Disrupting the Natural Products Market: Strategies for Growth and Innovation

Mike Maddock: 0:00

I promise you that there are people in the audience. That will be the disruption that the industry needs. The real question is is it going to be you?

Tina Smith: 0:15

Welcome to the Natural Products Marketer Podcast. I’m Tina and I’m Amanda.

Amanda Ballard: 0:20

And we’re here to make marketing easier for natural product businesses, so you can reach more people and change more lives.

Tina Smith: 0:29

Welcome to the Natural Products Marketer Podcast. We’re joined today by Mike Maddock, who’s going to be speaking at the SoHo event in Orlando in September, so we’re really excited to have you here, mike.

Mike Maddock: 0:43

I’m excited to be here, hello, amanda, hello.

Amanda Ballard: 0:47

Welcome back. It’s been a while.

Mike Maddock: 0:49

It has, but it’s good to be back.

Tina Smith: 0:51

So we thought we would get a preview of your discussion that you’re going to be sharing at Soho so that people can know what they’re in for when they get there. And we noticed that your talk is all about disruption. So tell us, why did you pick the topic of disruption for these natural products retailers?

Mike Maddock: 1:11

Well, a long time ago, a long, long, long time ago, I started a consulting firm called Maddox Douglas, and over the years, maddox Douglas has worked with CEOs or C-suites from 25% of the Fortune 500. So big brands you’ve heard of and what we were doing for them was helping them launch new products and services. And I know, because I’ve been in the room, that small businesses and entrepreneurs are the boogeyman that keeps these CEOs up at night, and so these people are disruptors. They’re typically the things that they don’t see coming. They create the new products, the new services, the new business models. So I figure the room’s going to be full of disruptors, or people that ought to be disruptors. So why not talk about the questions that disruptors ask themselves?

Amanda Ballard: 1:59

Yeah, that’s really interesting. So you also run these peer group and advisory boards and you’re helping these CEOs and operators solve the big problems. So what are the biggest questions and concerns that they have? And I mean, I know you alluded to these little guys keeping them up at night. What other problems are they facing?

Mike Maddock: 2:20

Well so let me tell you a little bit first about a couple more things about disruptors, because I want to see if people in the audience recognize themselves in this story. So disruptors have a few things in common they’re often new to the industry. Being new to an industry helps you see things that others are missing. They’re not B2B people or B2C people. They’ve created B2Me firms, which is to say that they know their customers better. They’re so close to their customers that they understand the customer’s needs far before larger companies can. They’re naive to rules. They don’t understand what’s been tried in the past, what’s illegal, what’s worked, what shouldn’t work, what should work, et cetera. So the fact that their naivete actually gives them an unfair competitive advantage. Disruptors tend to be natural prototypers. They want to rapidly experiment so they can fail forward quickly and you can imagine that’s not what big companies do and they get bored very easily. And to your question, amanda, a lot of the people who wind up in these peer groups what are disruptors? They’re people that want to see the world differently or they’re afraid they don’t. So the questions that I hear from people in my peer groups, these advisory groups, the number one question is how do I move past my current plateau. They’re afraid that they’ve hit a plateau and they want to get through it very quickly, which reminds me of a story.

Mike Maddock: 4:03

I was at a conference in MIT and my friend Vern Harnish, the founder of Entrepreneurs Organization, stood in front of one of those giant whiteboards that you had in Psych 101 in college and he said I’m going to show you some things.

Mike Maddock: 4:17

And he wrote 1 to 5, 5 to 10, 10 to 20, 20 to 30, 30 to 40, all the way up to 200. And then, over one to five, he said this is your issue. With one to five employees. And over five to 10, he said this is your issue. He went on the whole board and at the end he put and wrote an issue for each size company and he put down the marker and said does anybody have any questions Now? This room was filled with about 100 entrepreneurs from all over the world and we all went just our jaws dropped because he nailed the issues for each one of those companies the companies had at that particular moment in time and each one of those is a plateau, each one of those. There are things that happen and people in these peer groups would rather learn from wisdom than intelligence said differently. They’d rather hear from someone who’s already been through that plateau, who may see it differently than they do, so they can scale more quickly.

