Creating A Thinking Tool Culture In Your Company

Dan Sullivan: Hi, everyone, this is Dan Sullivan, and I'm here with my podcast partner Steve Krein, and this is the next episode of the Free Zone Frontier, which is about where entrepreneurs are heading in the future, and many of them are in the Free Zone right now. And this will be a two-part podcast, and so, Steve?
 
Steve Krein: So excited to have this conversation, Dan.
 
Dan Sullivan: And we've just been trading entrepreneurial lore for the last 25 years or so that we've actually been working together. What we're doing today is we're writing one of our quarterly books. And this is book number 36 in quarter 36. And it's called Everyone And Everything Grows. Steve, this is the first time that we've gone backstage at Strategic Coach, because we get a lot of requests: Well, how do you guys find great people? How do you train people? And everything else. And I have some smart aleck comments like, "Well, we've got a dispensing machine and you just have to put in the right amount of money and a great person pops out."
 
But we actually have a very in-depth system of basically mindset-based and thinking-tool-based that everybody in our backstage does the same tools that the entrepreneurial clients in the front stage do. I got to the point where I said, "We're getting so many questions about it, I think we ought to give them the full description of how our front stage has been put together." This will be year 35 next year. So we'll be in our 35th year. As of November 13, actually, it's 34 years complete, and then year 35 starts. And I said, "You know, this is a good time to actually kind of describe how we've gone about creating the backstage."
Steve Krein: Well, first of all, Dan, it's great to be here as always talking with you and reflecting and talking about both the past and the future in helpful ways and useful ways for our listeners. But this book in particular, and I think I might even go as far as to say the last three or four books, have been very helpful in what I think is going beyond observation and talking truly- It almost seems a little autobiographical. This seems a little autobiographical about the company. And I haven't read this one. I've read all of your others, of course, and multiple times, in fact. And I've always been fascinated for the last 25 years at how... I'd like to say I geek out on your tools, like, you know, you come in, what's Dan's latest thinking and how's he thinking about it? But I think there's some continuity in how you think about creating tools, why it's important, not just for you to use a tool to get your thinking clear, but to help us in your community become clear.
 
And I think for those of us who've been around long enough to have watched the Program evolve—I know there's now hundreds of different tools—I think it's really helpful for you to explain the thinking tool culture that you've built, not just backstage, but I think you've almost reframed it for all of us in your community and for us all building our own communities and have built now StartUp Health for the last 12 or 13 years, thinking tools are at the core of our, not just value creation, but scalability ourselves. And I think it's really almost a benchmark standard of what a tool needs to do, how it needs to add value, and how it needs to be simple. But I'm really excited to learn more about your thinking around how the title is Everyone, Everything Grows, the thinking tool culture. So let's dig in.
 
Dan Sullivan: Yeah, well, thinking tools for me, first of all, it's a process of thinking that I've picked up from having entrepreneurial clients. So next year in August will be 50 years since I've been coaching entrepreneurs. So I started in August of 1974. It took a long while to get a handle on what I was doing because I just jumped into the deep end of the pool. I had been an advertising copywriter with the Toronto branch of a global advertising agency called BBDO. My mother told me when she was 73, she finally found out, since I've left home in 1962, what I do for a living. She was busy, you know. I'm one of seven, and she was busy.
 
And you have a different relationship with every child, and I was in kind of an easy relationship. But she says, "You know, you were doing this when you were a kid. You were actually helping adults actually think more clearly." There's a famous story of my next-door neighbor who was 78 when I was 8, and I would ask her about her experience. She was born in 1874, and she talked about the farm with no electricity, no tractors, no trucks, no machinery that was electrical. And I said, how could you do that? And what you realize, she lived a normal life. You know, you don't miss things that haven't been invented yet. And she would call my mother after I was over talking and she said, "He got me thinking about things that I hadn't thought about for 50 years or 70 years and, you know, I feel better."
 
That's kind of what I do with entrepreneurs. You notice in almost my thinking tools, I ask you a little bit about your past, more so recently, because I realized that entrepreneurs cannot have a more confident future until they have a more confident past. They've got to reinterpret what their past experience has been, and my attitude is, it's their property, so they can do anything with their property that they want to.
 
Steve Krein: Let's pause there for a second and just dig into something I've noticed and I have a deep appreciation for your consistency with, which is any use of your past is for learning.
 
Dan Sullivan: And it's legitimate. It's legitimate.
 
