In this irrepressible episode, Daniel Marcos, co-founder and CEO of Growth Institute, shares the wisdom he’s gained in building a several hundred million dollar business in 4 years, losing it all in his next venture, and going on to coach and impact hundreds of thousands of entrepreneurs and C-Suite leaders.
You will discover:
– The difference between the leaders you have and the executives you need
– How to know if your leaders can make the leap so you can take your organization to the next level
– The number 1 hindrance to scaling your organization
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome. Welcome once again to the secrets of the high demand coach podcast and I am here with yet an unbelievably high demand coach that is the one the only Daniel Marcos. Now he is the co founder and CEO of Growth Institute, the leading online executive education company for C level executives at fast growing firms. It has with it has over 550 5000 Sorry, members from 11,000 companies across 70 countries. And Daniel is a keynote speaker. He’s a columnist for Inc Magazine and a CEO coach with a mission to help 1 million entrepreneurs to scale their impact and reduce drama in the process. And so Daniel, I’m so excited to have you here. I’m just fascinated by what you guys have built over at Growth Institute and can’t wait to dive into that. But I want to hit rewind just for a second to start us off here. Tell what’s your story? How did you end up getting into the coaching consulting world? And why did you ultimately choose to make the leap and found Growth Institute?
Daniel Marcos
Thank you Scott, really appreciate that. Thank you very much for the invitation. And by the way of saying hi from Tampa, sunny Tampa. I’m here to do a keynote that I did this morning. I’m so sorry for the bad and everything all the back. So everything started 25 years ago. I’m 51. Today I was more than 25. When I started the first FinTech company in Mexico, finances were were the first one to put financial information online, in the internet. And we very early partner with an Argentinian Brazilian entrepreneur. We grew up on there, the Argentinian brand that was really the acquirer. And the three of us we went to JP Morgan raised $53 million dollars. And then off to the races, we build a toy 1200 People company, corporation, nine countries, and then sold it to Santander, almost a devaluation of a unicorn, back in 1989, and 2000. So you will see, you will see a huge success back then. And that kind of put me in a different seat. So intrapreneur, I started at 25, I left at 29. Two years after we sold it, I stayed for two years running division and then left. And that really helped us what he was fast growth and all the drama and everything that happens with US growth. And of course, I had to learn from the best. So I start reaching out to the best business leaders all over the world when they met a lot of the people that too, they are my faculty, the growth is heated. After that, I thought I knew everything I drank my own Kool Aid of success, I believe what he was on the magazines, and I came to the US build a mortgage bank. And I had a subprime mortgage bank to finance homes for undocumented Hispanics in 2007. And you have to imagine what happened. He was he was not pretty. So he was he was really, really bad. They lost all the money that had built on the first one, and then ended up with over a million dollars in debt. He was bad, he was really, really bad. So I got a lot of calls from people back then. And one of them was word Harnish, the author of scaling up and neither of you that I started with Bernie in the past, I took a program with him, called birthing of giants at MIT, and called me and said, Hey, what are you going to do? And I was depressed, and I cried on the call. I was not a good spot in my life. And he said, So what are you going to do? And I said, I need to go back to Mexico to get a job. And we remember it took us eight US was in pretty bad shape. So me as a foreigner, get a work visa and everything else was stuff. So I said, I’m gonna go back to Mexico and get a job just to put food on the table for my kids. And my wife. And Verdun said, no, no, become a coach. And I was like, No, you’re crazy. I cannot even be an entrepreneur myself. I don’t trust myself to be an entrepreneur. Wow. And you go to other entrepreneurs. And he said, That’s precisely why. Because you went through such a hard process, they have to make sure it does happen again. So start coaching other CEOs. So it does happen again. And I said, Ron, I’m sorry, I can’t pay me really to get a job. And he asked me after that. He said, So how are you going to