Ken Schmidt explains: Why great products don’t sell themselves, how to hire and retain great people, what to do when you are running out of money, how to keep going when things are terrible, how to create a community or engaged customers and employees, where most business owners get it wrong when designing a product or service, how to dominate in a commoditized marketplace, why you’re entire team must know that you want people saying about you, why you have to be liked to raise investment capital and more.
Find Ken’s Book – Make Some Noise: The Unconventional Road to Dominance
Question #1 –
“In the mid-80’s, when Harley-Davidson was at the brink of going out of business, how did you find out what the source of it was? I own a electrical business and we’re always trying to get ahead of all the debt and payments from our business. It’s stressful and I know we will get out of it, but it’s tough when we aren’t necessarily sure of what the direct cause is.” – Question Jamie Poss @ Poss Electric
Question #2 –
“When people think of Harley they don’t just think of their motorcycles, they think of the community that is associated with Harley. How do you create that community and culture?” – Abbey McCartor / Business Coach
Ken, Abbey is a real hard worker and a very diligent member of our team. What advice would you have for her, as it relates to work ethic?
NOTABLE QUOTABLE – “Be the only person who reads the newspaper cover to cover every day. No something about everything so that you can build rapport with anybody.” – Ken Schmidt
Question #3 –
“How did you keep yourself from not becoming totally negative? How did you stay positive and upbeat in the constant stresses of the situation?” – Quick Relief Plumbing
NOTABLE QUOTABLE – “Celebrate small pockets of success and make a huge deal out of it.” – Ken Schmidt
Question #4 –
“How to find and keep good people.” – Coach Don Calvert / Score Basketball
“It’s always better to hire for passion and energy instead ability or background.” – Ken Schmidt
“Every human on the planet has a need for validation and when we do that for people they come back for that and stick around.” – Ken Schmidt
Question #5 –
“When you think you’re at the brink of failure, what kept you going?” – Clay Clark client who wishes to stay anonymous
Question #6 –
“Why would you want to redeem the “tarnished” name of Harley-Davidson instead of
simply restarting with a new brand name?” – Curtis Music Academy
Question #7 –
“When you have no money left to run the business, where do you turn?” In my first round of doing my own business, I got to a point where I couldn’t even spend $200 for a part that I needed.
Question #8 –
Chupp – Questions for Ken Schmidt
Andrew, are you familiar with the company Harley Davidson? I am. Are you aware that the company almost went bankrupt in 1985? I’ve heard that. For what year were you born? I was born in 1998. Okay, so 19 and 19. 80 five. Harley Davidson was almost into into bankruptcy. They were headed into what many believe to be certain bankruptcy. In fact, the New York Times famously wrote the their the company’s obituary. Wow. Before the company was actually dead. Now, if you could meet the guy who actually successfully turned around the company, would that. Would that interest you? That’d be pretty cool. Well, on today’s show we have Kenny Schmidt, the iconic former communications director for Harley Davidson, and he’s gonna. Teach us why great products don’t sell themselves, how to hire and retain great people, what to do when you’re running out of money, how to keep things going when things look terrible and are getting worse.
How to create a community of engaged customers and employees who killed the engine turned the earlier engine backup. This is Harley intro thing. We got to have the music. You’re killing the vibe. Good. Okay. Now we can get back to the super long intro where most business owners get it wrong when designing a product or service, how to dominate in a commoditized marketplace. Why our entire team must know what you want customers to say about you and why you have to be liked in order for people to want to invest in your business. Andrew, all of this and more on today’s episode of the thrive time show
Eric, chuck, guess who’s back?
Oh Man. How are you, sir?
Pretty great guys. Thank you
sir. I, I can’t. I’m super excited to have you in person at the thrive time show workshop. Next Friday. We have an average on an average. According to Nielsen, we have about 30,000 a Tulsan who will be listening to each and every one of our broadcasts. Right? And I think we have nine tickets left for the workshop and Ken’s going to be speaking at the workshop. So this is Friday, so we’re talking about not this Friday, but next Friday, December seventh. You’re going to be in Tulsa, Oklahoma. When was the last time that you came to Tulsa, Oklahoma,
you know, I’m trying to remember it. It’s been at least two years though. I know that and I know so much has changed.
Can you introduce kind of your career for the listeners out there that aren’t as familiar with your background? Like what did you, what was your role with Harley Davidson? Between 1985 and 1999.
The head of communications. So I really had was all of the company’s image and reputation were shaping the sort of competitive positioning of the business, how we are going to be seeing what we were going to say, who we are going to say it to. And then the second part of my responsibility was I was responsible for attracting investment to the company. So I did the investor relations side of the business too. Two very different but, but really awesome.
Well, when you, when you start with investor relations, that can be tough because you want to tell people if you want to be honest and transparent, but you also want to inspire confidence. So that had to be. Did you ever get like cold sweats headed into your, those early meetings because when you joined the team, you guys were in a race to the bottom. You were like a submarine. You were a bunch of enthusiastic people at Harley Davidson, but you guys weren’t doing well, but you were winning quality awards. Did you ever get nervous during those initial investor meetings?
Oh, you know what? It wasn’t even cold sweat going to get people to take a call from me or returned a call from him and it was really tough until, uh, the company started making money and it was kind of interesting about that is in 1987, which was the first profitable year, President Reagan came to the Harley factory and your pa and did a big star-spangled blow out about, you know, the company’s great success and what a great international business it was. And that really legitimize the business for investment people. It’s kind of a really cool thing to show, you know, the really, it was sort of the power of the president said, hey, these guys are at Jeff and boom, the next day, the phone’s just ringing off the hook.
