Lazy Leverage

Have you ever bought new tech, spent months implementing it, and seen zero throughput improvement? You’re not alone. It's an age-old problem plaguing small businesses.

Whether it's switching property management software or adopting ChatGPT company-wide, the result is the same. Lots of disruption yet no meaningful change.

The culprit isn't the technology itself. It's how we deploy it. In the audiobook 'Beyond the goal', Dr. Eliyahu Goldratt identified four critical steps for technology rollout in the Theory of Constraints work, and most businesses overlook at least a couple of them.

Step one is easy: identify what the technology can do (it's on the vendor's website). Step two is to ask, “Does this technology diminish your actual constraint?”.

Step three is to identify old accommodations. These are the rules your team created to cope with historic limitations.

Step four is to identify new rules.

Technology becomes a burden if you keep operating under old policies. Companies spend millions on ERPs without updating the implicit rules designed around previous limitations, then wonder why productivity stays flat.

Jon extends this to the AI hype cycle, in which venture-backed firms are buying pool cleaning companies claiming AI will revolutionize operations. But until someone explains how AI solves managing $21/hour workers in wealthy homeowners' houses, it's just expensive posturing.

The constraint isn't following up on leads but managing low-cost local labor. Writing emails faster doesn't address that!

KEY TOPICS:
(10:26) What to Do When A Lot of Work Nets Zero Results
(16:01) Step One: Identify the Power
(18:28) Step Two: How Does It Diminish the Constraint?
(21:10) Missing the Step Between Goals and Rocks
(28:17) Step Three: Identify Old Accommodations
(33:45) Step Four: Identify New Rules
(37:00) Why ChatGPT Adoption Isn't Driving Revenue Growth
(46:45) You Must Be Intimately Familiar With Both Your Constraint and the Available Tools

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com

Jon sits down with Brian Wilson, Head of Knowledge and Automation for Sagan.

They cover the critical importance of developing middle managers, why founders can't afford to choose their strengths, the unique advantages of founder-led sales, and the underutilized sweet spot of building internal software tools that attack your company's constraint while avoiding the overhead of external SaaS products.

Your job as a leader isn't to do the work but to have the work done through you by your team. This philosophical shift separates founders who scale from founders who stay trapped in tactical execution.

Regarding internal software development, Jon argues there's a sweet spot between individual AI tools (Brian sorting his email better) and full SaaS products (which require customer acquisition, uptime guarantees, OAuth integration). Internal tools capture more impact than individual productivity hacks without the overhead of external customers.

This is why companies spend millions on ERPs without harvesting gains. They never updated the implicit policies designed around the old limitation.

KEY TOPICS:
(01:50) Developing Middle Managers: The Missing Piece in Scaling Companies
(07:55) The Founder's Sales Advantage
(12:30) Internal Software Development
(17:07) Goldratt's Framework: Technology Must Be Applied Against the Constraint

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com

The best operators in M&A make hundreds of millions because they "model deals elegantly," but billionaires "can barely do the math. They just only do deals where they can't lose."

At least that’s what Jon and Peter believe. It's Warren Buffett's philosophy in action; that price is your due diligence.

Metrics should be entered manually, not automated. The psychological weight of pulling numbers and inputting them weekly creates accountability that automated dashboards never achieve. It's the difference between ownership and passive observation.

They distinguish between dashboards (lagging indicators like revenue) and scorecards (controllable activities like reviews requested). This separation, learned from their EOS coach Chris Kaplan, prevents teams from chasing metrics they can't influence week-to-week.

Next we’re asking, “Should you judge people on outcomes or process?” Saban (echoing Bill Walsh) says focus on the controllables. That is, the score takes care of itself. But Jon admits he's "constantly ripped in half" between mandating process and demanding results. Peter suggests it depends on performance level: high performers get freedom, struggling performers get prescription.

They tackle paired metrics as protection against perverse incentives, using India's snake-bounty program as a cautionary tale. When the government paid for dead snakes, people started breeding them. Similarly, optimizing turn time without pairing it with customer satisfaction leads to cutting corners.

Finally, Jon and Peter riff on Saul Alinsky's "Rules for Radicals", particularly when he says that, when pressure increases, people try to diffuse responsibility.

As a manager, your job is keeping accountability focused: "You are responsible for everything that does and doesn't happen to make this number improve."

