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From the library of the New York Stock Exchange at the corner of Wall and Broad Streets in New York City, you're Inside the Ice House, our podcast from Intercontinental Exchange on markets, leadership, and vision and global business, the dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years.
Each week we feature stories of those who hatch plans, create jobs, and harness the engine of capitalism right here, right now at the NYSE and at ICE's exchanges and clearinghouses around the world. And now, welcome inside the Ice House.
Pete Asch:
I'm your host, Pete Asch, recording from East Lansing, Michigan, home of Michigan State University and where I'll be for the next week watching my daughter's Odyssey of the Mind team compete in the world championships. As I drove out here yesterday, I caught up with Hidden Brain's Success 2.0 Podcast series, including the episode entitled, Getting What You Want, all about achieving your goals in life.
Now, Shankar is one of my favorite podcasts hosts and an excellent interviewer, but he neglected in the episode to talk about the one important follow up question, what happens after you realize your long sought after achievement? Our guest today, Biggby Coffee co-CEO Michael McFall, was confronted with that exact issue after spending years building the coffee franchise into one of the largest in the country.
To quote him, "Sometime around 2015-2016, it became clear that Bob and I weren't going to have to worry about retirement and we're going to be able to put our kids through college." That's where he got really pensive and started to deal with the existential stuff like, what is this all about?
By complete coincidence, I was introduced to Mike and his incredible writing about the teachings that can be garnered from his journey through that existential stuff just a few weeks before I made my trip to the Great Lakes States. That means I'm recording this episode across the street from the Biggby Coffee headquarters. And as soon as recording wraps up, my wife and I will take a stroll to the location on Lake Lansing Road.
Despite there being over 300 stores across the country, I never had a cup of Biggby Coffee until this morning, as the corner of Wall and Broad is about 250 miles away from the nearest one. Whether you have a Biggby next door or not, if you're interested in running, scaling, or even exiting a business, Mike is someone you should get to know.
His first book, Grind, about starting a business has been succinctly summarized by him as "the secret to being a successful entrepreneur is sell more shit tomorrow than you did today." His second book deals with what happens when you successfully stand up a business. The pages contain his blueprint to evolve a business from profitable to sustainable for you, employees, customers, and not to be hyperbolic, but the world.
Our conversation with Mike McFall on Grind, Grow, and his career will be coming up after the break.
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Pete Asch:
Our guest today, Mike McFall, is the co-CEO and co-founder of Biggby Coffee. He began his tenure with the coffee chain that become Biggby in 1996 as a minimum wage barista and has held every position within the company.
His first book Grind came out in 2019, and this episode will be released on the publishing date of his follow-up book Grow: Take Your Business from Chaos to Calm from Greenleaf Publishing Group. Welcome, Mike, Inside the ICE House.
Michael McFall:
Thanks, Peter. It's great to be here.
Pete Asch:
I mentioned my wife and I are going to go get for me my second cup, her first cup of Biggby after this. We're going to both walk into the store and get our respected drinks together. Now that you've entered the grow phase of your career, does your wife let you go order your own cup of coffee, or do you still have to sit in the car?
Michael McFall:
No, I've calmed down a little in the last decade or so. That story goes that we used to go on trips, road trips, and I'd stop in stores. I'd walk in and I'd find 150 things wrong in the store and it would make me super uptight. You're referencing that story where she'd make me stay in the car and she'd go on to get the coffee on a road trip.
Pete Asch:
I ended my road trip with a Biggby cup of coffee and I did not have 150 issues with anything. Your new book, Grow, is dedicated to your parents. Your dad, Jim, was the entrepreneur. You wrote in Grind, your first book, that most people are entrepreneurial, but few possess the appetite for risk to set out their own.
How did his experience and watching him with his journey give you the confidence to set out to grow Biggby and what you've done so far?
Michael McFall:
Well, I watched him. I was in high school when he started his business, and I watched him do what it took. The mentality was it's not going to fail. He was in there he actually designed the machine that gave him a competitive advantage in the manufacturing space and automotive. I watched him work on that machine, tweak that machine, make that machine productive.
And then there were always the nights where I'd wake up at 3:00 in the morning and I'd see the lights on downstairs and he'd be down in the dining room working. It was this commitment to it's not going to fail. That was his mentality. I know that was his mentality, and I brought that into my world too. We're going to do it. We're going to make the decision. We're going to launch, and we're going to do whatever it takes to make it work.
Pete Asch:
If your dad inspired that entrepreneurial side, your mom, Joanne, a Michigan State University professor, she must have given you the tools to not just be successful, but now doing what you're doing with your books, teaching others. How did she inspire you and was that emphasis on not just learning, but teaching part of the household growing up?
Michael McFall:
Well, her mantra growing up was that the only measure of success for anybody was how much they were willing to contribute to improving the human condition. That was her mantra. It's been my belief my whole life and probably somewhat for my dad too was that you can do that through business. That's the mentality I brought in.
