Ken Lucci 0:25

Well, good afternoon podcast audience. Welcome to another exciting episode of the Ground Transportation Podcast. My name is Ken Lucci From Driving Transactions, we are a financial analysis, business valuation and m and a advisory service and the transportation sector. unfortunately do not have my esteemed partner, James Blaine from P'S training on today. He's no doubt out training a slew of new chauffeur and professional coach motorman. Um, so James, wherever you are, Godspeed, my brother. Sorry you're not with me, but I do have someone who has been a friend to me, a friend of mine since the eighties, which is dating both of us. A gentleman named Steve Firestone of who, uh, definitely honored to call him my friend. We've worked together many times and he is the founder of Firestone Strategies Group. Steve, welcome.

Steve Firestone 1:26

Thank you, Ken. Good to be with you. Virtually wish we could be face to face for this next hour or so, but uh, I'm delighted to be here.

Ken Lucci 1:36

Thank you, Steve. give us your bio. Listen, I know, I know your bio, but I want you to give us a highlight of your bio and your experience so people understand where you're coming from.

Steve Firestone 1:45

Sure. So roughly half my career has been spent in what most people would call corporate America, and that time was, in a couple different industries. Started my career in the banking industry, although I never would claim to be a banker. Uh, but the first dozen or so years of my career was in, in banking. Um, and then I left, I left the banking industry and through a. Circuitous number of events ended up in the security industry, Ken, where you and I met each other, and spent over, over a couple decades with a couple stops in between, spent call it, 20 years in the security industry, either as president or CEO as, or, or one of the executive leadership team of a number of, um, security companies and by security companies. I'm talking about burglar and fire alarm and video and access control companies, both commercially and ally. Um, and during, during that time, I was involved in, in one way or another, and over 200 acquisitions of companies. Ken, you and I spent, uh, uh, some really delightful years doing 38 acquisitions of companies in 18 months.

Ken Lucci 3:05

Yes. Yes, we did.

Steve Firestone 3:06

so, so we certainly know what rapid growth is through acquisition and the, the challenges therein, my most recent stay in the security industry is I was president of a company headquartered in Pennsylvania and had 30 ish offices around the country. And we were recognized as the fastest growing security integrator in the industry. Uh, so a bunch of years in the security industry, but also on the, the corporate side. I ran, uh, sales and marketing at Office Depot for a number of years. Um, had roughly $9 billion of revenue responsibility and about 8,000 people, um, in my organization. So I, I've, I've been in kind of that corporate world the other half of my career, though. Has been spent as a consultant or running a consulting company, for some global brands like American Express and Nokia and T-Mobile and some, some big companies that everybody would recognize the name, but also everything down to small technology startups and every place in between. Um, and those consulting years were largely in kinda strategy, organizational alignment, growth plans, you know, maximize opportunities in a market across a whole bunch of different industries. So I've worn a bunch of different hats and a different size companies, uh, and companies all across America.

Ken Lucci 4:38

That's a great summary and you know the reason why I asked you and, and you and I stay in touch. So you, so we've talked a lot about the chauffeur space together. You attended the chauffeur-driven NLA retreat in Savannah. Uh, so the state of the financial, state of the industry. speech that I gave. So I, I asked you here today because I wanted to tee something up. this, I think we will both agree this is getting close to the ends of our careers. Um, we're both consulting. one of the things I've noticed as, as kind of doing deep dive consulting with the transportation space is a truism that I see with all small business. We never expected to have the financial data on 280 companies, so we see common threads on those metrics, profitability, sometimes lack of profitability, et cetera. But the other commonality we see, which I'm really intrigued with, spend a lot of time dealing with, and I know you do, is the small business owner, founder. I would put small business in the category below 50 million. certainly we deal with, owner operators that go from a million all the way up to 150 million. But this, this issue that I see is with the, with the, the one to $50 million company. Some people think 50 million as a small business. Yeah. Kind of is the commonality I see is what I call, and I hate the phrase, we both hate the phrase, the owner or founder working in the business and not on the business. So the number one problem I see is the lack of financial acumen, the lack of financial management of metrics. But the right up there is the founder, owner working in the business and not on it. So let's tee up what that means. You know, to me it's akin to being a, a football player on the team. On the field versus at best being the coach that is directing the team or where you should be if you're running a company, is up in the owner's box. And I hate to say up, but in the owner's box, directing the entire operation and planning the future of the organization. So what I mean by that, and I give an example, is, you know, $4 million operator that I deal with every Tuesday. He sits down and he does his entire accounting for the week. And when I talk to him, I say, back up a step. You, you're acting as the bookkeeper? Yes. Okay. How many hours a week do you spend Between eight and 12. Okay. So what you're saying to me is a function that you could easily job out for $20 an hour, $25 an hour, to someone who's QuickBook certified. You are doing that in prime sales time. Now I know one of the reasons why you've been stuck at $4 million for five to seven years because you are performing what is ideal, no question, a critical function, but it's a function that's easily taught or given to someone else because it's, you know, it's, it's fi, it's financial bookkeeping, it's QuickBooks. I see the same thing where owners have to be, I'll watch them at meetings at the show for Driven show, and they're literally dispatching. They've got their laptop open and dispatching. So to me, the fundamental problem I see with small business, and the reason why in my estimation, and it's a statistic, 80% of small businesses never sell to unrelated third parties. That's a, biz buy, sell statistic. And it's a statistic of the SBA 80% never sell because they never leave the realm of a lifestyle business in where the owner is an integral part and controls the, the business to a company that functions on its own, largely functions on its own. So I wanted you to speak about. Why you see that phenomenon? Why do you see small business people never being able to work on the business, the strategy of the business? where ultimately is the business going to go? What is ultimate success of the business? Because every day they're just blocking and tackling. They can't figure out how to win the World Series mixing sports metaphors because they're literally fielding on the team.