I’m going to write that down as my, as my tip here. That’s a secret about the, the uh, the success and the value of the company. Step one now. Now here’s the deal. We work with 160 real business owners, plumbers, doctors, lawyers, neurologists, and Eric during the past couple of weeks a month has been gathering questions from real clients for Mr Schmidt. It’s kind of a teaser to the words of wisdom you’re going to get at the workshop. So, Eric, can you share a there he interrogates Mr Ken Schmidt with these questions. Got that one light bulb hanging down. Ken. And here it’s just one light bulb hanging down interrogation room. Okay, here we go. First question we have. I came in and so in the mid eighties when Harley Davidson was on the brink of going out of business, how did you find
out what the source of it was? I own an electric electrical business and we’re always trying to get ahead of all of the debt and payments from our business. It’s stressful and I know we will get out of it. Who asked this question? Is it, this is from Jamie Passover at Pos Electric Electric. And so he says, uh, you know, they’re always trying to get ahead of all the debt and payments from our business. It’s stressful and I know we will get out of it, but it’s tough when we aren’t necessarily sure what the direct causes. So he’s asking you, what was this? How did you guys find the source of the, of the downturn?
Most companies are spending more time looking for kind of who and what to blame outside the business and then inside the store, that natural instinct that, gee, we’re working our butts off of somebody else’s or something else out there was causing our problems. And the, the, everyone at the business assumed a until manufacturing leadership was shown otherwise that the Japanese companies to are hardly the only real competition at that time know had some kind of Voodoo that was enabling them to get their people to do 10 times the work for half the wages of hardly employees. And they had access to all kinds of computers and technologies, you know, that, that American companies that currently didn’t have. And, and if you were around in the eighties, you might remember as Japanese car manufacturers started gaining a huge toe hold in the west. There was just a constant stream in papers and in the media of stereotyping and misinformation about Japanese manufacturing that they were just so much better than the US and everything that they were going to eat our lunch and we’d all be working for them because their workers wore uniforms to work and did calisthenics every morning and St Company songs before work, you know.
And they had these computers and these guys had all worked 20 hours a day and they didn’t care if they didn’t get paid overtime and all that kind of crazy stuff. Well, what happened was the, the, the, the heart needs manufacturing chiefs, kind of the guys that were running the plants went over to tour some of these factories hoping to find some legit, uh, intelligent things they could steal and bring back enough from this mythical land of amazement. And instead a, they didn’t see anything that they went looking for it. They didn’t see any mass technology and company songs. All they saw was a lot of simple, sensible manufacturing and that the reading was really clear that the head of manufacturing got up in front of all the manufacturing employees and union people and said, Hey, we’ve identified the problem and it’s us and we’ve got to stop denying that it’s us.
We’ve got to stop looking for excuses. We gotta start looking for other people to blame. Just as we will all claim, you know, personal roles in anything that we can do successful for the company. We also have claim personal roles for, you know, all the problems that we’re having right now and that was kind of a, a, a watershed moment for a lot of people because he had a lot of employees in particular that were really downtrodden in sort of thinking, you know, there’s nothing we can do to compete against this giant Godzilla over there. And then realizing, well, they don’t really have any advantages that we don’t already have. So it’s kind of a matter of getting our act together and stopped looking for other people to blame. And you know what, another thing too, I know I’m babbling here.
With rather than a, uh, looking for a miraculous cures for problems inside the plant in a switches that can be flipped from left to right, uh, you know, just easy solutions that didn’t exist. Basically what Hurley started doing, and this was something that was taken from the Japanese, it was essentially getting employees involved in creating solutions to problems. So rather than, you know, complaining about where bottlenecks or problems were in the factory, the question was turned back to the employees and what would you do to smooth this out? What would you do to improve this? What would you, you know, do change in the layout? Would you change in the machining to make things run more efficiently? Uh, and sort of discovered for the, you know, one of those early miracles that Jesus, if he asked people that are responsible for their work areas, how they could do their jobs better, they’ll tell you, nobody knows better how to run a machine. Then people that run the damn things eight hours a day, but they’d never been asked before. They had no forum to make suggestions, to say, hey, here’s a problem and you, here’s three. You know, I was running the place. Here’s how I fixed it.
What are the things that I enjoyed most about reading your new book, the early release I got. And then the actual hard book, hard cover. By the way, thank you for sending the hardcover of your, of your book and all the listeners out there who are not familiar with your book. Can you share with the listeners out there the title of your, of your new book?
I absolutely can. It’s called make some noise. The unconventional road to dominance.
What I loved about your book that I just wish I wish that more authors would write like you, but they probably can’t because they probably haven’t helped do they hardly turn a Harley Davidson turnaround, but your book is so practical. There’s no bs and I think there’s so many, and I’m not ripping Ted talks, but you know what I’m talking about here. There’s, there’s Ted talks out there where people talk and esoteric vague ideas that at no point are practical and you’re saying, listen buddy, if you want to know how to run this machine better, go ask the person who spends their whole day working on it. That is a powerful teaching moment for somebody out there. Why does so many people can, uh, so many people in leadership, so many executives, so many white collar people. Why do they look for vague, esoteric these vagaries and he’s big platitudes as opposed to asking the actual technician doing the job?
I think the reason that happens is because they’re afraid that they’ll be seen as weak for doing that. Instead of admitting, Hey, you know what? I’m not the expert on everything and risking that might be smarter than me or might know more about it for you know, for a lot of people it’s kind of threatening, but what actually happens is first of all, you know, people really liked being asked questions. You know, how would you do this better? Right? If you were running the place, what would you do? And you finally get amazing answers. People like being asked and you get incredible Intel and that was, that was it kind of a south. The Harley was able to spread over the organization, have a lot of, you know, kind of bitter and confused, a disgruntled employees. The fact that leadership was a, Hey, you know what? We don’t know the answers to all this, but a lot of you do and if you have good answers and we’ll listen and act on that, and employee saw that that was exactly what was happening. I said, well Jason, it just gave people a a, an incentive to speak up and they did.
just like anybody does. You ask anybody, ask a dental patient and a chair, you know, how could we make this better for you guys can answer the question 100 percent of the time. Got an idea. Here it is.
