Know Your Risk Appetite with Matt Aiken and Denver Whetten
Alright, Denver. We were walking around your office this morning. You were showing me your your two your Lincoln Room and your Chamberlain Room, and they've got these awesome paintings in there. And then we went up to your went up to your office, and you had this this coffee table book of paintings from the civil war. And I I asked you, hey, what's what's one of your favorites?
Matt Aiken:What's something that stand out, that stood out? And and you turned to this picture of Robert E. Lee and general Jackson having a pretty intense conversation. The conversation was surrounding their their different approaches to risk. Right?
Matt Aiken:They're sitting here in Chancellorsville, first half of the civil war. They're sitting in an entrenched position, outnumbered, maybe three to one, four to one, and Jeb Stuart comes up and says, hey, there's a hole in their flank. Hey, if we could get if we can get around, if we can get to this exposed side, we have a chance to really do some damage. And then and then you've got Robert E. Lee, this really conservative general.
Matt Aiken:He's like, hey, let's stay here. And then you've got this this general Jackson who's he's aggressive. He's ready to go. That's like, hey, let me take some guys around their flank. Let me go and attack them.
Matt Aiken:They've got a decision to make. And what what's going on? There's a different level of risk appetite. And so I I wanted to start with what stood out to you about the painting? Who do you see yourself maybe as more in this in this situation, and and and why is it one of your favorites?
Denver Whetten:This painting just really resonated with me because I'm I'm the aggressive one. I I I like action. I like taking risk. You know, in in my mind, it's it's big risk, big reward.
Matt Aiken:Mhmm.
Denver Whetten:And and and I think that that, mentality is what helped me be able to get off the ground, build build a company. You know, had it not been for the willingness to take risks, we I would have never started digging construction. Yeah. There came a time in our building the company where I needed someone to be able to balance out my appetite for risk to to help cover some risk and and and make sure that I'm not leading us to complete failure or and and and I think that happens in in most companies. You know, when you start out, there's not a lot to lose.
Denver Whetten:And then once you build momentum and you build something and you have the responsibility of hundreds of families depending on you, then the dynamic has to change a little bit and you have to start thinking, hey, this isn't just me betting. This is this is all of us. Mhmm. And and we have to make sure that we're making the best decisions possible. And so had hired a a young project engineer about twelve years ago, and, he he very, very capable, very smart, but very risk averse.
Matt Aiken:Mhmm.
Denver Whetten:And and so I started running a lot of my decisions past him and and and trying to understand, well, what are some of the risks and what are some of the things that we need to be thinking about that I don't wanna think about, but I I I need to think about, I need to be responsible. Over time, he continued to learn and mature and and grow up through the company, and now he's my CEO. Yeah. He's my CEO. He's leading Dagan Construction.
Denver Whetten:He's leading a big organization, and and he is still risk averse, not as much as he used to be. He's he's he sees the the upside of of the the need to take risks, the need to grow, the need to do things that are different than the way that we've done in the done them in the past. But I still feel that dynamic with him where where he's he's gonna push back sometimes and be like, well, why do we need to make that purchase? Well, why why do we need to do that type of work? If we've never done it before, what are the chances of failure?
Denver Whetten:Mhmm. Hiring people, you know, we don't really need those guys. We we we could do it without them. Let's grow slower, more more safe, you know. And we've had that dynamic pretty significantly over the past five or six years where where he's taken a larger leadership role in the company.
Denver Whetten:And and so as I got to spend some time in Chancellorsville standing in the spot where this cracker they they call it the cracker box meeting between General Lee and and Jackson. While I was standing in that in that in that place, listening to, the person giving us the the the lesson, the leadership lessons that could be learned from that. My relationship with TJ, just really, really surfaced right then. And and, t TJ's the conservative one that's like, hey. Let's dig in.
Denver Whetten:Let's take the safe route. And I'm the one that's that I'm conscious of it, and I'm and I'm trying to do a better job at at not making those types of decisions that would put us in a lot in a lot of risk. Mhmm. But then I also saw that that, you know, this this action that that that came out of this meeting was decisive Mhmm. Was was decisive for this battle.
Denver Whetten:Mhmm. Had had this not happened, there was a higher chance of of failure since the the confederates were outnumbered three to one.