It took a while for that to evolve and crystallize for me, but at the end of the day, I do believe that business, private enterprise, is the most powerful force in the planet by about a factor of 10. We, as successful entrepreneurs, we have an obligation. We have an obligation to improve the human condition once we have gotten our businesses to the point of sustainability.
Pete Asch:
We'll talk about once you get to the business to the point of sustainability, but let's go back to the beginning for our audience. Biggby has its roots very close to where I'm sitting right now. You were going for a walk with Bob Fish, who became your co-founder.
How did that conversation that I believe started about just maybe seeing you get a single promotion from barista to maybe assistant manager or manager end up with this 25 year partnership?
Michael McFall:
I have the title co-founder, but I didn't build the first store. My business partner, Bob Fish, and his wife at the time, Mary Roszel, started the first store. I applied. I walked in and applied to become a barista. I love that job, but I was at the university on a very specific research project with a colleague of my mother's just preparing to go back to graduate school. The coffee gig was just make a little extra cash.
But what happened to me was a couple of things. One, I began to sense an opportunity in coffee, but two, I love going to work. I mean, I loved going to work, and a lot of that had to do with this hospitality mentality where you love taking care of people. I really thrived in that environment. What happened was Bob approached me about taking on a managerial role within the business.
It was this beautiful spring day and we sat down interview style at a table and immediately popped up and ended up going for a walk. We ended up four and a half hours walking around East Lansing. The thing was is we didn't know each other. I worked the open shift, he worked the closed shift at the store at that time. We didn't know each other. At the end of that walk, we shook hands and agreed to set up a new company.
It would be the company that we would use to develop the brand Biggby Coffee. The company was formed on a handshake. What happened in that walk? I don't know that I can really say. I would love to have a recording of what we talked about over those four and a half hours, but it was life. We were pretty similar people. We had this grand sense of adventure.
We had both lived relatively unusual upbringings, but we also both had unbridled ambition. I think that might have been the thing that really brought us together. We just talked about what could be possible and, I guess, in a way dreamt about what could be possible. At the end of that walk, we shook hands.
I resigned the next day to university, and I took over the assistant manager's job at store one in preparation to become the general manager of store two, which was being built at the time.
Pete Asch:
What about you and Bob make it such a great partnership? I know you wrote in Grind that he's an introvert who can keep up and be an extrovert when he needs. It's very clear from the couple interactions we had, you're very extroverted. I mean, is it simply an introvert and extrovert partnering up, or what else about the two of you make it such a great team?
Michael McFall:
Well, I'll tell you a pretty eerie story that occurred. You know the Dale Carnegie program? One of their tools, one of their exercises is you get 40 cards, all of them have personality traits on them. They take you through this fairly quick process of boiling those 40 cards down to two cards. You go for three minutes and you take it from 40 down to 15, down to 10, down to five, down to two.
It's just this process. We're in this room. There's 15 people in the room. He's sitting across the table from me. He's 10 feet away from me. Going around the room, we're reading our cards. It comes to Bob. He reads his two, they're exactly mine. It was loyalty and legacy. We're both extraordinarily loyal, like loyal as dogs, and then we both want to leave an impactful legacy.
We match up really well. But then also from a behavioral standpoint, he does things... And this is how we talk about it. One, he's very, very good at taking something relatively simple and making it amazingly complex by looking at it from every angle and thinking deeply about whatever that is and coming up with every possibility, every eventuality. I'm good at taking the complex and making it really simple.
The two of us work incredibly well together. He makes me slow down. He makes me think. He makes me go through analysis and so on. But then at the same time, I bring a sense of urgency to engage and execute. It's been magical. I mean, on top of that, he's just a really good person. I guess we just got lucky in that way. I mean, he's just a really good person. It's been magical. It's been 26 years together.
The amazing thing is I was honored last week with a lifetime achievement award in entrepreneurship and I was like, wait, I'm just getting started. What do you mean lifetime achievement? But we both have that mentality. We always feel like we're just getting started. Right now we're at 350 stores. We just eclipse that number and it's like, okay, now we've got a solid foundation. Now we can build something super powerful.
Pete Asch:
We've been talking actually on this podcast a lot about packaging, and in the book you used a corollary of physical space as a message. When you walk into a Biggby, whether here in East Lansing or anywhere of the other 350 locations, what do you want the customers and employees to get from that physical space of walking into that store?
Michael McFall:
We want it to be opening and inviting. We want people to feel comfortable. What we've done with our brand... By the way, that's a really great question that we've spent a lot of time on over the years. The idea is, is that our brand, where we want our brand is we... In the coffee space, you have the Starbucks, the Intelligentsia's, the Blue Bottle's on one end of the spectrum. I would say fairly pretentious brands. Great brands, but fairly pretentious.