Steve Krein: Yeah, and so there's very little, I would actually not say little, there's no negativity that is talked about regarding your past. It is all learning. You know, you've always said you're on the winning team or the learning team, and I've always appreciated that saying. And I remember early on, you used to have something, I think it's been a different name now, it used to be called The Negativity Transformer. Yeah. Now it's The Experience Transformer. I'd love to hear your thinking around that, because you clearly have made a very important decision early on in Coach's thinking tools to not allow people to go negative and make complaining a problem for what they're doing with the thinking tool.
 
Dan Sullivan: Yeah. Well, even in The Experience Transformer, we have three columns. And the other thing about a thinking tool is that it's a structured form on a piece of paper, or it's digital these days. You can do it digitally. But what I got to realize about that particular tool, The Experience Transformer, you think of a past experience, and then you say, what worked about this experience? And if it was negative, they say, well, nothing worked. It was negative. And I said, no, no. You know, for example, what did you learn from that experience that was a win?
 
You know, we have experiences in common of people that we have been involved with legally. And, you know, it was a bad experience. In my case, you know, it was a flagrant appropriation of our intellectual property, and we sued him. But when I got finished the lawsuit, which I have a nondisclosure on, so I can't say who it was and I can't say what the outcome was, other than the fact that I was not unhappy with the outcome. But when we got finished, our IP lawyer, who you know, John Farrell, who was in your Coach2 program. And John is a wonderful IP lawyer in Silicon Valley. And he says, "This has been very costly. Nobody wants to go through this. It seems like a waste of time. It seems like a waste of money."
 
But he says, "Knowing who you and Babs are, you'll take whatever cost there was to this litigation, and you'll multiply it by a hundred times value." And John just knows what I do with any experience, you know, and that my sense is, the world kind of happens to you. None of us has a memory of asking to be here, you know, and we wake up and, you know, I mean, the teeth, you know, it's all input. And as a child, you're growing up, so the world is kind of happening to you before you can even think about what's happening, because the human brain, they're discovering more and more, isn't fully developed until someone is 24 years old. They said the full use of your brain. Well, think about teenagers today and what's happened to them before they're 24. And it's really coming at children and adolescents and young adults these days. I mean, there's so much just coming at them that wasn't true in the 1940s, '50s, and '60s when I was born.
 
But here's the thing, you can't change the events of the past, but you can change your interpretation of the events. So, the thing that you think is a bad experience was bad because that was your interpretation. It's not the event.
 
Steve Krein: At that moment in time at that.
 
Dan Sullivan: Yeah. The event is just the event. You can't rewrite history, but you can rewrite your interpretation of your own history. And the other thing is, you're the only one who actually knows it. There's nobody else on the planet who actually knows your history. The day-by-day experience and what you were thinking about, you're the only person. So as far as I'm concerned, it's totally your property. And you can rearrange your property and you can improve your property, you can do anything you want with it.
 
So we have the first column as what worked, and they get five things. I require that they get at least five things that worked. And then I say, okay, now what didn't work? And now they've got a greater sense of confidence from what worked, and they can re-look at what didn't work, and now they're just lessons. You know, they're not wounds to themselves, they're not injuries or anything, they're just experiences. And then I say, well, faced with a similar experience in the future, what would you now do differently than you did the first time? And all of a sudden they said, geez, you know, that wasn't so bad after all. I learned a lot from that. And I said, if you learned, then you're winning.
 
Steve Krein: Yeah. Well, I think it's a training ground. I don't remember what year of the Program you get introduced to that concept. Maybe it's in the first year.
 
Dan Sullivan: I can tell you exactly when it was. It was 1999.
 
Steve Krein: There you go.
 
Dan Sullivan: Yeah. It was because of an experience I had in London where somebody broke into-
 
Steve Krein: Oh, yeah, it was the book, right?
 
Dan Sullivan: The Gloucester Millennium Hotel. I always give them a shoutout because they just did a terrible job of responding to it.
 
Steve Krein: Yeah, that was- You had a book, before you could have backups, that was a book that you had on the computer, if I remember correctly.
 
Dan Sullivan: It was gone. My book was gone. My computer was gone. Fortunately, I had a team member in London with me, but I wrote an entirely new book. I didn't try to recapture the book.
 
Steve Krein: Do you remember which book it was?
 
Dan Sullivan: You know, I'm up to, counting the 36 that we're doing in the quarterly books and the three that we wrote with Ben Hardy, I think I'm up to 53, 53 books, you know.
 
Steve Krein: 53 kids. So let's actually use that experience, because one of my questions was going to be, how do you know when you need to start a new tool like this one? Or, and I always think of, I remember this goes back a long time. You had a framework for a tool belt or a toolbox that all these tools fit in. And it was The Pocket Coach and you had a couple of things in the beginning, but how do you know when to go pull out something in the arsenal of tools and it's time for a new one? And this clearly was time for a new one. None of the other tools would suffice, but take us through your thinking on that.
 
