Armando (0:00 – 1:04)
Hi, I’m Armando Roman, host of the Founder’s Guidepost. You’ve built your business over decades, and now it’s time to think about that once-in-a-lifetime exit. You’ve come to the right place.
Here, you will hear business exit professionals talk about what you should know before exit. Besides hosting the Founder’s Guidepost, I’m CEO and founder of Axiom Founder’s Family Office, a Scottsdale wealth management firm helping founders and their families preserve their American success story. We oversee and coordinate a network of vetted professional advisors to help maximize their probability of achieving everything that is most important to you.
And we host the Scottsdale Founders Forum, a biannual live event for the founder considering exiting in the next 36 months. Here’s to your hard work and your American success story. Enjoy.
Hi, Armando Roman here with the Founder’s Guidepost, here with Paul Smiley, the CEO and founder of Snorrin Technology. And Paul, thank you so much for this time this afternoon. How are you doing?
Paul (1:05 – 1:11)
Pretty good. It’s a busy time of year, like you said earlier, but we’re balancing ourselves today. Balance is the key.
Armando (1:11 – 1:49)
Yeah, well, balance is always important, right? So Paul, you built a really great company from, really from scratch. And I remember talking with you in the early years when you were kind of scraping by to get everything to come together.
And at some point, it did come together. But those were some lean years in getting the people, getting the contracts and that. But a lot of people who would love to emulate your success.
And the conversation, if we can have this today, just about what lessons you’ve learned, what lessons you’d like to share. And I’ll ask you first, if you wouldn’t mind just talking a bit about your business, about the business that you’ve built.
Paul (1:50 – 2:24)
Okay, so our business, we are a federal contractor. We deal primarily in the defense area, the defense space, where the Department of Defense, whether it’s the Air Force, Army, Navy or Marine Corps, have requirements that they need outside support. In a nutshell, they don’t have enough military people to get this job done.
So they put out what we call request for proposals, competitive request for proposals to come in and provide a service that’s not normally given to a contractor. But again, they need that service support to get their mission done.
Armando (2:25 – 2:29)
Okay, fantastic. And so you’re operating in multiple states?
Paul (2:29 – 2:49)
In multiple states, normally, military installations. During the pandemic, we did have some of our employees working from home remotely. But at the high point of our company’s back in 2018, we had 349 employees in 27 states, including two locations overseas, Italy and Germany.
Armando (2:51 – 2:54)
That sounds like a lot of people to manage in various locations.
Paul (2:55 – 3:19)
It’s a lot of people I think seven times over came up with. But one of the lessons I tell small business owners is that you can’t do this in a vacuum, you need to have a robust pool of talented people, your staff, i.e. who can make sure they get the job done, because you’re one person with two ears and two eyes and two arms. And you can’t hang this kind of paper across the world with just yourself.
Armando (3:19 – 3:28)
Right, exactly. So let’s talk about what would you say are the key factors to you growing and running the successful business?
Paul (3:29 – 4:33)
Oh, I think one step back prior to that Amado, and the real question is when I mentor and speak about entrepreneurs or business owners, the real question is, why are you going into business? That’s number one. And the second question is, is there a need for what you provide, whether it’s a product or service, there must be a bona fide and sustainable need for what you do.
So as I mentioned earlier, we recognized early on that the federal government, the Department of Defense needed professional services to do that. So there was a need for doing that. But the second part is I didn’t go into business purely to make money.
Of course, you have to be profitable business, or it’s just a hobby. But oftentimes, people make a mistake that I’m running business for the primary reason of making money. And then I will tell you, you’re probably going to fail.
Or more importantly, you will make a money decision, when in fact, you should be making a business decision. So making money is important and profitable. But the danger is, your number one sustained reason is I’m going to be able to make money and get rich.
It’s a big trap.
Armando (4:36 – 4:56)
So I know I’ve heard you talk a lot about leadership, Paul, about the leadership, the management, setting the tone at the top, and make sure that’s consistent throughout the company. How have you done that? And how have you seen that impact the customers that you have that you know what they see?
Paul (4:56 – 6:51)
Okay, I just got back from Oklahoma. I was in four locations there, talked to our customers, retired colonels like myself, and squadron commanders, i.e. the people who we support. But going back from a baseline perspective about leadership, my 25 years in the Air Force taught me something very important.
Leadership is important because we’re in the people business. And so when you see a company with a manufactured airplanes, or we choose pilots how to fly, with cybersecurity, or with manufacturing, when you go home and take off your owner’s hat or your president’s hat, you realize that you’re in the people business. And then this year in 2022, I can’t tell you how many people situations trumped business situations or operational situations where, you know, one employee is having a pregnancy problem, and she’s out of PTO, or like it happens most of the time, there’s a family member who has a mom or dad who passes away, or there’s that, you know, not so good employee at the site that needs to be corrected and some corrective actions, and doing it the right way, in the legal way, your HR department, it just goes on and on and on.
And those are the things that I think most business owners of small companies, three or four people, don’t get a chance to see. And so, as I mentioned earlier, in 2018, when you’re 350 people in 27 states and across the globe here, you know, your people problems are exacerbated greatly, whether it’s a personnel problem or a family problem or a healthcare problem or an HR problem, all those things really come back to the owner and CEO of the company. And that’s why it says, we train pilots how to fly, various other things we do.