And then at the other end of the spectrum you have the McDonald's, Dunkin' Donuts, and so on. What we're trying to do with our brand and our physical space and how we name things, so internal brands, drink names and so on and so forth, is we're trying to split the middle on those two polar opposites, and so that we can pull from either side of that spectrum, so we can pull from somebody that's going into Dunkin' Donuts or McDonald's every day and getting their coffee or somebody that's going to Blue Bottle or Starbucks.
And then we try to do that with our physical space as well. We want it to be upbeat, energetic. We want people to feel comfortable, a place that isn't intimidating in any way. I remember early on in my career here in coffee, here's my mom, incredibly accomplished, very, very smart, brilliant woman, and she told me one time she walked into a coffee shop in East Lansing and she felt intimidated because she didn't know how to say cappuccino properly or she didn't know what a latte was.
Wow, here you have somebody who wants to spend money in your place, they walk in and you make them feel intimidated? That's crazy. There is that arrogance. It's not as much anymore because so many people now know the product and so on, but back in the day, people didn't. We never wanted that moment for a customer. We always wanted the customer to feel invited to come in, comfortable being there, and so on.
Pete Asch:
Along that process, you're writing and talk a lot about the collaborative process that you use at Biggby. How do you incorporate feedback from customers and your fellow leaders and employees into your decision making process without losing the vision you and Bob have for the overall company?
Michael McFall:
Well, when you work hard to get everybody to understand the vision, it becomes theirs too. That is what we try to do was we try to get everybody... When we created our vision for the organization, there was a lot of people involved in that. That wasn't just Bob and I sitting down at a table and scratching it out. The whole process, our purpose, our vision has been collaborative.
So then when you bring the people that were involved in all that into any kind of a decision making process, they should be well-aligned in theory, right? That's the idea. I make that sound like that's always been that way. I mean, the transition he and I have gone through from autocratic, maniacal, obsessive entrepreneurs to where we are today has been a long journey and that is essentially the topic of my second book, Grow.
Pete Asch:
Yeah, I read an article I think from 2017 in the Detroit Free Press that said you were drinking 14 espressos a day. It sounds a little bit more of the chaos period, but I'm across street from your headquarters. You have 350 locations.
How do you use that space to bring a unified message? Are you having your franchisees come in to use the test kitchen there? Are you going out to the field? How do you maintain that connectivity as I think you have stores as far as Virginia now from your headquarters?
Michael McFall:
Well, I mean, this might be too granular and just stop me if it is. What we've created is a model built off of the Subway sandwich shop chain, and what they had is they had development agents around the country. What happened was we had a longstanding relationship with Fred DeLuca, 10 years, where we were negotiating his purchase of 50% of our company. In that process, we got to know a woman named Lisa Oak very, very well.
She ran his private equity fund of sorts, family office, and they made investments in franchise companies and other stuff too, but she ran that franchising piece. At the end of the day, we didn't get a deal done with Fred. We had a purchase agreement to the letter agreed upon and we were waiting to sign it and he passed away. We never got that deal done. Fast-forward, we hired Lisa Oak, who left the company when he passed.
We hired Lisa Oak to become a consultant for us to develop and build the structure that Subway had, this DA structure. We said to her, "We want to build that exact model." She came in and she built that. And then amazingly, it was an incredible moment when we hired her to come in and be our chief development officer. When you hire one of your top five mentors on the planet, it's a strange feeling, but she's been great. She's amazing, but she came in.
What that structure is, is you have successful franchise owners in remote geographies, and actually they're not even remote geographies anymore, they're pretty much everywhere, where they have a geography that they are responsible for developing. They work with prospective franchisees. They help open the stores. They find the real estate. They coach and mentor the franchise owners after they're open. And then there's a royalty split.
They get one-third of the royalty, we get two-thirds of the royalty. That was developed because we felt like we were losing the connectivity to the franchise owner in the store. What we wanted is we wanted an experienced, well-heeled person, leader in each geography there representing us, aligned with us from a core values and purpose and vision perspective, coaching the local owner-operator.
That was, I mean, a long answer to that question, but that was a huge transition for us because we knew we were losing that connectivity. We were losing it. By having the we call it area representatives, the AR, in place allowed us to support that franchise owner better, and then developed the relationship with the AR, and then therefore the franchise owners.
Pete Asch:
As you were writing that book, as you're thinking about the model, as we're going back into the history of Biggby, was there anything that you would change from Grind of the advice you gave to entrepreneurs that may have come out of a good place in terms of where your head was in this hectic maniacal grow phase, but now that you're looking back on it, you'd want to maybe edit those pages?
Michael McFall:
No, I haven't. That's a great question. I just got done recording Grind in an audio format. I just read it in detail, like every paragraph six times, because I'm terrible at this. No, I read that book again. There's a few things that I would change how I wrote them, but the fundamental premises I still strongly believe in. Here's why I wanted to write this book series the way I wrote it is that you're a very different person in the startup phase, and you have to be.
