Build Series EP.6: Relentless Prioritization with Hill Hamrick – EP.263

Pacific Lake Partners – https://www.pacificlake.com/

Trilogy Search Partners – https://trilogy-search.com/

(00:00:00) – Intro

(00:06:55) – Introducing CSW and Hill

(00:08:45) – Priorities Frameworks

(00:12:23) – Most Effective Ways to Build Trust with a Team

(00:18:52) – Challenges in Creating a Synchronous Team

(00:22:37) – Making System and Software Migrations

(00:27:04) – Moving Decision-Making Down the Org-Chart

(00:33:48) – Matching CEO Mindsets with Organizational Needs

(00:44:23) – Board Member Advice

(00:47:42) – Prioritization Evolutions

(01:02:10) – Lessons from the Military

Alex Bridgeman: Well, Hill, thanks for coming on the podcast. It was really fun to do the launch series, first 100 days episode with Sam and excited to join the Build Series talking about prioritizing relentlessly as a CEO and I love your like war versus peacetime CEO discussion, that’ll be a lot of fun. Could you start by outlining what CSW, Central Storage & Warehouse, does? 

Hill Hamrick: Yeah, CSW is a cold storage warehousing company. And so we have five warehouses that are mostly run at zero to negative five degrees. And we essentially have a million square feet of storage space across those five warehouses. And what we do is really we handle volume and variability and provide flexibility to our customers who require some form of storage. And so we are very different than other types of just warehouses or real estate because we are ultimately a service business where we’re solving supply chain problems for our customers who are mostly food manufacturers. And so for the most part, our customers send us their finished goods that come off their production lines. And then ultimately they sit in our warehouse for two to three weeks, and then we mix and match their inventory to go out on their sales orders to their customers, like the Walmarts, the Krogers, the big retailers, food service, whoever it is of the world, but really all over the country and even internationally. And so, throughput is what we do. And so, most of our- like two of our warehouses turn around, like they receive and ship 100 plus trucks a day over three shifts, or about 40 or 50 employees per site. And so a lot of what we do is the things you see in the frozen food section of your grocery store and particularly Wisconsin, known for its dairy and cheese but also its pizza manufacturing. 

Alex Bridgeman: You and Sam are co-CEOs and acquired this business a few years ago. And you’ve talked about kind of the evolution of your priorities as a CEO, kind of moving along as the business, you came into it, you got more comfortable, stabilized, you’re building out a team. It sounds like there was some system migrations too and EOS. But before diving into any of that, could you talk through maybe the framework you have today for what your key priorities should be as a CEO, like an ideal world or maybe a ranking of sorts, like what do you focus on buckets wise for priorities? 

Hill Hamrick: Yeah, I think Sam and I think about this collectively, and then we kind of build down from there. So what we think at a high level that our priorities as co-CEOs are start with people. So people’s kind of the top of that list. The second thing I would say is strategic direction of the company and having a vision for where we’re taking this over time and working on setting that. And then from there, the next one is then building alignment organizationally across that. And then the fourth one, I think, is measuring and executing to that. And then the fifth one, I think, is constantly evaluating, what are the few things that really matter, then again, kind of go back and inform the strategic vision. But really, if we’re not doing that, nobody is. And we have to make sure that that is something that we’re actively doing, is figuring out what are the few things that really matter that’s going to make this endeavor successful. 

Alex Bridgeman: And is there- how did this shift from day one to now? Like where do you feel like you spent most of your time very early on versus now a couple years later? 

Hill Hamrick: Yeah, I think I probably could have said that. I mean, again, I don’t think that’s- none of those things are that, in my opinion, unique or insightful, and they’re somewhat academic, and you kind of, in business school classes or business books, kind of hear similar things about what a CEO should be doing. I think the true difficulty is how do you actually put that into practice in the face of everything else that goes on as a CEO, as an entrepreneur in a small business. So I think early on, you can say that all you want, but you probably don’t even know your business. And so you can prioritize, think about the few things that really matter, but you might not be that effective at it because you really don’t understand the business, the industry, your customers. And so, I think for us, we really had to spend a lot of time learning and learning the business and the industry at the truly tangible level. And we have a very in-person, physical, labor-intensive business, and so you really have to understand, hey, what does it mean when I put this price on a piece of paper and give it to a customer? Oh yeah, we’ll do this. What does that actually mean? And then where is that assumption going to be wrong and why is it going to be wrong? Because that’s the difference between being profitable or not being profitable. And so I think a lot of what we did early on was learn, sometimes, most times, the hard way, but seeing kind of what we at least had learned in the diligence process and ahead of time actually physically translate to what truly just needs to happen for this to be successful and actually meet this assumption that we’re making at a higher level. And so I think the biggest priority from day one in the first phase, as Sam talked a lot about in the 100 Days episode, was just really learning. And the second one, which I think is more lasting, is just the people side and really getting to know the people on your team and building trust and credibility with them. That’s particularly important as a brand new, relatively inexperienced CEO, but I think that’s just as important two to three years in and even beyond, that you have the trust and credibility of your full team from the most senior person on the executive leadership team down to the newest employee, and the more trust and credibility you have from there, the better the business is going to operate and be successful from there. 

Alex Bridgeman: So, in thinking about that priority of kind of people and culture, establishing that trust is kind of a, obviously a key point before doing anything else within that bucket of priorities. What do you feel like looking back were the most effective ways that you were able to build that trust with the team? And I’d also be curious like what that looks like today as well. I know you guys got forklift certified. Like that sounds like it was just pretty fun too. 

