(inspirational instrumental music)
- [Man] Innovation.
Taking something existing and transforming it
into something extraordinary.
The Air Force's inception was built on innovation,
has thrived on innovation,
and counts on today's innovators to transform the future.
No matter how big or small, innovation begins with an idea.
Welcome to LIFT, Leaders Inspiring For Tomorrow,
developing the innovator in you.
- [Casey] Ladies and gentleman,
will you please rise for Colonel Heathman
and our guest speakers.
All right, good morning Team Fairchild.
- [Audience] Good morning.
- It's eight o'clock in the morning.
We decided to start 30 minutes later this year, all right.
That's based on your feedback, all right.
How many got burritos this morning?
All right. I want to say thank you to the CGOC
for stepping up early this morning to cook some food.
They're gonna have food here throughout the day.
If you want some more, please feel free.
This is kind of, if you need to get up,
use the restroom, things like that, kind of a free flow.
We want you to be nice, relaxed, and in that full,
just take it all in mode today.
So welcome to LIFT.
We'll call this 3.0.
How many folks have never attended this event?
Wow. Good.
I was hoping we, as we do these each year
and we do these now on the April Wingman Day,
that we get enough iteration here
that we get new folks in here, and I appreciate the fact
that you're all coming out here this morning.
We're gonna have a great lineup today.
There's three major things that kind of
create the recipe for today.
The first and foremost is the actual LIFT Team itself.
So if you've had any hand in building
what you see here today, leadership,
even the smallest thing,
if you supported the LIFT event today,
could you please stand for a second?
Don't be shy, don't be shy.
All right. I want to give the LIFT Team a huge hand
for everything they've done today.
(audience applauding)
Absolutely cannot do without them
and there's so much work that goes in behind the scenes
and they make this place just look incredible.
We've got an incredible production team
from Joint Base Lewis-McChord.
This is the second year they've been with us.
They're live streaming this so you'll be able to find this,
all these videos on the DUD's website, DVIT's website
later down the road once they upload everything,
and you'll be able to share that content where you want.
It's all part of the Creative Commons,
and we do that on purpose, but we wanted to ramp up
our production quality and we so much appreciate
you guys coming back again this year.
The second ingredient are of course, our speakers, okay.
Last year, we had the grateful eight.
We had eight speakers that we brought in
to talk about the topic of leadership.
This year, we have the magnificent seven.
You're like, well, why did we go down to seven?
Well, again, based on your feedback and airmen feedback
from last year, we're still gonna give them
20 minutes to talk, but we're gonna do a panel
at the end of today.
And so you might have gotten note cards.
If you didn't get any, during one of the breaks
you can go get a note card.
If you've got questions that come up during this,
write them on the note card and then take them in the back,
and we're gonna be collecting those
and we're gonna have a moderated speaker panel
at the end of today, probably around 11 o'clock.
It'll be about a 40 minute panel.
General Holt's gonna moderate that with our speakers.
And I think it's gonna be slightly entertaining, okay.
So I hope you guys come up with some good questions
and they'll float that, like I said,
towards the end of the day.
And we'll kind of make that our final event.
And the third ingredient for this recipe, of course, is you.
This event is designed by airmen, powered by airmen.
And without you, without your curiosity,
without your willingness to want to take in some content
that probably isn't anything you would normally find
in your military environment, you're saying
not only to yourself but to others,
hey, there's something to be learned here.
And all that I ask is that you continue to maintain
this sense of curiosity,
because what we're trying to tackle today
is the idea and culture of innovation.
We have all heard this word: innovate.
Hey airmen, go innovate.
I will tell you I struggle at times with understanding
what does that mean.
Because there are days I just want the printer to work.
Right? I don't need an innovative solution,
but there are some times when that process
to get from broke to fixed, we have to look
at that stream of events.
What happens?
I put in a work order that goes into a computer
that goes into an airman's hands, it gets queued.
There's all these steps that we don't think about,
that sometimes maybe we do need to look at these processes.
So I'm not inventing a light bulb,
I'm maybe trying to make life a little bit easier
for myself or from a process owner standpoint,
for somebody else on this base.
Maybe there is something that needs to be invented
and you're sitting here now that have the next widget
and you're holding it to yourself
because you're being really selfish about it, right.
I need you to come out, okay, come out into the light
and start sharing those ideas with your leadership.
Because the one thing that I can promise you
is your wing leadership, your group leadership,
your squadron leadership, they support you in this
'cause we talk about this.
We want you to have a space and a venue and a base
that you can come to, be stationed at,
and then when you depart here, feel like,
you know what, my ideas were heard.
Okay. We also have some funding, too.
I would never be afraid to ask for money, right.
We do get the N-O word a lot, right, no,
but sometimes you need to defend your idea
and that takes coaching, and that's what
some of these speakers here are here to do for you too,
to inspire that, and some of them are gonna talk about
events that they have in the community of Spokane
that you can go to for free.
Some of them, they even feed you, okay,
so I would take advantage of that.
And they'll coach you through how to come up with an idea,
how to look at a problem, how to go after venture capital,
how to start a small business.
Maybe that's something that you're interested in on the side
or something that you may want to do
five, 10 years down the road.
Some of you are gonna be transitioning soon.
If these things are interesting to you,
I want you to take advantage
of what the community of Spokane has to offer,
and there's a lot.
And like I said, you'll hear some of that today.
So I want you to buckle up.
I want you to settle in.
I want you to have a good time.
You're allowed to laugh, you're allowed to cheer.
Take lots of notes.
In your program, you're gonna have a notes page
for every speaker that we have here today,
and then you also have access to their LinkedIn accounts
and their Twitter handles, so if you want
to keep that dialogue and that communication with them,
they're allowing that to happen.
And I'll tell you, having seen the speakers last night
kind of interact at our social, I mean,
the synapses that were firing in their brains
were firing at such a rate it was hard to keep up with them.
And because there were so many different ways
that they were all connected, and I'm hoping
that an event like this for you does that same thing.
So thank you for being here.
If your friends didn't make it,
go ahead and take out your phone and text them
and tell them to get over here.
We have some seats available for them.
But as I said, come and go as you please
and we hope you really enjoy today's program, all right.
Thank you for being here and have
a wonderful Wingman Day, all right.
Take care.
(audience applauding)
- Thank you Colonel Heathman.
Hey, before we get started, I have one question,
speaking of innovation.
Can anybody tell me where you're going to find
a good farmer?
Out standing in his field.
Had to give that to one of our speakers,
so I wanted to bring that up.
Thank you.
(audience lightly applauding)
All right, Team Fairchild.
Welcome to Fairchild's third annual
Leaders Inspiring For Tomorrow event.
I'm your host, Master Sergeant Casey Hearn
of the 92nd maintenance squadron.
Shout out.
(one audience member applauding)
Thank you sir, appreciate that.
Before we get started, I'd like to lay out
our sequence of events for today.
We have seven fantastic speakers for your enjoyment.
We will have three breaks throughout the day,
which will be 10 minutes each in length.
During that time, feel free to purchase food in the back,
use the restroom, and please mingle
with your fellow airmen and do some networking.
But please be in your seat a couple minutes prior
so we don't have to wait on you.
At the end of the third break, we're gonna have a raffle.
We got three big bundles of books down here
and keys to a Ford still in my hand,
so we'll be doing that as well.
So keep your numbers handy, you might be called out.
But without further ado,
I'd like to introduce our first speaker.
He is a retired Air Force brigadier general, General Holt.
Prior to joining Brady, he built his leadership foundation
in the military where he advanced
from instructor pilot in air lift aircraft,
to the second highest ranking
United States military official at NATO.
He has earned multiple awards and honors
for effectively managing major crises
across Europe and Asia.
General Holt will inspire you to take chances,
be bold and break free of the bureaucracy
that stifles the creative, innovative spirit.
Ladies and gentlemen, please help welcoming General Holt.
(audience applauding)
- Thanks.
How are we doing on sound?
Oh, we can hear me.
Okay, great.
The other thing I want to proudly proclaim
is I am a Fairchildren.
I am Fairchild alumni, and so thanks for bringing me back.
I want to thank Colonel Scot Heathman who is
got the job that I used to have here that I loved.
And the funny part about that was
I got here after six one-year assignments in a row
and they said, don't worry.
Any Air Force Personnel Center types here?
Where dreams go to die?
And they said, don't worry.
Fairchild's a stability tour for you.
You're going to be there two to three years, right.
Which is code words for,
you're not in the running for a wing, right.
So that's okay.
