Scott Ritzheimer, the founder of Scale Architects, shares his compelling journey from accidentally dropping out of high school to becoming a key figure in entrepreneurial leadership. His experiences span the spectrum from building, scaling, and selling businesses, to founding Start Church, a company that intersects business acumen with faith-based leadership.

Scott discusses the challenges and breakthroughs of leading and developing businesses, emphasizing the necessity of adapting leadership styles and strategies as organizations evolve. He provides insights into understanding market needs, building effective teams, and establishing systems that ensure business sustainability and growth. His approach combines practical advice with anecdotes from his own experiences, making complex concepts accessible and actionable for aspiring leaders and entrepreneurs.

Want to learn more about Scott's work? Check out their website at https://www.scalearchitects.com.

Connect with Scott on LinkedIn at https://www.linkedin.com/in/scottritzheimer/.

Key Points with Timestamps:

• [00:00:30-00:00:51] Introduction to Scott Ritzheimer and the scope of his work.
• [00:01:24-00:01:49] Ritzheimer's approach to podcasting and leadership.
• [00:10:24-00:10:48] Insights on the similarities between nonprofit and for-profit organizational leaders.
• [00:11:25-00:11:50] The backstory of Start Church and its pivotal moments.
• [00:15:09-00:15:39] Ritzheimer's reflections on turning a failed business into a successful venture.
• [00:21:16-00:21:48] The importance of focusing on what is essential for business leaders at different stages.

Transcript

00;00;00;00 - 00;00;30;20
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment of my career.

00;00;30;23 - 00;00;51;10
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on the show.

00;00;51;24 - 00;01;24;14
Craig Andrews
Today I will welcome Scott. Ritzheimer. He is the founder of Scale Architects. Scott's one of these people that has been there, done that and has lessons to prove it. I can read through his bio and what have you, but here's the bottom line. Scott has proven that he can build, scale and sell businesses. And then he went off and he launched his own podcast, called The Secrets of the High Demand Coach.

00;01;24;17 - 00;01;49;02
Craig Andrews
And his whole purpose was talking to people who have been extremely successful coaches to figure out their secrets. He's the founder. he's the author of Founders Evolution. And we're going to talk about these things. I really recommend you listen to this, because it's not often you get to hear somebody share lessons. Who has been the successful and can help you avoid some of the mistakes.

00;01;49;03 - 00;01;52;03
Craig Andrews
So with that, Scott, welcome.

00;01;52;05 - 00;02;12;05
Scott Ritzheimer
Hey, so excited to be here. it's just going to be a fantastic conversation, Craig. Just listening to a couple episodes before this, I was getting excited about it. So I always like to tell folks, podcasts changed the whole course and trajectory of my life. about five years ago. And I guess it's longer now. It's seven, eight years ago.

00;02;12;08 - 00;02;24;22
Scott Ritzheimer
And so I always get this moment of anticipation right as we start there. Like, this could be that for somebody. So I hope for somebody. Excuse me, hope for somebody listening today that it just hits them right where they are I'm sure.

00;02;24;23 - 00;02;52;06
Craig Andrews
Well you know, and we we were chatting a little bit in the, the green room and the thing that hit me is you're full of surprises and, we started off talking about Teslas driving across Texas. It veered into Teslas in Norway. And you say, oh, yeah, my wife is from Stavanger. I'm like, what? What's back me up?

00;02;52;06 - 00;03;01;04
Craig Andrews
Where? How did all this happen? How did you meet your wife? are you Norwegian red timer? Doesn't sound Norwegian.

00;03;01;06 - 00;03;19;28
Scott Ritzheimer
No, red timer is not Norwegian. It's a good old Irish name. No, it's not Irish either. It's German. It's a good old German name. And, long history there. where my folks moved over, many of them from, Germany, many of them from the UK. a good 2 or 3 generations ago, before I came around.

00;03;19;28 - 00;03;39;10
Scott Ritzheimer
But, to make this story a little bit more interesting, we have to rewind a little bit further than meeting my wife, which was just before that. I accidentally dropped out of high school. so, there's lots of folks. About a third of my grade actually dropped out. but, all of them, except for me, did it intentionally.

00;03;39;11 - 00;04;03;10
Scott Ritzheimer
I did it by accident. And what had happened didn't really care for high school. Wanted to get out and do, my own thing, which at the time was actually going into ministry and, and so I convinced this is before Pennsylvania did this, but I convinced my high school and, a college in Missouri to allow me to do dual enrollment, before that was commonplace, like it is now.

