LAC  Frankie | Russo Capital

 

Leadership can be a lonely place on top, especially if your team is always straggling behind you in the valley. Back when he was a young entrepreneur, Frankie Russo, founder of the Russo Capital portfolio of companies, he was exactly that kind of leader. Realizing that his company will only be as good as its weakest team member, he has since learned to “slow down” and adopt a leadership philosophy that brings out the greatest performance potential from his team by tapping into the individual talents and strengths of its members. In this chat with Alicia Couri, he shares how he came to embrace this leadership methodology. Frankie also shares some important insights from his bestselling book, The Art of Why, notably the critical relationship between passion, purpose and profits in business.

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Leading Without Leaving Others Behind With Frankie Russo

I have the amazing Frankie Russo with me. Let me tell you a little bit about Frankie. Frankie Russo has built the Russo Capital portfolio of companies throughout multiple industries, including technology, advertising, marketing, automotive, music, agriculture, publishing and finance. The companies he has invested in have offices in the US and India and serve 128 US markets. Russo and his team have led two of his companies to become one of America’s fastest-growing, privately-owned companies seven years in a row. The Art of Why, Russo’s first book, which was published in 2016, is an Amazon bestseller list in the self-help category. He is on the Inc. 5000 fastest-growing companies, seven years in a row. Welcome to the show, Frankie Russo.

Thank you. After that intro, I can’t wait to hear what I have to say.

You have been leading companies, leading organizations creating this global empire of yours. I want to know, what is your own personal leadership philosophy?

First off, thank you so much for having me on your show. I always like to be with other people that are aspiring to do something great, but more importantly, aspiring to help other people. I can tell that you’re doing that. A big part of my leadership style is focusing on how do I help the people that are around me, whether that’s leading at my house with kids or leading at the office. I always try and look at what is it that I can do to better serve the people around me. I like to look at a lot of the decisions as a leadership as the next right decision, it’s what I call it. The next right decision is all we can deal with at any given time. That’s easier said than done when you’re in the position of the visionary and you got to think ahead and all that good stuff. I try to naturally allow myself to think ahead but I’ve got to temper that with what’s at hand.

That’s a balance.

I like to go fast and that can be a good thing, but also can be difficult if you’re working on my team. I’ve come a long way over the past years and my team is grateful for that. It hasn’t always been easy. The only way I’ve gotten there is by, first off, focusing on like, “What are the core values for me and for my company? How do I lead with those values?” You hear a lot of the same core values from great companies and there’s a reason for that. You’ll hear things like, “Put others first or transparency. Passion for innovation or being driven.” All those are our core values as well. Those aren’t things you put on the wall in the lobby or say at meetings. It has to be something that individually, I have to do.

When I’m looking at how well someone is doing in my organization or on my teams, I don’t look at, what are their KPIs? How much revenue did they bring in? How well are they doing in their departments? More importantly, are they always, sometimes or never driven? Do they always, sometimes, or never put others first? I go through that and that becomes the matrix. It’s a lot less about what your performance is and a lot more about what type of person you are. That’s the only way I found that you can begin to have a real culture that is a long-standing, realistic and also creating that work-life balance, which can almost seem like an oxymoron at times.

There’s no such thing as balance. We just do what we can especially that you have six kids. It’s an incredible balancing act. What are those statues behind you?

They’re for different things. Some of them are for the Inc. 5000 list. We’ve been on it a bunch. This was the first time we were the fastest-growing company in Louisiana. That was an exciting one. I have two different types of companies that are my main companies, and one of them has been in the advertising and branding and marketing field for a long time. These are Telly Awards. These guys did a good job because they made you feel like you’re getting an Oscar.

It looks like the Emmy’s.

The award business, it’s easy to get sucked into that. I’ve gotten sucked into all kinds of different award type things and you can’t help it as a business owner.

LAC  Frankie | Russo Capital

The Art of Why: Master Your Purpose

It validates some of the work that you’re doing and it’s a team effort. It validates the team as well.

The first time I got the Inc. 5000 award, I can remember where I was when they sent me the email. I was in one of the airports, I don’t know which airport maybe Houston or maybe Dallas. I can remember almost collapsing because it was the first time after a long stint of working hard. When I built this round of businesses, this was the first time that I was doing it for something more than money. When you do that, which is a good thing. You’re working hard and you’re working hard for your clients and you’re working hard to do something and it’s not clear where you’re at with it, it does feel good to have some validation. It’s important, especially when you feel like you’re an entrepreneur and you’re having to be the leading edge. You can feel like you’re alone in that sometimes, even if you have teams around you.

