Episode 29 - Dov Seidman of LRN and Author of “How: Why HOW We Do Anything Means Everything… in Business (and in Life)
Meet Dov, founder and CEO of LRN, a company dedicated to creating ethical, sustainable and profitable business cultures. Have you ever been put to the test ethically in a business deal? Have you worked at an unscrupulous company? Is your boss completely lacking in moral principals? Dov argues that out-behaving your competitors is more important than out-performing them, especially in today's viral/WOM/transparent web-connected world. Enter one bitchy blogger and your world comes apart, right?
The paradox of success now pushes us to pursue significance, not profit. You have permission from Dov to wield charismatic authority in delivering your brand promise. Doesn't that sound like fun? Learn how to imbue your corporation with ethics and why that will pay off in profit like nothing else you can do.
In this episode of DishyMix, Susan brings questions from some of the digital marketing and media world's new and leading CEO's including Rob Simon, CEO of Burst Marketing who asks, " why do people need direction now?" Scott Blumberg, CEO of Return Path asks how to standardize "how." Dakota Sullivan, CMO of Yahoo!'s Blue Lithium asks how we can train our children in this new paradigm. Matt Edelman, CEO of PeopleJam wants to know how we can instill values in a sustainable way in a society overly engaged in shallow pursuits of wealth and celebrity. And Ian Schafer, CEO of Deep Focus, Sarah Fay, President of Isobar USA, Richard Jalichandra, President & CEO at Technorati and Ben T Smith, Chairman of MerchantCircle have more questions for Dov that are answered on the DishyMix blog. http://dishymix.com
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Susan Bratton: Welcome to “Dishy Mix”. I'm your host, Susan Bratton. On today’s show, we have an author and the founder and Chairman and CEO of a company called LRN. Dov Seidman is our guest today, and Dov has just written a book called “How: Why HOW We Do Anything Means Everything…in Business (and in Life)”. Dov runs a company called LRN and it's a company dedicated to things called compliance and ethics, essentially building sustainable and profitable cultures. So we're going to talk a lot about cultures and integrity and ethics on today’s show.
Dov Seidman: In a nutshell, we inspire principled performance in business where we hoped companies foster and reinforce a “do-it-right’ culture that does the right things the right way. My passion for human endeavor and the human condition and human behavior and organizational life that I studied from Philosophy has allowed me to turn into a concrete business and a company that I can lead and pursue in my life.
The reason to invest in a culture that keeps its [++] promise, that connects in authentic ways to anybody it connects with is because that’s the one thing the competition cannot copy. I think we need to show that the world has become so transparent. I am so hyperconnected that there is a new strategy and approach for nice people and good people to finish first. I think information in toddler terms. Information is like a toddler, it goes everywhere, it gets into everything, and can't be controlled.
Susan Bratton: So, let’s welcome Dov. Welcome.
Dov Seidman: Thank you, Susan, nice to be with you.
Susan Bratton: Nice to be with you, too. Thank you so much for coming on the show. I've heard great things about the book. I was encouraged to read it by one of our recent guests, Brad Berens. I picked up a copy and read through it and really enjoyed a lot of what you were saying. What you're saying is about just the manner by which we run our businesses has become more important than anything that we can do in the way we deliver our goods and services.
So what I wanted to understand--first I want to let our listeners know we're going to be talking about essentially what you call “a new platform for competing and that soft qualities are the new hard currency of business”. I think that’s really important especially around reputation and how reputation creates the culture of our organizations, and more importantly than our organizations of the products that we market. The culture is coming through loud and clear to our customers in the way that features and benefits used to. It's the culture of the company and the integrity beyond the features and benefits, the promise of the brand in its entirety. So I think your book is very, very timely.
So I wanted to get to a couple of things and before we get into the book “How”, I want to learn about LRN and how you founded the company and what you do at LRN?
Dov Seidman: In a nutshell, we inspire principled performance in business where we help companies foster and reinforce a “do-it-right” culture that does the right things the right way. We are a BE company. What I mean by BE is before Enron, and for us our mission is authentic. We believe that doing well and doing good can go together and that you can be principled in your pursuit of capitalistic endeavor. What became interesting is that it has become recently practical to be principled if not fashionable and I think that that’s a net good, i.e., more people doing the right thing.
