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EntreLeadership

20 Years of Practical Business Wisdom from the Trenches
By Dave Ramsey

Read an Excerpt

EntreLeadership

1

EntreLeadership Defined


Looking out the window of my personal office, I was watching the sun come up. I had come to the office extremely early because I couldn’t sleep and I needed some answers. Our business was officially bigger than me and it was scaring the crud out of me. I was going to have to add more layers of leadership, which meant I was going to have to relinquish control or not grow. Sounds simple, but I am a control freak extraordinaire, so turning loose tasks and responsibilities is not easy.

Those of us who are small-business people have stacked our own boxes, answered our own phones, and served our own customers. So making sure business is done the way we would do it matters a lot to guys like me. No corporate training program that creates plastic scripts that mannequins spit out, where the customer leaves feeling like something fake just happened. Oh no, guys like me want everyone we come in contact with to feel our dream. We want and demand that customers have an experience. And many of us have had our corporate experience, and we didn’t like it. We want something that is real for us, our team, and our customers. So turning loose is a really emotional thing… ’cause the person you task with that area really has to breathe air the way you do.

After having mentored and grown my first three key leaders over several years with one-on-one instruction, I was seeing the benefit of growing fellow believers in the cause. But this hand-to-hand method of growing leaders was way too slow and was holding back our business. I needed new leaders and I needed them faster than three years. In order to raise new leaders, my core team and I set out to teach a class that is our playbook on how to do business our way. We mentor, cuss, and discuss with our leaders daily—and in a very intentional way. But the EntreLeadership class is the foundation.

EntreLeader?


Tons of books have been written on growing leaders. There are famous leaders in all walks of life whose leadership principles I have learned from. As I sat that first morning trying to find a way to communicate to our next new leaders what we wanted them to do, I thought it might be as simple as teaching leadership.

What Is a Leader?


When I teach this course live, I ask the audience to picture the face of a wonderful leader. Then I ask them to write down the best one-word character qualities these great leaders have. What one word best describes the character of a great leader? When we do this we always get character qualities like:

• Integrity

• Servant

• Humble

• Visionary

• Decisive

• Disciplined

• Passionate

• Loyal

• Listener

• Influential

• Driven

• Charismatic

Taken together, this is a good definition of leadership. It’s interesting to me that most of us can list what we want our leader to look like, but we don’t apply it to ourselves. Have you ever asked yourself what kind of leader your team members want? If you want to lead, or you want to grow or hire leaders, they and you must have the above listed character qualities. We all have some of these qualities and we all have some we can work on. The big deal here is to remember that the very things you want from a leader are the very things the people you are leading expect from you. You must intentionally become more of each of these every day to grow yourself and your business. And to the extent you’re not doing that, you’re failing as a leader.

What Is in a Name?


As I sat in my office with the sun coming up writing the first lesson and thinking what to name our little leadership course, I hit a snag. I know that the title is supposed to give an indication of what is in the material (duh). When I thought about calling this material “leadership,” I knew that wasn’t right. Because there is so much more to business than simply leadership and leadership theory. I have sat in “management classes” and “leadership seminars,” and for a practitioner, a doer, like me, they weren’t enough. I learned something, I always do, but those classes were too much about concept for a guy who has stacked his own boxes and answered his own phone. I concluded that I didn’t want to grow my business simply with leaders—that was a little too dry, a little too theoretical for an entrepreneur like me.

Entrepreneur


Maybe I was trying to grow entrepreneurs. Maybe I wanted a company full of little mini-mes. After all, when you think of an entrepreneur, what words come to mind to describe that animal?

• Risk taker

• Visionary

• Passionate

• Driven

• Work ethic

• Creative

• Out of the box

• Determined

• Courageous

• Motivated

• Learner

• Maverick

As I thought about what a pure entrepreneur is, I decided in three seconds I didn’t want to grow a company full of us. Leading that group would be like herding cats or trying to nail Jell-O to a tree. I do want the spirit of the entrepreneur woven into our cultural DNA, but a whole building full of us would be a really bad plan.

