Brock Briggs  0:00 

Hello and welcome to the Scuttlebutt podcast. I'm your host, Brock Briggs. And each week, I bring you a conversation with a current or former service member at the top of their craft. These conversations will make you smarter. They'll help you explore new ideas that challenge you personally and professionally and they'll make you more money. Today, I'm speaking with Josh Thompson, a former Army medevac pilot and now a fractional CFO. In this conversation, we talk about the family dynamics of the military and how to live for your legacy and not your resume. We hear about Josh's experience in command of several field hospitals in the army and how he managed finances for several struggling activities.

He also goes in depth on the challenges facing medical services, both in a civilian capacity and in the service from a readiness perspective. I hit him with a hot question of whether or not pregnant women should be allowed in the service or not as well enough to listen through to hear his take on that. We also talk about some of the financial challenges SMB owners face and the best practices for having clean financials and operations, M&A and raising money. You can find this episode as well as all other scuttlebutt episodes, transcripts, weekly newsletter, and the YouTube channel, all at scuttlebuttpodcast.co. Please enjoy this episode with Josh Thompson.

Brock Briggs 

What do you think is the thing that you're most anticipating about this PCS move that you guys are going through as a family?

Josh Thompson  1:39 

I think for me, the thing I'm anticipating the most is just, it's like, how do we reconnect, right? I got, you know, my three kids are, they're 12, 14 and 16. You know, the social dynamics there are a lot stronger, like when they were little, you know, it was no big deal to pick up and move. They, you know, they didn't have all these same ties and connections and now they're on all these, you know, club and travel sports teams. My daughter plays club volleyball, my son's on a club travel soccer team, my youngest is plugged in with peewee football and it's like, man, all the social aspects are a lot more important for them.

And so I think, as far as like plugging in, in the new community, it's like, how do we hit the ground, when we get to our new duty station? How do we get them reconnected? And then just kind of stabilize the family, you know, it's much more disruptive at this point. My daughter's third high school and three years and so that, you know, that's hard when you're a kid and you know, the friendship dynamics are, as you know, as important as they are when you're, you know, in your teens. So, I think that's one of the things where I'm really kind of like, I don't know, if I'm anticipating it, but it's like, okay, how do we minimize the turbulence, you know, in this season of transition?

Brock Briggs  3:10 

How has your approach to PCSing and uprooting and kind of moving your family around? How has that changed over time? Because you've done so many of them through either through your service or now your wife's, you know, still on active duty. What's different? And have you learned anything that is like, oh, this is the most important thing when it comes to kind of having a successful PCS?

Josh Thompson  3:40 

The approach has definitely changed as the family has grown, right? Like when it was just my wife, and I, it was sort of like, okay, cool, like, where do we want to live? You know, wherever, in the community around, there was the fun stuff. You know, there was maybe a little bit of an aspect of like, should we live on base? Or should we live off base, because if we live off base, then we could, you know, maybe pick up an investment property or something like that. But now, the approach is very much changed to like, how do we minimize the, you know, how do we create the least amount of turbulence or the smallest week to kind of minimize the impact to everybody? And so now, you know, a lot of the decisions are around like, you know, I mentioned you know, my kids sports, right? So it's like, okay, where's the good club volleyball team? Where's the good schools?

You know, while still kind of balancing like, we don't want to have this crazy commute to and from the base. Is it a good place for us to invest? Like one of our things that we've always done is we generally will buy a house wherever we go, you know, we use that VA loan and make an investment and that's worked very well for us. I'm in the army so with the exception of Fort Irwin, California, which is way out in the middle of the Mojave Desert, like the Twentynine Palms for you know, all the Navy and the Marine guys. It's everywhere else that we've gone, we basically have bought a house and turned it into a rental property after we left. And so we generally think like, okay, is it a good place to invest? Are there good schools and that goes along with the investment?

Generally, if you can find a place in an area with good schools, that's a good place to invest. Or they're good athletics, for you know, our kids. And then and usually the, you know, the commute is sort of the last major decision criteria factor that goes in there. Yeah, I think those are probably the biggest approaches to PCS. I think the other thing that's really changed over time is like, we're very deliberate about just kind of being more organized and more mobile, like Athenaeus is our 11th PCS. And so, like, my storage room is, it looks like somebody's dream storage room, like everything's tough boxes and it's labeled and it's just, you know, you moved so many times that you can't find stuff when you need it. And so over the years, we've kind of developed sort of a very mobile and portable organization system,

Brock Briggs  6:13 

Does that kind of give you the feeling of just like maybe nowhere as home? I think that that's I like struggled with that even just four years and I changed duty stations, but stayed in the same local area. And that was only one time and it just felt like a constant feeling of just not belonging and also like, you know, staying in one year in an apartment and then you're, you know, two months in and you're finally unpacked and then you're like, why would I even hang anything on the wall? Like, why would I? And, you know, why would I even decorate? Because I'm just gonna leave. You know, what are your feelings about that?

Josh Thompson  6:52 

Yeah, absolutely. You know, I don't remember the context of the situation. But somebody actually asked one of my kids like that same question. They asked my youngest and we have this sign that we hang on the wall. And it says, “Home is where the army sends us.” And, you know, it was like, a gift that somebody gave us years ago, you know, we've kind of always put it up by the front door. And someone asked my 12 year old son, like, oh, you know, where's home for you? And he literally said, like, yeah, home is where the army sends us, you know and like, we kind of joke, but like, it really is, like they don't identify with any one location. And you know, interestingly, like, you know, you and I had talked about transition. And as, like, I retired a year ago, my wife is, she's at 18 and some change.