Steve Firestone 10:20

Well, that's a, that's a mouthful. And I, I think you're, you're spot on. And, and as I described my work history, I never really counted the number of different industries that I've, done work in or consulted in or, or led organizations in. But it's, it's a lot. and it's, it's interesting because every time I start a relationship, either as the leader of an organization, as an employee, or as a consultant. I almost always hear before we start working together, Steve, you need to understand our company's unique and our industry is unique

Ken Lucci 11:05

Hear the same thing.

Steve Firestone 11:06

and the sooner you understand that, the better our relationship is gonna be. And my answer to that usually is, well, that's curious because I've been working for, call it 45 years and I'm finding quite the opposite to be the case and that there are more similarities than there are differences and the challenges that that companies have regardless of geography, regardless of of industry. There are, there are some uniquenesses based on size, but the challenges are essentially the same fundamental challenges. And we can come back to that, but I, I wanted to do that as kind of a preface to respond to your, the points that you were making and, and that is, you ask why does that ha why is it so hard to get out of that? And, why do owner operators, CEOs, presidents get stuck? Well, first of all, they get stuck because in most cases, those guys built the business on their own backs with their own energy. They must, they're, they muscle their way. And I mean that in the most complimentary way. They muscled their way

Ken Lucci 12:23

We both done it. Yep.

Steve Firestone 12:25

They, they, they, they just, they didn't take no for an answer and they woke up one day and they went, oh, dang, I got 40 employees, or I got a hundred employees, but I don't wanna give up what got me there because, oh my gosh. What if somebody doesn't do it as well as I do?

Ken Lucci 12:44

Yep. And that's, you know, I, and that, that is, that is, you know, uh, let's just face it. The entrepreneur is a very, he's a, he or she is a very unique person to be able to take all this risk. And, you know, the Frank Sinatra song, I did It My Way, comes to my Mind. But I, I think the fundamental flaw and the reason why businesses fail in many ways is they reach that ceiling where the owner can't do it all and they don't know how to let go. So, go ahead, I, sorry. Sorry to interrupt.

Steve Firestone 13:19

you're absolutely right. And, and I, I've been very fortunate as you know, Ken, that, that, I guess because I've been working a long time, I've gotten some, uh, I've received a lifetime achievement award from the security industry, which means, I guess I'm an old guy. but through. My involvement in that industry and others, I've had the good fortune of being able to do some keynote speeches at some, big industry events. And one of my keynote topics is called Leading Change for any size Business. And basically what that is, it's a, it's a, it's an analysis, a self-reflection on where is my company at the natural lifecycle stage of the business, and based on where I am as a company, what should I do based on where I am to avoid the down slide or the stagnation of the business? Because it's a hundred percent reliant on me making every decision, every company gets to that lifecycle stage at one time or another. Those that are successful, a, recognize that they're there or they're approaching it and they take the necessary steps. To mitigate that risk by making sure that, to use that cliche, we both hate, uh, that they begin to work, on the business, not in the business, which is the hardest thing for an owner operator to do. So in, in some cases because they get stuck there because it's a comfort level. In other cases, they get stuck there because they don't trust their team. In other cases, they don't even know what it means to work on their business rather than, than in the business. And if I were to break those three categories into what percentages are in each, the great majority are the owner operator, CEO, founder. They don't even know what it means to work on the business, not in the business.

Ken Lucci 15:13

Correct. they assume that hard work and the number of hours and tenacity is going to, it carried me this far. It's going to carry me into the future and forward. And the problem with that is Every industry's being disrupted. Change is inevitable. And the worst thing you could do is be insular and do things the exact same way. You know, the other, the other thing that, that I think that they, they also, most entrepreneurs are from the bootstrap up. I mean, I, I, I'm blessed to do business with some of the biggest network operators in the country, if not the world. And, you know, one guy comes to mind, he always tells me he started the business from his, parents' basement. And now he's a, he, one of the biggest networks in the country, but at the end of the day, they don't have. the playbook on strategy. They don't have the playbook on strategically kind of how to get themselves out of their own way. You know, I used to make, I used to make a joke and you've met some of the people that worked for me that, you know, my ultimate goal was to make myself the least important person in the business. Um, didn't achieve that with ambassador. My cell phone was filled with 2,700, you know, contacts of people that called me from the head of the Yankees, you know, on down. But in most cases, I was able to make myself the least important person. I can tell you, you didn't want me dispatching, you didn't want me billing, right? I had people to do all that. I was still leading on the sales side, but when my father died, I left for 15 days and the, and the company didn't miss a beat. I was very proud of that. very proud of the people that led the business while I was away and. I I think I'd ask every, every owner operator, or every operator that's out there listening is what would happen to your business if you had to leave for 15 days? Because ultimately, you know, my family was much more important.

