Ken Lucci 0:25

Good afternoon, ground transportation podcast audience. My name is Ken Lucci from Driving Transactions. I am usually accompanied by my lovely and talented co-host, James Blaine from PAXs Training, but he is off training a group of chauffeur, no doubt. Hi Andan around, the country somewhere. So I am equally blessed actually. I am more excited to have Mike Zopone, who is an EOS professional implementer, on the podcast today. For those of you in limo land, Mike used to be an operator, uh, made the savvy decision to sell his business to our friends at ros. we might talk a little bit about that, but, Mike, tell us about EOS. Tell us about your background. Then tell us about EOS, and I'm dying to hear what led you to EOS as a system. So please tell us about your background.

Mike Zappone 1:23

So I guess I, I feel like I have the same story as everybody in the limo industry. When I tell the story to outsiders are usually, uh, wowed, but most people have my same story. I started my company when I was 19 years old. I ran that company for 33 years. We were based outta the Hudson Valley up in Newburgh, New York. I sold the company to Leros, as you mentioned, after 33 years, I, I did an early retirement, took a year off, Bored out of my mind. Is really what happened. There's a, the big emptiness after you're in this 24 7 crazy business, and then it just stops. tell you how bored I was. I, became friends with Jeff Cardena. That'll tell you, that'll give you an idea for how bored I really was

Ken Lucci 2:02

For those of you in podcast land that do not know who Jeff Jeffrey Cartia is, there are two Jeffs at Leros. One is Jeff Nikkos, who is the president and CEO, and I love to get, emails and, phone calls from him. And then there's Jeffrey Cartia who fancies himself in-house counsel, who I just think is Ros, pit bull. So that's how he treats me because he's always growling at me. But Mike, you became friends with him, so that's interesting.

Mike Zappone 2:32

I did actually Jeffrey's a great friend and he is, he's a really good guy. hopefully you can edit that out so that the world doesn't hear me saying that.

Ken Lucci 2:39

Now he is a good guy. I just actually texted with him a little while ago.

Mike Zappone 2:43

Yeah really kind and an incredibly talented individual.

Ken Lucci 2:46

That whole team is incredibly talented.

Mike Zappone 2:48

yeah.

Ken Lucci 2:49

Most professional management team in the industry

Mike Zappone 2:52

Absolutely. Yeah. It's next level. So it was neat to see them taking, you know, a lot of people say, you know, business is business. And, and to me it wasn't, it was really personal. This was my baby. And being able to pass it off, to the transportation group was really, uh, wonderful to see, you know, the care and the things they did with it that, that I, you know, that I just couldn't or wouldn't do.

Ken Lucci 3:10

Let's stop there for a second because I think it's important. From an m and a perspective, there are two types of buyers out there that are operators, existing operators that are buyers. One type will come in and they will immediately inform customers that now you are an X, Y, z customer, X, Y, Z, quote acquired, right? A, B, C company. And I look at that as unneeded disruption. And some people, well, we want to do a, you know, a consistent brand and you know, there's different ways of doing that. But the leros modus operandi, and they've done it about 15 times, is to buy companies that have a really good brand in a specific area. They operate on a hub and spoke model. And they don't change the name, do they?

Mike Zappone 3:59

even to this day, they're still running under, under my original name, which.

Ken Lucci 4:02

and think about that, because it's pretty much, if you are a retiring operator, there's really no change to the business other than maybe you're not answering the phones, but the client is seeing the same brand names, the same billing, the same communication. I like the strategy. They call it the hub and spoke. I like the strategy. I think at some point that they will because they're growing their, their regional and national business under the name Ros Transportation Group. But I like the way when they acquire their methods are the least disruption as possible.

Mike Zappone 4:37

it's a heavy lift for them, to uh, getting a peek behind the curtains after, post-acquisition and seeing all of the work that goes into keeping all these brands, separate. And it's, it's a lot of, it's a heavy lift for them, but

Ken Lucci 4:49

It is. but you also spent some time consulting with them after the sale?

Mike Zappone 4:53

still do. Yeah. it's great I get to play in the sandbox and build things. They let me take on some technologies and do some passion projects. So it's still

Ken Lucci 5:01

Yeah. All with no more risk of insurance, no more risk of Drivers and the things that kept us all up at night as, as seven day a week operators. So I've been in your shoes having retired and said to myself, I'm gonna visit all my friends, I'm gonna read all the books that I bought that never read, and then. Magically 10 months down the road, you get bored outta your mind. In your case, did your wife say Get the hell out of the house?

Mike Zappone 5:27

yeah, it was figure out something to do or else. Right. So

Ken Lucci 5:30

Think about it. 24 hours a day is a lot to fill. because you're, you're also, when you own a limo company, you can't help but be thinking about it seven days a week. So that must have been a major change for you. So how did you get exposed to EOS and tell us about EOS as a company.

Mike Zappone 5:47

So ironically, it's my good friend Jeffrey Car was the one who told me about it. And he said, you know, and of course he just dabbled into it and said, I've looked into this system, I've looked into this, and it sounds just like everything you, you say and do, you should check it out. 'cause I, I was telling him, I'm like, look, I'm really, I'm really bored. I, I think I'm gonna open another business. I kind of don't wanna get into something else. I was hoping to, you know, maybe have some kind of a hybrid retirement, but I need to do something to fill my time. So after he, he told me that I read the book, traction it all resonated with me. And, and Traction is the, is the primary book. There's a series of books, but Traction is the one that kind of. Breaks down what E os is. and so I was charged up. I'm like, okay, this is, this is what I'm gonna do. We're gonna, we're gonna go buy or open another company. And that's where I found the opportunity to become an EOS implementer. And it just checked all of the boxes. it doesn't require a big staff. All the things I didn't wanna have, I could set my schedule. And, and to me it's, the missing link. if I look back to the 33 years I spent and, you know, being in that hamster wheel and running a, crazy business, EOS is really, it just provides all of those solutions around it. And so, I feel like I'm, providing, you know, a cure if your American dream turned out to be a nightmare, you know, I feel like EOS is a cure to that. So I it's a really feel good opportunity for me to be able to, to help people and see the difference it makes in their lives. 'Cause I was there.