And so, you know, we'll do this next assignment and then she plans to retire out of this next job. And a lot of our conversations have been around, like, where are we going to go? You know, like, where do we want to settle? And we have, like, the one thing we've arrived at and one conclusion is that we have zero affiliation or ties with any one place, right? We just feel kind of nomadic. And she's, my wife's basically, like, let's just wherever our daughter goes to college, like, maybe we should just kind of go there and be close and be a support structure for her. Then I'm like, well, then, you know, we still have the boys who. So this next year, my middle son will be starting his freshman year of high school. My youngest will be starting seventh grade.

And then my daughter, she's two years from graduation. She'll be going into her junior year. And it's like, okay, like, you know, one of our discussions has been around, okay, do we just go to this next place and stay there for six years and kind of get all three kids through high school? And then we move? Or, you know, when she makes her break from the army in two years, do we then pick up and go somewhere else? And it's still this big question mark. And we're kind of taking the approach. They're like, we'll cross that bridge when we get there. But yeah, that's a long answer to your short question that it's like, yeah, we definitely don't feel tied or anchored to any one location. And you know, I joke with my wife is say, like, we should just buy a sailboat and like move to the British Virgin Islands or something like.

Brock Briggs  9:29 

Yeah, that doesn't sound too bad after a career in the military, that's for sure.

Josh Thompson

Yeah

Brock Briggs

You were telling me about some friends that you have that were kind of going through a difficult time in their marriage after like one of them had returned home from the deployment and just like looking at the family unit and how that gets shaped by what the military asks of you, whether it be PCS, whether it be deployment or just even the hours demanded. It's like it's a miracle that anybody is together. Like I truly mean that and people that have really strong successful marriages that have spent a lifetime in the military, I applaud that so much because it is so, so challenging.

Josh Thompson  10:21 

Yeah, absolutely. Yeah. So the story that I was sharing with you is a friend of mine. And it's really, it's a couple. So friends with both the husband and the wife. My wife and I are good friends with them. They're in a Bible study group that we have and it's online, it's zoom base and it's with a bunch of different military families that we've connected with over the years. And anyways, the husband and this couple just came back from a nine month deployment to Europe where they were, you know, engaged with the whole year Ukrainian conflict and whatnot. And long story short, he called me two or three days ago and he was in tears. And he's like, you know, Josh, I don't know what to do, man, like, this is my seventh deployment. But this reintegration has been the hardest. And, you know, my wife basically told me that she wants to leave me.

And that, you know, there's nothing left. And he's like, I'm devastated, you know and it was just as heartbreaking here, you know. And we're struggling with, like, how do we help them from afar other than just, you know, emotional support and you know, encouraging them. But, yeah, to your point, like I don't know where the analogy came from or who created it but somebody, somewhere, you know, shared the metaphor of, you know, the military is like a magnifying glass, where, you know, it's going to magnify anything that it touches, right? And you know, so it's a marriage. If there's flaws in that marriage, it's going to magnify those flaws, right? If there's any weakness, it's going to exacerbate that and it's going to, you know, focus on those weaknesses is going to bring them to the surface in time.

And that, you know, that can be really hard, right? That's a very stressful, it's a hard job, you know, we asked so much of our service members, you know, just to pick up and move and leave and, you know, to just unplug on a moment's notice. I have another friend who's in the Special Operations community and you know, literally got like a 911 kind of call and got on an airplane, and, you know, went to Africa just in recent days based on some of the recent geopolitical events that are happening there that you may have seen in the news. And that was literally like, four hours notice. And he was gone, right. And so now, you know, his wife, and his kids are just, like, rolling with it, like totally unplanned, unscheduled deployment and who knows how long he's been gone for?

And so you know, it does shine both ways or doesn't magnify both ways, right? Like, when there's a really strong marriage, it can highlight that. And you know, really, you see the good and the greatness that can come out of that. You know I'm very proud to say that, you know, my wife and I have been married for 19 years. In August, it'll be 20. And I feel like, you know, a lot of the trials and deployments that we've been through have really kind of strengthened our marriage. But at the same time, it absolutely did highlight and kind of magnify and reveal to us where there was weakness, right? In our relationship and in our marriage. So yeah, it's a high stress career field.

And I don't think that everyone comes into that into it with that type of eyes wide open, you know, awareness of like, what it can do, you know, and that's, I'm speaking with 20 years of experience, but I know that even you know, with people that just are, you know, single termers and do a single enlistment or we have we have other, you know, young officers that I've mentored over the years that, you know, they just do their four years and their pay back and they get out because it's like, this is crazy out and how people do this.

Brock Briggs  14:41 

My wife has been having a lot of interesting discussions because the positioning of what the service means to people is so unique when it comes to family. There's a certain element of security that is embedded into working in the military. You have a steady paycheck, you're going to eat, you're going to have a place to stay. And as my wife prepares to exit, she's, you know, people are asking her like, oh, you know, you're pregnant like and then they find out, she's getting out.

And they're like, it's almost it's like a shaming activity like, oh, well, why would you get out? You know, you have a family, like, kind of make you feel bad that, you know, like, oh, like family is a priority. And it's just a super strange dynamic that we want. It's hard to do that to make a career anyway. And then to raise a good family on top of that, absolutely doable. But it's a hostile environment. And like you said, if you don't have your ducks in a row, that any kind of bad thing could flare up and cause a really, really big riff.

Josh Thompson  15:55 

Yeah, I think, you know, I think that's the challenge, right? Of an extremist organization. Are you familiar with that term, extremists?

Brock Briggs  16:02 

I mean, I've heard the word but not referred to.

Josh Thompson  16:06 

So there's a book called Leadership by a guy named Tom Cole. And he talks about, like, you know, there's different types of leadership, say like transactional, right? So we're just, you're doing something for me. And then there's a transaction that happens, right? And then there's transformational, right? Which is where like, I'm, you know, I'm pouring into you, I'm mentoring you, right? You're growing, you're developing because of this leadership relationship. And so like, if you think of, like, transactional is like, your McDonald's manager, right? And you're just like, hey, man, I need you to go do the fries and clean the restrooms and take care of these customers. And there's not a lot of like, you're not doing anything transformative or mentoring or growing them.