You’re a concrete crew, a construction crew, and I think you would agree when you pull your people aside and say, Hey, what can we do to make your job more efficient? To make it better, to make it easier? What kind of rebar do you think? What kind of tools? What kind of people not appreciate that?
Absolutely, and I 100 percent agree with what Ken Schmidt is saying. It’s a lot of times I agree with what Ken said and also I think it can be an ego problem with the people at the top. They think that they know more and a lot of times it’s the technician that can give you the best answers.
Well, you know, as a, as a leader who’s been trained by Ken’s newest book, I can tell you this, I’ve discovered that if you’re at the top, you want to go to the bottom of the org chart and ask the people there who are seeing the customers, what can we do to improve the experience is so important that you get off of your. Get out of your big castle, get out of your ivory tower that high horse, get off the high horse. We’re going to be knocked off that high horse by bankruptcy. Now, Eric, chuck, we have a tough question that’s asked by one of our employees, one of our teammates. Uh, can you read the question for Mr Kenney got first.
She is so abby mccarter’s. Well, one of the business coaches up here at thrive and works with many, many clients, you know, all week every week who the kind of who she is because Ken has a little bit of a visual overview kind of who is this person? Yeah. So abby is a, I think she was about 25 years old, she’s a college graduate, came to thrive with a hunger and a thirst for learning code business, great coats, isolated, very humble, just a very awesome person. And uh, and her question for you, Ken, is when people think of Harley, they don’t just think of their motorcycles. True. They think of the community that is associated with Harley. So how do you create that community and culture like Harley has?
Quite honestly, I like the best compliment you can give to somebody at Harley, especially those that were around during the tough times, that they see the business as something that represents something more than just motorcycles, which means they’ve seen what the dealers have done around the country to build the social side of the sport, to build that sense of community out there of motorcycle riders, if that’s an amazing thing. You see, we learned pretty early that in the revitalization process that one of the things that separates Harley for the rest of the writing community is that our people, and this goes all the way back to the early 19 hundreds. There’s all kinds of photographic evidence of this, partly people liked to ride together and anytime you see a big group of bikes coming down the road, it’s pretty safe to assume that all or most of them are going to be Harley versus you know, other brands, other bikes, riders tend to not do a lot of socializing together and we had learned over time and especially once we formalized this, that anytime we and our dealers, we’re writing together with customers, we learned a lot by asking a lot.
It was sort of that same thing, hey, we’re right in front of the people that we serve. Let’s ask questions. Let’s. What could we do better? How could we make this bike fit your body that are. What would you do if you were running the design side of the business app? You know, how would you change it? So we got tremendous Intel. We also learned a lot of really kind of neat a human behavioral stuff. And what we learned in some of the basic stuff we learned is that when you ask people questions they answer. The other thing we learned is that when we provide people with some some sense any form of validation or a boost to their self esteem or ego than any type of ego boost, people will constantly come back for more of that and that’s really what sort of directed a lot of the success of the business that you’ve seen as this.
This notion that we can delight people because we choose to in ways that far transcends just this product that we’re selling and we know about people. People will always return to any source of joy in their lives, any source of delight, and if for that source of delight for people, they’ll keep coming back. Which is why you see, you know what? My dealerships are getting. Do so many events on weekends, sponsored rides, a bike shows, fashion shows, cookouts, barbecues, concerts, whatever that is to bring people together because it makes people feel good. It gives them something to talk about during the week. To invite their non-writing friends to participate in. That is generates a ton of of bugs that had been part and parcel the success of the business. And what separates it from everybody else out there in the marketplace is the social work that, that hardly, hardly dealers do out there to build their local networks. And if it pays off in spades
at every turn, every interaction. So
and, and, and be that source of delay, be that thing that’s on their calendar on a Saturday so they have something to look forward to. Hey, you know what, don’t know what’s happened is this weekend. But I know at least for a couple hours I can go out and have some fun.
It means a lot. Absolutely. Absolutely. And, and, and so abby who asked that question, abby mccarter, she’s a real hard worker, very diligent member of our team. What advice would you have for her as it relates to work ethic,
self refer. Other people were saying she is probably one of the toughest, hardest working people we have on our team. Yeah. But she’s also, what, 25 years old and in which was the last time you checked, are you, are you, uh, you, you, you, you’re probably not 25. So if you were going back and giving advice to somebody out there who’s 25 years old, I’m making their way up the corporate ladder, you know, what, what, what advice would you have for somebody like abby?
This is something that I always tell people. I’m close to 60, so everybody’s younger than me now, but what I tell everybody is you be the person that reads the newspaper every day. Now I’m not talking about an online version of it. They read the damn paper from cover to cover, know a little bit about everything that’s happening. And the reason for that is because that’s what makes you conversant with higher ups in business. It’s, it’s what they know is what they’re thinking about. It’s the, it’s what they’re confronting every day. And when you can talk about what they’re talking about, what, what, what leaders and movers and shakers were talking about, you’re going to continuously get invited in. To me, if you’re going to be seen as a, as a player, as legitimate Percy, you know what’s happening in business. You know what’s happening in government. You know what’s happening in popular culture. You know, what, what’s important to people. Then I would always find it in any working environment that there’s always just sort of the coolest people who don’t know what’s happening in the world. You know, they, they don’t know what, what, you know, Jay was the stock market is down. It is. Well, Gee, why Lucy?
If you don’t know this stuff,
I agree. I think what happens is a lot of times is most people don’t understand that, uh, we talk, we chat, we teach this on podcast, but the, but the, the key to success is you want to build rapport with whoever you’re talking to, build rapport and get him to like and trust you. Find Their needs, right? Find a need that you can help them solve a problem. You can help them solve, deliver benefits, you know, solve a problem for them, prove you can do it, and then call them to action. And it’s so hard for anybody to want to do business with anybody who they don’t like and trust. That is great advice. Now, chop, you have another hot question from a thriver out there. Who is this driver? This driver is the owner of quick relief plumbing out of Kansas City, Oklahoma or Kansas City, Kansas, obviously in Shawnee, Kansas, and he asks, how did you keep yourself from not becoming totally negative and how did you stay positive and upbeat and the constant stresses of the situation?