Matt Aiken:Yeah. So many of our listeners, you know, they're if they're in that early stage, that that point where, man, they've done they they've placed the bet. They're like, I'm gonna start this business or, hey, I'm I'm going all in on this business. We're we're gonna go take ground. They've got a sense of maybe healthy aggression, healthy aggression being the key here.
Matt Aiken:What's a lesson that that those leaders need to hear as it relates to understanding your risk your own risk appetite? Maybe maybe a lesson you had to earn the hard way, right, in in the early days before before TJ came along.
Denver Whetten:Over the years, I've persuaded our team to take on jobs where on a single job, we've lost up to $2,000,000 on on one job. That hurts. It hurts, man. You know, coming away from that, I'm like, I don't wanna do that again. That wasn't fun.
Matt Aiken:Yeah.
Denver Whetten:You know, luckily, we were healthy enough to be able to absorb a loss like that. Those are hard lessons to learn. And those are situations where you come back and you're like, man, I need to listen more to those people who are saying, hey, that's not that's probably not a good idea.
Matt Aiken:Yeah. The the British don't say lesson learned. They say lesson observed. Right? I've I've observed the lesson.
Matt Aiken:The lesson is, you know, manage risk wisely. I mean and and, you know, circumstances are what they are. It might have been a good decision at the time. We wanna make sure that the lessons that we've observed that we've call it we earned. We we earned that mistake.
Matt Aiken:We earned that lesson by going through it. Now now we need to take a a next step going forward. As you think through, okay, hey, you know, there's there's these lessons I've observed, and then I'm I'm realizing I need counsel. One of the words you used a second ago was persuaded. I persuaded my team to to take on these jobs.
Matt Aiken:When I think about this this painting, which, by the way, we'll we'll put a link to in the show notes to this painting so you can see it. But if you find a real one, you you have to promise me to send it to Denver because he he's still looking for yours.
Denver Whetten:Right? Right. I'm looking for one that I need that I need to put in my office.
Matt Aiken:That's right.
Denver Whetten:Except it's sold out.
Matt Aiken:It's sold out.
Denver Whetten:And they're and they're they're hard to find.
Matt Aiken:So there you go. Shoot your shot. Go find go find us one and and and we'll see what we can do. Now you used the term persuaded when I think about this painting. The painting is such that that Jackson is trying to persuade Lee, hey, no.
Matt Aiken:Don't don't stay entrenched here. Let me take let me take some of the troops and go around and attack. Right? Let me take this more risky aggressive maneuver. Where maybe in your kind of middle stage as you and TJ are starting to develop this trustworthy collaborative relationship with you in that CEO role and him kind of more in that, you know, that that integrator role.
Matt Aiken:Where have you guys learned to practice healthy persuasion?
Denver Whetten:We've studied EOS and that really did help us understand the differences in our roles between a visionary and an integrator. Mhmm. That helped us be able to see that, man, it's really important to have a good integrator, and it's also really important to have the visionary. And we have our place. We have our place.
Denver Whetten:Under understanding that helps us each know that even though we have different tendencies, they're both good and they're both healthy. Mhmm. And then practicing one on ones Yeah. Where where we we gain alignment and we talk about, the way I see things and the way he sees things. And just us working together and and winning together helps us build confidence in each other and trust.
Denver Whetten:Yeah. And the other important thing I think is is that he's able to say what he thinks without me saying, well, I don't well, that's a dumb idea. Like, we we need to be more aggressive. Mhmm. You know?
Denver Whetten:He's able to say what he thinks. I'm able to say what I think. And that doesn't mean that we're gonna go his way or my way. At at the end of the day, hopefully, we're coming up with a solution that works works for both of us.
Matt Aiken:Yeah.
Denver Whetten:And and and those those types of solutions are are the better ones.
Matt Aiken:Yeah. You use the term trust. Can you help some of the folks who are maybe trying to find their integrator or they're in their early stages of finding that that partner, that other side of the push pull equation, whether whether you're the hyper aggressive entrepreneur that's like, I, you know, I gotta go be taking ground constantly or you're that more risk, you know, tech technician manager type who who has slowly, steadily built your business, but you realize that you need a little bit more aggression. You need someone to help you say, that's a good bet to go take. What what what is some advice you'd give to to those folks who are starting out that that relationship to make it open, honest, collaborative, and ultimately trustworthy?