Tina Smith: 5:14

Yeah. So okay you are talking about, people are sitting there in these peer groups and they’re trying to learn from other people who have already been there and scaled past that plateau. And it just makes me think you know personal experience. I’ve hit plateaus myself where it just feels like you’re at a revenue level or a success level that, no matter what you do, how much money you spend, how much time you put into the business, it feels like you can’t get past that because there’s some kind of ceiling that’s happening and sometimes it’s all in my head and you know it’s a mental block, but sometimes it’s a people or resource issue, or sometimes it’s a different kind of issue, and so these are the kinds of plateaus that you’re talking about taking people through.

Mike Maddock: 6:03

It’s probably things they’ve been working on again and again and they just don’t know how to fix. Yeah and I. First of all, tina, I want to commend you for being so transparent, because being in a room full of other P&L owners liberates you to be able to have the conversations like oh my gosh, I’m embarrassed, I’ve been at $500,000 for three years, or I’ve been at a million dollars for two. I can’t get over this hump. What’s going on?

Mike Maddock: 6:27

I like to say that wisdom is learning from other people’s mistakes and intelligence is learning from your own. So who has the wisdom? There’s a tenant in design thinking that sounds something like if you keep trying to solve the same problem over and, over and over again and can’t solve it, you’re probably working on the wrong problem. So the magic is being able to be surrounded by people that naturally look through a lens that helps them see your problem differently than you do it. My friend, marshall Goldsmith wrote a book called what Got you here Won’t Get you there, and sometimes the very superhero power that you have is what’s holding you back. So you need an advisory board or people in your company who can kind of shake you and go whoa, I see it differently than you. So a great example are you two Tina, you look through the lens of strategy and Amanda, you look through an operational lens, so you can look at the same problem and see a completely different possible solution. And that’s what makes companies scale being surrounded by people that see things differently than they do.

Amanda Ballard: 7:38

So how do you help how businesses identify who those people are on their team or what gaps they have in their advisory group, whether it’s a group that they would you know put together through what you do, or if they’re just building their company from the ground up, like, how do you identify who those people are and where you need to plug them in?

Mike Maddock: 8:06

times the stories you know. After you’ve been coaching CEOs for a while, you start to recognize a pattern Like um. So, for example, I’m a visionary, and every visionary has a superhero power and, and, uh, an accompanying Achilles heel, like there’s. It’s like the flip side of the coin, and so, um, a visionary. And visionaries are people that typically start companies, so I would imagine, for example, that most of the people that run small retail companies, who started them, are either a visionary or a strategist, because visionaries are about challenging convention. They feel like they can do something different. Their blind spot, though, is boredom. They want to move on to the next thing, so, even if they found a pattern that works, they want to fix it, and it’s like crazy and this is something that’s been a trend in my life, I guess. Move on to the next thing, because I get bored doing the same thing.

Mike Maddock: 9:03

Strategists are the other people that tend to start companies, and their superhero power is mapping and measuring, and their Achilles heel are unintended consequences. Why? Because strategists don’t like to implement. Strategists like to figure it out, delegate it and say if it doesn’t work, call me and we’ll tinker with the engine, but they get really tired of implementing, and since they’re not on the ground, they don’t see sometimes the impact that their ideas are having to people and process etc. So I test people, if anybody’s interested. Actually, on flourishadvisoryboardscom there’s a 10, no, it’s eight questions. I think you answer eight questions. It takes about a minute and a half and it’ll tell you the seat. There’s six different seats around a great advisory board or peer group. It’ll tell you which one you naturally will find yourself in. Well, tell us more because there’s.