But in my personal life, just like as an Air Force commander, I’m in the people business. And when you’re in the people business, you must be a good, humble leader. Without that, you’re going to fail because you’re not going to take care of the people getting the job done.
Armando (6:53 – 7:15)
So Paul, you’ve talked about your military career and that a few times in this conversation. How do you think that’s been helpful to you as you launched a business out there? Because as you’ve said, military career, you’re there for 25 years, is that right?
Yeah. Okay. And being a business, it seems like it’d be a completely different animal.
Is it or not?
Paul (7:15 – 8:22)
Well, the leadership part, when I speak to people who want to be business owners, the Small Business Administration has program called the Boots to Business Program. And it is designed for people who are veterans, who are leaving the military or who have left the military and able to go into business for themselves. And the first thing I tell them, you gain some very valuable managerial leadership skills in the Air Force, in the Army, Marine Corps, the Navy, use those as a business owner.
And it says, when I was a commander, we would command a control unit while I’m flying on an airplane in the E-3 AWACS at Tinker Air Force Base, I’m still managing people resources and managing time. And more importantly, I’m managing situations. And so the leader must be able to understand and decipher a priority of what’s important for the day.
So when I get up in the morning, it’s like my military career, in my own mind, I’m putting together a priority list of what’s important today. Because some things can wait till tomorrow. So I think that leadership skill is people, prioritization, communication, and also really important, how do you handle stress?
Armando (8:25 – 8:51)
Yeah, well, that seems to be an ongoing thing at times, the whole stress management. So do you, with your military experience, I think about discipline. And it seems that many, many people in general, learn discipline later in life than others.
Do you think that helped you have your successful business, the discipline that came part of being the military?
Paul (8:52 – 9:47)
I think so. I think, for me, it starts before the military, it starts with growing up in Chicago, from a family of eight boys and two girls. My dad was a great guy, hard worker, a union guy, but had military background as well in the Army.
And it starts with culture and character and values. And those values, oftentimes, as you grow up, whether you go into the military or go work for some big corporate miracle, or whatever you do, those values normally follow you. So even prior to going into the military, in fact, when I came in and enlisted in 1977, basic training was pretty easy for me because it’s about following orders.
I’ve been following orders from my dad since I was a kid. So those family values and how you bring to the workforce or to college or to high school, those things come from home. So that’s where the genesis of my value and decision making and character issue started with my dad and my mom.
Armando (9:49 – 10:00)
Okay. And you’ve had a long run in your business, obviously. What lessons or what do you wish you had known when you started the company versus what you learned along the way?
What wisdom might you share?
Paul (10:01 – 10:43)
Well, I would say I’ve learned some, probably the biggest lesson is that only do business with people you trust. I mean, I got burned a couple of times trying to help someone out doing the right thing and didn’t work out too well. But I’m glad I learned that lesson.
There’s some scars and scratches I think you need to have going through the business owner. But my number one rule for business owners is to only do business with people you trust. And that’s the, people use networking a lot.
And I’m not a networking guy. I’m about relationships. Because relationships, whether it’s business or family, they’re kind of the same.
And the foundation of that relationship is trust. So I go back to only do business with people you trust.
Armando (10:45 – 11:35)
Sounds like good advice. Now, when you have people in those management positions across the different locations, it seems like it could be difficult to maybe manage them and keep everyone working in the same vein. I took a look at your website to see some of the overriding core principles that you have and some of what you say as a company that you want to have and follow.
And you mentioned four principles, leadership, reliability, and responsiveness, service excellence, and a transformational technical training solutions. How has having those core principles helped? How do you take those and permeate them through all the people in the company and remind them and keep those at the forefront so that they, the people act and deliver on those?
Paul (11:36 – 13:42)
Well, first of all, the folks who you hire as managers, I hire leaders who have a management capability. They have that skill. And oftentimes as you do your research, you find out I’m hiring Mr. X or Mrs. X to be a vice president or director. The skill set is important. And they normally bring that to the table. The most important thing is the attitude.
And you can get a lot by sit down, having a face-to-face conversation with those people you want to hire in leadership jobs and making sure that they buy into the culture that you’ve established because the culture is like the oven. You put something in the oven at the wrong temperature, it’s going to be undercooked or overcooked. So they can buy into the culture.
And what I believe in is owning a president and then bring something unique to the table from a diversity perspective. Hey, they bring a different aspect too that can make our brand better. That’s the person I want to hire.
A person who doesn’t need, you know, one-on-one oversight. They’re in Washington, DC or Virginia. I trust them.
They’ve demonstrated that trust. And you just give them the rope they need to do to do their job. No one wants to be manager or, you know, too much oversight on them.
So you find the people you trust, they bring the right skill set, you judge that attitude and that character, and then you give them an opportunity to shine. And I would say in 15 years, there’s probably only maybe one person who we hired to lead a program who didn’t work out. And it was really a character issue and a trust issue.
