Ceiling of Complexity

I took a quarterly seminar many years ago taught by Dan Sullivan. It was aimed at entrepreneurs and focused on how you could grow your business and enhance your life through planning and simplification. One of Dan’s catchphrases that I go back to frequently was, “reaching your ceiling of complexity.” As I entered the library this morning to write this piece, that line struck me between the eyes.

I realized that I was bumping my head against that “ceiling” that felt five feet high at that moment. I had attempted to write this blog three times in three days and hit a blank each time, something that rarely happens to me. My head was definitely bruised from bopping into that low ceiling. Why now?

A few days ago, Noah and I attended the Precision Machined Products Association annual Management Update Conference. There were more than 150 people at the event, many of whom I had known for decades. A lot of younger people attended too, which is a sign of vigor and optimism in the industry. The focus of the meeting was on change and the ability to build a foundation of relationships and culture which would enable a business to weather the inevitable ups and downs of being in the game.

Lloyd experiences deep thoughts on buying and selling machining businesses.

Underlying the topics was the tough reality of people nearing what they deem to be “retirement age” struggling to exit the industry and businesses they have loved and prospered in all their lives. How do they exit gracefully with the gains they have made? To whom do they sell the businesses or pass them on? Quite a few people are now asking me to help them in this process, and the emotional investment for families in the center of these decisions is heavier than I expected.

I’m not playing with the private-equity boys who are all about the numbers. The EBITDA, accounts receivable, and the viability of the customers is their only focus. It simplifies the game for them. For me, it is the people, their life’s work, more than just the money that is the magnet, and that’s what makes everything so damn complicated.

Selling a business is a quantum leap more complicated than selling a Wickman or a Nakamura. More emotions, more family input, more tugs and eventually hugs. It shouldn’t have surprised me, but it has. Knowing the buyer and seller by their first names is a blessing and a curse. The beauty of selling machining businesses is that I’m invited into people’s lives in a profound way. It gives me a purpose akin to the purpose of writing a blog aimed at the people in this industry.

The deals I’ve been working on are much more complex than selling one machine or buying a package of machines. When somebody is buying a business to gain access to contractual relationships and may encounter erratic income streams, the deal is constantly in flux. The broker becomes an interpreter of facts and feelings on both sides of the transaction and sometimes has to soften the emotions on both sides to keep things on track. My ceiling for complexity rises and falls with the vibes of each deal. I find the process exciting and exhausting at times. I think I’m getting better at it, but occasionally the ceiling is a little bit tight.

Question: How do you simplify your life?

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4 thoughts on “Ceiling of Complexity

  1. John griner

    Lloyd:
    In the context of business I have tried to be “all things to all customers” and to have the right machine for each part. When things get too complex I revert to a more simple focus with a narrow and deep niche. Being a specialist with a narrow and deep focus seems to be more profitable and less stressful than being a generalist. Southwest Airlines exemplifies this with their 737 fleet and no frills customer base

    Selling a screw machine business. Unsolicited advice. I would have the sellers create a package for you with ebitda numbers, fact based projections, and other financial and emotional conditions of the sale. That might help you and the seller agree if it’s worth the investment of everyone’s time. Buyers could be culled out by presenting financial capacity to do a deal and financial and other parameters they expect. You may lose a deal or two but it will simplify things and help insure all parties are serious. Just my unsolicited advice. Best of luck. !!

     
  2. Seth Emerson

    Lloyd – I sent this to AARP as a letter – probably too long for their column, but this may be applicable here.

    I have been retired now for more than 6 years. Turning 65 in America, should you be lucky enough to have had a (virtually) lifetime of good employment, means making financial decisions and working with the Federal Government in a few instances, Social Security, Tax structure, Medicare, etc. It also means, again, if you have made investments, that you have to evaluate options, look ahead to your, and your families, future. In short, you have to use every bit of acuity you have. It is an important time in life. Now, I spent a working life in aerospace/defense industries, working in Marketing, Production and ending up in Information Technology for the final 10 years. At the same time, I started a company, built and raced cars, worked on raising a family, volunteered in several organizations, etc. I was always sharp. I could read a situation, understand the important things in a presentation or an organization, So on and so on. What I have found is that most people do not stay sharp, no matter what they do to stave off old age. I found this out during that changeover to retirement. At age 65, my abilities to quickly evaluate options, decide firmly and go on, had slowed. The irony of this is that it starts to affect you at the exact time where you may need it the most. I have noticed that, in the last 5 years, I must have things explained again or repeated to me. It isn’t hearing loss, it is, however perception loss. Like many older folks, names have started to disappear, but not yet to any embarrassing extent. But I still have new ideas. Sometimes they are synergies of old ideas or things that just occurred to me. I am hopeful that this is just an age thing. Not any kind of debilitating illness. It means adjusting to a different level of attentiveness, making sure I think things through a couple of times before acting. It could be depressing to think about, but, if I start to consider that, I think about all the people in the world who never get to sit here at 71 and do that evaluation. So make that adjustment so you can maximize your future, it is just a fact of life.

     
  3. r in nyc

    First – Thanks for the actual written words and not a droning podcast to muddle through!

    I say all the time: “life keeps getting in the way.”

    We are all in a world now where everything is going at 150 miles per hour.

    The never ending technology that is supposed to simplify our lives, BUT just complicates and steals our time. being connected 24-7-365
    getting emails at 3AM, texts at 5AM.

    Just take a few days and REALLY look how much you time you waste on your phone, computer, device etc…

    Are you on facebook, playing games, watching STUPID boobtube videos, 1000 channels of crap, or just surfing porn?

    The hours that are wasted when actually added up will really surprise you!

    I have given up on games and read technical articles to learn and improve myself in ALL subjects.

    I am guilty of this as well, though I refuse to be a part of any social media nonsense.
    “hey everybody I’m going to Bermuda for a week and no one is watching my house”
    Although I do not have or pay for cable and I don’t have a working TV. (it burned out and I haven’t missed or replaced it – cheap Chinese crap. Let them steal that one – LoL)

    That is all the BIGGEST waste of time.

    I only comment here and a few other select boards, and you may see there are times I cannot find the time to post.

    This is a machine blog – so I can say that I have been spending a bunch of time on the shop floor making parts since the new minimum wage law went into effect here in NYC. There are people that cannot justify $15 an hour, so until things steadily pick up I gotta do some work myself. (and I can do it in 1/3rd the time)

    I personally have not learned yet how to simplify my life.

    Not yet buying into the whole KonMari “bring you joy” thing and de-cluttering method.
    I have numerous High Quality traditional tools like vernier calipers, and the many gages and devices you would find in any good machinists’ toolbox. Each one brings me joy and brings me back to a simpler time, even though I haven’t used such tools in probably 30 years. There is something about anything made by Brown and Sharpe over 40 years ago – the look, the feel the quality, and love. (for me, I speak of hand & measuring tools specifically)

    At the end of some days some friends and I get together, I unlock and open my special desk drawer and we enjoy a fine Bourbon and discussing the simpler times…

     
  4. Lloyd GraffLloyd Graff

    John, Seth, r in nyc, thank you all for your thoughtful comments. You guys all raised by ceiling of complexity to a tolerable level. Simple is not simple and I don’t know if it is an “age” thing but various infirmities like loss of vision and loss of hearing make every day life more taxing. I feel sharp and creative but it takes more time to do the routine stuff which means less time to “accomplish stuff” but the alternative of going to adult classes and schmoozing about the good old days sounds awful to me. I plan to keep pushing and if that means pushing against my ceiling of complexity, so be it.

     

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