And then 10 months later, we had my going away party
and I went off to a big deal.
Okay.
And it kind of changed my life
and I'll talk about that in a second.
So I want to start out with, let me see if this works.
Boom.
And it doesn't.
And it does now.
This is where I want to start, I want to set the table.
You've got great speakers today, far better than me,
but I get to be here anyway because I'm alumni.
I want to bring to your adieu can be disruptive
if you're an airman.
It's okay.
I survived and you can too.
But it's a very dangerous path
and you have to decide whether
you want to take that path or not,
and we'll get to what that means.
So let's start with a war story.
And I'm gonna start with the Fairchild war story
because I think it illustrates the point.
So the first thing I want you to know about
is about a public-private joint inner agency task force
that forever in my career I have called
the Department of No.
Does anybody have any interaction with the Department of No?
Nobody.
Wow.
Okay.
Let's be interactive.
I'm gonna be interactive, you be interactive
because what I have here is a laser beam
and I can point it at you and bring you up here with me.
And I'm not above doing that, by the way.
Those who know me know I'm a little guano crazy
and so that's exactly what I'll do.
All right.
The Department of No is where a disruptor,
a well meaning disruptor who was trying to fix something,
let's say the water cooler's putting out bad water,
not the big idea, but something,
and we're going to go fix it.
And then the Department of No gives you 18,000 reasons
why you can't do that.
It's not legal.
You can't contract that way.
We would have to put that on the POM budget for next year.
It doesn't make a whole lot of sense,
people bring in these plastic bottles of water anyway,
and why would you want to do that?
Now get out of here.
All right.
So fully disclosed, I have a Native American background
despite my blonde hair, 'cause there's a Canadian
in there somewhere.
And so I want to translate a little Cherokee Indian for you.
It turns out that the word vice wing commander
in Cherokee Indian translates to
everything the wing commander doesn't want to do.
(audience laughing)
And so I'm working third shift, right,
at the ORI, the nuclear ORI.
We're getting ready, it's dress rehearsal.
The teams coming next week, it's going to be a big deal.
And I'm gonna get through this pretty damn quick.
We get to the, I'm leaving the command post,
I'm going to go check on the mobility line
because that's a big deal to generate forces
and get them out of here, and I want to see
how they're going to be doing
right before we bring in everybody and start the line.
And I get in there and I see an airman first class
and that's all, that's the only person who's there.
It is three o'clock in the morning.
Just me and him.
And he's never met me and I've never met him.
And I ask him, so how are things going?
Are we ready for the folks to come through?
And he said, yes sir, we are, but I'm a little worried.
And I said, why?
He goes, I just think that this configuration is really slow
and I don't think we're going to process people
very fast here.
I said, well, what would you do?
He goes, well, actually what I've been thinking about
is I would do double lines here
and then I would re-wicker the building this way
and I would take it this way and we could run
two chalks through at the exact same time
as we were doing one.
And I said, so we're having to talk about queue theory?
Awesome.
Okay, well let's do it your way.
Let's do this tonight as our control.
And then tomorrow night when we do it again,
we're going to do it your way.
And so you set it all up just the way you want to do it
and we'll alert both chalks at the exact same time
are to run through.
Okay, awesome.
And so I get back, now I know the trap is set
because I did this intentionally
because I know the Department of No
is going to find out about this.
(audience laughing)
All right.
So what ends up happening is, long story short,
I get back the next night
and I see nothing's changed in the room.
I see the airman there, but I see a few other figures
standing around, checking their watches, clipboard,
got a tech sergeant over here,
got a senior master sergeant over here,
I got a captain in the corner over here.
I'm going, whoa, what happened?
Where's the double lines?
I thought we were going to do this other thing.
And then the airman comes up to me and he says,
well, I thought about it and honestly,
the way we're doing it is the best way.
I said, whoa, you have a gun to your head and we can't tell.
(audience laughing)
So I said, you know what, that's great but thank you
for your innovative spirit
and I'm going to give you the night off.
And they all look at me like I'm,
I just killed their kitten, right.
I don't have enough people.
We, the airman does all the work.
We stand around.
Now who's gonna do the work?
And so what happens is I bring in the crowd and I go,
shame on all of you, shame on all of you
because we probably are not going to retain that airman now.
And what you told him is, is that failure
or the chance to fail won't be accepted here
and we can't get better
and we won't know if that idea will ever work,
and even if it failed, all we're going to do
is put another stripe on him
and say thanks for being a thinker.
And now this one says, they say they want to empower you
and embolden you, but the Department of No
doesn't mean that, right.
So leaders, I know some of you are going, I've done that,
I've killed that kitty.
Think about it, okay, no judgment.
But that's a Fairchild truism.
That's what happened here.
I'm sure it doesn't happen now.
All right.
So disrupt.
You got to have your heart in this thing.
Okay, this is the real deal.
There are threats in your world
if you want to be a disruptor,
but big things can happen in your life.
So the first question you gotta ask yourself is,
do you care?
Is this something I care about?
Right? Are you passionate about it?
Some of you, believe it or not,
are airmen who believe this is not an adventure,
it really is a job and I'm getting out soon
and I don't care.
I mean, I care enough to be professional,
I'll follow the three core values,
I'll do my work and then I'll get out
and I'll go on and it'll be a great experience.
That's fine.
No problem.
No admonishment.
If you serve one hour in your country's uniform,
you have my salute forever.
Okay.
But find what you do care about
because that's where this disruption path could take you.
If you care about it, you'll do stuff about it,
and we'll talk about that.
How am I doing?
I'm doing good.
All right.
Can you make disruption and innovation
and creativity a process?
Yeah, you can.
It doesn't have to be that way.
But think about this.
Let's talk about someone who's naturally gifted,
naturally creative.
Million dollar ideas come into his head all the time.
He monetizes them and goes on.
You know him as Sting and he had a 10 year drought
of not writing a word.
I mean writer's block extraordinaire.
Now good news is he already had $100 million in the bank,
right, so he's covered for 10 years of no ideas.
But a process might be helpful,
especially if you care about what you're working on.
It's complicated.
And this clicker is no good.
All right.
Try again.
There we go.
Okay.
I think most of the process is involved in preparation.
You don't know what's coming your way
in terms of that crappy water cooler
or the the line that you want to work on.
So a routine, a ritual that I would recommend in your life
if you want to hone your skills as an innovator
and a creative person is first off, handle your noise.
I didn't do that so well for the first
three quarters of my career.
Handle the noise.
We all have noise in our minds at all times.
You've got computers, inputs, people coming to you,
jobs to fill, kids to take care of,
all this stuff in your life.
Some is good noise and some is bad noise, right.
So take some time for mindfulness.
If you think that you right now, could stop everything
and close your eyes and make your mind silent
and not have a thought for one minute,
if you think you could go that long, raise your hand.
Okay, that's good.
Five minutes, 10 minutes.
You're good.
It's a muscle.
You build it.
It's called mindfulness.
You have to find a way to tune out.
I don't care how you meditate.
You want to get on a yoga mat,
you want to have a little app in your iPhone
that helps guide you through something,
but get away to tune out noise for a little bit.
It will make you strong and clear on a lot of things.
Read addictively.
I put some books up here for you.
You can do whatever you want, but there's,
and then that follows into writing, journal.
Write yourself, publish, do whatever.
Write about what you care about.
Because this journaling will actually take you
to what you really give a crap about.
Okay.
Then trying on new clothes.
If you don't care about this, well think about
what role you would play and then go meet people who do that
and hang around them for a little bit
and find out if that's what you want.
And then heroes and villains in your life.
I am certain that a couple of you might've had a commander
that you felt was a little deficient at some skills.
I'm certain of it, right.
We have good, bad, and ugly in our lives all the time,
and guess what?
On the civilian side, no different.
Right.
So you can learn as much from them as you can from heroes.
And that's what I really want to hone in on
is the positive aspects of this.
Today, you get to be around a bunch of thought leaders.
Absorb and continue looking at thought leaders
who can help you.
So those questions I put up behind me
are questions for you to always think about it.
All right.
I'm going to give you a war story.
I have time.
The Bishkek, I went out of here at Fairchild
as the vice wing commander and I'm on my way to Bishkek
because I get there to a basket case.
And here's what happens.
A month before my wing command starts at Manas,
the corrupt regime is going to evict the United States.
That's one factor.
Two factors.
General McChrystal and General Patraeus get with me
and they say, here's the deal.
Not only are you going to have to hold that ground
and keep that base there, we need you to triple the capacity
of it because the president has just approved the surge.