Negative. I mean, who wouldn’t be between know newspaper. The New York Times is of the world, right? In the company’s obituary and all the negative buzz. It was hard for anyone to not think that that maybe all these people are right. You know, maybe we are going down, you know all you know. I, I don’t know what I don’t know, but what I do know is I don’t want to have to do anything different. You know that what I’m doing right now. What I would say though is it as corey as it probably sounds, I think that the, the, the movement among leadership, the company and some of this literally came from Japan, is this notion of the celebrating success at any. If we could find small pockets of success and make a huge deal out of it internally, it spawned a contagious feeling of, hey, we’re in this together and at least in some pockets of the business installments and pride that had been lost and that we posted letters all over the, the factories from customers that had written in saying, hey, we’re pulling for you.
I’d love you to death. And guys in the military sending pictures of their hardly flags fly you over their tents, you know, whatever that was it. It was stuff to let people know, hey, don’t. There’s a lot of people that are counting on us and you do a great job, but we got to keep pushing. We’ve got to keep pushing. As we began to see a lot, you know, positive improvements, things like scrap and rework, reductions in the factories, improvements and dealer order fulfillment that we made big deals out of that stuff and made sure to acknowledge the people that were behind that sort of, hey, we did this together. It’s working. Let’s keep pushing at it. Honestly. Got, uh, the, the, the tone and the internal temperature. Uh, improved with every celebrated success and that becomes contagious behavior unto itself. We went more of that more fun time.
On a personal level, how did you grow up? Did you grow up middle class? Did you grow up? Yes,
absolutely. A State College, Pennsylvania on the Penn State University campus the few blocks off of 10 states up in a very. It’s a very small town. So I grew up on a heavy diet of college football
basically where you say you’re middle class growing up, right? You’re a middle class family. What is x? This is something people ask me all the time. They asked me, they said, clay, you know, I know you grew up without a lot of money. You get rejected all the time. How do you stay positive? Because I think as a leader you have to bring, you have to breathe positivity into your organization, but also reality, you have to breathe both reality and positivity and your organization. But if you’re depressed and overwhelmed and you personally just get, you know, it’s not going to go well for you as a leader. So I would just like to ask you, where do you draw your personal positivity from?
That’s a really great question. It depends on what I know is, is that anybody who works for a living doing it doesn’t matter what it is. Anybody that works models the behavior of their quote unquote superiors, the people above them that’s a superior is showing a lot of, you know, the Boston showed a lot of energy, a lot of passion, a lot of contagious enthusiasm is employees model that because hey, this is what you got to do around here to get that raise or get that promotion. And then the flip side of that is that the leaders and bosses that whine and complain and stare at the ground and you don’t have anything good to say. Having employees who do the same thing. So I always focus my energy in a work environment and they realize, hey, if someone is going to be modeling me, I gotta be. I gotta be on fire all the time. We got to be fired up. Try to be lighthearted trying to be human. And that kind of spills over the why you see a lot of who people really are in a working environment and people that is, and we’ve all seen this as the naysayers, the people who stare at their shoes, they complain a lot. I tend to not really have very successful businesses.
Nobody wants to work with them. You just said people that tend to stare at their shoes and kind of come across as negative, didn’t do not have very successful businesses. Am I correct?
Okay. So I have a, a thriver out there who happens to be a client I’ve worked with. I’ve worked with this guy. He’s been stuck with me Ken Schmidt for almost six years. What kind of choices does he make? It’s called the score basketball. It’s called score b ball. If you get a chance to google search it, he has the number one highest and most reviewed basketball training facility in Oklahoma right now. And he’s competing with the University of Tulsa, the Oklahoma City Thunder. I mean huge, huge companies and organizations in his basketball camp just continues to win year after year. And one of the things that he’s asked me in multiple meetings, because he’s had a hard time finding good people, he has some good people now, but the question I get asked by coach a lot, and I know if he were here on the show with you right now, he would ask, you know, how do you retain and find those? How do you hire? And then how do you retain good people? My friends, if, if you’re, if you were talking directly to coach Don Calvert right now. Okay. You’re managing a company where you have four or five employees. How do you. How would you approach hiring and retaining good people?
On the hiring side? It’s a lesson I learned the hard way and a lot of people I guess have all. You’re always going to be better off hiring for passion instead of ability or background. And you can tell, I think most of us live with at least one working eye and one ear can tell within 30 seconds of the meeting somebody, Hey, this is the energetic, passionate person that this is somebody who is eager to learn. This is somebody who’s willing to try things, somebody that I would follow, and then there’s a lot of people except me and they looked great on paper. They’ve got tons of experience. Then you meet them every day. There are no Jay, I don’t want to work with this person. This person is going to be tough to, to work with. So the first phase of that is always hire for passion and enthusiasm over to visibility because those are people that you know you’re going to be able to shape virtually every business I work with will tell you that the w, the, the two biggest problems that they have or you know, attracting customers and then also retaining employees and, and essentially that it’s a two problems that can be solved the same way.
You know, I talk a lot in my book about what I call weapons of mass attraction, but there were things that we do as people and as business leaders that are seen as either attractive in the human sense. Things that pull people toward us. And there’s a lot of things that we do that create the exact opposite behavior. And that people don’t want to be near us, and when we provide lifts to people’s self esteem, when we provided an ego boost to someone, when we are provided, when we are being a source of unexpected delight for people, what we’re doing is we’re filling an unmet human needs in every human being in the world has the need for validation. I’m the same way. We have needs for food, water, and shelter. We need validation. We need boost to our self esteem. We need ego boost.