Ken Lucci 7:10

give us the history of EOS and the main principles of EOS. First of all, what does EOS stand for? For the audience that doesn't know?

Mike Zappone 7:18

So it's, the entrepreneurial operating system. And the most common misconception is that it's a technology. And so EOS was created by Gino Wickman. Gino is a lifelong entrepreneur, and, and what Gino did. Was just put together all of these timeless, tools and disciplines in a way that allows us to execute. So, you know, if you read all these wonderful books, good to Great and you know, some of Patrick Chi stuff there's wonderful books out there that we've all read to E-Myth and all these really, really great books, but what does that mean to me as a small operator? Like those were written for somebody that had 10,000 employees. It didn't really apply to me with, you know, 20 or 50 people in my company. So Geno just put it together in a really nice, neat package that allows it to relate to small businesses, and it lets me execute. So it, focuses on three things and this. Sounds a little bit like a, a yoga model, but it's called vision, traction healthy. And so vision is just about getting everybody in the organization on the same page with where are we going and how are we gonna get there. It's the long range vision, getting everybody to be rowing in one direction. That's where the magic happens. And, and that sounds really simple until you go around and, stress test that in your own organization. When you start asking people like, Hey, where's this company going? You ask five people, you get five different answers on where we're going and how we're gonna get there. So aligning the vision's really, really important. And then traction is just about seeing people executing on that vision with discipline and accountability. No matter where you look in the organization, everywhere from the chauffeurs, all the way through reservations, dispatch, it doesn't matter. We're all, pulling in the same direction. And then healthy is about creating an environment of people that, just a cohesive group of people that you enjoy spending time with. You're not afraid to raise your hand and say that difficult thing, put the skunk on the table. You know, if there's an issue, I'm gonna, I'm gonna bring it up. It's all for the greater good of the company. 'cause often we spend more time with the people at work than we do with the wrong family. That's the vision. Traction, healthy around what EOS it really is based around

Ken Lucci 9:14

So give me the typical implementation of how, the starting point. How do you engage with an organization, it's definitely for SMB. It's definitely for entrepreneurs, right? I don't know about you, but listen, I, I have been an entrepreneur for my entire life, but it's tough to recognize sometimes, number one, when you've reached your own Peter principle, and second of all, perhaps when your baby that you consider to be absolutely gorgeous is a little fugly, So tell me, how do you roll up your sleeves and help a small business?

Mike Zappone 9:55

So the process and again, this is running about 275,000, companies are using EOS around the world, and there's 850 people like me that work as professional implementers. You don't need to hire somebody like me to, to do it. This is like eating healthy and exercising is good advice for human beings. Uh, EOS is good advice for any business, whether you're a, a one man band or whether you have, 500 employees this work. Generally speaking, my, core client, my marketing efforts are based around people that have between 10 and 250 people in the organization. And that's administratively so for this industry. It wouldn't be counting your chauffeurs, right? You would exclude those. So your office staff or your leadership team is at least 10 people, or more, uh, to help you working on the business. And the process is we do a, we do what's called a 90 minute meeting, and it's a free session that we do. And I walk them around the entire model, show them what it's all about, give them some tools and disciplines that they can take. And at the end of that meeting, they're really answering two questions. Is e os right for me? Is this the right time? Is it the right fit? And am I the right person to help them implement it? So they, they walk away with knowledge and value right out of that. If they decide to move forward. Then we work in full day sessions, and a full day is seven hours, plus or minus an hour. And this is offsite out of the office. And we do what's called a focus day. And in the focus day we, we have a specific agenda that we cover, and then 30 days later we come together. We do vision building, day one. 30 days later, we do vision building day two. And at the end of that period, you have all the foundational tools. So it's a spaced learning environment. You have all the foundational tools you need, and then we just jump into execution mode. And the execution mode means every quarter we come together, we review the last quarter, see how we did, are we all still rowing in the same direction? Set the vision for the next 90 days, jump back in the business and make things happen. And then at the end of the year, we do a two day annual. And that process lasts with me normally about two years. And at the end of two years, the companies have this, they get, and that's a beautiful part. I'm not creating dependency, I'm creating, you know, they're, they're able to go off and do this on their own. So at the end of two years, clients graduate, they go off and they run. Some stay with me forever, but it's nice not building that dependency. Like I've hired a CFO firm for example, and. They were running my books in the limousine company and, I couldn't take it back from them because it was so complicated. It was so proprietary. I didn't know what I was doing. I was almost held hostage by that company. And that's the exact opposite of what we're doing. We're empowering people to do it on their own.

Ken Lucci 12:18

Oh, trust me. My favorite thing to say to people is we love working our way out of a job. If now we do have retained clients that we do business planning, financial planning, financial reviews, analysis, et cetera. But for the most part, when people buy our financial course, or even if they go through our three-year review at the end of it, not saying, gotcha, you gotta keep us. They keep us by choice. You're giving them a system. EOS is a system that once you have, implemented that and it becomes muscle memory. It becomes the core operating system internally.

Mike Zappone 12:55

Absolutely. Yeah. And a way of running your business really. It's just a, a different way of running your meetings and, discovering your core values. And a lot of those things like core values is such an overused term. And people use chat GBT to create their core values or, you know, steal somebody else's. And, it really just takes all of the pieces, puts 'em together in a way, that just moves the entire company. And it focuses you in six key components of the model, which is really, you get to the root cause of what you're trying to do. Is it a people issue? Is it a data issue? Is a, you know, is it, is it a process issue? Like where is a struggle? Where are we gonna pin down? And

Ken Lucci 13:30

What are the six elements,

Mike Zappone 13:32

it's vision is on the top. And then people and data. So those are the three main, then there's an issues component. Then you have a process component and you have a traction component, and that's kind of the wheel. And so as we're working with clients, we really wanna drill them down. If something comes up, are we just getting out the zip ties and the duct tape and fixing it as quick as we can and throwing it back in the corner? Or did we find the root cause of the issue? Like, where does this belong? Is this our process? Is it a people issue? Do we have the wrong person in the wrong seat? What's going on here?