Tina Smith: 10:01

You said there’s six seats, so tell. Well, tell us more, because you said there’s six seats. So tell us more about the other seats, because I’m guessing that if you’re putting six seats together, these six different types of leaders. So Amanda’s question earlier was how do you know who you need in that seat? And I’m guessing you probably need one from every other seat that is, somewhere in your advisory board or people that you can tap to help you solve problems. So tell us more about the six seats that we might be looking for if we’re not a visionary or a strategist.

Mike Maddock: 10:37

Okay. So and this is informed again by my you know, I think the greatest coaches were the worst players oftentimes, and so I have to tell you if I sound like a Mr Smarty Pants. All of this is based on me watching people that are smarter than me run and scale companies and the mistakes that I’ve made in my own companies. So I wrote a book called Free the Idea Monkey to focus on what matters most, and I focused on the idea monkey and the ringleader. What matters most, and I focused on the idea monkey and the ringleader. In today’s parlance it would be like a visionary and an implementer, an operator, a visionary and an operator. Amanda, I already outed you as the operator. You’re an operator.

Mike Maddock: 11:18

Typically, companies are started by visionaries or strategists, so you two are kind of a yin for each other’s yang, and great companies have a Roy and a Walt Disney. The other all six characters around a flourish table or a great peer group goes operator, strategist, rainmaker, visionary, tech, futurist and orchestrator and, as you might imagine, each one of those has a superhero power or a lens that they see challenges through and they have an Achilles heel that often is their blind spot. So great leaders figure out that superhero power, the blind spot and, importantly, on their executive team or peer group who needs to be around them so they can break through plateaus more quickly. So do you want me to go through the superhero power and blind spot of each one? Would that be interesting?

Amanda Ballard: 12:07

I think it would.

Tina Smith: 12:08

Yeah, me too. Plus, you haven’t said anything about Amanda’s weaknesses, but you pointed out mine.

Mike Maddock: 12:16

Let’s go back to your weaknesses, tina, just for a minute, okay. So repeating visionary, you’re about challenging convention. That’s your superhero power. Your Achilles heel is boredom. You move on too quickly. Strategist, you’re about mapping and measurement, and your blind spot is unintended consequences because you don’t like to implement. So sometimes you miss things on the ground. The operator, amanda. Your superhero power is about systems and metrics. Systems and metrics. Your blind spot is novelty. So what happens is most large companies, eventually, are run by operators.

Mike Maddock: 12:58

Operators don’t like change, they don’t like novelty. They’re all from Missouri, they’re from the show me state. You need to prove to them that, if something’s working, that you prove to me that this will be more effective. Prove to me that we should change Show, when the world is shifting very quickly. In a time of great change, operators sometimes really can bring a company down because it’s time to pivot, and they don’t like to pivot. No pressure, yeah, no pressure. You’re fine, it’s all good. I have all kinds of wonderful operator stories. I have all kinds of wonderful operator stories.

Mike Maddock: 13:44

There’s also just a quick digression. There’s a partnership paradox and the partnership paradox is if you get along really well with your partner, all the time you’ve got the wrong partner, because we don’t like to hear that our baby is ugly and when you’re looking through a different lens you might think that’s a really good looking baby. But your partner should occasionally go oh my gosh, that is an ugly baby and nobody likes to hear that, and that causes tension Plus two. Under pressure, you go in the exact opposite directions. If you’re a visionary and an operator, for example, the visionary, under pressure, wants to reinvent. The operators, like double down, we know how to do this batten the hatches. So it causes a lot of tension. So that’s the partnership paradox. Let’s keep going.

Mike Maddock: 14:32

The rainmaker um, the rainmaker is all about finding and binding sales. That’s a superhero power and I like this one. The achilles heel is the sausage machine, because a real rainmaker doesn’t give a rip about what it takes to get the work done. How many people are going to have to work on the weekend? How many people are about to have a nervous breakdown? How complicated it is? They want to go whale hunting. They want to bring in the whale and say slice and dice, it Don’t bother me with the details.

