Five mistakes to avoid when building a business with Jeff Morrill

Jeff Morrill co-founded Planet Subaru, “your undealership,” in 1998, and built it into one of the most successful privately-held car dealerships in the United States. He later started other businesses in automotive retail, real estate, telecommunications, and insurance that generate over $100,000,000 in annual revenue. Jeff is the author of Profit Wise: How to Make More Money in Business by Doing the Right Thing. He donates all income from the book to Population Services International, a global health organization with programs targeting malaria, child survival, HIV, and reproductive health. 

Jeff is a strict vegetarian, even though people tell him it's a big missed steak to eat that way. However, he does like his puns well done. Jeff lives with his wife, Julie, outside Charlottesville, Virginia, on a mountain he refers to as “The Morrill High Ground.” 

www.jeffmorrill.com
www.planetsubaru.com

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Transcript

Intro: Welcome to the Lucky Titan podcast where you will learn how to fill your favorite platform with tons of your dream customers from some of the world's top entrepreneurs. I'm your host, Josh Tapp, now let's get started. 

Josh: What is up everybody, Josh Tapp here again and welcome back to the lucky Titan and today, guys, we're here with Jeff Morel right and you probably remember his episode from well over a year ago, Jeff and I had such an awesome conversation and even honestly, after recording, we had an even better conversation it felt like I remember leaving that going, Gosh, this recorded the whole conversation but I'm excited to have Jeff back here because this guy has done some pretty impressive stuff in his life I mean, he's done over nine figures is that nine? 

Jeff: Yes. 

Josh: 9 figures with Planet Subaru one of his companies, this guy's done some amazing different businesses, you know, in Real estate, Telecom, with his with Planet Subaru, all these different companies, you know, and really generating just a lot of revenue with these companies showing what it takes to actually make a company work and the truth is, I was excited to have him on here to talk about pitfalls, and avoiding those pitfalls and I also want to throw this in there for everybody to to make sure you go check out his book profit wise before we hop into the interview here. So anyways, Jeff, say what's up to everybody, we'll hop in.

Jeff: All right. Well, thanks for having me back, we had a great conversation last time and looking forward to another one

Josh: Me too, I'm sure it'll be great, because I'm genuinely curious about what's been going on. So you've been in a lot of different industries, Jeff, right and I think you're probably one of the few people in this world who can say these are the pitfalls that happen to pretty much everybody in every industry and if you were to say, across all those different industries you've been in, what would you say are some of the primary pitfalls or mistakes that people make when they actually try to attempt to scale a business? 

Jeff: Well, if we start with the assumption that, that it's your team that's doing the work, and therefore, the people who are coming to work every day for your critical to the mission of your organization, then your interaction with them is central to the success of your company and in your life, because this is how you're spending your minutes, hours, days and years with these people oh, let's start with this one, one mistake that I used to make, and I'm still working on and that is that if someone fails in your company in some way, I think traditionally, I looked at, and it would be I never I wasn't going through a race or anything, it wasn't like I was doing doing that but I would blame the person for screwing up and what I've come to realize is that if someone fails in my organization, the first thing I need to do is go look in the mirror and figure out what I didn't do to allow that person to succeed in that moment so I'll give an example, it might be that my failure is having the wrong person in the company, I mean, it might be a hiring mistake, that we haven't been able to correct with good training and immersing them person or culture that can be it, it could be very just simple and profound that the person shouldn't be on the team but oftentimes, we hire pretty well so that's not it, it might be something more subtle, it might be that we didn't show that person exactly how to do it, or we didn't give them the proper motivation. In other words, we didn't show them how it would benefit them, it would help them in their pay or help the organization by doing it the way we want them to do it or maybe we didn't provide them with the right tools you know, in a case of we were blue collar business, so if we don't have the right equipment to change a tire or the the equipment isn't properly maintained, or it's too old, that's not the technicians fault, whose fault is that, I mean, ultimately, that's my fault. So I would encourage the next time anyone in your audience gets frustrated with someone on their team screwing up, if they ask the question well, differently after they feel a little bit and get upset, they say, what, what did I not do to allow this person to succeed and I think it takes a long time to get to that place in your career where you have the confidence to do that and to say, this is my mistake, even though it wasn't me who dropped the ball.