Hill Hamrick: I think like I was fortunate enough to be a Marine Corps officer for about five years. And I think it’s hard to find better leadership training than kind of being a junior officer in the Marine Corps. And I think that’s one thing the Marine Corps taught you extremely well is like you are going to be leading people, but that certainly doesn’t mean they will follow you or should follow you. And the first thing a Marine Corps officer does is to go to officer candidate school as kind of the screening or the boot camp to even become an officer. And the motto there is ductus exemplo, which is Latin for lead by example. And in that school, you’re being trained essentially or evaluated by enlisted Marines who you ultimately will outrank and lead once you finish that. But there’s very much a, hey, you have to be worthy of leading this person who is way better at everything than you, but you have to show that, hey, you’re going to do what it takes to be worthy of that respect and that position. And from there, like I think one thing that was very apparent as I experienced the Marine Corps and saw particularly leaders that I really admired, that they all had that trust and credibility with every single Marine they interacted with, whether it was a brand new 18-year-old Lance Corporal who just started or more senior people who’ve been around a while. And I think they all did this great thing where they went out, they engaged with Marines at their, they call it at their level, at their place of work, at their point of business, at their job, and really engaged with what they’re doing, what their challenges are, how they- what they needed to be more successful, and truly just cared about them. And the really good ones just made that, just had that naturally, but also, I’m sure had, over time, figured out ways to convey that, and especially in a very short period of time. And I had the fortune of working for a general as one of my deployments, I was the aide to the commanding general of a task force in Afghanistan. And he was, without doubt, the best leader I’d ever come across. And as his aide, I was mostly responsible for keeping him on schedule. And my biggest challenge was he would just end up talking to Marines. And I’d be like, sir, we’re late for the meeting with the four-star general who’s commanding all of Afghanistan. And he’s over there talking about CrossFit with the Lance Corporal and just having a great time. And people loved him though. And he was a phenomenal leader. He’s going to be, he might even be the commandant of the Marine Corps at some point here in the future. But I think he just had that ability to build trust with anybody that was working for him. And that just gave a great foundation for the direction he was setting, for people being willing to follow him and buy into what he was doing. And so I think that was very much a formative experience for me around that level of engagement and care for every person that’s part of the organization to have that and seeing what the power of that becomes once you’re trying to really change something or drive forward. And so really from day one, I think we were in part excited about this opportunity at CSW because of the number of employees. And I think Sam and I both really, like we had this in our search that our first value was being people first, and that’s now today our first value as a company. But ultimately at the end of the day, like this company and all companies are just a collection of people, and we have an opportunity to have a really positive impact on them that goes along with the success of the company and the success of the investment. And that’s really exciting in a lot of ways. And that’s really rewarding. And that’s one of the main reasons that- that’s one of the main things that motivates us. And so, when we first came in, our goal was to convey that commitment to our team members that our goal here is to make this a better workplace, to give you more opportunity, to provide advancement for you. And those are the real benefits of the vision we’re setting and the growth. And we need your help with it. And we really care about your input. We value what you do. We value you as a team member. And so a lot of that’s just really spending time, time with them, again, at their level, watching what they do, helping out with their jobs at times. And so, the first six months, that’s kind of 90% of what we did. And it was, in some ways, necessary because there was just some gaps in the organization and the business was growing really, like kind of outstripping its capacity to execute. And we don’t stop; like we are a 24/7, 24/6 business, kind of nothing shuts down till the weekends, and so you kind of have to keep up with it and there’s not really time to get behind. And so, I think over the first year especially, like we were working 16, 18, 20-hour days and not necessarily like… we got on a forklift occasionally, but we’re not very good at it, and we cause more issues than we solve. But just being there really helps. And I still, I was laughing about it the other day, like there were times when our third shift warehouse men would say, like I would walk in at six in the morning, and they would be leaving after having completed their shift, and then I’d still be there when they showed back up at 10:30 that night for the next shift. And that didn’t happen a ton, but just being there and just witnessing the problems and showing that level of commitment to what was going on, I think, went a really long way to start off that trust. And now we don’t have to do that to have that same level, but I think it still becomes a priority for us to think about how we’re engaging with them, whether it’s just getting out of the office, walking the warehouse, knowing everybody’s name, knowing how their family’s doing, asking them about that. I think that’s still really important, and we prioritize that, and now at this point though, that’s not scalable. That was easier to do when we’re in the weeds and we’re with them every day and we’re solving them, but as the business grows, as Sam and I get more elevated above the ground levels, how do we still have that same impact from a prioritizing people and having them bought in perspective without having the same amount of time committed to it? I think that’s kind of what we’ve translated that priority into is how do we then set culture at the high, at the kind of top of the organization and have that be felt really across the board down to the frontline team member. And then I think a lot of that just becomes we’re getting better leaders who are also bought into that at every level. And so, then it’s great because now when I come into a warehouse, I can talk to a warehouse man for five minutes, but I’m saying the exact same thing that they’re hearing from their general manager and ops manager, particularly around, hey, like what are we doing here? Where are we going as a company? Why is this new thing that we’re talking about this week important? And how does it fit in the bigger picture? Like they already hear that now because of how we’ve managed to scale the culture. And then it gives them, it gives kind of everybody a reason to buy in and allows it to have more of an impact with people than just us kind of being out there and seeing everybody for six hours a day. 

Alex Bridgeman: Can you talk about some of the challenges you had to overcome early on to get to that level of kind of cadence and being in sync with the same messaging and same goals? Like obviously, it didn’t start out that way. What sorts of things did you have to do to make that happen, especially across multiple locations where there’s not like two employees there, five there? It’s pretty large teams across lots of different geographies. So, there’s a lot of challenges within that I can envision like you running into. What does that look like? 