We need to feel like people see us the way we see ourselves and we all see ourselves as an important and necessary and awesome and Ditto, promotable and powerful. When we do that for people, they first of all, they come back for it again. It’s, it’s giving them a source of delight. Somebody is paying attention to me. I liked the way that feels. I’m going to come back for that. And they’re also going to stick around the. The. You always ask people gv. You have trouble keeping the employees. We have trouble keeping employees here and then I’ll say, well, where do they go? Or why did they leave? And they say, well, they leave for more money then. I’m sorry, but that’s, you know, I’m not going to swear on the show here, but I say that’s total bs and you know, it’s bs they left because they didn’t feel wanted.
They didn’t feel valued. They didn’t feel appreciated. They never felt that somebody was looking out for them. Right. And as they will bounce from job to job to job until they find somebody that’s willing to do that, it’s one of the hardest discoveries of life for people, especially young people that you get out in the workforce and hey, you know what, nobody’s looking out for me. You know, mom’s not here to put a bandaid on it. Boo Boos and then teachers aren’t here to wipe my nose. That’s, you know, that’s a tough world out there. But if I know that, but, but if somebody makes an effort on my behalf to show that they care about me, I’m going to stay. I’m going to stay close to that person because that person is filling that need for me that I’m not getting anywhere else in life. And, and I think more businesses are starting to figure this out. It’s, it’s not coddling people’s not calling the police, it’s just giving them that self sense of self worth that I care about you. You’re important to me. Let’s talk. Instead of doing an employee review, you know, let’s talk about where you want to go with life and how I can help you get there. Let’s make a plan together. And people hear something like that. They say, oh my God, Hey, somebody here cares about me. I like that
you just stole the words right out of my mouth. Can I was gonna say that’s something that clay has taught me tremendously from the first time I met him and that we teach all of our clients. And that’s if you help your team members achieve their goals, wow. They’re helping you achieve your goals. You will, you’ll get so much buy in from these people. They will be willing to go to the end of the earth because you guys are on the same page together and they feel heard and validated. Just like you said.
And You wonder why. Why is it so hard for people to figure it out?
Here’s, here’s the deal, here’s the deal, when you were on our podcast the first time, and if I’m, if I’m getting this wrong and you say, I don’t like you, that’s fine, I respect that, but this is a real thing. We just got the head of the Harvard Business School, Clayton Christiansen today to commit to being on the show. Come on. No books. Well, a best selling author of the 21 irrefutable laws of leadership is going to be on the show. The founder of priceline is going to be on the show. Come on, but I can tell you we’ve had a lot of guests on the show. You’re on fire. Very few, many guests have. I reached out to say and I’d like to have you on again, but when you. I’ve never met you before. I’ve never like shaken your hand. I’ve talked to you on the, on the podcast obviously, but how did you know? When did you pick up on the idea that I actually gave a crap about you and entrepreneurs and I actually was a real. It was a real thing for me and not just some bs job that I was just doing
to anything that you do go on the website. I always look for it. Don’t think it’s intentional anymore. This, I think it’s habit is I respond to kind of obvious effort to be a human and realistic and you know, when I see width, see shouldn’t Schumer, instead of trying to be as corporate speak, that’s somebody I know that understand sort of how things work. I get this person and that’s somebody I want to talk to or spend time with and that that’s obviously what you said. Uh, I’ve done, uh, done so well. There is, you’ve taken a lot of complicated subjects and presented it very palatable human way that’s not super serious. There’s always going to be some humor and energy and I’m sorry, but you know, people are just naturally myself included, attracted to that.
And then when you were on the show, I picked up on an energy that you are done with Harley Davidson Motors, right? But you’re not done helping people. You’re not just mailing it in. This is not some corporate assigned interview. You’re bringing passion, you’re bringing energy. Therefore I picked up on the energy and said, you know what, I would like to have you on again. Why in the world would you want to keep helping people after you’re retired? Why not just sit in a hammock all day thinking about how great it’s been?
What else was really cool about this? And people ask, what are your work of art for a see, I’ve been exposed to so many businesses as so many industries and I get to see how you know, things are made and see how you know, hearts get opened and how surgery gets exposed to all this stuff. It just fascinates me to know him and what’s also cool about is because they go to work because all these businesses is I get, I get to see all their words and people will tell you their their warts. If, if you. If they think that you might be able to offer a suggestion there too, and what I’ve discovered is, is pretty much all the warts are common. Whether you’re building houses or you’re a funeral director in technology and that everybody faces the same problems and when you can offer somebody sends solutions and a little optimism that they can get through that stuff and get past it. A man that’s, it’s just a great feeling and you know, I get lots of love letters and phone calls from people then, you know, it makes me feel good. So I keep doing it.
We have another question from a thriver who I believe wanted to kind of keep the name anonymous. Anonymous. Oh, okay. He says, we don’t know when you think you’re at the brink of failure, what kept you going?
Wow. I would love to say confidence and passion. I think the truth is it in reality that it was fear of doors being shuttered and jobs lost. Frankly, that’s what kept us going at partly because we’re at a point where the
pretty much anytime something positive, what happened in that, in the business or you know, something would happen in the outside world and the economy. We’ll see some sort of an uptick. Uh, we were always be super hopeful that that was somehow going to translate into something that the company that’s motor company say, you know, we, we, we keep pushing, but there was sort of one set back after another and their early days. But what started happening is when we, when the company began a very, a very serious effort to improve the engineering and the quality and reliability of the products, we, we’re going to come up with new engines and new transmissions. That was like the big rally and cry we got, we got to get ready. We got to build these new engines. We got to have these redesigned transmissions and the, and boy, when this new stuff hits the market, you know, people are going to love it.
It says it was. Everybody was kind of rallying behind this and that was kind of a blessing and a curse. The curse is it just a second? But there was sort of this constant reinforcement and transparency for leadership as here’s what these new engines are going to do because here’s the problem that we’re having with warranties and stuff and the old stuff. In the market, this is what’s costing us money that we can’t be spending on engineering and giving you all a raise and all this other kinds of wonderful stuff. Here’s what we’re trying to do, here’s what we expect from you. Here’s what we think’s going to happen. When this new stuff hits the market, then it’s going to be great. And what happened was the new stuff hit the market and 85 and 86 and was very, very well received, generated a ton of buzz and all the bikes books or at least being written up everywhere for though this amazing quality in these great bikes, but nobody was buying them.