So growing leaders was too refined and calm for me, but growing entrepreneurs was too wild and chaotic for me. So I decided we needed to grow a combination of the two… and thus the EntreLeader was born. I want EntreLeaders who can be

• Passionately serving

• Mavericks who have integrity

• Disciplined risk takers

• Courageous while humble

• Motivated visionaries

• Driven while loyal

• Influential learners

Are you getting the idea? We wanted the personal power of the entrepreneur polished and grown by a desire to be a quality leader. We wanted big leaders who have the passion and push of the entrepreneur. These character qualities are what we look for in potential leaders and what we intentionally build into our team every day to cause us to win.

Words matter. So when we call someone a “team member” at our place, that means something; it isn’t some corporate HR program that tries to make slaves to jerks feel better by changing the words. It means you will be treated like and expected to act like you are on a team. When we call someone an EntreLeader it means something. It means you are more than a renegade lone ranger and it means you are more than a corporate bureaucrat who treats his people like units of production.

Defined


A leader, according to Webster’s Dictionary, is “someone who rules, guides, and inspires others.” The dictionary says an entrepreneur is “someone who organizes, operates, and assumes risk for a venture.” The root of the word “entrepreneur” is a French word, “entreprendre,” meaning “one who takes a risk.”

So for our purposes EntreLeadership is defined as “the process of leading to cause a venture to grow and prosper.”

Once we had our title and definition, we had to determine the components of our playbook. We began to list what is essential for other new and growing EntreLeaders to know about starting, operating, and leading a business the way we do it. Because we are practitioners we ended up addressing mechanical things like accounting and contracts. Because we are very concerned about our culture as well, we needed to explain how a team is grown, motivated, compensated, and unified. Because we are also marketers we knew we needed to sell some stuff in order for all of us to eat. So our playbook has truly become “everything you want to know about building and running a business but didn’t know who to ask.”

EntreLeadership Basics


Let’s start at the beginning: your mirror. John Maxwell has written a wonderful leadership book entitled The 21 Irrefutable Laws of Leadership. In this book John discusses one of his laws, the Law of the Lid. Basically he says that there is a lid on my organization and on my future, and that lid is me. I am the problem with my company and you are the problem with your company. Your education, character, capacity, ability, and vision are limiting your company. You want to know what is holding back your dreams from becoming a reality? Go look in your mirror.

When I first started leading in my early thirties, I was a horrible leader. My ambition and drive caused me to accomplish the task and pick up the pieces later. One cold winter morning when we had about fourteen people on our team, I became angry over people coming to work late. I don’t get it—come to work early like I do. Don’t come dragging your tail in twenty minutes late and mumble something about traffic. I have noticed there is less traffic before the sun comes up. Get to work on time. I am paying you, and when you don’t come to work on time you are a thief.

We were at the beginning stages, and every sale meant our survival. Every customer was a big deal, and every person on the team had three jobs. I couldn’t grasp how these people I hired didn’t understand that if they slacked off, they would lose their jobs because we would go broke. Get with it. So I got angry. Sometimes it is good to be angry, but what you do with it can have lasting consequences. I am not proud of this, but on that Monday morning, for the staff meeting I moved fourteen chairs out on the sidewalk in sixteen-degree weather. I gave a talk that morning about showing up to work on time and said that if every one of us didn’t do two people’s work, we were all going to be “out in the cold.”

I know those of you who lead and have experienced my frustration are smiling right now, but I will tell you that leading by fear and anger is not leading—it is bad parenting for two-year-olds. And if you “lead” like this, your company will perform like scared two-year-olds. I still to this day deliver the message to our team periodically about our expectations for work ethic, but that message is much more polished and pulls our team rather than pushes them.