You’re the driving force. You want to know that you were doing it right. At least other people see that you were doing it right and you weren’t a hot mess. A lot of times, it could be like a hot mess.

Most of the time.

It’s like, “It’s going to come together. Trust me.” That validates that it did come together. Does that play into the philosophy that you had with your book, The Art of Why?

Big time. The Art of Why is the first book. I have a second book coming out called Breaking Why. Breaking Why was a follow up to The Art of Why. I use why interchangeably with the word purpose. If you think of it, the art of your purpose. It’s about making an art form out of your purpose and also making a lifestyle out of your purpose. What that means, for me and for most of us, is that our purpose is the same for all humans. Our highest purpose and that is this universal concept that I’m the happiest, I’m the most of the fulfilled. I’m doing what I’m supposed to be doing when I’m helping other people. Most of us, in some way, at some point, some more than others, have helped someone and felt that deep fulfillment of that.

When you can find a way to make that a part of your everyday life, especially in the workforce, it allows for you to fulfill a deeper sense of purpose even if you’re not necessarily in some nonprofit or in some mission. I grew up in Inner City Mission work with my parents. I was instilled with an important responsibility and need to help people that were underserved. We were running homeless shelters. When I got out of high school and when I moved away, I didn’t want to do that. I struggled for a long time to figure out how to marry the two. Quite frankly, I didn’t want to be poor.

You want to build a business and you wanted to help. It’s like, “How do I do both?”

It took me a long time. The Art of Why is about my journey and other people’s journey like that to figuring out how what they do in America, not necessarily in some mission work or overseas and whatnot. We’re all familiar with the humanitarian type of work. How do I do that? How do I make my work humanitarian?

How does it have meaning and purpose beyond me? It is a struggle.

A lot of people are like, “I’m doing this for my family.” That’s true, but I felt like that wasn’t enough.

Don’t flinch. Click To Tweet

I connect with you on that. Yes, you have a responsibility to your family and it’s great but there’s a bigger world out there. There’s more need out there. How do I serve at that higher level?

I believe you can do both and that’s what The Art of Why is about. It’s looking at those things. We look at a lot of different things. Breaking Why goes even deeper into that. I’m excited about both of those. Both of those projects, I don’t make any money on them. I give the money to microfinance. Have you seen microfinance before?

No.

There are several organizations and one is called Kiva, Kiva.org. It’s an amazing organization. That’s where I used to do all my investing in Microfinance. You’re loaning money to small entrepreneurs all over the world, mostly women, but it gets repaid. 98% of the loans get repaid. What I love about it is you’re not giving money away. It’s being repaid and then it gets recycled into the next person. Also, it’s specific. What you’re investing in is like a cow or a sewing machine or a van, things that are specific to their business. It’s helped several third world countries turn their economy around.

It was a Nobel Peace Prize winner in 2007. The concept of microfinance was the Nobel Peace Prize but they do it well. It’s neat. I find that that’s an important piece, especially with younger generations that don’t feel they can be philanthropic. You can come in at $25 or $50 on a loan and be a part of something. I’ve invested in 40 different countries through this. It’s powerful to see them come to fruition. You get these updates. The book in and of itself, was part of my purpose, to be able to find a way to share it with as many people as I can.

Anyone who’s reading, if you want to invest in a bigger purpose and you’re not sure how now you know. You can go to Kiva.org and check it out. Whatever you have, that money is recycled. It does serve a bigger purpose because that same $100 that you give can go over and over. It’s recycling it over and over. It’s helping people, generation after generation. What is the biggest mistake that you think that you’ve made in your leadership journey coming up that you thought, “How do I recover from this?” Did it do anything to your confidence? What was it? How did you recover? How did you feel about it?

I’ve made a lot of mistakes as an entrepreneur and I’m grateful for those. What I’ve learned about, at least myself and a lot of entrepreneurs, is that the mistakes or the pain are the only time I will learn from it and do something different. It forces me to want to get out of that discomfort. One of the biggest mistakes I made was early on in my career. When I was in my early twenties, I started making money in my hometown where the people around me were still in college. Nobody was making a lot of money. All of a sudden, I started making $20,000, $30,000 a month as a mortgage broker. This is in the 2000s.

The mistake I made was that, during that time, I thought that it was never going to end. I clearly was too young to anticipate a 2008 entire meltdown of the country. I thought, “We’re making the American Dream happen for people. I must have the Midas touch or the golden touch.” Not realizing that anybody could do mortgages back then. You could get your dog into a house with 100% financing with no documentation. Clearly, it had to have been successful because I was making it happen. Needless to say, most of us know how that story ended with a total meltdown.