But it dawned on me that more insight was needed as to “How should we do the right thing?”. If so, how would we do the right thing? How would we innovate and find new ways to connect and collaborate with our customers, our own colleagues, investors, and any other stakeholders? That’s what inspired me after 14 years of being in this business to write the book and try to provide a new lens for people to look at what they do through the lens of how they do what they do with an understanding that it might make the ultimate difference in their business and their lives.
Susan Bratton: At one time, you told me you wanted to be an architect when you were growing up, yet you are an incredibly well educated man. You hold degrees in Philosophy from UCLA, Politics and Economics from Oxford, and you got your Law degree from Harvard. How did you start out wanting to be an architect and then get the kind of education you got? How did you end up in the ethics and integrity category? What was that story?
Dov Seidman: Sure. I was a dyslexic and I was learning disabled growing up, and reading and writing was very painful to me. I didn’t even read a book till I was 17 and I didn’t get 1,000 on the NSAT and I took it twice. So growing up, I found a way to navigate the world in more visual ways and I felt that I was drawn to architecture because it was a more visual and concrete way to contribute and make a difference in the world, and at the time, I thought I can make a living doing that.
Then as I challenged myself to overcome some of those disabilities, I started UCLA and I think the only class opened which wasn't popular at the time was a Philosophy class, and I became passionate about Philosophy. It seemed to map to the way I think about things, and I studied Philosophy for 7 years. Then when I went to law school, I studied Theory in Philosophy of Law, but my master’s thesis in Philosophy was on the subject of moral conscience. So I feel blessed and fortunate that my passion for human endeavor and the human condition and human behavior and organizational life that I studied from Philosophy has allowed me to turn into a concrete business and a company that I can lead and pursue in my life.
Susan Bratton: When we were preparing for the interview, you told me you were a reformed lawyer. What did you mean by that?
Dov Seidman: Right. So I went to law school and I practiced law for a few months, and I found myself in a law firm. I reflected on it and felt that it wasn't for me. I had the idea literally an epiphany for LRN, and I quit two months into it, [++] from law school and I spent 18 months trying to found and get LRN the train of LRN out of the station.
I think what's interesting about it is that it was Nixon that opened up China, who went to China. It was Neutron Jack Wells that tried to make GE boundaryless. When lawyers come forward and say, “Carrots and sticks and penalties and just admonishing people to follow the rules is not the way to inspire the type of conduct we want.” People tend to take you more seriously to say that the behaviors you want in business, you want people to comply with law and hold themselves to higher standards. Instead of asking lawyers to insure such, we are now looking at it as an outcome. If we can foster a culture that has deeper commitments and is dedicated to living a set of values, then you will get compliance with law and ethical behavior as an outcome of that.
What makes me a reformed lawyer is that I thought I would be a lawyer but I quickly decided to become an entrepreneur, but one that is leveraging my legal background, I think, in useful ways.
Susan Bratton: Well, you've been really successful with your book, Pulitzer Prize winning journalist Thomas Friedman featured your thinking and excerpts from your book and interviews with you in his best selling book, “The World is Flat”. You've had a lot of success, you've presented to everybody from the National Press Club to the Milken Institute to I think The Defense Industry’s best practices forum. You've been on ABC and CNBC and BBC, you name it, Wall Street Journal, Fortune, Forbes, Business Week, Financial Times, you've been everywhere. What's the single take away that you hope or what's that single piece of impact that you hope you're making with all these exposures and not to leave out “Dishy Mix” listeners.
Dov Seidman: If you go into Webster’s or the Oxford Dictionary and you type in outperform or outbehave or outdance(?) or outnegotiate or outsell or outmaneuver or outfox or outsmart, these are all words because these words describe habits of behavior we've gotten ourselves into in the last decade or two. If you type in outbehave, it's not yet a word, and I believe that the frontier of achieving success and significance in the 21st century and beyond will be in outbehaving the competition. Of course, you need great products and services and you need to continue to outproduce and outperform, but in the past, that allowed us to win. Today, that only keeps us in the game.
The world has become hypertransparent and hyperconnected. Those of us who make the most powerful connections in a connected world and have heighten connection--in other words who collaborate; who can extend trust throughout their global supply chain; who cannot only assert that they have wonderful products and believe in great values but live them day in and day out; and not only say that this is our brand promise but keep it through every interaction; I think are going to be the people who win.