00;04;03;13 - 00;04;24;09
Scott Ritzheimer
And it took all kinds of work. I waited my schedule the first few years had, a 4.0 and only needed two and a half graduate. credit to my senior year to graduate. And I thought, great, like, this will be perfect. I'll go out, I'll get a head start on college. I'll come back and graduate with my class was how it was going to work and everything was all set.

00;04;24;09 - 00;04;34;15
Scott Ritzheimer
Everyone agreed, and I started applying for financial aid. we lived in a rural part of Pennsylvania and had a rural salary in Pennsylvania. And there's no way we were going. Yes.

00;04;34;17 - 00;04;36;09
Craig Andrews
What part of Pennsylvania?

00;04;36;12 - 00;04;39;20
Scott Ritzheimer
the Pittsburgh area. So we lived north up for a little while, and then south of.

00;04;39;27 - 00;04;44;22
Craig Andrews
So you don't eat scrapple? No. okay. All right.

00;04;44;22 - 00;05;10;20
Scott Ritzheimer
So we got the pierogies nailed, though. so, so, start applying for financial aid, and I just got rejected for everything. Every single thing I applied for. and then I was thinking, at least Fafsa will go through, I get I get denied for Fafsa. I'm like, what in the world is going on? So I reach out to the the office, registrar's office or whoever it was at the school and said, hey, this is the problem I'm having.

00;05;10;20 - 00;05;26;06
Scott Ritzheimer
Like, well, we'll get back to you. They don't get back to me. They don't get back to me. They don't get back to me and get to the middle of July. Right. Financial aid deadlines coming up in a couple of weeks. And I talk to them and they say, well, we figured it out. You don't qualify for financial aid because you don't have a GED or a diploma.

00;05;26;09 - 00;05;44;05
Scott Ritzheimer
And so all these things that you've applied for, you need that. And they said, can you get a GED? And I was like, I have no idea. I'll look. So I look it up, I go, and find out that there's a school near us that has the GED program available. I go take the test, turn it, and they tell me two things.

00;05;44;05 - 00;06;17;27
Scott Ritzheimer
When I hand them the paper, they said one. This is the first time we're doing assessment. scoring out of state. It's getting sent as close to your neck of the woods, the southwest. And so you won't get your results for three weeks. And I'm like, thinking to myself, dang it. Like, that's after the financial aid deadline. At least I can go back to school and finish up, is the thought that goes through my head the very next word out of the test, Proctor's mouth is, and Pennsylvania state law disallows you from returning to a state school once you've attempted the GED.

00;06;17;29 - 00;06;38;03
Scott Ritzheimer
And I was like, oh, boy, I'm in trouble now. So couldn't get into the school because I had $0 for tuition. as a little more than zero, but not enough for tuition. Couldn't go back to high school and, and, to to fill out the country song. Right. someone's going to write one on this eventually.

00;06;38;03 - 00;07;07;23
Scott Ritzheimer
We had three dogs. They all died in a two week window, this same two week window that I'm accidentally dropping out of high school and getting kicked out of the college. I wanted to attend. Terrible, terrible time. and, and in the midst of all of this, I find out about this little ministry school and, again, in Missouri, of all places, and, long story short, end up out there like, four days later, found, you know, room board, everything got in the whole nine yards.

00;07;07;23 - 00;07;29;06
Scott Ritzheimer
And Sunday comes up, I'm sitting at, a church that was associated with the school because it was a ministry school. And this beautiful blond woman sits next to me, and, and my, my roommate sitting with me said, hey, what's your name? And in the thickest Norwegian accent, she says, yeah. And we're like, hi. no idea.

00;07;29;08 - 00;07;42;21
Scott Ritzheimer
And so that's that's where I met my wife, in in Kansas City, Missouri, after just, you know, three of the worst weeks of my life, I met the most wonderful woman in my life. And, and the rest has been an absolute joy.

00;07;42;24 - 00;07;55;09
Craig Andrews
Wow. And and so she's from Stavanger, which, if I'm remembering correctly, that's down on the southern, that's on the coast. Sorry. The southern end of Norway.

00;07;55;11 - 00;07;58;14
Scott Ritzheimer
Yep. Southwest corner.

00;07;58;17 - 00;08;03;13
Craig Andrews
Have you, this is totally aside. Have you ever been to Prague? A stolen?

00;08;03;15 - 00;08;23;11
Scott Ritzheimer
Yes, many times. so we took our kids up there. 2 or 3. 2 or 3 week. 2 or 3 years ago. anyone who doesn't know it. Prague a stolen is. It means preacher's pulpit. It's this giant. I think it's about a 900ft sheer cliff that has a point on it. And, and it became famous when Tom cruise crashed a helicopter on it.