Okay.
And I show up to a base that people outside the gate
actually hate Americans because we're
propping up a corrupt regime,
and yes, that's what we're doing.
So the money wasn't flowing down to the people,
is I guess what I'm saying.
And so I had to go native, assess the situation,
really delegate out the mission to our folks
and lever anybody's creativity.
So it's, I can't be the answer guy.
I've got to go find lots of answer guys and gals.
So we go native, we learned Kurgas, we get in the schools,
we tend things downtown, we empower women's programs,
we get into entrepreneurship.
A whole cocktail to distance ourselves
from what I know is coming, a bloody violent revolution
on the other side of the year and all those relationships
that we invested in came to fruition.
And Roza Otunbayeva, the new interim president
after the massacre, made an announcement
that we would be staying.
And we took care, this wing took care of 98%
of mobility requirements for General McChrystal's surge.
Because Fairchild was the main force provider, right.
We had to save the country and we had to save
a bunch of Peace Corps volunteers and we did all that
on the backs of relationships that we developed
and a heck of a lot of innovation.
So I asked General Patraeus to stay to the end the year
because I loved it there.
This is the transformative year of my life
and I loved it there.
And he said, you know what Blaine, you've gone native
and I can't have you there.
I mean, you're wearing robes, you built a yurt.
(audience laughing)
Some of you actually may have seen that yurt.
But we did a lot of cool things and it was a lot of fun.
We put the mobility mission back on track.
Now, the next one for me,
and this leads up to what my wish is for you,
the next one for me is what I'm doing right now.
So I finished up my military career
and I run a little company called Millionaire
for a couple of years to kind of have a pretty sobering
MBA experience and convert my skills
into tractable business skills.
And then I get my big opportunity, a really great,
through a mentor, a really great entrepreneurs,
built three metals companies, comes to me and says,
what I'd like to do is I want to be a part
of the restoration of Appalachia
and I want to do it this way.
We want to build the first aluminum rolling mill
in 40 years.
We have nano crystalline powder metallurgy
and all the other alloy categories spun out of MIT
that are going to change the world of material science
and change aerospace transportation,
every single thing we do.
Okay.
And we're going to build this in the heart of Appalachia
where for 30 years, they've been in nothing but decline
and recession and the loss of three major industries.
And I can tell you they're as resilient a people
as you have ever met in your life.
They never say die and they always come forward
with innovative ways to kind of keep it together.
This community has the number one factor
that I would want in anybody that I hire.
Resilience.
They never quit, even if they don't know what they're doing.
And if they do know what they're doing,
it doesn't matter because they're never going to quit.
These are people with amazing values.
And so the bones of the city are good
and it's got a great history and we're going to rebuild it,
but we're going to do it with this massive company
that's going to lightweight everything you drive,
fly in or in boats, whatever.
Okay, that sounds like a great opportunity.
We're going to hire a third veteran,
so we're going to put our arms around that one as well.
And then we'll just keep on disrupting.
The speakers that you're going to hear from today,
last night was really a treasure for me
because every single one of them is working on something
that we're doing in Appalachia.
Right. And I want to lever that, I want to get into that
and to bring that home with me.
And so it was really sparking off a lot of ideas
because on the social mission side,
we're gonna get at opioid epidemic,
we're going to get at the obesity epidemic,
health and wellness, we're going to get at
the revitalization of the community and the town
and embracing its former values and lifting it up
and bringing it back, okay.
And for me, from my Bishkek experience,
the reason I told you the two war stories is,
hey, that's a nice spiral.
I remember the development work I did in Bishkek.
It changed who I was, and this does the same thing.
But I want to take you back to the process
because the process matters.
I don't get to be that guy in Kurdistan.
I don't get to have this opportunity now
unless I'm a habitual reader,
unless I'm always trying to look at what every,
what's out there, and these are great forums
and great ways to do that.
Okay.
And so preparation.
I didn't know Kurdistan was going to fall on my lap, right.
It was a three year tour at Fairchild.
Kaboom.
The fixer goes in and everybody was like,
well, that's gonna be the shortest wing command in history.
Two days, until so we stayed.
It's the process that matters.
You can do that, but you have to answer that first question.
You have to go, do I care?
It's a binary answer, it's yes or no.
It's not a kind of care.
And if it's no, it's okay.
Disconnect.
Don't take that next enlistment.
Don't do that next thing, okay.
But what I think you'll find, if you can remain positive
and you're passionate about your work,
you will find so many ways to go,
you know what we could do, dot, dot, dot.
So what's the culture here?
What could we do?
And leaders embrace those things.
Even if you have enough experience to know
what you're young one is going to do
is going to result in failure.
Create a bubble, let the car accident happen,
and then chalkboard it, right.
But the bigger message that you'll be sending your people
is, I will let you disrupt.
I will encourage your thinking and new ideas, okay.
I don't agree with the Department of No.
I remember when we started this innovation thing,
four years in the Air Force,
and the vice chief staff of the Air Force said,
we've got 11,000 ideas that we got
in our innovation programs, and how many did you implement?
Not a whole lot.
Okay.
Every one of you can contribute in any way, shape or form.
Even if you know you're getting out of the Air Force.
Good gosh.
What a great place to work on innovation
and trying new things and a perspective about
what you would do in a great, safe environment.
What's the worst that can happen?
Nothing.
Right.
My sadness that night at Fairchild's
Logistics Readiness Center was we're gonna lose that airman
because we broke faith with that airman.
We busted our promise with that one.
That's unfortunate.
Okay.
But everyday, we can re-recruit folks here.
So here, before I turn this over, here is my wish for you.
My wish for you is that at least
one or two times in your life,
this comes from your preparation,
a situation or a moment calls on you
to draw on nearly everything that you have ever learned,
that you are tested in this moment,
and that you gain all of the wisdom and peace
that comes from successfully pushing through.
I'm in one of those moments right now.
I don't know how it will end.
I don't care.
Quite honestly, it's the journey
that's the most important thing.
I know we'll be successful.
I know we'll get this done, okay.
But my care is about, what are we doing right now?
And in Bishkek, it was another one of those times.
It tried every single thing that I've ever learned,
from languages to dealing with folks in other cultures
and that type of thing.
I wish that for you because that's what your preparation
will yield to you in terms of rewards.
So I want you to enjoy the speakers today.
'Cause like I told you, they are going to be
far better than this kickoff.
And we're gonna bring Kevin Sanders out here
who's gonna talk to you about a lot of
the exciting things that he's doing.
And I'll leave you with, disrupting yourself routinely
and preparing will empower you, it'll empower your wing
and your teams and you might just find
you're staying in our Air Force for a real long time.
Thank you very much for having me today.
(audience applauding)
- Thank you General Holt for inspiring words.
Hey, so I was coming into work today and I seen
on a big marquee that Snoop Dogg is coming to town.
Did anybody else see that out there?
Raise your hand.
You saw that? You saw it?
Colonel, you saw that?
So the next question is,
do you know why he uses an umbrella?
For drizzle.
Alright, last joke, I promise.
I won't tell any more, I'll stick to my J job.
Thanks again General, for that.
That was pretty good though, right?
I just let it on my phone.
So our next speaker has over 25 years
building global brands, including senior level roles
at Kellogg's, the Coleman Company, Timberland, and others.
He consults with and trains organizations on building trust
with today's skeptical buyers
using his propriety triggering trust framework.
Mr. Sanders also teaches MBA students
as a, excuse me, professor at Gonzaga University.
Mr. Sanders will help you find the necessary component
to enable a culture of innovation.
That key component is trust.
Please give a warm welcome to Mr. Kevin Sanders.
(audience applauding)
- Good morning everybody.
- [Audience] Good morning.
- You guys are in for a real treat today.
There's gonna be a lot of great speakers
that are gonna come out here and they're gonna tell you
an awful lot about innovation
because they're experts in innovation.
Well, I'm not an expert in innovation.
What I do know a little bit about
is about this idea of trust.
And so we're gonna talk a little bit about trust today
and the role that trust plays in innovation.
Because a culture of innovation is a culture of trust.
So in order to have a culture of innovation,
you have to start with an innovation,
with a culture of trust.
Because trust rarely happens.
Every innovation really happens in a vacuum, right.
The best ideas come from the collective wisdom
and effort of the team.
And so innovation requires teamwork
and teamwork requires cooperation
and cooperation requires trust.
So I'm going to talk about trust today
because trust is the foundation of human relationships
and it's arguably the key to success in business today.