Ken Lucci 14:01

You hit upon something that we preach the same thing, but we see it constantly. And that is, you know, let's face it, the limousine industry operators think, oh, it's extremely complex. No, it's not. It's basically doing the same thing over and over. Now you do have, you have vanilla ice cream trips we do every day home to airport, corporate to airport, et cetera. And obviously there are high touch stuff. There's some, high touch stuff that goes along. But the end of the day, I believe, and you tell me if you think I'm wrong, if you make it a year in this business, you've seen about 80% of the scenarios that you are going to see right or wrong.

Mike Zappone 14:40

Yeah, absolutely. and the other 20%, you could write a book on the crazy stuff that happens.

Ken Lucci 14:45

a hundred percent, uh, without question. And those books, if we could tho those would be unbelievable, but my point here is I listen to operators talk to me about the same problems over and over and over and over, and I use this phrase, okay, back up, because that's a teachable moment. But my whole point is you are saying the same thing. You are asking them to identify what the problem was and stop and say, okay, wait a minute, this is the problem. this is what occurred. Now what's the real problem? Is it a lack of process? Do we have a wrong person, wrong seat, or do we have right person, wrong seat, or do we have, get 'em off the bus completely?

Mike Zappone 15:26

Absolutely.

Ken Lucci 15:27

I love the fact that you do 90 minutes at no cost. I love that. And I do find you have to give to get right, you have to give people an idea of what they're investing in. So the first day, are you taking me the owner out of the business?

Mike Zappone 15:44

Yeah. And, And so one of the biggest challenges, from a cost perspective, from my opinion. This is a really affordable process. So we're, we're less than a part-time reservist would cost, uh, the average limo company. So the cost is normally not the barrier. It is the time. And it is. And, and so what that really shines a light on is that look, if you cannot take your leadership team and remove them from the organization for one day, you have a much bigger problem that you, you need to solve. So it's kinda letting go of the vine, the story that, that Gino tells in traction as the entrepreneur falls off a cliff and he's hanging onto a vine. It's a thousand feet down to some rocks and a thousand feet up. And he doesn't know what to do. So he looks up to the clouds and says, is anybody there? And, voice comes down and says, do you believe? And he is like, sure, I believe then let go of the vine. And the entrepreneur says is there anybody else up there? I don't wanna let go of that vine. 'cause it's really scary. And

Ken Lucci 16:37

okay so in my opinion, we have hit upon the essence certainly 85% of the limo operators, well listen, based on size. 85% are under 5 million. And so in my estimation, the majority of the problems with a business is you get to a certain point of revenue. You're doing so much on your own. You've reached a point when you said it, your dream becomes a nightmare. you've created a lifestyle business and if you took off 30 days, the business would suffer. If you die, the business dies. So how does EOS solve that problem? How do you turn a lifestyle business into a real company?

Mike Zappone 17:21

So you touched on before, it's the Peter's principles, you know, running from zero to a million, right? Is You can do that, it's a reasonable amount of energy, effort, and it's easy to do. But then when you get over a million, and maybe it's not 2 million, but at 5 million, right? It's a completely different animal at 5 million than it was at a million and at 10 million or 20 million, it's polar opposite again. So as you're hitting these ceilings, you know, evolution took you to a point where you hit the ceiling. You are either going to break through that ceiling, you have a revolution, figure out how to get through it. You're gonna flatline or you're gonna fail. And those are the three options when you get there. And as these. Lifestyle businesses hit the ceiling, they need to figure out how to break through. And that's in our focus there, the very first thing we go over are the five foundational tools that you can use to, to identify when you've hit the ceiling and how to break through. 'cause it's not a matter of if I'm going to hit a ceiling, it's when, if your business is growing, you are going to hit the ceiling several times. And it could just be sometimes the whole company's stuck. Sometimes it's one department or sales department hit the ceiling or sometimes it's, you know, just one individual stuck. So like you can hit the ceiling in lots of different ways.

Ken Lucci 18:23

You can and listen, I give credit to anybody who starts a business. I think when you do that, especially, you did what I did, my first business was when I was 15. It was in the security industry, the burglar alarm business. I was one of the, the youngest guys in the, in the industry at the time. You didn't have to go through the licensing in Massachusetts at the time. And I, I was doing security, putting security systems in before I even had a driver's license. So when you grow up in the business like that, the way you did and the way I did, it's difficult to take. You are working in the business every minute and it's difficult to ever. Divorce from the day to day to work on the business. so I mean, it sounds to me like the e os system is pretty well thought out. How long has E os been around, by the way?

Mike Zappone 19:12

Geez I wanna, I don't even know the answer. I probably should know the answer to that. It's been quite a while. I I think Gino has been assembling it over like 10 years before he officially launched it. So it's been around a long time. To hit on your point, if you think about the typical person that shows up at work, and, especially in the ground transportation business you show up in the morning with the best intentions and all of a sudden something goes crazy, your world gets tipped upside down and you're fighting the day with two swords trying to survive. And at some point you leave. That's Groundhog Day just happens over and over again. So when are you gonna stop and be able to work on the business? And, And usually if the leaders are experiencing that what do you think the people behind us are doing? they're just fighting the same way. Everybody's coming in and just fighting against a tide and it doesn't have to be that way.

Ken Lucci 19:53

yeah, and, and I call it the bloody slog, right? Every day you've got a sword in one hand and the shield in the other, and it's a bloody slog. And to your point, if you work on making yourself the least important person in your business by training the right people, by developing the right processes, the developing the right procedures, that's one thing. But it sounds to me like e os is completely holistic, starting from the core values of the business. What do you want to be? Why are you here? Okay, so there's a cultural element to this.

Mike Zappone 20:32

Absolutely. And you know, it goes back to, you know, in, in the good to great having the right people in the right seats. It's such a great concept. And I read that book and I didn't know How do I implement that in my business? And so EOS has a tool called the People Analyzer. And so this, now I know like, does this person is, are they a core values fit for my organization? We analyze our people. We know if they're a core values fit, we know if they gwc their role, right? We, we create an accountability

Ken Lucci 20:57

What is GWC for their role?

