Vance Rodgers: Balancing Innovation and Efficiency - Strategies for IT and Business Success

This transcription is AI-generated and may contain errors or inaccuracies.

Matt

My name's Matt and I will be talking with Vance Rogers about balancing growth with efficiency and empowering teams to innovate and scale effectively. Vance, you have a really interesting background as for engineering leader, because you're a background, you worked or you were on a duty in the U.S. army. And I'm always trying to figure it out, like, what kind of influence it had on you and like what maybe tools or approaches do you use today as a leader on the engineering side?

Vance Rodgers

Yeah, so there's. So my unit was, I was in a special operations unit called the Army Rangers, and we had a real. So we have a creed, it's called the Ranger creed, that we go through. And the environment provides a lot of discipline. So how do you translate all that discipline over to software engineers where everyone wants to do what they want to do? So it really comes down to some of the overarching principles. And what I try to bring to it is there's a method for planning, it's called the 1 3rd, 2 3rd rule, where essentially leaders don't spend more than a third of the time for planning and let the rest of the team spend the other 2/3 to do their plan and develop and to execute.

But I also think something that's really important that you sometimes see in the lean methodology is just that you do the work, you measure your work, and then you review it and you go back. So you constantly have this feedback loop. And a lot of times I see that missing in the enterprise role, just this constant feedback loop of whether when it's successful, people don't review actually when it's successful to see if it could have been better or even if it. But usually they'll review when it's bad. And so a lot of times what they'll do is they'll say, oh, let's review why it went bad, and then let's fix why it went bad. But we never review like why it went well or why it was successful. And that's something that we constantly do in the military, is you just keep this, this loop almost like the software development life cycle.

You just keep going in these concentric circles, and that's just how you get better. You keep training, you keep exercising, you keep reviewing it, you keep seeing what can be better, what can be more efficient. And you go, and you, and you just keep applying that. So those are some of the principles I try to apply in the real world out of the military.

Matt

Really interesting concept, like to highlight your advantages. Right. Because we should focus on the things that we are good at. And I haven't heard about it before. I met it so many times. Like, of course you tell about few things, but I don't know, that's, that's really interesting concept. And during our last call when we had a quick talk before the podcast itself, you caught my attention with the first law of business.

The, the concept that you described on your, on your blog. Could you elaborate a bit on that?

Vance Rodgers

Yeah, that was a amusing at a time where I was really frustrated with something that was happening where I currently work. And it was essentially I saw someone in the business spending a lot of time like work to just have work, but with no purpose. So the first law was essentially, look, everybody has a purpose in the organization. Some are more easily pronounced than others. For example, when you're on the sales team, you know, your job, your job is to bring money through the upper funnel. So essentially what I was saying is there's, there's three major levers, but the first lever essentially has its own three levers, so five total. So on the sales funnel, we know that there's three levers you can pull to increase revenue in the company.

And the first law is all about you gotta make the company money. Everyone's job in the company is to make the company money. So that first lever on the sales side is you can either increase the amount of people you're selling to, you can increase the amount you're charging, or you can increase the lifetime value of your customer or how long that their retention is. And if you do every one of those steps, like let's say 10% every year, you. You're increasing your top revenue funnel by 33% every year. But the other two levers are where I really was kind of had a thorn in our saddle in terms of. So where do someone who's in maybe shared services, how do they generate the company money?

Well, me being an it, we generate the company money by making the operational expense more efficient, much less of a footprint within the company. And then you have people in departments like maybe HR or Risk and compliance, and theirs is essentially to not lose the company money. You know, where do we find areas to not lose the company money? And that is another element of, that's that fifth lever. So the first lever is revenue upper funnel. Second lever is opex and the third lever is risk and your risk thresholds. So first lever is easy, you know, we know how you increase revenue.