Josh: Right? What you know, what's funny is, as you bring that out, I think about the first class I took in my MBA program, we talked a lot about this right of establishing cultures and accepting failure in the right places and knowing when to hire fire and the pervading here human behavior with this is to treat everybody like the salesperson right where they say it's always incentivizing them monetarily and what's interesting is from all the research studies that have been done is it's not always or monetary is actually one of the lowest forms of incentivizing somebody to do work correctly, it's actually more of like intrinsic things like recognition and what and I like what you're talking about, I'm curious how you've been able to bridge that gap with non-salespeople because you've worked with a lot of different salespeople in your with your different companies, with somebody who's in a non-sales role, how are you incentivizing them to repair the failure without making them feel crushed?

Jeff: Yeah, well, even in the case of salespeople, I agree with the principles that you've outlined there and I see that you know, in people need to earn a living, they've got bills to pay, it's sort of like the cost of entry, though a competitive salary, some kind of pay plan that rewards them appropriately relative to what someone else would pay them at that just the minimum and that's what you get to have their body show up every day but if you want their heart and their effort in the best of that person to earn that with more than just a paycheck, and so I think it applies to salespeople applies to basically everybody in the organization and, and I don't have a custom answer for that, what I've discovered is that everybody has his or her own formula, there are some people that what they really need, they need to be told Daily, how good a job they're doing, they love that affirmation, maybe I'm reminding myself of that book for marriage is called the five languages of love, this describes it kind of different things, maybe you're familiar with it very in it, there's no universal formula so one of the things for me is I come to work, I mean, if when I was an employee back in the day, I used to work for somebody else of course and what was interesting for me is I came to work self-motivated, no motivation required but if you wanted to extinguish it, you could do that, by unwinding my decisions, if you did that to me, you could you didn't have to, you didn't have to motivate me but I could tell you there was a way to certain to demotivate me. So anyone that was my supervisor had to understand that about me that they needed to help work with me to make sure that my decisions wouldn't be unwound so I think it's customed to the salesperson, I think, generally, you can start with what makes you happy, do you like when people tell you you're an idiot or that you screwed up? No. I mean, most people don't start there. So why would it be a good idea to think that somehow telling somebody that they're an idiot is going to get you where you want to go with them, so I think in the absence of anything else, you start with yourself, and then remember that each person's cost a limb and they're very candid, I think if you asked me, what do you like about working here, what do you don't like about working here? What keeps you going? What fills your tank? One of our interview questions is actually exactly that, what is the thing about work that gives you energy and because we want to know early on as, as someone who responds to money, to recognition, to being supported, affirmed those kinds of things.

Josh: Yeah, I see. And that's really interesting because I know for myself, money is always fun, right, even as the owner of the company is, I, if we land a massive deal or something, and I can keep a chunk of money for myself, that's always a good feeling but there's nothing better for me than hanging out with people like you, right and being known by by more successful people, I love that that's it just gives me life, because being known by them, but also being friends with them is something that's just fun for me, right and I get so much life from that and so it allows me to direct my attention to that but I know with a lot of employees, they don't even know what motivates them yet, you know, they're like, honestly, they'll be like, oh, money or recognition or whatever but sometimes it's, it's just that the boss gave them time, right, you're having having a time to sit down with the and I'm curious where you've had so many employees, you know, at this point, how do you instill that in a way that because you can't always spend an hour with every single employee every single month, right? Because at some point you run out of time so how do you juggle that when you have so many employees?

Jeff: Yeah, I think I'm not an expert here, one of the things I do, because we have like at the Subaru dealership, which is the biggest of our businesses, and the one that I spend the most time on, we have 85 people and I actually used to be there every day, when I say every day, like seven days a week, and then later, six, and then later five, and then I moved away so I have a managing partner that runs I go back several times a year, when I see people, I could spend the week just catching up with people asking about their kids, and it's just not possible so I guess what I try to do is set the tone for our managers to do it and to the extent that I'm there, bumping into people, I take every, you know, serendipitous opportunity, maybe in the lunch room or bumping into someone at the water cooler or just walking down the hall, you know, without purposely going to see every one of our 85 people, I can bump into a few every time and hopefully over the course of the year I'll catch him by accident several times but it's a big challenge and I don't think I've perfected that sort of connection that you have to people and managing that among all your other time responsibilities, particularly as a company grows.