Steve Firestone 17:09

Can, can, Can, I add one? can I add one? thing, one thing to that, that point. the other thing that I have found as I've entered an organization, again, either as an executive running the organization or as a consultant, there, there's a, there's a natural size in terms of number of employees that might even be more important than the dollar amount. There's a natural size where, where if the owner or the operator doesn't successfully have a strategy, a real strategy, for organizational alignment and some of those things that we can talk about later. If you don't have a real strategy, They will think that the business is healthier, both financially and from a culture perspective in terms of satisfaction of their workforce. They'll think it's better than what their employees think it is.

Ken Lucci 18:10

always.

Steve Firestone 18:11

it. It's, it's the healthy, it's the healthy CEO, founder, owner, operator. It's the healthy one who has enough self-reflection to say, you know what, I've now got 75 employees, or I've got a hundred employees. And we used to always say we're a family business. And, you know, all those wonderful things that go along with quote a family business when you're that size and maybe the number's not even 75, maybe the number's 50, depending on the uniqueness of of the company, uh, it is critically important that they have the kind of financial data. To make decisions like you guys provide to your clients and they have a real organizational alignment, strategic plan with measurable, quantifiable data points on the operation of the business. 'cause ladies and gentlemen, when you're that size, it's not a family business anymore.

Ken Lucci 19:10

No. And, and if you ever want to create enterprise value, and, and this is something that I, it's funny, I'm, I'm bringing on an a an another m and a guy at some point because he, he's in every other industry. I'm not. And he makes the point that I'm trying to make here is that if you don't transfer translate, if you don't transfer your knowledge as a founder to a team of people that can run your company, you're not creating any enterprise value. It suffers and dies when you suffer and die. And that statistic of eight outta 10 businesses never get sold. I'm here to tell you I don't care how big you are in the transportation space, I have $50 million companies that cannot run without the owners direct involvement every single day. And oh, and, and I'm on zooms with 'em, and they have to sign checks and they, and they have to, they're constantly being interrupted, et cetera, et cetera, et cetera. If, if you don't go from a lifestyle business to a company, you are not creating value. And I don't believe you can get to a company without a strategic plan. You can't. You cannot become a company that runs on its own without a strategic plan. Your vision as a founder got you where you are, but it is no guarantee that it is going to carry you forward. In fact, in some cases, the vision becomes a myopic view of inside four walls. But let's not get esoteric. So, so gimme an idea what you think the basic strategic plan means, because a lot of people are probably saying, what are they talking about?

Steve Firestone 20:51

Yeah, it's the, the term strategic plan is not quite as bad as work, on the business, not in it, but it, it may be one of the, what I think are the most, I dunno if this, this is the wrong grammar, most least understood, um, wor words that, that

Ken Lucci 21:09

Is that like when George Bush has least underestimated?

Steve Firestone 21:12

That's it. That's, that's it. Uh, um, that, that's out there in the business world. And so I'll start with what strategic plan isn't strategic plan or mission or the whatever words you wanna throw out. There is not, a plaque or a poster on a wall that you spend a couple days or a couple weeks or a couple months working on, where you can't really measure is it working or isn't it working? Um, your workforce has no idea what it means if they even know the one exists. So it's, not that,

Ken Lucci 21:51

It is not platitudes and.

Steve Firestone 21:54

it's not So in my view, I actually use the word organizational alignment as much, or at least. With the word strategic plan, and here's what that is. To me, it's an organization and, and this is, I, I've used what I'm about to describe, I've used personally in multiple stops in my career. I regularly use it, um, as part of my consulting practice. Again, from companies that have ranging from, 40 employees, or actually less than that, all the way up to Office Depot, which was, you know, as I said in my organization, there were about 8,000 employees and there were 30,000 employees or 40,000 employees worldwide. So, and every, every place in between. so organizational alignment means, let's figure out. Why we do what we do. And, and the way I phrase that is, what are our core values as an organization? Now, my definition of core values is, and when I say core values, I'm not talking about we, one of the, we wanna be the biggest, baddest transportation company in Charleston, South Carolina, which happens to be where I live. That's, that's not what I'm talking about.

Ken Lucci 23:24

I agree. I agree. It's not, it's not, it's not, in the hotel industry saying, I want to have the most hotel rooms that have put the most heads in beds. It's what Ritz Carlton referred to as We are ladies and gentlemen, serving ladies and gentlemen. It's the entire system behind that. It's the roadmap. It, when you say organizational alignment, I instantly think of everybody rowing in the same

Steve Firestone 23:48

Mm-hmm. Mm-hmm.

Ken Lucci 23:49

Okay.

Steve Firestone 23:50

this, this. Sorry. Go ahead.

