I recently sat down with Steve Johandes, an executive mentor for business leaders for Vistage, the international peer-to-peer advisory organization.
Steve offered his thoughts on everything from how he stays up-to-date on the latest business insights to how he thinks CEOs get it wrong as they navigate a competitive marketplace. Here's the transcript from our conversation.
Susan: Great to see you again, Steve. I've been looking forward to this interview for a while.
Just to bring everyone up to speed on you and your background – you bought a millwork distribution and manufacturing company when you were only 26 years old with two partners.
At the time, Empire was a $40 million company. You grew it to $400 million and then sold it.
After that kind of success, and being only 51, you could have taken any number of high-profile jobs. Instead, you became a Vistage Chair or a coach for CEOs, business owners and leaders.
Why did you choose that role?
Steve: The sale came shortly after my 50th birthday. I had this amazing run with an amazing company in an amazing community.
As a result of that, I had all this great wisdom that was shared with me, and my question really became, as I entered the second half of my life, “How will that look different from my first half, and how could I have an even larger impact?”
Then, there was another interesting conversation that just really enlightened me.
My former business partner, mentor and “business dad” reminded me that he was 52 when we met, and I know the impact that he had on my life.
So here I was now at a similar age and I began to ponder how could I make the kind of impact he had on me, not just in one company (we grew from 100 to 800 employees), but in many companies and across thousands of employees.
Susan: From my understanding, each Vistage group is designed to help members help each other improve their businesses and hopefully their personal lives. How do you do that exactly?
Steve: There’s a really cool mantra that the thousand or so worldwide Vistage chairs say when you ask them why they do the work that they do, and I love it.
"It's about helping high-integrity leaders make great decisions that impact their businesses, their families and their communities."
When I hear that it reminds me that just like in the business I owned, growing the businesses is just one part of the whole. True leadership is about all three components.
If we don’t consider all three we are missing the real joy that can come from being a great leader in business and using that as a platform to extend our reach so much further … it is thinking bigger than ourselves.
As a result, I try to look at how I work with leaders to provide that balance of what they're doing in all three areas.
The real magic comes when you work that discussion into a group setting beyond the mentoring relationship. The group digs deep into all three of those areas.
Whatever the committed action, the member is not just accountable to me as chair but to his or her 12-16 partners in the group. When you think about it, the power of all the group member minds on an issue, and the accountability to everyone — that is powerful.
Susan: Vistage published a research study that found that among small business CEOs economic optimism is at peak levels. Why do you think these CEOs have such a positive outlook? What are some of the reasons?
Steve: In my experience, Vistage members in particular have a positive outlook because they get to see the entire picture.
When a Vistage Chair like myself puts together a group, the model is intentionally diverse from an industry, age, company size, and gender perspective. I even try to add a non-profit into each group.
What ends up happening is that optimism comes from the fact that a member doesn't just get to see what's happening in their industry, but gets to see economically what's happening across the market.
That is where the optimism comes from. It's like, oh my gosh, I may have a slow-down in this part of my business, but I now know what somebody else is doing in the technology industry or what somebody else is doing in a service industry and how I might be able to apply those mindsets within my industry.
Inherently, by having that diversity of the group, you're able to look outside of where you are. Whatever the problems are with your company, you're able to see what everybody else is doing across the entire economy. That really drives optimism.
Susan: I am impressed by how you devour leadership content. You consistently post thoughtful posts and share information on social media. In your role, it’s essential that you are "in the know."
How do you prioritize what you read and keep from getting overwhelmed by the sheer volume of information?
Steve: I love the work that I do and the fact that I get to consistently learn as well. My goal as a Vistage Chair is not to pass on my plateau, but grow with my members.
As such I even keep a list of terms in various industries, technology, etc. that I may not be an expert in, but they sound interesting. At any point in time, that list will have about 100-200 terms on it.
I look for those terms in content that I read, view online, videos, etc. I even keep that list in my workout room. Whenever I work out, I say, “what am I going to learn today?” and watch a YouTube video about it.
My goal is to keep my mind open to what is happening around me and on how I can connect those dots back to my members.
There is also a great filtering mechanism that comes from being a chair. Right now I have 20 members between two groups this will grow to 30+ over time. On top of that, I'm on a couple of advisory boards of some large companies as well as work with family offices that own many companies.