Second lever is a little bit harder. And there's this dance that I call out in that law between a pendulum Swinging between the first lever of putting all your effort into increasing sales, and then eventually you have to go and address your operating expense. Because what you'll find in companies is that they'll start growing so fast that the OPEX starts outscaling the growth of the revenue. And if you don't address the opex, make things more efficient, look at automations, clear out some of your, some of your vendor contracts. You know, maybe you can use some first principle thinking in that you'll find that your OPEX starts eating up in your revenue. And a good way to just verify that is you can just look at your industry competitors or know what the industry EBITDA rate is and, or what that margin is. And you just use that as your baseline.

As soon as you cross the threshold, that baseline, you focus on the other one and you go back and forth and it's this dance. I'd love to say it's a science.

It's definitely not. You know, if all companies were a science, they'd all be successful. So there's definitely an art to it. Um, but yeah, that's just, that's where my first law business came in.

Matt

And speaking of the roi, I'm running this podcast for two years. And while I'm getting prepared, I of course visit the LinkedIn and see the profile, see the descriptions to make my initial kind of research and what I noticed, because I talk with people from all around the world. A lot of leaders from Europe, a lot of leaders from the U.S. uh, and like the major difference that I see in the Description on the LinkedIn before the CTOs or VPs of engineering, heads of engineering who are based in US versus Europe, it's the, that in the US there's a lot of, A lot of description about like, specific projects about ROI on those projects about size, about the budgets, about how much money did the person save, save thanks to that initiative. And the same was in your case. So I really wanted to ask this question. Like, you know, could you tell more to, to, to the listeners?

Like, how do you calculate roi? Why do you do this? Like, is it like a common approach in the us? Like, tell me more.

Vance Rodgers

Yeah, so it, I think it is a common approach. When your environment's doing it, you're not trying to reinvent the wheel. So if everybody's doing it, and that's your, you know, I'm a competitive person, if that's your competitive market, then, you know, you toe the line a little bit. But I also think it helps you articulate. How did you do something that may be intangible for the company and make it tangible to the bottom line. So if you're looking at the first rule, how does someone in HR or risk put an ROI on some of the initiatives they did or the task they did? How do they know that they put, you know, risk and compliance mechanisms in place?

How do they know that it actually returned a value to the company? You know, those are really hard things to quantify. So how we look at that is really simple. I. We call back of the napkin math, you know, people I talk to, it's just a really simple formula. And essentially you just take how much you're expecting to either save the company or how much you expect to make the company. So there's two, there's two different levers there, and it goes back to that first law, and I'll talk about that mechanism.

But there's always a cost to doing everything. A lot of people don't understand that. So a lot of times they'll say, oh, this is just going to increase our revenue by, by 10x. And they'll say the ROI is 10x. That's not true. You have to look at all the bodies that are involved to make it happen, and you have to calculate what those bodies are going to be doing and what they couldn't be doing. So it is a really great example of that.

If we say, hey, there's an initiative to, let's say, transform using one particular platform to another platform, a lot of times we'll just say, oh, we're going to save money from just changing platforms. What we don't calculate is all the bodies involved over X amount of time to actually do that transformation, you actually have to calculate that into the cost. So if it takes 10 bodies and they all have a particular salary, and it takes, you know, a full year, and let's say each of those 10 bodies are, you know, a hundred thousand dollars in blended rate that just cost you like a million dollars to do that transformation. So, so if you're only Expecting to save 300,000 per year, your ROI is in the negatives for a while. And so you're looking at two different calculations. One is how long it takes you to pay that back. So back from the applicant math, without using any kind of weighted average cost of capital, it takes you over three years to pay that back.

So is that effort really worth it? And in it, I can guarantee you that three years is the maximum roi. That's when you stop your ROI calculation because everything changes in three years. Technology Changes, new leaders come in, they want to change platforms. So three years is about the cap. If you can't get a ROI in three years, you should really rethink if you should execute that project. So it's your simple ROI calculations.

Cost you're expecting to make, or I'm sorry, cost you're expecting to save, how much you're expecting to make minus the difference, and divide it by the cost to execute, and that's your roi. There's another little back of the napkin formula that I use in terms of when it comes to operation expense savings. And I don't see a lot of people using this. And I remember I shared it with someone and they were like, I have an mba and no one's ever explained it to me like this. So here's my little secret. If you make $10 in revenue, and after all the operation expense, you end up with a dollar of profit. So your margin's 10% for every dollar you save in opex.