Hill Hamrick: Yeah, I think that has been and is a continued effort and one of our bigger struggles. I think when we really get that right, I’ll be a lot better golfer. But yeah, it’s really difficult. I think one thing that we found is you’ve got to have good data. I don’t think we probably realized this right away. Because you think of cold storage warehousing, and like data probably isn’t the first thing that comes to mind. But for us, like we really have to be able to explain what’s going on and what’s happening and why these things are important to everybody in the organization, whether you’re a forklift operator who works third shift and sees your manager for maybe 30 minutes a day, or you’re the COO or whatever. And the way we can do that is if we have simple numbers and data and metrics that explain those things that everybody can understand. But to do that, you got to have data collection and processes that then feed, make those insights meaningful. And this business had operated for 75 years with no concept of that. And it was purely just people kind of showing up to work, doing what’s in front of them. And we kind of joked, it was like you had a good day or a bad day. And if you had a bad day, you worked 12 hours instead of 8. And then you went home and did the same thing the next day. And there was no real measuring, there’s no forecasting, there’s no planning, there’s no data-driven decision-making. And so that’s been a lot of what we’ve done. And we’ve really embraced the Entrepreneurial Operating System, EOS, as the way in which we’re going to do… in which we do that and continue to do that. But it’s really powerful in the sense that it just gives the whole team a common framework and language to stay focused on the same things and to keep improving the organization around the same priorities, around the same processes, around the necessary processes, and the direction that ultimately Sam and I think is the right way to go. But it gives our ability to explain it and have it permeate down to the lowest level, it enables that without us having to go individually do it across the full team. And so, we’ve really embraced EOS as that unifying framework that then allows everybody to execute within that vision. But also, I mean, it’s not easy. And that takes a lot of effort and discipline and accountability and buy in from the whole team. And so I think that has been our biggest, that’s kind of one of our- especially in my world on the operation side, that’s kind of our biggest thing right now is how do we really build that alignment, put things in place so that we sustain that alignment, and then we can execute to what we’ve all agreed is really important. And ultimately that is what translates to customer service and ultimately translates to why CSW is the premier cold-store provider in the US. 

Alex Bridgeman: And all of that migration and the data, like warehouse management system, that sounds particularly interesting, but then even implementing EOS and being a 24/6 business, there’s not like this downtime or lull in the business where you gather most of the team and go over different parts of what you’re working on or transitioning to. How do you make those transitions, either like software, like system migration or EOS migration, in the midst of just the business continuing to operate and not being able to pause for any meaningful amount of time? 

Hill Hamrick: Yeah, and I don’t know if this is unique, I mean, it’s not unique to us, but it might be harder, more exacerbated with us, but it truly is building the airplane while flying it. And I think, yeah, it’s just, compared to other business models, like we have a lot of advantages. People don’t stop eating pizza, so that’s a nice thing. 

Alex Bridgeman: AI is not going to get rid of pizza. 

Hill Hamrick: AI is not going to get rid of pizza. But also, we are very labor intensive. And so when somebody doesn’t show up to work, that means everybody else has to do more work. That makes everything else harder. And so, I think one experience- so we are truly building the airplane while flying it. And I think what we found is we really have to change the level of ownership of problems, where I think previously when the family ran it, kind of like I said, it was a very decentralized, like people driven company where you just had really good people in certain spots that made things happen and solved problems and made it work. But that’s not scalable at all. And so, the company continued to grow and got into a point where the problems and the challenges and just the day-to-day nature of the business was way too much to handle for those given people. And there’s nothing really backstopping that. And so we’ve really had to kind of reset things and reset the structure really to make sure that things are being owned, whether it’s measurables, KPIs, measurables, problems, are owned at the lowest level possible. Because if we can do that and own it at the lowest level possible, like first off, one of the big principles of the Marine Corps is this idea of maneuver warfare where you have a commander who sets the intent, like ultimately, hey, here’s my intent of what should happen. But then ultimately, you’re trusting the execution to the people who are actually on the front lines, who have the most accurate information, most up-to-date information, can act the quickest. And in maneuver warfare, the idea is that if you can act faster and make decisions faster than your enemy, that’s what’s going to lead to success and victory. And we’re not too dissimilar, whereas if we can solve problems and make decisions quickly at the point of friction, then that doesn’t become a larger problem that sucks in more people and more time that we can’t really afford to give up because we’re constantly moving and every kind of second counts, especially from a leadership perspective. And so, I think what we’ve really tried to do is empower our supervisors, our frontline leaders to own things, give them the data that they need to understand what’s going on so that they can solve problems for our customers as the first kind of line of defense, and then elevate if necessary. But the more problems we can solve at that level, the more time that our managers have to do things like focus on the next 90 days, the next six months, the next periods of these longer term priorities that are going to make us ultimately more successful in the long run. And sure enough, but then like, that doesn’t happen because customers change. I mean, the reason why we exist is because customers have unpredictable supply chain needs, and so they might need 50% more outbound loads one week than they did the previous week, and that means it’s kind of all hands on deck, and then priorities go out the window, and we’re just trying to get trucks out the door to take care of the customer. So it’s definitely not perfect, it’s not linear. Every day is different. But I think what we’ve really gotten buy in on, especially as EOS has taken more of a hold, is there’s a real cost to getting sucked in. And for our managers, I think they’re seeing that more where if they didn’t plan properly and all of a sudden Monday is way harder than it should have been because they didn’t make the right decisions on Thursday and Friday, they might get through the day okay on Monday, but it consumed all of their time and all of their ops managers’ time just to get through the day, which means they didn’t advance their priorities, which means they’re behind it by the end of the week on where they really should be. And the only way they can solve that is if they make better decisions ahead of time and then trust their supervisors and their team to execute so that they don’t have to get involved unless it’s really necessary. I think that realization and change in mindset is getting us to a point where we can make this material progress, even while we’re dealing with the day-to-day challenges of running the business and solving problems that we didn’t expect for customers. 

Alex Bridgeman: Could you go through maybe a couple examples of decisions that might have been previously made by higher levels of management but are now being pushed down to the people actually executing any particular part of the business? What are some examples where you saw that happen? 

