Blind Spots & Bad Decisions: Kevin McCarthy's Fall from Grace and Rise to Wisdom
Brent Peterson (00:01.292)
Welcome to this episode of Uncharted Entrepreneurship. Today I have Kevin McCarthy. He is a longtime art entrepreneur. Kevin, do an introduction. Tell us your day-to-day role and one of your passions.
Kevin McCarthy (00:13.987)
My day-to-day role is trying to keep my head above water with all the minutiae of work that goes involved with being an entrepreneur, right? Because we wear a lot of hats. What was the second part of your question, Brent? I'm getting old. I already forgot.
Brent Peterson (00:26.466)
What? No, it's all right. What do you have for a passion in life? Outside of work.
Kevin McCarthy (00:32.001)
My passion, well, believe it or not, my passion in life falls right in line with the work because that's what I do. Part of what I do is as a keynote speaker and a leadership development trainer is to help people make better decisions and build better relationships. I'm passionate about it. Who was it? Was it W.C. Fields? Correct me if I'm wrong, who said, if you love what you do, you won't work a day in your life? That's
Brent Peterson (00:56.642)
Yeah, absolutely. That's such a true statement. Yeah, that's awesome. Yeah, we've had some pretty good speakers on. I know Jack Daly, he's really big into the sales and super inspirational. Jack has done more than 100 marathons, which is very inspirational for me. And I know that it's always great to hear a passionate speaker.
So I know one of the things that we talked about in the green room, but actually, you know what? I forgot to do Kevin before we do that. I almost forgot my joke before we start the content. I need to tell you a joke gonna do a it's called the free joke project and You just have to give me a rating 8 through 13. So here we go
Brent Peterson (01:45.58)
If you see a road sign that says, says survey crew ahead, they're not actually interested in your opinion. I know that now.
Kevin McCarthy (01:57.345)
Then you want my rating?
Brent Peterson (01:58.946)
Yeah.
Kevin McCarthy (02:02.081)
I give that a nine.
Brent Peterson (02:04.142)
Oh, all right. Well, thanks. I appreciate that. Yeah, that's better than I thought you'd give me. And I have poor delivery, so I apologize for that.
Kevin McCarthy (02:15.283)
Now it did remind me of what my daughter would tell me. Dad, that's just another dad joke.
Brent Peterson (02:20.106)
Yes, definitely. was definitely a dad joke. All right. So Kevin, let's get back on track. Tell us a little bit about your younger entrepreneurial days. What exciting things did you come up with as a younger entrepreneur?
Kevin McCarthy (02:34.945)
Yeah, so I've been.
an entrepreneur for as long as I can remember. The proverbial lemonade stand in the front yard as a kid, selling whatever I could get my hands on that I could sell to my buddies. I think I was in junior achievement when I was a young teenager. So there's always been a passion to go out and create something that would help people with whatever this problem was.
and it was never really locked into any given problem and solution. My parents were both entrepreneurs, so it's just kind of been bred in me. Probably the most successful or the beginning of my real upward trajectory was starting a real estate franchise with Century 21. And we started that from scratch. People thought we were crazy.
The interest rates were double digits for homes back then. And that project, we went from ground zero to being the number one Century 21 franchise in Arizona within two years. And then we were on the top 21 list, which was the big deal within that franchise. And we were number 13th in the nation within four years. So that was beginning of really a lot of other fun projects.
Brent Peterson (04:05.966)
Yeah, and those I would imagine that was the time when everybody still wants to move to Arizona, especially back then. And I probably know when the date or the time was, but everybody really want you're in the right place at the right time. that's one of the, know, that's luck is not always part of it, but definitely being in the right place at the right time is a great way to start off an entrepreneurial career, right?
Kevin McCarthy (04:28.855)
Yeah, right place, right time for sure. And just the willingness to take a risk. So what was really important about this story? A couple things that really, if you're thinking about starting a business, here's how that one started. I was in my living room with my mother. My mother owned a franchise with two partners, a Century 21 franchise.
She was frustrated because the two partners in her, they didn't get along. So I just said, well, let's buy them out. Now, mind you, I didn't have any money. And my mother didn't have any money to buy them out.
And she looked at me and she said, well, you don't have any money. How is that going to work? said, we'll find that. We'll figure it out. but you've got to figure out whether you want to buy them out. So we decided to buy them out. Well, I had a friend of mine who I had done business with. And I made a call to him, and he loved the idea of partnering up and buying her partners out. And so, excuse me, he didn't have a lot of money either.
We were all young, we were all in our 20s.
My mother presents an offer. We decided to give them a buy sell offer. So she presented an offer that was higher than what the value of the business was. Knowing that they weren't going to sell, they didn't sell, but they bought her out for the value that we had established. And so that gave us a little bit of seed money, but then we went to, my buddy and I went to an investor friend that he knew, and we got the money and sure enough, we started a franchise of our own.