You actually do just the reverse math is almost equivalent to $10 in revenue. So sometimes just a little bit you save in OPEX equals so much more on the revenue side of things. And you can calculate your ROI that way also.

Matt

Great examples. Thank you.

Thank you for that. I really appreciate the practical knowledge, I would say. And let's, let's talk a bit of the way. How do you lead the teams? Because you told me that after like some assessment, they noticed that your kind of person personality is yellow, which means, like long story short, you are not really organized person like you. You told me about your desk. It was like a great example, but at the same point you're doing it pretty well, right, with the big team.

So maybe could you tell me, like, how, how does it influence your daily job and how do you cope with. With that?

Vance Rodgers

Yeah, so what you're referring to is we took a. The company I'm currently with likes to do these personality tests when you first start, and then that way you, when you're talking to someone, you can see what their test is because it's displayed and then it helps you communicate with them. So we did a test called the Real Colors, and it buckets you into four different colors with a score. So yellow or gold happened to be my lowest score. And that meant my. And that's really around organization, which means I'm not very strong in the organizational category. I'm very strong in green, which is a learner, someone who asks questions, who loves to gather information, loves to think creativity.

And then you have orange, which Is like your, your self starters. A lot of entrepreneurs are orange and then you have your blues which are, you know, empathetic people who are really have hold relationships with people very well. So sometimes when you look at people at hr, they're very high blue over everything else. Yeah. So I have a very low gold slash yellow.

What does that mean? That means that as much as I try, I cannot stay organized.

So I have executed a few things. One I know to use the strength of my teams. So I find people who are really high in those categories and I usually leverage or delegate them a lot of that organizational tasks because they get a lot of pride and they get a lot of energy out of doing those things. Cause that's what they're good at. So I make sure I execute giving them the accountability and the empowerment to follow through. Um, I, I try to let my team make their own mistakes, you know, cause those are all learning opportunities. And then I try to give them the power to just, you know, lead with, with tasks they've been given.

So I try not to helicopter over them. I know we do daily check ins. You know, they ask for my advice when they need advice. But between that and just a few simple personal, you know, processes that I do to stay organized, those are what I, what I utilize.

Matt

And you gave me a really good example because I'm talking each, like I think each talk, each podcast, I talk a lot about AI. But like you gave me like really, let's say good example and a case on how do you use the AI to help you be organized and how do you implemented it in calendar. Could, could you tell?

Vance Rodgers

Yeah. So I used two tools and they're usually my default. Go back to tools. One, I used a bullet journal. I've used that for like the last seven years. But I always fall back on an app called, I think it's, I believe it's called Use Motion app. And it is basically an AI integrator with your calendar.

And essentially you build out your projects, you build out your tasks that you need to follow through with on that calendar. And it will comb through your current work calendar and find empty spots and then fill those spots with tasks that need to accomplish. What's great is these are all soft tasks unless you make it a hard task. So if for some reason maybe you're in the office and someone does a drive by at your desk and you're talking to that person in that, in that spot, it'll automatically reshift your calendar. And if you put in your deadlines for when you want these tasks to be done, it'll start to prioritize those tasks in your calendar at the right time. So it's really cool. Then it'll tell you, hey, like, you hit your deadline.

Like, this is an ASAP task. So it's.

It's pretty cool. It's kind of like having your own personal boss without having, you know, someone hitting you up for, when is this due? Or, hey, do you have this done?

So you can. You can get ahead of that too? If you're working for someone, you know, making sure that you're. You're following through with your creator mode.

Matt

Of getting things done, do you have other like. Like daily routines or habits that, you know, help you to be effective? Maybe something that you took from the U.S. army? Like, anything specific for yourself?

Vance Rodgers

No. So I wish I had daily habits.

Matt

I'm.