pay the million dollars that you owe? And I will have no idea, like the salary that was going to get was to put food on the table. But I couldn’t pay a million dollars of debt and interest. So he said, Why don’t you coach on the weekends. And without money, you pay your debt, as it sounds great. So I started coaching on the weekends, and six months into it. I wasn’t making more money on the weekends, that during the week on my job. So I was saved to my job become a CEO coach. And I’ve been coaching CEOs all over the world for 15 years now. And then four years after this. I was paid my million dollars plus interest. I was living a very comfortable life. I was doing great, but I was Traveling like 250 nights away from home, or giving coaching or consulting. And then my wife got pregnant again, or we wanted to have another baby, our second child. And my wife said, Okay, great. So when are you gonna stop traveling? And I was like, What do you mean? That’s what I do. And she was like, you want to be a dad? Or you want to be a consultant? You can not do both. So I said: okay, great. So I went to work and said, Vern, I’m done. I’m resigning. And he was like, how are you resigning? Like, you’re making more money than the coach in New York. I will see loved America coaching in Mexico and Guatemala and El Salvador and all that, and making more money than the average coach all over the world. And he said, What are you gonna do? And I was like, I need to do something different. Because I need I want to be a father and have a family. And I, I love what I do. So I’m going to bring it all night. So he said, Okay, do it in Spanish. Let’s see what happens. And then we’ll say we’re doing English. And I started bringing scaling up in Spanish. And he was huge success. And Vern got super excited. Okay, let’s do it in English. And let’s border over unlike co founder or VC to around 12 years ago, and we’ve been helping a lot of companies implement not just scaling up many other methodologies. After Vern, we sign up to upgrading and Greg him of business and solutions via Willie. So, Marshall Goldsmith, conscious capitalism, Russia sold out, we have over 120 faculty, instead of being Tom Peters, and the rest, it’s been a great way. Right? A lot of fun.
Scott Ritzheimer
Well, I mean, you’ve got some you’ve got a star studded cast in the business, especially in the coaching world. How do you how do you get that many people who are arguably competitors? How do you get all of them working together to help serve the the C suite executives in your program.
Daniel Marcos
So we believe that cooperation, it’s better than competition. So we say we help you come to our community, and promote your brand, your content, and what you teach. And we really believe it goes, well, we believe scaling up, it’s a very important part, but he’s not everything. As an example, in scaling up, we have a decision of people. And one of the biggest problems we’ve seen people is top ready, how to hire. So we call Brad smart on top rating and said, Hey, let’s build a class on how to hire because we could not fix a team if you don’t have good leaders, right? From hiring them. Then we called Marshall Goldsmith that said they now we have all these leaders, they need to be better leaders going to class with you. We have a class with Salim Ismail, as an example from XYZ organizations. And we will tell him, it’s a great now that you implement scaling up Nike needle, all this innovation and technology and everything on the top. Why don’t we promote px? What’s the next level. And that’s the way we put it together? We believe you need a village of gurus to grow your company. And our job is that village. So that’s what we mean by all kinds of thought leaders to our platform to collaborate on code together. And we really give a platform for the CEOs to choose what’s the best methodology and how to put it together?
Scott Ritzheimer
Yeah, I love that. So I’ve got this question for you. And I think of all the guests I’ve had on you the best one to kind of lay it out for us. But one of the transitions that a lot of my clients who are scaling up are going through or are moving from what I would call a leadership team to an executive team. There’s just there’s a different type of person and the the burning question, I just got off a call with someone who’s asking the same thing is I my people going to make it right? Are they going to be able to take a step up? What’s the difference? So we’ll just lay this out first, what’s the difference between like a high caliber executive and, and kind of the leaders that we tend to have around especially early in that scaling and growing phase?