Josh: Yeah. Well, then let's just kind of pivot here really quick. So yeah, that's one of the biggest pitfalls and I would agree with you is that, you know, learning how to manage the people and learning how to deal with failure, but what are some of those other mistakes that a lot of entrepreneurs make when they kind of dive into entrepreneurship?

Jeff: Well, let's talk about smaller companies and other one that comes to mind, I work with a lot of people now I'm on the receiving end of lots of services because I have this large wooded property in Virginia that just needs endless amounts of maintenance and needs to tree work and mowing and it needs to be plowed the driveway it's very long, dry, wet needs to be plowed man, just tons, there's leaks that develop in the skylights, just one of these things, I'm always hiring people to do things and I can't tell you how continually frustrated I am by people who cannot keep their word and I reminded of a book I read a long time ago by Miguel Ruiz, and the name of the book was The Four Agreements, which is basically his four most important things in life and one of them was to be impeccable with your word and what he meant by that is he wanted to make sure that if you said something that you were going to do it, you know, that it that it was true and accurate and how often do we interact with people that want to do business with us that we've hired or whatever, and they tell you, I'm gonna be there Tuesday, and they're not there and they tell you all get this piece of information that you need by the end of the day, and they never get it, it's very common and I think many people underestimate just how much they're sabotaging their business, because not only are they really alienating their customers, but I assume they're doing the same thing to their team members and team members in this hiring environment, they can work for anybody, probably for more money so if you can't be trusted, they can't count on you, if you tell them, you're gonna give them a raise by the end of the year, and you don't, and then you've got to come ask him for it, each one of those things is a withdrawal in that bank account that you have with them, whether it's the team member or the customer and the way you make investments or deposits in that bank account is by doing what you say you're going to do and if you're just not very good at doing that, then I've got a secret for you, which is, if you can't keep your promises, then just make fewer of them, if you're the kind of person that has a really hard time showing up on time, then don't tell somebody, I'm going to see you at three o'clock today, tell the person I'm really busy. I'm going to try to get there this afternoon but I can't promise that I'll be there so it's the same situation, it's just that you framed it differently, you frame the expectation for the customer, your team members or whoever that you're working for so I think that's a very common mistake I see among trickily small business owners and people getting started.

Josh: Yeah, well, I think a lot of entrepreneurs feel like they have to make promises to get people excited to work with them but the truth is, most of the time they're already sold before you start making those promises and, you know, we'll have people I've learned this the hard way many times is that when somebody asks you, can you do something, even if you have the capabilities, it doesn't mean that you should always do that for them, you know and we've seen many times where I'll be like, yes, we can, we can do that and I mean it with the best intent possible and being honest about my team has these capacities, but then sometimes it pulls from our core competencies or takes time away from it, and it ends up damaging that relationship because we aren't able to fulfill on what I initially had promised to people, you know, I'm saying.

Jeff: oh, yeah, totally. I think sometimes the best thing you can do when working with clients is to say no and just to be, you know, to say, well, yeah, we could theoretically do that but but no, this isn't going to work for us and certainly when you step outside of your systems, mistakes start happening and yeah, things get ugly, for sure. 

Josh: learn that lesson the hard time many times and I do my best to never make that mistake again, yeah, love it so so we've talked through, okay, so we've talked through failures, right. making sure that how you manage your failures, and we're talking through right now how to, oh, my goodness, spacing this last point but just what we've been talking about, right, so the truth is, is like moving forward with business and, and, and avoiding these pitfalls, I think part of it is looking at companies like yours and saying, this is how you've been able to scale you've been able to grow it and you discussed the, you know, the importance of team at this perfect, that's kind of been the pervading thing with you is having the right people.

Jeff: Yeah, so let me jump into another one, which is hiring for experience instead of potential so this is very much related team and team building and obviously, if you're gonna scale business and get to the point where we're talking about what where, where all the magic happens, where you're not chained to the business, and that you have people really good people running it for you so that you can, if you're still interested in growing a business, you can go do it yourself, or you have other people that can do that for you, I think the key to bringing really good people on board is making sure that you're not hung up on them having already done what you're, what you're asking them to do, Isn't the right phrasing that so a really good example this and this is happened recently, one of our service managers, we have more than one dealership where our service managers call me and said I want to I want to run an ad and I want I need the counter people in the service bar we call the service advisors or assistant service managers, that's the person who takes the keys and you know learns about what your car needs and relays that the technician 

Josh: Yeah. 