Mike Maddock: 15:08

Details, tech, futurists are all about digital leverage, how to leverage the robots, etc. Ai, whatever the big trend is this month. And their blind spot are the humans, because they often are callous about how AI might make someone feel, or the jobs will be lost. So they tend to look past the people dynamics. And then, finally, the orchestrator. Their superhero power is about culture, cultural dynamics, you know. You know how core values, et cetera, how the culture of a company can make it stronger, faster, better all the good things. And their Achilles heel is pluralism. Particularly when it comes to innovation, I can tell you that if everybody thinks it’s a good idea, it is not a disruptive idea. And if your job is to check in with everyone in the company, by the time you do that, it’ll be too late to launch that product, service or business model. So pluralism is a real issue with orchestrators when it comes to being inventive.

Tina Smith: 16:13

Yeah, I’m just thinking about some sales people. If I can imagine some of the things like Rainmakers that you were talking about, I can imagine some of the things that they might say like yeah, we can do that, mop’s team is going. We cannot do that.

Mike Maddock: 16:32

I have a wonderful friend that used to work with me. She actually became a congresswoman. You know who you are, maria or Marie, I should say. And Marie would sell a nuclear submarine, like she would come out and go. Someone would goie, marie would sell a nuclear submarine, like she would come out and go. Someone would go, can you build us a nuclear submarine? And we’re like, and she’d go, oh, we could totally do that. She’d come back and tell us well, I just sold a nuclear submarine. We don’t know how to build a nuclear submarine, we’ll figure it out. You know she was making rain one way or another, um, that’s. You know you have to be, uh, you have to be a true believer to be a great, uh, rainmaker. You know you gotta get as many no’s as possible in one day anyway.

Amanda Ballard: 17:13

So I’m curious if because I’ve seen this happen before you have, you know these companies that have managed to grow in spite of their flaws everyone has flaws, right but as you get into like these, you know tens of millions, hundreds of millions of dollars in revenue and you look around these boardrooms and you see so many people that look the same and think the same. If someone’s hearing you know there’s six seats and they’re like well, all my seats are filled, but they’re filled with the wrong people, like how would you navigate those waters of being? Like, hey, we have way too many rainmakers and no operators. How do you handle that?

Mike Maddock: 17:55

Yeah, so in Plan D, which is the book I’m speaking to, there’s a two by two. That’s really useful. Two by two, that’s really useful. And the access are let’s see, really good at their job, doesn’t know their job, high in core values, low in core values. So bottom left is doesn’t know the job, doesn’t carry your values. That’s an easy one. Got to get rid of that person. Bottom right, high in core values, doesn’t know their job. Yet you train that person up, top right, high in core values, really good at their job. These are your A players. You love them. You do everything you can to keep them.

Mike Maddock: 18:37

And the worst quadrant is the top left, the people that are really good at their job but they do not hold the same values, and this is typically a rainmaker.

Mike Maddock: 18:47

This is the person that you make excuses for because they have such great relationships, they bring in so much money, they have such good ideas. But guess what, if you hold onto those people and I have the people in the top right quadrant, the ones who are really good at their job and have really high values start looking at you and saying you’re a liar and I’m leaving because you’re not upholding the values of the company. That’s the most dangerous quadrant of all. So I would start there. I would start by looking at people that might be really good at their job, but they’re a cancer in your culture and everybody knows it. Everybody can see it. You know it too, and you are making excuses for them because you’re afraid of something. What you ought to be afraid of are the people that are watching you and saying I can’t believe that she or he is putting up with this stuff because apparently our values don’t matter around here.

Tina Smith: 19:43

Yeah, yeah, so just I’m thinking about that. That’s a great way to sort of measure the team that you have and you’re talking about like high court, high and core values and good at their job. But what if they all are high and core values and good at the same job, kind of what Amanda was saying. Like if you’ve got, like you need the six different people, sort of speaking, into your life, so your, your whole company, is really good at rainmaking or at operating or whatever it is. So, yes, you can fire people. That might take some time because you’ve got seats that you need to get right with the right people, and I know you’ve had this experience before where everyone’s been the same in the room. So what do you do when that happens?