Mike Zappone 21:00

gets, it, wants, it has a capacity to do it.

Ken Lucci 21:03

wait a minute, back up. That's a golden nugget. Say that again?

Mike Zappone 21:06

Gets it wants, it has capacity to do it. So do they understand the job? Do they understand the, three to five roles that are responsible for the seat they're sitting in? And most times the answer's no because the seed hasn't been defined. It's like, look, you come in and you're gonna fight fires right alongside of me, just if there's a fire, you put it out. That's your job. When, when you define the roles, we wanna understand, hey, does this person understand what's expected? the million dollar question is if I said, Ken, are you doing a good job? It's a hundred percent subjective, right? Yeah. I'm doing a good job 'cause I show up early, I do this, I do this, but it's really not defined to be able to say that I should know that I'm doing a good job and you should know that I'm doing a good job. There should be no question. And that's where the G comes in. So do we get it? Then the second part is, do we want it is this a means to an end? Am I just waking up doing this job because, I need a paycheck? And so people go to chauffeurs in that capacity. Like, oh, no one was eight years old and wanna be a chauffeur. Well, there are elements of people that really love being a chauffeur and wanna be in that position, enjoy providing the customer experience and the customer service side of what they do. so there are people that want that and need to put them in that seat and then have the capacity to do it. Do you have the mental and physical capacity to do the job? Right? I, I might wanna be a brain surgeon, but, lots of people would argue successfully that I don't have the capacity to do it. So can we get this done? You don't teach a, squirrel how to climb a tree or a duck, how to swim. They just are natural at it. And we wanna be able to put people that have a natural capacity to be able to do that job. and sometimes they don't have the capacity. It's either we're gonna train them up, do we have the time to train them up, or, you know, do we have the resources to be able to train them up? Or maybe it's a time capacity where they're just, they just don't have the time to be able to do the job. So it really shines a light on what you're doing, you know, using some of the time management tools that, that exist. Like, Hey Ken, what are you responsible for during the course of the day? And how many hours are you willing to put into this business? I, I'm gonna put in 80 hours a week. We might identify that you have a hundred hours worth a week worth of stuff. It's not possible for you to be successful within the time capacity that you've established. And so it really does shine a light on, on all these pieces and, and allows us to, reposition the chest parts to move forward.

Ken Lucci 24:22

And sometimes it is difficult to admit to ourselves as operators that we're not doing a good job as leaders. Okay. sometimes what's in our head is not what's communicated verbally. We think it is, but it's not heard that way. So the gets it wants it. Do you have the capacity to do it? The fact that you've systematized that? My dad used to own a supermarket and I swear to God some of the people he had there, I'm like, dad, Jesus Christ. I mean, and he's like, Ken, do you want to spend 12 hours a day in a walk-in chest getting frozen food? No. he said, that guy has checklists every morning. I've given him checklists and that's how I've trained him. at the end of the day. if the owner of the business is not going to take the responsibility for shaping the culture for working on the business. To me, that's the number one reason why businesses get stagnant and eventually fail.

Mike Zappone 25:25

You, you hit on something and, as the owner of the company, right? The vision is so clear in my head that I just assume you see it. And I think it was Stanford that did a study I, I wrote about this, but it's called the thump Thump Theory. And so I'm gonna tap out on the table some songs like, you know, like, uh, happy Birthday or whatever it may be. The success rate between me tapping and you being able to pick it up is like, less than 20%. And I'm really frustrated as a leader because why don't you get this? This is such a simple song, and I'm sitting there tapping on the table, and you should hear this. And we do the same as leaders. We're just, we're not, being articulate. We're not sharing our vision. It's really clear to us. It's really clear in our head, but it's not clear in everybody else's head. And so I think that's the biggest point that founders, uh, especially visionary founders, that started their company. To them that vision is vivid, it's crystal clear, but the people around them are just hearing thump, thump all day long. They don't get the song or the vision.

Ken Lucci 26:19

And in some cases the entrepreneur and, you know, listen, I, I took management classes in college. I'm surprised I even made it outta college. when I decided to get into this doing business valuations, I had to go back and take my finance courses because I just didn't feel like back then I was really focused on learning finance. So entrepreneurs work in their business every day. they're in charge of everything, chief cook and bottle washer. But are they in charge of being the task master and the one that is constantly teaching? are they capable of doing it? And the number one issue I see is what you just said. They know it in their head and they think some sort of a mind meld is going to get it to the next person.

Mike Zappone 27:04

Yeah.

Ken Lucci 27:05

Talk to me about EOS and what is the end product after two years? Is it a written plan? Is it a bible of sorts on the business? What is the end work product?

Mike Zappone 27:18

I just wanna jump back to one other thing you said about the owner. I usually use the example about saving for your retirement. So if you, if you look at your 401k every single day and the stock market has a great day, or stock market has a bad day, you're, you're riding the rollercoaster rate. that's too much frequency for you to be looking at it. But if you never looked at your 401k and then you did it the day before you retired, you might not be happy with where you are. Right. It might, define a, a whole different set of circumstances. And so the balance between working on the business and in the business. comes in a 90 day world. And so EOS establishes this 90 day world. 'cause that's about the right timeframe for us to be able to remember and keep focused before things start to fray. So we know what we have to do. We know what the most important things in the next 90 days for us to accomplish are. And then we focus on that while we're doing all the craziness. And then at the end of 90 days, we come back up, you know, we are, we all aligned, we realign, set the priorities for the next 90 days and we just jump back in and stay in there. So owners struggle with, you know, it's kinda like going to the gym on New Year's Day. I'm gonna, I'm gonna go to the gym every day at five o'clock in the morning, for the first week. And then I'm gonna, cancel my membership three months later when I stop going. So you need to create a cadence that's going to be sustainable.

Ken Lucci 28:29

It becomes muscle memory.