And it's arguably the key to success
in both our professional lives and our personal lives.
I mean, it's hard to even find an article on leadership
or teamwork or corporate culture or innovation
that doesn't talk about the importance of trust.
And the reason it's so important is because
if people don't trust, they don't act.
If people don't trust, they don't act.
So if you want them to act, to embrace your ideas,
to support your projects or your causes,
or to collaborate with you on innovation,
you need them to trust you, right.
Trust is one of those things
that we all recognize is really important.
And the better you are at building trust,
the more effective you'll be.
It's as simple as that.
And so in the time that I have here today,
I want to help you get better at it.
I want to help you understand how trust works
so that you can become more trusted
in the relationships that matter most to you.
Now see, we know the trust is important,
yet we often struggle with how to do it,
how to understand how to do it better,
and I think there's a couple of reasons for that.
The first one is that we really don't understand
what trust is or how it works and the other thing
is that we're not very good at getting,
at being intentional about it,
of getting our clicker work here really well.
We're not very good at being really intentional
about how we build trust because again,
we don't really understand how it works.
So I'm gonna try to help you with that today.
Trust is a really complex topic
and it's like getting up here and say you got 20 minutes
to explain medicine to people,
but I'm going to try and do my best to offer you
a little crash course on how trust works.
Just basically the core principles of how this works
so that you can leave here today with a better understanding
of how to build trusting relationships with others.
And then hopefully, as you're listening
to the other speakers today talk about innovation
and talk about how to do innovation,
the process and how to do more of it,
that you understand that the foundation of all of that
is a team or an organization that trusts each other.
So let's talk a little bit about really how trust works.
One of the biggest misconceptions that we have about trust
is that we think it's a single thing, but it's not.
Trust actually has two parts, a yin and a yang, if you will.
And those two parts work together,
but they also operate very differently.
And so the first side of trust,
and by competence we mean, are you capable?
Do I believe that you can do what you claim?
And are you dependable?
Do you have a history of fulfilling commitments?
Do you deliver on your promises?
The other side of trust is sincerity.
And by sincerity we mean, are you honest?
Do I believe that you will be truthful with me?
And are you fair?
Do I believe that you will act in good faith
and consider my needs in addition to your own?
So another way to think about this is that competence
judges someone's actions, their performance,
while sincerity judges their intentions, their motives.
In order to understand the relationship
between competence and sincerity,
we need to understand the relationship
between gains and losses.
See, when we enter into a relationship with someone,
it's because we expect to receive some sort of
beneficial outcome from that relationship, right.
That outcome may be short term, may be long term,
may be small, it may be large.
We're getting involved with that person because
we want to end up better off than where we started somehow.
But that person offers us is the potential for gain.
What that relationship offers us is the potential for gain
and we want that gain.
But all relationships also come with risk, right.
And trust and risk go hand in hand
because if there were no risk, there were nothing at stake,
then we wouldn't need to trust.
But the reason that there is risk
and the reason that we do need to trust is because
that outcome that we want
is dependent on the actions of others.
And we can never be completely sure
how that other person is going to act, right.
And so there's a potential that we won't receive that gain.
There's a potential that that won't work out for us
in a way that provides us that beneficial outcome.
But there's also the possibility that things
will end up much worse than that, right.
See, whenever you create a dependency,
you also create a vulnerability.
And so it's possible that that other person
will exploit that vulnerability,
that they'll take advantage of us for their gain,
which would result in our loss.
We don't want to get into this relationship
to turn out worse off than we are, right.
We want to achieve that gain.
And so there's always the potential that we'll be,
that we'll receive a loss from that.
So when we go into relationships with other people,
it's because we want to achieve a gain and avoid a loss.
Remember that.
We want to achieve a gain and avoid a loss.
And to understand whether we believe that person
is trustworthy or not, we need to assess the likelihood
that trusting them will result in that gain
and avoid that loss.
And we do that through a process of trying to predict
their competence and their sincerity.
See, competence predicts my potential for gain.
If I trust your competence,
I expect that you will deliver on your promises,
that you will provide me with that benefit
that I'm looking for.
If we agree that you will pick me up at the airport
at six o'clock when my flight arrives,
if I trust your competence, I have confidence
that you'll be there to pick me up, right.
And so competence reflects my confidence
in your performance.
We predict or try to assess your sincerity
on the other hand, to predict our potential for loss.
Because again, we can never be quite sure
what the other person's going to do,
but if I trust their sincerity,
I trust that they will safeguard my interests.
I trust that they are interested in that
mutually beneficial outcome where we both received a gain.
That's what fairness is, right.
I trust that they care about how I end up.
Now the challenge with assessing people's competence
and people's sincerity is if we think about competence
as the ceiling, right, and sincerity being the floor,
the challenge that we have with that
is that those two things are not equal.
It is often much more difficult, much more easy
to judge someone's competence
than it is to assess their sincerity, right.
Their competence is above the waterline, right,
because it's based on your performance
and it's usually easy for something for me
to be able to see, like it's visible or it's tangible.
It's knowable in some way.
You were either there at six o'clock or you weren't.
But it's much harder to judge someone's sincerity.
Again, because it's based on their intentions,
it's based on their motives and we can never be quite sure
what those motives are.
And so ultimately, in order to be trustworthy,
you need both sides.
You need to be competent in your actions
and sincere in your intentions.
Let me ask you this.
Which side is more important?
Well, let me ask it in a slightly different way then.
Who would you rather deal with?
Someone who is honest but incompetent,
or someone who is competent but dishonest?
Yeah, neither choice is a great one, by the way, right?
(audience laughing)
But if we had to choose, most of us would choose A, right.
Who here works with a lot of people
that are honest, but incompetent?
And most people would prefer A, right,
people who are honest but incompetent,
if they had to choose.
Now, some relationships are more driven by
and more determined by competence, right.
And other relationships are more driven by sincerity.
And so there's a little bit of context here.
But all things being equal, sincerity is more important.
It's actually much more important.
There's a number of reasons for this,
but one of the biggest ones is that
we don't weigh gains and losses equally.
We actually fear losing more than we value winning.
We fear losing more than we value winning.
It's a concept called loss aversion.
It was first proposed by the cognitive psychologists,
Daniel Kahneman and Amos Tversky.
Anybody read Thinking Fast and Slow?
Yeah, that's Kahneman.
He actually won a Nobel prize for his work in this area.
And well, loss aversion basically says
is that it is more psychologically painful for us,
for example, to lose $5 than it is
psychologically pleasurable for us to win $5.
And that's because again,
we don't weigh gains and losses equally,
and as a result, we don't weigh
competence and sincerity equally.
We weigh sincerity more heavily than we do competence.
But how do we often build relationships?
We lead with competence, right.
We're really good at the competence part.
We're really good at demonstrating how competent we are.
But as we just discussed, the sincerity side of trust
is actually more important.
Competence is important because it reflects
our ability to get that gain we want, right.
But sincerity is what protects our floor.
And at the end of the day, your competence doesn't matter
if people doubt your sincerity.
If there's any chance that you will exploit
my vulnerabilities, if there's any chance
that I will actually end up worse off by trusting you,
I'm not going to trust you, so it doesn't really matter
how well you were gonna perform
because we weren't gonna get there.
And so what I want to leave you guys with
is a couple more ideas about how you implement this idea.
And the first one is that we need to do a better job
of revealing our sincerity.
We need to do a better job of making it easy for people
to see below the surface,
to understand what our intentions are.
We need to make it easier for people to protect their floor.
Now, I'm not up here saying that you should
not talk about how competent you are, right.
That's still important.
But oftentimes when we're trying to build relationships,
we start with competence and we focus on competence
and then we stop and we never get to that part
where we talk about sincerity.
We tend to ignore that.
That's the soft stuff.
That's not fun, we don't talk about that stuff.
But I hope you leave here today with an understanding
that that's actually the most important part.
And you can look at, as a society,
why we don't trust as much as we used to.
And it's not because we've become less competent,
because we've become less good
at talking about how sincere we are.
We want people to know that they're safe with us.
That of course, assumes that you are sincere, right.
You got to give it to the guy, right?
I mean, he had an uphill battle.
He lost by the way.
Bad, he lost bad.
So I'm not up here suggesting that we create
opportunities for us to look sincere.
I'm telling you that we need to do a better job
of convincing people that we are sincere.
I tell my clients all the time that
I'm not here to make you more sincere.
I'm here to help you get credit for being sincere.
And the last one I want to talk about
is this idea of embrace, don't erase.