Hill Hamrick: I think one thing, one of the biggest things, we have generally, our business, our biggest challenge operationally especially is matching our labor availability to the labor required to serve our customers. And they’re not always perfectly matched because our customers need loads received or shipped  at a certain time, a certain day, a certain schedule. And we have labor staffed at kind of a fixed time and schedule. And so, trying to match those is an ongoing challenge, kind of day to day challenge, and a lot of that dictates how successful we are. And so, I think, for a while, I think our general managers kind of try to set priorities and really be directive in terms of what needs to be happening all the time and how we’re kind of moving labor around and everything else. And I think we’ve now gotten them to realize that the more the supervisor understands, hey, what’s happening today, what’s happening in the next shift, what’s happening in the next shift, and what’s happening tomorrow, what does that mean from our capacity versus what we need to do, and then what are the other priorities we need to think about, then they can make that decision and be a part of deciding, hey, I’m going to move this labor over here, I’m going to prioritize this customer, I’m going to work on this other task, and have them own that decision, and then ultimately have them measure it. And so we know how successful we are by the next day if everything went to plan. I think that’s been a big change in the mindset of, we have to, A, train them, but then B, trust them to make those executions and then have a way of knowing whether it worked or not and then give them that feedback on like, all right, we made this decision, was that the right one? Like, let’s think about it and go from there. And I think our… like that is not without flaws and we’re getting better at it. But I think the two things there are really, like back to my point about data collection, we have to be able to give data to our team members quickly to understand what happened and where we could have done better, where we made a decision that either worked or didn’t, but in a way that like doesn’t take a lot of time because as you pointed out, like today’s already moving, and we’re already thinking about the next day, the next load, whatever it is, and don’t have a ton of time just to sit down and retrospectively look at stuff. And so a lot of that’s just like how do we capture data, then how do we push that data back out in a meaningful way to our team members for them to keep making these decisions better and better and get better over time. And then the other piece of that too is pretty early on, we put in this concept that I had learned in the Marine Corps about glass balls and rubber balls. And the idea is that people are going to fail. If people aren’t failing, then they need to get promoted or they’re not trying or whatever else. But you have to encourage failure. Failure is one of the best ways to grow. But you’ve got to fail in the right things. And so, I heard this earlier in the Marine Corps that you’ve got glass balls and rubber balls. And so if you drop a glass ball, it breaks, it shatters, it’s a mess, it’s not good. But if you drop a rubber ball, it bounces, you pick it back up, and you move on with your life. And so it’s really the rubber balls that you want to accept failure on and use that as how we grow and develop and learn. But the glass balls you have to treat differently and have a different level of prioritization and not drop those because of the consequences. And so, you walk into our warehouse, you’ll see a bunch of glass ball posters written out of critical things for our top customers of what we really can’t mess up and we can’t accept failure on that. But then everything else, yeah, like okay, we made a bad decision there, great, like let’s learn from it. But our ability to learn and adapt really comes down to how well we, at this point, can capture that data, the meaningful data, then show it back to our team members in a way they can understand and use efficiently so that they can quickly learn from that and then put it to practice the next shift and keep going from there. 

Alex Bridgeman: And to the data collection system, that warehouse management system, I’m thinking about a restaurant reservation system where it shows all the different tables and when and where they’re going to be available. Is it kind of like that, that anyone can look and see when pallets or pizzas or mozzarella sticks are coming through different parts of the warehouse, and you can plan out your day and demand based on that? Is that kind of how it works? 

Hill Hamrick: No, not even close. 

Alex Bridgeman: Oh, not even close. Oh, man. 

Hill Hamrick: No. Back to the reason why we exist is it is very difficult for our customers to predict what’s going to happen. And some of that’s due to like just production schedules can be unpredictable on the food side. Things can go wrong, or you can not… whatever it is. But really on the sales side, it’s different. Like back to a pizza example, if Walmart’s running a buy one get one free thing on your pepperoni pizza for a month, like you’re going to sell a lot more pizzas, which means you’re going to need more shipments going out, which means we’re going to have lower inventory, and there’s just rippling consequences, versus or you kind of tried this new spinach alfredo pizza or whatever that didn’t sell as well, and so you have more inventory of that, and then that has implications to us too. And so, we don’t really, we sometimes get forecasts of all varying degrees of accuracy and helpfulness. And so, what we can’t do though is have a super rigid system that plans all this stuff out, but breaks the second something changes. And so, part of our goal technology-wise is, yes, to have a system that handles that variability and is flexible enough. But what we are really looking at is, really like back to this matching labor available to labor required, and labor required is either receiving in product off trucks or shipping it back out off of trucks. So, what we’re monitoring that our technology is telling us is, hey, where are we in the schedule today? Like we have appointments starting at 5 a.m. through 10 p.m. or 11 p.m. We have constantly inbounds showing up, and we have ways where the whole warehouse knows where we’re at on that schedule, on what trucks are on time, what trucks aren’t, and where there are potential problems. So that’s the main thing that we’re displaying now across our full team. But then what we really need to do is, that we’re working on, is capturing data that really shows, hey, where do we need to focus attention because there’s a problem that isn’t obvious to us? And how do we get the right person there to solve it before it cascades or compounds over time? It becomes a problem that doesn’t just happen today but happens, the same problem’s going to be there tomorrow and the next day and the next day. And instead of like the 15 minutes of labor it would have taken to solve it today, we’ve now incurred 75 minutes of labor over the whole week and then you start adding that over different issues, and then that’s how all of a sudden your warehouse doesn’t operate nearly as well as it needed to to hit our goals and hit our plan. 

Alex Bridgeman: And a big part of this that we talked about earlier too was matching your mindset as a CEO with what the company needs. And you mentioned like wartime versus peacetime CEO and making sure you’re matching whichever one with what the business needs at that point. Can you talk through that concept in more depth? 