Mike Zappone 28:31

Absolutely. And so to answer your other question about the end game. And so what we're doing is teaching tools and disciplines and, and the idea is just that the muscle memory at the end of 24 months with a client, we've walked them through the EOS model so many times that they just, it's in their DNA, they memorize, we've showed 'em all of the tools in the toolbox. They know how to use it. it's working all the way through the organization. And at that point, they're able to just continue on that journey forever. But some people really require, it's like working with a personal trainer. So for me, you know, using a gym analogy, I can't stand going to the gym. I will only go work out if I have an appointment with a trainer. Otherwise I can make every excuse in the world why I'm not gonna go. So that's why they keep me around because I hold them accountable. I, Hey, listen, your rock completion ratio was less than 80%. You know, an issue. I'm gonna say that to the founder of the business or, or the visionary or whoever it may be, and I'm holding everybody accountable and they like having that, third party, but it's not a necessity. So that's what the end game looks like.

Ken Lucci 29:32

And you do for organizationally and operationally, what we do for finance, and to your point, these guys know they should be looking at their financials, but they don't. And the best companies with the best practices, one of the key best practices is a every month going through their financials. And it, to your point, again, sometimes it takes us saying, you know what? You can do it on your own. Uh, don't expect your CPA to do it. 'cause he doesn't understand the limousine business. He doesn't know what your labor costs should be, what your fleet insurance costs should be, what your repair and maintenance costs. We know it. Keep us around. We'll do that for you. we'll spend 90 minutes a month with you going through and creating what your next steps are, what your initiatives are. But see, to me it sounds like EOS, what I love about hearing this is it starts with the culture and the core values. It seems to me like culture is weaved through this what do you do when you find somebody? 'cause we all know these people that, they're really solid at what they do, but they're just a toxic person to work with.

Mike Zappone 30:40

The, and the two people issues that come up all the time and, and you highlighted 'em before you have the, the right person in the wrong seat. There's a person in your organization that you just love. They've been with you forever and you know, they, they're like family to your organization, but they just can't consistently execute on their job. You either have to move them to another seed or you gotta move them out. In a for-profit company, you can't keep them around. The harder challenge is when you have somebody who's just really, really good at their job. They're that square peg and they're killing you in ways you can't see it. And look, it's a really tough decision, but you have to move that person out. it is a weight, it's killing the company in ways you can't even see. And so again, the people analyzer just makes it really clear when you get your leadership team and we go through and we're rating people on the core, on the core values of the company, and somebody's below the bar, it's pretty obvious. And I've not witnessed anyone who just marginally fails it's, tragic failure or there's somebody who's a, a real fit for the company. There's never a question mark.

Ken Lucci 31:38

And it's interesting to me 'cause I've been on corporate in corporate America before and I've hated it. Okay. Corporate America to me breeds mediocrity. Okay. if you wanna hide, if you want to get away with doing mediocre work, just go work for a large corporation. I'm dealing with one now that, thank God they pay me by the hour for the meetings that they have me in. But I've just, I, I just keep saying to my business partner, send 'em another bill. They've got me in another project group. But at the same time, small business has a different set of circumstances and a different set of problems. Normally they have a shortage of resources, whether it's capital, it's people, process, it can be all of these things. And I, I do think it's difficult for the owner to realize or accept that they need help. tell me what you do when, you know EOS is the perfect fit for this organization and everything they need. 'cause they're just banging against that ceiling and they can't overcome it. I don't wanna use the term, how do you sell 'em or how do you convince them that they need it?

Mike Zappone 32:43

So I, I don't, you know, it's too, and it's, this might sound really harsh, but, I need to work with clients that want it more than I do. I'm really passionate about what I do and I've spent 11 hours in a, in a session room that was supposed to be, you know, six hours or seven hours plus or minus an hour. And I'll, I'll stay all day and all night to do it, but, it's too heavy of a lift to have to pull people around. So you have to have a certain amount of pain before you realize that, you know, this is what we wanna do. And, and I just wanna touch back on the financial side of what you're doing. So, we create a scorecard in e os. And so the scorecard is, is the activity-based metrics that are going to show up on your p and l, for example. And so, uh, when they, get a, a bad month. When they have a bad month, and they're like, okay, we missed. They're not able to go back in time and correct it. So when you're setting the targets for them, we're able to break those down into weekly revenue, and we can make course corrections real time. So when they see that p and l, it's not gonna be, started like, oh my goodness, how did we miss? I, I thought we were having a great month. They know every single week where they need to be. And so measuring those activities across your entire company, and it's not just financial it's, how many accounts are we bringing in? How many incidents do we have? How many this I, many that, so the scorecard is a huge part of, of what we do. Working with clients.

Ken Lucci 33:56

You break it down, it's a little that they can manage. Um. I never would've made this statement in 2018. I mean, I was a fantastic top line operator. I judged, Everything by the number of accounts I brought in the market share I had. We were the biggest in Tampa Bay. And thankfully I had a really good fractional CFO, but I wish I had somebody on my shoulder saying, why do you need that mini bus? You've got three sitting there, and they're all about 70% of industry standard, which is what we have. But I can honestly say to you that I made myself the least important person from the day-to-day operation for a few reasons. Number one, I, really didn't like dispatching. If you wanna screw up a dispatch board, give it to me. Okay? And the second piece is, and this is germane to what we're talking about, is while I did take reservations periodically, that was not the best use of my time. How do you deal with an operator who says on a Tuesday I'm sitting down and I'm sending bills out, or I'm sitting down and I'm closing jobs. You know what? No offense, but is that really the best use of your time as the business owner?

Mike Zappone 36:10

Yeah. And it's funny you say that, and, and I, find so many people, like someone's getting the mail or somebody's, you know, they're out washing buses or they're, you know, whatever it may be. And I think what it really boils down to is that they're looking for fulfillment, right? And so you get fulfillment out of doing something that you enjoy. So like, for me, if I wash a car, right? there's that sense of completion. And so the owner in doing those, simple tasks are really, to, they're trying to create fulfillment and we just need to get them that fulfillment at a much higher level. And so you can get the same satisfaction or that same good feeling by working on this instead of that menial task. And so we, you know, what we usually do is just show them, you know, the path to what makes you happy. Because it's funny you said, you know, the reservation thing, I loved reservations because it got me out of doing what I was doing. So I would like grab the phone and engage with a client because I thought I was, giving good customer service, but really I was not doing my job that I hated doing. It was, that.