So the problem with my company then and now is me. The problem with your company is not the economy, it is not the lack of opportunity, it is not your team. The problem is you. That is the bad news. The good news is, if you’re the problem, you’re also the solution. You’re the one person you can change the easiest. You can decide to grow. Grow your abilities, your character, your education, and your capacity. You can decide who you want to be and get about the business of becoming that person.

I was teaching this lesson to a group of future EntreLeaders, and during the break George came to me to tell me I was wrong. George explained that he was in the drywall business and that there was no one in the workforce who was worth hiring. They were all slackers who didn’t work, and when they did work, they did poor work. He stood there red faced explaining to me that the problem with his business was his horrible employees. This big tough construction guy’s face got even redder when I told him his “turkey” employees were his fault. “How’s that?” he asked with attitude. My answer was simple: he hired the turkeys in the first place, and worse than that, he kept them. His employees are his fault. George continued to argue that with what he pays he can’t attract great people. That is your fault, George. Pay more, which means you may have to charge more, which you can do if you don’t have to explain away the bad quality and constant drama brought on by having turkeys in your business. Your problems in business are your fault. That is the bad news and the good news.

Here’s a great head-to-head comparison of what I’m talking about. Within the same week our team counseled two different guys in the landscape business, both in the same area of town. One was closing his business because he couldn’t make a living, saying, “Nobody can make a living in this economy.” And the other was having the best income year of his life. They were in the same business in the same end of town. What was the difference? You’re catching on, right? It was the guy at the wheel. The person driving the ship was either a captain or he wasn’t. You get to decide what you are. Starting now. Ready, set, go.

From the Top Down


To further motivate you as an EntreLeader you need to know that whatever is happening at the head of the organization will affect the entire body. The Bible says the anointing drops from the beard. In Old Testament days when someone was pronounced king, the Israelites had a tradition of pouring oil (lots of it) over that person’s head. The oil symbolized God’s spirit being poured over the leader. And the oil that was poured heavily over the head ran down the hair, the beard, onto the rest of the body, symbolizing that as goes the king, so goes the kingdom. That is a great picture for remembering that as the “king” of your business, your personal strengths will be your company’s strengths and—you guessed it—your personal weaknesses will be your company’s weaknesses.

I grew up in sales, so our company has always been great at marketing and selling. I am very entrepreneurial, so my company tends to be impulsive and too quick to act. We have had to counteract that by honoring and raising up team members who are more strategic in thought and practice. We have had to work with our natural strengths and against our natural weaknesses. And it is all my fault.

I spoke with the son of a billionaire who had been given his father’s company. This intelligent and successful EntreLeader had taken his father’s billion-dollar company to a three-billion-dollar company in just one decade. He had become more successful than his dad and yet was very respectful and grateful toward his father. He explained to me that the strengths of his father, who founded the company, could take the company only to a certain point, and then new approaches were required. The way he described the situation was, “The quirky brilliance of the founder could take us only so far.”

EntreLeaders Are Powerful


To be a real EntreLeader you have to realize you have great power but seldom use it. Having great power and managing it as a tool is what real EntreLeaders do. When you hold the pen over the paycheck—the right to fire a team—you have power over their lives. That is positional power, the power given to you by your position. If you lead only with positional power, you are simply a boss. Any idiot can be Barney Fife. A “boss” is the kid at McDonald’s who has been there a week longer than everyone else, so the manager gives him a twenty-five-cent-an-hour raise and promotes him to be in charge of fries. He then becomes the Fries Nazi—he has positional power and he uses it.

I actually was that guy for a few weeks once. When I was twenty-two years old I was selling real estate in a new subdivision for a large national home builder. I outsold everyone on the team, so they made the stupid decision to promote me to sales manager. I immediately became the Sales Manager Nazi, bossing everyone around, even those who didn’t report to me. It didn’t take them but about three weeks to take away my promotion and put me back where I belonged, in sales. I lost several friends and damaged relationships in my three-week tenure because I confused having a position with real leadership. Having children doesn’t make you a good parent, it means you had sex. That’s all.