Vance Rodgers

I'm one of those people, you know, I think it speaks to my low yellow score, and that's where I can do a habit for 60 days, and I don't do it for the 61st day, and by the 62nd day, it's completely broke. I don't have the habit anymore. So sometimes it's more about just routines or rules that I try to set up where, you know, the first thing I do in the morning is I. I open up my phone. I just, literally just comb through my calendar to make sure I've. I've. I know what's coming up, and I have everything prepped for those meetings, if I have any meetings.

And I know I need to get my mind straight for certain things, really just trying to set up a good environment. I find that the environment really keys me up for success. So sometimes if I know I have to work really hard on something, I get out of my house because I can find distractions in my house. So those are some of the rules that I've set up. Not necessarily habits, but just kind of rules of my environment. I still go in the office at least twice a week. I find that just being able to talk to some people or just sit in a work environment makes me focused to work.

And so now in a world of remote work, just being a little bit hybrid helps me with my personality be a lot more productive than I could be.

Matt

I feel like after so many years, you've seen a lot of. And you made a lot of decisions which are. Which. Which were maybe not popular or maybe even controversial or contrarian to what the others leaders are doing. Um, and I'm always wondering, do you recall any of those Decisions that were tough and maybe controversial. And what was the outcome and what did you learn from it?

Vance Rodgers

Yeah, so we made one decision a couple years ago that was very controversial. Um, you know, I had to build out the deck. I had to build out the story I was telling of why we should go this route. The strategy. And I called it API first strategy. And essentially in it, we're so platform based, we use a lot of external platforms versus in house, custom applications that we built. And so our goal was to make sure that every platform we were on had API extensibility.

For those who don't know what that means, it just means that you have the ability to utilize the app at almost full functionality through APIs. And that allows us to then kind of build any tool that we need or any platform that we need by leveraging all the strengths of all the other platforms. So we called it a low code, no code, API first. And what it did is, is it allows us. My goal of the presentation was to say, look, this allows us to get to market faster for helping the business. It allows us to lower our total cost of operation, you know, lowering that opex, and it'll allow us to do this with a smaller team. So we didn't.

We already had a small team, so I didn't. We didn't necessarily go out and get more headcount to control this stuff because it was already done by the current team. And man, we debated for hours on it. And then I just, I answered. I had all the answers to the questions. And when I talked about it, I said, like, look, this will get us in a, in a spot to where there's no tribal knowledge. You know, someone leaves the company.

It's not like all of a sudden we just lost a book of knowledge. It just went out the door. And, and you know, even if we read their documentation, we don't know how things work.

Everybody can jump in. Even people on the service desk can jump in and partake in supporting these low code, no code situations. And so when they saw that there was a better ROI in the future through. Just through those debates, those were, those were the challenges. Now, I'm always a contrarian too. So anytime you want to talk about controversy, every time we have a conversation, even if I agree with the point, I will still be a contrarian and talk about all the other inverse stories that we're not thinking about just so that we can think about everything there. But, you know, it comes with cons, always being a contrarian.

You know, the old Japanese proverb That the highest nail always gets hammered first, you know, so I have to be careful. Oh, he.

Matt

That's tough. That's tough.

I, I agree. But you know, like, I think like we always learn on those like a tough decisions and like on our contrarian decisions, the same. Those are the most impactful and maybe do you recall any like, you know, like the most challenging decision or the toughest challenge that you have in your career? Uh, and what was that and how you gone through that?

Vance Rodgers

You know, sometimes the toughest decisions are, are leaving current teams to go to a different organization and work with, with another team. Um, I, I've always felt like I've built really good relationships with my teams and it's part of maybe the loyalty I got from the military where especially if you're maybe in a tough project or you're, or you're doing a tough thing, it's like, hey, if I leave you guys, am I, am I abandoning you to whatever other leadership is out there? And so those are some of my toughest, toughest decisions to be honest, is probably leaving the team. I'm, I'm very much. I just believe in team. I don't believe any of my success is, is solo. I believe it's all done because I've done it through a team.