But, you know, it happens. You know, if you tell me there’s a president of a company who has never failed, I’ll tell you there’s a president who’s never tried anything new. And like I said earlier, this was a brand new company from scratch.
So when I started it in 2007, I looked in the mirror and goes, I am a novice CEO. I’m a novice. Leadership, I got that down to a science.
I’ve always learned to try to improve myself. But from a business perspective, I was quite aware that I was a novice, new, what you would call a good to great, a level one business owner.
Armando (13:44 – 13:57)
So how did you train yourself, teach yourself? How did you get the skill sets to advance beyond level one? What did you do?
Was it a formal step-by-step program that you went through or how did you?
Paul (13:57 – 14:59)
It was interesting. The leadership part wasn’t difficult. It was kind of easy from the business perspective.
I read a lot. One of the books I read was guys, my CEO, good to great. Then I had a couple of good mentors who helped me learn the business.
So my journey started from at the Air Force, going to corporate industry, doing a good job there, made a few mistakes along the way from the learning. And then this thing happened where my boss decided to retire and my life became a living hell. And so all the things I went through, good and bad at the first company I worked for between 2004, 2007, I just took those lessons and learned.
So you can have an experience that’s a bad experience. You can have a pity party for yourself, or you can say, hey, I learned a lot from that one. What that means is when I started the company, I wasn’t a freshman.
I was maybe a junior because I had three years of experience of good and bad. And I just kind of kept both of those. I learned from the bad and go, don’t do that.
And from the good, expand on that.
Armando (14:59 – 15:05)
Right. Right. And even though even those setbacks can be valuable learning experiences for everyone.
Paul (15:06 – 15:11)
Yeah. That’s the wisdom comes from in my mind. Wisdom comes from experience.
Experience comes from failure.
Armando (15:11 – 15:16)
Right. Right. And sometimes you have to reinvent yourself and just be resilient.
Oh, yeah.
Paul (15:16 – 15:25)
Oh, yeah. You know, no one’s going to wake up tomorrow and have an ideal plan of what the world has in store for you. You just fooling yourself.
Armando (15:26 – 15:57)
So you mentioned trust and how important trust is in people, you know, that the people, you’ve got to trust them, feel good about them. There are obviously lots of tests out there, personality tests out there that can help identify personalities and identify traits and characteristics of people. Have you used some of those?
Is that part of what you’re thinking of on getting the trust or is it more of a face to face interaction just to get a gut feel? How how do you determine trust?
Paul (15:58 – 17:43)
It’s a face to face kind of deal. So I would have people who will call me and say, hey, here’s an email, how would you do business with you? And I would probably hit the delete or maybe respond.
You know, can you pick up the telephone? And this is all pre pandemic. So to showcase that when I had business meetings, I would say the part of the first 10 years of the business, I spent about 200,000 miles on Delta United, flying to different meetings and so forth.
Like I said earlier, network is one of those things where people oftentimes say, what can you do for me? But the relationship part of business is, hey, what can we do for each other? And sometimes to get that, you got to get on an airplane or get in the car and drive someone, meet that person, face to face, shake hands, eyeball to eyeball, maybe have a meal.
And you build that over time. When I was a squadron commander in Korea, in the Asian community, we did a lot of drinking, a lot of face to face. We didn’t do Zoom calls and Teams calls and internet kind of stuff like that.
And that’s old school kind of stuff. My dad, as I mentioned, was a teamster in Chicago and watching him and my uncles do business. It was a handshake, gentleman’s handshake.
But now everything’s contract and double sign, cross the Ts and the Is. And so what that taught me is that from a contract perspective, a contract is simply a mutual agreement of distrust. That’s what a contract is.
You can’t have the paperwork, but I think spending time face to face, getting to know someone and their values and about their family and things like that, to me, that’s the starting point of trust. And today with the pandemic, somewhat in the rear view mirror, I still think we can do that. I get emails every day from people I’ve never heard from before who want to sit down and have a business relationship.
It’s not going to happen.
Armando (17:45 – 18:24)
Wow. So, Paul, I know that you give back a lot. You give back in different ways and you try to help people whenever you can.
And I realize that’s just part of who you are. That’s part of how you live. That’s part of how you exist.
And it’s just part of who Paul is. How does that impact you as a CEO of a company that I said you started from scratch and you’ve got all these people on board? How does that impact the business and the employees and that?
Just your generosity, you’re giving back and you’re helping others.
Paul (18:25 – 20:09)
I’ve got to go back to my family’s history. My grandparents grew up in Mississippi. They were farmers.
They had their own land down there. And my grandmother would tell me stories about the Great Depression where people walking up and down the highway in front of their house, whether it’s black, white, Native American, whoever. And she would go to her kitchen and say, we’re going to help feed you and your family.
And that’s coming from a woman and my grandfather who were farmers. They weren’t wealthy at all, but they found the generosity as Christians to help someone. And that is kind of permeated between my mom and dad, my uncles and aunts and so forth.
And you just kind of, I guess, contagious to doing that. So from a Christian perspective, I think we are blessed to be a blessing to others. And over the period of time, I’ve seen business owners who have the concept and the mindset that it’s all about them.