And then you transition into the bootstrapping entrepreneurial phase, but then you've got to transition into a leader of an organization. And then ultimately, at the end, the second half of the grow phase is transitioning from that primary leader in the organization through to what I call irrelevance, where the entrepreneur can get run over by a bus and the organization will continue to thrive.
I've always really struggled when I give talks to entrepreneurs and so on because my mentality today is very, very different than what it was in startup. Could I take my mentality today and go back into startup and do it again? I don't know. We talk about this all the time internally. Does it take that maniacal, obsessive, autocratic person in an organization at startup to turn it into something that eventually becomes successful?
I think so. I mean, in many ways, I believe that. I think you have to dial the knobs around on being autocratic and maniacal and so on. You can't be unhealthy, but it's that obsessiveness that I don't have today. I don't have that obsessive approach to my world, to my work anymore. I did then, and I actually think it was probably necessary then.
Pete Asch:
In our 350 so episodes of this podcast, something we've often come across is that there's companies that have the founder CEO through IPO is the way to go, and then there's just as many companies that the founder CEO needs to step back because they can't lead a publicly traded company or a scaled company. With Grind, you captured that essence of you, and then in Grow is the current you.
When you send it to me, I couldn't help but notice that that Grind is about half the size of Grow. Tell me about that process. You're written Grind. You've been doing lectures. You're doing lots of talks about it, podcasts. But when did you realize, wait a minute, I have not only something else to say, but I have a lot more to say about this topic? How did you get set about to go write Grow and begin which I believe now will be the second of what is at least three books that will be coming out?
Michael McFall:
It started as one book, and I realized early that that book was going to be way too much. My first glance, I broke it into four books. Grind was the first one. Grow, at the beginning of the project, I designed it where it was going to be two different books, one on being a good manager, and then one on being a good leader. Frankly, I just got impatient. I was like, I can't wait to write two more books.
Because ultimately the third book in the series after Grow is the book I've always wanted to write, but I really felt like I needed to write the first two to build a foundation so that maybe people will pay attention to my message in the third book. The message in the third book is a call to action.
I hope I'm building my chops in the world where when I go to write that third book, when people read it, I hope I can begin to have an interesting and powerful conversation in the world about the responsibility of successful entrepreneurs.
Pete Asch:
We'll talk about the second book, and then we'll get into your vision for the third book in the second half. But as we head into the break, you've spoken often about your goal to one day own the Detroit Red Wings. Fellow Michigander and past podcast guest Matt Ishbia recently became the owner of the Phoenix Suns.
You write about Matt in the book. What did he teach you about creating a workplace culture and would you ever consider taking a page out of his book and buying a team across the country if that was the only option for you?
Michael McFall:
I don't know. I've thought about that. Let me have that problem. Let me have that struggle someday. Matt's incredible. When you meet Matt, Matt's a real powerful force. I was very fortunate to sit in a group where he spoke about his culture. I loved it. I loved it. He's got a lot to teach. I wish he did more of that kind of thing. I really do because he's a great leader, and what he is built is obviously his proof of that.
But would I ever buy? No, I don't know. I mean, for me, I'm just a loyalist. No, I'm getting pretty deep into hockey these days, supporting youth hockey, and I have a tier one franchise that I'm sponsoring here in Michigan. We're getting pretty deep into hockey. At the end of the day, it probably is more about the sport than it is that one particular team.
But boy, it would be hard for me to own another team and have them show up to play the Red Wings.
Pete Asch:
You mentioned owning a team. Do you still play? Are you still going out there?
Michael McFall:
Yeah, oh yeah. Yeah. My team's been together... My second year at Biggby I joined the team, so that's 25 years ago and we still skate together. Both my brothers play in the team. These guys are my best friends. Yeah, I still play. I play twice a week now.
Pete Asch:
You also write a lot about all about your athletic accomplishment as well, but your golf game, is it still negative one par? A lot of hockey players retire and become pretty good golfers.
Michael McFall:
Yeah, no, I'm terrible. No, I mean, when I tell you about my athletics, I was just good enough in the two sports that I played, hockey and golf, to realize I wasn't very good. When you see the people that can make a living at it or you get close to the people that are playing at the highest levels, it is incredible how good they are.
Pete Asch:
It's funny you say that because actually you talk about in the book a conversation you had with your own daughter. How do you both balance being supportive and encouraging, but also honest when giving feedback, whether it's an aspiring manager or your own kin?
Michael McFall:
To me, it's about authenticity. The culture of amazing is something I talk a lot about, where everything's amazing. The problem is is when everything's amazing, I mean, you know... Let's take for example, you're going to give seven talks in a row over a month. The same people come up to you after every one tell you, you hit it out of the park. It was amazing. "That interview you did, Peter, was amazing," and they tell you that every time. Well, you know you're not amazing every time.