Key Topics:
(07:47) Why Automation Kills Accountability
(10:20) Building Your First Scorecard: Start Imperfect and Iterate
(12:41) Dashboard vs. Scorecard: Lagging Indicators vs. Controllable Activities
(19:57) Control the Controllables, Not the Score
(37:27) How Incentives Create Perverse Outcomes
(41:14) Why DLER Must Be Balanced with Customer Satisfaction
(45:38) Change the Metric, the Goal, or the Person
(48:56) High Care, High Standards.

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com

Peter admits he's stuck in patterns. He’s not quite burnt out, but feeling the weight of deeply grooved neural pathways at 40. Jon responds with what he calls his "wacko" idea: ketamine therapy as a tool for breaking mental ruts.

Speaking metaphorically, he says that Ketamine fills in the snow tracks your mind has carved, giving you a chance to create new paths. But only if you do the work afterward, such as therapy, reflection, habit change. Without that follow-through, you slide right back into the same grooves.

This leads to their "barbell strategy" for change: either make tiny, effortless tweaks or commit to massive action. The middle ground never sticks.

It's too much effort to start, but not enough commitment to force follow-through.

Jon and Peter also discuss hard-coded solutions in software. A go-to-market engineer explained why his work couldn't be productized: the last 20% of customization drives 75% of the value. Peter sees this in his own business with Airtable, while Jon wrestles with it at Sagan.

There’s a tension that LeadSimple’s journey illustrates, and it’s that customers want self-service, yet implementation requires expertise.

The result is an awkward middle ground: $7,000 packages, third-party consultants, and confusion about what the product even is.

Key Topics:
(04:18) Tony Robbins and the Concept of "Massive Action"
(06:26) Tiny Tweaks vs. Life-Changing Commitments
(12:43) Ketamine Therapy
(19:23) Familiar Media as Self-Care: Seinfeld, Star Trek, and Comfort Viewing
(31:03) Hard-Coded Solutions: Why the Last 20% of Customization Matters Most
(34:32) Distribution Strategy: Ben Horowitz's Framework for Implementation Complexity
(42:09) The Cost of Friction Between Purchase and Pleasure
(45:33) Scorecards and Metrics: Getting Back to What Actually Matters

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com

The secretary problem is one of mathematics' most elegant solutions to a universal challenge: how do you know when to stop looking and commit?

Peter suggests interviewing 37% of your candidate pool without hiring anyone, then hire the next person who's better than everyone in that first group. It’s a pretty universal tactic, whether we’re talking house hunting, car buying, getting roofing quotes, or even picking a spouse!

There are two critical limitations to this, though. First, you need to know the total number of options, whether that's 100 candidates or 25 houses on the market. When that's unknown, you convert to time-based constraints.

The second limitation: the secretary problem only applies when you lack expertise. When Jon or a real estate agent has seen "5,000 of these," they can make absolute judgments, not just comparative ones.

Peter draws from a current predicament in which a Nicaraguan candidate has been asking for what seemed high compensation. Should he have paid based on her country's cost of living, or on the value she'd bring?

Jon pushes back on the entire concept of salary budgets. He argues everything should be discussed as trade-offs.

Peter admits his biggest mistake wasn't the salary negotiation. It was failing to sell the opportunity itself, assuming the candidate knew who he was and what Crane represented.

Key Topics:
(04:00) Interview 37% Without Hiring, Then Take the Next Best Candidate
(06:49) Time-Bound vs. Quantity-Bound: When You Don't Know the Pool Size
(11:01) Why Employers Settle Too Quickly (And Peter's High Bar for Hiring)
(13:12) You Have to Be Worthy of Great Talent
(18:00) The Geographic Salary Dilemma: Nicaragua, Philippines, and Relative Pay
(23:18) "What's Your Budget?" Is the Wrong Question
(28:11) Life as Optimizing Around Trade-Offs
(37:44) Peter's Biggest Hiring Mistake: Not Selling the Opportunity
(40:04) Have Team Members Sell Candidates on the Reality of Working There

Stay connected for more insights and strategies by following:
Jon: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@MatznerJon⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠lazyleverage.beehiiv.com⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
Peter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠@pslohmann⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ on X and at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠peterlohmann.com