160: Sizing Up Big Picture Strategic Challenges…FAST with Paul Szyarto

By May 26, 2017Podcasts

 

 

Paul Szyarto talks about his templates for overhauling businesses, the root of common business problems, and how to identify improvement opportunities.

You’ll Learn:

  1. How to assess root problems quickly
  2. Why identifying current facts is more accurate than relying on history
  3. The underlying source of tremendous confidence

About Paul

Paul Szyarto is a renowned business transformation expert. He is currently the CEO of Campana & Schott Inc., controlling all operations throughout the United States. He holds numerous degrees and certifications, including an MBA from Oxford. He is also a Lecturer at Rutgers University Continuing Education and The Wharton School, a member of the Advisory Board for Argus-Soft and DELCON Construction, and a practicing martial artist. He also teaches Krav Maga and tactical training as “The Combat CEO” at his VMMA franchise locations.

Items Mentioned in this Show:

Paul Szyarto Interview Transcript

Pete Mockaitis
Paul, thanks so much for joining us here on the How To Be Awesome At Your Job podcast.

Paul Szyarto
Great.  Thank you so much for having me, Pete.

Pete Mockaitis
Well, you have a really interesting background story.  You mention that you could have very easily ended up living a life of crime.  What’s the story there?

Paul Szyarto
I grew up in Union, New Jersey, kind of in the Union County area.  So Union, New Jersey, Irvington – the bad spots of New Jersey.  And my dad was an entrepreneur himself, but he was also a very abusive, hard to live with alcoholic and drug user.  Pretty much we lived a life of chaos, trying to more or less survive on a personal note.  And when I was a kid we moved like 26 times by the time I was 17, just due to the craziness of living with my dad.

And when I was younger, you see what your family does, you see what your dad does, and you look up to certain things, whether they’re right or wrong, you think it’s something you should be doing, getting into.  And not that I got into the drugs and alcohol side, but he did some crazy things when I was a kid, and you thought it was okay, and that’s where I found myself.  So in the middle of Irvington, Union County, doing bad things as a kid.

So I remember when I was 16-17 I got into a lot of trouble with fights on the streets; I was probably kind of a bully back then.  And you wind up in front of a judge, next thing you know the judge says, “Hey, you’re joining the military, right?”  And at the time I didn’t really understand what he was talking about, and next thing I know, I was in the US Navy at the age of 17.  So, I could’ve really gone down that path of a life of crazy crime with drugs, alcohol, theft, violence; but somehow, someway, some judge more or less saved my life.  So I did go into the military, and that pretty much changed my outlook on life.

Pete Mockaitis
Oh, that’s fantastic.  So glad to hear it that you’re on the good side here.  And so, what happened in the Navy that turned it around?

Paul Szyarto
So I’m coming from a life of lack of control, lack of parental discipline, and I remember the first day I got into bootcamp, and it was… Let’s just say it’s a whole lot of “Hurry up and wait”, and if you don’t do what they tell you to do, it’s a hell of a beating that you could never expect.  It’s not a physical beating; it’s more of a mental beating to where they put you through such physical activity, mental stress to where you learn really quickly that they don’t take crap.  You do what you need to do, and there’s a reason for every single thing you do.

And I’d say the first day you try to more or less revolt a little bit, you try to test orders, and they straightened me out really quickly.  So, I remember I didn’t want to do something; next thing I know I’m standing in front of a division of 180 people doing push-ups for 2 hours.  And that makes you listen very quickly.  So, from that point on in the military, it was everything that they had us doing had a benefit.  There was a strategic path for everything you did, from cleaning the floor to learning how to work on satellite communication systems – there was always a purpose.  And if you followed the guidance that they gave you, it turned out to be a tremendous benefit to not only the team but to yourself.

So, I’d say that’s what really turned me around, is I started to look at things from a broader perspective, beyond, “Hey, what can I do with this today?”  But, “What can I do with that tomorrow?  How does it benefit my life?  How does it benefit the lives around me?  How does it build a team atmosphere?”  And for 8 years I learned that philosophy really well.

Pete Mockaitis
Oh, that’s so good, and I think we’re also going to hear a little bit about some of your martial arts discipline entering the picture to add to that.  And so maybe you could help frame things for us – so your firm, you’ve had some quite impressive results, in terms of boosting revenue by 300% and bottom line growth by 600% in one year.  So, that’s intriguing.  Can you start us off by telling a little bit sort of how you were able to do that, I guess first from just a business strategy perspective, and then kind of more pointedly to a sort of personal practices and philosophy perspective?