Kevin McCarthy (06:02.445)
was 7,400 square feet on a busy intersection in Mesa, Arizona with just the three of us. And all the other Century 21 founders, franchise owners thought we were nuts. The double-digit interest rates were just coming off of a high, tough economy basically. But we had a plan.
The plan was actually written back when business plans were really well thought out and written out. And so we spent a lot of time writing the business plan and we were innovative. And this is a real key is that you have to think about breaking the mold. Century 21 is a very structured franchise, if you will.
We decided we were going to do things differently than any other franchise in that system had done. And that is probably the key to our success is one, we offered 100 % commission program. Anybody in real estate that's listening already knows right off the bat, Century 21 doesn't have 100 % program.
They're what's considered a commission split type of a franchise. But we thought, well, why not just sell a rental space to some of the top agents and give them 100 % of the commission?
Now the interesting part was we had a 6 % franchise fee. So how does that work? Did we go broke or did we have to pay out of pocket? No, we just called it 100 % of what we get. And the agents loved it. So they got 94 % of the full commission, 6 % went to the headquarters. We charged a rent to some of the office space. Nonetheless, long story short is we had 94, 95 agents at any given time, very popular, very busy.
Kevin McCarthy (07:56.501)
location and we outgrew everybody's expectations including our own. didn't think we were going to be that successful that fast. We knew it would be a lot of hard work. So but being innovative and taking a risk even though you know we didn't have any money it's like we can make this work let's figure it out.
Brent Peterson (08:18.264)
Yeah, that's awesome. So I know in the green room, we talked a little bit about blind spots and how to identify those. I mentioned the Jahari window, which is that there's always a blind spot for you and even for the people that know you. Tell us a little bit about how you kind of found that or how did you discover that blind spot that could have been a blind spot in your own career?
Kevin McCarthy (08:40.763)
yeah, now we're getting into blind spots and I'm the chief of blind spots. I've had plenty.
So let me carry forward then to get to that, you know, get to an answer to your question. After running the 13th largest Century 21 franchise, I was offered an opportunity to go out and speak professionally for Century 21 and then eventually on my own, while I was on the traveling around the country, I decided to build a software project and then turned around and sold that software project to a publicly held company, became president for them. And it was at the top of my game. And then,
the dot com bubble burst and all the stock that I was given as an insider in the publicly held company was restricted.
But I had learned how to margin it. I didn't know what that meant. That was really dumb. What that meant basically is I learned how to borrow against the value of the portfolio of, I couldn't sell the stock. Well, when the dot com bubble burst, Merrill Lynch wanted all their money back and I had a good time spending it, so I didn't really have it. And so now, Brent, was in the Northwest sitting at a coffee table with a buddy of mine from church telling him I just lost my inheritance, if you will.
And he said, well listen, do you have anything left? I said, well I've got a little bit of capital stuffed away. He goes, I've got an opportunity where I'm invested in a pre-IPO that's getting ready to go public. And I thought, well my ears perked up. I had just gone through that whole publicly held company thing in stock.
Kevin McCarthy (10:23.051)
And so he said, I can introduce you to the treasure if you want to ask questions. And so I thought, well, this is great. This might set me back on my feet. So I met the treasurer of this company. I liked what he had to say. I pulled, I wrote a check. That's one of those paper things we used to have to pull out whenever we wanted to buy stuff. And I wrote a check for $10,000, became proud owner of shares and that up and coming company. They'd been in business six years and we're getting ready to go public.
So everything looked great. While I'm waiting for that company to go public, my same buddy at church called and said, hey, the CEO of that company heard about your business development background, wants to hire you as a consultant for 30 days. I thought, well, after a little bit of figuring out and juggling my schedule, I decided to go ahead and do it. So I ended up becoming a consultant for this up and coming public company, and it was supposed to be 30 days. It turned out to be 15 months.
And Brent, the punchline is this, I ended up spending 33 months in a federal prison for a crime I didn't knowingly commit because I had blind spots. I ended up working for this guy, not realizing...
that he, according to the FBI, he was one of the most cunning con men in the history of the state of Washington. And he had taken $93 million from over 5,000 investors over seven years. He was basically pulling a stock fraud, telling everybody he was going public, taking their money, and then always had an excuse for why the public offering had been postponed or delayed.
Well, that 33 months in a federal prison, that'll rattle anybody's cage. It turned out it was a pretty good experience for me. I wouldn't recommend it for anybody listening. But it gave me an opportunity to do something most executives and entrepreneurs don't get a chance to do. And that is to get away from the minutia and the craziness of running business, to sit down quietly and really reflect and try to understand who am I?
Kevin McCarthy (12:35.085)
How did I not know he was a criminal? How could I possibly have worked for this guy for 15 months that closely and not seen the red flags?