Susan, in business, a value always accrues to those people and companies who do things that are proprietary that the competition can't copy. My family cannot decide to copy yours and I don’t think your family can copy my family. Our different life journeys, how we do things; the personalities; how we've dealt with adversity; how we've celebrated success; every family is unique.
By analogy, every corporate culture is unique. The reason to invest in a culture that keeps its brand promise; that connects in authentic ways to anybody it connects with is because that’s the one thing the competition cannot copy. Therefore, I think it's the source of sustainable advantage going into the future in a world in which our pricing, our products, even our business strategies, and business model can be copied and reverse engineered not in six years, in six months, and even sometimes in six weeks.
Susan Bratton: And exactly, how do we do that, Dov? You talk about creating reputation and culture in a wired world. We all understand the transparency of business today. It can't just come from the top down. It has to be entirely imbued in the organization, and there are people listening right now to you who are in control as the CEO of the company, as the founder, the entrepreneur. There are people who work in organizations where they don’t feel like they can make a difference. How do we handle that?
Dov Seidman: It such a deep and broad question. You used an interesting word - control. I think that CEOs who get this--I don’t want to understand that they are no longer in control--that the world is wired and connected in ways and everybody is communicating and blogging and acting out there. The only control we have is not commands from on high or boundaries with carrots and sticks to motivate people, to live within the rules. The only control we have is values. If a CEO can enlist a community of employees in values and create shared understandings as to what these values look like in action--how do we behave our values? The ones who think that way are going to innovate in doing that.
Let me give you an example of innovating and how, then I'll start with something pretty basic. There's an individual in New York who sells doughnuts for a living, and the person across the street from him also sells doughnuts. They each sell a very fresh, well priced doughnut, but the one person outsells the other three to one. So he was observed to do one thing that the other person doesn’t do. He puts a tray on his stand and he lets people take or make their own change. So he's not standing there distrusting his customers and counting change. He lets people take their own change, which allows him to spend more time serving doughnuts. But most importantly, people experienced that sensation of trust and they repaid that trust with a loyalty that brought them back again and again.
This doughnut person innovated in how he connected with his customer by extending trust by saying, “I trust you to make your own change.” To me that is a metaphor. Everyone of us in business has to become that doughnut person. We need to find new ways to form these connections and create trust in our relationships because when there is trust, people innovate. In order to innovate, someone needs to take a risk. Any innovation is preceded by someone having the courage to do something different than they did before.
The only acronym in the book is called “TRIP”. When there’s trust in the room, people take rational risks, and when they do that, they innovate. When they innovate, they create progress. So T for trust, R for risk, I for innovation and P for progress - TRIP. I think that the CEOs who get it are the ones who don’t distrust their colleagues, but rather they extend trust to them as long as they have shared understandings around the values they live by.
Susan Bratton: So we're going to take a break after this next question that I ask you. When we come back from that break, I have done my homework for you, Dov. I have a whole series of questions from CEOs that are “Dishy Mix” listeners who have read your book and wanted to ask you something additional. So we're going to do that when we come back from break.
But before we go to break, I want to set a scene for you. I have either been involved with or tangentially associated with companies who have done the following things. They have mailed out empty boxes or boxes with bricks to make their numbers for the quarter. They have shipped things to phantom warehouses to phantom corporations. They’ve put customer data on a disk and sold it for millions of dollars and then gotten the disk back. I literally work for a company that had an institutionalized program called the “Vendor Extortion Program”, VEP, where they would actually shake down their vendors for orders in exchange for giving that vendor their business. They would take business from that vendor and that was the condition of their relationship.
These are some of the things that come off the top of my head. I have been in those organizations and been 35 years old. Old enough to know better and I knew I hated it, and I felt like I couldn't do anything about it. I know that there are people who are listening to me tell these stories, who’ve been in exactly those positions. What can we do with that?
Dov Seidman: The best way to do that is to focus--any community has a few socio past, a few people who believe that they [++].
Susan Bratton: They're usually in charge.
Dov Seidman: Well, we need to create cultures that don’t--with these apples that get thrown out of the barrel and they don’t get promoted. I assume that every company can have some percentage of people who want to gain the system. I don’t believe in focusing on them, I believe in focusing on the 98% of people whose hearts are in the right place. If we can connect with them, probably they will throw the 2 % out of the barrel way before management finds them. In the right culture, the bad guys or gals don’t get to the top.