What you want is you want the real feedback. And then when somebody does tell you it was amazing, you believe it. That's the baseline in terms of you engagement. There's a difference between being supportive and nurturing than there is with the... When you're giving feedback, that may be different than being supportive and nurturing. My daughter knows I love her. She knows I support her. She knows I'm nurturing. Well, that's a baseline, but then there's feedback.
All the feedback can't be positive and encouraging. Sometimes the feedback has to be you're not that good. You're not good enough for this family to spend seven out of 13 weeks on the road for you to travel and play volleyball. You haven't made the commitment to the sport yet. The end result of that was amazing because after that she did commit. She did become a much better volleyball player, and she plays at a high school here in Ann Arbor that's a really competitive...
It's got a really competitive volleyball program. That was an amazing conversation with her. I think she appreciates it. I'm not sure exactly, but I think she does.
Pete Asch:
I have a feeling if she's like most teenagers, she'll appreciate later on. Right now maybe can't take it all in.
Michael McFall:
I hope so.
Pete Asch:
After the break, Mike McFall, co-CEO of Biggby Coffee and author of Grow: Take Your Business from Chaos to Calm. I will discuss his new book, which captures the skills you need to transition from startup entrepreneur to business leader of a growing sustainable company. That's coming up right after this break.
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Pete Asch:
Welcome back, before the break, I was talking to Mike McFall, author of Grow: Take Your Business from Chaos to Calm, about his career in building Biggby Coffee. Laura wrote the introduction to Grow. I assume that's Laura Eich based on the context clues from the intro. She talked about your evolution from a stone... You talked a lot in the first half about being a foundation to a tree.
At the New York Stock Exchange, we also use trees a lot. We are found underneath a buttonwood tree, and we use that to reflect our ever-growing community, but also our commitment to sustainability. Can you talk about Biggby's sustainability efforts?
Michael McFall:
Right now it's probably the area of the business that we have the most work to do. It's something that we're blaming and we're making the excuse that we're a franchise company, that we have a lot of local owner operators that all have varying opinions and so on on environmental sustainability and also how we should go about it. Well, that's an excuse for a lack of leadership in that space, and I know we are lacking in that space.
I mean, we've tried to do some things that we... Bob and I put money behind a movie called Beyond Zero, which is a movie about interface carpets, which has been a real huge success, and it really tells the story about getting better at managing your environmental impact. But I wish I had a better and more powerful answer. We have a group that's working on it.
I feel like we're taking these incremental steps and that we're not being powerful enough, and I feel like we need to make a real commitment to dramatic change there. We'll see. I mean, we talk about it a lot and we know we have to work on it, but I would say it's probably the area of the business we need to spend the most time on.
Pete Asch:
Grind talks about having an exit strategy from the start where Grow talks more about the decades you have left in the company. 25 years is not a lifetime achievement award as we were saying in the first half. How has your understanding and the use of the phrase due diligence evolved between the two books, and how do you view that as a personal growth methodology?
Michael McFall:
I think if there's one original concept that's a theme in both books, it is this concept of due diligence, and that people do enormous amounts of due diligence in relation to or before starting a venture. They analyze the market. They analyze competition. There's a million things that people study in relation to business, but they leave out, in my opinion, the most important variable, which is doing due diligence on yourself as the entrepreneur.
You are the most important ingredient to the success of your future enterprise. Do you understand how you are going to impact that business, what your strengths are, what your weaknesses are, what strengths you can leverage, what weaknesses you need to supplement? To me, it isn't about determining whether you should or shouldn't.
What it is about determining is how your behavior as a leader is going to impact the future success of that business, and then making sure that you counterbalance that. Same as a leader, same concept as a leader. I've always thought that... There's a VC firm here in town, very, very successful. They leverage the university here in Ann Arbor. The gentleman that runs it talks about how when he gets involved with companies, for him it's more about the behavior and execution of the person, the leader.
He tells a funny story about how he'll back one company, they'll go through, they'll exit. That same leader will come back some number of years later with a concept. He knows them better now. He's more enthusiastic. He'll back that leader again, and then they'll exit. He said before that person sits down in the chair with their third idea, I've got my checkbook on. I'm ready to go. He goes, I don't even know what they're talking about.
I don't even care. I believe in that leader. They've done it twice. They've been successful. They've built teams. They've been able to exit. It's not about the idea. Whenever I have the opportunity to talk in front of entrepreneurs, I talk about the myth of the million dollar idea. So many people think that the idea is what's important. Execution is what's critical, and you as the leader of the enterprise are critical to that execution.
Pete Asch:
And that stuff is something you cover in your books is the due diligence on yourself and you offer readers a very honest look at yourself. For example, on page 99 of Grow, you paint a honestly bleak picture of a very toxic work environment masquerading as a plague around.
When did you realize that there was a disconnect between the office decor and the workplace expectations, and how do you help other leaders realize that a keg in the break room isn't going to really solve real issues?