00;08;23;11 - 00;08;33;02
Scott Ritzheimer
That was, that's that's the claim to fame for break is stolen. But, it's a it's a, it's about, 45 minute drive from her house. It's a beautiful hike.

00;08;33;04 - 00;08;46;25
Craig Andrews
Yeah, that, you know, I walked, actually, I tried to walk up to the edge of that ledge. And the only ledge that ever scared me so much that I actually got on my belly and kind of inched up.

00;08;46;27 - 00;09;07;10
Scott Ritzheimer
Yeah, I definitely did not walk out there. I did the crawl. I stuck my head out over the edge. My wife was about to kill me if I didn't kill me, but, But yes, in Norway, what folks don't quite get here in the U.S. is anytime you have a ledge like that, there's like a state trooper. And and like, a fence, you know, like, there's no way that you would ever get out across it.

00;09;07;10 - 00;09;24;29
Scott Ritzheimer
In most state parks here in the U.S., it's all safety and security. In Norway, it's like a few falls. Like, you shouldn't have been that close to the edge. It's on you. And, and so even walking out there, you have to kind of like, cross a couple of spots that are, like, genuinely sketchy, you know, and then there's, there's 50 people out there all doing the same thing.

00;09;24;29 - 00;09;40;04
Scott Ritzheimer
And, and it's very few accidents because people respect it. But yeah, it's for anyone who's, who's, you know, building out their bucket list. Check out the preacher's pulpit in Norway and, and get up there and take the hike. It's beautiful.

00;09;40;06 - 00;09;57;26
Craig Andrews
So here's where here's where I get confused, like you. Okay. Accidental college or high school dropout? You go to a ministry college, but you're more of an entrepreneur. What? And help me connect the dots.

00;09;57;28 - 00;10;24;23
Scott Ritzheimer
So fascinating thing. I've done a ton of work in both the nonprofit and for profit space. it's somewhere around, 20,000 different organizations that I've helped start. And one of the things that I've discovered is that, folks who start nonprofit and folks that start for profits are very, very similar people, they have different motivations. They have many times different life stories.

00;10;24;23 - 00;10;48;09
Scott Ritzheimer
But when you look at the basic wiring, that visionary spark that they have, that's an essential ingredient to building a successful organization from the ground up. they're very, very similar. most like founding pastors are very entrepreneurs, not necessarily in a business sense, but in a mindset way. I had no idea about that. I actually grew up in an entrepreneurial family.

00;10;48;09 - 00;11;07;22
Scott Ritzheimer
My dad started, his own business when I was in my early teens. and I got to see the ups and downs of that. Had no desire to be any part of it. None whatsoever. I was like, I'm getting out of this world. It's tough. I saw him grinding for years, just trying to make it work, having wonderful years and then difficult years.

00;11;07;22 - 00;11;25;18
Scott Ritzheimer
And I actually really didn't want much to do with it. moved down to Atlanta to work with a ministry here. And, during that time I met, a guy who who later became, my partner at this company called Start Church. And, and we started working together. I just needed a part time job to pay the bills.

00;11;25;19 - 00;11;50;23
Scott Ritzheimer
Right. That was the extent of it. and, I'm trying to make a really long story short here, but, he had this company called Start Church and sold it. a couple of months after I started working at the company, they did their best to keep everybody on, as best they could. and, about a over a course of 18 months, they systematically, but unintentionally destroyed the company.

00;11;50;23 - 00;12;13;11
Scott Ritzheimer
The new owners did. The big challenge was that they the deal was owner financed. So, the the previous owner was still, you know, trying to, you know, stay engaged and help the company out. And it just there was no bad guy in this situation. Everybody wanted it to work and it failed miserably. And that was my second introduction to the world of business, right?

00;12;13;11 - 00;12;37;16
Scott Ritzheimer
As my dad, as an entrepreneur. And then me watching this company that I had actually grown to love very quickly, just just reduced to a shadow of its former self. And in August of 2008, there are two and a half employees left. I was the half and and the, the new owners call up the previous owner and say, hey, we've done everything we can.

00;12;37;16 - 00;12;58;02
Scott Ritzheimer
We can't get this to work. It's going to sink our business, too. If if we don't cut it, we're gonna declare bankruptcy. If you'd like the company back, we're going to declare bankruptcy for the the corporation. If you'd like it back, you can have it. Now, at this point, the company is basically three broken computers. And one of those office chairs with all the padding worn out of the middle, you know, like it?