See, oftentimes when there's a breakdown,
when there's a failure, it happens on the competent side,
right.
It happens because there was a failure in our performance.
You weren't there at six o'clock to pick me up.
But how do we respond to that?
Oftentimes we try to cover it up or deny it, right,
we make excuses.
And that takes a breakdown in competence
and turns it into a breakdown of sincerity.
And we consider failures of sincerity
to be much more egregious than failures in competence.
So I tell people all the time, one of the best ways
to build trust is to screw up and then use that
as an opportunity to reveal your sincerity,
to let people see below the surface,
to let them understand that you do care about their outcome,
that you do care about how they end up,
that you'll do what you need to to make the situation right.
And we will screw up, right?
We always screw up.
But it's a real opportunity for you
when you have that moment when you realize
that you've screwed up, you have a moment there
to decide how you're going to react to that.
And so knowing a little bit about what you know now, today,
my hope is that you'll take that moment
and you'll use that as the opportunity it is
to help that person understand
that you are actually sincere.
So if we want this culture of innovation,
and again, the people today are going to
talk a lot about how to do that,
but if we want that culture of innovation,
we want the opportunity for the teams to get together
and to come up with those breakthrough ideas,
then we need to start with that foundation of trust.
And we need to look at that idea of trust,
not just improving how competent we are, but again,
focusing on the idea of being sincere
and communicating to people that they are safe with us
because innovation requires the creativity
and that creativity needs that safety,
that safe environment.
We need to know that ideas are safe
and that it's okay to fail, as the general said.
We get there by demonstrating that we are sincere,
that we are honest, and that we were fair
in how we are doing this.
So to get that innovation, that culture of innovation,
I want you to think about how trust becomes the fertile soil
from which that culture of innovation
can take root and grow.
And now that you know a little bit about how trust works,
think about the role that you can play
in trying to create innovative environments
by managing how well you are competent,
how well you're communicating and demonstrating
that you are sincere.
Thank you guys for your time today.
I appreciate it very much.
(audience applauding)
- Thank you Mr. Sanders.
So it's that time for that 10 minute break.
Okay, ladies and gentlemen,
our next speaker is a C level lead
with experience in marketing, manufacturing and sales
and new product development across 20-plus industries.
He has spent over 30 years practicing, excuse me.
He has over 30 years practice applying the principles
of lean thinking to companies large and small
across the country.
Mr. Wood will speak about different approaches
to every day problems in the workplace,
a necessary step towards innovation.
Please offer a warm welcome for Mr. Chris Wood.
(audience applauding)
- Thank you.
- I'm really excited to be here this morning with you all
and to talk about innovation and what that means.
It sounds like I've done a lot of things in my career
and I have been very fortunate to have done that.
But I started out as just a farm boy south of here,
broke everything on the farm,
so engineering was easy.
So we're gonna dive into talking about ideas,
innovation, invention, technology,
and I'll start off with some definitions.
We want to make sure everyone's on the same page.
And so lots of us have ideas in our work,
want to make improvements, want to be innovative.
So the first thing I'd like to do is define
these three elements: innovation, invention, and technology.
So innovation is really about improving
or making substantial changes
to a process, a product or a service.
Pretty basic, simple, straight line definition.
And then there is a difference between
invention and innovation.
If we go back to Alexander Graham Bell,
he invented the telephone.
That was something totally brand new.
And so invention is focused on creating something brand new.
And then we had Thomas Edison.
He's known for a lot of inventions,
and one of those were the record player, the phonograph.
And that was about 150 years ago when all that happened.
There's been a lot of innovation through the years
with the telephone, the phonograph and stuff like that.
And so what do we have today?
What has that innovation led us to?
It's a cell phone, right.
It has music, it has everything.
And so we have to remember it's an endless journey
of continually improving, making better and learning.
And the third element is we want to talk about
what technology is.
And technology is really defined as scientific method.
Applying it in most typically industrial application
using engineering and applied science skills.
It was first documented, the term "high tech,"
in about 1958, and they were talking about nuclear energy
at that time and called it high tech.
Well quickly in the computer industry,
that is very high tech also and because
a semiconductor plant is a multi-billion dollar facility
and there's an enormous amount of science
and material science, chemistry, engineering,
all those things make up high tech.
Well, also flying an aircraft, there's a lot of science
to keeping that thing up in the air too.
So you guys are all in a high tech position.
So those are the three things we start with
just to make sure we're all on the same page.
And technology is really about scientific method,
scientific discovery.
So as we move forward with this discussion of innovation,
we can look at it a couple different ways.
We can be internal to our work that we're doing
and with our team.
And I usually like to think of that
as continuous improvement of our work and internal focus
in areas that I have influence and maybe some control over.
And then also it could be external focus.
So I spent a lot of time in Spokane working with startups
and at the various universities in the region.
And often, everybody comes an idea to go sell somebody,
right, and that's a very external focus,
and that's the whole startup ideas and things like that.
So we have kind of those two different spaces.
But part of that whole process is whether
I'm selling my idea to a consumer outside
or to my team inside, it's about change management,
and we're going to talk about some of those elements today.
And it's continuous.
It's a long-term continuous improvement-type effort.
When we're internally looking at it,
it's about bringing our whole group along on the journey,
just not ourselves.
We can think a lot of, hey, I have this idea,
like General Holt talked about the airman
in the middle of the night.
We can move this, do this, this, this,
but if we don't pull in our crew and our team
and get on board, they're not going to come with us.
And it just limits our innovation.
And so those are some of the first key steps
we need to look forward to.
So I have a little roadmap we're gonna talk about today
about the journey and some basic principles,
good guidelines about little 10 little steps
to creating innovation in our environment.
So those 10 steps, they're pretty quick
and easy to remember.
And we'll start going through what those are.
And the first one is, I like to think about,
and this one has really been emphasized
over the last five or six years,
is they've really spent more time with startups.
Don't put the cart before the horse.
Somebody has the idea for that new, better mouse trap.
And usually, it's driven by some technology
that they've learned.
It becomes like a, if I have a hammer
and I know how to use the hammer,
everything becomes the nail.
It becomes a familiarity of the instrument
is what I want to use.
And I was down working with at University of Idaho
with a startup boot camp.
It was a week-long event.
There was a couple of the students to,
women that had a startup idea
and they are very excited because one of them's
boyfriend was in engineering school
and had access to a 3-D printer.
And their problem they were trying to solve
is they said, makeup brushes are very expensive,
they're hard to clean, and we want to do something
for cleaning our makeup brushes.
And I'm going, oh, that's great.
And they go, we're so excited because
we're going to 3-D print this cleaner.
And they were talking about all this 3-D printing stuff.
And then, and I said, you know what we can do?
In the 10 minutes, we can get in the car,
drive down to Walmart, and for under $30,
by an ultrasonic cleaner.
We can go put your brushes in there
and validate the concept.
So we don't have to wait for weeks of computer aided design
and figuring out the printing
and then what's the motor and the wiring.
We can go take something today off the shelf
and validate our idea.
So that's what we want to remember.
Don't put some technology in front or some solution or some,
you know, let's just go try the idea,
make sure we're not putting the cause and effect
in the wrong order.
So that's the first principle.
Now the second one is we need to stop and say,
what job are we really trying to do?
And Harvard Professor Clayton Christensen
likes to call it the job to be done.
And there was a national fast food company that said,
we want to make a better milkshake.
We're gonna put our best food scientists on it,
we're gonna use the best food science,
we're gonna get the best ingredients,
we're gonna run all these consumer tests,
we're going to look at what it really takes
to move the needle and sell more milkshakes.
And they ran those studies, they did that work,
and the new needle did not move.
They said, oops, what's going on here?
And they said, we need to take a minute
and look closer at this.
So they started asking questions.
They brought in a person with some fresh eyes and he says,
well, tell me about the customer.
And they said, well, it's milkshakes a treat.
It's usually served in the evenings and with a meal.
And he said, well, show me the data.
And they start looking at the data and they found
it wasn't something that people were sitting down
and drinking.
It was through the drive through, most of the sales.
The second part of that was most of the sales
were before 9 a.m.
And they're like, what, 9 a.m.?
What's going on?
We need to roll up the sleeves.
So they start talking to the people coming through.
They found out 90% of those people
had to commute longer than an hour.
So what's the job to be done?
They wanted a breakfast supplement that wasn't messy,
didn't get crumbs, didn't spill, would suck,
they could sip on for an hour, wouldn't be gone right away,
and they had some protein, enough filling
that they wouldn't be hungry by 11.