So I had to answer a lot of questions and that began my journey. This was back in 2004 to 2007. That began my journey into cognitive psychology, probably and almost certainly because I needed to just figure out what the heck was going on. How could I not have known? And then that turned into today's passion, Brent, which is now that I understand these blind spots and how we have unconscious biases and thinking errors and limit
and all these factors that go into how we see the world and how it's not so clear as we think it is. That's what I do. So now I turn that study into just a passion, which is a business which doesn't feel like work.
Brent Peterson (13:34.414)
Yeah, that's awesome. tell us a little bit about your talk and your motivational speaking. What do you speak about when you get up on stage? What is it that you kind of bring to the audience and what is it that you hope they receive when you talk about that?
Kevin McCarthy (13:51.137)
I speak to lot of audiences, quite a variety in fact. I speak to lot of financial audiences. I've done a lot of work with AICPA. I speak to fraud investigators. speak to...
internal auditors, different companies. Lennox hired me and it was quite fun actually. They put my wife and I on a cruise ship and I ended up speaking on a cruise ship for Lennox, the HVAC company. And so when I'm speaking, it's really, there's a lot of variance in how I present and the subjects. always cater everything to meet the goals of the planners of the event. But the underlying message that they all want, first of all, they want
They want me to tell my story and I'm happy to tell the story because I like my wounds and now I need to help other people not even get the wounds, right? But it's always about making better decisions and building stronger, better relationships. And what really fuels that is in all my research,
most organizations make a huge error in their hiring and promotion process. And everybody I share this with would agree. In fact, Gallup has in over 80 years, their research backs this up, which is we hire independent contributors and subject matter experts. They do a great job. And so we promote them into leadership. We make them supervisors and managers and directors and so forth, right? And we forget that just
Just because they're great at their work, that doesn't make them great at leading people. So that gap right there is the core of the presentations I bring forth. It's like, if you're already in leadership, you need to learn how to connect with your people, because you're the problem. Gallup says this. They said in over 80 years of research,
Kevin McCarthy (15:50.295)
we've found the most startling, most profound discovery we've made is that 70 % of engagement boils down to the manager. So it boils down to you or me if we're leading people. We need to become better at making better decisions and building stronger teams and stronger relationships with our people.
Brent Peterson (16:15.438)
Yeah, that's in this day and age of AI that's even more important, right? Because I mean, I've literally just got off some emails where people said that, you know, the human involvement in content is dead. And it's sort of sad to hear, right? So I'm hoping that you and I will be able to read content. And if nobody has a hand in making it.
Kevin McCarthy (16:29.336)
Huh.
Brent Peterson (16:38.318)
I guess it's going to be a different world, right? We're going to be reading stuff that is written by something that doesn't really know us. And it does apply to our managerial backgrounds and how we interact with our subordinates and how they interact with us. Yeah, that's fantastic. know, if you had some advice then or had some wisdom to share, what would you share with?
somebody that is sort of entering a position that if you had some 2020 hindsight, what is it that if you could give them one thing, what would be that thing you would tell somebody that's entering there to be aware of or to sort of keep your blind to keep an eye on your blind spot?
Kevin McCarthy (17:26.241)
Right? It's
First of all, we don't know we have blind spots because that's the nature of blind spots, right? And we all tend to be good people with good intentions. Well, maybe not the psychopaths and sociopaths, but that's different. But we all tend to be good people with good intentions. We feel like we're usually doing better than we are. It's just the way we work. That's the lens that we see the world and we see ourselves through. So it's really important to remain humble and vulnerable and transparent.
parent so that you can actually connect with others. The day and age of command and control, I'm the boss, you'll do as I say, and do it right and do it now. mean, those days are, they're dying. So if you're still stuck in those days, you might as well get on the bandwagon and realize that your people don't care for that. They don't want it, and they'll leave like in droves if that's the way that you're going to run your organization. People want connection. They don't want a boss, they want a coach.
They want somebody who cares, not just about the end result or the bottom line, but they want somebody who cares about them as individuals. They don't want to be a means to the end. They want to be part of the overall project. They want to feel valued and seen and heard so that they'll give you 100 % of their best energy.
Because right now, you know, anything that you read in the polls and Gallup has backed this research up for, again, 80 years. Most, about half the organizations are disengaged right now. Worse than that, there's about 18 % of every organization that is actively sabotaging the organization. means they're bad mouthing management. They're poisoning the minds of your good people on their way out the door. So how do you, how do you get more engagement where somebody feels like they want to give you
Kevin McCarthy (19:18.223)
hundred percent of their energy because they like to be where they're at. Well the only way they can do that is it's you. You've got to be a boss, a manager, a leader that they want to follow. A leader that they that they care about because they know you care for them. And if you don't, if they don't sense that and they sense that you're just they're just a means to an end or that you're better than them because you've got a bigger title then you just count on the fact that there's they're already looking for another job.