00;12;58;04 - 00;13;20;03
Scott Ritzheimer
There's not a whole lot left, but it was basically the blessing to say, hey, you can go ahead and try and start it back up. If you want to. And so they said, you have 24 hours. Let us know what you want to do. He said, yes, I want it immediately. Went and got a U-Haul drove up to to get the, the assets and and on his drive he called me and said, hey, I think we can make this business work.

00;13;20;03 - 00;13;37;02
Scott Ritzheimer
Will you help me relaunch it? Will you come on as an owner and help me do it? And and that's how I became an entrepreneur. I said yes to, that call wasn't, some big scheme. It wasn't a, a big idea. Wasn't the dream of my life. but it was something I thought we could make it work.

00;13;37;02 - 00;13;56;02
Scott Ritzheimer
And, and then September 2008 came, and our first, you know, six months of business, the stock market dropped by 32 points. And I wondered, what in the heck am I thinking? but, but, you know, we were we found a way. We hustled. We made it work. We worked for his basement until the HOA kicked us out.

00;13;56;02 - 00;14;17;12
Scott Ritzheimer
You know, it was a scrappy young thing, and I loved it. I fell in love with business. Absolutely fell in love with it. And so what ended up happening? A company like Start Church. We sat at the intersection of business and nonprofit or business and faith, however you want to put it really the whole time, because we were we were in many ways a Christian company.

00;14;17;12 - 00;14;38;10
Scott Ritzheimer
We served pastors and leaders, we served rabbis, in synagogues as well. And, and so we're constantly having this wrestle of what does what does that mean? What does that look like? How do we how do we weave those two together? should we have goals? Should we have profit? Right. should, how do we help these folks to succeed?

00;14;38;10 - 00;15;01;10
Scott Ritzheimer
And in the call that God has on their life and, you know, it wasn't without, its challenges, but we we succeeded. We helped thousands and thousands of pastors. We helped thousands and thousands of, nonprofit founders. and toward the latter end of my time there, we actually started doing a lot of work with businesses as well.

00;15;01;13 - 00;15;09;05
Scott Ritzheimer
And, and that's where the number 20,000 came from was all the work that we did with, a large number of those folks there during those days.

00;15;09;12 - 00;15;39;01
Craig Andrews
So going back to when your, your buddy was picking up the assets and he said, hey, why don't we take this? And that's kind of an interesting moment for me because, you know, it's what you had was a failed business and you're picking up the assets from a failed business. and it kind of feels like, the, you know, picking up, the blankets from somebody that died from a contagious disease.

00;15;39;04 - 00;15;41;02
Craig Andrews
What was the appeal?

00;15;41;05 - 00;16;12;08
Scott Ritzheimer
You're a lot smarter than we are. That that's that's what the appeal was. you know, what we didn't know at the time was that we were going to also inherit, about 250 full service clients that had paid but had not gotten the remainder of their services. we also didn't realize that there was about $100,000 in debt to, to, short term debt to our vendors and bills that hadn't been paid, that, to protect our name, we chose to pay back, afterwards.

00;16;12;10 - 00;16;32;04
Scott Ritzheimer
there was a lot more that was a lot worse than what we thought the I think the difference in the metaphor is that what we, what we had was the vision of what it could be. We had spent time thinking about, hey, if this didn't work, what would we do next? Right. if it did work, what's that going to look like?

00;16;32;04 - 00;16;55;02
Scott Ritzheimer
And we had a dream for what we we thought we could make it work. We. And we had a dream for what it could be. We saw the challenges that folks are facing trying to get their organizations off the ground. And we knew we could do something about it. That was the draw. The draw was to build something that would really have a meaningful impact in those early days in those organizations lives.

00;16;55;04 - 00;16;56;06
Scott Ritzheimer
Wow.

00;16;56;08 - 00;17;04;27
Craig Andrews
Wow. That's cool. So what was the what did you guys figure out that the prior management didn't? What was the key to turning that around?

00;17;04;29 - 00;17;24;04
Scott Ritzheimer
Yeah, I think the the key to it. And, you know, in hindsight this is a lot easier. I don't know that we figured this out or they didn't figure it out, but where they got it wrong was that they they bought a company and gave up. Its its top asset. they they bought the company, and then they tried to keep their distance from the previous owner.

00;17;24;09 - 00;18;04;18
Scott Ritzheimer
They wanted to have their space and do it their way. But he, he the company was small enough at that time that he was still the company. And what had happened was his first time around, he built a company around him, and the second time around we we used his skill set to build a company with him. And, and so what that did was it allowed us to, to build reproducible systems relatively early on that other people could create value, other people could drive sales, other people could drive revenue, and that was something that that even though they were doing it in a way they had failed to achieve in our same market.