Ken Lucci 23:53

And to me, unless everybody is on the same wavelength and following the same plan, it's very difficult to do. And I think that the best example is the Ritz Carlton system that they put in place. Okay? And we are ladies and gentlemen that serve ladies and gentlemen underneath that every associate, they were not team members. They know, they were not staff, they were associate, had the ability to satisfy the client and spend up to $2,000 doing it without approval. Okay. Fundamental, fascinating business case that most of the people thought it was crazy when, Jorge did that when he was the owner. And I think Marriott's watered it down a little bit, but that's my opinion. But that to me was the essence of the strategic plan. The why. We don't serve everyone. We're not trying to serve everyone. We know where we fit in the space. It's the same in the chauffeur transportation industry. But I think if you, if you say to somebody, why do we exist? Many will yield towards the logistic, well, we exist to get people there from point A to point B. Okay, well, you know, That's not what FedEx does either. I mean, FedEx gets packages from point A to point B, but their entire strategy is their strategic plan. Strategic vision is when it absolutely has to be there. We know we're 10 times, higher priced, but we we're gonna get it there. You're gonna know where it is every step of the way. So to me, that's, it's you, you hit the nail on the head that it is, it starts with the Y.

Steve Firestone 25:31

And those, those are two classic business examples, um, where, certainly FedEx created a space. I mean, they, there, there if, I mean lots of people watching this probably don't even remember pre FedEx. I mean pre FedEx, it was like watching TV when there were three channels. There were, you didn't have choices as to how you got your packages where you needed to get it. So they, they, Fred Smith created a category. He created a space that was based on when it absolutely, positively has to be there overnight. Now that, that's kind of, that's kind of the foundation of, of their why. And you're right about ladies and gentlemen, serving ladies and gentlemen. And Ritz has had that for good grief, probably 50 years

Ken Lucci 26:20

exactly. And let's, let's, let me just draw a parallel between those two business cases and the chauffeur space. In the hotel space, there are clean, comfortable rooms everywhere you want to go up and down every highway, starting with Motel six and Ritz Carlton said, no, no, we're not competing in that space. Okay. And FedEx competes with a government agency that gets money thrown at it. Okay? when Fred Smith came up with the FedEx business case, his, his business school professor laughed his ass off and said, you're gonna fail miserably. You're competing with the government. Well, in the chauffeur space, we are, obsessed with talking about the TNCs and Uber and we to a point where we do not realize. how blessed we are to sit in the top of the service delivery chain as far as transportation. The ultimate service that you can have in transportation is to have a chauffeur experience. But we miss that as an industry, and I think it, it is, it is it is part of this entire discussion. The businesses, the business owners are obsessed with getting the car from point A to point B, obsessed with their dispatchers, et cetera, et cetera. So they never have a time to grow. And some of the industry fathers are the same way. They never have really a time to, to look at the strategy of where the business is going, where their business is going.

Steve Firestone 27:41

I am, I'm sure the, the people that are watching and listening to us talk, they can tell that we've spent a lot of time together because you say something, I think of what I wanna say, and I say something and you think about what you wanna say. And this, this, this happens to be a topic that we're both very passionate about. Which is, how do we make those organizations that we have a relationship with, how do we make them achieve something that they never thought they could possibly achieve? 'cause in many cases, the limitations on someone achieving their maximum potential is. They don't believe they can get there, and they certainly, in most cases don't know how to get there. So back to this organizational alignment, in my view, it starts with, with the core values. And the second step is, an enterprise wide transparency. When I say enterprise wide, I'm talking about enterprise wide transparency on the establishment of, I'll call it corporate level, or senior level corporate level. stretch goals that are set agreed upon, measured. Quantified. So there's nobody who says, oh, I think we're doing great in quote, customer satisfaction, but somebody else in the organization goes, you are crazy. We stink at customer satisfaction. If you set stretch goals that are measurable and the operative word is stretch, 'cause I know where you're gonna go next, the operative word is stretch and we can talk about what that means in a second and, and it is published and shared with the workforce and everybody understands how are we measuring, how are we doing both at a corporate level, ultimately then at a department or business unit level that establishes those same stretch goals that are relevant to their specific part of the business, eventually all the way down to an individual contributor level. The most successful clients I've had or companies that I've run. Individual performance appraisals and individual goals are tied directly to department level, tied to corporate level stretch goals that all support one or more of the core values of the organization. But to most companies, that's like handing Since the Eagles won last night, and I'm an Eagles fan, I'm gonna thump my chest a little bit. That's like handing the the Philadelphia Eagles Super Bowl playbook to a middle school football team. You can hand the playbook to the middle school football team and they'll go, well this is really cool stuff. We have no idea how to do this. 'cause no one's ever shown us how to do it. You guys do that with driving transactions. On the finance side, most companies. Regardless of size, have never really effectively done what I just described, and that's why they don't do it 'cause they don't know how to do it.