It was like a, the discovery that, you know, the sort of the discovery we made was we, we’re sort of betting the farm on product made the product great, but the market said, yeah, your product’s great, but you know, everybody else’s is great too. So sort of, you know, what do you have to justify that difference in price? And we weren’t far enough along the APP to be able to explain that or even have, you know, avenues to do that. So, so the curse of the whole, that whole product revitalization thing was it sends a signal to pretty much everyone involved in the business at every element of our success was going to be due to having a great product. And we soon learned, you know, as all businesses eventually learned that just having a great product doesn’t necessarily give you any advantage, let alone the sustainable advantage.
You’ve got to stand for something bigger than the product. And as we began to learn that as we went out and started getting involved with our writers and making it a focal point of the business, part of our strategy, be visible, be active beyond the street, be at the dealership you’ve been on Saturday. They put together events, pulled writers together. Uh, there was a kind of a sense of enthusiasm and we’re all in this together and this constant reinforcement that was coming from writers saying, please keep us going. Don’t let this die. Uh, that, that really fueled a lot of people in and really kept us going. And if we weren’t out there having those discussions, you know, we wouldn’t have heard a lot of that. And when somebody is standing right in front of him, you know, and the guys got, you know, your company’s name tattooed all over his body. Say, no, this is the only thing in my license important to me. Don’t let it die. I mean hell, that doesn’t get your juices flowing. That EPA will,
you know, we had a listener out there that obviously wasn’t in the trenches with you at Harley Davidson, but he’s aware of the story. He’s a writer, he’s aware of the New York Times obituary. Think about that thrive nation. Thinking about that for a second, how would it feel to be the communications director for a company or to be working in the plant to be doing any job at a company where the New York Times writes an obituary about your company while it still fighting for survival? Think about. That’s rough. I had to be. I mean, I don’t know how you break that to your team. You’re like, oh guys. Well, the New York Times.
Right. I mean it’s, I mean you had to have many, I mean, how did you address that with your team, by the way? Did you talk to your team about that particular op ed or what did you do? You just kinda
certainly coming off from all the motorcycle magazines too. I mean it was pretty much the world sort of collectively written as often moved on
and so this particular thriver runs a music academy that he teaches kids how to become musicians and singers, vocal lessons. It’s called Curtis Music Academy and he wrote a question that hopefully you don’t find to be offensive, but again, he wasn’t with you in the trenches at the time. He writes, why would you want to redeem the quote unquote tarnished name of Harley Davidson instead of simply restarting with a new brand name?
That’s a pretty deep question. First of all, and I don’t mean this to flip it, but who wouldn’t want to get out and explain the name change to the big biker dudes with hardly tattooed all over there.
Hey, guess what guys? We’ve got a new name. Now.
The fact that even though the God knows the company was taking a beating and the company was suffering and losing money and all this bad stuff was happening in, in, in dealerships were shuttering and you know, all the financial strain that was causing on them the nameless, still synonymous with motorcycles and there was still tremendous affection and loyalty among the old guard that you kind of have your traditional dyed in the wool partly types. I mean the people that we’re going to support the company through thick and thin. So obviously we didn’t want to upset any of them. Uh, also they were still Davidson’s involved in the business, a customer affection for them, which was really high. They were kind of mythical characters in the, in the writing community. So we didn’t want to lose any of that. Uh, you know, from a practical business standpoint, it’s easier to go to market with an established name certainly then to try to start from scratch with a new one because then you really wouldn’t be starting from, from square one. And obviously didn’t have any money to do that. So the name still meant a lot, so
you guys made it.
We use that to make it mean more.
There you go. Solution that you could have just added to the front and Carly Davidson. He could fix the tattoos and everything. I got another, another hard hitting question for you here. I’m a thriver wrote it and they asked when you have no money left to run the business, where do you turn? In my first round doing my own business,
I got to a point where I couldn’t even spend $200 for a part that I needed.
That’s a very tough thing for anybody but what we saw at at what made getting
financial institutions to give us credit to give Harley lines of credit, which it hadn’t done before. Basically what you had was the then CEO and cfo of the company literally going door to door begging for credit to stave off bankruptcy. And Luckily for. Well everybody in the Harley world is literally in the 11th hour, you know, quarter to five on December 30, first 1985. But you know, an hour that will live in infamy. They found somebody who liked that it major institution who liked bikes instead of talking, you know, a story of woe instead of breaking up the balance sheets and talking about the revitalization of the things that are happening in the plants and all these reasons why these financial institutions should have reasons for optimism. They found that by, by simply talking, sharing their passion with somebody else who happened to have some passion for motorcycles, grease the skids, and instead of being turned out immediately like they were everywhere, everywhere, everywhere. They went somewhere to look at the balance statement or the cash flows and said, look, God, no, I’m not going to risk the farm giving you guys any money when they allowed themselves to be humble and human
and, and to be very, very visibly passionate about what they were doing. A take on somebody else who felt the same way. And that’s really what made it happen. So I guess that’s just a way of saying you’ve got to ask. Obviously if you need the money you’ve got to ask for, but you’ve got to also just. And some humanity, it seems some humility and hopefully you know a Dosa passion while you’re doing it, because if you’ve got that obvious passion for what you’re doing, people are more inclined to listen to what you’re saying.
The title of where I want you to chime in here, they have the title of Ceo on Your Business Card, but they’re not willing to go door to door. They’re not willing to put hat in hand given the and bag. They’re not willing to grovel and say, please, please invest in Harley Davidson. Can you speak to the humbleness and the determination and the passion of the CEO and the team at the time who was willing to go door to door to save the company and to save the thousands of American jobs at Harley Davidson?