00;18;04;24 - 00;18;27;16
Scott Ritzheimer
a similar thing that happened was they were blending markets and didn't realize that that was the case. And if you have an organization that's less than $3 million, the biggest challenge that you have is knowing and understanding your market and tapping it regularly. There's lots of other things that come downstream of that, but if you don't get that one thing right, none of the other things matter.

00;18;27;18 - 00;18;48;21
Scott Ritzheimer
And they had also made the mistake in that respect that they they thought their market and our market were the same and they weren't. And so when they tried to apply their skills and techniques and abilities from their market to ours, it just flopped. And and you know, more than that, I couldn't tell you. I was a low man on the totem pole back in those days.

00;18;48;21 - 00;19;08;27
Scott Ritzheimer
So I don't know a whole lot about the inner workings of what they did, just what we saw. But what we realized pretty early on was that we had to hyper focus on our market and what our customers wanted, not what we thought the answers were. And I think we were forced to have the humility to do that because you know, there was no other option, right?

00;19;08;27 - 00;19;14;24
Scott Ritzheimer
It was it was that or die as an organization. And, and that really drove us to figure it out.

00;19;14;26 - 00;19;38;16
Craig Andrews
So you've said a few things I really want to drill in on. And one the most recent, you had to know who your customers were. And one of the stories I love to share is about Steve Jobs. When he came back to Apple. Not because I think Steve Jobs is a brilliant was a brilliant human being. He was a brilliant marketer and a not so brilliant human being.

00;19;38;18 - 00;20;07;23
Craig Andrews
But when he came back to Apple in 97, he spent millions of dollars running an ad, TV ad, 62nd ad that said absolutely nothing about computers. At the time, Apple was a computer company. There were no iPods, no iPhones, none of that. But when I dig in and understand what he was doing, he figured out that the the people that he could most quickly sell computers to were creatives.

00;20;07;26 - 00;20;29;28
Craig Andrews
So he ran the Think Different ad, which starts off, here's to the crazy ones, the misfits, the square pegs in the round holes. He's speaking directly to the most passionate buyers of Apple computers. Yes. And so I'm hearing you say the same thing. You had to be really clear on who your customer was. Yeah. And just get hyper focused on that.

00;20;30;00 - 00;20;31;09
Craig Andrews
Yeah.

00;20;31;11 - 00;20;48;09
Scott Ritzheimer
It's so true. And and you can see it happening in a big business context. It happens a lot. Again, interestingly enough, when when the company is much larger, there's a gap in between where we figure it out enough that we're okay. But in those early stages, to me it is everything. Now, I'm a system and process guy.

00;20;48;10 - 00;21;16;23
Scott Ritzheimer
Don't get me wrong. Right, I'm I'm a structure and repeatability guy through and through. it's a huge part of what I do to help folks scale. But one of the challenges, I think, that particularly the earlier stage organization is face younger, not by age, but by tenure founders and entrepreneurs. Face is they listen to all these podcasts and resources and books out there on leadership and and and all these things that we should do as founder and CEO.

00;21;16;25 - 00;21;48;20
Scott Ritzheimer
And it muddies the water on what we actually need to do now. And so a huge portion of what I do, everything from my podcast to our website to the work I do with my clients, is designed around the idea of helping folks understand not another thing that they should do, but how they can ignore the whole mass of things that are good things that they don't really need to do right now and understand what are the 2 or 3 things that they actually must do right now and in this stage.

00;21;48;22 - 00;22;07;23
Scott Ritzheimer
And to answer your question, we did that by accident. it was no grand scheme. Right. And, it wasn't that we had it all figured out, but accidentally we stumbled a on the fact that we had to find a way of connecting with our customers and doing it again and again, and we had to be tuned in to their needs.

00;22;07;23 - 00;22;18;27
Scott Ritzheimer
We had to know where they were and what they were thinking. And we we wrapped not only our sales and marketing process, but our fulfillment process was intrinsically wrapped around that idea.

00;22;18;29 - 00;22;41;25
Craig Andrews
Yeah. When you mention sales and that goes back to something earlier that that you said, you said two things. One, you know, about the the founder of the company that the company was originally built around him. And so he wasn't replaceable, you know, the company A when you take him out, the company doesn't run. Yeah. But you also talked about sales.

00;22;41;28 - 00;23;10;20
Craig Andrews
And that's something I see a lot of. I see people that they're like, oh, we got the star sales guy. And I'm looking at him. I'm like, why are you keeping him there? Like, because he brings all the revenue and we break down all the ways that that happens. But the biggest thing that they're saying is we don't have a sales process where we can hire and put different people in and fill the sales role.

