Operational Scalability: Dutch Mendenhall of RAD Diversified On How To Set Up Systems, Procedures, And People To Prepare A Business To Scale
Get Everyone Aligned: I believe the first step is making sure everyone, especially my executives and leaders, is on the same page about our decision to scale.
In today’s fast-paced business environment, scalability is not just a buzzword; it’s a necessity. Entrepreneurs often get trapped in the daily grind of running their businesses, neglecting to put in place the systems, procedures, and people needed for sustainable growth. Without this foundation, companies hit bottlenecks, suffer inefficiencies, and face the risk of stalling or failing. This series aims to delve deep into the intricacies of operational scalability. How do you set up a framework that can adapt to growing customer demands? What are the crucial procedures that can streamline business operations? How do you build a team that can take on increasing responsibilities while maintaining a high standard of performance?
In this interview series, we are talking to CEOs, Founders, Operations Managers, Consultants, Academics, Tech leaders & HR professionals, who share lessons from their experience about “How To Set Up Systems, Procedures, And People To Prepare A Business To Scale”. As part of this series, we had the pleasure of interviewing Dutch Mendenhall.
Dutch Mendnehall is the president of the Alternative Investment Association, CEO of RAD Diversified, and author of the bestselling book “Money Shackles: The Breakout Guide to Alternative Investing”. As an educator and investor who’s grown a $200 Million real estate portfolio from scratch, he’s the perfect visionary to help investors take advantage of everything Alternative Investments have to offer.
Thank you so much for your time! I know that you are a very busy person. Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I hail from a family with deep entrepreneurial roots, though not without its challenges in real estate. Independence came early for me, as I ventured out on my own at 16. While my beginnings were humble, I am grateful for the journey that led to the establishment of RAD Diversified. Today, we boast a portfolio exceeding $200 million, with a dedicated team of over a hundred professionals. Our growth trajectory as a company is noteworthy. At the core of my ethos is valuing and nurturing the bonds within my team, ensuring we prioritize our investors and consistently excel in our domain. Whether it’s through authoring “Money Shackles” or serving as the President of the Alternative Investment Association, my focus remains on creating impactful results. On a personal note, I am a devoted husband and father to two young boys, aged six and seven. This provides a glimpse into my background and the foundation upon which I’ve built my life and career.
It has been said that our mistakes can be our greatest teachers. Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
One memorable incident early in my speaking career was when my pants unexpectedly ripped just before I stepped on stage. Despite the mishap, I proceeded with my presentation. This taught me a crucial lesson: regardless of unforeseen challenges, whether in investing, client interactions, or external economic factors like recessions or inflation, it’s imperative to face them head-on and adapt. Commitment and resilience are key. Just as I didn’t let a wardrobe malfunction deter me, we shouldn’t let challenges prevent us from taking action and moving forward in our professional pursuits.
What do you think makes your company stand out? Can you share a story?
Here’s the deal: At RADD, we’re all about action. We don’t just chat about what we hope to do; we get it done. And it’s not just about coaching or mentoring; when someone invests with us, they’re part of the family. We see them as partners, and that’s exactly how we treat them. We genuinely care, and it shows in everything we do, whether that’s with our team, our clients, or our investors.
Our community efforts are a big part of our culture. Take our scholarship programs and our work with veterans as an example. We recognize and value the freedoms we have, and we’re committed to giving back in meaningful ways.
When it comes to real estate, we’re always on our toes. Economic challenges, industry shifts — you name it, we’re looking for the silver lining, the opportunity. It’s this can-do attitude and drive that sets us apart. We’re all in, pushing ourselves and our team to think outside the box and make things happen. That’s the RADD way.
You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?
What three character traits have driven my success? First up, unwavering self-belief. It’s really about having complete faith in myself, my team, and what we do here at RADD. I genuinely think we’re ahead of the curve, especially in real estate. It’s about tuning out the noise and negativity, and fully trusting in our capabilities.
Secondly, self-awareness. While I have strong beliefs, I also recognize my limitations. I’m always looking to grow, learn, and improve. That drive and willingness to evolve permeates everything we do at RADD.
Lastly, surrounding myself with outstanding individuals and empowering them. Whether it’s our executive team, leaders, or someone new to RADD, everyone brings value. From those in acquisitions, sales, consulting, to a fresh marketing intern — everyone has a role and deserves the tools and environment to shine. Those are my top three, and I’m pretty proud of them.