EntreLeaders understand that ultimately the only power they can use to grow a quality team is the power of persuasion. Persuasion is pulling the rope and positional leadership is pushing the rope. And we all know you can’t push a rope. If you want employees, then boss them around; if you want team members, explain why you do what you do. If they won’t do what you ask, explain it again and again. Then, if they are simply contrary, they have to work somewhere else. But don’t lead with threats and fear.

I have three wonderful children, and my wife and I have enjoyed all the ages of their lives. I have heard parents moan and groan about the teenage years, but we had fun with our teens and had good (not perfect) teens. Part of the reason for our success was a leadership decision. I discovered that fourteen-year-olds have multiple personality disorder. They have within their little growing bodies two people: a four-year-old and a thirty-four-year-old. The problem is, you as the parent never know which one is going to appear in a given exchange. Teens have a desperate desire to be treated like adults and oftentimes have an inability to act like adults. I decided to ask my teen with which person I am speaking: the four-year-old or the thirty-four-year-old? Because if I am speaking with the four-year-old, I will simply tell them what to do, and if they don’t do it, there will be parental problems for them. As Bill Cosby says, “I can take you out and make another one that looks just like you.” That is positional leadership, and if I resort to that with my teen or my team, I am not building to the future. I may get what I want right then, but I did not equip them to perform when my back is turned. If I am speaking with the thirty-four-year-old, I can explain why they can’t stay out until two A.M., smoke a joint, and get pregnant: because it will destroy their life. I am older and wiser and will persuade them to perform within boundaries that accomplish all our goals. If I can persuade them, I have built into our future; we will both get to go places we could not have gone otherwise.

The weird thing is that while persuasional leadership takes longer and takes more restraint at the time, it is much more efficient over the long haul. When you teach team members or teens the why, they are more equipped to make the same decision next time without you. You don’t have to watch their every move, you don’t have to put in a time clock, and you don’t have to implant a GPS chip in their hide when they learn how to think for themselves. Positional leadership doesn’t take as long in the exchange, but you have to do it over and over and over and over. You never get to enjoy your team or your kids because they become a source of frustration rather than a source of pride.

Benjamin Zander has been the conductor of the Boston Philharmonic Orchestra since 1979. At age forty-five, something changed within him. He explains, “I’d been conducting for twenty years, and I suddenly had a realization. The conductor of an orchestra doesn’t make a sound. [His power depends] on his ability to make other people powerful. And that changed everything for me. I realized my job was to awaken possibility in other people.” He continues, “If their eyes are shining, you know you’re doing it. If the eyes are not shining, you get to ask a question: who am I being that my players’ eyes are not shining?”*

You Gotta Serve Someone


I remember attending a Christian leadership seminar where the guy up front said that great leaders are always servant leaders. My immediate reaction was, “You have got to be kidding. If I wanted to be a servant I would go to work for corporate America—no thanks.” Often when I am teaching people to be EntreLeaders, I introduce the same idea—that a leader needs to have a servant mentality. And I get the same reaction from strong business owners: “Servant? You have got to be kidding!” I think the reason they react that way is the same reason I reacted that way. I didn’t hear “servant,” I heard “subservient,” as in, bow down to my team—or that somehow they would actually be in charge.

Once I understood that I am serving my team by leading them, just like I am serving my children by parenting them, I relaxed. I might serve a team member by reprimanding him or even by allowing him to work somewhere else. I might be serving the rest of the team by instantly firing someone who was sexually inappropriate with someone on the team. I am serving them by teaching and mentoring them. I am serving them to their good and the good of the organization.