00;23;10;23 - 00;23;13;00
Craig Andrews
I'm interested in your take on that.

00;23;13;02 - 00;23;33;26
Scott Ritzheimer
again, I think this is a stage specific issue. Right. if you have someone, early on, vast majority of time founders, the one who's, who's the chief sales officer, right. Like, they they should be driving. No one can sell in that early stage like you can. Even if you're terrible at sales, you can't hire someone to solve that problem for you.

00;23;33;29 - 00;23;50;24
Scott Ritzheimer
nine times out of ten, if you don't value that activity enough to do it yourself, you're not going to value it enough to pay someone else to do it effectively for you. So the other risk of it, and this is something similar to what you're talking about, is if you hire out sales too soon, that is the oxygen of your organization.

00;23;50;24 - 00;24;15;05
Scott Ritzheimer
What do you think happens when somebody, you know, figures, there's a better way we can walk out and take the oxygen with us. It's it's not helpful. So for me, I think early on, most founders or someone on the founder team should be intimately involved in and responsible for sales. Now, what happens from there? And what happened for us was, we got beyond the point where he could carry all of it.

00;24;15;05 - 00;24;32;08
Scott Ritzheimer
We had to have somebody else come in and help out, and we found, again, it was a bit of dumb luck, you know, looking back on it now, I can see how it worked. But it was no grand scheme at the time. and, and we found someone who could help us. And what he did was exactly what you're talking about.

00;24;32;08 - 00;24;53;20
Scott Ritzheimer
He started from the get go on saying, hey, we're going to build a process for how to do this. This is what our pitch looks like. This is how we're going to follow up. This is how we're going to generate leads. and he really walked us through that process. And immediately what we did after bringing him on was bring somebody else on as well to implement that process at the same time.

00;24;53;22 - 00;25;13;01
Scott Ritzheimer
And that way, our income was distributed over three different sources. So in the short run, if one of them was sick, it was okay because somebody else could fill in in the long run if one of them had left, which, you know, thank God none of them did. we could we could fill in that gap. We weren't we weren't exposed to one person.

00;25;13;01 - 00;25;33;28
Scott Ritzheimer
Right. The a lot of folks, we'll talk about what if they got hit by a bus? It's just a terrible, terrible exercise. But we weren't exposed. So if one person wasn't there anymore, let's say they won the lottery. Or worst case scenario, they went and started to do it on their own. we weren't we were never exposed to that because of the structure we had where multiple people could, could do it.

00;25;34;00 - 00;25;58;06
Scott Ritzheimer
So I think that's really important. I would say to your point, if you play the tape a little bit further, one of the biggest things that prevents companies from truly scaling, from getting past that organic growth stage and into true scalability is they are beholden to 1 or 2 what we call big dog operators. And many times they're in a sales seat, right?

00;25;58;06 - 00;26;29;13
Scott Ritzheimer
They're they're recalcitrant and stubborn and mavericks, and they're not culture fit. But we need them, right? The way that we built the company on their back. And now we can't imagine life without them because we think that would all go away. And, to a certain extent, that's true if you don't have the processes and systems. But if you do build, like you should, what I have seen multiple times, both of my own companies and, and others, is that when that person goes out, sales go up and not down.

00;26;29;15 - 00;26;39;16
Craig Andrews
That's so interesting. And I think that would surprise a lot of people when they lose their star sales guys. Sales go up, not down.

00;26;39;18 - 00;26;57;20
Scott Ritzheimer
Yes. And again, I would just say at the right point in time, right. So if you don't if you haven't done that legwork, if you don't have a system, if you got rid of sales as soon as you possibly can as a founder, and you have one person who represents 100% of your sales and that person leaves, sales are not going up, right?

00;26;57;20 - 00;27;29;09
Scott Ritzheimer
Not not anytime soon. And that is that is an exceptionally painful process. I've I've had to walk in on the tail end of that for several clients. And it is it is a grueling grind to try and recover from that. But again, if you do, if you use the opportunity that that salesperson creates by understanding, what about how they're working works, and you start to begin to build systems and processes around that, that align with who you are and what works for your market.

00;27;29;11 - 00;27;54;08
Scott Ritzheimer
That's where you see, it's not about the heroics anymore, right? It's not you don't have to make a diving catch to hit your sales goal. You have to run the plays. And if you do that repeatedly again and again, that's where success comes from. And the same person who did the heroics, you know, back in the day, is usually not the person who's going to to be able to follow the plays and run them with the consistency you need to scale.