You have to think
that it takes a lot of guts, especially for people that a big household name business to show any form of humility when that’s not something that that business was ever known. Pork is at the end of the step, was back in the dark days. So for, for them to, to be human, for them to be so passionate and again talking to people who the who were particularly interested in having these meetings to begin with says a great deal because it also said, hey, nobody else is going to do this for us. And in most business, I mean that’s the problem that most businesses have. Now though, the people that are running the show, the CEO, they’ll defer that to somebody else. They’ll say, well, send the finance guy in. What will the or or you know, we’ll, we’ll send in a consultant in to do that for us rather than showing up themselves.
And if it means enough to you as a businessperson and it’s absolutely vital to your ability to make a living, let alone all the people that are working for it, you got to get up in there yourself and be human. Some of them was kind of cool that I noticed early in the days when we were going and making the presentations, but the investment community, this is after we, we’d done our public offering and we’re looking to grow the base of shareholders. We we’d be in a major, a major institution like if fidelity in Boston, they need walk into the lobby and it would just be a WHO’s who of, you know, Fedex and be in there and g would be in there and general motors and all the big companies that are in there for their quarterly sit down with these guys and you look at the.
All the employees look like they wanted to blow their brains out in it rather than have to sit through another one of these fricking leader ship presentations. Here’s the numbers, here’s how we did. This is what all this is, where we’re struggling, this is where we’re doing well. And that, that was like literally where a light bulb went off over my head and I said, look, our goal here isn’t to show these people are numbers. They’ve already seen the numbers. What we’re here to get them to like us. Let’s talk to these guys at the same way. We would have random group of motorcyclists. Let’s talk about what we love and what turns us on and what gets us excited and would get. And if they like us, they’re going to listen to what we have to say, that the meetings will go more smooth, they’ll ask more questions, they won’t be in an obvious hurry to get us out of the room. And that’s exactly what happened. I mean, we were cool people with cool stories to tell. Why the hell should we be telling them no, these guys don’t want to just hear operational stuff and you know, dollar signs and basis points is that they want to see and hear stories from the people that are running the show.
They see the, these people are awesome and infectious and full of passion. Enthusiasm. Well then they got in line to,
you’re everything you’re saying it parallels so much
with Eric Chop the guy that, uh, hops on the show with me every week and the guy’s been asking these questions. Eric is a business coach, but he used to run a concrete company, you know, and after his parents exited that company, he is decided to commit his time and his energy and his life professionally speaking to a coaching businesses. And he’s very passionate about doing so. And Eric has put together a list of questions that he wanted to ask you and I know we’re kind of running short on time, but he has some questions and so if it’s okay, I’m Eric, you’ve got a few questions for kinship. Love for you to ask him your questions that you have because you are passionate about your clients and you really want to see them become successful and it’s not about money for you. Yeah, it’s a job. But you want to help these clients really win. And I love to tap into your, a source of passion and your, your, your questions for Ken.
Absolutely. And it is a passion and I’d love to see clients be successful. Maybe it’s not always financial success. Maybe it’s some time freedom or get them to be able to do what they want to do with their lives. Um, and so can, I appreciate the time and it’s been a blast having you on the show. So here comes with a couple couple of questions from the hot seat. So the first question I have for you is where do people go wrong when it comes to designing a product or even a service experience?
We see this everyday because they focus on this stuff 24 hours a day, seven days a week that they know what’s right for the customer, knows nobody knows more about this stuff than we do so that we’re. We’re bringing something new after the marketplace. We know that people are going to get excited about it and then you know, that’s why so many businesses are gone in less than five years is you don’t know more about what customers or potential customers, what they do. Instead of saying, here’s a bunch of really great new stuff that we designed that we know you’re going to love is how about getting the the people that you serve or hopeless or involved in the creation of a involved in the actual zone design process. How would you do this? What would you like to see this project? Who would you like to?
What enhancements would you like to see on the service side of our business isn’t. They’ll tell you because we have the, one of the benefits of being broke is we basically learned that we’ve made every mistake that you could make one of them trying to out guests what people want and enforcing them to shape their, you know, their hopes and desires around what you have available rather than, you know, just get them involved in the process because we say, oh, we’re adding all these new services enhancements and new service decks and new service training for, you know, the people working or dealerships and the customer say, that’s awesome, but I worked five days a week. I couldn’t get my bike to the shop it up before 5:00 because I don’t want to have to drop it off on a Saturday. I want to be able to, to write it. Then the obvious question that would ask, well would it help if we stayed open till seven? That would help if he stayed over there. What about if we just came and picked up your bike? It was, oh my God. You’d have thought that the cloud.
God reached down. It’s genius. Brilliant. That do that. The bonds that that stuff generates is off the chart. We wouldn’t thought of that, but the people will tell you and you know, what we know about people’s people support what they feel they help create. If I have a say in how you’re doing something, I’m going to support that versus, you know, you’re basically telling me what you’re going to do or what you have for me about the. Sometimes that works, but most of the time it doesn’t
ask people first. Dr Robert Zoellner is a partner in the CEO of the thrive time show and cohost and he often talks about this principle of finding a parade and getting in front of it. And it sounds like that’s kind of what you guys did. All the clients, customers, they’re already marching. Let’s go ask them where they’re going and let’s get in front of them. So that’s, that’s amazing. Um, my next question for you coming in is what is the best action item for someone that is wanting to create a more tattoo worthy customer relationship?
Action item that I would say it relates directly to the motorcycle will look through the turn in the bike world. You know when you’re approaching a 45 degree turn it speed. You don’t look at the term, you look at the exit point. You want to see what’s happening after the during the bike’s going to go where you’re looking and what most people do is they look at a customer engagement that some kind of a bit of a transaction or the customers on the phone to the customer is coming to visit or you’re doing a sales call. They’re focused on the transaction and pushing the product, getting the sale, and they’re not looking through the terms. What happens after that? What happens after you’re gone? What do you want that person to say to somebody else? What do you want that person to remember? So you have to, instead of being a blessing into the turner, into the transaction, you have to let a rnr.