So anytime that I have to leave a team is probably one of my toughest decisions I have to make because, you know, there's maybe, maybe I put too much on my shoulders, but I believe that there's livelihoods there, there's families there, there's, you know, you're trying to build them up for, for their future success. I try to teach them as much as I possibly can that I've learned and I haven't learned everything. You know, I still have a long way to go, but I think I always believe those are my toughest decisions are really just you know, not being able to give a team everything that I possibly have.

Matt

Another thing that I wanted to ask you. It's. I think it relates a bit to the LinkedIn. So sometimes when I go to LinkedIn, I do my research. There are so many different names of the positions and I mean like, it's really hard to understand. Like what do you do? Like, you know, there are so many of those names and apparently most of them, like this is based on statistics.

The, most of the, the, the, the various naming of the positions are in the marketing, like on the link in the marketing. Seriously. I saw, I saw one paper about it, but what I wanted to ask you, it's about the, the pain point. Pain points and challenges that you have in your position. And maybe they are not so visible or obvious right from the outside. Like, as an insider, what would you say?

What are those?

Vance Rodgers

Yeah, I think, you know, when you get to a certain level, some of the pain points are really about. I'm gonna say the, I'm gonna say the word, but it's probably the only word I could think of right now. But there's more nuance to it. I'm gonna say it's around ego and it's around. It's around kind of a lack of clarity of people's actual roles and positions. So when there's a lack of clarity on that and who owns what and what people are responsible for, you get some egos involved. And that's okay. That's okay.

That's a relationship building thing. Those are conversations that need to be had with individuals. And some people, you know, I work with people who just aren't willing to have those conversations. They believe that their, their swim lane is theirs and no one can cross over. I'm totally okay. People want to cross over to my swim lane, you know, like, hey, if you want to, if you want to take some of, some of the stuff off my plate, you know, let's, let's, let's collaborate on that, you know, because there's plenty, there's plenty to go around. So I think those are some of the hardest unwritten things that people deal with.

And that's just networking within your company, building those relationships, understanding the personalities that are involved, because it really comes down to personalities and, and then, you know, clarifying whose roles and responsibilities are for what. Every time I start a project that's large with large team, I make sure to clarify who's responsible for what. So that way, you know, there's. The work can just get done if you just do that in the beginning, you know, sharpen the ax, it's cutting the tree so much easier.

Matt

How about the recession in the tech world? Like, do you feel it? Do you see, have you seen like major changes in the way you operate, in the way you ch. You build the technology? Or maybe, I don't know, with hiring people.

Vance Rodgers

So we haven't been hiring people for over a year. But when I pay attention to the current market, you know, I, I see that there's lots of layoffs that happen, especially in the tech world, and some are in certain divisions that really have nothing to do with, with the, with the fintech field that we're in. But what What I, what I think I'm seeing is there are, there's kind of this holding pattern going on because in my field with technology, the AI portion of it is really starting to. You know, there are leaders who think, hey, we can supplement hiring people by enhancing current engineers with some of these AI coding agents, you know, like Copilot and some of the other ones that are out there. That is still, there's still some time left to see if that will reveal itself as being an actual benefit or a hindrance. Some of the early stuff I'm reading about and I'm hearing about in the industry is that it's starting to become a hindrance. It's not as good as people are thinking it is.

So it's going to be, it's going to be interesting to see where that ends in a year. But in terms of the current recession, tech, I know it's kind of going on. I know there's been layoffs, I know hiring has slowed down. But in terms of it affecting me in a, in a smaller bubble, we haven't really seen it yet.

Matt

I recently talked with one folks, one guy from the, from the Silicon Valley, and he's helping a lot of engineers to get the jobs right. And he was mentioning that he has because he's doing it for years, like 10 or 15 years, and he had like a Meta coefficient or like back then in the time Facebook coefficient. And it was like how easy it is to get the interview at Meta as an engineer. So like during the last two or three years, like more or less two, two and a half years, he, it was really difficult, but because nothing was happening. The recession, the recession was there before. It was crazy. Like it was so easy to get the, the, the, the interviews.