Daniel Marcos
So I’m gonna take a little bit of time to answer because not that long a simple conversation. When you start a business, you hire generalist, and then you have to go to specialists. And then you hire a generalist that is able to do everything you can they kind of start growing because you trust them, they’re there, you sell them things and they start catching them. But then you need a specialist that he’s really, really good doing something. And that person does have a capability to that one, too. You usually hire people that start with you very early as an executive, and then becomes a manager and then a CEO or leader or a VP. And they don’t have the tools to be on the C suite. They’re very good at doing something they have a great attitude, but they have no idea how to run a p&l, how to hire how to fire how to negotiate a lot of tools that you need to be on the C suite. So whenever you transition and by the way, I call stage two to stage three and exactly what you are mentioning, because we have like five stages of companies. And what you’re measured is exactly going from Stage Two to stage three. You Yeah. So I really believe that once you go through that process, you have to go and have to put your team in three different buckets. One bucket is the one that you tell them, what they need to do, how they need to grow. And they have the ability to be able to learn that and then become that person. The second one is ones that have the attitude, but don’t know how to do it. And you have to handhold them on the process, and help them develop to get to that. And the third, that they just don’t have the capabilities to do it or the capacity to do it. And you have to let them go or put him in a different position and stay in the company. I explained that whenever you have a, let’s say, a two year old kid, you give them Gerber some food. And then when they’re 16, you still give them Gerber and said like, no, they don’t like Gerber, like, Yeah, but the Gerber still had amazing food. He’s just not the right fit for a 15 year old kid. Right? How many Gerber’s they have in your company, how many people you’re the they were amazing on, let’s say, stage two. And now you’re on stage three, and they just don’t fit. So it’s the three things. But let me do a little bit more of a deep dive on this. For me, the biggest issue of scaling is not having enough capable leaders to be able to execute. And excuse when I go to a company and they say I want to be $100 million company. And they were like, Yeah, but I understand the dream. But today, you run like a $5 million company or like a $10 million company. And indeed, you’re running like a $10 million team, and your computer is doing 12 or 13 million. And that’s why you have all this drama. Because your mindset, your tools, everything’s at 10 million, and you’re doing 13. And that’s why you have all this drama and problem, Imagine you’re driving a car 120 miles at the second speed or third speed, you have to change the gear and go to the next level. So the biggest issue is not building enough capable leaders to become bad. And here’s the last thing that I say, it’s not about you. It’s about your team. Whenever you go to stage three, I have a lot of fields that said I build a great company, you did not you build a great team. And that team build a great company on the back. So that’s kind of where I see it is not a one, rule three talk. But you have one on one, we’re a team and kind of put them on those three buckets, and then execute with them differently.
Scott Ritzheimer
Yeah, I love that bucket. So if we kind of go back to this, and what are some indications that you’ve got some bucket one folks like how do you know that when you give them the opportunity to step up that they will?
Daniel Marcos
So you, the way I do it is I build an org chart. So first, I said, Okay, where’s the company going to be next three years. So I understand the KPIs and targets and kind of make a dream of the company next three years. And then I write a functional org chart of the company in three years from now, for that, see if a match I say I’m gonna do today you’re doing 10 million number to 20 million in three years, then a rake an org chart for a company doing 20. And then I did a right job scorecards of each of the positions. So I go to the lira and said, Hey, in the future, when we’re 20, we need that position to be filled with a leader with both capabilities. Do you want to be in that position? or Yes, I want to be locked visually, immediately. Now that they see their dream, they could sign up, I say, Great. That leader needs to have these capabilities. And you just have these capabilities. Do you want to be that? Yes. And now you show them a gap of skills, and then said, hey, that’s where you want to be? You want to get and they may have the the first group said yes, I want to be there. And they usually ask you for budget, or time or something for them to develop an IDS. So that’s a way to do it. I tried to paint the picture, even just give you him learning and development like that and say, Hey, I bought a new course security’s gonna take it, they will never take, they need to have them the buyer in mindset, they want either, and they need to understand the why.
Scott Ritzheimer
Yeah, I think what folks who have not been through this process would probably be surprised by is how many people say no, that’s actually not what I want. And when you’re clear about it, right, when you’re clear on Hey, this is the change that we’d have to make. There are a lot of folks on your team who they’re pretty happy with, you know where they are, it may mean there’s some adjustment that’s going to come but they know that they’re going to be happier, you know, down a level or two where they can do what they love to do. And it always catches me a little off guard and going through is how quickly folks who recognize that about themselves. Not everyone, right, but a lot of folks can. And so why is it? Why is it that particularly that Founder CEO type feels the need to figure out that out on their own, right that they don’t necessarily do the exercise like you just talked about.