Denver Whetten:Right. I I think the first step is to actually understand yourself and what your own tendencies are. Yeah. If I'm blind to that, then then it's gonna be hard for me to even know what to look for. Mhmm.
Denver Whetten:First first off. Once I know what my tendencies are, then I know what it is that I'm putting the company at risk for. Whether I'm so risk adverse that I'm gonna prevent the company from innovating and adapting to the market or or I'm so so biased for action that that I'm just gonna drive the company off a cliff.
Matt Aiken:Mhmm.
Denver Whetten:And so I think the first step is understanding your own bias and your own tendencies. And then for us, it was it was, well, who who is that natural person who is is performing at a high level
Matt Aiken:Mhmm.
Denver Whetten:Who tells the truth, who has the courage to speak what he says and stand up for what he believes, who also is respected. Yeah. Right? Has earned the respect of of the team. Yeah.
Denver Whetten:And and I think all those things are important. I'm sure there's way more things that that could be thought of here. But but but those those specific qualities or things that TJ has had where it's made it easy to to to be able to trust him and to have a a a really great relationship with him and be able to create this dynamic where where where our tendencies are different, but we lead the company in a safe but still an innovative and adaptive Yeah. Mindset.
Matt Aiken:Yeah. So I heard I heard character. Mhmm. I heard competency, and then I heard courage. Right.
Matt Aiken:Like, those are things you're trying to cultivate within a relationship. Hey, do I character, do I I trust their integrity and honesty? Like, would I entrust them? Are they trustworthy of this thing? And then competency, you know, do they have the skills and talents and experience to to be a good steward, to be a to provide wise counsel in this situation?
Matt Aiken:And then courage, the ability to step in and say the hard thing. Right? To to promote long term harmony over short term peace. At Keymaster in in my business, I have a business partner. He he's an aide on the Enneagram.
Matt Aiken:And so what that means is that he needs to be heard. His whole thing, like, anytime we're in a a conversation, he has an opinion. It's not that he thinks it's the best opinion. I mean, he he's can't come to that, but but he needs to be heard. And so many of of the the folks that we've hired and that we've worked, we've had on our team struggle with that idea of he needs to be heard.
Matt Aiken:What are they coming in? They they're coming in saying, I get it. Yeah. Yeah. Yeah.
Matt Aiken:But this is the wise outcome. So sometimes it's very clear to the other party, maybe to you. Maybe sometimes it's abundantly clear. We're gonna go do this thing. We're gonna go take this risk if that's what you're on on the side of.
Matt Aiken:And then the other party's coming in and and they they don't want to be convinced. How does how does that situation where it's, you know, for whatever reason, bad day, bad time of the day, not a ton of additional context, What does it look like when you can't persuade and when there is misalignment? What what do you do in those situations for you and TJ? That's never happened before, has it?
Denver Whetten:No. I'm pretty impulsive, and and and I know that.
Matt Aiken:Mhmm.
Denver Whetten:And and I also know that that that gets us in trouble. I very rarely put my foot down and say, no. This is what we're gonna do. Yeah. I I trust my team.
Denver Whetten:There's never usually a situation that, a risky decision needs to get made right now. There's there's there's always time to to think it through, to to to talk about it more, to to to get to some middle ground where where we can both agree. Yeah. It's a little bit tricky because as as the owner and founder of the company, it's it's my baby. And, really, I can make whatever decision I want to if I wanted to.
Denver Whetten:And and and say, well, this is what we're gonna do, and I could pull out a trump card and force some some some decisions that that that I like, and I probably have over the years. But I've come to find out through results, negative results from times when I've done that that that that's not very wise. Yeah. And I need to have some control and and and and I need to I need to, rely on the people who are running the company, who I'm trusting to run the company to make the decisions for the company.
Matt Aiken:Yeah.
Denver Whetten:I can't be running around overturning decisions that they've already made or else it would be a disaster.
Matt Aiken:Yeah. One of the principles or frameworks I talk about a lot is result with customers is resulting. Right? Not evaluating a decision based on the outcome, but evaluating it based on the decision. And so I I wanna tell the the story of of Jackson and Lee a little bit further and get get, I've got a question for you about it.