And I’ve never seen a Wells Fargo truck behind a hearse or a funeral where you can take it with you, but you can have some great opportunities to change people’s lives. And sure, what that means is our company motto is people before profit. If you take care of the people with great retention, you’ll earn their trust.
And it’s something you can talk about, but you have to demonstrate it. So for the first two years, I had my retirement pay, a little money saved up, and I was the last guy to get paid, but I made sure my employees were getting paid before. And just this year, we’re back to having our company Christmas parties across the country in different work locations.
And that’s money that comes out the profit side, but that’s okay. People need to understand that if you want to have this mindset and this concept of people for profit, I say, don’t put your money where your mouth is. You put your money where your heart is.
That’s what I do.
Armando (20:10 – 20:32)
Wow. Fantastic.
So Paul, working capital for companies, I just had a phone call earlier, an hour ago with a company that is growing tremendously and working capital is often an issue. You get a new customer, new contracts, new service obligations, and that you’ve got to deliver and you’ve got to put the money out before you get paid.
Paul (20:32 – 20:33)
Absolutely right. Yeah.
Armando (20:33 – 21:21)
That can be, you know, that can be as you’ve seen it, you’ve experienced that can be something that’s just got to be navigated. And you’ve mentioned before many times in that regard, how important it’s been to have a relationship with your bank so that as your company grows, you’re able to finance that growth. You also mentioned just a moment ago, everybody else got paid first, Paul got paid last.
You know, you’re going through some of your own personal sacrifices to make sure the company is good, the company has the cash that it needs. But I think about the bank and how important you’ve made the bank. You’ve said many times how important that is.
How did you nurture that relationship? How did that come about so that you had the working capital that you needed when you needed it?
Paul (21:22 – 24:02)
Yeah, it goes back to what I said earlier, Armando, I could have called the bank and said, hey, I’m Paul Smiley, the president of Sonora Technology. I need your help. Or I could have just emailed them.
Or I can have a friendship and relationship with someone who says, let me teach you about the banking industry and how we see you as a small business. And so I think it’s important for me to mention the first person who gave me a small line of credit was Candice Wiest, who was the president of West Valley National Bank. And she taught me a lot about the banking industry and how the banks see businesses, whether you’re small or large.
And she said something that was kind of funny. She says any company comes into her bank, you all have the same last name. That last name is Risk.
The first name is up to you. And so she’s talking about the five T’s of banking. But she gave my first loan.
And as we grew, I learned how to be bankable by having the correct presentation that we give the bank. And today our bank is fantastic. We have all the money we need to grow.
We have a great relationship. And over the years, I’ve educated and trained my banker as to what we do. So as an advocate of our company, and she’s a senior vice president, when she goes to the president of the company or underwriting of those folks in charge of capital, she can intelligently tell them what Sonora Technology does.
And she can show them our history of what we’ve done and how we made them money. So that relationship is important. And so when I get a call from different banks who kind of gave us the Heisman during the early years because we weren’t so-called bankable, they come back now when I take my business and goes, nope, I’m with the same bank for the last 10 years.
And I’m loyal to them because they are loyal to me. But the big question, Armando, I think you’re bringing up is very important. Access to capital is still the big elephant in the room.
And it’s been there since I’ve been in business since 2007. But there are ways to do that. And I’ve been successful in having some colleagues of mine establish that small line of credit.
And they will grow as they need more. But now they’re building that track record of trust, that track record of on-time payment. And then they’re lowering the bank’s level of risk.
And that’s what it really boils down to, to be bankable, to be low risk for the bank, and to deliver and have that relationship with your banker. We meet probably four to five times a year at lunch or dinner to update them on how are we doing and what’s going on and what the next moves are. So if I need a big contract, $100 million coming up sometime in 2023, I’m starting that process with the bank right now, six, seven months out.
Armando (24:03 – 24:20)
Yeah. So you’re not waiting until you need the money. You’re nurturing that relationship, building that relationship, keeping it strong, deepening that so that, as you said, they benefit, they’re making money off of you, which is what they’re in business to do, and they’re helping you grow your company.
So that’s a mutually beneficial relationship.
Paul (24:20 – 24:33)
Yeah. And then send them new clients who are ready to enter that part of their company’s development. And so, again, relationships are what’s in it for both of us versus networking what’s in it for me.
Armando (24:35 – 24:43)
Okay. So 13 years, you said you’ve been in business, is that right? 13 or 15?
Paul (24:44 – 24:45)
- Yeah.
Armando (24:45 – 24:45)
2007.
Paul (24:46 – 24:46)
Yeah.
Armando (24:46 – 25:06)
Okay. So then what lessons have you learned that you’d be happy to share? And I’m remembering that you mentor people.
People come to you quite a bit and just ask you for help. They ask you for advice. They ask you for guidance.
What are some of those common things that you hear from them when they’re asking for help that you might be able to share?
Paul (25:06 – 27:33)
Well, I think there are two distinct roads that new businesses are challenged with. And it’s not a right or wrong answer. It is simply what does your lifestyle dictate at this time?