Hill Hamrick: Yeah, absolutely, absolutely. This comes from Ben Horowitz, from Andrew Horowitz’s book, The Hard Thing About the Hard Things. I think I read this before business school, and so coming out of the military, I mean, I never worked in a company before, I was like, oh, I can relate to that. And then I kind of appreciate it now more, and I think, especially given my background, it’s a lot easier to be a wartime CEO. You just roll up your sleeves, you’ll get in the trenches, like you just go spend 20 hours in the warehouse, and like, it’s not… I wouldn’t say it’s like… it’s tough, but it’s also very doable and not that dissimilar from my previous experiences. And in some ways, it’s very comfortable. And I think at times, that was certainly, especially early on, that was required, there’s a lot of benefit to it. It helped us learn a lot faster, just having dealt with problems that we otherwise wouldn’t have and really understand the core of the business. But I think I likely over-indexed on that to start, and I use an executive coach, James Bergeron, who’s been a guest on this podcast before, who I think basically had only started working with me day one and I think after a year was very skeptical that I was ever going to get out of the wartime CEO mindset. And we constantly talked about, okay, what’s it going to take? Like, I was, okay, these things have got to happen. And then we checked in, we revisited a few months later, like, well, now, these things have to happen. And I think he probably sensed it was kind of always a moving goalpost on my side. Whereas I’m just like, oh, man, we got all these problems we got to solve because we got to take care of customers. We got to fix all these things. And I think, I mean, to some extent, we’re probably both right. But at some point, you do have to get out of it. And I think knowing when a wartime, being in a wartime, or when you’re in a wartime or peace time is really important. I think now that we’re like three years in, we’re definitely not in a wartime anymore. If we are, that’s a bad thing. Like, that’s probably a gap in our company that has even got us to that point. But what I do think though is, especially now, I think one of our lessons is you can kind of have these brief periods of, quote, wartime. And those typically occur when you’ve got to do something for a customer, whether it’s because you’re not performing at the level that they need you to, or they just need something different, that you can really kind of excel and show how you’re better or different. But I think, really, in terms of like prioritization, we think about how do we, how do Sam and I especially keep tabs on especially our key customers? Like, what are their needs? Are we actually addressing them? Do we need to kind of go redouble our efforts on certain things, or are things that we can help solve for them that they’re not necessarily looking for us specifically to solve, but we can, and so we should. And that that goes a long way for our ultimate customer relationship and partnership as we view it. And so I think more recently, there’s times when we just had to kind of be, all right, this customer is critical, like we have a glass ball issue here, so we have to kind of be all hands on deck and maybe push back some of this longer term stuff to go solve this problem, get things reset, or snub this customer out in this tough time. And then we get back to peace time and then working on the longer term things. And I think Sam and I kind of talk about this on a weekly basis about what our priorities are and help keep each other honest. But I do think that’s a good example of when you can be at peace time but all of a sudden have to switch back quickly because you have to address something critical, especially for one of your customers that create that. And then it makes sense to kind of rethink your priorities for that defined period of time and then come back up and reset and figure out where you are as a team. 

Alex Bridgeman: What makes you more uncomfortable being in peacetime versus the wartime? You mentioned wartime CEO is kind of your more comfortable setup. 

Hill Hamrick: Yeah, it’s a good question. I think it goes back to what we started talking about. I think the main reasons why Sam and I got into this, I think we really enjoy working with people and teams. And I think Sam had a different path to this than I did, but my experience with the Marine Corps was very much this, where it was a blast working with the whole team, having a positive impact, watching people grow. And so, to me, it’s like, no matter how bad it is, if I’m hanging out with warehouse men and we’re accomplishing stuff, or team members, CSRs in the office, I get a lot of- it’s enjoyable for me to be a part of that team and help them solve problems. And there’s nothing I love more than walking in and being like, hey, look, look at this new cool part of our software that we just developed. Here’s how much better it’s going to make your life and showing them that. And you probably don’t think it’s as cool as I do, but I really enjoy it. And so I think just being able to help solve problems. And when you’re in that wartime mentality and there’s just a lot of problems to solve, you can quickly see the results of it, and those are tangible, right in front of your eyes. I think at peacetime, it’s less obvious or less immediate on the impact you’re having and all that, and so you just have kind of less feedback. But I do think at this point, too, in some ways, I feel that changing in myself, though, now, I think because of where Sam and I are at and our confidence in being able to do things like really know the few things that really matter and the strategic direction that we go in as a company, I think based off of our learning and growth, we have a lot more confidence that we can do that well and have that really impact the company on a positive level. And so that does make it more kind of exciting to go work on those things and know we have to work on those things to be successful. Versus early on, I think it was, we probably didn’t even know what we were doing and so we just needed to go be out with the company and understand what was going on. 

Alex Bridgeman: Have you found that the volatility between war and peacetime has shrunk over time? Like there’s less bouncing back and forth and you’re only going to wartime if it’s a much bigger issue than maybe a year or two ago, it was a smaller issue that would push you to that mindset versus now?

Hill Hamrick: Yeah, absolutely. And I think that is very much driven by two things, I would say. One is this EOS framework that helps us stay aligned on what we really need to be working on. And so we’re much more able to understand, hey, we’re off track on this quarterly goal we’ve set. We’re going to get back on track by doing this, but for the next two weeks, we’re going to prioritize this. And those are conversations we have collectively at the senior leadership team level. And so now we kind of have a measure of whether we’re doing what we said we’re doing or not, in terms of how we’re shifting priorities and bringing it back to what we’ve ultimately decided collectively was the most important thing for us to work on this quarter. And I think the second thing is just having our team members operate at a different level of ownership from kind of our direct reports all the way down to the front line. Like the more we can get true ownership of issues at that level, the less we have to get involved and the more it’s going to get taken care of in a way that’s in context with the- that’s in alignment with the company’s values and the company’s commitment to our customers. So I think those two things around our team members just embracing EOS, embracing the vision and owning more things at every level means we have to get pulled into it less. And we just have a way of measuring when we do get pulled in, like do we have a good reason for it and then how do we get back out and making sure we stay committed to that.

Alex Bridgeman: And you also mentioned before the podcast that the real risk here is not knowing which scenario you’re in. Where do you see that happen most often, where a CEO doesn’t necessarily know which mindset is needed right now? What are they usually missing and what are some things you do to make sure you’re choosing correctly, like which one you need to be in?