Ken Lucci 30:53

No, it's you, you are absolutely right. And, and listen, it doesn't have to be a 500 page opus either, but let me bring, let me bring it down to the transportation operator space that I deal with. Most of the companies this year are, I shouldn't say most, many companies are flat. I've got some customers of mine that are, maybe 35% of my customers are 10 to 15 points above where they were last year. But many companies are flat because many companies are reactive. Okay? They're reactive. They're also stuck in a groove of how they did things. Okay, so let's just talk about one specific stretch goal. Let's, talk about the stretch goal. Of making sure that every single prospect and customer that we come in contact with knows and is exposed to everything we do. Okay? Now I said my own, my operator say to me, well, Ken, it's on my website. I say, you know, and you, you can imagine it's in somewhat of a blunt style. Do you really think your clients are sitting on your website for 25 minutes figuring out the specific use cases they can use you on? So they're not, so let's just talk about the stretch goal for one second. If our goal was to make sure that we are increasing the total revenue spend of each client, this is what it would look like. Every single time the phone rings, whether it's private or corporate, whether it's a prospect or customer, you try to turn that one airport transfer because that's the basis of our business. That's the milk and bread. You try to turn that one airport transfer into a minimum. Book the round trip and I'm, it's going, you're gonna have a benefit if you book the round trip. Ideally, at that point, you want to turn two transactions into four. Now, I'm not saying one transaction transfer is a failure, It is not advancing the stretch goal. The stretch goal you talked about, if this was organizationally, was my stretch goal. Moving the needle on the stretch goal is turning one into two, two into four. Movement of the stretch. Goal as an organization is to make sure that that prospect who just became a client and booked at least two trips now is on a system that it exposes them to everything else we do. So let's just talk about that for one second. As a corporate stretch goal, it's a corporate client. Cole and I have created something on the sales strategy side that speaks to exactly what you're talking about. It's like these two things came together magically. When you look at a corporate client, in my estimation, you're not advancing your stretch goal if all of they're doing with you, this corporate client is airport transfers. Okay. And if you are just dealing with the executive assistant, you are not advancing the other use cases like employee engagement outings. Okay. That's the venue of the human resources department that doesn't book airports. Okay. The training department that may bring in clients to do training that needs transportation. the, uh, public companies, the coordinator, the board of directors coordinator. There's one in every single public company. She doesn't order airport. But I'll tell you what she does do every single year, she puts on the most important meeting in the company. Okay. Do you think they need transportation for their board meetings? Yes. So the point being, if you issue the stretch goal. As an organization, one of our stretch goals is to make sure that we are increasing the revenue per client by exposing them to every specific use case that we offer. Okay. The CEO's anniversary, right? Executive assistance week. Right. All of the different things. That's a perfect example of a stretch goal, and, and to me it's the essence of proactivity versus reactivity. It's the essence of, of moving your company forward versus just literally being a sailboat with the, with the, sail flapping in the breeze. Am I right?

Steve Firestone 36:02

Uh, perfect example. And I would just put an exclamation point behind and highlight and circle the words measurable because in that example you just gave, um, there's probably a couple stretch goals that could come out of that. And, and one of them could be, again, I'm making the metric up that for every, making it up for every four, relationships that we have, we want at least 1.5 of them to have multiple purchases from us beyond what the original purchase was. You can, measure that.

Ken Lucci 36:47

You can measure that and listen. You can measure that entirely. You know, my, when my dad was in the grocery business and he had a counter on the front door, and I said to him, why do you have a counter on the front door? And he wanted a count every customer that came through the door. And he, he literally would measure the departments. Okay. He would measure the departments. So at the end of the day, the stretch goal. Moves revenue, it advances the why we are here. but to your point, it's gotta be measurable. If it's not measurable, it is pation.

Steve Firestone 37:20

If it's not measurable, it's merely an opinion and the owner operator's opinion is gonna be very different than the people. That are working for, it's, it's just going, if they're measurable and you're transparent with your workforce on how you're doing, then everybody can agree that we either hit it or we didn't hit it. And if we didn't hit it, what was standing in the way of hitting us. And then you can, you can develop, in my world, what are called accelerators a fancy word for tactics on what, okay, what do we need to do now logistically? What do we need to do now to hit that stretch goal that supports our core values?

Ken Lucci 38:02

hundred percent. You know, it, it's, it's dealing with entrepreneurs as, as we have, I mean, you've dealt a lot more in corporate than I have. I'm dealing with a little bit of corporate right now with pretty, pretty large customer on the buy side. But at the end of the day, the entrepreneur has a secret weapon that the big business doesn't have, and the entrepreneur's secret weapon is the ability to be nimble. But the other piece of that is their own omnipotence. I, you know, I, I, I talked to, I talked to, a 20 group, the, the peer groups, and I talked to a group and they flew me out to San Diego and I was really apprehensive about this, speaking to this group because they're all profitable besides thinking they could do everything on their own, including plan their exit, which they can't. I said, you know what you got, it's easier for me to talk to companies that are not profitable. Because they know that I have the answers and there's a good chance they'll listen to me. But profitable businesses are more difficult because, here's what we're fighting. We're fighting the fact that you think that tomorrow is gonna be the same as today and yesterday, and you're fighting the entrepreneurial biggest weaknesses. Omniscient thinking They think because they are the master of their own domain, that they always have to be. Right. And I, and I see it, that's the biggest achilles heel of the entrepreneur. is to be so focused in your business. You know, the analogy I use is you look inside one box every single day. I've looked inside 280 boxes. and same with you. We've been just exposed to, to so much more. At the end of the day, the stretch goal issue, how many stretch goals should I have? Talk about my strategic plan. Is this a five-year plan? Does it have to be a five to

Steve Firestone 39:47

No Absolutely not. As a matter of fact, my recommendation to companies regardless of size, regardless of industry when I work with them, is. since we start with core values, your core values should be three or four, probably no more than five, depending on the complexity of the business. And then, there's could be a boat load of stretch goals underneath each one of those core values. And by boatload shoot, there could be 20, 30 of those, but there could be seven or eight.