I think what matters here is--we don’t need to prove that bad guys won't get to the top. I think we need to show that the world has become so transparent and so hyperconnected that there is a new strategy and approach for nice people and good people to finish first. That it is a more sure path to not just success, but more importantly, enduring success which is we're all after.
Now, I can give you a defensive reason to do the right thing, in a world in which nothing stays hidden, we have to act as though we have nothing to hide. But the only way to act as though we've nothing to hide in a world in which nothing stays hidden is in fact, you have nothing to hide. So that’s a practical reason to be consistent and to be fair and honest.
But more importantly, we can lean into this world. We can turn the conditions of transparency to our advantage by doing the right thing. I read about the University of Michigan Health Systems. They were being sued with others for medical malpractice. They said, “The right thing to do here is to apologize because we're in the healing business, and if we've wronged any of our patients, why don’t we start by apologizing?”
Now, they could have hankered down and admitted nothing and gone to court and said, “We can outspend these people litigation.” Instead, they decided to apologize and their malpractice lawsuits went down by 50% as did they payouts. Instead of thinking in terms of what they can and can't do, “We can fight these lawsuits”, they’d started to think in terms of what they should and should not do, and what they should not do here is apologize whenever they made a mistake. So one of the habits of mind that we need to shift to in a how-world, is from what we can and can't do to what we should and should not do.
Susan Bratton: Well, one of the very interesting points about that particular story in the book is that the doctors, when they realized they’d made a mistake, they were to apologize immediately. It wasn't about waiting until the customer realized they’d been wronged. The doctor often knows they’ve made a mistake before their patient knows, and I liked the immediacy of the apology.
Just recently, I screwed up an ad campaign for one of my sponsors and I had just read your book. I called that customer and I said, “Hey, we didn’t put your campaign up in time. We didn’t do it. We missed it. We screwed it up, and I want to let you know what I'm doing, how I fixed it and what I'm going to do to make good for it.” It was great, it made me feel really good to do that.
Dov Seidman: Right, absolutely.
Susan Bratton: So we need some little sign for our offices to remind us everyday that it feels really good to do the right thing.
We're going to take a short break to thank and take care of our sponsors for the show. When we come back, we're going to lay on you some really good questions from some of our listeners. So you'll stay with us, I hope?
Dov Seidman: Absolutely.
Susan Bratton: All right, here we go. Let's thank our sponsors for “Dishy Mix”. I'm your host, Susan Bratton, and I'm with Dov Seidman from LRN. Stay tuned.
Susan Bratton: All right. We're back and we have Dov Seidman. Now, Dov has written really good book but I’d highly recommend you pick up and read through it. It’s called “How: Why HOW We Do Anything Means Everything…in Business (and in Life)”. I have a number of questions from some of our listeners that I've collected ahead of time to ask Dov. The interesting thing is that in many cases, I would say in at least 50% of the cases, there were multiple people who had essentially the same question that they wanted to know you and that they thought they were excellent questions.
So I'm going to read in the first case, I'm just going to read two questions to you that are essentially two versions of it and then you can answer one time. So here's the first one. It's a combination of questions from Rob Simon who is the CEO of Burst Marketing and Brad Berens, PhD and Chief Content Officer of DMG World Media and the iMedia Connection site.
So here's Rob’s question, “Dov, why do you think that people in business today seem to need more direction and help on how to provide the how of doing business?” And Brad writes, “The real problem with business ethics is that often it's hard to quantify the ROI of those ethics or perhaps another way of putting it is that the ethical ways are often harder and sometimes more expensive in the short term than the fast and dirty way? In this, it's like getting marketing folks to take interactive into the equation early rather than at the last moment, still a perennial problem.”
“So how does Dov get his clients to take the ethical questions on early rather than after something has blown up in the company’s face, sort of like the fake Wal-Mart blogs? Also where in the corporate food chain just does this need to come from? Sure, it's easy to say that it's up to the C Suite to create an ethical corporate culture, but isn’t that a cap out(?)? How does an entry level person embrace what Dov calls the ‘hows’ and not get fired?”
Dov Seidman: Right. Well, there's more than two questions there but…
Susan Bratton: Yes, a lot there.