00;27;54;11 - 00;28;11;22
Craig Andrews
You know, and that's such a critical insight. Well, let's let's move on. So you, you now run Scale Architects and you have your book coming out and what's what why did you write the book?

00;28;11;24 - 00;28;31;13
Scott Ritzheimer
Yeah. So the big idea behind the book and we we've kind of touched on this a couple of times was the biggest challenge that I faced as a leader, and that I saw these other leaders facing was not one thing. Right. It was that every time it seemed like you figured something out, something else would smack you in the face.

00;28;31;13 - 00;28;53;10
Scott Ritzheimer
You know, a month or two later, I. I got so tired of getting blindsided by new challenges. Every time I felt like I figured it out, I understood the rules of the game. It felt like someone changed them overnight. you know, early on, it was about how much we could sell and getting stuff out the door. And then all of a sudden, we had to have managers and a leadership team and had to figure that out.

00;28;53;10 - 00;29;13;18
Scott Ritzheimer
And then we had to we had to staff a full sales team and do lead development, and it just felt like it was just constantly changing. the recipe for success and how I needed to show up first as CEO and then CEO was constantly changing. And I, I always kind of had an idea of what was in the rearview mirror.

00;29;13;18 - 00;29;36;01
Scott Ritzheimer
I knew how to do what we had done, but I grew less and less confident in my ability to understand what we needed to do next. And and that came to a head, after I had taken over in the CEO seat. It was a couple years into that and, and, and as I was coming in, we had this problem where our profit margin was, was shrinking each year.

00;29;36;04 - 00;29;55;20
Scott Ritzheimer
Right? We were growing our revenues by at this time, about $1 million a year. But the percentage of that that we were keeping was getting smaller and smaller. It was sitting in the mid 20s and by the end of a three year kind of cycle of of trying to fix it and failing to do so, it dropped all the way down to just over 7% for a year.

00;29;55;23 - 00;29;56;11
Craig Andrews
Goodness.

00;29;56;17 - 00;30;19;20
Scott Ritzheimer
Which meant we were doing more, selling more, hiring more people. And and not only were we keeping less of it, when you get under 10% in most environments, not all of them, but in most environments you do not have the lifeblood that you need to be able to grow effectively. It's it gets very, very close to not being sustainable, let alone grow able.

00;30;19;22 - 00;30;51;02
Scott Ritzheimer
And, we had tried all this stuff. We had read all the books, the Cullens, the lens, Shoni, the wick, like all of the business leadership development, you know, structure books. And they were all helpful. They helped us create this successful multi-million dollar business. But none of them were turning this problem around. And it's at that point that I heard about, this idea that the your strategies for success have to change and adapt over time, but that it's not it's not just gas and check.

00;30;51;02 - 00;31;20;24
Scott Ritzheimer
Right. It's not like we have to just make it up as we go every stage. There's actually a predictable pattern that organizations go through. And as I did that, I realized I have to show up. The biggest problem is not my bottom line. The biggest problem is how I'm showing up as a founder, when I really need to be showing up as a CEO, I needed to stop trying to fix everything myself, to jump in and save the day, or to make the diving catch, or to land the deal or whatever it was.

00;31;21;02 - 00;31;40;29
Scott Ritzheimer
I had to build an executive team that did that, whether I was there or not, because it wasn't any problem that one person can solve. It took a whole team working together to do it, and, and in doing that, working through, I found some wonderful resources, most of them by a gentleman named les McKeown, was a dear friend and colleague of mine.

00;31;40;29 - 00;31;56;03
Scott Ritzheimer
Now, and it ultimately allowed us to triple our bottom line in a year. We turned that thing around, we tripled our bottom line in a year and then added five percentage points the next year and the next year after and not. Yeah.

00;31;56;05 - 00;32;02;24
Craig Andrews
Yeah. And see a couple examples. What did you do that that fix the bottom line.

00;32;02;26 - 00;32;21;15
Scott Ritzheimer
Yeah. Crazy stuff that has nothing to do with the bottom line. we worked on our org chart. We had just grown and kind of thrown people into management roles and, and, and so the things that we did, these make absolutely no sense. But when you put them together, you realize it's actually the pattern that every organization follows.

00;32;21;15 - 00;32;46;25
Scott Ritzheimer
But, we we reworked our org chart, we reshuffled a lot of folks had to move a lot of folks out and had to hire some, some others in. We, we changed the way that we made, decisions as a team, and in doing so, realized we had to cut, about 30% of our revenue off. There was a part of our business that represented 30% of our revenue, and we realized we had to kill it, overnight.