At the time, I was spending more than I was making. It’s typical when you make money fast as a young person. When it all hit, I didn’t have anything to show for it. There are a lot of mistakes in that, clearly. I hate it when people would tell me, “Easy money come and easy go.” I was like, “Screw you. That’s not me. I don’t believe in that kind of stuff. I’m going to do it differently.” I was like, “It was exactly what everybody said it would be.” I didn’t spend any energy or time building a business. I hired people, but it was other people that were young and friends of mine that wanted to make money. That’s all we were doing. There wasn’t anything to it besides making money. That’s a problem. That sent me back a good bit early on. It was a big mistake. I don’t look at my mistakes as regrets, which obviously is a little bit easier to do in hindsight.

You feel nothing.

It’s easier to do that in hindsight if you’re in the middle of a big mistake. It’s uncomfortable. The fact is, over time, I’ve stopped looking at things as mistakes in general. I also live my life differently. That was years ago and I take from that some humility. My motto has always been don’t flinch. I can promise you, back then, I was flinching a lot. I’ve had to learn how to balance the concept of don’t flinch. If you’re an entrepreneur or you’re an executive or you’re doing anything on your own, if it’s not even for profit, it’s a project, whatever it is, you’re going to feel alone. You’re going to have anxiety and depression and all these different emotions.

LAC Frankie | Russo Capital

Russo Capital: Stop getting frustrated if your people can’t do what you do because otherwise, they would be you.

 

A big thing for me is I’ve had to dig in. I call it hacking and rebuilding strategic emotion for success. In fact, that’s the title of the book. It’s Breaking Why: Hacking and Rebuilding A Strategic Emotion for Success. We talked about, “How do I make my business more humane? How do I do humanitarian type things?” It’s the same thing with emotion because emotion is what makes me human. I’m sure, animals get emotional. They get mad. A horse will buck you off if you’re riding it, but they definitely don’t have emotions the same way we do. Emotions are one of the biggest things that make us human.

To think that I am going to be successful in business for 40 to 60 hours a week and not be human, quite frankly, that’s what a lot of us get to. A lot of us end up falling into the fact that work becomes this unemotional thing. If it is emotional, it’s this weird relationship blocking out what you feel. There are all kinds of pieces to it. For me, it boils down to passion, purpose, and profits and being able to figure out how to put those three things together. Profits, meaning more than money, it could be a person’s life has been influenced or time might be the profit or whatever.

Being honest with ourselves about those pieces is the first step. If I’m in something that I’m not passionate about, I’ve got to look at that, which is uncomfortable. I was passionate and I was profitable back then in the mortgage business, but I had no purpose. You can’t do one without the other. That was a big mistake for me. It made me who I am. It definitely changed my confidence level. Every day, I wake up with that as a reminder. I don’t regret the past nor do I wish to shut the door on it. I have a relationship with the past in a way that’s healthy, without being more bitter or losing my confidence.

As this driving leader, where did you learn how to temper or know when to temper that with building the team up? I know some entrepreneurs that are drivers can be at the top of the hill and everybody else is in the valley and you’re like, “Come on.” How did you learn to temper that? “Get out of the valley. Let’s go.”

I’ve been there more times than I’m proud of. First off, one day at a time. That is something that I have to work on every day. It’s gotten a little bit easier. I went through a divorce and it was one of those things that finally forced me to slow down. That was good for the companies. I was so far out in front or so far up the hill or whatever you want to call it that you have to circle back. What I realized through it all is that they say things like, “You’re only as good as your weakest link,” which is terrifying if you’ve got a bad employee. There’s always one, usually. I can’t say I have any bad employees.

It’s good to know.

For me, it is true. If they don’t understand what’s going on, you may make fire but the fire will go out. There will be bodies behind you or a massive turn over. If you love client and employee turnover, don’t ever slow down and don’t ever meet them where they’re at.

You’ll have carnage behind you. It’s all about self-awareness. It’s all about realizing that that is exactly what’s happening. How do I turn that around for the betterment of the company and those employees? They are your weakest link, but they are the greatest capital in your company. It’s who you have on your team. You have to start treating them like the investment that you’re making in them.

One hundred percent and it took me a long time to realize that. There’s a big gap between being a self-employed person and being a business owner. That gap is employing people. It’s huge. It’s a difficult thing. It’s different. Early on, after I got out of the mortgage business, I started a little company called Potenza Inc. It was for my little brother who was a graphic designer. It’s a funny story. I looked at what I did in the mortgage business and what we did well. I made people believe that we had a good company. I decided to start a make-believe company. We were going to make people believe in our company. We were going to make all the community believe in our client’s product and their company, which is another word for branding. We called it Potenza Inc. We were make-believe. That company is still doing well.

