BOM - Stretch Not Snap by Alex Freytag - The Real Estate Espresso Podcast

Episode Transcript
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(00:02):
Welcome to the Real Estate Special Podcast, your morning
shot of what's new in the world of real estate investing.
I'm your host, Victor Monash. Happy 1st of the month and happy
birthday to my sister. It's her birthday today as well.
On the first day of each month, we review the book of the month.
In order for a book to be considered worthy, a book of the
month, it has to meet a very simple criteria, has to be
impactful enough that it will either change your life or your

(00:23):
perspective on the world. Whether does or not a force is
entirely up to you. If you consume it as a piece of
entertainment, you're missing the point.
But if you internalize its messages, you have a realistic
shot at lasting growth. Our book this month is
absolutely worthy of Book of themonth.
But before I introduce the book,let me explain that at our
company, Y St. Capital, we've implemented the
entrepreneurial operating system.

(00:45):
This operating system for managing a business builds on
the ideas in Gino Wickman's bookcalled Traction, which we've
also reviewed here on the show. I know of so many companies that
use the system to set business goals and maintain
accountability. Our entire organization is
invested in EOS and has been forseveral years now.
The book is called Stretch, not SNAP.

(01:06):
Create a self funded incentive plan and employee entitlement
and get your vision shared by all.
By Alex Freisteg Alex Freisteg'sbook is a business fable that
addresses a common challenge faced by entrepreneurial
companies, how to transform the employee mindset into one of
ownership, engagement and sharedvision, particularly through the

(01:27):
strategic implementation of incentive plans.
The book builds on the foundation laid by another
business fable, this one by GinaWickman called Get a Grip.
In this book, Freitag revisits the familiar characters of
Victoria and Eileen, the leadersof Swan Services, as they
navigate the next phase of theirentrepreneurial journey.
The story opens up with Victoriaand Eileen facing growing

(01:48):
frustration while their company,Swan Services, has successfully
implemented the entrepreneurial operating system.
They've been gaining traction. They've been getting clarity on
priorities and leadership team and leadership team alignment.
They observe A fundamental disconnect with the employees.
Despite the company's progress and leaders dedication, there's

(02:08):
a prevailing me first or entitlement mentality that's
taken root with the employees. Employees seem to expect bonuses
and rewards merely for showing up, rather than genuinely
connecting their efforts to the company's overarching vision
financial health. That disengagement is stifling
swan services potential and prevents the full realization of
its culture. Recognizing that bonuses, as

(02:30):
currently structured, are seen as entitlements rather than
rewards, the main characters in the book realize that they lack
ownership thinkers employees whounderstand the key financial
levers of the business. They need employees that feel a
direct stake in its success and act accordingly.
They understand that for the company to truly thrive, every
member has to be invested in thevision and understand how their

(02:51):
actions directly impact the bottom line.
And so that sets the stage for the exploration and
implementation of something called a Profit Work Solution.
The core of Stretch Not Snap is the unfolding of the profit Work
solution and methodology designed to create a self funded
incentive plan that genuinely drives employee engagement and
financial results. The fable illustrates the

(03:13):
solution through practical challenges and successes faced
by Victoria, Eileen and the team.
The essence of the methodology evolves around several key
principles #1 financial literacyand transparency.
A fundamental tenant is the belief that employees cannot act
like owners if they don't understand the financial
realities of the business. Victoria and Eileen learn the
importance of teaching their team basic financial literacy,

(03:34):
breaking down complex numbers into understandable metrics.
That includes explaining how revenue is generated, where the
costs are, and where the profit comes from.
The goal is to demystify the company's financial goals and
foster a sense of shared responsibility for financial
outcomes #2 identifying the performance indicators and
leading measures. This book emphasizes moving

(03:56):
beyond vague goals to identify specific, measurable performance
indicators that directly influence profitability.
Employees are taught which numbers truly matter and how
their individual team efforts contribute to the numbers.
It creates a clear line of sightbetween activity and financial
performance #3 the self funded incentive plan.
This is the cornerstone of the methodology.

(04:16):
Unlike traditional bonuses that might be paid regardless of
performance, the incentive plan,detailed and stretched not SNAP,
is self funded. It means bonuses are paid only
when the company achieves specific financial targets above
and beyond the operational needsand base profitability.
It ensures the incentive plan doesn't drain the company's
resources, but rather rewards employees for creating
additional profit. The plan is designed to

(04:38):
cultivate positive tension, encourage employees to stretch
without snapping under unsustainable pressure #4 is
ending the entitlement mentality.
By linking rewards directly to measurable collective financial
performance, the methodology dismantles the entitlement
mindset. Employees come to understand
that bonuses are earned through direct collective effort value

(04:59):
creation rather than being an automatic handout.
The shift fosters a culture where employees are motivated to
contribute actively because theysee a direct correlation between
their effort, the company's success in their own financial
gain #5 there's sharing the vision and building ownership.
The book stresses that the self funded incentive plan isn't just
about money, it's about connecting every employee to the

(05:20):
company's vision. When employees understand the
financial gain, they are more engaged with the overall
strategic goals. They start thinking like owners,
identifying inefficiencies, proposing improvements and
actively seeking ways to contribute to the company's
profitability because they know they'll share in the success.
And then number six, continuous learning and adaptation.
This is something that, by the way, is part of our organization

(05:42):
for sure. It requires continuous
communication, education, feedback loops and a willingness
to create the systems and processes that are going to
propel the business forward. Stretch Not Snap provides A
practical step by step road map for entrepreneurial leaders
implementing the entrepreneurialoperating system.
It's filled with relatable scenarios and practical advice.

(06:03):
The author provides A compellingcase for financial transparency,
shared metrics, and self funded incentive plans as powerful
tools to unlock the company's potential.
It emphasizes that when employees are financially
literate, motivated, and rewarded in line with the
company's success, the possibilities for sustained
growth and profitability grow immensely.
So as you think about that, go get a copy of Stretch Not Snap.

(06:25):
As you think about that, have anawesome rest of your day, go
make some great things happen, and we'll talk to you again
tomorrow.

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BOM - Stretch Not Snap by Alex Freytag

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