#246 – The Art Of Preventing Stupid With Matthew Davis

Thomas Green here with Ethical Marketing Service. On the episode today, we have Matt Davis. Matt, welcome. Hey, thank you. Happy to be here. I’m very happy to have you. Would you like to take a moment and tell the audience a bit about yourself and what you do? Yeah, sure. My name is Matt Davis and I own Davis Business Law. We represent small businesses. We’ve got branches right now, right in the heart of America, from Kansas City down to Dallas and I think we’re about to go to Houston here in the next month or two. So I operate kind of a spread out law firm and we just love taking care of small businesses and helping them grow, so our avatar client is ambitious small business owners. Well, thank you for the introduction. I said I wanted to ask about your book. Is the aim of the book to help the business owners that you also service. Yeah, yeah. So my first book that was, has been published is called “The Art of Preventing Stupid” and I was kind of a smartass with that title.

But the idea behind that is we want to encourage and help our clients not make the unforced errors, not make the stupid mistakes that hinder their business goals. And there’s, there’s maybe an ethical basis behind that really. I always tell the story this way. My mother was the only woman in her med school class back in the 60’s and then she ended up in St. Louis for residency. Came back here to our hometown, which is a small city and set up her medical practice. And she was one of the, she was no BGYN, but did a lot of surgery and she was one of the pioneers of breast cancer screening back in the 70s. Really pushed it hard., and from a professional standpoint that was a change in medicine of really getting in front of the problem, because breast cancer can be profoundly deadly.

And so I went to law school and ultimately wandered back to our hometown, set up a professional practice and it just stuck with me that we need to do things to help protect our clients and help protect our interests and in the law, that’s not something we’re really taught in law school. We’re taught to be reactive rather than proactive. And I don’t want to talk too long, am I making sense for you? Perfect sense. It leads me nicely to my next question, which is, it’s kind of like, what do business owners do that’s stupid that they should prevent? Well, it depends on the business and what the basic framework of what we teach is this. Number one, brainstorm. But brainstorm with structure and brainstorm incisively and we’ll get to that. Number two, then you have to prioritize, and three, you’ve got to develop a plan.

And on the first point, there’s a lot of businesses use this swat analysis, strengths, weaknesses, opportunities, threats, you draw a cross and you now have four quadrants and our real specialty comes from the fact that when businesses get in trouble, guess who they call. They call us, right? Because we’re, we’re the line of last defense. But what we’ve done is we’ve noticed that there’s of course they’re, not of course, but there’s three main things that get people in trouble, we call them catastrophes which are things outside of your control that will just hit you. And the answer to dealing with those are to anticipate them if you can and then you either prevent or prepare for them. The next sort of issue is ignorance and ignorance means what don’t you know about your business that you need to know? What are the skill sets? What are the learning curves you have to climb?

And we really dig down to try and help teach our clients to how to identify those, because if you can identify those and then educate yourself, you can stay out of so much trouble. And the third category that we deal with in brainstorming is, we call it ineptitude and that just means you’re slacking off at what you know you’re supposed to be doing. So, you’re not managing something and you’ll see ineptitude more in mature businesses and ignorance more in startup businesses and there’s some gray area between those two, but what we do is if we ask, if we teach our clients to ask questions in brainstorming, Let’s take this as an example, Okay, what are my weaknesses? What are our threats? That’s not an instructive question, right? But if you go, if we look at them, the systems of your business, which would be the management, the personnel, the facilities or the plant and so on.

We go, what do we not know about our personnel or our recruiting or what does our team members not know or what do, what do I, pardon me, my English there. What do our team members not know? And if you ask those more incisive questions, you get a lot higher quality assessment of what your vulnerabilities are. Have you got any thoughts about the most common one among the categories that you mentioned? The common ones are, for instance, your management very frequently, you know, will not be ready to deal with catastrophes. Okay, so for instance, I was meeting with the president of a quarter billion dollar company. So a big outfit and I just said, listen, you know, we don’t have a plan in place if you die. You know, there’s not a vice president of the company that can take over and we’ve got to do something about this.

And, and you know, ultimately he said, yeah, you’re right. We really do. And maybe that leads me to the next point, which is when you deal with those vulnerabilities, you can capitalize on the opportunities. So that company in particular what we did in response to that threat or that vulnerability, we went out and hired two really great senior vice presidents Just beefed up the company and what that did is it got the president in a position where he could use his brain power to go acquire one of their major competitors and he grew the company by 50% through that acquisition. And so the, I guess the concept that we have is, you know, the companies that deal with their vulnerabilities are the ones that are the a players on the field. They’re the ones that can get out there and take advantage of their opportunities because you know, it’s a binary choice.