Ken Lucci 37:09

well and I have a fantastic client, love him to death. And we preach the following things. We've never found a company that was suffer from profitability problems when their pricing was in the top one third of their market. Okay? They know they're worth, the guy's got one of the most beautiful fleets in, in his region. Owns his own building, every single morning he closes jobs. He closes the jobs, okay? And I say to him, I'm gonna ignore this because you love doing this, but at some point, okay, at some point when you say to me, revenue's down a little bit, I'm gonna come back to you and say do you think that has something to do with you sitting down closing jobs between nine and 11 every morning when that's primetime selling time?

Mike Zappone 37:57

Sure.

Ken Lucci 37:58

Okay, so a part of it is an owner. Tell me if you agree to this with a statement. Part of it is to understand the jobs that you have to work yourself out of and how you have to progress as a quote, company owner.

Mike Zappone 38:15

and so we use a tool in Eeo s it's called Delegate and Elevate. And it's it outlines the four

Ken Lucci 38:20

that again. Delegate and Elevate. Delegate and Elevate. I love that.

Mike Zappone 38:25

So the top left is the things that you love doing and that you're great at doing. And it just walks all the way around. And the bottom right are things that you hate doing and you're not very good at. And the reality is, people go to hell. The, the living hell is doing things that you don't like doing, but you become pretty good at it because you've done it enough. And so the idea is to, match your people and be able to give that to somebody else. Give those tasks to people that are going to be able to love doing that job. If I'm not a numbers person, I don't wanna be closing trips every day. And so again, just delegate and elevate and back to that owner it's interesting, I use the same analogy when we talk about meetings. And so there's 15 people in a meeting and I say, okay guys, let's just do a recap of the salaries in this room. How much is this meeting costing the company? Did we get a value out of what we're doing? And at that owner's salary, are we getting a value or should we be paying that salary level for somebody to close jobs? And so, you probably wouldn't spend that much on a, on an, on somebody in that position.

Ken Lucci 39:26

And the most important thing to me is if you are not working on your business and you are stuck in it, and the menial task, the day-to-day who's working on your business, you know the market is changing every single day. The market is changing every single day. The world, the transportation world around us is changing and evolving. You are stuck with your head down. Who's working on your company to move it to the next level. And you know what I like about EOS, from what I've, read about it is you're not on your own. You don't have to recreate the wheel. This is a system that has worked, and now we're gonna do is we're gonna tailor, make it for your company.

Mike Zappone 40:09

Absolutely. Yeah.

Ken Lucci 40:10

what's the biggest objection? You told me what the biggest problem is, which we're gonna address, but what's your biggest objection?

Mike Zappone 40:16

I think it's, getting people to a 90, it's, it's a tricky, I struggle in a quick, conversation to be able to explain to somebody, Hey, this is what EEO S is. It's a pretty complex model, and so it really takes the 90 minute meeting of me showing and teaching for them to get a flavor of what it is. So I think the biggest objection is that people are just unsure of what it is, and then they dismiss it as like, this is the latest fad, or this is, uh, another craze. And so really getting them to understand it is uh, is probably the biggest c.

Ken Lucci 40:48

And getting them to change, right? That's what the fear is because to me that, oh, this is something new. Oh, it's the latest fact is an excuse. I know enough about the author of the book and the gentleman that created Eeo s to know he took the best and brightest disciplines that are from the best organizations in the world and distilled it down for use by small businesses. You could sit and listen to the best in the business to me is Jim Collins. Right? Author of Good to Great. at the end of the day, what you are correct those are for. Large organizations, multinational organizations, hundreds and hundreds of employees. But, but what EOS is to me, is it's distilled all of the vitals down. I don't think you can overlook the purposeful starting at the core values piece, because to me, that's the essence of why people do business with us. It's the essence of what makes us different. I will never forget getting into a car. I won't say who the network was, was one of the largest in the industry. And back then they had a laminated card in the back that said their statement of core values. And I pulled it out. It was a direct ripoff from the Ritz Carlton. and to me, Ritz Carlton gets right what we're talking about. It's why are we here? Who do we serve? What are our core values? But you know, something that's distinct to the Ritz Carlton, it's as distinct as the Lion logo. So you have to develop that in your small business. I mean, don't you find it, the personality that you want to exude for your small business.

Mike Zappone 42:36

Absolutely. And, and so as when we're doing our core values exercise, when we create them, they're internal. And so lots of our clients couldn't, advertise 'em because there's curse words and things like that. And in, in their core values,

Ken Lucci 42:49

Sounds like mine.

Mike Zappone 42:50

Yeah we're using them for internal use, and then we may hand them over to a marketing company and say, Hey, spin this, an outward facing. But for our purposes, we're looking to attract the type of people that share our values and share our, there are people and there's just, you know, when you meet people, you're like, man, I just instantly clicked with this person. They're, they're my kind of people. Yeah.

Ken Lucci 43:11

yep. and I think that when you are working in a small business, when you are the owner, you need to understand, number one, they're not your family, but you are gonna be around them probably more time than your family. So you better find a way to get along, communicate your expectations, and inspire. People wanna be inspired. People wanna feel good about the place they come to work in every single day. I struggle. I have a client who came to us about valuing his business and he's in business with a partner. The partner's downright toxic, and I only found that out because we were on site and we're doing a valuation of the business so he can be in the position to buy another company. And I just found out by being in the next conference room, listening to his interactions with the dispatch department, 2025 is a lot different than 1980 and you can't treat people a certain way. So a lot of trying to attract the right talent, the right people to be on that bus it's a mutual respect level. A hundred percent.