Ken Lucci 40:24

and, and I'm a big believer to start with that less is more. And, and when, when we work with people on the finance side. Which is, you know, which has been challenging to get entrepreneurs to focus on their financials. You know, the big oh oh my account. I have an accountant for that. Good for you. Your accountant's only job is to tell you what you owe in taxes and how you did. Retrospectively, they have no idea. If you are not profitable, they're not gonna be able to tell you what metrics are off. That's where we come in, that's where our financial reporting comes in. But when we get them focused on the key metrics, to me it leads perfectly to, okay, now what's our strategy? What's our strategy to grow this? What's our strategy to move this forward? Because while all of your metrics are looking fantastic, how are we going to make sure that we take the business to the next step? So I would for the typical person getting into this, wouldn't you say less is more five to seven stretch goals? I.

Steve Firestone 41:23

Uh, this is gonna be a yes and no answer. It's, it's a, it's a yes that less is more, but. I would never restrict an organization to a number because as they look at, I, I'll give you, I'll give you a, and you know this one, Ken. The, the last company that I was operating as president was a security company. And our core values were to make that organization a compelling place to work, shop, and invest. As simple as simple can be. We wanted that company to be a compelling place to work, shop, and invest. and, you know, the company, I will testify that 300, because that company had roughly 300 employees, 300 employees could recite that our core values were a compelling place to workshop and invest

Ken Lucci 42:18

I remember the metrics behind each one of them. The measurement of that. The measurement of each one.

Steve Firestone 42:25

And it, and, and there were stretch goals identified like underneath compelling place to work. One of the stretch goals was, we want to have 30% of our new hires to be a direct referral from an existing employee. You can measure that. You either hit it or you don't hit it. Now why was that established as one of the stretch goals underneath a compelling place to work? Well, it was set as a stretch goal because if your existing workforce is doing references to get new employees into the organization, that means it must be a compelling place to work. So that's an example of how stretch goals fit within core values. So I would hate to say you can only have five, you can only have seven. You don't want 50.

Ken Lucci 43:22

No, but you're the core, the, the listen to, to your point, the stretch goal also should, should, can address a problem. And, and we sent out a survey recently and one of the biggest issues that, we were surprised about, the number one problem was fleet insurance, which we won't get into, but the, the second biggest problem is I'm stuck working in the business and not on the business. But the third was, was attracting and retaining chauffeur. Now as. a stretch goal, to take that back to the transportation space, you can absolutely measure. You should. One company I, I do business with has, monthly lunches for their chauffeurs, and the CEO himself gets out there and serves the food. And then he, he goes around, his whole executive team is involved and, you know, and initially I said, yeah, okay, this is good. Until I went and saw it, that was an amazing thing to witness. And he gives him a talk on how the company's doing, and then he, says, you know, we really need a few more chauffeurs. They do a referral bonus. But also, you know, he said to me flat out, these people really, they don't really focus on the money. They focus on the fact that they tell people, you know. The, the vehicle gets clean for you. You know, this is the technology we have and the CEO has a lunch for us every single month where he wants to hear what's going wrong. this guy in particular heard so much about a construction problem that was going on in a main thoroughfare. He actually went to the township DOT, and said, look, you guys are killing us. okay? Because, and, and it's true. When they were picking up their vehicles, it was just bottlenecking them anyway. So the stress root goals can fix a problem, and the stretch goals can also be for the CEO who says to himself, I'm gonna make, as a goal, I'm going to hire somebody to close trips the way I would, you know, and do the bookkeeping the way I would, and I'm gonna put. Seven to 10 hours a week more towards business development. I mean, that to me is a C stretch goal.

Steve Firestone 45:34

Mm-hmm. Yeah, I mean, I'll, I'll give you another one that just occurred to me. That's I'm, I'm sure is an issue in, in your industry. in every industry that I've ever done work in, there is a customer attrition problem.

Ken Lucci 45:48

Yes.

Steve Firestone 45:49

Nobody ever says, I have my arms wrapped around attrition. I don't ever need to pay attention to it. I, everybody, nobody ever leaves me. Well, we know that's not the case. So, if, one of the stretch goals is to reduce attrition, whatever the right word is there, repeat, purchase, whatever the word is. In the transportation industry, if one of the, one of the stretch goals is to reduce customer attrition by X percent and you are transparent, uh, I keep using that word. As the leader, you're transparent with your organization. That is one of our stretch goals. Think about how every department, if you will, within that company, can have an impact on attrition of existing customer relationships. Every department can have an impact on that.