You’re either dealing with problems or taking advantage of opportunities. And that’s the overall thing I’m trying to express is let’s not make the stupid mistakes. The problems are gonna come, but let’s avoid as many as we can. That’s a great point. And I do think um I think it’s in human nature to perhaps wishful thinking I suppose might be the term in terms of how you went about determining these the categories. And also the example you gave. Would you say it’s based on observation from all the work that you’ve done? Yeah, it’s you know, we we built that the matrix of course my matrix which we talked about in the art of preventing stupid. We call the business immune system report. And we have another one that we call the strong protected business report which is more about let more about subject. So for instance that one has your competition and so on. But the business immune system report naturally came into existence on a cocktail napkin on a flight to Miami, you know like most good ideas, you write them down on a cocktail napkin and um I was just flying to Miami for a conference and I was thinking about this and I just drew a little chart and I said, wow that’s it and there you go.

And what about the name then, is there a story behind the name of the book? one of my business coaches suggest suggested it and it’s just the, you know, and my publisher liked it. So we just ran with it. So you know, the next book is simply called the strong protected business and it’s, it’s, it’s more aspirational than than the original, you know, than they are to preventing stupid, which is, is kind of meant to provoke business leaders to go, man, I don’t wanna be stupid because you know they all think they’re 13 ft tall and bulletproof, that’s just the nature of the entrepreneur and you know my, my job is to grab him by the lapels as their attorney and smack him around a little bit and say, hey, we we, if we spend some time getting ahead of these problems, you’re gonna do so much better. So you mentioned about the inspirations, the prevention side of it and why you wanted to put it out there at what point did you think?

Yeah, I think I am going to formalize this into an actual book. Well you know I tell this story in the book and I have a client, it’s a husband wife. So their clients and their, their small town kids there, you know from just a little bitty town and they basically on the town now because they built a big company and one day we were talking a consultant had come from Chicago to meet with them and had all these crazy ideas about, about how to protect their business. They were just overkill. And we were talking about that and in the meeting I said, hey um how much insurance do you guys have? And they said a couple million or something, maybe it was three And I just was like, Wow. I mean it was really on me because I had missed not getting ahead of that for them.

I said guys we got to change that right now. And I have seen the local hospital after a car wreck run up $700,000 in medical bills in a day. Right. And you guys have got 30 loaded down big ford trucks, you know work trucks out on country roads, county highways and so on. Just you know, doing what they worked out in the country. I’m like, it’s not a question of if something’s gonna happen, it’s a question of when it’s just statistics you have too many miles on the road. Mm So we stopped, dropped and rolled and got the insurance in place. Right, Well six months later the wreck happened and I mean I still get the drop in my gut thinking about it. And by the way, this was the day the owner of the company was down in Oklahoma City and had his chest cut open and was undergoing major thoracic surgery.

And so one of our drivers was going down the highway and it was a hely highway by our standards and he went down the side of a Truck, a semi trucks, an 18 wheeler and came out the back and hit a mom and dad head on and they had just bought a new truck and the mom and dad didn’t live and the two kids in the backseat did and you know, just absolutely horrible and mitch, it’s, it’s heartbreaking. And uh, you know, we, we, the, the owner didn’t know about the wreck for two weeks because he was recovering and I went out to his house, Which is 35 miles or so out in the country on Sunday before he was coming back to work and knocked on his door. He was pretty surprised to see his lawyer there And I sat down and you know, he’s a big huge guy, 65, probably 300 plus pounds.

And uh, I told him what happened, what had happened and you know, he’s tearing up, which is real tough to see the whole thing was horrible and you know, the first thing he asks is, are the kids gonna be okay. I said, yeah, they’re, they’re healthy And you know, fortunately we have enough resources to take care of them through the insurance. And ultimately, as he naturally would ask, what about the, um, the company, I said, well, you know, the company is going to be okay because we have the resources through insurance in place to take care of it. And you know, that’s, that’s a pretty dramatic event. And you know, but it was to me very instructive of how much knowledge as a business lawyer, we had to help keep our clients out of trouble because that could have ruined their, their professional lives. And that, that to me was a real turning point going.

We, and, you know, we be in my firm, we know so much about how to help businesses that if we don’t get out in front of it with them and help develop systems to help them plan on how to deal with their vulnerabilities. We’re really not doing our job the way we ought to be doing it. Well, from from your perspective, congratulations on the job that you did. They’re putting the catastrophic personal stuff aside. Obviously you did a great job as, as the lawyer there in terms of the writing process. How long did it take you? I, I write in 500 words stretches so I can get up and write about 500 words in 30 minutes and then I walk away for the next day and I go, What did and your brain’s just going through it. And and so I can write I think art of preventing stupids about 50,000 words.

So it probably took me four months and I’m I probably spread it out a little bit longer than that sometimes. All right, we’ll go on cruises out of Houston and I’ll do a lot of writing there because the phone’s not ringing. Is that going to interrupt you? Yeah, it’s funny. Yeah. The phone and the law firm and this and that. And so yeah, the second book I I wrote in about four months and I finished it up. I spent a week in a cabin up in Colorado last year and we’re gonna figure out what we want to do with publishing that. But I have a few other responsibilities. Any biggest challenges there when in the context being writing. Um you know, I I have learned, I learned from a company called brand builders how to write and um to start with um they used a deal called modular content method, which is great. And brand builders is out of Nashville. Rory biden runs it.

He’s a pretty well known author and speaker and a great guy. And uh, what they taught me how to do is you get out of spreadsheet and you do what is it you do? You know what’s the point you’re trying to make what and then you tell a story about it. And then you Then you tell why and it’s it’s kind of escaping me right now, I have to get it out this week because my wife wrote a book and I said, Honey, we’ve got to tighten this up because you’ve got 300 pages here and and you’re on your sub box, which you ought to be. But we got to tighten it up to some some tighter points. But that modular content method is really, really good. But and what it also translates to is when you go speak, you can take like, so each chapter is a column in the modular content, But then you can pull those out and each column can be about 30 minutes of speaking, maybe 15, depending on the content.

And then what that does is it instructs how you give your speeches too. And it makes all that super easy. And favorite chapter, Have you got any thoughts there? Um, wow! You know, my favorite chapter is I think the one I wrote to start the strong protected business and what I do is I I talk about, I’ve spent a lot of my life, I’ve spent months, I should say back in the Ozarks, which are range of mountains here. Um kayaking right? And we’d like to go up to the top headwaters of these rivers and then kayak down them. And I write about how navigating a business from start up to in a mid sized business is like running the river and how, you know, that there’s obstacles ahead, you know, there’s rocks, you know, there’s rapids, you know, there’s gonna be trees over the river, you know, at some point there’s gonna be a lot of people on the river and you know, there’s any, any number of obstacles.

And I use that as a metaphor to describe how growing a business is like navigating those waters and how knowing what’s coming ahead by having experience and by asking the right questions and about having experienced guides to help you is really important in you achieving your goals. So that’s currently my favorite chapter that could change next week. Sounds very interesting in terms of your own business. When I say biggest challenges, what what comes to mind for you there, wow. Yeah, our biggest challenge has been figuring out who, who, who’s maybe the right way said who the right attorneys are to be on our team. And what I mean by that is we so in England, you guys have a distinction between barristers and solicitors, right? And we we would call those litigators versus desk lawyers.

That was kind of our distinction, but we don’t make that formal distinction. And, and I, you know, I would fill both roles in what I used to do. I’m now mainly just the ceo of the company, I’ve got a couple of clients, but that’s it. It took us a long time to figure out the profile of the lawyers that really were successful for our clients and could really help them out because we we really have to have swiss army knife attorneys because our clients have so many diverse needs. We can’t just have a desk lawyer because they just can’t do the work that our clients need because we represent again small business owners from startup. You know, some of our clients are 10 15 $20 million a year in business and they’ve just got a lot of needs that we have to have people to be able to fulfill.

And, you know, most law firms, at least in America are kind of collections of people with our cards and pulses. They just sort of haphazardly collect people along the way and we’re very um incisive about who we let on our team. And we’re also very incisive about their attitude because there’s somewhere along the way, I read a book about, there’s the distinction in people of problem solvers versus problem bring Urz and you’re not in your head because you go, oh, I get that right. And we really focus our interviews on finding people who are creating particularly attorneys who are creative problem solvers because that’s what our clients need. And when we figured that out, it it really, it really has helped propel our growth and we grow at about 30% a year.

So we’re, and we’ll do it again this year and I don’t see any reason why we want next year, which is pretty fast for professional services firm there is sort of a theme I think here, which is quite thoughtful or introspective would you say that’s accurate of yourself? Yeah, I, we I spend a lot of time thinking about the business, as Michael Gerber calls it, working on the business um because I joke sort of that I had a midlife crisis and decided to start a law firm. Um you would be horrified at my old marketing strategy because I, seriously, eight years ago I was practicing law out of my house because I had a book of business and I didn’t need to market right? And so I wasn’t in the phone book, I didn’t have a website. I was, I was busy all the time, but I had five kids at home and I was the only source of income for the family because my wife doesn’t work outside the home, she has a small business, but I was most of the income I should say.