And then you get to like maybe another corporate America or even the military, in some aspects and there's some transformation that's happening, right? Somebody's pouring into you, they're mentoring you, they're growing you, that's transformational. But then really, you know, the military, like police, fire military. These are these extreme cases where like, it's life or death, right? I'm doing this and I'm investing in you because like, my life literally depends on you and the actions that you take, right? I have to 100% be all in and trust you. And it's not like that in every aspect of the military. But there's, you know, there's a lot of aspects in the military where it is like that and that's what Cole in the book says is in extremists, right? Like, it's a different level, right? That's where like, you know, you see the videos of like, I forget the guy's name.

But there's a video of like an army Medal of Honor recipient where he like, carries his wounded buddy, puts him on the medevac aircraft and then right before the aircraft takes off, he like leans in and he kisses him. And it's like that level of like, I love you, man, right? Like, we're all in, I'm willing to put my life down and die for you. Like, that's the extremist version of it. And I think what comes, the hard part about that, that's a beautiful thing about this service in the military. But I think the hard thing that that also comes from is like, that expectation that like, you're 100% all in. There's no like, one foot in one foot out, right? I expect you to give it everything and prioritize this over your family. And so when you don't prioritize it over your family or maybe like, hey, I got a kid on the way now, right?

Or maybe like, hey, man, my marriage is about to fall apart. And the harsh reality is that, like, well, we have programs that are out there to support it. At the end of the day, right? It's mission first. And that's the mindset, you know, GO’s are making, you know, decisions based on like geopolitical threats and national security decisions,not based on like, what it’s gonna do to Josh and Brock's marriage, right? And so like, again, it's gonna magnify that and I think the challenging part is that, like, you're gonna have leaders and other people that you work with that are prioritizing their careers first, right? Like, I actually retired in June of 22. And all my peers just promoted to 06. I retired as 05. And all my peers just, you know, just promoted and I had some friends reach out and are like, dude, you know, you should be here like, pinning on too. And I was like, oh, man, no, I shouldn't, right? Like my family is more important than you know, my ego and the rank. Ryan Holidays got a great book called “Ego is the Enemy.” Have you read that one?

Brock Briggs  19:44 

I haven't. But Ryan Holiday is the man.

Josh Thompson  19:49 

Yeah, his books are great! But that book, you know, Ego is the Enemy is it really highlights it. And I think that's a dangerous thing, right? It was like, I have friends in the military that will willfully choose to take like a CONUS assignment and a different place then where their families and their spouses are like, I'm not moving, you know. And so they will go like on a three year CONUS assignment to some other place, geographically separated from their families and geo batch it because they're like, grinding and striving to climb the ladder. And you're just like, man, like, I feel like your priorities are totally out of whack. And people make decisions like that, you know, for me, it was, either the army was like, hey, you need to come back to the Pentagon. And I was like, no, my family's coming to this other place. My wife and kids are going there. Like, I'll take the job if I can work remotely and they're like, you know, no, sounds like, okay, cool. And here's my retirement papers. And I'm totally at peace with that.

But a lot of people aren't. Then you see people just like, keep hustling and grinding. I had another friend who was a longtime 06 and after many years of being an 06, ultimately didn't get picked up to be a GO. And literally, it was like, in tears, like, I gave my life to this and his entire identity was wrapped up in his, you know, his rank and his position. And it was just, it crushed him. You know, I think there's a good Colin Powell video out there, where he talks about, like, he goes to the same conference one year and he's the Secretary of State. And he talks about how, like, you know, show for a man in a limousine and you know, they shepherd him through security and they bring him up on stage.

And he's kind of like a special coffee cup and all this stuff. And then like, the next year, he's not the Secretary of State. He goes back and he's literally like, makes his own reservation and sees Uber in there. And he's got, like, his coffee said, he was reflecting because he's like, got his coffee in a styrofoam cup. And he's like, man, you know, it was all about it was this revelation that it was all about the position, it wasn't about him. You know and I think sometimes we get caught up in that trap or the sense of pride and the ego of like, man, like, you know, I'm a colonel or I’m a Sergeant Major or a Master Chief or whatever. But the reality is, you're just another dude to put your pants on like everybody else. And I think we kind of, our identities get confused, sometimes.

Brock Briggs  22:26 

Big time, I felt that in a big way, when I got out to even only four years felt a large sense of accomplishment that was a tie to that rank and just things that are now in the past and be a light in a history book somewhere. And I also thought that it would be much different getting out and like going to work at another job. But I quickly found out it's just a different ladder. It's a ladder with less spikes on it, perhaps, but a ladder nonetheless.

And I think highlights the fact that they're much of life's fulfillment likely won't come from your job or it shouldn't. It's going to be coming from, you know, relationships, your impact, and sometimes you can marry those. I think that that's the dream. And I will be curious to hear how your current like work status and what you're doing is kind of aligning with what you kind of find fulfillment in. But yeah, it's a dangerous game to be playing. I think we're after a lot of the same things.

Josh Thompson  23:37 

Yeah, I don't remember who said it or where he heard about recently, somebody was just talking about like the, you know, when you die, right, are they going to talk about your resume or you know, your legacy? And it's like, what is more? Like, where are you investing? I think it was like a Sahil Bloom tweet or something like that, where, you know, he was talking about time. Are you spending your life kind of stacking up all these resume accomplishments? Or are you investing where it's the legacy, like, what the people at your funeral are going to talk about? Because you know, when you have your funeral, they're going to talk about like how your resume star. So I like his stuff.

