The Small Business Black Holes with Alan Pentz Defining and Tracking Outputs: The Key to Employee Performance with John Seiffer
May 14, 2024
46:22
In this episode of the Small Business Mentor podcast, Alan Pentz is joined by John Seiffer, known as @BetterCEO on Twitter. John is a CEO coach and author of the book "Output Thinking". Join them as they discuss John's framework for defining and tracking employee outputs to boost productivity and scale a business. They also dive into John's Stages checklist model for analyzing a company's growth phase.
John shares the story of building and eventually exiting a VHS rental business for apartment complexes that he started with a partner in the early 1990s. The business model involved renting and rotating movie collections to properties on a monthly basis. Despite technological disruption from DVDs and streaming, the business lasted until 2016, even outlasting Blockbuster and Netflix's DVD-by-mail service.
The conversation then turns to John's Stages checklist, which defines the characteristics of Stage 1, 2 and 3 companies across dimensions like owner focus, people, energy, accounting, and wealth. John emphasizes that most small businesses are Stage 1 "owner job" companies with little enterprise value, and cautions entrepreneurs looking to acquire to really understand what stage a target company is at.
Finally, John explains the core concepts from his book "Output Thinking". He argues that business owners often get frustrated by the disconnect between what they expect employees to produce and what actually gets done. The solution is to concretely define the outputs required for each role and use that to hire, train, and evaluate staff. John breaks down how to implement an output-based approach in a knowledge business.
If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts, Spotify, and Google Podcasts, instructions on how to do this are here.
Quotes:
John shares the story of building and eventually exiting a VHS rental business for apartment complexes that he started with a partner in the early 1990s. The business model involved renting and rotating movie collections to properties on a monthly basis. Despite technological disruption from DVDs and streaming, the business lasted until 2016, even outlasting Blockbuster and Netflix's DVD-by-mail service.
The conversation then turns to John's Stages checklist, which defines the characteristics of Stage 1, 2 and 3 companies across dimensions like owner focus, people, energy, accounting, and wealth. John emphasizes that most small businesses are Stage 1 "owner job" companies with little enterprise value, and cautions entrepreneurs looking to acquire to really understand what stage a target company is at.
Finally, John explains the core concepts from his book "Output Thinking". He argues that business owners often get frustrated by the disconnect between what they expect employees to produce and what actually gets done. The solution is to concretely define the outputs required for each role and use that to hire, train, and evaluate staff. John breaks down how to implement an output-based approach in a knowledge business.
If you enjoyed this episode, make sure to subscribe, rate, and review on Apple Podcasts, Spotify, and Google Podcasts, instructions on how to do this are here.
Quotes:
- "Why do we even hire people? We hire people to do something to produce some kind of output. And if you're hiring a contractor that's defined in the scope of work in the contract, and that's the definition of an output. But when you're hiring an employee, we often just say, Well, you get good people on the bus and everything is gonna be fine. But what does that mean?"
- "If you own the company, it's what you want, not just the money. It's the lifestyle, the things you do at work...Those things that you want will drive your business decisions unconsciously or consciously. You're better off bringing them up to the conscious level and saying, Yeah, I'm gonna build this company the way I want."
- "Outputs are produced in two ways. They're either produced by Grandma who's got intuition, experience or they're produced by a repeatable system, and we start with documenting what the output is. Then you back into saying, OK, what's the system that produces that output?"
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