Dan Sullivan: Yeah, well, we were on a speaking trip to London because we didn't have the Program in London at that point. That came in in, I think, 2008 was the first time. But I was getting speaking engagements and that was a May marketing forum for us. And we had a lot of British clients coming to the United States and Canada, so this was very important. We had a day flight and we got into London very late, and the next morning I gave my speech at the same hotel. So we picked the hotel where the event was. So at 9 o'clock, I went to it, and I was using my Mac to use the slides. We had slides in those days, and I was projecting the slides with my Mac. And these were very valuable, I didn't realize, but the London police who came to talk to us about it said, this computer is very popular to steal right now.
 
Anyway, so we came back. I put the laptop right inside the door. They had sort of a little shelf inside the door, and we went out to eat. And we had lunch. We had a long lunch, about two hours, and I came back and the door was shattered. The handle to the door was almost hanging down, and somebody had just shattered the door. And Babs had money, we had jewelry and everything. They didn't take a single thing. They just took the Mac, and my feeling is that somebody had been at my talk and spotted it, you know, did some inquiry. Might have been an inside job, you know, for all I know. The way the hotel responded to me, the Gloucester Millennium Hotel, they just didn't want to admit that this had happened in their hotel. So we moved out. We moved out that night.
 
And I had a one-week deadline for getting this book done. So foolish Dan, you know, I'm a little bit dull on the details of using a computer. You have to back things up immediately. So I was sitting there. Babs was really tired. She went to bed, and I was sitting there. And I said, I have no energy whatsoever for recreating the book I had. But I have enormous amount of energy for creating an entirely new book and doing it in one week. I said, I really like that. I really get excited about that. The next Friday, the team member who was with us, who had another Mac, he was on Free Days, more or less, with us. I forget what the authoring's, but you actually lay it out page by page.
 
Steve Krein: QuarkXPress.
 
Dan Sullivan: QuarkXPress. QuarkXPress, yeah. So we just created an entirely new book and it was all laid out. I came up with an entirely new title, and we went through the whole thing, and I had it all complete. And meanwhile, I always do graphics in my books. I was just doing graphics on sheets of paper and faxing them through on the hotel fax machine, and we just sent it through so they could be working on the graphics. And he arrived back in Toronto just before deadline. They just had to edit it and proof it. It had to be off to the printer by the next Monday so it had to be-
 
Steve Krein: So how did The Negativity Transformer, as it was called then...
 
Dan Sullivan: Yeah, it was negativity. So I went through this process and I said, hey, this is kind of a neat thing. When something really negative happens, you have a great deal of energy available to you, but it's negative energy. And if you can give yourself a new focus, a brand new focus, then it becomes positive energy. Because I had enormous energy for this project. I didn't have that amount of energy for completing the previous book. So to me, it was like a reward. Those robbers actually did me a favor. They got me off a book I wasn't that interested in.
 
Steve Krein: Right. So upon reflection, when you finished the book, did you realize there was a tool here? I was trying to get inside your head a little bit to thinking when in the process was it time for a tool?
 
Dan Sullivan: Yeah. And I think that I did it in rough form. You know, I mean, we didn't have the technology at the front of the room back then. I mean, I had overheads too, you know, I was doing overheads on the screen and everything else. I just played around with it for a couple workshops. I was doing a lot of workshops in those days. I just played with it. And I said, you know, think of something negative that happened to you, and I sort of recreated it. And I said, looking back now, what worked- One of the things, all my tools are binary, that you're creating 100% and you're creating zero. And it's like electricity, you have to have the differential between positive and negative to create new innovation.
 
So, there's a great composer, historic composer, Johann Sebastian Bach, who is, you know, world famous. He's got this mastery of contrapuntal, where he has two rhythm lines that are almost opposed to each other, but he gets them to work together. And I think that all creativity is contrapuntal. You create up one extreme, you create another extreme, and the new thing is created in the middle.
 
Steve Krein: Right. That's probably related to the flow of VOTA—Vision, Obstacle.
 
Dan Sullivan: Vision, Opposition, yeah. That was my first tool, which really created the Program, The Strategy Circle. That was 1982. So we already had this, and we had a lot of other tools in the Program, but this one experience, The Experience Transformer, the tool that evolved from the robbery. And more and more as I go on, I said, I'm so thankful those guys broke into the room. And I mean, it only cost me a computer. I paid a Mac for a new tool.
 