At the end of the day, I had to look at that and it got to a point early on in that company. There were many different professional services that I needed to be able to offer that I couldn’t do and not well enough to charge for at least. The fact is that I got to a point where realized, “It doesn’t matter if I’m 110%.” I’ve been in this for a while. If I’m 110% now and I’m not every day 150%, it’s not enough. If my team is not there and I own a company, it’s not enough. The more I realized that the more I was able to start working on my company instead of in it, which is one of the hardest transitions to make. It’s difficult. Some people never do. The people that don’t, are the ones that aren’t in business anymore.

That is a big statement right there. It’s about making that transition and delegating the things that you need to do. You feel like you’re the only one who knows how to do it.

You’re only as good as your weakest link. Click To Tweet

I’ll tell you what I did with that. Let’s assume that I am the best at it. I had to let go and say, “I’m okay with it being 75% to 80% of how I would do it,” and that became okay. What I realized was that I need to have a little more employees than I think. I’m thinking, “If five of me would do this, I need eight.” There are some realistic things. I could sit there with five and be like, “We’re going to do it with five.”

You have to drive those five.

Every time somebody got good, they would burn out. It took me a lot to be like, “It’s not lowering your bar, per se. It’s about being realistic.”

It’s realistic expectations.

You’ve probably heard this before. People would tell me, “You should stop getting frustrated that they’re not as good as you at it or can’t do what you do because otherwise, they would be you.” That’s part of it. Knowing your role as a servant leader and knowing your role as the visionary and making sure that you’re giving yourself enough time and dedicating enough of your energy and time to that role and not allowing yourself. I’m my own gatekeeper. Nobody is going to stop me from getting back in the weeds and micromanaging.

You have to stop you.

They’ll either go along with it or they’ll leave, but they’re not going to stop me.

The thing is people have different strengths. In the work I do with team optimization, recognizing the different strengths that they have. Maybe they won’t do it the way you do it. If you allow them the opportunity to do it, they may come up with a way that’s better and more efficient than the way you did it and get better results in time once they learn what it is that you want. When they learn what the result is that you want, giving them the freedom to do it that way, sometimes you’ll figure out, “They’re doing it better than I ever did.” Giving them the time to do that.

That’s part of it. The fact is that the people that work with me or for me or however you want to look at it, they do it better than I do it. It is different but it’s also better. I had to give them enough empowerment to do that so that I could even get an opportunity to be a part or witness something different.

As the leader, it’s about setting up the result, “This is the result that we want to get to,” and allowing them the freedom and the autonomy to get to that result. You can make mistakes. I had a guest talk about that some companies give awards at the end of the year for the biggest mistakes that someone has made during the year because it allowed the whole team to learn. It allowed them to grow. It allowed them to see that life doesn’t end because this happened. We learned a lesson.

I bought a technology company. I was already in software and things like that and I bought the company. I got frustrated when I got into the software business because there were always bugs. That was frustrating. I was like, “When are we going to not have bugs?”

LAC Frankie | Russo Capital

Russo Capital: If you are that leader who doesn’t empower and encourage your people to come up with solutions, they’ll be running to you every minute.

 

Never.

They called anything that you’re working on an issue. I was like, “Issues? No, it’s either features or bugs.” They called everything an issue. I’m like, “We got to clean this up.” Somewhere in this, it all went back to issues. At certain companies, I haven’t got this far yet but I’m working towards it and I’m changing towards it, you would take a shot and celebrate when someone found a bug. Especially if you found a bug before you launch or before a user did. Finding bugs is a celebration. I don’t like it because they’re expensive but the fact is that if you have a culture that celebrates the mistakes or celebrates the bugs, you got a good culture because that’s the problem. When people are afraid to make mistakes, innovation and creativity die.

People feel scared and frustrated at work. You don’t want that culture. Find as many bugs as you can. Go find the bugs.

Tell me about them after they’re fixed.

Don’t come to me with the bugs. Tell me what the fix is. We found it. This is what’s going to fix it. We’re going to put this patch and we’re going to fix it.

Somehow, I’m finally at a place where nobody comes to me with a bug anymore. A lot of them, they’re already fixed, which is awesome. We’re getting there.

There are some who say, “Don’t come to me with a problem unless you already have the solution for it. I’m not the one that has to always come up with a solution.” That’s the thing, some people look for the leader to always come up with the solution for everything. If you become that leader that you don’t empower and encourage your people to come up with the solutions, they’ll be running to you every minute.

I tell all of my people, “If it’s a crappy solution, I’ll work with you and I’ll let you know. I’m going to let you know if it’s a crappy solution, but come with something.”