Hill Hamrick: Yeah, I think from my experience at least, I think on the first side, I think it’s easy to, for the same reason I just mentioned, get stuck and think you’re in a wartime mentality because you can just see all these problems. And we were just actually talking to our CFO about this who just started four or five months ago and I think we’re super excited about her, she’s awesome, and she kind of has the same mentality, it’s like, oh, I can fix that, I can fix that, I can fix that, and we kind of have to be like, okay, yeah, but take a step back and think how much time that’s going to take and think about what the impact of solving that problem is, versus if you spend time on this other thing, that could have a much bigger impact on the whole company, so you can’t get sucked into solving all these little problems. I think that’s very much how we were in the beginning, too, is we just saw all these problems and all these things that needed to get fixed and felt like- and sometimes it was, but felt like that was the right thing to do and you could just see the immediate impact. But in reality, when you think about it collectively and take a longer term mindset, you start realizing like, yeah, those problems might need to be solved, but you probably aren’t the one that should solve them. And there’s a real cost at your time of not working on the things that only the CEO is working on. And so, I think it’s easy, especially when you’re first starting the company or you just have a lot of things you’re dealing with, it’s easy to get sucked into all the problems you just see because they’re immediate, right in front of you, but they’re not necessarily the most important ones to solve. And I think the flip side, though, is true, too, where if we don’t have the right kind of alignment and measures throughout the company, like we’ve talked about prioritizing, then it’s really quickly, like then you can quickly get detached from either your employees or your customers. And I think that’s the biggest risk of thinking you’re in peacetime when you really need to be in wartime because the customer’s considering leaving you or not happy with something you’re doing, or your employees aren’t happy and you don’t know it, and there’s really an issue that you’re not aware of. So, I think that’s why it’s really important to have good kind of information flow from your customers and employees to alert you to when you are coming close to needing to be in a wartime mentality and shift priorities to address those problems. Ideally, if you’re doing it really well, you don’t even have those problems surface, but you at least need like warnings and leading indicators that those things are surfacing and you can adjust appropriately from there. And again, that’s how we frame those things as like glass balls. And the first glass ball that we have is around our people. And if for some reason, people are considering leaving CSW, like that is the biggest thing that I, as a CEO, want to know about is why, what are we doing to drive this person who’s been with us X number of years away? And we need to fix that immediately. And then on down, it’s mostly customer driven from there as our glass balls. 

Alex Bridgeman: Was there any advice that has stuck in your mind from a board member, other CEO, investor on kind of this mindset and identifying the right one and switching between the two? Is there any piece of advice that has stuck with you? 

Hill Hamrick: I don’t know if they use this as explicitly as I do, and maybe it’s just self-serving on my part, but I think that one thing that actually came up recently as we thought about our organizational planning for the next three to five years, which is really, like that is something that we absolutely should be prioritizing and thinking about, and I think we have a much more informed opinion and view on that now than we did two or three years ago. And I think there’s still a lot of fluidity just because of the nature of our business. There’s different ways of kind of approaching it. But I think one thing that the board really challenged both of us but me in particular on is, how do we get it so that we’re not adding additional direct reports to us and to me in particular? And I think that was a really good challenge around, yeah, it’s just very difficult to manage multiple direct reports, especially senior people who have multiple people underneath them. And it’s hard to do that effectively. And the Marine Corps, I should know this from the Marine Corps, because we work in rules of three, where everything is structured hierarchically, so there’s no more than three people reporting to a senior person. And I think that was a really good pushback of like, all right, as we think through this, like this is just going to become- you create these problems by having multiple direct- like too many direct reports without kind of enough really coalescing of it beneath the CEO level. And the more you get sucked into managing direct reports, the less time you have to spend on what really matters and the strategic direction and the higher level things that we really need to be thinking about, strategic customers, growth, capital allocation, culture at the organizational level, those things that nobody else is really doing. And those things just become, I know they’ve seen it from their perspective, both within CSW and elsewhere, that those things fall by the wayside when you have more and more direct reports. And so I think that was a really good pushback from our board on, yeah, great, all this is great, like bring more people to the organization, but also think about the structure in a way where it allows- the structure doesn’t become prohibitive to the CEOs of being effective at what they should be really prioritizing from there. 

Alex Bridgeman: How many direct reports do you want to get? Do you want to get to three as well and follow the rule? 

Hill Hamrick: Yeah, I think three would be nice. And it’s also just, I think the level of those direct reports and how well they’re managing their direct reports makes a big difference and how many people they’re managing too, because I think one of our challenges right now is we don’t have that right either. And so then, like my number of direct reports won’t necessarily be that high, but then we have it too high elsewhere. So, we’re not managing the next level down effectively, which creates problems that then we get sucked into that probably don’t need to be problems in general, but are a sign that we kind of just need to, we need to relook at the structure from there and how we’re dividing up ownership. 

Alex Bridgeman: And you mentioned being able to spend more time on long-term plans for the business and any strategic alignment you do and having more time for that with reducing some of the direct reports and some of the other stuff that you’re working on. How has your prioritization evolved? We talked about people for a lot of this episode, but on the strategy side, how have you organized your priorities in that camp? 

Hill Hamrick: Yeah, I think there’s two things. One is within the context of EOS, we do like a yearly offsite planning session that’s a two to three day endeavor to set, hey, here’s- like we confirm our 10 year vision, we confirm our three to five year target, and then we set based off of that what our one year priorities need to be to accomplish, to be successful over the next three to five to ten years. And so that is a very effective way of working with the whole team to align on, hey, if this is where we’re going, we all agree this is where we’re going, so what does that then translate to down to this level and particularly this year? And so I think that’s been very helpful collectively, not just for me and Sam, but the whole senior leadership team on what those priorities really should be. And so then I think from there, what I found effective in terms of how I’ve adjusted how I operate is really, I distinctly remember the CEO of Spirit Aerosystems, which is a big manufacturer, came to business school and talked to us and was like, yeah, you just got to block off your calendar and just have deep thinking time. I’m like, oh, that sounds nice, I should do that. That would’ve been unfathomable the first like two years of just like I’ll just ignore everything and block off my calendar and like the first year especially, like oh well, I could list off ten things in ten seconds that could go wrong, that I can’t do that. And I think now though, that’s a very powerful tool of just, all right, like shut off shut off email, block off the calendar, like this is executive time. I’m going to work on this priority and think through it, and that’s been very powerful to help just dedicate time to it and block off and let my- I tell my direct reports I’m going to do that too so they don’t bother me, they’re not walking in my office, they’re not calling me, because otherwise, I love talking to people, I’m not going to- it’s hard for me, especially a warehouse man walks in and like, oh yeah, what’s going on, like what’s happening. And so just blocking that off and being more disappointed about that has really helped. And then I think like the engagement with others, particularly both across the cold storage industry, but across technology in general, I think has become an increasing priority. That is the way this is manifested to is I think like there’s a continued, there’s a massive opportunity for us to get technology right. And if we can get that right, that creates a ton of value for the company in terms of how we operate. And that’s a huge, I think that’s a big piece of where we’re going in the next three to five years. And I think that is becoming an increasing amount of time where I’m spending my time is thinking through and talking and learning about what’s out there, how that then impacts what we do today, but also what we’re going to do in three to five years, and then figure out how to fit all that together and translate that into something that’s actionable and meaningful to our team without just kind of, we call it the special project fairy in the Marine Corps, without kind of just like bouncing from special project to special project without any really unifying vision or direction, that I think is a big risk of the amount of technology that’s out there and available now, but how do we really think through, hey, this is what’s going to be meaningful, and not just kind of chase every new shiny object. That’s been a big piece of kind of what we’re thinking about and how I spend my time now as well. 