Between the 40 or so companies I work with, I get to see what is important to them in real-time and that statistically is a great sample of what is important to most business leaders in general - not just in West Michigan, but across the globe.
Plus, I have a few tricks up my sleeve on the technology side. Whether I'm consuming media in an article, an email, on LinkedIn or on YouTube, I use some automation tools that allow me to just hit a “like” button and it automatically posts it to a buffer account. Then it redistributes at predetermined times across all my social media platforms.
I started doing this to keep up with the younger leadership in my previous company, and I continue this practice with my community. Your readers can follow me on LinkedIn or Twitter: @steve100XLLC.
I'm always trying to learn and understand what is most important to the people I want to engage.
Susan: That’s certainly a streamlined way to do it. To get ready for this interview, I went on Vistage’s website. You tout that member companies grow 2.2 times faster than the average small and mid-size companies. Why do you think that’s the case?
Steve: That goes back to one of your previous questions. It does come down to the diversity of industries.
Here's the reality. If you're in an industry peer group for example, there's only going to be a limited amount of ideas and quite frankly, there's never going to be the transparency that you have with non-competing companies.
It’s human nature. Everybody is inherently competitive in the same industry. In a Vistage group, the sky's the limit. The light bulb goes on often. “Why wouldn't I do that in my industry when it's being done successfully in another industry?”
Susan: You work with CEOs and business owners monthly during your one-on-one coaching sessions and group sessions. How do you think executives typically get it wrong when it comes to running companies in this ever-evolving business climate?
Steve: When I look at my own experience. I know that the total amount of enterprise value that we created at Empire divides equally into three buckets. Each of those buckets is only about a third of all the value created.
The first bucket was what went on in the four walls of the company or in our industry. The second bucket was innovation. I define innovation as not just inventing something new, but more importantly, how we looked outside of ourselves and said, “What are other industries doing that we can take and apply to our industry?”
In addition, What is happening across the economy? What are true macro-economic trends? How can we apply them? How can we think beyond ourselves?
The third bucket was what I call arbitrage or leverage. People normally say, well, that's like financial leverage. For me it was not only financial leverage, but how we leverage ourselves as individuals in terms of growing our employees and creating those opportunities. This was an arbitrage play of human potential.
My challenge to executives is that, if you're not looking outside your four walls, you're missing potentially two thirds of all value creation in my experience.
In our group meetings and during our one-on-ones, my role is not to be the smartest guy in the room. My role is to help members get prepared so that when they go to the group meeting, they can maximize the group’s feedback.
They can look beyond themselves and they can explore the additional buckets that are available beyond their four walls.
I believe whatever my experience, whatever my wisdom, my solution will always be trumped by the collective wisdom of the group, if I let the process happen.
I think CEOs sometimes get it wrong by limiting the amount of outside advice that they get, or they get it in a format where they have no accountability associated with it.
It does a CEO no good to go to a round table where they get peppered with a bunch of suggestions and there's no accountability or no action that comes from that interaction. All that creates for them is confusion.
I really do two things in our one-on-ones. I hold members accountable, and I help them to visually hone in on what is the most important thing that they need to be working on.
I really find where executives miss the most is not taking the time to work on the business, versus in the business. I tell executives that if you are a member in one of the groups, and you're not getting a huge return on your financial and time investment, then you should not be in the group.
Working on the business is hard and requires a huge commitment of time and recognizing that it must be done. As one of my members put it, “If the business can’t survive for one day a month without me, I really don’t have a business.”
Susan: If you could give a newly appointed, first-time CEO one book to help her on her professional track, which book would it be?
Steve: Susan, this is a pretty dry book, but I think it's a great book for a few different reasons. The book is called Scaling Up by Verne Harnish and what I love about the book is it really introduces the key foundational layers of scaling.
In my experience at scale, there are different problems that occur at every stage of growth.
Certain problems occur from zero to one million in revenue. There are problems that occur from five to 10 million, 10 to 50, then 50 to 100, 100 to 250 and so on.
But really the biggest challenge and opportunity that I see with West Michigan companies is that point when they are around 50 to 100 in revenue. I always joke around with people and describe that 50 to 100 million zone is like wet drying cement.
If you don't get certain core things going on at that point, you are busting up a lot of concrete later because that is the core foundational layer. In West Michigan, companies have been wildly successful getting to that point.