Don’t come empty-handed. It’s easier to steer that boat in the right direction than to build the boat. It’s like, “It’s already moving. Let’s steer it in the right direction. Don’t expect me to start building the boat. I’m not Noah.” You have six children.

They’re all young.

Fun times in your house, especially at lockdown.

Creativity and innovation die when people are afraid to make mistakes. Click To Tweet

It’s four girls and two boys. Luckily, I’m in Louisiana and where we are they got to go back to school. I don’t think I’d have made it. Trying to deal with the panic of COVID hitting while you own a bunch of companies and homeschooling children was terrifying.

You’re surviving through it. They’re back in school. I’m sure you have a rock-solid rockstar for a wife who is coordinating all of this.

It’s three different schools. We bought a Land Cruiser because it could fit eight people but it’s still tight. We’re keeping the Land Cruiser and I have a car. We’re going to get a third car that the nanny can help with. We got one of those Sprinter twelve passengers. It’s like a limo. That’s what it takes. We have a whole system to be able to get them out the door. She came up with it. She’s amazing. She’s more of the practical type. She’s an entrepreneur as well. She’s great at operations and practical.

Systems and processes.

We complement ourselves well.

That’s excellent. As your children grow, how do you guide them in their own confidence? What do you teach them about leadership?

At the end of the day, you can have a lot of rules and there are different ways to lead. There are different ways to parent. For us, kindness, respect and gratitude are the three rules we have and the things that I try to instill in them. Ultimately, with those three things, you’re going to be successful as a leader. If I’m grateful, it’s going to help with my morale. We talked about strategic emotions. Gratitude is a huge part of hacking that strategic emotion and staying positive and looking at things from a positive standpoint and not regressing into what’s going wrong. That’s a huge thing I teach them that is important in anything that they do and will help with success.

Kindness is about the service we talked about and about thinking about other’s feelings, thinking about what other people are doing and helping them. The more extreme case is clearly not hitting people or calling them names or bullying. Punching people in the face is not kind. The last thing is respect. At the end of the day, there are certain things that don’t understand yet. They have to respect us on. Going in timeout is what you get now. Going to jail is what you get later. I am doing this to help you. Those are the big things. They all look up to my wife and I. They ask a lot of questions about money and things like that because we’ve tried to instill that in them. They are constantly looking for ways to be an entrepreneur.

They see that modeled.

They want to do orange juice stands, lemonade stands, sell drawings of art, anything they can do to try and figure out a way to make some money to build a clubhouse, which is real estate. We’re learning some different things here and there. It’s exciting. It’s great to have an opportunity to teach somebody in-house about the things that I’ve learned.

To instill what your parents instilled in you into your own children. This has been a fun and amazing interview. I hope you enjoyed it as much as I did, Frankie.

LAC Frankie | Russo Capital

Russo Capital: Kindness, respect and gratitude – when you have these three things, you’re going to be successful as a leader.

 

I did.

I learned a lot. I’m truly honored and grateful for you to take the time to sit down with me and talk about this. Your book is on Amazon, The Art of Why. Go check that out. Look out for that when he drops his new book. What is the company that you have? How can people engage with you?

My company is called Russo Capital. Russo Capital owns the eight investments that I have. The company is on the Inc. 5000 list, all part of the Russo Capital portfolio, RussoCap.com. I’m on all major social media under Frankie Russo.

Thank you. Maybe when you launch a new book, you’ll come back and we’ll talk about it.

I love it. I’d be happy to do that.

Thank you, Frankie.

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 About Frankie Russo

LAC  Frankie | Russo CapitalSince 2005, Frankie Russo has been building the Russo Capital portfolio of companies throughout multiple industries including technology, advertising, marketing, music, automotive, agriculture, publishing, and finance. The companies he has invested in have offices in the USA and India and serve 121 U.S. Markets.

Russo and his team have lead 2 of his companies to become some of America’s fastest growing privately owned companies 6 years in a row [Potenza Inc – INC 5000 list 2014, 2015, 2016, 2017, 2018, 2019 | 360ia – 
INC 500 List 2019]. In 2017 his company became one of the top 50 companies in southwest Louisiana. Russo was also named as ABIZ entrepreneur of the year and recognized as one of the top 20 under 40 honorees in Louisiana.

“The Art of WHY”, Russo’s first book which was published in 2016, landed on Amazon’s Best Seller list in the Self Help category. He currently conducts a series of book tours and talks around the country to help his audience master their own purpose. All proceeds from the sales of The Art of WHY go to support microfinance around the world. TAOW Publishing’s main microfinance partner is currently KIVA.