Brock Briggs  24:17 

Yeah, very smart and very well, he can talk very well, simplifies things. I really enjoy his work. I think now we're kind of fully fleshed in here. I would love to kind of zoom out and hear maybe like a two to three minute high level view of kind of how you landed where you're at today.

Josh Thompson  24:39 

Yeah, sure. So you know, I went off to college. I went to Embry Riddle Aeronautical University in Daytona Beach, Florida. I was an aerospace engineering students. I did ROTC. And really my plan was just to like do my four years, get out and then go be an engineer and work for NASA JPL or something like that. And maybe an aerospace company. And I finished college. And I was commissioned as a medical service corps officer, which was my second choice. I was really frustrated because I was the top Cadet in my ROTC battalion. I wanted aviation. And I didn't get it. But MS was the, there's three places in that army where you can become an aviator and fly. So aviation is the obvious one. But then medical services is where you fly medivac. And then Intel, you can be a military intelligence officer and fly like their recon aircraft that are doing data collection and signals and intelligence type of stuff.

And so I was selected for Medical Service Corps, went to flight school. I dropped a flight back and got picked up for flight school, did that and I spent my first 10 years as a medivac pilot and really doing kind of point of injury to the front doors of the ER and that whole pre-hospital system of like, picking patients up off the battlefield. And it was wild and crazy. You know, I commissioned an 02 April of 02 right after, you know, kind of 9/11 had happened. And so it was right into Iraq and Afghanistan and all the deployments and just, you know, flying patients there. I was in, you know, just to give you an idea of the pace and the craziness of it. I was the Flight Operations Officer for the 54th medical company air ambulance in 2005, which was kind of the, you know, the peak push during the Iraq conflict. And I was there for 15 months. I was in based out of Balad, Iraq. We flew 17,000 patients in 15 months.

And these are like life, limb or eyesight patients, right? Like the routine guys are going by ground, which is just you look back, you're like, holy crap, man. It's like mind blowing. So anyways, long story short, I did medivac for the first 10 years, spent 7 of those 10 years essentially away from my wife. Either I was deployed or she was deployed. I think we already mentioned that she's also or she's still in the army. And she's a medical corps officer. So she was the tie-in and brigade surgeon with the 100 and first airborne division and then the first symmetry division. But yeah, long story short, we spent 7-10 years apart, right around the 10 year mark. We just had our third kid and my wife was like, hey, this single parents name sucks. Maybe you should do something else.

And I was like, yeah, Roger that! Household six has spoken. So you know, I saluted the household commander and dropped my papers to get out. And I was at a place where, you know, I didn't have any payback or anything. But she still did. And so because they paid for her undergraduate and medical school. So she still had an obligation. And so I dropped my papers. And I was about three weeks from getting out and the chief of the Medical Service Corps at the time, general Sheila Baxter, personally called me and was like, Josh, like, what are you doing? And I'm like, man, when we get there? And she's like, no, you're not like, how are we going to get you to stay? And I was like, well, I don't know. What are you gonna offer? And she's like, well, why don't we pay for grad school? Sounds like oh, well, tell me more. And so long story short, the Army offered to pay for grad school. And the Army has a program.

And it's actually open to all services, but it's called Army Baylor. So I went to University of Baylor and or Baylor University and I got a master's in healthcare administration and Masters in Business on the Army's dime, which was awesome. So double masters and then transitioned from, I was a 67 Julia, which is an aeromedical evacuation officer to a health services controller, which is a 70 Charlie. And so basically, you're like the financial manager for, you know, the army and doing all things, managing army budgets and dollars. So, I became an army controller. And then that really kind of started my path down the Healthcare Administration track. My first assignment out of grad school, I was the CFO for Irwin Army Community Hospital based out of Fort Riley, Kansas.

And then from Fort Riley, Kansas, I went to the Walter Reed Army Institute of Research, which is in DC and that's a big two and a half billion dollar a year Pharmaceutical Research and Development Organization. So if you've ever been overseas or any service members have already taken like any anti malarial drugs, every single anti-malaria drug on the planet has been invented at the Army Institute of Research. They're also doing, like HIV research. They're doing all kinds of infectious disease research. So you know, you think about like, Big Pharma doesn't, they're not incentivized to create any kind of drugs prophylaxis or treatments for infectious diseases, really, because we don't really have them, you know, in our country.

And so we're army and not just the army, but the military, the DoD, sends service members into all these austere environments and third world countries where there's all these naturally occurring infectious diseases, you know, Ebola, dengue and chikungunya. And who knows what else. And service members get all these diseases. And so the DoD actually spends quite a bit of money, developing drugs and prophylaxis and treatments for all these orphan diseases. And so I was there as the CFO managing all those, the money, the finances for all those research programs, which was a really cool experience. And then after that, I moved up to the Surgeon General's office and I worked for the Surgeon General, started my first year doing programming and working on the President's budget.

And then a byproduct of my time as a CFO, both organizations, the Community Hospital and the Institute of Research, had some they were basically running deficits when I showed up there, so they were in the hole. And you know, I put programs in place to get them solvent out of the hole. And I did well because of that and, you know, got good evaluations and people were happy with the work that I did. Well, once I was working for the Surgeon General, there were some other organizations that were insolvent. And so they actually came down and said, hey, we need to send you out and kind of go on the road to help these other 11 other facilities that we're having budget issues. So they use me like an internal consultant and sent me on the road to go consult and advise the commands at these facilities to help them get well financially.