So road A is for a person who maybe you inherited some money, you retired from the military, you saved some money, you don’t have a whole lot of debt. So you start your company and you say to yourself, I’m going to put in 12, 13 hours a day. I’m just going to go read, sleep, and eat in my company.
You do that. And then there’s road B, where maybe you don’t have that. You still got bills to pay, you got maybe college tuition, a mortgage to pay, and you’re going to work a regular job.
And then you kiss the wife and the kids good night and go to bed. You’re going to start running your company at six o’clock at night to maybe 12 in the morning. And that’s your role, because that’s the role that you are given.
Again, it’s not a right or wrong answer. So some companies say, wow, I see company A over here on road A, they’re kicking butt, and they’re growing like fast, and they got 75 employees already, and I got two. But just like anything else you do, the more time and effort you spend there, you’ll probably see improvement or success a lot sooner.
So I had one friend, he was in road B. He had to work a job and work his company in the evenings on the weekends. And he got frustrated.
He goes, I’m not moving fast enough. And he was going to throw in a towel and said, don’t throw in the towel. Here’s the reality.
You’re not putting in the time because you have other commitments that you have to do. And so as time progressed and his company got bigger and he started spending 10, 12 hours a day, he was able to quit his regular gig and focus more time on the business and very successful after three or four years. But oftentimes, you want to throw in the towel because things aren’t going as fast as you want to.
But I would say this, being a business owner is not for the faint-hearted. It’s a lot of hard work, and you got to be willing to struggle and get some scratches on you. But as long as you have a good purpose and a good focus and a good vision and people who are in your corner and do a lot of prayer, you can make it.
You can. It’s not an overnight instant kind of stuff. And oftentimes we want to have that instant success.
And I’m glad I kind of went through my little journey down in the valley of death, so to speak, and came up because it taught me a lot of valuable lessons about patience and being steady and staying on course.
Armando (27:34 – 27:45)
Yeah. And so you mentor different people, of course. The people come to you, you have people who you meet with on a, I think, on a regular basis to help them as well.
Paul (27:45 – 27:45)
Every quarter.
Armando (27:46 – 28:02)
And are they, is some of that, like you said, going through the valley where it looks pretty deep, dark, and ugly. And sometimes I think people need not so much a pat on the back, but sometimes a kick at the rear end. Hey, keep going.
Paul (28:02 – 29:04)
Yeah, yeah. My daughter’s a business owner. She’s in the marketing programming world.
And when the pandemic hit, boy, she got shut down pretty bad. I think had it not hit, you’ve been doing fantastic. But you look at your market, and one thing you have to do as a business owner is have a continuous risk assessment.
What are the risks of the business I’m in? So during the pandemic, if you’re in a restaurant business or a gym or a people interaction type business, you got hurt pretty bad. You got shut down by no fault of your own.
And so during the pandemic, I put together a podcast called Small Business 2.0. And it was designed for small businesses. So what are you going to do? One, to get your business through the pandemic.
And then on the other side, how are you going to restructure or re-engage? Because on the news, what you heard was, well, small business are taking it to shorts. Okay, Captain, obviously we get that.
But what are the solutions that can help you get this thing done?
Armando (29:04 – 29:22)
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Paul (29:23 – 31:27)
Right. So, and there are a lot of lesson learned out there. And I hope people did capture some of the lesson learned.
But there’s always risk to anything we do. And I remember several years ago, we had the Krispy Kreme donut chain out here in Arizona, across the country, and it was a bricks and mortars. And then someone said, you know, those things, those Krispy Kreme donuts, they’re kind of unhealthy for you, get you fat, diabetes and everything like that.
And before you know it, all the brick and mortar stores closed up. And so things can change a lot. But my favorite story is, prior to 9-11, you walk through the airport security things.
And this guy had this great concept called security-sensitive shoes. So you keep your shoes on, there were no planks in there. And then with the stroke of a pen, someone in Congress says, everyone must take their shoes off at the airport.
So much for that great idea. A lot of shoes, but now you got to take your shoes off. So there are lots of stories like that, where you had this product, or this invention of the service and just kind of went away.
And then when I talk to young entrepreneurs about the product they may be servicing, I’m not in the product business, I’m in the services business. But from a product perspective, I remember this thing we had called a Garmin. You put in your car, and it was kind of a little GPS kind of stuff.
And now every phone, every car has a navigation. Why do you need a Garmin for navigation? So to me, that was a highlight of the word sustainable.
Is your product or is your service sustainable for the long run? Because things come and go. We don’t have eight-track tapes and things of that nature anymore.
So how do you get inventive and so forth? But technology is the changing aspect of most businesses. And even in the services businesses, how we onboard people, instead of being at the site, we do all that paperwork for HR online.
So standing abreast of change is pretty key. You just can’t get comfortable in what you do. You got to get smarter and be able to navigate the changes that happens, particularly in technology.
Armando (31:29 – 32:09)
And that makes sense. So what about retention? When you get good people, you hire them, you get a good relationship, and you bring good people on board.
What about retention? There’s a lot of benefits built around employee retention, which are tools, of course. But I wonder what you think about those tools versus what you just already said before about that relationship with that person, caring about that person, helping that person, and helping them see, because you’re speaking with your heart, that you care about them.