Mike Zappone 44:27

Yeah, absolutely. And, and And I think if you're not aligned on a, on a core values fit, and the second thing that makes people feel good is like the day you went to work and you just you worked all day and, and you didn't accomplish anything. You just survive the day and you leave. It doesn't really feel that good. But when you knock stuff out, when you complete something, there's that sense of accomplishment that, I mean, that drives endorses, that makes you feel good. And so I think. It's the core values fit. People have to line up, they have to be, culturally part of your company, and then they have to be able to reach success and know what success is. Did I move the needle today? Am I making a difference? And so, that endless, you know, hamster wheel is just, it doesn't breed, people that are, that are happy, you know, you're just working really hard. It's a sprint. You can't do it forever. We need to be in a marathon.

Ken Lucci 45:10

And when we deal with people who wanna sell their businesses, many, there's a bucket of them that come to us that have been on that hamster wheel. they've been a million dollar company for years and years and years and years, and they can't break through, but they, or they might be a $5 million company, they can't break through and they don't correlate their own lack of growth. Okay. what are you doing today? I'm closing trips. I'm dispatching it's like literally a haphazard way. No systems in place where EOS systematizes. Now I can see where the average entrepreneur who basically got themselves up like you and I did from their bootstrap saying, I don't need that. because I've gotten this far you're actually becoming your own worst enemy. I see it every day in the financials. Okay. the beauty of where we sit is we see the same things over and over, and we say do you notice this, this is the problem. This this guy is still doing dispatching. He doesn't have an operations person. You see this is what's going on. And they're all, they don't recognize the fact that it's their inability to change, grow, and follow a system that's well beyond them.

Mike Zappone 46:27

you can't be part of a system and at the same time understand that it's kinda like the matrix, right? You don't know your, you know that movie you didn't know you were in the Matrix and you just are, it's your everyday world. They're so deep in the woods that they can't see it. They need someone from the outside to come in and like you're doing and shining a light saying, Hey guys, look, are doing things. And it's just because evolution isn't always the most efficient way. You look at the Colorado River, right? Carved its way through the Grand Canyon. It's beautiful. But a straight line is the shortest distance between two points. The evolution of our business usually doesn't make us the most efficient. And that's why it's always evolution and then revolution to be able to go back and make sure that if you were starting the company today. Would you still do things the same way? So if I said to, any of these business owners, look, I'm gonna hire you as a consultant, and I want, we're gonna open a company and, fill in the blank on another planet or another state, tell me what I would do. The odds of it being the same thing you're doing today are, are usually pretty slim. And that just shines a light in the fact that how we did it to what it took to get here is not what it takes to go forward. And so

Ken Lucci 47:30

That's the essence of small, the small business. Most of the reasons they fail, if they're not failing from a cash flow or financial deficit or financially being unhealthy, they're reaching a point that they just can't get beyond themselves. They can't get, they can't get outside their own box. And that's, that to me is the benefit of bringing someone like you. And, you know, I wanted you on here specifically now because, you know, we shy away completely from doing any strategic consulting. Okay. Because I find that the entrepreneur deep down knows what he should be doing, but he can't get out of his own way. Where our job is fairly easy. Is we diagnose the same things in every company and it's hard, fast, black and white data points, financial data points revenue KPIs. But what you've gotta deal with is you've gotta deal with more the operational and getting the company to be removed from its entrepreneur, so to speak, and become, get to the next professional level. It's gotta be a more difficult job.

Mike Zappone 48:39

It is until you, the accountability chart really solves that. And so if you have, most founders of companies and, and e os would tag them as a visionary. And the visionary is the person that sits at 30,000 feet. They have all these great ideas or creative problem solvers. And when you have in, when you have a visionary trapped in the integrator seat, and the integrator would be like the COO level, the person that's actually making all the major departments run, when that, when that visionary is trapped in the integrator seat. You just get a lot of spikes, right? A lot of you don't have any momentum. You're starting, you're starting, you're starting, you're never finishing anything. And so what we do when we come in, in the accountability chart, we're like, okay, if we have a visionary, we call it out. We establish a three to five. What's the best use of this visionary's time? What are the three to five things they need to be doing? What are the three to five things that the integrator needs to be doing? And when you establish that relationship, EOS calls it rocket fuel, but it is the yin and yang of business. It's the magic. And, you know, ironically for me, and, and, and I didn't know this, I did not run my company on EOS because I didn't know about it back then. But I found my integrator and that's when my business really, really took off. When I found the person who was just my opposite, she was able to take, you know, take and run with the ideas and execute. And so we really just were yin and yang and, and my business really, really took off and, and was a better place. And it's not always, people talk about growth and growth is not always top line growth. Sometimes you need, you know, sometimes it's, look, this is a 24 7 business. Maybe I wanna get some time back in my life. Maybe I wanna be able to take a couple weeks off that I'm gonna carry my cell phone around, or whatever the goal may be. Right? So there's growth in lots of different areas business. And so defining what you want, and I'm always, I'm always surprised that when we start with the vision statement in the business, what do you want from this? It's not an easy question for a lot of people to answer. 'cause

Ken Lucci 50:26

No. and sometimes that's as a result of being on the hamster wheel. You may have had some pretty decent ideas of where you wanted the business to go when you started it, but now you find yourself so deep in the recipe, so deep in the business,

Mike Zappone 50:42

there you can't see.

Ken Lucci 50:43

Exactly. And we see it over and over. we deal with it on the finance side because it's all black and white. we actually, it's very simple. You are hiring us for profit improvement. Here are the things that are wrong. There are only two ways to solve 'em. We're either going to go up on our pricing. Or we're gonna cut our overhead cut our cost, and cut our overhead. It's interesting, you hit upon something where, and I think it's, a universal misnomer in the business where you get together at these conferences and all you hear about is the size of fleets, and all you hear about is top line revenue. And I, I had hoped that during the pandemic, we would've been dissuaded by that because that's not success. Top line revenue is just pure vanity. Pure vanity. I've never had anybody who wasn't my client come up to me at a show and say, oh my God, my gross margins this year are 44%. Last year they were 38%. They just don't, they don't focus on that. And I do think it's because, it's an easy measure. Hey, top line is 7 million this year versus 6 million. But when you are talking about. Breakthroughs, which is what you're speaking of. You're talking about instead of the business running you, you running the business instead of the business being your life, your life is better because of the business. And I don't know how many people get that way they don't get to that point.