Michael McFall:
How it went down was you mentioned that really powerful moment in 2015-'16 when Bob and I were losing inspiration in the business. We had a successful business on our hands, no doubt, but we were lacking. We didn't want show up as much anymore. We didn't want to be engaged. We realized we didn't know why we wanted to grow the business. Long story short, we call it, it's the shaman in the woods story.
I went on a camping trip and I met a gentleman in the middle of nowhere who was a consultant in the stakeholder capitalism space. I presented my card. He came and talked to us. We went through. We did a stakeholder assessment survey, so he evaluated all six stakeholders in stakeholder capitalism. We were doing reasonably well in five, we were failing miserably in one. The one that we were failing in was our own employees.
And so then with that, he came and said, "I want to do a study. I want to dive into that stakeholder." And so we did, and he did an in-depth survey study of our employees. I got that report on a Thursday night. I didn't open it. I waited until Friday morning. I opened it. I read it. And at the end of the day or at the end of reading it, maybe an hour later, I had tears coming down my face.
I couldn't believe that I was the kind of person that was managing a business or the people that worked in that business were talking about it the way they were. It was awful. At that point was the turning point for us. Our consultant, Nathan, told us he thought we should get up in front of the group and read the results of the survey word for word and then make a commitment to change, make a commitment to improve.
That's what we did, and we've been on an amazing powerful journey since that moment. It's nowhere near complete, but I'll tell you what, I love managing the business today. I love being involved in the business today. I love the people in the business today. It's just a totally different reason for being. We found our purpose. We agreed upon our vision, and that's what we're up to. That's what we're doing.
Pete Asch:
How does that physically manifest? I mean, particularly coming out of COVID, a lot of conversations about what does a workspace look like, remote, in office. What are you considering and what should other CEOs consider about the physical office space before enacting policies?
Michael McFall:
I don't necessarily think that one approach is different, or I'm sorry, is better than another. I think remote or in-person can all work. The key and basically the premise of my second book is you have to build an environment that's supportive and nurturing and loving for your people. Some people think that's harder to do in a remote environment. We'll see. We're trying really hard.
But the concept is, is that in order to build a high performing team, which is what we all want to do because high performing teams will get amazing results. To build a high performing team, it starts with safety. The team members have to feel safe. They have to feel nurtured. They have to feel supported.
Now, whether you do that in person or you do that through the remote technology, that's what we have to be striving for, and that is, in essence, the primary premises of Grow.
Pete Asch:
You mentioned that you feel like due diligence might be one of the big novel things you come from the book. For me, what really stuck with me is this idea that the opposite of integrity is not dishonesty but fear. Can you talk a little bit more about that and how fear can affect a company from top to bottom?
Michael McFall:
Well, I mean, fear has been the baseline in leadership and management for a long time. I believe that great leaders throughout history built environments where there wasn't fear and that's how they had amazing results. That's how they had performance. In order for somebody to feel safe, you have to have integrity both as an organization and as a leader.
If anybody in the organization sees you acting outside of integrity in relation to the core values and the purpose of the company, they don't trust you anymore. And without trust is fear, and fear is corrosive. Fear and anxiety get in the way of people performing at a high level because they don't feel safe in taking risks. They don't feel safe in challenging.
When you're a leader, it is absolutely critical your people feel comfortable challenging you and telling you you're wrong. To me, integrity in building that environment where people feel safe is absolutely the core component to building high performing teams.
Pete Asch:
One of the ways you, you've recently used to perform well at Biggby is this entrepreneurial operating system, and you talked about it in the book as one of the list of modern inventions up there with some of the more I'd say mainstream ones.
Can you talk about what it is, its implementation, and also how that really captured the need to trust experts if you're ever going to transition from a grind to grow mentality?
Michael McFall:
We got introduced to EOS. We hired John Gilkey as our president, and he came out of a vendor. He owned a company that was a vendor of ours in the technology space. He sold that, and I worked them for two and a half years after he sold it too to come in and help us run the business. He brought EOS with him. He introduced us to EOS. I've got a huge debt of gratitude to him for that.
EOS is the entrepreneurial operating system, and it gives you a methodology, an operating system, for the process of going from today to your strategy. It works the organization through a quarter by quarter basis of achieving your one year, your three year. And then it also does an amazing job of communicating.
That's probably the most powerful piece of it, is that you have this broad based communication within the whole organization so everybody knows what the organization's up to. And then on top of that, everybody knows what everybody else is up to to support where the organization is going. It's magical. A guy here in Detroit wrote EOS. He actually wrote it in Biggby, which is amazing.
He has since sold it. He sold it to private equity. It's very powerful here. I don't know exactly the scope, but I know Minnesota is probably the most powerful state with EOS at the moment. Michigan is huge. It's very common in Michigan to talk to somebody and say, "Are you an EOS company," and they're like, "Oh, yes. Isn't it great?"