Mike Maddock: 20:35

Yeah, so thank you, I have had this experience. Specifically, I had a company that went from $5 million to $8 million to $10 million to $12 million to $15 million to $18 million to $20 million, 10 million to 12 million to 15 million to 18 million to 20 million in revenue inside of about three and a half four years. So we were a rocket ship. And then we went from 20 million to 18 million to 16 million to 15 million to 12 million. I’m like, oh my gosh, what is happening? And I had an executive coach come in and test all the people I loved. Executive coach, come in and test all the people I loved on our team, only to find out we were all quick starts, except for one person. So we had a room full of visionaries which made us really good at pivoting and really bad at executing. So how would I have handled that differently? Number one I would test my executive team to make sure I understood when they’re having the best day of their life and when they’re having the worst day of their life, which seat they run to. It’s the same seat. You want people that are reliably running to that rainmaker seat, the strategist seat, the visionary seat, et cetera. I did not do that. I did eventually, and we had to make some pretty dramatic changes.

Mike Maddock: 21:45

The next step is this Stop thinking about people. If you have a heart and I know you both do you get connected to people and you’re like man, I love that person. I couldn’t do that to this person. So take the names off the chart. Have a discussion with your executive team about the things that need to get done specifically. What are the things that we need done in this company? How are we going to measure these things and then start saying who can do these things and see if you have people for those spots.

Mike Maddock: 22:23

If you don’t, then the next best thing to do is saying, okay, well, we need, if this company is going to run to find people for those spots. It’s a difficult conversation, but I can tell you, if you start with, what are we going to do with Tom? No one’s going to. I protected a person in our company for forever because I could not. I could not let this person go. I just couldn’t do it. What I really needed to do is stop thinking about a person and say what does this company need for the good of the whole? What are the roles? Sorry, I didn’t answer your question the first time, Amanda.

Tina Smith: 22:58

You were answering part of the question, because that assessment is so helpful and useful. When you have a team of people that are working with you and these retailers absolutely have teams of people that work with them and if you think about this whole core value and can you do your job thing, it’s really important, especially whenever they are customer facing there. They are you on the floor, to the people that you serve. So I think that’s incredibly helpful.

Tina Smith: 23:27

And there also is this leadership thing and it’s interesting because I was just putting together a responsibilities or accountability chart for a client and I put all the different roles and then I put the client’s name everywhere, because they’re trying to do all the roles, all the roles, and I’m like, reasonably, this is a job and this is a job and this is a job. So when it’s right and you have to prioritize, but when it’s right, you’ve got to find really great people to fill these roles and in the meantime, you’re covering for them. So what’s the first thing you want to get off your plate? And it was a really good exercise and they really like seeing that on paper because they can take it to their leadership team and be like I need help running this company.

Mike Maddock: 24:20

And Michael Gerber wrote the e-myth, the entrepreneurial myth, and that’s one of the hacks that I remember from that book exactly what you just did, tina, where you’re laying out what does your company look like? At $5 million, at $10 million, at $20 million, what are the things that need to get done? And you’re right, when you’re a startup or when you’re a very small company, your name is on a lot of those little boxes. I remember when I my first company, the bills would come in and I would write the data in the top right corner and stack them up and then, when the check came in, I’d go I can pay four of these like that.

Mike Maddock: 24:57

I was in charge of accounting. You do not want me in charge of accounting. It’s a bad idea and I got out of that role as fast as I possibly could, not only because I um, I just hated it, but because I was not qualified to do it. But somebody had to do it until we grew. It’s also a great argument for growth. We were talking about what to do with these people if they’re in the wrong seat. Well, when you grow, there are lots more seats, and I trust the visionaries out there to figure out a new division, a new company, a new seat for those people, as long as they’re in the right one. So it’s a hard part of business when you scale.