Paul Szyarto
I’ve probably worked with, I think on my own, from an owner / operator standpoint, I’ve probably worked with 22-23 different assets right now. I’ll actually put it back on the military to where everything has a purpose, everything has what I call a SOP – Standard Operating Procedure, or a template of how you should be doing business.

And if you look at business out there, whether it’s manufacturing, pharmaceutical, services – all business has a common template, a way of practicing.  Everyone’s looking to generate revenues, everyone’s looking to manage cost, everyone’s looking to boost their bottom line.  So, when it comes to operating a new business, such as the one with my recent endeavor, I came into the organization and the first thing I’m looking at is focusing on really people, processes, the technical infrastructures to support the people and the processes, and what are the models to generate revenues, cost efficiencies and so on.

You’ve got to think if you’re a small business and you’re trying to build the organization based on specialists, you need to have a lot of work that allows that specialist to stay busy for long periods of time.  These specialists cost a lot of money, and if you don’t have a long-term contract, they’re going to be doing a single job based on whatever specialty they have, and then you’d need multiple people to support the client.  So we went to more less or less a generalist model, to where a single resource could manage one full client or multiple clients, and then you start optimizing resources from an on-prem versus remote activity standpoint.

And then you’re able to do a lot more with a lot less, you’re able to change your bottom line, your net margin model, and you’re able to reach out to more customers.  So that’s kind of what we did with the current organization I’m with, and we saw results within the first 3-4 months, to where you saw customers more interested in working with us, it was easier to create diversified cash flows, it was easier to work on more customers at a single time, and I did it with a lot less resourcing power.

Pete Mockaitis
Understood, yes.  And so, I guess I’m curious to hear – you said something kind of bold, in my estimation, in terms of everything has an SOP – Standard Operation Procedure – for how you should be doing business.  And so, that’s very intriguing.  I’d like to hear a little bit when you enter into these situations, are you able to kind of quickly recognize, “That’s wrong; that’s not as it should be”, or how does that kind of mental process unfold?

Paul Szyarto
And again, I attribute this to the military, and even to martial arts.  And I think of it like this, to where everything has a foundation.  When you build a house, there’s a foundation.  And every foundation in the world is going to be one of two types – it’s going to either be a basement or a slab.  So there’s not a lot of diversity with the foundation.  Then when it comes to the house, all houses are going to have walls, they’re all going to have windows, they’re all going to have a roof.  See the things is, that’s where the diversification of the organization comes from.

So when I look at a business, I don’t look at it as, “This is a pharmaceutical versus a manufacturing versus a service-oriented or an IT.”  I look at, “Okay, what is the premise of the business?”

So that’s kind of what I do, is I try to create a foundational template that I walk the organization through, and I’ll go through kind of a scorecard, a list of questions on how they’ve built their foundation.  And that’s when you can start picking apart where the true problems are, because most organizations don’t have a problem with just… For example, at a pharmaceutical company – they don’t just have a problem with delivering a quality product or not making enough sales.  There’s a root problem with that – maybe there’s a quality issue, maybe there’s a manufacturing issue, maybe there’s a cost issue to where costs are too high, maybe they’ve estimated incorrectly.

Pete Mockaitis
Understood. Could you share with me some of the most powerful questions that are applicable, I’d say to the people side of business universally, as opposed to some of the strategic revenue / cost matters.  I’m curious to hear, when you said they had the wrong people, what are some of the key questions you ask on the people side, and then how do you drive that to finding some root causes?

Paul Szyarto
So, when it comes down to really trying to analyze an organization in regards to finding the root problems, I’ll use my current organization as a great example.  So when I came into my current endeavor, we were… So the first thing I do is I look at the books.  I look at their P&L statements and their balance sheet.  So that pretty much gives you a really good understanding of where the organization is financially.

And what happened when I joined this organization is, they were taking on a loss consecutively over a 3-year period, so the first thing I did was, you go to the owners and start asking questions regarding the loss.  You start investigating what type of resource structure that they have set up, what is the management profile.  I started asking questions as far as what is the revenue value per billable resource, what is the organization bringing in for the resources as a whole?

So you’ve got to think if we’re bringing in a million dollars and we have 10 resources, logic states that if every one’s billable, you should be bringing in no less than $100,000 per resource from an equal distribution standpoint.  So now, to make money, you have to look at the cost base for those resources.  And that’s where we start investigating.  So if it had a cost base of 50k per person, then we’re looking at 100% profitability on that set.