Steve Krein: So, I want to dig into your tool creation. How did you know, so obviously this time was a tool that didn't exist in your toolbox, but a couple hundred tools later, with so many different ways of slicing and dicing VOTA, so many different ways of slicing and dicing goal setting or thinking about anything that an entrepreneur faces every day. I find it fascinating that you're not relying on- I mean, I know there are some tools that you use every day, like Impact Filter, that are time tested and useful. Probably, as you said, you do them every day. But for the most part, you're creating a little bit of a new dimension to your toolbox.
 
How do you know when to use an old tool for what you're challenged with, and it's time to actually slice it a different way? I'm always interested in that. It's not like you're relying on Strategic Coach's 10 tools. There's frameworks and fundamental foundation, but there's so many, especially as you get into 10x and Free Zone, you're slicing and dicing things in so many different ways. I'm just always like, how did you know not to go back to an old one and use that for the exercise versus the creation of a new one?
 
Dan Sullivan: You're responding, you're in a relationship with the audience, you know, I'm in a relationship. Personally, every quarter I'm dealing with 500 entrepreneurs, and I'm testing the ideas. And I've got a rule that I've learned, I didn't have it at the beginning, but I've learned a rule is never fall in love with your tools until the check writers fall in love with your tools. So I'm constantly getting feedback. You're one of my main sources of response that I take into account when I'm creating a tool. I say, you know, I wonder how Steve's gonna... "What is this? This is just a replay of something else." But that's very valuable to me because very few clients, they may think that, but they don't say it, but you think it.
 
Steve Krein: I feel close enough to you, Dan, after this many years.
 
Dan Sullivan: Not only that, I don't think I'm peculiar to who you do this to. I think you do it to everybody. I need that direct response. I said, if I show him another tool, I have a different reason for showing him the tool, a different context for the too. But I look at the tool. Some of the tools are one-time tools. They're good for a quarter, and it gets them to think about something, but it's not like a daily workout that they have to do this. It's just going back and taking a look.
 
We did one that I haven't repeated at all called "Sunk Costs." And I just had people identify sunk costs where they're spending money on something, and they've spent an enormous amount of money on it, but they're getting zero value out of it. And immediately, people identified three sunk costs, and they said, God, I got to get out of this. But I wouldn't do it the next quarter. They already did sunk costs for one quarter. It's like the difference between a TV special, a one-time event, and something, a series that runs for eight years.
 
Steve Krein: Is that organic, that it happens that way?
 
Dan Sullivan: Yeah, you can't predict it. It's a feel for what the response is.
 
Steve Krein: Because if I use that, and I'll take it to your 3x3 that you're doing now, and I'm like, that tool, I remember the very first time you even wrote it down, it wasn't even a tool yet. Then I watched it evolve. I remember the Howard Getson back and forth. And then it got another dimension with connections between them. And then a couple quarters later, or not even maybe a couple quarters, maybe a couple Connection Calls later, all of a sudden there's another layer. And that has become such a, it's not clearly a TV special. That's kind of in the toolbox. So is that organic just by the response of the-
 
Dan Sullivan: Yeah, totally the response. It's totally the response.
 
Steve Krein: You don't know when you're doing it. And it usually comes, I'm assuming, even like the sunk costs thing or your 3x3. Somebody came up with a question, you use a framework to answer it, and then it gets on a life of its own.
 
Dan Sullivan: Yeah. And some of them are dead shortly after arrival and not as much recently because, you know, I've sort of internalized how I think clients are going to respond. They're busy people. They like thinking about things quickly, coming to a decision quickly, and taking action really quickly. I mean, that Hallowell, You know, he's one of the great gurus in today's world for ADD people. He's written eight or nine books, and he and I get along really good. Like everyone else, I met him through Joe Polish. Anyway, Ned came and sat through two workshops, and he said, "I've never seen any presentation or any method of teaching that is so geared to ADD people." And I said, well, that probably has to do with that for, you know, the last, you know, at that time, probably 40 years, I said, the last 40 years, 60% of my client base have been somewhere on the spectrum—or just impatient, you know, not necessarily ADD, but just action-oriented, very results-oriented, very action-oriented.
 
And I said, I've got to get them at hello, you know, like when I introduce a new tool. But the one way of doing that, Steve, and I'm just clarifying that in my mind as I respond to your questions, is that the first things you do is you open the idea and it's strictly about them and what happened in the past. You know, they're in their own realm with this. First of all, it's totally about them, and that's a good way to get people interested and make it about them. But then it's about something that only they know. And I'm just seeing the logic of this as you're doing it. So if I did The Strategy Circle again, I would take them back to some previous experience. I wouldn't just start them out with the vision of the future. But, you know, we got other tools that do that, so I don't have to fool around with the tool.
 
Well, Steve, this brings us to a good point for ending episode one of this two-part podcast. So this is the first, and you'll now wait for the second.