people who are vulnerable and curious are the best leaders and people who simply want everybody to do what I’m telling them to do. Whether or not that seems to be working aren’t. So, those are my two tips. Be vulnerable and curious and once you get feedback, then go do something about it.

Right? Go take a class, go read a book. Go work on some things that you know you can get better at until you become the leader you know you’re capable of being. 

Charles: Mm-hmm. That’s really powerful stuff. I think curiosity is such a powerful tool. Me too. It just, it’s natural to some people and just not natural at all to others.

Mike: Yeah. Yeah, when, when one of our core values at EOS Worldwide was grow or die still is. And when we were interviewing staff people for the EOS Worldwide leadership team, or the Next Level managers, I would always ask candidates, what do you do to sharpen the saw and get better at your job on your own personal time?

And when people didn’t even know what I was talking about, that was a disqualifier for us. if you’re comfortable with the status quo, if you feel like you already know everything there is to know about the work you do every day, I don’t know what that feels like. I am so restless when I’m satisfied, so restless.

Like what am I doing? I need to do something. Drives several members of my family a little crazy. but I want. To keep growing. And I’m aware that when you stop growing, you start dying. And I’d prefer to enjoy this journey around the sun for many more years. 

[00:59:40] Legacy: Impact One Leader at a Time

Charles: Yeah. So in wrapping up, tell me a couple things.

One, how has working with leaders changed you? 

Mike: Changed you? Well, just those two things. I think it’s helped me become more curious and more humble and more vulnerable. Like I, it is a gift. being surrounded by people who have the courage to start and build and run companies when they’re dealing with COVID and economic and political crises and uncertainty.

And, they, they don’t have anybody to talk to because they can’t talk to their leadership team. The leadership team’s pissing them off and they go home and start complaining about it at home. The spouse and the kids are tired of hearing it. And, God, it is just to, to, to watch those people get up every day and, and, and strap the boots on and try and be great at their job and get better every day is highly motivational.

It’s just made me a better person and, and when I get a chance to help and when somebody sends me an email, like the one you got from your client the other day that says, you’ve really made a positive difference for us, man. I, I’m getting chills talking to you about it. I just, I’m so grateful for the opportunity to help.

Charles: Such a beautiful thing. Yeah. Tell me, in closing, when everything’s over, what do you want to be remembered for? 

Mike: I want to be remembered for having a phenomenal impact in the world. One leader. One company at a time. I take every personal relationship and every relationship with a team very seriously. I’ve come to know the companies that the leadership teams I work with represent as organisms in and of themselves.

I see how the owners and leaders view that organism as its own little baby. And God, I just love, I want to be surrounded by, parents and grandparents and kids that are celebrating the journey that we’ve taken together. That’s how I want to be remembered. 

Charles: I have no doubt you will be. Oh, thank you. I mean, you have made a huge impact on my life, even in the short time we’ve known each other.

Mike: Yeah. 

Charles: Mike Paton, thanks for coming. 

Mike: My pleasure, Charles. Fun. Thank you.

Charles: Hey, thanks for watching Cleared for Takeoff. If you enjoy this as much as I do, make sure you hit that subscribe button, maybe share it with somebody, drop a comment. We love to know what your thoughts are on each episode, and we’ll see you next week on another episode of Cleared For takeoff.