Matt Aiken:So there are these circumstances where it's the middle of the night. Right? Jackson says to Lee, like, let me take these troops. I'm gonna leave you with some, but you're gonna be almost outnumbered 10 to one. But if I take these troops and get around, we might actually turn what may be a loss into a victory.
Matt Aiken:I'm gonna I'm gonna go follow this 16 year old kid. 16 year old? 14. Year old kid through these back roads, march my guys starting in the middle of the night. I'm on these back roads following this four 14 year old kid so we can flank him.
Matt Aiken:It's a 20 mile march. So this is a big ass. This is an aggressive play. And so what I they decide to do it. So just moving forward, they they decide to do it.
Matt Aiken:In your analysis, in in your evaluation, was this a disciplined decision or a reckless decision?
Denver Whetten:It was disciplined. Okay. It was disciplined, and it was because there was a very high level of trust Mhmm. Between Lee and Jackson. And it wasn't just trust because they were friends or because, you know, there was no other choice.
Denver Whetten:It it was because of Jackson's previous victories
Matt Aiken:Mhmm.
Denver Whetten:And his previous performance. He had done a a great job being aggressive in previous battles. And and then the one directly previous to this one at Fredericksburg, Lee had set up Longstreet, and and and and they had set up in a defensive position. And and and Jackson showed up a day after the battle had started, and and he showed up saying, hey. What are we doing?
Denver Whetten:We need to get aggressive, and we need to go on the offensive here. We can wipe them out. And Lee said, no. We're we're in a defensive position, and Jackson complied. Mhmm.
Denver Whetten:He said, okay. Then that's what we're gonna do even though that wasn't what he wanted to do. Mhmm. And and I think the give and take has to happen for that trust in the relationship to be there. Mhmm.
Denver Whetten:If my relationship with TJ where I get in a situation where I overturn a decision that he's made already and we've we're already a day into it, and I start doing that, then our trust goes down. Yeah. And and he's gonna start saying, well, whenever Denver shows up, then we're just gonna do whatever he wants. Yeah. Or or vice versa.
Denver Whetten:Yeah. And so I think, trusting each other, upholding the decisions that we make doesn't mean that we don't, you know, adjust and and and and have have backup plans and contingency plans when when they're needed to to to adjust sometimes when we've gained new information about a strategy that we've we've got in place. But but we still support each other and we still support each other's decisions. Yeah.
Matt Aiken:And and one of the things in the framework of we teach relationship, results, trust, influence. Right? You you gotta have a relationship like you just established. You know, Lee Lee and Jackson had history. They had a shared mission.
Matt Aiken:They had they had shared values in how they were trying to accomplish and and prosecute the war. You know, results, Jackson had proven that he could get the results that he was, you know, telling to to Lee. Maybe not proven that he could get this specific result, but he's proven he can get results in the past. And Lee's trying to believe that. And then trust, whose best interest are they operating in?
Matt Aiken:Jackson's not trying to get away from a, you know, a fortified position. He's not trying to get away from a loss. He's trying to operate in the best interest of everyone that's in that army at the time. And so what happens, he ultimately gets influenced with Lee and gets to make that decision. And one of the things that he does is he doesn't go through this framework exactly, but this what we teach in coaching is risk equals threat times vulnerability.
Matt Aiken:Right? Threat times vulnerability. Sometimes we say risk and and we don't know exactly what we're talking about. Like, we're just that's a really risky operation. And and I was I was explaining this to you.
Matt Aiken:It's it's a little bit of a crude analogy, but let's say, you know, I'm sitting here and I'm pointing a gun at you. Right? That that's a that's a high threat position. Right?
Denver Whetten:Right.
Matt Aiken:Right. I I've I've got a gun. I'm pointing it at you. We could say maybe threats at about a 100. Right?
Matt Aiken:Okay? But then but then I said, okay, hey, how vulnerable are you to that? Well, if you're sitting there in your t shirt, you're pretty vulnerable. May maybe you're sitting there and you've got a bulletproof vest on. Okay.
Matt Aiken:A little less vulnerable. Right? What if you were sitting inside of a tank? It's like, well, I'm not vulnerable at all at this point. Right?