Every summer we have a huge company picnic. Any time I am going into any situation, meeting, or event, my assistant gives me a tour book that has all the participants’ bios (if I don’t know them), maps to all the locations and a timeline of the event, and some facts and figures about what we are doing. On this particular summer day my wife, my teenage son, and I were on our way to the picnic. We have a very young team, with the average age under thirty, so we have lots of young families. As I glanced over my info for the day, I noticed that in attendance that day among six hundred people were ninety-seven children (of our team members) under the age of ten. So we had tons of kids’ games—several giant blow-up bounce houses and slide type events. When we pulled up, parked, and began walking into the camp where the event was being held, it looked like a giant day care. Wow, kids everywhere. My wife immediately found team members and struck up a conversation. My teenage son and I began walking through this child-induced chaos toward the barbecue. He turned to me and said what any good teen would say: “Dad, how long do I have to stay?”

Right then it struck me that we had a teachable moment. I said, “Son, look across this field. What do you see?”

“Way too many little kids.”

I laughed and agreed. “Actually there are ninety-seven kids here under age ten that are the children of our team members. Do you know what that means?”

“Nope, but I bet you are going to tell me.”

“Yep, those kids’ parents make a living, have a future, and those kids have a future partly because of how I act. If I misbehave in my personal life, if I fail in areas of integrity, if I screw up, it will mess up a ton of lives. As a servant leader, I understand that I am at least partially responsible for those little kids.”

“Dad, that much responsibility is kind of heavy.”

“I agree, son, but to whom much is given, much is expected. We as a family have all the financial and other blessings of having a successful business. What goes with that is we must take our responsibility as leaders very seriously. Son, even if you screw up, it will harm the future of some of those little kids. If you decide to get drunk, hit someone head-on, and kill them, we will get sued and all these people could lose their jobs. You have the blessing of being in this family and get to have and do all the things that success allows, but with that even you have a huge responsibility to make our family name one we are all proud to wear. Now let’s get some barbecue.”

Another example of this concept that brought tears to my eyes recently: I have a good friend who is CEO of a small manufacturing plant. He loves his team but is a very tough leader who demands excellence. The economy had a downturn and the plant’s orders had dried up, causing him to temporarily lay off almost his entire production team—over 250 people. Some of those team members have been at his plant for decades, and they and their family are some of his best friends. The morning I called to check on him, I asked him how he was doing. His response was that he had just had a very long walk. He said that he had decided to park at the back of the parking lot every morning from that day until he could get the plant up and running again. Parking at the back meant a very long walk past 250 empty spots every morning, and that reminded him of what his job was—to get those team members back to work. That is a true EntreLeader.

So how do you begin to foster and live out this spirit of serving your team with strength? Avoid executive perks and ivory towers. Eat lunch with your team in the company lunchroom every day. Get your own coffee sometimes. No reserved parking spots. Look for the little actions you can take that say to your team that while you are in charge, and while you lead from strength, you are all in this together.

We do several large live events a year, which entails truckloads of equipment and product to sell. These days all that is prepackaged and loaded at the warehouse, but just a few years back we as a team had the opportunity to load and unload these trucks ourselves. With every able-bodied man present, including VPs, EVPs, CFOs, and the CEO, the work took only about thirty minutes. Yes, you read that right. I was in the truck helping unload and load. I never thought it was a big deal, but one day a new team member wrote me a long e-mail afterward, saying he had never worked in a place where the boss was a real leader. He had been with us less than two weeks and looked up in the truck and realized the guy handing him boxes was the owner and CEO. After having that experience, the guy will find it a little hard to cop an attitude about anything he is ever asked to do while he works on my team. The work I did that day took me just thirty minutes, but for years now it has had an impact on my relationship with my team.

Passion


Before we leave some leadership basics, let’s talk about something that is really missing from a lot of organizations and their leadership: passion. You cannot lead without passion. Passion causes things to move, and passion creates a force multiplier. Passion actually covers a multitude of sins. Real EntreLeaders care deeply, and that is basically what passion is. Passion is not yelling or being wild; it is simply caring deeply. When you and your team really really care about what you are doing, the natural by-products are quality, excellence, impressed customers, employees who become team members, and ultimately a higher likelihood of profit. When you care deeply about the organization, lots of things start to happen naturally.