It's just a matter of time.
Brent Peterson (19:49.036)
Yeah, I worked in, or I had the privilege of selling our company and working and I know that new management saw us as, saw everybody as disposable and it was very transactional and it was very disheartening to go from sort of a nurturing environment to somewhere where if you're a developer or whatever you do, know, you're, if you don't have a job, if the company doesn't have work, you're out.
Kevin McCarthy (20:16.515)
Hmm.
Brent Peterson (20:16.761)
There's no coaching or helping them to find a new skill set. I can totally understand that, where you're coming from, especially in the empathy side and being a boss that cares about your employees and wants to see more of them, what your output is. And I think too, nowadays with younger people having different values than some of the more seasoned or mature.
entrepreneurs out there would have, like there's different values that they don't always see straight up money as a value. They see some time off and some work-life balance and all those other things that myself as an older entrepreneur might not understand unless you listen to what your employees are saying.
Kevin McCarthy (21:04.673)
Yeah. And that's a very good point to emphasize the point. don't, the younger generation, they don't care as much about the money. Right. I mean, it's important, but they don't, it's not what drives a lot of them.
What drives them is a sense of purpose and accomplishment and mission. So if they can be part of an organization because they believe in its values and they believe in its mission, they're all about it. The problem is that they'll jump into an organization because of that, but then they'll begin to see very quickly that the individual manager, their boss, doesn't live it up, doesn't live out those values.
and that mission, they're just again treating them like a means to an end. Not because they're bad people, it's just because they don't know or they're not applying what they know if they do know how to connect with those people. So you've got to connect with your people. It doesn't matter how many ping pong tables you have or if you're serving beer on tap in the break room or have couches in the break room. All those frills, they might be niceties, but nobody's going to stick around.
because you have those frills. They're gonna stick around if they like their boss. People don't quit their job, Brent. They quit their boss.
Brent Peterson (22:29.742)
Yeah, such a great point. Kevin, we have a few minutes left. And as I close out the podcast, I give everybody a chance to do a shameless plug about anything they'd like, would you like to plug today?
Kevin McCarthy (22:40.067)
Well, thanks for asking. Well, in the same vein that we're in, in 2015, I decided as a keynote speaker, I don't have a lot of time, but I need an instrument that I can use to help demonstrate what this connection looks like. Why is it that everybody's so different? What causes personality rubs? And what causes people to have conflict? that day, so I looked around at all the different assessments that are out there. I'm advanced.
certified in disc in three different companies, so I love the disc assessment, but they're all expensive. I couldn't afford to have my entire audience take an assessment. Not to mention, it takes 10, 12, 15 minutes if you're fast, maybe eight or nine to fill out these forms, right? So I got some smart people and we developed in 2015 the blind spot assessment. It takes less than three minutes to complete the questionnaire. The results are astoundingly accurate and the PDF report is very easy to
It's easy enough to where it becomes immediately actionable and that is what is really important. So then flash forward that was 2015. I debuted it in 2016 It's been going like wildfire 2020. I started actually monetizing it quite by accident This is an organic business in the sense that I had somebody come to me and say hey, can I license that? I love that assessment. I thought well, why not? So I started licensing it now I have companies I even have coaches all over the world that
that are actually licensing the assessment and using some of my other intellectual property for training and other tools that I provide for them. So there's my shameless plug, Brent, is the blind spot assessment. The process to get the blind spot assessment, simple, just reach out. We'll have a little 15, 20 minute meeting. I'll find out about you. You can find out more about me and then I'll send you a complimentary copy of the blind spot assessment. If you like it, I'll give you a 14 day free trial, which by the way is unlimited use.
it really gets make so much sense because you don't have to pay per use. Pay a subscription fee, you can use it as much as you want for lead gen, for training, for keynote speaking, for HR, for candidate screening. I mean there's a lot of different uses. In fact, our latest client was American Board of Radiology recently signed up for an account because they told me they want to embed the blind spot assessment into their internal leadership development process.
Kevin McCarthy (25:09.647)
So there you go, Brent.
Brent Peterson (25:11.67)
That's awesome. And how do they get in touch with you?
Kevin McCarthy (25:15.059)
The best way to reach out to me is, I'll give you my email address, kevin at blindspots.com. Now don't spam me. If you've got any audience members that think, my goodness, don't do that. But if you're sincere, just reach out. There's my email address. Blindspots.com is my speaking website. Blindspotassessments.com is the assessment business.
Brent Peterson (25:38.358)
Awesome, thank you, Kevin McCarthy. Blindspotassessment.com, thank you so much. It's been such a great conversation.
Kevin McCarthy (25:46.849)
Yes, thanks for having me, Brent. Appreciate that.