Jeff: so anyway, he wanted to run an ad because it was a Jeep dealership he wanted Jeep a specific experience and the problem with doing that is that if you run an ad that requires Jeep experience in a service department, there are about 3 million people in eastern Massachusetts, there are probably only a few 100 people that can satisfy that single criterion, or two criteria, I guess they worked in a service department, and particularly worked in a jeep dealership so that's great. I mean, yeah, you'd love to have that person who's just plug and play and knows the product and knows all the warranty procedures and all that but it's so unrealistic, you've turned your talent pool into what one author called a talent puddle, I mean, it's just drips, there's, you're looking for a unicorn, so much better to run an ad that said, if you want that you'd say we would love to have experience in with Jeep, in a automotive experience is great, but not required, we'll train, we're looking for people who enjoy the optics in the car business, who like to talk with customers who you find that energizing all that all the kinds of things that I talked about in the book, about recruiting, or excuse me, writing good recruiting it, but not requiring too much experience and looking for the potential for that person who is capable of learning quickly and then you can mold that person in your image.

Josh: and so you're saying instead of hiring off experience, you hire off of potential? 

Jeff: Yes. 

Josh: Awesome. I thought you were gonna say the other way around because Oh, man, that's the exact opposite of how we hire. Our big thing is looking at people and saying we can teach you the skills, right, nothing that we do is really that difficult. You know, we're not, we're not rocket scientists over here and it makes it easy to hire people because we're like, do you fit culturally, are you somebody that's really wanting to become something bigger and when we hire them, it makes our lives easier, too, because they don't have their own stigma, I guess of what it should be, or what how things should be because they don't.

Jeff: bad habits, don't learn the bad habits. Yeah, and that's certainly the case for us, too. I don't envy medical systems that have to hire doctors, right, or, you know, intensive care nurses or those things require long experience but most of us are in businesses that don't, and even jobs that are pretty hard, like to be an automotive technician, automotive technicians do not get nearly enough respect for everything that they know but they can contribute meaningfully within three to six months now, they're not going to be pulling an engine out of a car in three to six months, but they can be doing that the basic services and some of the recalls aren't terribly complicated that we do so they can do those things and over time, we can grow that person while they're contributing into a master technician and those are the people who really do the amazing stuff, you know that the disassemble engines and put it back together without any extra parts leftover? 

Josh: Yeah,

Jeff: yeah. 

Josh: Yeah, that would be a nightmare that's, that's why I don't work on cars My dad is into, he builds Hot Rods, and he loves cars, I did not did not inherit that skill from him, I every time I tried to fix it, I'm like, I'm gonna be a man and do this myself, end up taking it apart, cursing 5000 times, putting it back together and bringing it to somebody else to fix it. So

Jeff: yeah, well, now that I live in Virginia, the businesses are in Boston so these things I used to just throw a set of keys to somebody to handle I've, I've got to do it, even replacing the washer fluid, kind of scratching my head saying we're looking for the cap, it's a like I said, they don't get enough respect but there are certainly things that can be learned and again, it would be a mistake, I think, for companies to underestimate how many skills they can impart in a reasonable amount of time and the benefit is you mentioned, you get people to do it your way, if you teach them you're away, you don't have to have them on learn, you know, five years of experience, or 10 years of them doing the wrong thing or the wrong procedure and I'm reminded in the US Navy, on his aircraft carriers will qualify in less than a year, late teen early 20 somethings to fire those planes off the carriers are low, the very explosive ordnance that goes on under the wings, these are really hazardous and responsible positions, the Navy doesn't take can't afford to take 10 years to train somebody to do that, they will the pilot pilots train and train and train for years before they get in the wings on their shirts but the people who are firing those planes off the decks there, they can qualify those positions last year so tell me how many positions and most companies are that hazardous to that responsible for Navy can do it in a year, you can’t. 

Josh: Yeah, just look at what they're doing, right, yeah all we do is build content for people so I mean, no, life's at risk here but sometimes you're like, man, it's not that hard, right so we've got to master our systems for sure, yeah, I love that. Well, so you want to kind of change directions here for just a minute, Jeff is I want to know like what's next for you, like, you know, you've done so many different businesses and everything, where's the next big business venture? Are you like, Hey, this is where I'm happy to see where I'm staying.