Dov Seidman: …they're related in meaningful ways. So why is it so hard? Think of the habits of [++] thinking and of behavior. In the ‘80s and ‘90s, I believe we we’re in a “Just do it” society. Bosses told us, “Just get it done. I don’t care how.” Obviously, don’t do something egregious like use child as labor. But other than that, it was about bottom line - results, speed, ingenuity, efficiency, “Just get it done I don’t care how.” So we developed habits of speed and the cleverness.
Then the world changed and became flat and connected where how we do what we do is in plain view. So we not only need to shed some of that habits such as thinking in terms of command and control, divide and conquer, hoarding information and shift our habits to reaching out, apologizing when we need to, keeping promises, being consistent and not just managing our reputation through communications but earning our reputation one interaction at a time.
This has to start at the top of any organization. Tones (?) from the top matters now more than ever. We're in a transition period, it's sometimes hard to do the right thing. It feels an convenient. Sometimes we know we're acting on principle because it feels difficult, unpopular is not dangerous, but that’s probably when you know you should act on principle. Overtime, that will become your new habit.
Another way to look at all of these is we used to win with products and then we started to win with all sorts of services, but everybody’s answering the phone on two rings. You can walk into a store and say, “I'd like to buy a plasma TV screen and I'm looking for a 42 incher.” The salesperson could be wonderful with service and say, “Let me take a walk with you.” But that’s service could be copied, anybody can take a walk.
How is what happens during the walk is an open, honest, authentic conversation. Are you prepared to tell that customer that they don’t need the 42 incher, that it's a much better deal if they were to get this one? And because the business world has evolved to offering rich, meaningful, lasting experiences; we are starting to realize that experiences and customer experiences are the outcome of human interaction. Human interaction is good and valuable and inspiring when it's honest and we get our hows right. So it all bodes well but we need to foster new habits. We need to thing differently like the doughnut person that I referred to earlier, like the doctors, and understand that it starts at the tone at the top but everybody needs to lean in and engage.
Susan Bratton: OK, next question, perfect follow up. This is from (Scott?) Matt Blumberg, he is the CEO of a company called Return Path. He says, “It's easy to standardized the how of a company, Six Sigma Manufacturing is the extreme example of this. But we human have gotten very good since the days of the first assembly line that’s churning out identical widgets. How do we go about standardizing the how of a company? Then, even if we figure out how to do that, how do we make it genuine and authentic?”
Dov Seidman: It's such a wonderful question. Look at all the self-help books out there. It's so easy to change what? You can't fool you, you discontinue a product and you invent another one. All of our hows, even how we lose five pounds or how we get better returning emails? Any how, it's tough for us as people to make changes, but therefore, those who can get a ride have a real advantage.
The way to this is to understand what Aristotle said, “Excellence is not a single act. It's a habit.” We need to go to a how gym and build some how muscle. Doing the inconvenient thing over and over, it finally will become easier for us. The way organization used to do that is they need to create a richly reinforcing system. If we talk the right talk and then walk the right talk. If we celebrate and reward how behaviors and discipline and punish the opposite. If those are the people that we promote is in recruiting, we recruit the people to the company that share these values. If we educate people around these things, if we come out of it in a multifaceted way, then we can start to create new habits.
But most importantly, if we do it and we start to thrive and we do it and that’s why the best and brightest simply don’t leave even though it's so easy to leave a company. All you need to do is put your resume online. If this is what creates a deeper connections with our customers and our employees in a world in which these connections are getting thinner and thinner because you can see greener grass or a competitor’s products so easily and efficiently, then we will continue to go to that gym and most importantly, innovate. We will find new ways to create trust and authenticity in our relationships.
Susan Bratton: I'm conscious of our time but I've got a couple of really powerful questions for you. The next one is a combination again of two people who are coming at this thing together. Matt Edelman, the CEO of a marvelous start up called PeopleJam and he wrote, “One person, one author, one book certainly can have an impact and you will with your target audience. Adults will be influenced by your words. But the truth is that the kind of values you're encouraging in life are instilled at a very young age. How can our society advance these values in a sustainable way in the face of the overwhelming amount of media attention given to the comparatively shallow pursuits of celebrities and the overrich and the media or cries of the Internet sites that cater to aspirations about looks, wealth and material possessions, i.e., the ends not the means?”