How does that translate or relate to employee retention?
Paul (32:10 – 35:45)
Well, you’re going to have different generations of people out there with different values. I’m a baby boomer, so I’m not a big fan of change. If I find a great job I like, I’m going to stay there.
And so understanding that people are sometimes kind of fickle. In our particular situation, about 85% of our employees are veterans, and some of those veterans have spouses who are on active duty. So we may have an employee at Randolph Air Force Base in Texas whose spouse worked for us, but maybe he is active duty, and now they get an assignment to Germany, and they’re going to leave.
It makes sense. But what happens for us is that we want to make that person feel that this is the best company you’re going to ever work for. And if you do leave, that’s fine.
But when you leave, my goal, my measure stick is for you to say, Sonoran Technology, best company I’ve ever worked for. That’s a champion and advocate, and that rumor or that fact gets around other people that I want to work for those guys there too. Now, you’ve got to earn that every day by taking care of those folks like you mentioned.
So we focus on giving good salaries, good benefits, having a healthy workspace where people don’t feel threatened. And oftentimes when they come on board and I’m out at the site, I’ll tell them, don’t ever be threatened about your job. Your job is secure.
And then hear the pros and cons about our company. We’re not a perfect company, but we’re going to treat you and your family with respect and dignity and do that. And on our website, I have people say, wow, I see what you guys stand for in terms of doing that.
And so people say, I have an open door policy. I have an open airline ticket policy. If there’s a problem at a site, then I need to go there.
I’m going to go there and talk to employees and so forth. We’ve had quite a few examples where we had to do some corrective training, but some people will leave for money because it’s a better job and that’s okay too. So regardless of the reason they leave, that they leave under good circumstances where they can say, hey, I got treated real good at Sonoran, a good company to work for because your reputation of the company will be out there way before you get there.
And so we built that brand of Sonoran is a good company to work for or great company to work for. Again, we’re not perfect, but we spend a lot of time making sure that retention is one of the things that we focus on. And so I haven’t had many problems, but I think we’ve done pretty good and set a pretty good track record of retention.
But again, you’ve got to earn that reputation of a good company and you can do that a lot of different ways, Christmas parties. And for me personally, when I come in on Monday morning, the first thing I do is my HR manager, he gives me birthday cards for that month. And I sit down, I write a personal note to all the folks there.
One of my friends told me years ago, he says, when you get a couple hundred employees, you won’t have time to write birthday cards. Yes, I will. He goes, why do you say that?
I said, because as human beings, we do what’s important. And when I go out to the sites, I oftentimes say, I’ve never got a personal birthday card from the president of the company or a card for a wedding or for babies, things like that. So people do pass away.
And by my HR department, I give them all the credit because they are great at keeping me aware of what’s happening on the personnel side out there. So I made that note, someone’s mom and dad passed away or grandma passed away. But when I hear that from the managers, then from the HR department, the first thing we do is get a card and sometimes even a phone call.
But those are the things that personal touch that make people value and respect your company.
Armando (35:46 – 36:16)
Wow. So you mentioned on your website, I looked at your website, you mentioned culture about dignity, respect, and human kindness being very, very important for the corporate culture. And it sounds like the touch you mentioned about personal notes from you are part of that.
How else, when you think about the dignity, respect, and human kindness, how do you foster that as a culture for all those people in all those locations all across the country?
Paul (36:17 – 38:04)
You have to show it. You have to kind of show people what you stand for. And like I said earlier, it’s not only about giving, it’s about that phone call.
I’ll call maybe once a month, two or three employees out of the blue and say, hey, this is Paul, how are you doing? Just checking on you to see how you and your family doing, how’s work going. It goes, I’m in trouble.
No, you’re not in trouble. I’m just telling you something to go on. But it’s that surprise call that goes, wow, the president called me and I thought something was wrong.
Because that’s the normal human nature. If I get a call from my boss, whether the president or vice president or anybody, oftentimes the first inclination is that, what’s wrong with us, screw up. So we try to break that down.
And the president called, you need time and so forth and see how you’re doing. And people respect that. We’ve had a couple of employees who’ve had some health issues, injuries and so forth.
And they get a big basket at home, hey, maybe you fell off a bicycle, put a little bike in there. Hey, be careful next time. From a jokey perspective.
But they get it. They get it. And I think people want to be known.
And I’m from a school of thought that if you have a bunch of employees saying, I’m just a fill in the blank, you’re kind of missing something there. Because I guarantee you, every 10th and 25th of the month, our HR manager, payroll people are the best well-known people on the planet because it’s payday. And so it’s like the field goal kick in football.
It only becomes real noticeable when the game’s on the line and he has to kick a field goal. So we try to make sure every person feels embraced and that they have purpose in what they do. And so that’s kind of the real thing about the culture of the company that makes sure people feel, hey, I feel value for what I do, regardless of what my job happens to be in the company.
Armando (38:06 – 38:33)
And it sounds like also, Paul, that was very intentional when you started your business, very intentional that you wanted to have that in your company as part of your corporate culture. And would you say that that, again, comes really from your background, your upbringing, the family environment that you’re part of? Or did you have to work at that to make that part of the culture?