What do I want this person to remember and repeat? We’re so what do I need to say and do it from this person that is going to delight them, be something that they didn’t expect that they’ll talk about and share with some for somebody else, and what buttons do I need to push on the human side? You know, to validate this person, to boost this person’s self esteem. You give that person an ego boost that we know that person will come back for more of a relationship is not a word that customers in any industry use. Ga, I’m looking for a company that will build a relationship with me. I mean people don’t talk that way, but when we do talk about friendships, businesses and people that we like, so if we view the business that way, what do I want this person to remember? How can I validate this person and make them feel good so they’ll come back, but they’ll remember that. They’ll take my call next time. Well, you’re pushing the right buttons and that person’s not thinking relationship. I’m going to have a friendship with this person, so what do I need to do to make that happen? That’s the action item
it. Most people that I’ve talked to say, oh, we’re really relationship business, and they’ll say, we’ll explain what that is. We wanted to be a value added partner. Said, please stop spewing that.
speak to me because it makes me want to throw up on my shoes. Nobody talks that way. Is that. Are you talking to Thanksgiving dinner table? Of course
I’m looking for a Turkey leg for years. Nobody talks like that. It’s corporate jargon. It’s corporate bs. I. I do think there’s a place for a various online videos and various case studies you could watch, but if you’re looking for business without the BS, Ken Schmidt and his new book, that’s what you can and get somebody out there said. I was trying to write down the title of the book because I want to buy it for myself or a member of my family right now, so when I know what was. What was the title of your new book again?
Thank you for asking it. Make some noise.
No road to dominant, chuck. We’ll make sure we’ll make it. We’ll put a link on the show notes. Got It, baby. It’s on there. Okay, good. I’m so sorry. Can I interrupt you? Can you repeat the title and the subtitle one more time?
The unconventional route to dominance
chubby. Have two more final questions before he hangs up on it. It’s about to happen. I can feel it. Okay, good deal. Ken, what were some of the hardest decisions you had to make to turn Harley Davidson around? Number one,
budgeting budget was the ugly monster that loomed over everything because everybody was asking for more than they could have a no matter what part of the business that you’re in, marketing one and more money engineering one and more money for the trucking people wanted more. Everybody did a. So a lot of tough questions were asked and the question is would typically be something like you’re saying it’s more important to hire a marketing people than it is for us to have more engineers, so you had to have damn good answers on Roi for everything. What you also needed to have, and I actually, I think this is more important than he had to have at least one vocal advocate on the finance committee that had to be somebody in there that would speak on your behalf and with support you when you’re having these budget discussions.
Otherwise, you know, he, he can’t split a dollar 11 different ways and make a level of different people happy. So if somebody is not on your side, it’s not going to happen. We also wrestled really hard about what we could or couldn’t say and promote publicly because we were. We realized that we simply couldn’t afford to over promise on anything, even though there was a really strong tendency to want to do that, to want to really brag up the product, brag up what was happening in the dealerships, brag out, brag about whatever we were going to be bringing to market. So it’s really a matter of a big, very, very careful and very choosy about the steps that we were taking in public, even though we were super enthusiastic about it. Not over promising on stuff. Uh, the, the, the discussions on this stuff are heartfelt and what really makes me happy about that as discussions like that would ultimately even involve people all the way up to like the CDO and people running the factories because they weren’t simply willing to delegate this stuff to. Other than that, they wanted to know exactly what people were thinking, what we’re thinking about, what the issues were, how they can help, uh, how we can help them so that they’re, the tougher the decision, the more people were involved, that’s for damn sure.
Very good. Okay. I got one more. Here we go. What do you mean when you say you should position your business to dominate in a commoditized market?
Oh, cool. I believe that every market for every industry in the world is commoditized right now. And what I mean by that is we’ve all gotten so good at whatever it is that we do as businesses. Everything that we make, big shell, everything is so good.
Apparently this is a knowledge bomb. I’m sorry. Can you show up? Is excited about this idea and he wanted to just hit the hit the horn horn’s there because you’ve seen this. Every business owner feels like they have the new widget, the new product. They feel like what they’re doing is don’t understand. It’s different. I don’t even have any competition. I don’t have any competition. I’m not a commodity. Continue Mr Ken. Sorry about that.
That anybody I’ve ever spoken to in the business world that I don’t think I can get from somebody else. It probably for less money because everything is good. Everybody’s really good at what they do. Everything is sort of become interchangeable. And that’s why you have all these businesses out there who feel they have no choice but to compete on price, which isn’t even competing. But it, it, it, it’s all they have left. Uh, so what, uh, in fact, this is essentially what the, my entire book is about. I mean, business leaders have to make competing to be dominant, the top priority of their business not and look at competing very, very seriously. And most don’t do that because if we go to market and we sell. So therefore we’re competing now, you’re not competing as a business until competing to be dominant and plans to be dominant are built into the business process.
This is what we’re here for. This is what we are working toward a if we don’t know is the business from a reputation standpoint, what we want people to say about us in the marketplace, we’re not competing. That means we’re not positioned to be dominant if, if, if everyone in the business can’t recite chapter and verse what we want people saying about us as a business and what we are doing to make that happen, than a business isn’t competitive. It’s a commodity and in and in any industry and any business, the first businesses that are willing to do this and to not look at the world through the same lens that their competitors are looking for and to intentionally be different than attempt to be dominant. They are going to outcompete other businesses that just rely on price. The traditional go to market tactics and that’s what wakes me up every morning so that there’s no reason that any business in the world can’t be crushing. It’s competitors that are selling the same stuff. If I can get customers to like me more than they like you, I win and nothing to do with the product I’m selling them.
Ken Schmidt, you know this? So you know the drill. I like to end each and every show with a boom. So without any further ado, here we go. Three, two, one.