Leadership often entails making difficult decisions or hard choices between two apparently good paths. Can you share a story with us about a hard decision or choice you had to make as a leader? I’m curious to understand how these challenges have shaped your leadership.
Absolutely, it’s a relevant point. When things are booming, you’re bombarded with opportunities. But when times are lean, choices become critical. Consistency in decision-making, regardless of the business climate, is vital. For instance, do we invest in marketing to attract capital or allocate funds to real estate? Or, perhaps focus on staff and future prep?
Let’s talk real estate deals. If presented with two lucrative ones, I’d aim to pursue both. It’s about balancing risk with reward. I compare the risks and rewards. If both deals promise good returns, I’d lean towards the one with a familiar landscape, minimizing unforeseen challenges. But that said, venturing into the unknown is the essence of entrepreneurship. Embracing uncertainty often leads to the most rewarding outcomes.
Thank you for all that. Let’s now turn to the main focus of our discussion about Operational Scalability. In order to make sure that we are all on the same page, let’s begin with a simple definition. What does Operational Scalability mean to you?
Growth in business often comes with challenges (and sometimes even pain). As a founder, you’ll constantly get advice on how you should operate or scale. But at the end of the day, you have to make decisions. It’s important to understand that improvements you initiate today might not show results for years. You’ll make hiring decisions that work out, and some that don’t.
There are several books I recommend. ‘Scaling Up’ by Verne Harnish provides a solid roadmap for growth, while ‘Team of Teams’ by General Stanley A. McChrystal offers valuable insights on team dynamics. ‘Atomic Habits’ by James Clear is great for personal growth. But what’s crucial is to have your team aligned on a common vision. If your core team isn’t on the same page, your business can easily derail.
Another key aspect is communication. Make sure your team is on board with the vision and direction. Also, don’t be afraid to part ways with hires that aren’t a good fit. Remember, they often make that decision for you. When one door closes, a better one often opens.
Lastly, while growth and systems are essential, they shouldn’t compromise your profit. It’s crucial to strike a balance between income, profit, and expansion. Know your financials thoroughly, including future predictions. Operate based on a sustainable income, ensuring you can withstand challenges. In short, be adaptable and always keep the bigger picture in mind.
Which types of business can most benefit from investing in Operational Scalability?
Any business that sees the potential and benefit. In my industry of real estate investing, I’ve found scaling crucial. Some might partner with larger firms that buy a significant chunk of their business, aiding in scaling. Personally, I’ve always wanted to keep control. It thrills me to see how my team and business evolve, and the results we can deliver. I guess I’m just super passionate about what I do.
Why is it so important for a business to invest time, energy, and resources into Operational Scalability?
Investing in operational scalability is crucial because it allows businesses to grow intentionally and efficiently. By developing strong leadership, putting the right systems in place, and maintaining company culture, businesses can ensure they’re growing in a way that’s sustainable and beneficial in the long run. Without this focus, a company might face inefficiencies, lose its core values, and even jeopardize its financial health.
In contrast, what happens to a business that does not invest time, energy, and resources into Operational Scalability?
If a business chooses not to scale, it doesn’t mean they’re settling for mediocrity. It’s a deliberate choice, and they can still excel, focusing on efficiency and delivering the best. Now, if a business wants to scale and fails to invest in their operational capacities, they’re essentially sailing a ship without a compass. Our investment in leadership training and development has been a game-changer for us. Leadership is the backbone of a growing organization. Without strong leaders, an organization will find itself in a constant state of chaos.
I always stress the danger of letting anything dysfunctional linger within the business, comparing it to a disease. If you ignore it, it festers and causes deeper problems. Systems and procedures are crucial in scaling; they provide a framework for consistent and efficient growth. However, hastily implementing systems can lead to unnecessary distractions, so there’s a balance to strike.
Lastly, I firmly believe in phased growth. Trying to grow too quickly without understanding the implications and effects on the business can be catastrophic. Growing in stages or “waves” allows you to adapt, evolve, and maintain a grip on the organizational culture. Every growth phase has its challenges, and addressing them step-by-step is key to successful scaling.
Can you please share a story from your experience about how a business grew dramatically when they worked on their Operational Scalability?
Reflecting on our journey, our growth came down to prioritizing the success of each individual customer. We began with a handful of successful real estate deals, and it snowballed from there. The RADD Inner Circle is our Done-For-You real estate investing solution, we saw growth from just six members to hundreds over time. Similarly, our REIT investors multiplied from a mere 22 to thousands. It all boils down to focusing on individual success stories. When each person thrives, the entire business scales.