To answer the second part of your question there, we also brought in people who were an implementer, someone that was a consultant where they walked us through executing these tools and this process I think for two straight years, and then we branched off and started doing it on our own. It's been remarkable. For years, we didn't use third parties. I mean, we just didn't do it.
One, we felt like everybody was too expensive. And two, we always felt like we could do it better than the third party. The problem is, is those two things are in conflict. It's too expensive because the pros are expensive. You don't want to spend the money on the people that actually know how to do it the right way because they're too expensive.
We were able to get through that mentality, and a lot of that had to do with the fact that we had money to spend on outside consultants and parties to work with and so on. EOS, working with outside consultants was one of the things that cracked the code for us in terms of working with third parties because it was incredible.
Pete Asch:
I was going to do a little sidebar. You've mentioned a couple times that some of the VCs in this area. My colleague John Tuttle would be offended if I didn't hammer home this point. What is it about this state and this area that is nurturing these businesses and a little bit under the radar too of what we're seeing with Silicon Valley and New York and Atlanta and places like that, and how does it stack up?
Michael McFall:
Well, Michigan's an interesting place. I mean, Michigan was the core of one of the largest industries in America ever, right? I mean, the automotive industry. I grew up in a space where almost everybody was an entrepreneur in the automotive space. I shouldn't say almost everybody. A lot of my friends' parents and so on were entrepreneurs in the automotive industry.
That industry did spur an enormous amount of entrepreneurs, built an incredible amount of wealth, and so on. We've got two major research institutions here in Michigan, which I think that the VC firms just feed off of these ideas, the commodity, the engineering schools, and so on. But Michigan is a... But it's also just an incredibly beautiful place.
I wish you could take some time to go over to the lake and get up North. I can't imagine you will, but it really is truly a spectacularly beautiful place.
Pete Asch:
Well, I definitely plan on spending some time exploring it this week, and particularly Detroit's gone through this metamorphosis over the last couple decades as that core industry has changed. You talk about the future of a successful business as a super organism of innovation, the hot topic right now, AI.
What role do you see AI playing in the process of creating this super organism and innovation, and is that a technology that you're thinking about using at Biggby?
Michael McFall:
Yes. I teach here at the university and a student of mine is deep into blockchain and decentralized autonomous organizations and this whole new genre of how shit's going to work, right? It is so powerful. It is so incredibly powerful for me understanding the true basis behind blockchain technology and the power of decentralized autonomous organizations and AI.
I think the key is I look at it as an opportunity. I look at it as this is going to be amazing and powerful. Here's my take. You can be scared of it. You know what? Who knows where it's all going to go? But if you're scared of it, you certainly won't take advantage of the opportunities it's going to bring to you.
As leaders, I'm just trying to keep up as best I can and really try to stay on top of these new technological mechanisms that offer us real opportunities. Do I know how AI is going to impact our business, and how we're going to use that to take care of the customer better, and how we're going to be become a more innovative company because of it? I can't tell you right now.
We have people in the organization that are working on that and are skilled, like John Gilkey. Like I told you, he managed the technology business for 22 years. He's really well-versed in this stuff. I remember the first time, I'd never even heard of ChatGPT, and he pulled up on his screen on a Zoom call. He pulled up on his screen and he starts worrying this thing.
This is before I'd ever even heard of it. It was a while ago. It was like, oh, this is magic. I just think that that leaders, especially leaders like me, 50 plus, we got to keep looking at these things as real opportunities.
Pete Asch:
Definitely. And also, as you mentioned, not being afraid of engaging so you can help shape them. One of the parts that you write about is this idea of swarming creativity, which whether you're talking about the inputs into AI or running a business requires a diversity of thought.
Can you talk about some of the ways that you're using a justice, equity, diversity and inclusion approach at Biggby to bring new perspectives into decision making, whether about AI or just how to run the shop day-to-day?
Michael McFall:
Yeah. Well, the biggest one is two fat rich white dudes aren't running the minute-to-minute, day-by-day anymore, and people need to acknowledge that it does... If you've got two 50, 60 year old white dudes running the organization, calling all the shots, that both came from privileged backgrounds, that right there, the bias there is extraordinary. We need to acknowledge that.
I was up for a trustee position and I thought I was a no-brainer for it. I didn't get it. I don't want to out the organization, but the leader of that organization called me and said, "Mike, there was no way in the world we were putting the 'fat, rich, white dude' on the board." People have asked me whether that upset me, and I said, I love the organization more because they were willing to do it, and they were willing to tell me, they were willing to say those words.
Cool. Amazing. My affinity for that organization has gone up because of taking that approach. Everyone has bias. I don't care who you are, everyone has bias. It's not about getting rid of bias. What it's about is getting people around the table acknowledging, engaging the bias, and then working through decisions where they can get to an agreement when their biases collide. That's what it's about, and being okay with bias.