And I ended up doing just kind of doing that work for about two years. At which point, my reward for all that was the opportunity to command. So I went to Fort Campbell, Kentucky and I took command of the fire at six field hospital and I commanded a 586. I took command in July of 19th. And then I've been in command for about four months, when the first COVID stuff started happening. And so that was a really interesting time to be a hospital commander is right through the thick of COVID. So a lot of COVID deployments all around the US, doing that. And then after COVID kind of died off, then I got the opportunity to take command of the next organization, which was the 5/31 Hospital Center. And we went to the Middle East and we were the level one trauma facility for St. Calm. So I commanded that hospital in the Middle East and then that's when I basically retired and transitioned out of that job, got out and that's when I kind of started my civilian career. I was a little longer than two minutes, walked down the resume.

Brock Briggs  33:35 

No, that's fantastic. You would have a hard time getting all of that into two to three minutes. And each one has always kind of doing my research on you. And I was like, man, what are all these weird titles. Like, I continue to be surprised by kind of just unique situations kind of people fall into and man, I can't think of a situation I've come across where the military like major transition for you. Like, you come in and you'd like you do your stuff. And then they're like, hey, we need to, it wasn't just like, we're gonna get out and like you need to go on to like, learn to be a professional out in the world. It's like, no, we're gonna make you a professional and like, put you in these roles, like within the Army. What a cool thing. I was wondering why you've got a dual MBA MHA. And when you say it's on the Army's dime, then that makes sense. It's like, man, what is this guy about?

Josh Thompson  34:34 

No, you know, it was one of those things like I never in a million years thought I would be, you know, running hospitals and being a CFO and you know, pharmaceutical drug development companies like, what is like, how do you even do that? But it's kind of crazy to think that you come out of grad school and they're like, okay, cool. Here's this $250 million a year hospital that we need you to go and like manage the books and like, you know, six months ago, I was like balancing my own checkbook. And then now I'm writing this, like, CFO for this, you know, $100 million dollar hospital, you're like, what the heck, man? Like, who else would do this? Like nobody.

Brock Briggs  35:13 

Yeah, that is wild. I gotta hear about some of these circumstances where you're put into and like you said, you brought several different hospitals or like activities that were in a deficit and kind of like, got them on a good track. Talk to me about that. What was the circumstance? Maybe walk us through one of them at a high level and then I'd love to hear any kind of like, commonalities you saw. What was driving the misappropriation of money? Or what exactly was driving those problems?

Josh Thompson  35:47 

Yeah, so I wouldn't say there was never any misappropriation, right? Like funds are always being used legally, just to throw that out there.

Brock Briggs  35:55 

That was probably not the right word to use. But

Josh Thompson  35:58 

Yeah, I don't want to like ask any light and like there was any, you know, illegal activities because Congress is very, very serious about how you use appropriated funds, right? But what happens is, it's really a mix of like, you know, the organization is really big and you've got a lot of leaders making decisions that there are levels. And while, you know, you don't have great systems and processes in place. I think the best way to explain it is that, you know, people are working in silos and it's stovepipes. And they're not necessarily communicating well and like, the organization's making contracts for different things and they're not managing those contracts well and then, you know, maybe the HR and the command group is hiring. Again, the healthcare, if you're, you know, you go back to your time in military treatment facilities, about 70-80% of the employees and military treatment facilities are civilians, right?

And so it's paid for with a different pot of money that the facility itself has to manage. Whereas, like, if you're wearing a uniform, like that's paid by the service. And so the organization doesn't have to worry about all your pay and salaries for anybody that wears a uniform. And so if the organization doesn't manage your hiring process as well, they put a bunch of contracts out and they fail to manage those contracts well. They can get into a situation where they basically have over committed financially. And so, you know, it really just comes down to stewarding those resources well over communicating across all the different silos that, you know, are within an organization.

And so for a financial person, if that commander doesn't have a strong, you know, CFO or G8 or S8 or you know, whatever it is and your respective service, financial manager or controller, they can very work cross functionally and kind of, you know, across the organization and really understand it and create a good picture. It creates opportunities for commuters to overcommit from a resourcing standpoint. And so then it's like, okay, you know, sometimes they get themselves in trouble. And you know, the big army typically, at least on the army side and it's very similar across all the services, but usually, they only have, like, the GO level quarterly reviews, you know, if that have like, how are the resources being executed. And so what can happen is, you get into like, third quarter or into the fiscal year and now all of a sudden organizations are like, oh, crap, like, I don't have enough money to execute this.

Or maybe there's this huge maintenance thing that has to happen, like when I was at the army senior research, we had a laboratory in Bangkok, Thailand that had like $50 million worth of deferred maintenance. And it's like, okay, the building's about to fall down, we have to fix this, where do we get this money? You know and people are, like, well fix it. And, you know, general officer says it and then people start fixing it and then they're like, you know, figure it out guy, like, go find the money. And, you know, it doesn't always just, you know, appear on trees, right? So you got to, you know, you have to basically create a liability and you have to go take money. Rob Peter to pay Paul.

And so a lot of what I was doing was helping command teams learn, you know, which Peter they could rob so that they could finally pay Paul And then some of it was a lot of expense reduction. Where can you draw down? Where do you have money that's buried and executed on contracts? And how can you obligate those funds, get it off those contracts so that you could actually use it to get yourself solvent and get healthy financially so. And those were great lessons to learn because I you know, that's really what I think parlayed into, you know, my career on the civilian side.

Brock Briggs  40:01 

Walk us through some of those contract issues. You're saying that they were maybe not managing the contracts. Well, what does that mean? Are they not getting good bids? Are they, you know, signing up too many contracts,and then there are overstaffed? And you know, don't actually have the budget for that. Where exactly was the problem?