Because it was things you had to introduce that maybe weren’t there.
Paul (38:33 – 40:16)
It’s part of family, part of my military career. But, you know, people who know me and know me well know that I just have no tolerance for being uncivil. I just have no tolerance for it.
It’s not necessary. And oftentimes what happened in leadership, leaders get misguided and they will spend 85 percent of their time dealing with the problem people in the company and 15 percent of the time with people who are making things happen every day. And I say reverse that formula.
Spend 85 percent of your time with people who are getting the job done, because if you don’t, you’re ignoring them and they will leave and then do your very best to replace those people who are trying to carry a company down. And they may not be trying to tear down on purpose, but in this new social media environment, it is pretty rapid. So I have no social media.
You want to call email. I don’t have Twitter. I don’t have any of that kind of stuff because I’m a face to face.
Let me call you. Let me see you kind of person. And I’m accountable.
And I expect all my employees to be accountable. And so we’ve had a few employees I’ve suggested because I can’t mandate it. Do yourself a favor.
Get off social media. And they did it. Oh, now my life is, you know, back to normal.
So, you know, we don’t have a Facebook page, that company something for recruiting, but it’s not a day to day people posting stuff. But I think, you know, stand aware, stand aware of the social media, the pros and cons. I focus pretty much on the pros and make sure that that the cons don’t kind of disrupt our company.
I think a lot of companies suffer, you know, from being too open on social media because there’s no accountability there.
Armando (40:17 – 41:26)
Well, social media is we’re all trying to figure out and it has, it has, you know, the good and bad about it, but it is certainly part of the environment that we just have to navigate. Okay. And then I’m going to go back to your website for a second here, because on your website, really in the cover page, you talked about establishing relationships with honesty, trust, integrity, respect and service excellence.
And it’s more of what you’ve already been talking about, you know, part of the corporate culture, but really how you treat people and that. And it sounds like that has served you well. So for someone who’s maybe starting their company now, and they’re building and bringing on team members, it can be hard to find good people today hard to find people at all today because of the limit, right?
Certified people. So they might not be able to be as picky as they might like, if they want to get some of those contracts serviced. Any, any thoughts or suggestions, people as they’re, they’re navigating those, those hires during times when it’s a little tighter to get people?
Paul (41:26 – 43:45)
Yeah, well, I’m leading a group of folks down here in Arizona, and we’re trying to have what we call veterans employment awareness, where again, we’re 85% veterans in our company. And, and every veteran is going to be a perfect, faithful company. I can tell you that right now.
I’ve had veterans in our company who just didn’t work out. Maybe they were too regimented. Maybe they didn’t realize that you are retired and I am retired.
So I don’t, I don’t do a military stick around and never have, but I think that veteran brings something to the plate, which is, I understand culture. I understand respect and dignity. I understand honor.
I understand work ethic. I understand coming to work on time. I really understand teamwork because military is a team environment.
If you can bring a person with that kind of talent to your company, it’s a good start. And oftentimes they want to challenge what they have is that you take the gen X, gen Y, whatever it happened to be. And we try to broad brush and paint all those young people as, you know, lazy and stuff.
And that’s not true. That’s not true. It’s a stereotype.
I have a lot of young people who work for us. They’re great employees in the sites. I saw some of them last week on Oklahoma, you know, 23, 24 years old, this absolute gems for our company.
And so I’m always cautious to tell business owners, don’t deny and pass bad judgment on our young workforce, because in reality, they are the future, you know, we’re going to retire one day. And so what we should be doing is training those young people up to be more accountable, to be responsible and to take our place. And so within our company, we have some, some leadership programs at the various sites out there, focused on our younger generation, preparing them to lead.
And you think about the military, that’s what we do. As a lieutenant colonel, my job is to train lieutenants and captains and majors to be lieutenant colonels so they can lead one day. If you have your company, you and your vice presidents are the only people with leadership skills, and you’re not training the next generation, your company’s going to fail because no one’s gonna be there to take your place whether you’re sick or taking vacation.
So I’m happy to say I can take up two weeks and my vice presidents and next level managers can run the company themselves, because I put that trust in them. And I’ve trained them, we’ve trained them over the years to take the leadership role.
Armando (43:47 – 44:33)
Yeah, and that touches on succession planning as well that having those people who can replace so that everybody can be replaced if need be, you never know, like, you know, life can take some interesting turns and sometimes very tragic turns. Yeah, you need to replace people, because you just have to. Well, any other thoughts, Paul, as you’ve, you know, you look back over the 15 years of having your company on day one, I said you were a novice CEO, you had a good foundation in terms of who you are, you know, your beliefs, your work ethic, etc.
Now you’re 15 years in, any thoughts you’d like to share on just what’s helped you become successful within your business?
Paul (44:33 – 47:21)
Yeah, well, I’ve started to capture that I’ve been in the process of writing a book, it’ll be coming out probably next summer. But one thing I look at, you know, for the folks who are in my leadership chain, and I have a couple of appraisals scheduled for next week, and I just told my HR manager today, I gave her a little sticky, in a sticky red, that you can do you think your life is in balance? I says, save that piece of paper, we talked about next week, I give you a feedback and appraisal.