So the job to be done was a breakfast drink, not this treat.
So they missed the job to be done.
And so that's what we need to find out as we think,
most of the time we think we know what people want
and we think they know how they're going to use our product,
but 99% of the time, that's not the way
they're really using it.
So we need to understand the job to be done.
Then we need to, as we dive into that,
we need to step back and look at the big picture.
This so often a problem, we don't grasp the materials,
the methods, the machinery and the team members needed
to get the task done,
and we don't go flow the whole process.
I was in this situation in a titanium mill.
They were cutting ingots of titanium.
They were way behind schedule and capacity.
They couldn't get enough out.
So they were going to spend $20 million
on a new chemical pickling line to clean the scale
and everything off the titanium
before they rolled it and cleaned it up.
And they flame cut these ingots,
and when they flame cut these ingots,
they had to go in and hand grind and take
all the stress relief off that edge of that metal.
'Cause if they heated up the metal
and put it in the forge, those micro cracks
would go right into the rest of the metal.
So they had this very laborious process,
all the stress relief grinding, into the pickling line.
And I said, what happens if we cut it differently?
Let's step back and look at the bigger picture.
Where is the problem?
Really, it was how they were cutting it.
They could cut it, I said,
how many do you need to cut a day?
They said, about one a day.
And it takes about 90 days to get that piece
through the plant, and they need it
to go through the chemical line.
I said, how long does it take to cut one with the torch?
Oh, about 15 minutes.
How long would I take it to cut it with a band saw?
They said a day.
I said, how much does that band saw cost?
A million bucks.
And could you go put it in the furnace right away?
Yeah.
I said, well, I'd rather spend $1 million bucks
and take a day to cut it than 20 million in 90 days
on the new pickling line.
So we had to step back and look at the big picture
and look at what's happening along the whole process
and the pathway.
So also now, as we move into how we work,
we get too comfortable and too compliant
and we're just told the way things are done, right.
Our biggest competitor becomes status quo.
So many of the external startups always tell me
we don't have any competitors.
We have the greatest little thing, we have no competitors.
And one was a startup I was working with here in Spokane.
They'd been students at Whitworth
and after their freshman year, they can move off campus
and they didn't like the off-campus housing situation.
They said, we need more transparency with the landlords.
We need to create a system.
I said, well, who's gonna pay for that service?
They said, oh, we'll have the landlord's advertise on this
and then they can list their property.
And I said, and then what do the students do?
Well, they'll rate them like, what's that rating service?
Yelp, right.
And I'm going, really, you're going to get them to pay
for advertising and get bashed by students on your site?
And our biggest competitor,
how does that landlord advertise today?
He puts a 75 cent sign out from the hardware store for rent.
My status quo, how do I do the work today?
That's what I'm competing against.
When I change or I want to innovate
or I want to provide a new product,
how am I going to get that consumer, my team on board,
because I'm dealing with status quo.
And so we need to take a minute and have that group
learn the process, agree on the steps.
We have to talk about what it might be.
And so to do that, that creative tension,
we need to start evaporating clouds.
And what do I mean by that?
Well, I have my view of the world.
You have your view.
Here are the facts and data.
Usually, we're missing it all over the place.
So we need to get to that intersect point.
So the first step of that is about
having common definitions and a common language.
There's a old movie series called
Revenge of the Pink Panther.
It became cartoons.
Some of you might have seen that.
There was an Inspector Clouseau, Peter Sellers,
and he was bumbling and always had,
kind of making a mess of things.
And he goes into a innkeeper and he says he needs a room.
And he looks over while the innkeeper's
getting the paperwork and the keys.
And he sees a dog and he says to the innkeeper,
and the innkeeper's looking the other way,
he says, does your dog bite?
And the innkeeper, says, no, my dog doesn't bite.
And then Peter Sellers leans over,
Clouseau leans over to pet the dog and you hear that,
(making a chomping sound),
and he goes, oh, ouch!
And he goes, I thought you said your dog did not bite.
And the innkeeper says, it's not my dog.
Right.
So how many times have you been in that situation
in your work and you say, it's not my dog, right.
We have to get that common language.
We have to evaporate the cloud.
We need to take that time so we're all on the same page
so we don't get bit by that dog.
So that's a really critical part
about accepting change also.
I mean, you guys have inspections all the time, right?
And it probably feels like you're being criticized.
In industry, I call them audits.
You know, I can walk into a company very quickly
and I can start pointing out waste all over the place.
I can free up half your floor space.
I can get your product out of here twice as fast.
I can guarantee that.
Do you think I go in and tell them that?
No.
What I do is start with definitions
and then I give them a piece of paper and I make a map.
I take the CEO or the plant manager
and they have to follow around and draw a map.
I just get the emergency exit plan off the wall
and I make them follow that map.
You know what that map looks like?
A plate of spaghetti.
They drew it, and then we get done, I say,
okay, what's our next step?
And they go, we're going to change this.
So already I have them in my camp.
I've got them to that point.
I make it their idea, not my own.
So that has us moving to brains before money.
50% today is okay.
Or I mean brains before money.
So let's look at their alternatives.
Can I get 80% of the function at 20% of the cost?
I was working with Genie Industries
over in Redmond, Washington.
They make the scissor lifts.
They were putting in a new scissor line.
The engineer said, oh, we need a three quarter
million dollar milling center and we broke the work down
and we could do the functions for $5,000.
They sold the machine and we put in the new boring line.
The next element is brains, or 50% today is okay.
We hear the term a bird in the hand
is worth more than two in the bush.
That's like action today is worth more.
Why? Because we've learned from the activity.
So just start doing it is the next element.
Just go do it.
Just get going.
Planning in a conference room is great,
but getting out on the shop floor or out with the customers,
how they're using it, is important in this process.
So can we spend 20% of our time learning
and 80% doing taking this approach.
The next thing is look at all these sports teams.
I mean Gonzaga fans here, anybody?
Jimmy Kimmel's up next.
(audience laughing)
So sports is a big dollar thing, right?
And they have a scoreboard.
Where's our scoreboard?
Are we checking we had an idea, we had a hypothesis,
we think we can make this improvement.
How did we measure it?
Did we hit our target?
Is it sustaining?
Are we still doing it 30 days later, 60 days later?
And reflect upon the process.
Those are three checks we need to do
as part of our scoreboard.
Reflect upon the change process.
What worked well?
Do we have the right people?
Did we have enough time?
What was our program management like?
Those kind of elements.
And then the last part is our learning curve.
And we're in a very steep curve
and it gets steeper and steeper and it's okay to fall.
But we need to learn, adjust quickly, and repeat.
So this is the element of scientific method,
that we're using facts and data,
we ran these tests, we checked what we were doing,
we make adjustments.
Now, we might've hit that target.
And so in our adjustment is how do we start moving it
across our organization?
We might've made a point of improvement.
Now how do we link it to other areas?
And then the next element is, ah, we were slightly off.
So how do we do a slight reframing?
Did we get this problem statement correct?
Maybe we have to go back and reframe that statement.
And the third element is, it's time for a pivot.
We missed the thing big time.
We've got to turn.
And most of the startups I work with,
they're doing two or three pivots
before they get some traction going.
So thank you again for your time.
Remember these 10 little steps
and take them and go try them.
Thank you again.
(audience applauding)
- Thank Mr. Wood.
Our next speaker, I'm very pleased to announce him.
He is a founder and CEO of stay vacation rentals
and corporate housing for the last eight years.
With over 2,000 units in 32 U.S. cities,
a highly decorated former Airborne Ranger
and captain in the U.S. Army,
Mr. Allen realized and constructed a means
for alternative accommodations while traveling the nation.
He'll share how the military prepared and inspired him
to develop his business, as well as the challenges
he and other military members face
when it comes to innovation.
Please welcome Mr. Jordan Allen.
(audience applauding)
- Thanks everybody for being here this morning.
This is the first time I've been on a military base
since I got out in 2011, and I was like,
I got this overwhelming amount of stress
that I forgot my PT belt and it was like,
I'm gonna be a shitty leader.
Like, I can't lead people into combat.
And I'm like, wait, I'm not in the military anymore.
So I was pretty thankful for that.
(audience laughing)
Yeah, I mean I think that really finding your passion levels
is important and you guys got to see a lot of instruction
and a lot of really impressive speakers today.
My goal is to kind of tell you how I started a business,
because I think a lot of people talk about
all the fundamentals of it,
they talk about all the academic world
of starting a business and I'd just kind of like to tell you
how this all happened for me.