Tina Smith: 25:43

You mentioned testing your leadership team and I know that you gravitate toward the Colby and there’s actually a place on your website where people can take the Colby and enter it. So if you wanted to I’m sorry enter their Colby results. So if you wanted to test your leadership team and then have someone like you talk about the six different seats, you could have your leadership team take the Colby. Amanda and I did, and I had you look at it and tell us which seats that we filled, and other people can do that too. There’s a form right on your website where you can submit the Colby scores and I think you’ll be happy to talk to everyone about their Colby scores.

Mike Maddock: 26:27

Sure, I’m hoping to talk to thousands of people about their Colby scores. Sure, I’m hoping to talk to thousands of people about their Colby scores in the next two weeks. So, absolutely, my purpose is to connect people in possibility. So when people call me and say, hey, I’m curious about this, if I can help them I will. So for sure. And I respond to all the notes on my website. Stephanie, my chief of staff, makes sure that I respond to all the notes on my website.

Mike Maddock: 26:52

Stephanie, my chief of staff makes sure that I respond to all the notes on the website, so please do. I mentioned earlier there’s an eight question. If you don’t have your Colby score, the eight questions will get you started, but a Colby score will get you all the way and I can give you a much more in-depth look at you know, your superhero power that way.

Tina Smith: 27:10

Yeah, and just because if people are coming to Soho in September and they’ll get to meet you in Orlando and I know that you’re happy to speak with anyone there but if they want to take this test before they come, then they’ll actually be able to tell you which seat they’re in or which seat their teams are and they can have a personal conversation with you. So it’d be a great idea if people took that before they came to the event.

Mike Maddock: 27:35

Yeah, thank you, tina.

Amanda Ballard: 27:37

Yeah, so we’ll make sure to link that in the show notes for you so you can reference that.

Tina Smith: 27:41

Yep, okay. So I know you’re kind of a tease sometimes, so why don’t you tease us a little bit? If the listeners do come to Soho, what can they expect to walk away with?

Mike Maddock: 27:55

What can they expect to walk away with? Okay, we will talk a little bit more about how to find a yin for your yang. We started that conversation here. I’m going to talk about how your expertise gets in your way and what to do about it. The most important question that a disruptor asks themselves I’ll touch on that, and that is the question that helps disruptors completely shift business models how to move from being inventive to a true innovator. There’s a difference between being an inventor. Most of us think we’re being innovative, but we’re just inventing stuff. I’ll teach you how to do that. I’ll talk about what to do when you have too many ideas. You know some of you are going to come to the conference is like I’ve got so many ideas I don’t have enough time of the day to implement any of these things, so we’ll talk about that.

Mike Maddock: 28:45

And then, finally, my favorite thing to talk about is how I get away with showing pictures of butts on stage. So you’re going to want to hear that.

Tina Smith: 28:55

Well, I can’t wait, I know.

Amanda Ballard: 28:59

I am on the edge of my seat already.

Tina Smith: 29:30

Yeah well, we’re excited that you’re going to be at Soho this year and definitely look forward to the disruption conversation not going to happen now, and especially with technology shifting you know the sands under our feet constantly. I think this industry specifically is ripe for disruption to happen and I would love to see the independent retailers be the disruptors that this industry needs.

Mike Maddock: 29:52

So I’m excited yeah. I promise you that there are people in the audience. That will be the disruption that the industry needs. The real question is is it going to be you?

Amanda Ballard: 30:07

Thanks so much for listening to the Natural Products Marketer Podcast. We hope you found this episode to be super helpful. Make sure you check out the show notes for any of those valuable resources that we mentioned on today’s episode.

Tina Smith: 30:18

And, before you go, we would love for you to give us a review. Follow, like and subscribe on Apple Podcasts, Spotify, YouTube or wherever you’re listening today, and make sure you join us for our next episode, where we give you more marketing tips so that you can reach more people and change more lives.