Ken Lucci 46:38

true story that speaks directly to that. We have a program on the, on the sales analytics and sales data side that we just started, where we do what we call the past present future report, and we pull it out of the reservation system. It's not a report that they build, it's a data set. We pull all of the data for everything, pull it everything, and call works as magic. So one of the things we do is we went over with a specific client. we go over the top 25 clients and we got down to, I think it was number 11, and we're like, this one's down 38% over. Last year and the year before. So when they drilled down, and first of all, they didn't know it. Okay. Which is another issue. but second of all, when they drilled down, what they found was one of the executive assistants that was the primary booker for the sales exec team, she had a problem with a bill. there was an internal person at this company, and this was like a $10 million operation who just wasn't responding to emails and wasn't fixing the bill. So that booker went to, uh, option number two. Okay. So it can be as simple as that. When you talk about attrition. we are all one trip away from a client looking in another direction. but in this case, and I, and I, and I, said to the owners, what's up with that? And they said, well, yeah, this person's been a problem. I said, okay, well, no offense. Straighten out a billing problem, my Jack Russell can do that. this cannot be a reason why one of our top 25 clients, one of the bookers went away. And on top of that, why are we finding out about it now? Okay, so from a, from a communication perspective, the stretch goal can be, I'm going to, as a C-level, I'm gonna communicate with my top a hundred clients three times a year, four times a year, twice a

Steve Firestone 48:29

yes,

Ken Lucci 48:29

It's so So, at the end of the day, to me, strategic plan is all about proactivity. it's all about purposefully moving the business forward. Um, my indu, our industry, the transportation industry has a love affair with Facebook posts and. One the posts yesterday was, you know, we're losing the airport market. We're losing the airport business, we're losing the airport transfers. Well, airport travel growth is growing like a hockey stick. Okay? And corporate travel is way back up like nine 11% of where it was. The answer is, yeah, we are overpricing because we are not efficient, but we are also, to me, we're not communicating the value that we have, and we're not five x-ing our airport offerings to everybody in the market. that's in the, the bucket, or the same people that use us. So a stretch goal might be my top 10 clients. Three of them are in telecommunications, two of 'em are attorneys. I am going to reach out and I'm going to present to the top 20. Attorneys in the market, and I'm gonna build that use case. So to me, strategic planning is, all about proactivity. And unfortunately, you know, a lot of industries get stuck in that groove. You know, I, I remember when my, my dad was in the independent supermarket business and my dad literally did the ad. back in the day they used to have a planner, newspaper planner, and my brother worked in that business since he was 17 years old, or actually since he got outta school. So we all worked there during our high school years. And my father still did the ad. The only way he taught my brother to do the ad is my father had a stroke at 69 and couldn't write with his right hand anymore. So the one stretch goal for every owner operator out there is teach a team member. If you don't have a team, assemble a team that can do the critical functions so that if something happens to you. The business still runs. More importantly, as importantly, teach them how to dispatch, teach them how to take reservations, teach them how to price motor coach so that you can go out and do the stuff that the owners are supposed to do. The working on the business. Right. Working on the business is a different level. of moving the business forward. Um, w in your mind, based on, you know, again, we're talking to a small business op, uh, uh, small business, a lot of entrepreneurs, what do you think a 3 takeaways are that you would say, everybody who's hearing this is seeing this should be doing to start the process?

Steve Firestone 51:19

First, it's begin to think about what your version of compelling place to workshop and invest is. And if you wanna steal Yeah, if you want, if you wanna steal, steal that. call Ken and he'll Ken will call me and I'll decide if I wanna give you permission to steal compelling place to workshop

Ken Lucci 51:37

Hey, look, I, I, I stole the, we are ladies and gentlemen, serving ladies and gentlemen at Ambassador Limousine, which we were, we became the biggest in the market and to the chagrin of a few operators who still don't talk to me, but we grew from zero to a million the first year, a million to 5 million over five years, and we were in the service of others with pleasure and professionalism. That was, the why. That was who we were. we are in the service of others with pleasure and professionalism, and we built every system in the company around that. Go ahead. Start with the why.

Steve Firestone 52:13

Start, start with, start with that. The second is in order to begin to really effectively establish beyond core values, establish what are, what are the stretch goals and, and I forgot to mention this a little while ago, my definition of stretch is possibility, not probability. So a goal would have probability, a stretch goal is a possibility. That's the difference between stretch goal and goal. So, so I wanna, I wanted to throw that in. So the second is after you begin to really do some quiet moments, soul searching on what should my core values be, is do an assessment of what are the uncomfortable, and comfortable realities of my business based on where I am today? what are the realities of my business based on where I am today? And it's things like, FedEx never could have had when it absolutely, positively has to be there overnight. If they didn't have at the time, the best. Data management and tracking hardware and software ever created in industry. 'cause it needed to have that infrastructure to deliver on the Absolutely. Positively has to be. So as they're developing all of this, they went, I'm sure they sat in some room somewhere in Memphis and went, you know what, one of the realities of our businesses we started this is we don't have the infrastructure to be able to really deliver on what we say our promise is. So part of the second part of the process is what are the realities of your, of your business? And one another likely reality for some people watching this is I don't have a staff that can actually run the business without me being on the field. Well, that's an uncomfortable reality. That would make me very nervous.

Ken Lucci 54:25

oh. It literally will stop you from creating an enterprise value. The good news about our industry is one of the silver linings of the pandemic was the growth of the outsourcing of major functions of our industry, which is reservations and dispatching. Now, it doesn't happen in, in a vacuum. You know, you have to instill in those people the why you exist, and you have to make sure that you are supervising them as employees. But the other beautiful pieces if you don't have a staff, you can recruit from anywhere in the country Now. So If that's your biggest excuse not to achieve a stretch goal, then you're not overcoming the, easiest obstacles that are out there.