And uh I just said, wow, we’ve got to go start a law firm and, and here we are. So I, I spend a lot of time working on it because you know it and it’s been very challenging growing it and figuring out all the kinks and figuring out what we’re great at and just building the marketing arm of the firm, but, and by the way we use all the tools that we teach about, so we’re doing strategic planning two days from now and we will do the business immune system report right now, we don’t have a formal business coach, but our business coach who was one of verne Harnish is scaling up coaches, he was pretty impressed with what we did with that because he said you guys move so fast and you don’t make unforced errors. Of course we make some uncle, you know, everybody does along the way, but we just don’t make a whole lot of dumb mistakes and that helps us move fast.

So you practiced in preventing stupid, right? So that’s gonna be, it’s got to be a good thing. You mentioned the marketing and or promotion. I think a lot of authors when they created a book, I think this stumbling block essentially where they got this book and they don’t really know how to promote it if you learn anything that you could share with other authors. I think podcasts are a great way to promote it and of course lots of different authors have different goals okay for us. Um some of them, okay, some of them want to use it for speaking platform and it can be really good for that ultimately. I think one of the best ways to reach people about your book is through podcasts um and we we have not done a fantastic job marketing the book because it’s more of an internal tool for us.

I don’t really care about book sales and I hate to say it that way, but it’s, that’s, it’s too strong of a way to say it. But it’s not a primary focus for us. The primary focus is, um, you know, as a calling card for our clients to go, oh, okay, these people know what they’re doing, they have some ideas. So for instance, whenever we get a new client, they get a welcome package. It’s got a copy of my book in it and some other as I sort of jokingly called Davis business law propaganda. Um, but um, I’ll tell you what’s weird about being an author and frankly being a podcaster, The impact that has on recruiting is astonishing. I’ve got some farms out here that I inherited and that my great grandparents got in the land runs back in the 1800s.

And you know, I go out and I tinker around, I like the Hobby Farm, but my wife is not amused with that. And you know, one day we were here at the, at the firm and we were talking like rednecks about buying goats from my farm because it’s, it’s getting overgrown with weeds, right? And um, I just started laughing. Everybody’s like, what the hell are you laughing about? I said, well, it’s funny that here we are talking about buying goats for the farm and we’ve got 75 applicants for one of our jobs in Kansas city because we appear, you know pretty well on the internet because we’re on books and because of the book, because of the podcast and all the time, just having that marketing presence is really powerful for us when we’re recruiting talent to the firm, because it says something about how we approach the world and our our general aggressiveness and our general professionalism and in contrast to buying goats for the farm.

Right. It’s a funny analogy, you mentioned that you about your second book, Is there anything that you learned from your first book which you took through to your second book to make it better? Yes, absolutely. And and we, you know, we are constantly growing constantly building and the two really important additions to the, to the book or I should say, novel um is number one how to prioritize because what we did is we took the Eisenhower Matrix, which is a tool that General Eisenhower used later president to decide what he was going to do during the day and he dealt with things on urgent, on an urgent and serious access made four quadrants. And of course, if it’s urgent and serious, you deal with it. If it’s not urgent and not serious, you don’t deal with it. We beefed it up a little bit and maybe changed it. Um because we’re looking at things from a preventative standpoint.

So we changed the urgent access to likely versus active. So if it’s active and serious deal with it right now, if it’s unlike likely and not serious, you can put it off? Right. And so the prioritization um became important. But then the next thing I added is we we ultimately just call it the strong protected business plan and we came up with three different categories of things to consider number one, the easy list. Just get the easy stuff done From the prioritization. If it’s even if it’s unlikely and not serious, probably just get it done. If it’s a threat to you, if it takes five minutes, 15 minutes, get it done, a because it’s out of your brain space and b because momentum matters sometimes the hardest part is just getting started right um to then take the serious active things and deal with them. So Stephen Covey uses the word Rocks as your quarterly projects when you’re doing strategic planning.

And by the way, what we teach through our our books and whatnot is really dovetails in with strategic planning on a negative basis. And what I mean by that is, whereas, um we’re dealing with the vulnerabilities and we want to teach people how to do that. And then the strategic planning is about where to take advantage of your opportunities. Okay, so we’ve got Rocks is the second component of your strong protected business plan. These are your quarterly projects. So I’m about to get three new ones next two days from now, as is everybody up here in the C suite C suite, so to speak. And um then the third thing is, what are the habits that you need to either change or implement? And you know, that that there’s a lot of literature right now about that from Atomic habits um is a kind of famous book right now and we really try and teach our clients, you know, how to look at the habits that they’re doing and and how looking at your priorities.