Alex Bridgeman: Yeah, prioritization and focus means turning away from good ideas or ideas that you really like and look like they’re not just a shiny objectbut might actually move the needle somewhere. 

Hill Hamrick: Yeah, and this is kind of like, it’s almost a parallel to the wartime CEO thing where you just walk in, you’re like, all right, I can fix that, I can fix that. I think at this point, we’re kind of coming across technology where it’s like, oh, that solves a problem, that solves a problem. And in a vacuum, it looks like it solves a problem, but then when you start kind of piecing them all together, I think I described it recently as like, people ask, somebody asked me where our tech stack was, and I’m like, oh, yeah, we don’t have a tech stack. We have like a tech dump. And it’s just kind of a bunch of random stuff that doesn’t really work together, and there’s no unified data, and we have to fix that. But I think you run the risk of just having all these different little applications or tools that none of your actual end users want to use or know how to use or show any importance. So then they just become a waste of money in not actually accomplishing what they are. So yeah, I think it’s really important to prioritize, hey, what’s going to drive the most impact and then what’s going to really get used and adopted in a way across the company that achieves the impact you’re expecting. And that’s been another benefit of EOS is what one piece, one big core piece of IDS is like raising an issue, discussing it, and coming up with a solution, this IDS concept, as a team, and part of what we do when we do an IDS is, if somebody raises an issue, then they’re required to write out kind of a memo that, A, sets the issue, and then, B, sets the criteria in terms of how we’re going to evaluate solutions. And so, a lot of that comes down to, hey, what’s the impact on this? What’s the level of effort to implement it? What’s the likely level of adoption? How hard is it to adopt? Or whatever other criteria we want to add to that. And then we evaluate the options based off of that agreed upon criteria. And that’s kind of like a foreign concept to a whole lot of our team members and we hear a lot of like, oh, this just makes sense. Like, well, what do you mean it makes sense? Like, what makes sense to you doesn’t necessarily make sense to me. And we need to really define how we’re evaluating this, because it could be different depending on what we’re looking at. But that’s really how we’ve prioritized most things but really are kind of… as we evaluate changes or new technology or especially additional spend, aligning on the criteria then evaluating against it to make sure, yeah, we’re not just jumping from shiny object to shiny object. 

Alex Bridgeman: How do you handle ideas that maybe fall in the middle where it might actually align pretty well? There’s some ideas where it’s probably clearly like not worth doing and some that are clearly absolutely worth doing and obvious. But that kind of middle ground, how do you decide and maybe debate as a team where that idea falls? 

Hill Hamrick: Yeah, and I think that’s probably been one of my weaknesses as a CEO is I want to do more things than we’re capable of. I think it creates the risk of when you have too many priorities, nothing’s actually a priority. And then you run the issue of like you don’t get everything accomplished. And that just kind of sets an expectation that’s okay, well, it’s fine not to get everything accomplished. And so I think that’s been a growth for me. It’s like we really need to be deliberate when we set these priorities that we define them well. We call them SMART goals. And I’m going to blank on what that stands for right now. …specific, measurable, actionable. Yeah, Sam’s going to kill me for not knowing. 

Alex Bridgeman: There’s some other ones, yeah. 

Hill Hamrick: Yeah, but it has a very specific deadline. It has actionable things. It has milestones within it. And so, when we set these priorities and rocks, like we call them rocks, internal members of the senior leadership team, we all agree that, hey, this is collectively important and this is what’s got to get done to make this happen. And I think as we’ve gotten better at that, we’ve realized, like I think we’ve all kind of realized in some ways the hard way of really having to make sure it’s a priority. And I think to some extent naturally, back to this like building the airplane while flying it, like you sometimes just don’t have time to do it, or you just get caught up in the business. And if it’s not really a priority, then a lot of times it just doesn’t get done. And in retrospect, like we’re kind of sitting there scratching our heads being like, why did we make that a priority to start? And so I think we’re getting better as a group in terms of really, to your point, knowing, hey, when we say priority, what does that really mean? How important is it? And so then how do we align resources and organizations around accomplishing that versus things that we say are a priority that aren’t really are a priority. And I think I kind of fall in that middle ground. I think we’re reducing that middle ground as we’ve gotten better at that process of really evaluating and setting our priorities to start for a quarter or for a year, and making that decision, that determination ahead of time versus kind of in the middle of it when you’re not really as disciplined around or as deliberate around making those choices. 

Alex Bridgeman: Have you read the book Turn the Ship Around? 

Hill Hamrick: I have not read the book Turn the Ship Around. 

Alex Bridgeman: Oh, it’s really good. It’s a Navy book. It’s about a submarine captain who takes over the worst performing submarine in the fleet and brings it I think to like top quartile. But that was one concept. There’s a bunch of concepts you’ve mentioned, but one of the big ones was making sure everyone has the same or like has the right set of goals for what they’re supposed to be doing and there’s clarity around what is the objective, and like how you get there maybe is more up to you, but knowing that we all have- everyone knows what everyone else’s goals are and they all fit together, and we’re not just going in 30 different directions as a team. 