They landed a huge account and now they have to reassess everything and put systems and process in place. But then it's like, How do you take that to the next level?
Susan: What is the risk for CEOs who choose to “go it alone” and not tap into executive peer groups like Vistage?
Steve: The reality for me is that I meet a lot of CEOs and leaders in the community and I love hearing their stories whether they become part of my groups or not. It is what being a great community member looks like.
When I hear their stories, it is another dot I can connect with something or someone else. The risk however of going alone is that although they may be wildly successful, they don't become all that they can be.
That ultimately impacts their employees, their families and their community. One way or the other is not right or wrong, it just “is” for those that choose not to go it alone, they reap rewards well beyond the growth stats.
They become truly all they can be. Those are the types of members that I love having in my group — the ones who are always reaching for more in all aspects of their life.
Just knowing that there are other people that are experiencing that same problem you have and can help you to solve it is so liberating. The old adage of “it is lonely at the top” is such a true statement.
What is also the most fascinating part of not going it alone is when I see members helping other members solve their problem, only to realize they solved their own through that process.
They're able to distance themselves and they're actually able to look at their same problem from a different perspective and not be emotionally tied to it.
That's the power of the group. So, from my standpoint, there are a lot of great success stories out there and people have great individual networks.
The key thing for me is that these leaders have some type of accountability outside of themselves. It could be a mentor, could be a coach, it could be whoever, but they must be accountable to someone other than themselves. None of us can self-facilitate. It is impossible.
Susan: Are there certain types of CEOs and business owners that are good fits for peer-to-peer advisory groups or should all CEOs consider being a member of one?
Steve:, The number one characteristic is a growth mindset. If somebody is interested in passing on their plateau, that's not a great fit for a member.
It's the willingness to learn, willingness to always be better. Those are the attributes that when I'm interviewing people for my group, I'm looking for because those are the things my members want.
They want the person who is going to not only be pressing hard in their business and leadership, but pressing hard in terms of their family and their community. It's those attributes that reflect that they are really trying to be the best that they can be.
The best definition of a good-fit member is from Patrick Lencioni's book The Ideal Team Player: humble, hungry and smart. I mean, none of us will attest to be the smartest guy or woman in the room, but we know deep down that we all have a piece of the picture.
If we can get a person that has those attributes and is willing to be challenged, that's magical. Really, the key attribute is a lifelong learner, that person who wants to be better not just in business, but in everything they do. They’re not just marking time until retirement.
In fact, I would argue that the majority of my members will probably never retire. Seriously. I mean, when I look at my membership base I think, These are people that will always be in business, pushing and doing great things with the resources they have been given.
Although Vistage is new to West Michigan, it shares the title of the largest leadership organization in the world with the Young Presidents’ Organization (YPO).
YPO has a great presence here as well and I love how both of these groups differ from typical round-tables. The time commitment of both groups is large (one day per month) and Vistage adds a professional “chair” like myself who spends one-on-one time with each group member monthly.
Having a chair who has experience at scale and cares deeply about each member adds to the experience. In most markets, Vistage and YPO compete against each other, but given the uniqueness of West Michigan’s entrepreneurial spirit, currently 7 of my 20 Vistage group members have partners or founders who are in YPO.
If YPO is great and Vistage is great, then certainly 1 + 1 = 3 in West Michigan when you combine the potential impact of both organizations on our community. It is one of the reasons I became a Vistage Chair.
My BHAG goal is to indirectly impact 10,000 employees via all the work I do in my second half - advisory boards, Vistage, and family office work. Right now I am at about 4,000. I look forward to finding the next 6,000 to hit my goal.
I’m always looking at "what’s next." If they are a leader who feels the same, they should give me a call, I would love to hear their story.
More about Steve Johandes
Steve Johandes is an adviser, advisory board member and chair for Vistage, the largest peer-to-peer advocacy organization for CEOs and business owners.
He also runs an organization called 100X, which focuses on helping legacy-driven family offices and organizations be more intentional, visual and transformational.
He was recently featured in two Grand Rapids Business Journal articles that describe his journey: Business exec wins lifetime achievement award and Former moulding executive pays it forward. Check out his blog, Digging Deep. Thinking Big. What’s Next? Contact Steve: steve@100XLLC.com, 616.403.2554 or at www.100XLLC.com.