Here is the primary question of our discussion. Based on your experience and success, what are the “Five Most Important Things A Business Leader Should Do To Set Up Systems, Procedures, And People To Prepare A Business To Scale”? If you can, please share a story or an example for each.
- Get Everyone Aligned: I believe the first step is making sure everyone, especially my executives and leaders, is on the same page about our decision to scale.
- Decide on a Scaling Strategy: I’ve chosen a specific culture and method for scaling. For me, the books “Scaling Up” and “Team of Teams” are foundational tools.
- Prioritize Leadership Growth: I know that if our leadership grows and we have impactful individuals, our business will expand.
- Identify Critical Systems to Improve: I need to pinpoint the most crucial systems that require immediate enhancement. Our growth potential is in our systematic approach. I’m focused on the systems that make an immediate impact now, and I’ve got an eye on those that will benefit us down the road. I also prioritize which parts of our business need scaling, be it marketing, advertising, product range, or operational readiness.
- Be Prepared for the Unknown: I’m always willing to face the unforeseen challenges with a positive and adaptive mindset. I know scaling will bring about challenges and obstacles, but I’m ready to approach these with humility and a constant drive to evolve.
What are some common misconceptions businesses have about scaling? Can you please explain?
Many believe that scaling is all fun and games, but it’s essential to maintain a positive mindset every day. You’ll face challenges and setbacks, and how you approach them, with resilience and optimism, makes a difference. Being an entrepreneur often means stepping into the unknown, which can be tough for those who love to have control over everything. One common misconception is having a rigid expectation of what scaling will look like. The truth is, even with thorough planning, you need to remain flexible and adaptive. It’s not just about reaching a billion in assets or increasing profits; it’s about the journey, the strategy, and our dedication to quality, service, and impactful results. It’s about the legacy we create and the positive impact we leave behind. Remember, it’s the bigger picture that matters, not just the milestones.
How do you keep your team motivated during periods of rapid growth or change?
Keeping the team motivated during intense growth periods is all about communication. It’s crucial to continuously remind them of the larger purpose, the vision, and the impact they’re creating. Amid the daily challenges and obstacles, they should recognize the difference they’re making. Whether it’s the positive change in an investor’s life, the support we provide to veterans, or our scholarship programs, every team member plays a vital role.
Understanding that everyone in the organization, from marketing to real estate to operations, is interdependent is essential. They all come together to form a cohesive unit that drives our success. As our team grows, building and maintaining personal connections becomes challenging, but it remains a top priority. Whether we’re a team of eight or in the hundreds, knowing the essence of each team member and creating a culture where they feel valued is essential. At the end of the day, genuinely caring about each other and staying connected to our mission is what keeps everyone motivated. And while there’s no magic formula, I remain committed to preserving and nurturing our unique culture as we continue to grow.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I’m fond of a quote by Gandhi: “Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become your habits, your habits become your values, your values become your destiny”. This resonates deeply with me. I’ve expanded on this, believing that every moment, like right now as I answer this question, is my destiny. Every experience and decision has brought me here. I was reminded of this just last night while in the batting cage with my son. As we worked on his technique and mindset, I felt that, in that moment, I was living my destiny. So embracing, enjoying, and truly living in the present has been my key takeaway from that quote.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
We’ve made strides in various areas, from supporting our veterans to promoting a sense of unity as Americans, which isn’t about politics but our shared identity. We’ve also taken a stance against foreign entities, like the CCP, owning land in America. However, there’s an even more pressing issue that I see: financial discrimination. The distinction between accredited and non-accredited investors is problematic. The very existence of such terms, I believe, is unconstitutional. Why should accredited individuals have access to opportunities that others can’t?
While I strongly believe that companies and investment opportunities should be regulated for the protection of individuals, determining what someone can or cannot partake in based on their financial status is discriminatory. I’m passionate about challenging and changing this. No form of discrimination should be legalized. I acknowledge that other forms of discrimination exist, but this one, entrenched in bureaucracy and politics, limits access to better investment opportunities for the average American. It’s something I’ll fervently advocate against.
How can our readers further follow your work online?
The best distillation of my financial strategies can be found in my bestselling book, “Money Shackles: Thee Breakout Guide to Alternative Investing” at MoneyShackles.com
Thank you so much for sharing these important insights. We wish you continued success and good health!
Operational Scalability: Dutch Mendenhall of RAD Diversified On How To Set Up Systems, Procedures… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.