Steve Firestone 55:07

Yep. And since you asked me for three, I'll give you the third. The, the third would be to begin to think about, okay, if, if this is kind of the framework of my loosely, loosely defined it, and, and people shouldn't get hung up on, oh, I need to have the right words perfectly put together for my core values. That's a, that's an iterative process. Just begin to think about kind of what, what are the elements of my why? To use your, your example. So core values, what are the realities of the business? And the third is, okay, now how are we gonna measure, how are we doing? You do that for your clients on the financial side. Your clients need to do that. On the organizational alignment side also, world class organizations do that effectively.

Ken Lucci 55:59

Uh, agreed. And, and, and we, we are for the retained clients that we have, we are, we're, we're adding to the financial reporting and KPI, which to me is the foundation. To me, it is the total foundation. Somebody comes to me and says, I want to create stretch goals, and I want to do this. I wanna get into the motor code space. One of my stretch goals is to, buy a $180,000 jet sprinter because I wanna attract the top. Whatever the stretch goal is, you can't do it unless you know where you are at right now, financially. Okay. Okay. Because, and, and that's where, you know, I said to somebody today who laughed at me at something I said, I said, well, I throw in a little sparkle because to kind of blunt the medicine that I have to deliver. But at the end of the day, you, you've gotta listen to the medicine. You have to hear me when I say your cost of goods is way too much, too high. Because if one of your stretch goals, and I, and I think part of it is. As a CEO, we should have stretch goals. Our personally, ourselves as well. One of the stretch goals may be I wanna be the best public speaker, I wanna be the best leader I can be. And I recognize that perhaps I don't communicate well and maybe that's why I can't keep team members, but you should have a stretch goal as a, as, as a leader as well. But from a financial, from, to me, the financial metric or the financial foundation has to be there and then you can move mountains. I, I refuse to believe, and it's frustrating to me sometime because again, you and I see, you know, when you work in the security industry and consult for many companies, you see the commonalities in that space. We see the commonalities in the transportation space. Every single growth metric is out there and we are self-defeating ourselves. by sitting there being reactive. We are very self-defeating, and I think that if we're sitting there waiting for our technology to be as good as Ubers, it's not gonna happen. But I'll tell you what we can do, We could deliver much better value. We can be the best version of chauffeur Transportation for the top 5% of the market, who is whose price is number three or four on their list. What's most important to the, client is customer service, maximum safety, absolute reliability, kind of the Federal Express and Ritz Carlton comes together. I think it can, it, it, it can definitely happen. those three things don't have to be daunting. to me, a strategic plan starts with what do I want accomplish this year and how am I gonna do it? How am I gonna be, how can I make the business better? The entire reason I brought you on is because the two things of the, the, the, the, the number one problem we see is the lack of financial management and the lack of profit and the lack of financial acumen. But the second issue we see is this working in the business, oh, I'm exhausted. I had to stay up and I had to dispatch, and I had to do, uh, okay, you're keeping the business running, but you're literally a squirrel on a cage. The purpose of today's podcast is to get you to think like the game has gotta go on without you, you at best have to get yourself in the coach's position, but ultimately you have to get yourself in that owner's box. the owner is 100% focused on winning, but they're also focused on all of the organizational goals of what is this team gonna look like? Five years from now and strategic planning gets you there. Any last words before we release the audience?

Steve Firestone 59:51

Yeah, I have I, and I always, I always say this to people, and this is a hard one for some founders, owner operators, CEOs. My view, the more transparent you are with your organization. Reporting. How are we doing? The more you're gonna have success, if you hold all the cards close to your vest, the people that are working for you are always going to wonder, well, how are we doing? What do I need to worry about? What don't I know about? I, encourage every leader of every organization, and you know this, Ken, 'cause we worked together multiple times. I want the organization to know how are we doing and how are we measuring success? So transparency to me is really, really important.

Ken Lucci 1:00:46

So for the you single car operators out there, or you one to five car operators that are out there, what you're gonna say, what is this for me? You know what a stretch goal is for you. I'm not. I wanna see you succeed. I want you to create an enterprise value. I wanna make, see you make six figures. Make much more than you could if you went to work for somebody else. Stretch goal might be get out of the driver's seat for eight out of 10 trips, or get out of the driver's seat for 10 out of 10 trips, okay? Because no one sells your business and no one presents your business like you. Everybody wants access to the owner, especially on local businesses. So, and this translates to guys that are in $20 million businesses. I've got a guy who's a $10 million business who's doing the bookkeeping. And I said, what are you doing? Well, I found some mistakes that the old bookkeeper made. Great. We need to train the new one to do that. Because your business is stagnant, your business isn't growing. You need to get out there and you need to proactively put together a plan. So Steve, I want to thank you. Uh, where can people find you?

Steve Firestone 1:01:54

Uh, my website is Firestone Strategies. My email is steve@firestonestrategies.com.

Ken Lucci 1:02:05

Appreciate it. We will definitely have you, uh, on as a guest in the future, and we've got some stuff coming up together. I thank you for, uh, uh, joining the Ground Transportation Podcast. for those of you listening, we will be back here next week. Uh, if anybody sees my partner in crime, James Blaine, please tell him I miss him dearly. And, uh, we try to, to hold up the standard of the podcast without you, everybody go out there and have a great week. Thanks and have a great day.

Steve Firestone 1:02:35

Take care, Ken.

1:02:37

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.