So now when I start looking at organizations that are losing money, typically it’s from a resourcing standpoint.  So, resources are typically the most costly part of the organization.  You start trying to understand how is the resource set structured, where is the management?  And with this company we found that out of the 10 people – and I’m just giving you an example, so let’s say it was 10 – out of the 10, I would say it wasn’t an equal distribution.  It was more like two of them were bringing in 80% of the value, so two of them brought in 800,000, the remaining eight were bringing in a lot of generic cost, and many of them weren’t being utilized because they were specialists.  And if you don’t have a job for the specialist, what do they do?  They sit.

Same thing from a pharmaceutical or a manufacturing or whatever standpoint.  If you have resources sitting on a bench or machinery down that people can’t work on, or products not selling so you’re not producing or they’re not working, it’s all kind of the same premise.  So I really start with analyzing their P&L to understand where their profit and loss is, I try to understand what the cost base is of where they’re losing money or where their gains are.  So in our case we had two resources that were… Or 20% of the resources were bringing in 80% of the revenue, so you identify that, “Wait a second, guys.  These are only two generalists.  They’re working single projects by themselves and they’re also the lead resources that are able to guide the lower level resources.  So instead of having eight people that are doing nothing, why don’t we hire two more that can also bring in that type of value for the effort being provided?”

So that’s pretty much what we did – we restructured the organization, removed some management layers because you don’t need multiple managers to manage ten people anymore, if you only got four.  So we were able to decrease cost tremendously, and increase the value opportunity per person.  So, that’s more or less where I start, and then it’s people, process, technology, in essence, to where you start looking at.  Then I typically take a look at the processes of how efficiently is the organization accomplishing tasks, for example.

Pete Mockaitis
What are some telltale signs for, “Here’s inefficiency”?

Paul Szyarto
Well, some telltale signs are going to be… So if you look at, from a project management standpoint – a project has a finite start and finish date, and if you’re exceeding those timelines, there’s going to be a problem somewhere.  And typically it’s because expectations haven’t been properly communicated or there’s a lack of understanding of what we should be doing from a scope delivery standpoint.  So that’s kind of a telltale sign.

So same thing with… Again, I’ll go back to the large …  When you start missing deadlines, you’ve got to think: Who defines the deadline?  You do.  You’re the owner of the company, you’re the one in charge, so you define the deadline.  So it comes down to expectations and scope that define what that deadline is.  So, if there is communication happening, should we miss any deadlines?  Probably not.

Pete Mockaitis
Certainly.  And so you’ve shared then some of the ways that you find some problems or opportunities, depending on your point of view.

Paul Szyarto
Yeah, that’s actually really good – it’s not a problem, it’s opportunity.  Opportunity to make the organization better.

Pete Mockaitis
And so then, I’d love to hear now in terms of, what are some of your best practices when it comes to the communication, rapport building, people side of this, in terms of getting folks to buy in, be interested and do what you discover?

Paul Szyarto
Okay, so that’s actually a really good question.  This actually is a good follow up to what I was going through.  I walk in and the CEO goes, “What are you doing here?  What could you do to help me?”  And it comes down to, “I’m not a salesman.  I’m an information provider.  So I’m here to provide you with facts regarding your organization of why it’s failing, or why it’s succeeding.  And if you listen to those facts and we document the facts together and we analyze those facts together, and if we create a plan of execution together, you can probably make your organization better.”

So when I work with organizations it’s not about me convincing them, it’s not about me selling them my service.  It’s actually, I’m there to help and I let them know that right away.  Actually that’s where I start when I meet them, “I’m here to help.  Some of the things we may not agree on, but together we’re going to identify the facts of what’s happening with your organization.  And here’s the good thing – numbers don’t lie.  So I’m here to quantify what’s happening with the organization.  I’m not here to be quantitative.  I’m not here to say, ‘You’re doing well’ or ‘You’re doing badly.’  I’m here to say, ‘Well, here’s what the number say, and based on your goals for the organization, if you want to have a bottom line margin of 3% and you’re at 1%, we’re not hitting that goal.’  So whether it’s good or bad, let’s identify, ‘Here’s the fact’, then let’s identify what’s affecting the fact.”

I was working with a large, it’s called an EPC customer, so they do construction management for huge companies.  And we were analyzing why their bottom line was only 2%.  And when I’m working with the C-levels and the executives and so on, they sit back and they said, “Well, this is what it is.  It’s always been this way.”  And I said, “What could we do?  Let’s analyze, let’s take a look at this, because history isn’t always right.  Just because it’s always been 2% doesn’t mean it’s right.  Let’s take a look at the organization holistically, because if you think if you’re working with a $10-billion company or a $20-billion company, a 0.5% increase in the bottom line – that’s a considerable amount of money.”