00;32;46;28 - 00;33;06;18
Scott Ritzheimer
Only because we changed the way that we made decisions. We never would have discovered it beforehand. there's a whole lot to that. So we actually made it harder on ourselves. and then we focused really, really intensely on, on taking that new org chart, that new clarified strategy, and driving it into every part of what we did.

00;33;06;18 - 00;33;33;15
Scott Ritzheimer
Right, aligning everybody and also empowering folks. We pushed decision making down inside the organization as much as we could. And, you know, none of those were inherently financial decisions. In fact, the reorg on the org chart actually cost us more money. But in doing so, it led us to a state where we were making significantly better decisions at all levels in the organization we were able to cut, significant chunks of expenditures.

00;33;33;17 - 00;33;53;25
Scott Ritzheimer
and it wasn't like we were cutting big swaths of people from the organization. That wasn't how it worked, but we were able to become exceptionally more efficient because we were leading the organization more effectively. It wasn't about what we did anymore, it was about how we did it. And that was a huge shift that I had to make as a founder.

00;33;53;28 - 00;34;21;01
Craig Andrews
And, and, you know, that's that's fascinating because certainly over the last couple of years, you know, as as the economy got a little weird, you know, different people view it. I'm not going to call it tough. The economy got weird. And I saw company after company after company, just working on cutting expenses and and what you're saying is it wasn't about cutting expenses.

00;34;21;01 - 00;34;30;18
Craig Andrews
And in some cases, expenses went up. It was about getting the right people in the right places, getting people making good decisions.

00;34;30;20 - 00;34;53;20
Scott Ritzheimer
A 100% cutting expenses isn't inherently bad. It just it's a game of whac-a-mole, right? If you don't address the fundamental underlying challenges ahead of time, the expenses are just symptoms. And so you can, you know, if you've got let's say you've you've got, a broken bone, you can go and take ibuprofen and mask the pain, but the break is still there.

00;34;53;21 - 00;35;18;02
Scott Ritzheimer
You're going to have to keep doing it. And the problem with just saying, hey, we solve all of our profitability problems by either chasing more revenue or lowering expenses. It misses the whole function of how organizations work, and that is through getting teams to come together and make high quality decisions. And so if you just go in and cut expenses, you're going to have to do that every six months or six years.

00;35;18;02 - 00;35;38;02
Scott Ritzheimer
It's just going to cycle in on itself again and again and again. If you try and and revenue your way out of the problem, you're going to do what we did and you're going to create more and more revenue, but you're going to keep less and less of it and actually make your problems bigger. And so what we have to do is we have to shift our focus to first how we show up as leaders.

00;35;38;09 - 00;35;50;11
Scott Ritzheimer
Second, how we build the team around us, and third, how we structure our organization, to, to to really create the scalability that we want.

00;35;50;14 - 00;36;13;11
Craig Andrews
Well, you know, Scott, this is I could go another hour. I mean, what you're sharing is just amazing. It's it's, surprising. I think a lot of people need to hear this. but I, I know we got wrap, but I know that you actually work with people. You help people solve these problems. How did people reach you?

00;36;13;13 - 00;36;29;09
Scott Ritzheimer
Yeah. So a couple of ways, the best way is to head on over to scale architects.com. I wish it was as easy as saying look for Scott. Red timer, but no one can spell read timer. And there's two of us. I'm a junior, so look for the Scott red timer if you can spell it right. Who looks like he's 14, you'll find me on all the social media platforms.

00;36;29;09 - 00;36;55;15
Scott Ritzheimer
It's a little easier to head over to scale architects.com, and, you'll find a way to schedule time with me. You'll also find a free copy of the book. We're making it available for free to everyone right now, where you can get the full not just the first chapter, but the full book for free, to walk you through the seven stages that founders go through on their journey from pre-launch to post exit, from dissatisfied employee to visionary founder.

00;36;55;18 - 00;37;01;13
Scott Ritzheimer
And, you can get a free copy today at Scale architects.com. You can also schedule some time with me there.

00;37;01;16 - 00;37;06;25
Craig Andrews
Scott, thanks for sharing that. Powerful insights and I do hope people reach out to you.

00;37;06;28 - 00;37;11;02
Scott Ritzheimer
Craig, I appreciate it. Thanks for the time.

00;37;11;02 - 00;37;39;28
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Alize for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this episode on social media.

00;37;40;00 - 00;38;03;12
Craig Andrews
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00;38;03;14 - 00;40;13;26
Craig Andrews
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