Matt Aiken:And so when we're looking at this, we're saying, okay. Hey. Threat times vulnerability. So what were some of the threats? What were some of the things that could have gone wrong in the decision that that Lee and Jackson made?
Matt Aiken:We talked already about the 14 year old. Hey, what happens if the 14 year old misleads them? What were some of the other things that stood out?
Denver Whetten:They were outnumbered three to one. Yeah. So they easily could have gotten wiped out and and and or could have possibly been over
Matt Aiken:Yep.
Denver Whetten:Right then.
Matt Aiken:So the the threat was not just a threat of, hey. We're we're we're outnumbered, but this has a a broader influence to to the outcome of what could be a a pretty bad campaign for the for the Confederates.
Denver Whetten:Yeah. Right.
Matt Aiken:And so then so what about vulnerability? What were some of the things that that they that they potentially did to prevent this decision from going poorly?
Denver Whetten:They came up with a plan that Hooker was not expecting. Yeah. You know, they he he didn't think it was possible to get flanked in this situation.
Matt Aiken:Mhmm.
Denver Whetten:He was not prepared. They were entrenched facing the opposite direction when all of a sudden Jackson showed up.
Matt Aiken:Mhmm. It's hey. There's a high likelihood hood of this positive outcome. Yeah. We're talking about these negative outcomes, and we could spend all this time saying, like, this is a real issue, but one of the things you can do to mitigate your risk is to reduce your vulnerability.
Matt Aiken:Not not just reduce your vulnerability in in this case, you know, being attacked, you know, at this point, 10 to one, but reduce your vulnerability in the battle lasting long enough. Right? Lasting long enough for him to actually try it. You know, at this point, they they wake up at three in the morning. They go they they march out.
Matt Aiken:They flank them, and they end up winning winning the battle. Right? That's the outcome. And and like we said, we don't wanna look at outcomes as the evaluation method of the decision. But in this case, this they call it the Lee Jackson Bivouac is where the the location is, right, where they have this cracker box conversation.
Matt Aiken:They go through a rigorous disciplined conversation. They use trust and influence. And then what ultimately they do is they get alignment. Right? Jackson goes and does it.
Matt Aiken:Lee commits. He commits. They entrench I know this wasn't at Chancellorville, but you were telling me a story of the confederates lighting a bunch of campfires at at night to to make the union think that there was more people there. Right? Right.
Matt Aiken:They've got some tactics. They've got some alignment. This is what we're doing. We're on this path and we're in it together. And so ultimately, Jackson goes around.
Matt Aiken:They win the battle and this becomes one of Lee's greatest victories in the war. Yeah. Anything around risk, risk appetite, alignment that we didn't cover that you wanna make sure our listeners hear. Again, they're they're either they're somewhere on this journey with you. Right?
Matt Aiken:Pre having that second second in command, maybe in the in the beginning stages, or or really reading reaching their stride. Is there anything you'd want them to know before we close out?
Denver Whetten:It's important that you do have both sides in your leadership team. Yeah. It's it's important that that that you have the gas pedal and you have the guy saying, wait, but we need to have signed contracts. We need to have insurance. We need to have a good game plan.
Denver Whetten:We need to have a good relationship with this customer before we take on a job that size. You know, it's just really important that the recognition of who are these people on our team, what are their tendencies, and then making sure that even though the tendencies and the biases are are different, that the team can maintain alignment and the trust and relationship and respect throughout the whole process.
Matt Aiken:That's awesome. Denver, thanks so much for coming and and sharing the story with me. If anybody does find this paint what's the what's the painter's name?
Denver Whetten:Mort Kunzler.
Matt Aiken:Mort Kunzler. And this is Strategy and Tactics? Yep. Okay. Cool.
Matt Aiken:If you find one of these, listen. You we're we're entering into a contract right here. You gotta find it for me. Send it to Denver, and then we'll see what we can do together. How about that?
Matt Aiken:Sounds good. Thanks for coming.
Denver Whetten:Thank you.
Alex Judd:Well, there you have it. Thanks so much for joining us for this episode. If you want any of the information or resources that we mentioned, that's all in the show notes. Hey. Before you go, could I ask you for one quick favor?
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