So I grew up here in Spokane, Washington,
went to West Valley High School.
After high school, I was just way too cool for this town
and it was time to move to the big city
and see what the world is all about.
So I moved to Portland, Oregon.
I went to Portland State.
Got to play football down there, had a lot of fun.
The Seahawks never called, one because Russell Wilson
took up all of the salary cap, and number two,
I was like the 17th string defensive then,
so I wasn't, actually, I wasn't even
really playing down there.
So after that, decided to join the Army.
So went down to Fort Sill, did officer basic,
and just loved it.
It was such a new experience.
Got to do the Airborne Ranger program.
And that's kind of how this whole business got started.
I was ended up getting deployed to Afghanistan.
My younger brother ended up in Iraq,
and you get your two weeks vacation.
We're like, hey, why don't we coordinate this together.
Do we want to go back to Spokane and see family and friends?
And I think we decided, that's not a good idea.
We were both young, single, saved up some money from combat.
So decided to go down to Denver, Colorado,
and watch some Colorado Rockies home opener baseball games.
So we had four or five guys that were joining us
and we started looking at hotels
and it was kind of expensive.
We weren't going to be able to stay together.
And so somebody had mentioned,
well, why don't you guys stay in a house
or something like that?
And it was like, you know, this was before Airbnb
had existed and some of the other websites like VRBO,
HomeAway were mainly Vail, Colorado, and Destin, Florida.
They weren't really city websites.
So we went on Craigslist and I sent this guy an email.
It was like, I'll meet you out front with cash.
I'm in the Army in Afghanistan,
like every other Craigslist scam.
But this wasn't, this was 2010 so the guy actually
booked the place off for me and I ended up meeting him
out in front of the building with cash.
So the plane lands down in Denver,
me and my brother are on it.
End up getting a rental car, we go to Costco,
get vodka, beer, chips, salsa, pizza, the whole thing.
And we walk up to the, or we get to the building
and the guy's out there and it's like,
hey, here's your $1,500 bucks cash for four nights.
So he walks us into this building and we go up,
there's a swimming pool, fitness center.
It was overlooking Coors Field.
If you guys have ever been to Denver, it's right downtown.
And we're in there and my brother's downstairs working out.
We've got a bunch of guys in the living room drinking beer,
getting ready to go to the game.
I'm like, this is it.
This is the future of travel.
This is the greatest experience I've ever had.
We're all hanging out together, the pizza's in the oven,
the beer's in the fridge instead of
the bathtub in a hotel situation.
But I'm like, this is like a $800,000 condo.
This guy can't be making any money.
So the guy showed up or the manager showed up later
and I go, how many of these do you have?
And he goes, I got five of them in the building.
I'm like, oh my gosh, you must be so rich.
This is incredible.
And he goes, no man, these are just apartments,
I rent these.
And being from Spokane and then going to Fort Sill,
Oklahoma, and then going up to Anchorage, Alaska,
I had never seen a really nice apartment building before
that was kind of built to this condo quality spec.
So I went downstairs and talked to the leasing office.
I'm like, hey, how much does a two bedroom, two bath go for?
And they go, it's $1,400 bucks.
And I go, oh my God, I just paid this guy's
entire month's rent in four days.
I went and looked at his calendar online,
he was booked out till October.
I'm like, this is it.
This is what I'm doing.
(audience laughing)
So ended up, yeah, you know, good artists create,
great artists steal.
So ended up getting out of the Army.
Was living over in Tacoma, and we had,
I started looking around online at apartments to rent
and I found one downtown and we started putting up
fake Craigslist ads, just like the one that we saw
for the guy downtown.
And people started calling me and giving me
their credit card information.
Like, holy shit, I need to sign a lease now.
So I was like, hey, you still have that two bedroom, right?
Yeah, okay.
I'm like, I need to sign the lease on that
'cause I've taken a bunch of people's money,
so now I need to get the lease.
And so it was time to furnish it.
We didn't really have any money.
It was $2,500 bucks on our credit card,
so we went to Walmart, got some sheets,
went to a storage unit off Craigslist, got some furniture.
And I remember the first guest checked in
and our first review came back and they're like,
Jordan was such an incredible host.
He showed us around Spokane, he told us
about all the cool restaurants,
but we haven't slept on sheets like that
since we've stayed in a third world country.
(audience laughing)
So we had a lot of improvement to do my.
My wife now, but my girlfriend at the time,
she was living in downtown Bellevue and she met me
at my apartment and I was, it was actually a townhouse
and I was living in this guy's basement.
And she walks in and she sees all of these
yellow sticky notes with people's credit card information,
I mean, just all over my bedroom and she's like,
are you, is this like some kind of human trafficking thing?
What the hell is going on here?
I'm like, no, the software is so slow
that I have to write people's credit card information down
and then I can put it in the software
after the phone call's hanging up.
'Cause I didn't want to take that long on the phone
because more people are calling
and I need to get their credit card information.
And so that's kind of how this whole thing got started.
And it's you know, I think a lot of people
when they think about businesses,
you need to go put together this like,
or go by business plan software.
You have to go put a 90 page business plan together.
And I think that that's probably one of the biggest mistakes
you can do because it's just not,
it's like constantly roadblocks along the way
that tell you that you can't do it.
It's just better to start doing things.
And I think if you can get a dollar from somebody
for your product, it's them voting saying that they
liked your product or service.
So we were getting a lot of votes.
So kind of fast forward five years,
we were doing about $25 million a year in revenue.
We were across 12 cities and it was time to,
okay, this isn't a side hustle anymore.
I think this is like a real business now.
We need to start figuring this out.
And you know, I think what we're really doing is like,
we were kind of building an army with a mission
to provide this next level generation
of hospitality experience.
And we used a lot of the things we learned in the military
like scale, how you pack your rucksack
is exactly how we set up our units.
The extra sheets and towels
are in the master bedroom closet.
That way, whether you're calling from Boston,
New Orleans, Denver, no matter where you're at,
our guest service agents can pick up the phone and say,
hey, all your extra stuff is in the master bedroom closet.
Like that's the only way you can scale
is to have that consistency.
And nobody scales better than the military.
It's the number one scaling organization in the world.
So it was like, this is a real business,
we need to go raise some capital, so we went to US Bank.
They told us to get the hell out of there.
When you're growing really fast,
you don't always show a lot of profit
because you're reinvesting your money
back into your business.
And they only want to give you loans if you have profit.
And we didn't know what the word equity meant
to go raise venture capital funds.
This was still kind of in the early days,
particularly in Spokane.
So I just started Googling venture capital
and I met a few people and they introduced me around
a few other people just like you'd Google
the nearest pizza place or where
should I go get breakfast in Spokane.
So started making some phone calls
and after my third phone call, this guy's like,
well, why don't you fly over here to Seattle?
So I flew to Seattle.
This really scary British guy sat across the table from me.
I told them about the business,
kind of like I'm telling you guys right now.
And he didn't crack a smile and he just stared at me.
It was really awkward and it lasted about two hours.
I was starting to sweat.
It was January.
(audience laughing)
So it was, I left the office and the guy I was with,
oh my gosh, that didn't go very well, did it?
He goes, no man, that went really good.
Did you see like the corner of his mouth,
it kind of went up a little bit.
So the next week him and his team flew over to Spokane
and wrote us a $15 million check
and it was pretty exciting for us.
It was really time for us to scale to the next level.
Their family runs an $18 billion family office.
I didn't know this at the time.
I should've because it was like the top office
of the top building in Seattle.
I should have known they had a little bit of money.
And we continued to grow.
And now, I think I got my slides on here.
Now we're in close to 32 cities.
We've got a little over 2,500 properties.
We've got 250 employees.
We're on track to do about $130 million in revenue this year
and should do about $250 next year.
This is not the furniture from the storage unit
on East Sprague.
This is one of our properties we just set up in Columbus.
Is anybody here from Columbus?
No. Maybe.
So Columbus has the Zippity Doo Da festivals.
So now we brand stuff to make it feel
like it's kind of local market.
Columbus is also the fast food restaurant
testing center of the world.
So we put eat your veggies on the pillow.
Jack Hanna is from Columbus.
He probably wouldn't appreciate this,
but we put a zebra print rug down there.
And then this is kind of again,
just like what we've evolved to do.
And I think if we put a business plan together,
I might be managing trailer parks or camp grounds
and bringing dynamic pricing to all kinds of stuff.
We had no idea what we were doing,
and I think what we did is we learned and evolved
along the way.