Jeff: Well, I'm, I'm blessed that the amount of money that we have coming in is more than than the modest lifestyle that my wife and I lead requires so we've been working on a philanthropy, excuse me philanthropy plan, and trying to figure out how we can use the abundance that we don't need to serve the world and I'm really excited about it, it's a little bit anxious for me, though, I'll confess, we started out very modestly, I grew up, you know, with very little, and part of my motivation for being in business was I got tired of just not having anything and then I gave up basically 25 years of my life to get to where I am and thought about nothing else, but money for decades, I'd like a break from that so I'm really not interested in opening up any more businesses, the business we have do really well and we don't have, as I said, a very expensive lifestyle so I'm really interested in figuring out how the money could be used to accomplish good things in the world so what we're focused on three areas we're looking to, for animals, we're my wife and I are both vegetarians, we're very, we're animal lovers, not in the way that we think they're delicious but we're animal lovers like, we'd like to see more of them left alone, the second area is the environment and our ecosystem, because we can see that the kind of demands that we are as a species, putting on it exceed basically the long term ability to support that kind of those demands and the final thing is people and quickly supporting people in a way that supports those first two so to the extent that like reproductive choice, and health is really appealing in the sense that we love to see mothers bringing children to the world that are really desired and intended, you know, for the people who prefer not to have children at the time in their life, never their children would be nice that everyone around the world had access to contraception, for instance. So these are some of the things we're thinking about and they're a big change from from all the things that I've spent the last, you know, almost 30 years thinking about, but it's exciting.

Josh: Yeah, it's so interesting to see when that shift happens and then, you know, like you said, where the money goes next. It's funny to me to watch how many entrepreneurs the money is a scoreboard and then when you get it, like, well, there, oh, I need that much, you know, I'd be happy, more money comes with a lot more problems, it seems like. 

Jeff: it sure does and one of the surprising things for me was how quickly I mean, when I, when I say I didn't think about anything, money for 25 years, I I'm only slightly exaggerating, and then whatever you pay off your home mortgage, and I got a couple of Subaru’s in the garage, and whatever, we don't really take fancy trips, you get to that point where you're like, Well, we haven't, we're not gonna have to worry about retirement or anything like that and all of a sudden, I just didn't care about money anymore, it was just weird, it was like, it was just a strange sensation, I think that feeling maybe arrives differently for different people, depending on the circumstance, I don't have any kids, I hear from some business owners that they have this idea that they want to leave this kind of generational wealth, which even if I did have kids, I don't think would be really appealing to me but in any case, for some people, that's a big thing so that kind of spurs them to keep building way beyond what their needs would be presently, because they want to take care of future generations, but don't have that burden so we're gonna find some worthy people to give it to.

Josh: I love that. Well, it's awesome to see that you're turning towards helping others and I love to see that happen more often, well, Jeff, I appreciate you coming on today and sharing your wisdom with us yet again, I do want to ask you, if you could give us one final parting piece of guidance.

Jeff: Oh, you know, this thing that I'm Wendell Berry, he's a poet and I love his way of seeing the world and he talked about people who want to change the world without changing the set themselves and why this is probably not a successful formula, use that expression, you know, of trying to change the world without changing yourself and the reason I've been turning it over and over my head is is that usually all the change that people want to see, they want everybody else to do it, you know, if it's political activists, for instance, without you know, identifying any parties, whatever they want to see some social change. No one says, you know, brings a placard to a protest that says, here's what I'm going to do to be a better person so that I cause fewer problems for the community, yeah, no one bring that's not the thing they bring, right, they want to change and I'm not saying that there's anything wrong with activism, I think it's a good way to help change the world but, but ultimately, we have to work we have to figure out who we are and how we're going to improve and that's probably the most valuable work we can do so I guess I'd leave with your audience the challenge to find one thing that they could do that would serve the world didn't require anybody else to do anything. 

Outro: I hope you enjoyed this episode of The lucky Titan podcast if you've learned anything from this or any other episode make sure you rate it and share it with another entrepreneur could help thanks again and I'll catch you on the flip side