So when you start speaking like that, it can’t hurt to review, can’t hurt to analyze the organization or try to identify the facts.  And then once you do, people’s eyes start to open.  They sit back and they say, “Wow, I didn’t realize I was paying this much money for an ERP system like Oracle and this is the value it’s providing me, which wasn’t much, or I thought it would be providing me more value or more efficiencies within the organization.”

And if you can make recommendations that makes sense, that could decrease operative cost, increase efficiencies, that affect their bottom line by fractions of a percentage on large multi-billion dollar companies – those are big numbers.  So for me it’s less about convincing, and it’s more about providing them facts on where the organization is and working together as a team, back to that military driver, of how to make it better.

Pete Mockaitis
And so when you share these facts, I’m curious – do you encounter some defensiveness, some folks who feel like you’re attacking them or saying they’re incompetent or not good at their jobs, because you’re highlighting the problem / opportunity that the facts share and they’re responsible for it?

Paul Szyarto
So, here’s an interesting thing about people, is that especially when you get into the C-levels, executive level management, what’s the problem with people?  We’re all too focused on… What’s that word?  It’s called pride.  We’re all too focused on being wrong, not being right enough, having our pride tempered with.  The fact is, even the best CEOs in the world, even the best entrepreneurs in the world, we all make mistakes.  We don’t see all the details at all times.

And it comes down to, 1) Ensuring you have a good team, and that team is both internally-facing plus external resources – guys like myself that can come in and see things from a different or broader perspective, or a more focused perspective, that reveal facts.  And do I get people that turn around and they get very upset, they attack you, they say, “This is impossible!  How can this be?  I’m the CEO!”  The fact is, I’m there for a reason, and if you were doing the job that was expected of you or if you had the ability to see certain things, you wouldn’t need me and you wouldn’t need certain people on your team.

So, let’s say I’m there for an 8-hour session.  The first session is what I like to call the “informative posturing” session, where I explain what I do, they explain how great they are, I reveal a few facts, they explain how great they are, I explain a little bit more about what we can do with those facts, then they start realizing, “Wait a second.  He’s not here to hurt me.”

And the fact is, if they accept the visibility that’s provided regarding their organizations, I’m not the one that looks good; they’re the ones that look good.  My job is to make them look better.  So that’s typically how it works – first hour you’re going back and forth, a little bit here and there, trying to learn each other, trying to understand that, “Hey, I’m here to help.  And if you allow me to help you, you’re going to look great.  So I’m here to make you a better operator.”

Pete Mockaitis
You said a point about if they’re transparent, then it works out alright.

Paul Szyarto
Oh, transparent about me providing information and them accepting me information.  So a lot of the CEOs that were… Actually I haven’t had an issue in a long time, so the resources that I deal with, you’ll always have that initial confrontation, the headbutting a little bit in the beginning, and it’s not because I’m there to prove myself, it’s they’re there to more or less prove that they are not wrong, that they’re not making mistakes, that they’re being a great operator.

And when it comes down to me revealing facts and then you want them to be as transparent as possible about how their organization is operating.  So, it’s a foundation of trust also.  So when they realize that I’m not there to hurt them, they start opening up and they start revealing certain qualities about the organization that are good, bad, that could be improved, some areas that are great; and that’s when you start working as a team to rebuild that engine.

Pete Mockaitis
Excellent, thank you.  Well Paul, tell me – is there anything else you want to make sure we mention before we shift gears and hear about some of your favorite things real quick?

Paul Szyarto
No, I think when it comes to being in business, it comes down to just having confidence in your ability and if you know there’s a problem, state the facts and stick with it, and realize that you’re on a team to make the organization better.

Pete Mockaitis
Okay, thank you.  Well now, can you share with us a favorite quote, something you find inspiring?

Paul Szyarto
That’s actually funny; I’ll give you a story.  I would always hear these quotes, and I would turn to my wife and I would say to her, “Hey Cheryl, what the hell does that mean?” And she would always go into the details of what it meant and so on.  And ever since then I just never really got into the quotes.

But there is one by… I don’t know if you know him – there was a movie made after him, The 13 Hours from Benghazi. I can’t even think of his name right now, but he has a great quote called, “Embrace the suck.”  So, I take that as when times are tough and when you hate life and you hate the situation, embrace it because if you stick with it, keep your head down, keep on moving forward, it’s going to be over soon enough and you’re going to be that much better of a person.  So, “Embrace the suck.”  I like it.