Then, Dakota Sullivan, who is the CMO of BlueLithium recently acquired by Yahoo! wrote, “In a world where information is infinite and infinitely accessible, why do we still teach kids by getting them to memorize or hoard information? Why not focus instead on teaching kids how to access information, how to use Cypher(?) managed and avoid becoming overwhelmed by it? Instead of training children to retain and become weighed down by information, shouldn’t we be training them how to become uplifted and empowered by it?”
Dov Seidman: Susan, this is a profoundly important question and I can't agree more with those questions that it starts with--I recently became a father for the first time and I think information in toddler terms. Information is like a toddler--it goes everywhere, it gets into everything, and can't be controlled. Let's take the resume for example. Every person who’s had the opportunity to tell their entire life story in one page--the resume is the most efficient device society has created, everybody’s life in one page. But that’s in a world in which we can control our life story and show up at a job interview and that’s all we got asked, about things on our resume. Today, employers go on to MySpace and they Google us and our reputation precedes us before we get there.
So in a world in which we cannot control our life story by writing our resume, the only thing we can control is how we live our lives. Do we say what we mean? Do we mean what we say? Do we follow through? Now, children are connecting in this world online in more fascinating ways than we as adults will ever contemplate. But the one thing we need to do is bring our wisdom and experience to kids and get them to see that their only control is how they live their lives. We need to engage them in the realm of values. We controlled kids by saying physically, “Go to your room. Don’t watch TV. Be in your bed by 9 o’clock.” That no longer works, external controls can't work in a world in which kids are surfing the world wide net. So we need to put the controls in kids by engaging them in the subject of values.
I think this has profound implications for education. I believe in the ‘80s and ‘90s our educational institutions became somewhat corrupted. In a world of what education focused on skills development, specialized knowledge. We sent people to companies after they graduated college who could be performance-managed and the people who met their deliverables the fastest get ahead. We created great human doings, people who did a lot of things.
I believe in a connected world, we need to go back to character development and move from creating human doings to human beings. I think that with that, we're going to see a little bit of a Renaissance for liberal arts education--humanity, sociology, philosophy, English literature--the type of education that creates empathy and understanding and the ability to connect to people not like us and understand the human condition more and how society works. It's promising and I think education will evolve more towards character development at a time in which character is going to become our destiny, I believe, more than ever.
Susan Bratton: I've always felt character is our destiny anyway. In California, we call that karma as you know, you're from LA.
Dov Seidman: Right.
Susan Bratton: So, Dov, we're really out of time. I have three or four more excellent, really well thought of questions. I'm going to ask you a favor here and tell me if this is something you might be willing to do. In lieu of the time and to taking up our listeners’ busy time, would you be willing to reply to the rest of the questions? I think I have four more from people like Sarah Fay, the President of Isobar USA; from Ian Schafer, the CEO of Deep Focus: Richard Jalichandra form Technorati; Jim Lauderback from Revision3; Ben Smith from Merchant Circle. We've got some people with great questions. They sound like there's four of them. Would you be willing if I send them to you, for you to reply to them in email and I could post them on the “Dishy Mix” blog so that people who wanted to get more of this great juicy information that you're providing might be able to at least read your perspective on their questions?
Dov Seidman: I would be delighted to.
Susan Bratton: That sounds great. So you can be a guest blogger on “Dishy Mix” with these last four really good questions. All right, we’ll do it that way then. I just want to thank you so much for coming on the show. I don’t think I've ever had a more important subject on “Dishy Mix”. Sometimes we do a gossip show, sometimes we talk about the world of Internet marketing. But to talk about integrity and imbuing that in our daily lives is singularly the most important thing that we can do besides love each other and our families. So thanks for bringing that message to the world and bringing it to our listeners today.
Dov Seidman: It's a genuine pleasure. Thank you so much, Susan.
Susan Bratton: Thanks, Dov.
So, thank you for listening to the show today. We do a transcript of the show. If you'd like to print it out and read it, you’ll get to read what Dov says all over again. You can find that at PersonalLifeMedia.com. Of course, I’ll be printing Dov’s responses to the rest of the questions at DishyMix.com.
Thanks so much for tuning in today. I hope it was valuable and impacted your life, I know it will impact mine. Have a great day, and I hope I'll have you on the show next week. Take care.
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