Utopia would be nobody has bias. That's never going to happen. But what we have to do is make sure that we're getting as many diverse perspectives around the table with as many biases as possible. At the end of the day, the decision making we make incorporates all of that into the end result, instead of what historically has been a bunch of white dudes, privileged backgrounds, sitting around thinking they're smarter than everybody else.
They're not. If that's shocking to you, you're a dinosaur. You know what? If saying that out loud has any kind of like... If that resonates with you in a negative way, in any way, it's like, man, you're a dinosaur.
Pete Asch:
Well, as we wrap up, to put a positive spin on sitting around and thinking about stuff, I believe you're writing your third book, which I believe is going to be called Grace. How are you using Biggby's sabbatical policy to continue to explore this conscientious capitalism, this diversity of thought that you first encountered, as you mentioned, with Nathan around a campfire?
Michael McFall:
Well, the sabbatical is something that we believe the biggest gift you can give somebody, the biggest gift you can give an employee is time. That's what the sabbatical's about is take three months and go do whatever, and you get paid in full for those three months. It's our gift to help you as an employee explore your passions, explore maybe a new way of living or a new way of doing things.
That's the sabbatical. We absolutely love it, and we found that it's a powerful force in the organization when people have to rally around somebody going on sabbatical. People get to step up, take different kinds of opportunities and have different responsibilities. And then the person comes back from sabbatical and they've got a clean slate.
They can enter the world and really take a good long, hard look at what's the most powerful way for me to impact this organization? What should I be doing for the next year to have the most positive impact? The sabbatical has been a really powerful mechanism in our world for a long, long time.
Pete Asch:
You wrote Grind. You wrote Grow. You're working on the third book now, which is really, as you mentioned, embracing this conscientious capitalism. Just as a preview for our listeners, you still need to go back and read the first two books to be clear. How are you basically replacing profit with purpose? And does doing that limit either side of that equation?
Michael McFall:
Peter, that's the million dollar question right there, and I'll sum it up with... Our purpose is to support you in building a life you love. If you interact with our business any way, our purpose is to support you in building a life that you love. Our vision is to improve workplace culture in America, to build better workplaces that are supportive, that are nurturing, that are loving.
I was on a podcast a month ago or so, and we get to the end of the conversation. The host asked me, and I appreciate his honesty, he said, "Mike, do you really think that you can do this loving, supportive, nurturing stuff and build a billion dollar brand?" Because that is part of our vision is building a billion dollar brand. I said, "You've got that exactly wrong."
I said, "We are going to build a billion dollar brand because we're building loving, supportive, and nurturing environments." Because you want to build a supportive, nurturing environment, the team will perform at a higher level than it ever would've, and the results from a traditional business metrics perspective will outperform.
There's case study after case study, books written about that, that when you live in this space of stakeholder capitalism and you're making the six stakeholders equal amongst each other, the business performs at a higher level financially, even though it's not only about the stakeholder. That to me is the transition that we need to make.
We need to be making these investments. We need to be doing these things, and we'll see that our organizations will become more powerful.
Pete Asch:
Well, one of the ways you write about becoming more powerful and changing your thought and going deeper is to read broad and deep. Final question, less combative than the one you just mentioned, what are you reading right now and what are the final thoughts you want to leave the audience with?
Michael McFall:
I'm actually not reading at this moment because my book launches next week, and I've been probably three or four months into preparation for that, trying to record the audio version of the books. And then I'm also developing a keynote to get out in the world and talk about all of this. All my creative, all my time, everything I've got going is into those three things. I read Willie Nelson's biography.
I think that might have been the last book I... Anyway, extraordinary. If you want to talk about a story of somebody who stuck with it and went through all kinds of opposition and difficulty and so on to become the legend, Willie Nelson, it's a great read. It's one of my points in my book is we can't just read business books.
There are so many lessons to be learned from somebody like Willie Nelson, like Nelson Mandela, like these extraordinary people. I try to read more broadly. I don't really read fiction. I do stick to leadership management books and then a lot of biographies, and sometimes I'll venture off into some other stuff, but right now my life is pretty much wrapped up with output, not input.
Pete Asch:
Well, we'll let you get back to that output, and we'll see you in about a week, week and a half in New York for that book launch. Thanks so much, Mike, for joining us Inside the Ice House.
Michael McFall:
Thanks, Peter. It's been great.
Pete Asch:
That's our conversation for this week. Our guest was Michael McFall, co-CEO of Biggby Coffee. His new book, Grow: Take Your Business from Chaos to Calm from Greenleaf Publishing Group, is available now wherever you buy your books. If you like what you heard, please rate us on iTunes so the folks know where to find us.
Got a question or comment you like one of our experts to tackle on a future show? Email us at [email protected] or tweet at us at @icehousepodcast. Our show is produced by Josh King with production assistance and editing from Ian Wolf. I'm Pete Asch, your host, signing off from Michigan, home of Biggby Coffee and John Tuttle. Thanks so much for listening. Talk to you next week.
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