Josh Thompson  40:23 

Yeah. So really, where the problem comes down to is contract execution. So you know, there's good processes in place to kind of prevent you from overspending on a contract. But what happens is, like, let's say, like, in the hospital environment. You might need three pediatricians, right? Well, the military doesn't have three pediatricians to give you so you're gonna go out and you're gonna contract first contract physicians. While those three pediatricians, in order to get that contract in place, you actually have to take, like, if it's, let's say, it's $600,000 for three pediatricians on a contract, right? You have to take that. The military commander, when they sign that contract, that 600k 100% of that money goes into like an escrow account that they can no longer touch. All those funds get committed and obligated.

And it's like they're already spent, right? And now the contractor has to go out and find three pediatricians. And then what happens is like, as they find the pediatricians to do the work, then that escrow account is then drawn down, right? And if the contractor let's say, they go out and they can only find two pediatricians and each one was going to basically bill at the rate of 200K a year. Well, now you have $200,000 of money that's locked up in this contract. And you didn't, you haven't gone out and modified the contract to deobligate those funds and get the money back out. And there's no way that it's going to be spent because the contracts are never delivered the pediatrician to do the work. Are you with me so far?

Brock Briggs

Yeah

Josh Thompson

And so now, like, let's say, you didn't have the pediatrician doing the work. But you still have military families with kids that need pediatric care, right? And so if the MTF doesn't have the staff to do the work, where does that work go? It goes out to the network, right? So now, your patients get referred downtown to a civilian practice. Well, that civilian practice then sends a bill. So now I've paid I basically prepaid for three pediatricians with the work over here on the left. But now I'm getting a bill for one pediatrician worth the work on the right because the contractor only filled two of the three spots. And so now, I've spent 100% of the money on the three pediatricians.

But now I have this other deal that's coming in and left field and so it's almost like I'm paying for pediatricians, right? Until I go take the money off of the contract for the one that they failed to deliver and then move it over to pay the purchased care bill. And so that's how you can find yourself in out of balance and basically in debt and solvent. And then the really hard thing about managing government money is that most of those dollars are one year appropriations, right? So at the end of the fiscal year, that money dies and it can't be spent anymore on, you know, on anything. So if you don't manage contracts closely and take the money off that the contractor has failed to execute in accordance with the terms of the contract, you can't take it over and use it somewhere else, even though you may have had to go, you know, leverage some other things to get those services and now you've incurred a cost.

So even though it's sort of a net zero sum, if the contracts aren't managed, well, you can find yourself basically insolvent in the hole. And so that's what was happening. And so it was a matter of really, you know, micromanaging the contract process, the obligating and shifting funds and hoping commanders understand, like, no, I need to take resources from this contract that you already locked up because a contractor isn't delivering what they said they could and now you're incurring a cost outside of that, then we still have to go, you know, pay off and make hole. So that's fairly technical discussion, but I hope it made sense.

Brock Briggs  44:30 

Yeah, no, I'm tracking with you. It sounds like you're working with so many different layers of complexity, like not only are you working inside the military organization, you're dealing with contracts. You're also in some of these cases overseas. And so that probably adds a whole nother element and also like, just my very vague basic knowledge of complex healthcare is like that so many things stacked on top of each other. I'm sure that it sounds like my actual nightmare, really.

Josh Thompson  45:00 

Yes. Yeah, there's so many examples. You know, there was one like here's just a small example. So at the, you know, did some work at the joint staff. I’m with the Joint Staff surgeon and there was a submariner, a guy who's a cook on a submarine, who, you know they use trash compactors because they have to keep all the trash on the boat on the submarine. You can’t offload it until they go to port. So there guys, the cook is putting trash in the trash compactor, chops his finger off with the trash compactor. So they're out somewhere in the middle of the Atlantic Ocean. They have to surface a coordination effort to get the guy off the boat. This was in my medical evacuation days at the high level. Submarine has a service. We coordinate with the Portuguese Navy, they send a ship off the Azores out into the middle of the Atlantic.

They steam the ship several hours from their launches a helicopter which goes to the submarine to pick the sailor up, then the ship steams clear to like the Portugal or Spanish coast. And then they get another helicopter to take the sailor from the ship to a trauma center that's in, I can't remember if it was Spain or Portugal. And then we got to coordinate for the neurosurgeon and the orthopedic surgeon to then you know, go through and do the reattachment of the finger. And then all of the ICU level care that went into that there. And then we had to transition the soldier from there to Marshall, got evacuated back to Walter Reed where he ultimately spent time in the SRU rehab. There's so many moving parts and pieces. It's so complex. Here's like how anything gets accomplished.

Brock Briggs  46:53 

That is gotta be probably the most expensive finger chop, maybe in history. I'm sure millions of dollars spent to like, handle this one individual.

Josh Thompson

Yeah

Brock Briggs

Wow!

Josh Thompson  47:07 

I don't think a lot of people would appreciate that. And all the complexity are like, literally, you had, like the entire medical operation cell and the Joint Staff in the Pentagon, like turning on this one dude and his finger

Brock Briggs  47:20 

really raised a lot of disruption. I'm sure that he got a lot of shit for that. He got back eventually.

Josh Thompson

Yes

Brock Briggs

Wow! What were the big lessons or takeaways kind of from this process? Like what did you learn about kind of financial management? Or I'm sure that there's, I'm oversimplifying this by a mile, but the checkbook balancing nature of everything that you're doing in each of these. And like, how does that kind of maybe apply to business? Like, what is the application I guess for us?

Josh Thompson  47:57 

Yeah, so that's actually a really easy question to answer and it comes down to communication, right? I would say like, being a CFO, so I was a CFO in the military. And now, you know, I work as essentially a virtual or fractional CFO for private companies. And, you know, I tell people that 70-80% of what I do is just communication, it really comes down to communicating and cross functionally and being able to really translate complex concepts and processes and a way that anybody can understand whether that's a military commander or you know, service company owner. And so, you know, I would say, yeah, let's say 70% communication, maybe 20% like, you know, the actual like systems, understanding systems and processes and then 10% of is actually just like, doing the transaction work, you know and balancing the books and you know, doing the tactical, like actions on the objective. So.