Hill Hamrick: Yeah, 100%, and EOS is the tool that lets us do that. And like I said, I’m not sure EOS is that much better or worse than anything, any other kind of business operating system out there, but it just gives you the same language, to your point, to then all create that level of alignment across the senior leadership team, and that’s all aligned with where the business is going. But yeah, that sounds like a good book, and it sounds like the Navy, as they always do, take a lot of the best lessons from the Marine Corps and put it into practice. 

Alex Bridgeman: Yeah, it’s a good one. I’ll send you a link after this. But what other kind of just general advice around setting priorities has been useful for you? What other, maybe not even just from like investors or boards, but like stuff you’ve come across or read or books or other resources, what’s been helpful for you as a CEO? What other resources would you send folks to? 

Hill Hamrick: I think Sam and I talk a lot about this concept of easy hard versus hard easy and how people just approach their task list essentially. And I think Sam is one of the most, Sam really should be on this podcast. I probably should have done the other one and Sam should have done this one because he is the most prioritized human being I’ve ever met in my life. And he is extremely deliberate about how he spends his personal time, his professional time, everything. He’s really good at it. He might want me to edit this out, I’ll check with him if he wants me to edit this out, but he actually wrote his business school entrance essay which the subject was like, what matters to you most and why? And his was time, and essentially, time is the most valuable thing, and a lot of what he thinks about it is like how does he spend his time and making sure that’s how he wants to spend his time. So, he is very much a hard-easy person where the hardest things he has on his list he does first and knocks them, so he only has easy stuff left to do. I think most of us, me included, tend to be more easy-hard or not as deliberate as doing all the hard things first. And I think that’s been helpful for us just to think about then, what are the true hard things that usually are less urgent to some extent, because you can’t just check them off or get them done quickly and move on, but really need to be started sooner or have more deliberate time added to them. And I think our ability to share those collectively and understand where we’re at and hold each other accountable in the sense of like we’re just syncing up on those every week goes a long way to help me, mostly me, overcome my easy-hard nature and leverage a lot of Sam’s hard-easy nature. And I think that’s kind of a very helpful framework for us to understand how we think about things differently but also how we can be more effective collectively as a partnership. I think the other one that just both as a person and as a CEO that I found pretty inspiring is the book 4,000 Weeks. Have you read that before? 

Alex Bridgeman: No, no I haven’t. 

Hill Hamrick: Yeah, it’s not really a business book, but it’s just about mortality and life and how you choose to live it. And the idea is that we have roughly 4,000 weeks on planet Earth and that truly is kind of our one shot, and it’s really easy to get sucked into just the grind or day-to-day routine and not be deliberate about, hey, how are you really spending your time? And every week counts, and are you doing the things that you want to do as a person? And I think it was helpful both from being a CEO and just what we go through, and there’s certainly weeks where you say, oh man, that was a rough week. And I think the book at least allowed me to take a step back, and I think, Sam and I talk about this a lot, but back to what we’re doing here, it’s like we are extremely lucky to be in this position. We have what we think is a great company. We have the right group of investors aligned behind us. We get to learn every day and we get to come in and have an impact on our team and have the agency to make it work. Or if it doesn’t, it’s kind of within our control. But there’s almost nothing else we can kind of imagine that’s as rewarding, as engaging, as much of an adventure, really, for us to be doing than this together. And we love this context. And like that mindset has really kind of helped us take a step out of things at times and just remember, hey, what are we doing here? Like, why are we all doing this? And get through the tough times and enjoy the good times. But I think that idea of like, hey, you only have 4,000 weeks and you should make sure that that is spent how you want to spend them. I think Sam and I both have, like over the last three years, kind of really realized like, yeah, this is how we want to spend it. Not every day is perfect, not every week’s perfect. There’s times that it’s really hard. But hey, we’re in this together and we get to have a ton of control over just the company and agency over whether it goes well or not. And that’s super empowering. And I guess that’s kind of one of the main reasons we wanted to do this. And we just feel very blessed and lucky that we can do this. And not everybody can say the same. And that’s not a judgment or anything, that like some people choose to spend their life differently, and we very much respect that. And I think Sam and I feel lucky in the sense that we wanted to make this choice, we were deliberate about it, and we got lucky, and ended up in the seat where we get to live it every day. And I think that has been pretty impactful for both of us in just terms of how we think about this and particularly on the tougher times, but also the good times, and makes us motivated and excited to be here. 

Alex Bridgeman: The general you were an aid for, what couple of lessons or maybe one or two ideas from him did you take away? 

Hill Hamrick: I think aside from just the level of personal engagement he had with anybody he interacted with, I think the thing that he was really good at was he always, he communicated really simply, and that was, like I went to a nerdy liberal arts college for college, and like it almost was like everything you did, and it was a very discussion based environment, and like everything you did was an attempt to sound really smart or say something super insightful. And whether it was a professor doing that, which was very impressive, or a student, and like that was great in a lot of ways because it was a great way to learn. And so it was just very different. It’s a very contrasting thing to watch him communicate, but the power was really he was extremely clear, simple, and consistent, and the things that he said that we were focusing on did not change. He said it in a way where everybody understood it, that you didn’t miss it if you blanked out because it’s month eight of this deployment, we’re in Afghanistan, and everybody’s exhausted and all that, but was very disciplined around what he really wanted everybody to hear. And I think that’s super important as a leader of a larger organization, and back down to building alignment, where we experience this all the time, where it’s just, there’s so much stuff going on, we care about so many things that if somebody only hears something once and then doesn’t hear it again, like they’re just not going to do it. Like it’s just not going to happen, or it’s not going to get done, or it’s not going to be embraced. And part of how we solve that is just through what we measure but also very much what we communicate. And that message has to be very consistent. It has to fit in with the direction of the company. It has to fit in with everything else. It has to be simple and it has to be clear. And those are the things that I just saw over and over again and very different from what I had previously experienced, but saw the power of that we strive towards within CSW and try to put in practice. 

Alex Bridgeman: I love it. Well, Hill, thank you for coming on the podcast and being a part of the series. And this is the last of the Build Series. So, a phenomenal way to end our six episodes here. But thank you for sharing your time. 

Hill Hamrick: That was a great time. Thank you, Alex.