Mike Zappone 52:11

No. A statement that you uh, that I've heard that is, is gross as vanity and profits or sanity. And that's, uh, one of my favorite client

Ken Lucci 52:17

Absolutely. Abs I, the myriad of clients that we have the best practices, I can tell you the best operators in this industry, we are blessed now to, I never thought it would be this way, but I, I'm blessed that some of the biggest and best operators in the country rely on us. And they all have the best practices. They're all obsessed about their numbers. And I was taught that after I got into valuation piece and the financial review piece by a guy named Bobby Bellagamba, who ran Concord Worldwide. And, That he had what you're talking about, he had an integrator, he had, his brother was in charge of operations and his brother had the ultimate right arm Shady Azer. Shady was, was, would do anything would make it happen. He was an operations maniac and Bobby had the beautiful position of managing some would say micromanaging his finances. But he is a guy that, broke through and literally because he had the people he worked. On his business every day. He bought the land, built the building, put solar on top of it, focused on tax credits. Focused on budgets. And the operators that we see that have the best practices focus on that. They focus on steering the ship. They focus on, okay, is someone, off on the port side is someone off on the starboard side, and they really get to the level of being the true captain of the ship. They're not down in the engine room, they're not serving drinks on the colon aid. They are literally running the ship and they know the course. And it's an enviable position. I don't you hit upon something That to me. We kind of do the same thing, but to me, I always have a say, I Don't try to converse the ag. Financially agnostic. If you are financially agnostic, if profit is not your religion, don't come to me. Okay? In your case, you said something, look, if they don't get it, if they don't see that this is an investment, I just move on. Because there are plenty of people that want to change their seven day a week business to a company that lives for them, not that they live for the company.

Mike Zappone 54:37

absolutely. And this, this industry is just, it's such a heavy lift industry. It's, you know, there's 24 7, 365, and, and if you, if you think about it as an investment and think about, you know, the return you're getting on your investment, like, look, this is an awful lot of work that we do. Am I making enough money to, to make this worthwhile? And, and so when you, when you start asking those questions in this industry, I think it, it really opens people's eyes and, look, it's a lot of work and often not enough return.

Ken Lucci 55:06

and part of it is it's the insanity of doing the same thing and expecting different results, right? prospective client of mine said the other day, you know, well, you know, things are down. The affiliates aren't sending me the work, the networks aren't sending them me, the work. And I'm like the fuck are you telling me for? I mean it What are you complaining to me about their businesses? You are in a fantastic market. You are in a top 15 market in the country, and you are complaining as if the networks are doing something wrong by not sending you work. How many times a week are you out there telling the story of your business? The answer is, I don't have an outside salesperson. what are you doing? Well, I don't have time for that. The EOS to me is about, this is a bad analogy, but back in the day, I get corralled into a contest, a Dancing With the Stars contest in Tampa Bay. Okay? It's a long, stupid story, but it taught me tremendous. One, tremendous lesson. If you don't get out of your comfort zone, nothing will change. And EOS to me, you tell me if I'm wrong, systematically it dissects the company, dissects the issues, and it does take you out of your comfort zone as an owner.

Mike Zappone 56:20

And in the room, one of the rules that we have is something we call open and honest. And so you need to be, just what's ever on your mind, say it. And in a session I had in Connecticut uh, just a couple of weeks ago, there was a really, tough topic, and the individual just said it and the team, heard it and responded. And man, they left this meeting. a better company than they went in, just because they were able to have that conversation. And so one of the things that gets you outta your comfort zone is just, say what's on your mind. if hear what's being said.

Ken Lucci 56:53

You as an owner, need to hear from the people that maybe your baby is ugly and maybe the person that for some reason you think is great at their job is causing you overall long-term problems. The analogy I use about dancing, first of all, I, believe it or not, I was not born with rhythm. Go figure. I was scared stiff, but I made the commitment. Okay, it's a great story. The woman that rat lasted me into it. It was one of my best customers and also one of the most well-known people in Tampa. And I loved her to death. So I said, yes, Julie, I'll do it. But I was scared stiff. Okay? I never danced before and I'd never had a dance partner. And this was a professional dancer. And at the, she said, listen, all I'm doing is facilitating. We're gonna show you the steps. And I promise you, by the end of the 20 sessions, this is gonna be purely muscle memory to you. This was totally foreign to me, but it got me outta my comfort zone. So, you know, my message to anybody who's listening to this podcast and because I, I wanted to have Mike on ever since I saw his presentation in Vegas. You took me through the EOS presentation. I think there is a major gap. In small business, and there is a, epidemic. of the inability to change and grow. You think as an owner, you are growing because your revenue is growing 10%, but are you evolving as a business? Don't answer, you know, don't answer back to the podcast. But answer yourself the question. If you are living the same day on what Mike calls the hamster wheel, are you evolving your business or as I like to put it, is your business just a bloody slog that's running you? so Mike, tell us how we can reach you specifically and how people can sit in and schedule a 90 minute, with you.

Mike Zappone 58:52

So my email, it's, my name, Mike dot zon@eosworldwide.com.

Ken Lucci 59:00

okay. Mike, this has been fantastic. I mean, we could do another one, you and I on the evolution of your company and the feeling of what it was like when you sold it.

Mike Zappone 59:12

Absolutely.

Ken Lucci 59:13

Mike's Deone from EOS. There is life after limo. You've got yourself a great job. I know it's a great career and I know it's not seven days a week, right? Right. And you're not worried about the vehicle, crashing into a telephone pole, right? So for all of those operators to think you don't know what you would do if you sold your business, this guy is a living example. That there is life after limo. Mike, thank you for agreeing to be on the podcast and

Mike Zappone 59:42

you. You do the same. Thank you. Take care.

Ken Lucci 59:45

Uh.

59:46

Thank you for listening to the ground transportation podcast. If you enjoyed this episode, please remember to subscribe to the show on apple, Spotify, YouTube, or wherever you get your podcasts. For more information about PAX training and to contact James, go to PAX training.com. And for more information about driving transactions and to contact Ken, Go to driving transactions.com. We'll see you next time on the ground transportation podcast.