And so now we operate upscale travel apartments.
And what that means is we go downtown to the best locations,
find the best buildings and operate
a consistent guest experience from city to city.
And again, back to that military kind of training,
like having that consistent guest experience
is how you scale.
If every single thing you do is one off,
a one off piece of art,
it's really hard to kind of reproduce that over and over.
You guys have probably stayed in Airbnb before.
It's been around for about 10 years.
A lot of people when they think of Airbnb,
it's like the stinky kid with the backpack
going to stay in a dorm room, and it's evolved.
The company's now worth about $35 billion
and there's a lot of new kind of
niche business segments within that and we're one of those.
It's really combining the best of a vacation rental
and the best of a hotel and it's just a really fun,
kind of exciting industry to be a part of.
It's like if Marriott and Airbnb were to have a baby,
that's kind of what the Stay Alfred concept is.
So this is just kind of a highlight overview
of our business.
We've got 32 cities.
We're in 100-plus properties with over 2,200 units.
And you can see all the cities that we're in
and continue to expand.
We're actually looking to expand it over to Europe.
We're looking to buy a company in Prague
and Berlin right now, and it's fascinating
because of the company from Prague,
they don't have their information together.
Nothing's in Excel spreadsheets.
We're having to manually hand jam everything.
They're really difficult to negotiate against.
And then we talked to the company from Berlin.
It's like you'll execute the NDA,
we'll set up a Dropbox folder,
you'll have the leases translated in English,
and it's like, no wonder that the Germans took over Prague
in like four hours without firing a bullet.
(audience laughing)
So you get to see how you scale.
The Germans have kind of figured that part out.
So again, kind of our business model of what we do
is we go find apartments.
You go on apartments.com, you send people out to cities.
They run around and we go lease and furnish them.
We're actually manufacturing our own furniture now
in North Carolina.
So when you go to that hotel and feel that 500 pound chair
and you're like, where the hell did they buy this stuff?
Like, you don't buy it, you have it made.
So we're making a lot of our own furniture.
And then once that's up and furnished,
we start making reservations, we advertise all over the web,
and then finally the guests check in
and have an amazing experience and check out.
Technology and disruption is the biggest aspect
of our business.
We're here in Spokane being able to operate,
we're going to have about a million guests this year
check in with us, so to be able to communicate,
to be able to get guests in their rooms
with smart lock technology, using their phones.
Not every cell phone is the same.
Some of them don't have the NFC technology.
The iPhone 6 is free to even use a smart lock.
The guy that's coming over from China
may not have wifi service,
so even though there's all this innovation and technology,
sometimes a 2,000 year old lockbox where you punch in a code
gets people in every time.
So we do revert to backup stuff like that sometimes.
This is one of our buildings in Nashville.
If you guys haven't been to Nashville, please go.
It's one of the coolest happening cities
in the United States right now.
Home of country music, but it's evolved much more than that.
But this is one of our properties that we've signed.
We've got 10 floors in this building, so it's 140 units.
And it's just a completely different hotel experience.
You walk in, there's not really a lobby,
but then you go back and it's got a rooftop pool
that's kind of Las Vegas style.
And just a great experience,
especially if you're traveling with family and friends.
Shows a few other partners that we're working with.
Yes, I'm doing a shameless business blog right now.
Just some of the things that we're doing from technology,
like in the vacation around the world,
nobody has a loyalty program.
So you stay with us 10 nights,
we average the number of nights and you get a free discount.
We stole this from Expedia and Hotels.com
because they had such an amazing loyalty program.
Again, great artists steal.
But we have about 25 software engineers
that constantly are just figuring out new technologies
that are out there.
How do we implement them for our business
to be at the cutting edge.
Really it's just pay labor costs
are getting really expensive and to have 50 people
running around the city versus having the app on your phone
that can do pretty much the same thing
really allows us to scale and reduce costs.
Next slide.
Just want to show you guys some of the technologies we use.
There's probably about 50 more of these on here.
But it let's you know the interconnected,
like just how much we focus on technology
and trying to bring it all together under one tech stack.
It's nothing short of brain damage to do this.
Like just think of the military trying to get programs
to talk to each other.
We're maybe a little bit further along
than that in some regards, but it's a lot.
And this is kind of what I wanted to talk about
for the majority of the rest of my time,
I've got about four minutes left.
Yeah, vision, mission, values.
When we first started, we didn't have values.
I got out of the Army and it was like,
okay, sales and high performers,
that's what being a business is about.
And then we hired Ross Culverhouse, and Ross Culverhouse
was selling three times more than anybody else.
That's his real name, by the way.
I can't stand the guy, so I'm going to talk about him.
People who were like, hey Jordan, that Ross guy,
I think he's sleeping in the office.
I go, you guys, he's selling three times more
than anybody else.
It doesn't really matter.
And people were like, hey, I think people were like,
I think he's maybe doing drugs in the office.
I'm like, you guys, he's selling three times more
than anybody else.
(audience laughing)
And they're like, hey, he's kind of harassing
the girls in the office.
I'm like, yeah, but you know,
he's selling three times more than everybody else.
(audience laughing)
So Ross went in, ripped up his employment agreement,
took all of our contracts, went down to Miami
and then started competing with us three days later.
And this was kind of the point where it's like,
oh my gosh, people were telling me about this.
I wasn't being maybe humble enough to listen
to what people were saying
and I'm not going to do that again.
So we ended up figuring out what our core values are.
This is how we hire, train, promote.
If you're the most talented person in the world
but you don't fit our core values,
you won't be a part of our organization.
So we've got the six Hs.
We have happy.
We're selling vacation rentals,
so if you're not happy, you're like,
oh, I hate my wife, I hate my kids,
get the hell out of here.
This is like, you need to match people's
level of excitement.
Humble is probably the biggest piece.
Again, we're in a really fast growing industry
and don't hire know-it-alls and assholes.
That's kind of our philosophy.
And you know, probably one of my biggest takeaways on this
is the biggest probably mistake of my life
was when I was in Iraq and there was this new radio
that came out and I was like, second lieutenant
and they're like, hey, sir, do you know how to use this?
I'm like, oh yeah, no, I definitely know how to use it
'cause I didn't want to seem like
I didn't know what I was doing.
And then we got out in combat and ended up
getting in a firefight and it's like, holy shit.
Like I could've killed everybody in my unit
by not having radios to talk to aircraft.
I'll never do that again.
And it's just those like things where you know,
I think the Army culture or the military culture
has a long way to go on that.
Forget your PT belt and really making sure,
show me how to use this and kind of
dig in a few extra steps.
And that's kind of the philosophy that we've taken
in our business now is, if you're not a humble person
that's willing to listen to feedback, including myself,
you're just not going to be a part of the team.
Honest, obviously, telling the truth's important,
but it's more about being kind of genuine
and being your real self.
I think the sincerity thing is critical for this.
We had hardworking up there originally,
but we had a lot of people that were fitting
all these values and they're working really, really hard.
They just weren't getting the job done.
So we were, we're starting to let people go
that were fitting our values and it's like, okay,
we might have to take a look at our values again
because this doesn't seem to be working.
Hungry.
I think the concept of group think is a negative word
in most organizations, but when you're in the startup world,
you need everybody in your organization
drinking the company Kool-aid,
doing a keg stand with the company Kool-aid,
like believing in it because it's so hard
and if you don't have that shared vision and mission
with your entire group, it's just too easy to quit.
Every day is like, it seems like the world's
coming to an end and then it's just highs and lows
all the time.
And then H-loyal like, hey, take care of the company.
(audience laughing)
Yeah, I couldn't figure out an H word.
So we just threw H in front of H-loyal.
Should have explained that.
Yeah, we've got an...
So this is one of those things
like if you're going to go leave our company
to go make an extra buck somewhere else,
you're kind of leaving for the wrong reasons
so why are you part of the organization?
It's because you believe in the vision and mission.
You're going to go through, you're going to lose 30%
of your brain power over the next five years working for us.
So we're going to take care of you.
So we're really big at promoting people from within.
We really do encourage ideas.
I think it's like, hey,
is this going to screw up the business?
Okay, then just go do it.
We kind of don't put a lot of planning
and processes in place.
It's kinda go do it, learn quickly and fail.
So that's all I got for you guys.
Hope you enjoyed some of that.
Hopefully you got some nuggets and, what am I doing next?
Walking off stage.
Okay.
(audience laughing)
- Thank you, sir, that was awesome.
So we got 10 minute break right now.