Brock Briggs  49:09 

So it's not necessarily that people have the inability to balance the checkbook, so to speak. But it's navigating all of these moving parts. And as you said, communicating between each, the expectations and fulfilling those.

Josh Thompson  49:27 

Yeah, well, I mean, I would pitch it back to you, right? Like you're a data scientist, data analyst. You know, what is the hardest part and what is the main part of what you do as a data analyst?

Brock Briggs  49:43 

Well, at a high level, it's communicating. That's kind of fulfill right in there. There's kind of some other back end processes, but when it comes to the front side, it is communication. It's how we take a lot of information and communicate it in a way to have like effectively take action.

Josh Thompson  50:01 

And tell the story, right? It's all about how you take the data, manipulate it, process it, clean it and use that data to tell a story, right? That tells the story that you want to tell. And it's no different in finance, right? So for me as a CFO, you know, it's all about, like, what is the story that the numbers are telling. And I think you can kind of see that in the way that the services are built, right? Like you can basically hire a bookkeeper for anywhere from like 100 bucks to 500 or 600 bucks a month, that is doing all of the transaction work. And it's a lot of work, like keeping the books, like you know, if you're doing the books for a company that's doing 5 to $10 million a year and they have a high level of transaction flow, that's a ton of work to categorize all those transactions.

Make sure they're hitting the right, you know, lines and the general ledger, that everything is being in class appropriately, especially if there's multiple locations. And there's just a lot of like, nug work of getting down and getting dirty and like, you know, clicking the different buttons and making sure that everything is going where it's supposed to be going, right? But that's like, typically anywhere from 100 bucks to 500 or 600 bucks, that you're gonna get paid to do all those transaction level works, right? And then if you come up to the CFO level, now we're, you know, now we're looking at anywhere from five to $20,000 a month, that people are charging, you know, in my field, to just be the translator, right?

The guy that can look at the balance sheets and the cash flow statements and the P&L cells and can read all of the general ledger and all the complex data that's stuffed in there and then take that information, synthesize it into something that can help a business owner, make strategic decisions, whether they're investments or hiring or, you know, hold now or maybe, you know, a business valuation or you know, now's the time to sell, now's the time to grow, now's the time to whatever, right? Like, you're getting paid the big bucks, right? But what you can charge for is really about your ability to synthesize those complex topics. And translate that in a way that is understandable by people who can't look at the matrix and see, you know, what it's telling them? And so, you know, I think it's the same for you. I love data and I'm a data guy, right? Like, God, we trust and all there's no spring data, right? And so as a data guy, it's all about being able to look at it and use that data to tell the story that you wanted to tell.

Brock Briggs  53:00 

Yeah, absolutely. That's really interesting. And a great way to pitch that. I think I've got one more question about kind of your time in the army and the application of that. And then we can talk about what you're doing now. Let's say that you were in charge of all of the military hospitals in the world from like a military perspective and you ran the budget, all of that good stuff. What is the first thing that you're doing? What were the problems that you saw at a very high level that maybe were systemic, that maybe are/were beyond your control even in command of those things? Well, I'm sure that you're fighting an uphill battle on a lot of those things. I'm sure what ought to be fixed that isn't right now?

Josh Thompson  53:51 

Well, so there's really two huge problems that, like the surgeons General of the various services have, right? And it's pretty simple at its core. So, you know, what's the purpose of the military? Why do we have a Defense Department? Do you know what the stated objective is of the Defense Department?

Brock Briggs

I actually don't know.

Josh Thompson

Yeah, so it's first and foremost to deter, right? So the Defense Department exists. If you go out and you read, you know, all our various national defense strategy documents, the primary existence of the Defense Department is first and foremost, to be a deterrent, right? To keep people from wanting to attack us. And then if deterrence doesn't work, the next reason that we exist is to fight and win the nation's wars, right? And so the primary objective of the military healthcare system, the NHS writ large, is really all about readiness, right?

Because, like you might have if I'm a battalion commander or brigade commander, let's say I'm the commander of the 101st Airborne Division even, right? Like that commander is, he's super strategic, right? And his main thing is like, if I have to go to the Ukraine or I have to go to China or wherever the, you know, the latest and greatest geopolitical threat is it's really about what is the forces that I can amass, right? And what's the one thing that takes people out of the fight? It's medical readiness, right? Like, you wouldn't believe like, a guy gets a toothache. You know, if he has a cavity that leads to an abscess and his mouth is ineffective. He can't fight. He's a liability on the battlefield, right? You know, you said that your wife is pregnant, which is awesome. Congratulations, right?

Well, now she's no longer deployable, right? So there's a commander, I don't know if she's on a ship or what, but there's a commander that runs that ship that now has to, you know, he's only got what he's got. I'm assuming it's a he. So wherever that commander is, you gotta go to war with the team that you got, right? And if 20% of my team can't even get in the fight because they're not medically ready? Well, now I'm fighting with 80%, right? And so the military health care system's primary purpose is really all about readiness. That's why I like, like, it's kind of backwards. Like you compare your healthcare experience in the military, to what you know, someone in the civilian sector would be like, first thing you do when you come in, we vaccinate you against everything, right? We pull your wisdom teeth out, we, you know, we screen you for all different kinds of things, right?

We are trying to proactively prevent any future issues, right? Why we pull wisdom teeth. Almost every soldier comes in, they get their wisdom teeth pulled, we do that because wisdom teeth get impacted. And then you basically come out of the fight, right? Well, by proactively pulling your wisdom teeth, we just guaranteed that that will never be an issue in the future that would prevent, create a readiness issue, right? We vaccinate you against everything under the sun so that on a moment's notice, we can send you and we don't have to worry about you getting sick from some, you know, Anthrax or a smallpox or whatever else, right? We're doing a lot of it's the whole, you know, an ounce of prevention is worth a pound of, you know, I forget how it goes. But you get the idea.