Pete Mockaitis
Okay.  And how about a favorite tool, whether it’s a product or service or an app or software – something that helps you be awesome at your job?

Paul Szyarto
I would say a pretty cool tool, product… I would say right now we’re in the process of, and I don’t know if you’ve mentioned this earlier but we’re in the process of expanding out.  I’m into martial arts heavily, and we’re building out some franchises right now, called VMMA.  And there’s actually a pretty cool tool out there that will help every single small business owner and entrepreneur, called Fiverr.  It’s a site that allows you to pretty much do everything and anything for about $5.  And it gives you the opportunity to work with some really great resources for low cost with pretty good results for the price.

Pete Mockaitis
And so what things have you used Fiverr for successfully and you said, “Wow, that is good work and I am pleased with this exchange”?

Paul Szyarto
So about 4 years ago I released a company that did construction management, and one of my resources built this great video – it was one of these cartoony introduction videos, and I turned around, I’m like, “Wow, this thing’s amazing!  I can’t believe they put this together in the amount of time that I gave them.”  And it was so good, I praised this person to the end.

And then they turn around they go, “I’ve got to tell you something.  I didn’t build that myself.  I actually had some help.”  And I go, “What are you talking about ‘help’?  Who paid for this?”  And they said they did, and I’m like, “Oh my God.  I can’t let them bear the cost of this video.  This is insane.  This probably cost thousands upon thousands of dollars.”  And I found out, after a few drinks they revealed they only paid $5.  And I was like, “Oh my God, you had me going for some time here.”  So that was the first thing to where… Ever since I learned about it, it’s in my back pocket.

Pete Mockaitis
Well, you’ve got to show us that so we can get a sense for what a $5 cartoon video can be.

Paul Szyarto
I will tell you – you can all go to DelconConstruction.com, and there’s an intro video right on the home page.

Pete Mockaitis
Excellent, thank you.  And how about a favorite habit or a personal practice of yours that helps you flourish?

Paul Szyarto
Oh, so this is where we get into martial arts.  So, I wouldn’t say I’m a professional fighter, but I could fight pretty well.  But I would say that I am a professional martial artist and I’ve been doing this for years, and martial arts to me is all about more or less synchronizing the mind and body to prepare you for the next challenge.  So, you’ve got to think military.  Even before the military, I did martial arts when I was a kid and that helped a lot.

You kind of have to get into that Zen moment before taking on a huge challenge.  And one of the struggles I see with a lot of people out there is that they do not prepare their mind and body together before they take on that challenge.  So I’d say that is the greatest hobby that I have, is pretty much on a daily basis I go out to one of my gyms, I probably work out for an hour or two hours, doing different types of martial arts, and that helps me prepare for the next day.  So it calms my mind, exhausts my body, allows me to go to sleep restfully and wake up energized and ready to kick some more butt.

Pete Mockaitis
Oh, that’s great.  And tell me, is there a particular nugget or articulation of some of your message or wisdom you share that tends to really resonate with people, getting them nodding their heads and taking notes, etcetera?

Paul Szyarto
Well, we’ve only had so much time together and it comes down to for me, all about the “never give up” attitude.  And no matter how hard life is, could be worse, and life is what you make of it.  So I actually have a lot of mentees, whether it’s at a top university or one of the local neighbors.  It’s just about digging in deep and bringing out the best of you on a daily basis.

Pete Mockaitis
Okay, thank you.  And if folks want to learn more or get in touch, where would you point them?

Paul Szyarto
I would tell them to go out to my website – PaulSzyarto.com – you can reach me there, or through any one of my many entrepreneurial activities.  Or take a look on LinkedIn, and same thing – Paul Szyarto on LinkedIn.

Pete Mockaitis
Okay.  And do you have a final challenge or call to action for those seeking to be awesome at their jobs?

Paul Szyarto
You know something?  Every day I hear the challenges of life, and running a business, running a household, dealing with kids.  And I would challenge everyone to, instead of looking at the negative side, looking at the challenges of life, focus on what this headache can do for you, what it can build for you, how it can prepare you for the next headache.  And after working with those headaches and really analyzing them, you start building a template for life and you start realizing that there is no challenge too big, there’s no obstacle you can not overcome if you apply the basic template of life and business.

Pete Mockaitis
Alright.  Paul, thank you.  This has been a lot of fun.  I wish you lots of luck, and keep on rocking out, breaking many boards at once and doing what you do!

Paul Szyarto
Great.  Well, thank you so much for having me, Pete!

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