One thing that happens when you care deeply is a bent toward action. There is more energy in an organization with a passionate leader and team. Passivity is the opposite of leadership. The need and the ability to act are missing from failing organizations. It is the EntreLeader’s job to insert passion and passionate people into the organization’s processes and outcomes. There are lots of great leaders in America’s companies today, but there are way too many large, publicly traded companies who hire leadership that is talented but not passionate. The results are like eating cardboard for dessert. Yuck. The customers, the stockholders, and the lawmakers see an entire company that is bland, tasteless, and self-absorbed. Why? Because their leader is. You must care deeply and it will run through the whole organization.

This bent-toward-action passion also increases productivity and excellence. People are naturally more productive when they care deeply about outcomes and the organization. They care more about the customer without even being trained to when they are passionate. When productivity and excellence are hallmarks of a company, you will almost always find team members, leadership, and even customers who are passionate about the brand and what it does.

Another surprising thing passion does is cause team members, leadership, and customers to be more forgiving of each other. If I am a customer and I believe you deeply care about delivering to me, I am more forgiving when there is a mistake. I know you care, so this mistake was not due to apathy or lack of excellence, nor was it something that happens very often, so I cut you some slack. As a customer, if I think you and your company really don’t care, I will have you tarred and feathered for your mistake. As a customer I will actually defend your company to others if I know you and your team really care.

I am a PC, not a Mac. I have an iPod, my kids do, and there are several wonderful Apple products in my company, but I am a PC. Apple and iTunes are legendary for service that wows customers, and that is one of the ingredients of their success. They truly have built what Seth Godin calls a tribe, a deeply loyal and passionate following in their customers. Their customers will even defend them. I am so inept at computers that we have assigned an IT guy just to keep me going. So 99.9 percent of my mistakes are operator error. ID10T errors. So when I first signed up for iTunes it was no shock to anyone, including me, that I couldn’t make stuff work. It may be intuitive for some of you, but not me. So I e-mailed iTunes, and they answered forty-two hours later, which was fine, and they did finally and patiently get me going (all my fault, not theirs). I casually mentioned in a conversation that the e-mail response had come back a couple of days after I sent it, and three Mac people (fellow customers) in the conversation passionately defended them as having world-renowned customer service, arguing that it must have been my fault. It was my fault, but I found it very interesting that these customers had become Apple evangelists at least partly because of the passion with which Apple operates. Good job.

This type of forgiveness or grace extension will work with your team as well. It even works between leadership and the team. As a leader, if I know you care deeply, then when you screw up, I will be quick to give you a second or third chance. However, I have a very low tolerance for your mistakes when you don’t care. And in turn, when I mess up in my role as leader, team members are quick to forgive if they “know my heart,” meaning they trust my intent even though I worded something wrong or even really messed up the whole event. Team members can have great unity among themselves only when it is a group of people who truly believe each member cares. Personality differences, cultural differences, and educational differences are all overlooked when they trust each other’s passionate intent. We have a very diverse team, and outsiders often marvel at the way we truly love each other. One of the reasons is we hire and keep only people who are sold-out passionate about our cause. You cannot work on my team if you are simply looking for a J-O-B.

Passion is so key in leading and creating excellence that I will hire passion over education or talent every time. I prefer to have both, but given a choice I will take passion. La Rochefoucauld once said, “The most untutored person with passion is more persuasive than the most eloquent without.”

These are some of the basics that foundationally prepare you and me to go through our championship playbook. As you continue through it, remember that we really do these things every day—this is not theory. Also remember that this is a “championship” playbook—we are winning. You are not learning from someone who has never actually met a payroll or been scared to death, or who has only graded tests; you are learning from a guy who straps on a helmet every day and hits someone, and has won a lot.

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