How are those caused by habits or the lack of habits and dovetailing that in has been really powerful to a lot of our clients to help them make better decisions and and stay out of trouble. Thank you for that. It’s a great answer. I think there’s a lot of good stuff in there. It does make me wonder, are you proud of what you’ve created, both your books and your business? Um, wow, I mean I’m encouraged and I’m enthusiastic about what we’re doing. Um I I try not to be proud in the sense that, you know, pride comes before the fall. Um so I try not to, you know, I guess maybe the way to say this, I talk about this all the time. There’s another famous book called Swim with the Sharks Without Getting eaten Alive. Okay. And Harvey Mackay was a great businessman and a great business speaker and he, one of his great lines is I can’t believe how stupid I was two weeks ago.

Okay, and you know, I, I, so many of the really great business leaders I know are really humble and um because they understand that running a business building a business is constant challenges, learning something every day and that, you know, what is going on up here in your head and the level of sophistication and knowledge that you have in the experiences and the lessons they never end. And so, and I was with my uncle um who is uh, you know, he grew up here in our hometown and then went to Yale undergrad and then Harvard business school and then got shipped off to Vietnam to run riverboats naturally.

That’s what you do with the Harvard M. B. A. And um he went to Dallas, which, you know, it’s still in about 1970 I think and started building nursing homes and you know, I’ll drive down the expressways in Dallas, We have an office down there and it’s, you know, there’s uncle john, there’s there, there, you know, there’s all these buildings that he built and we’re walking around the park in his neighborhood and I think he’s been a real inspiration to me because he’s common as an old shoe. And the question is, are you proud? And I’m happy with what we’ve accomplished. But I don’t, I don’t really feel pride and like I do when my kids do something, how about that? Sure. I understand it’s interesting interesting take and there I understand I asked mainly because I like to do things to make myself proud.

So if I do something, am I proud of myself in that context. But I understand there’s there’s some different takes on the term pride. So I get 100% get where you’re coming from, especially with your kids. The next one is something that I asked almost everyone that comes on the podcast interested to know what your answer will be is what does success mean to you? Well, success personally is if I have a good marriage and if my kids turned out okay. So um I was pretty happy at the family reunion yesterday when somebody told me they were polite and I was like thank goodness all the all the disciplines paying off and you know business wise, I really like to do meaningful stuff and and help people and that’s you know, externally I love helping our clients. And the other thing I talk about all the time is how our team there, they are internal clients for us and you know, how can we help them, how can we fulfill their lives and make their lives better.

And that’s really powerful to me. So for instance, um Dixie is one of our lawyers, she’s out of Oklahoma City and um she was working for one of the big law firms down there and her billing quota was 9.5 hours a day, which meant she was working 12 hours a day and we knocked that down to six because we’re available our firm and we have to keep track of our hours and were able to match the salary because we’re run better than they are. And that changed her life. And it allowed her to go build the home of her dreams and as she’ll tell me, it allowed me to have the brain space and just the life to go have these two little babies she’s had in the last two years. And you know, that’s, that’s really powerful to me. Um actually is my right hand lawyer that works mainly for me and she’s just had her first child and it’s so wonderful to see all these people building families and having a great and meaningful place to work and to be able to help our clients achieve their dreams.

I mean, our first core value of the firm is believe and protect their dreams because I love seeing our clients build something out of their lives and that can change families for generations. And so, you know, success to me is having a law firm that’s aside from the family stuff is having a law firm that’s doing great work for our internal team and for our, our business clients. So given that criteria, are you a successful individual For now, but you know, we’ll see how things are going tomorrow. Yeah, I’m doing great. Two weeks from now, you never know apparently. Yeah, now we’re, I have built a great team and I should say we have built a great team and we’re having a ball and just you know we’re growing and we’re learning and that’s so great. I mean you know I was with two of my uncles, one of them is 89 and one of them is 80 and they’re both still running successful businesses and that’s really fun.

Congratulations on everything you’ve done. Is there anything that I should have asked you about today? No, I just had a great time. It was fun talking to you and and you know again I don’t know if I mentioned this, all of our resources we have up on our website which is davisbusinesslaw.com. And if anybody just wants to drop me and ask me a question. My email is mdavis@davisbusinesslaw and happy to answer questions. Thank you for that. For everyone listening, please review the links in the description and Matt, thank you for being a great guest today. Thank you Tom. Sure, appreciate it.