And this balance is important for everyone, whether you’re married, you know, a single, or working two jobs, or whatever you do, you got to have balance. But I think the big thing that somehow has changed our world is feedback. And so feedback over a Zoom call, if that’s the only medium, I get that.
But next week, I’ll walk down to my HR manager’s office, and I’ll close the door. And we will have a good feedback session for her appraisal. And what I’ll be cautious of and cognizant of, that I’ll do more listening than talking as her boss.
And I’ll ask her some pretty unique questions. So what do you want to accomplish in life? What can Sonoran Technology do for you and your family?
And then her performance has been exceptional. But also, I want to be able to help move her outside of the workspace, if she wants that. And go to school at night, whatever, we’ll pay for that.
But feedback is important, communication is important, and we got to do a better job of doing it. If you can do it in person, and do more listening and talking, you’re going to really find out the great people you have in your company, and then find out more importantly, how you can help them. And I think that’s one thing that good leaders always do.
I don’t like to call myself a successful leader. I’d rather call myself an effective leader, because an effective leader makes everyone around him or her successful. So I shoot for effectiveness versus success.
Success is oftentimes a very time centric, you’re successful here, and then, you know, things kind of go dormant. So if I’m effective, I’m effective to an entire pendulum, whether swings right or left, I’m effective because I’m making other people successful, and growing them as leaders. So that’s the interesting part.
Once you get some business legs under you, you can start seeing, hey, I can help a lot of people, and make the world a better place. And so when it says, what is Paul’s legacy, the legacy will speak for itself. I have no doubt about what the legacy of Sonora would be, or what the legacy of what my legacy would be, is that it would speak for itself.
And it will always come down to, you know, what he did his very best, and the company did their best to help people. If you can, if that’s the story, I’m good with that story.
Armando (47:23 – 48:23)
Wow, fantastic. So fantastic. So let me just look at my notes here to see if I have any other questions I haven’t asked you about.
We talked about leadership, about discipline, how your military experience has helped with getting your company and growing that. You mentioned you’ve got a lot of, about 85% that are veterans, who have gone through, you know, what you’ve gone through, maybe not, maybe not as many years as you, but they’ve been through the military as well. And let me just touch on some of the high points that you mentioned as well, about, you know, you mentioned about, you know, is there a need for your product or service?
You know, is there a need for that business to exist? And why are you in business? And really, as you said, people over profits.
So if you’re focused on the people over profits, then you’ll make decisions from the heart and help the people and they’ll be there for you when you need them as well. Where versus on the other side of the coin, if you’re focused on profits, then that is not a good long term recipe for success.
Paul (48:23 – 48:24)
Absolutely, yeah.
Armando (48:24 – 49:21)
Okay. And you mentioned that you’re in a people business, that everything you do really has to do with the people and the relationships, those trusting relationships, making the people the priority, and only really doing business with people who you trust. And that a more effective way for you to get that trust and see that and have that is in person, face to face in person with people versus the zooms and that kind of thing.
To get there. You also mentioned one thing about attitude, having the person having the right attitude, because not having the right attitude can kind of spill out throughout the ranks that are the other people and just not really be good. And I like what you said as well, that whole 80-20 rule, spend your time with the people who are doing 80 percent of doing things right, not the 20 percent who are the problems or the 15 percent who are the problems.
Paul (49:21 – 50:07)
Focus on the ones that you can keep. Yeah. People oftentimes say, no, that person has a good attitude or a bad attitude.
Well, it depends on the perspective, you know, bad attitude. What’s a bad attitude? You know, it’s the attitude that you don’t like, but maybe the attitude is, you know, is a result of their experience.
And so as we get older, I think we get a chance to be more observant and say, well, that person feels that way because of an experience they had, good or bad. But we oftentimes get wrapped up around the circle, good attitude, bad attitude, without having any idea of the journey that that person’s been down. Maybe they got every reason in the world to have a bad attitude, but the right attitude, that’s a different conversation.
Armando (50:08 – 50:13)
Yeah. Yeah. And how’s that expression go?
And doesn’t judge a man until he walked in his shoes?
Paul (50:13 – 50:14)
Absolutely.
[Speaker 3] (50:14 – 50:15)
That’s right.
Armando (50:16 – 50:25)
That can lead to attitude for sure. I liked what you said, the words your banker shared with you. Everyone who walks in has a last name of risk.
That’s it.
Paul (50:26 – 50:28)
That’s it. Yeah. I tell that people, it’s true.
Armando (50:28 – 50:31)
Yeah. Are you high risk or low risk?
Paul (50:31 – 50:32)
That’s right.
Armando (50:32 – 51:13)
You fill in the blank. And change, you know, managing change, effectively being an advocate for the company, your prior employees can be good advocates for you because they had an experience that was positive for them. And like I said, you want them to feel like you are the best company they’ve ever worked for.
That’s what you want them to feel. They’ll become your advocate out there in the workforce, promoting who you are and the company that you have. And you mentioned how can you help them?
Not just them help me, but how can you help them, you know, from a place of service versus, you know, trading dollars for their
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