And now he said like since the last two months, it's, it's back, back in the game. So like Meta is hiring one more time and like now this is like how he based his prediction in future. So I'm, I'm, I'm curious, like, how do you see, like, next, you know, are you positive about the next year, about the tech, about getting, getting back? Like the tech is getting back and you know, slowly growing the, the head headcounts on the engineering side or how do you, how do you see it?

Vance Rodgers

You know, that's a, that's a great question because there's, there's other elements to it. Um, you know, using Meta as a barometer or, you know, any of those major Silicon Valley fang stocks or even salesforce as a barometer for how the market's going feels like it's a good, you know, leading indicator. Where, where I'm curious though is where some of these AI tools are taking us. I've been playing with a few of them in terms of, you know, building out ideas and to be able to ideate through them. And within an hour having an application that would have taken me about 40 hours to build and having very good, you know, layouts on it, having very good, you know, user interface and basically I can, I can tell it what I want to look like and what I want it to do and it does it quite well. So that leads to the thought process that I have in terms of the more gig economy or the more project based economy that, that individual developers can do and start running into their own stuff is going to be, it's going to be more prevalent. So it's hard for me to say, you know, do you want to work for a big organization?

Now working for a Fang stock is awesome on the resume, but if you're not working for a Fang stock, if you're not that caliber of an engineer, because not every engineer is the same, you know, I, there's going to be a big space filled with a lot of those applications hitting the market are built by AI.

Matt

And the last question that I ask all my, all my guests is about the books, resources, maybe conferences that have been, you know, influential on your leadership style, on yourself as a, as a, as a, as a leader in ATT and ck. Maybe you could share some titles if you remember.

Vance Rodgers

Yeah, yeah. So I read there's three books a year I read and then I always recommend a fourth book for, for leadership, for, for the one book on leadership, I always recommend the Hard Things About Hard Things by Ben Horowitz. I. It's the first book I've read that talks about leadership in an organization on the hard side of things. And that's how you handle layoffs, how you handle growth and how you handle scale, how, how you handle the relationships with that company. You know, I've never read a book that touched that. I've never read a book after that that touches those kind of items.

It's so, it's a, it's a really good book. Ben Horowitz is pretty well known in the, in the industry too, in Silicon Valley. The other three books that I read once a year is one I think everyone needs to read Ready, Fire, Aim by James Masterson and that almost ties into that First Law of Business I wrote. Like the first chapter is you don't have anything until you sell it. Like, you don't even need a product to sell because you don't know if what you're building, if people want it until you're selling it. So why are you starting to build it until you sell it? He talks about a story about the guy who made Samuel Adams.

You know, his uncle called him when he was at the store looking for a computer and he says, what are you doing? He goes, I'm buying a computer. And he goes, oh, is the, is the computer selling your. Your beer?

And he goes, no. And he goes, you need to go out and sell your beer before you need to buy a computer. You know, how many sales are you going to put in your computer? Essentially, like, why are you doing cart before the horse? Kind of kind of methodology. I also always read the War of Art by Stephen Pressfield. Kind of just gets me in the mode of, you know, start creating.

If you start creating, the muse will get behind you and follow through. So it's a really good book. It's a simple read. You can do it in a day. Sometimes I just read like a page a day. It's pretty cool. And then that third book I read is the the Art Never Split the Difference by Chris Voss. That is.

That is probably one of my favorite books in terms of not just negotiations but communicating with individuals really understanding and technology is really good because you can really understand what are the true pain points that the customer has an IT customers the employees in the business world to customers are the customers paying them money for the revenue. So those are. Those are three books I read at least once a year.

Matt

The last one I absolutely. I love this book and I think the Life is about the negotiation. You negotiate at home, you negotiate with your kid, you negotiate at work. And I think this is the simplest kind of and like easy down to earth to understand the book like how to do it properly right. You have even the cheat sheets like about like from those book from this book. So it's absolutely amazing. Vince, thank you so much for today's talk.

Thank you for your tips and insights. I really appreciate the interview.

Vance Rodgers

Thanks Matt. Thanks for the invite. I really appreciate it. Subscribe to the Better Tech Leadership Newsletter. SA.

‍