Daniel Marcos
So the entrepreneurs used to doing everything, and they believe they still have to do everything. And I said, you have to let go up, we have your father’s called, you have kids. Three, oh, my kids is my most precious thing. And when they started to walk, I knew that they were going to fall and hit their hair, sometimes, and it’s part of the game. So when you team, you have to do the same thing, you have to kind of say, Hey, you want to learn how to grow, you kind of guide them, coach them a little bit, but set, go and walk and stumble, right? And, and, and fall. So you have to be able to do that. And in business, it’s it’s expensive. And it’s hard. I tell leaders, sometimes you have to decide what’s more important, losing a client or losing an employee, give an employee cream, I mean, stay with a client, you have to stop and said, Okay, I could get in and save the client. But most likely, I’m gonna lose the employee, or I’m going to let the employee kill the client. And then I will gain an employee that is really going to be able to execute correctly, or I’m going to gain a leader. And you’re going to have to let them make mistakes. Sometimes, it’s hard and expensive, but you’re going to have to lead.
Scott Ritzheimer
Well, yeah, that is such good advice. So you’re on, you’re on a mission to help a million CEOs to entrepreneurs started to scale their impact. Now, what is it that if you were to kind of sum it up? And I think he even mentioned this beforehand, but if you’re at a summit, what’s the big challenge that they face in trying to do that? Why is it so hard to scale?
Daniel Marcos
So what I’m trying to do is give me the job, no freedom, I’ve been a slave of my company for many years. And we always said, we teach what we need the most. I did it so bad on my first years, now I’m trying to compensate for my next years. But reality is I really believe a CEO needs to do three things. First, set the strategy, right, he we’re gonna go there, there, we’re gonna go lotion, whatever. Then make sure you have cash to run operations, you build a strategy, and that strategy needs certain cash, you have to make sure you always have cash to run operations. And then the third is building of capable leaders, for them to run your strategy or execute your strategy. And that’s where I spend most of the time. But let me give you an example. Your day, I will see entrepreneur that I was coaching. And he asked an employee to send an email and said, but before you send the email, send it to me so I could see it and improve it. And he rewrote the email completely. I was like, really mad, like this guy was doing $40 million a year. And he was rewriting emails that he said, Please work on the sent. And I was like, why you’re doing that terrible writing emails? And I’m like, Yeah, I get it. But you cannot write the email to everyone. So you have to let it go. And he’s like, no, no, no, this is really important. But that basically, the let me do one example. How bad from zero to 100. He was going to write the you know, he said, 70%. And I send you 100% It’s gonna be perfect. Another great. How many guys we have in that department? You say how five was a great five guys. So doing 70% That 350? You’re just one doing 100? That’s 100. So what’s better? 350 or 100? So 350? Well, the like, he couldn’t pass. So so you’d have to build enough capable leaders, and give them the time to do it. Of course, some are going to do it, some are going to fail. And you have to be okay with that and fail. And that’s fine. It’s just part of the game.
Scott Ritzheimer
Yeah. So good. All right. So here’s a question. I’d like to ask all of my guests. fascinating to see what your response is here. But what would you say is the biggest secret you wish was not a secret at all? What’s that one thing that you wish every entrepreneur listening today knew?
Daniel Marcos
I think already said it, but thinking that you’re going to build a great company, you cannot build a great company on your own. You build a great team, and your team is going to build a great company. So So my suggestion is, instead of focusing on building your company, build a great team. If you have an amazing head of sales and amazing head of marketing, and amazing head of technology, they will figure out how to build an amazing company. And your company is going to be great, either you remember the story in thinking grow rich of Henry Ford, that he’s attack that he is an uneducated man. And this reporter us attacking him like he doesn’t know all this information. And the guy said, Yes, I agree. But let me tell you what I think is intelligence. I have a box in my office full of buttons. If I push button number one, the best engineer runs to my office and said Sir, how can I help And he answers any generic question that I have. I push back on number two, when I get the best lawyer in the world, and answer any legal question that I want. Intelligence is at his box, and are the best people in the world running to your office and solving your problems. That’s for me intelligence, how can you be the best leader that you get the best team leaders wanting? helping you build your dream? If you do that? Golden.
Scott Ritzheimer
So good, that is so good. So one more question for you. And then I want to make sure that folks know how to get get in touch with you find out more about Growth Institute, and also hear a little bit about your podcasts. So before we get there, though, tell us you know, we’re all growing right? You’re still in your own mode as well. So you take off the coach, consultant, advisor hat, put on the CEO hat yourself, kind of jump down in the ring with the rest of us again, what’s the next stage of growth will take for you as a leader in your organization.
Daniel Marcos
So up to now we’ve been selling courses. And we get a lot of companies that said, hey, we need more we 100% solution. Because we sell the appellant course and they take some of the courses, but we’re not providing a HUBZone solution. And last year, we say okay, what is how does it look how does hump solution look. And, and our focus is precisely on building enough capable leaders, not what we do, really, as a team, but in a class. So, but it’s very, very different just to sell a class or sell a program, and not give you a full solution to take your team to the next level. So that’s what we’re doing next year, we’ve been doing some testing this year, in what we call a medial axis. And it’s a company in diversity, to help make all the management team be experts on scaling it to understand the typical things on how to hire, how to fire, how to negotiate KPIs with team members, how to negotiate supplier contracts, all your contracts are negotiated by your team leaders, they just go to your desk signing, I need them to understand how to negotiate, how to hire people how to fire, how to direction outside priorities, how to understand budgeting, and financials. So all the tools that they need to be on the C suite. And game video, Lexus has a program called CC ready. And our job is to help you have enough capable leaders to be able to be on your C suite. So if not, they won’t be able to do it. But it’s it’s not easy going from selling courses, to building a solution. And that’s where we are gearing up this year. And next year, we’re gonna start scaling that.
Scott Ritzheimer
That’s exciting as exciting. Now you’re also the host of the Learning UP podcast. Is that right? Where Can folks check out that your podcast?
Daniel Marcos
So in YouTube, in my channel, or any of the podcast platforms, and Learning UP is everything you have to learn we always talk about what you have to learn a little bit of what I said earlier? Who do you have to become as intrapreneurs we put all these big objectives. But we never understand who we have to become to do that. What do we have to learn to be able to command $100 million company and our Learning UP podcast, we’ll talk about that? What do you have to learn to really be able to go to the next level? That’s why it’s called Learning UP. Because you have to learn to go up to the next level. That’s that’s what we do. That’s
Scott Ritzheimer
Fantastic. And so Learning UP can be found on all the major platforms. Go check it out. Also growthinstitute.com Is that right? Is the courses and learning platform had a chance to browse around it myself. And it’s phenomenal as just, I have not seen a site that has that much depth of resource on it all in one place. It’s really remarkable. So head on over to growth institute.com We will add that link to the show notes as well. So you can get you can get there easily got it while you’re driving. And so Daniel, thank you so much for being here. It was just an honor and privilege having you on so much gold in this conversation. I know for me, I’m gonna go back and listen to it again, because there’s just so much that you can’t get it the first time. So if you’re listening, rewind, do it again. You’re gonna catch so many things you missed the first time through, we really appreciate it and for those of you who are listening, you know your time and attention mean the absolute world to us. I hope you got as much out of this conversation as I know I did and I cannot wait to see you next time. Take care.
Contact Daniel Marcos
Daniel Marcos is the co-founder and CEO of Growth Institute, the leading online executive education company for C-level executives at fast-growing firms. It has with over 55,000 members from 11,000 companies across 70 countries. Daniel is a keynote speaker, columnist from INC magazine and a CEO Coach, with a mission to help 1 million entrepreneurs scale their impact and reduce drama in the process. He is a member of YPO and EO and is a certified coach in the Scaling Up methodology. He is a graduate of EO’s premiere CEO program, the “Birthing of Giants”, and he holds a BS in Industrial and Systems Engineering from ITESM (Monterrey Tech) and an MBA from Babson College.
Want to learn more about Daniel Marcos’s work at Growth Institute? Check out his website at https://www.growthinstitute.com/
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