And so the first problem that military healthcare system is solving is the readiness problem. Our soldiers are medically ready to go by and win the nation's wars, right? It's the tactical commander's job to make sure that you're ready from a skill standpoint. But if you're getting sick or you have an orthopedic injury or dental emergency or some other thing, like, you know that that most likely is preventable, right? And same reason we do PT, right? You can't sprinkle fitness on people. So you have to do prevention every day. The second hard question that really challenges the surgeons journal and the services is, you know, we've created this benefit for family members, right? And so, you know, as dependents, they now are getting their health care.

And over the years, the military kind of swings back and forth where we would kind of, you know, in a garrison environment, when we're not fighting wars we spend that healthcare money on building up the care and the support in the MTF for family members to get seen and get cared for there. Because it creates, you know, medicine is one of those things where it's like it's a practice, right? There's an art to medicine and you have to see patients to get the reps and to be a proficient healthcare provider. You know, our surgeons like, you know, it's great, we have a 97 or 99% survival rate on the battlefield. Well, the reason that we have that is because when we're not at war, we have our surgeons embedded in the trauma centers around the United States, working you know, military green suit wearing providers embedded in all these trauma centers, working on guys that are gunshot wound victims and stab victims in these areas around our country where there's high crime rates, right?

So when they get to the Iraq’s, the Syria’s and the Ukraine’s, it's not the first time they've seen somebody, you know, with gunshot wounds and stab wounds. And so you know, it's all about, there's a readiness of the warfighter warfighting force, but there's also a readiness component of the medical force. And so, you know, we bring dependents in to help keep the medical force ready. But in an ideal world, we would just, they would all go out to the network, right? It would be all the purchase care, but then you're balancing from a financial standpoint. It costs more to buy it than it does to make it, right? So these are some high level numbers from something called the melamine study. To make health care for a family of four in the military health care system, it costs us about $18,000 a year.

That's what, you know, the DoD spends on health care for a family for when you get your care inside the military health care system. If you go downtown and you get it in the network and we buy that care, it costs us about $28,000 a year. Well, that's a $10,000 delta making and buying for a family of four. And you've got, you know, what does the, you know, how big is the act of force in the Defense Department right now, you know, you're talking millions of service members and then all of their beneficiaries that, you know, basically three x's or four x's, whatever the, you know, that is. So, you know, it's a scale problem, it's huge. That's why, you know, the health care is consuming, you know, like 25%, of the entire gross domestic product in the United States, you know, writ large and the DoD is just a small microcosm of that.

Brock Briggs  1:01:04 

That was all really interesting and a really unique perspective of, I've never had the chance to talk to somebody that's kind of like sat in the balance of like the financial plus the medical situation. I think I'd be remiss to not like expand on that with a couple of more questions, if you don't mind.

Josh Thompson

Sure, yeah. Yeah.

Brock Briggs

The first one is going to sound a little bit impersonal. But bear with me. Should women who are pregnant be allowed to be in the service while they are pregnant? From like, the readiness and the cost perspective that you're describing there? It’s a super hard question for me to ask because my wife is pregnant.

Josh Thompson  1:01:42 

Yeah, I can answer it two ways, right? Like, so from a purely objective standpoint, right? Like, if I'm a commander, which I've been. I've been a battalion and brigade level commander. It hurts, right? Like I need, I gotta go to war with the team that I have. And each time I lose somebody, like I ran, you know, I ran a hospital in St. Calm, right? I had people that couldn't deploy, right? And so, now I'm going downrange without all of my team members, right? And if you're a pit crew on a race car team, if you go to the race and you don't have your like, you know, your jacket, man, how are you going to change the tires, right? And so like, as a hospital commander, here's a great little micro example of that.

Like, I might only have two radiology techs in my hospital, right? And I might have one radiologist and my hospital. I might have one cardiothoracic surgeon in my hospital. I only have one anesthesiologist and my hospital, right? Well, if that guy or girl, let's go to your example, if that is a female person in that particular skill and they're pregnant, that's great. Like, I'm happy for them, like and,of course, I want them on the team. They're a part of our team, we love them, you know, they're, you know, I have relationships with these people. And you know, you work with them for a long time. But if it just so happens that they're pregnant during the time when you get activated and you go on a mission. Now you're going without this key player, right? And like healthcare is one of those places where you have all these, we call them low density MOSS, right?

Like you might only have one or two of these super specialized people ran out one cardiothoracic surgeon. I had one neurosurgeon. I had one pulmonologist. I had one, you know, one of like, pick all the different ologists that you can have in a healthcare organization, and you basically have one and if that person happens to be a female that gets pregnant, well, now I'm going to war without that person, right? Well, that's a pretty crappy position to be in if I'm responsible for providing all the health care for this. Right now, think of the second order effects of that, like if I don't have a, you know, this ologists now I gotta like, go into the local National Committee. Let's say I'm in Syria. And I gotta go find somewhere in the Middle East, where there's a host nation provider that can do this service, right? That can provide that same skill set.

They're not trained at the same level and standard that we are. They don't know how to operate in our system. I'm basically going to take you Brock, if you're the patient and I'm going to send you out into a Syrian hospital with a US escort. And we're going to basically say, hey, we're gonna scrub in and be a part of this procedure and watch you do it. And I'm just going to trust that, you know, you're the best thing that we can get for Brock in the moment, right? Like, think of the risks that that creates for the rest of the force. So you know, from a commander standpoint, like you put me in a really bad spot. Now, you know, what we do is if somebody gets pregnant, the way we work around that is we go, okay, I'm going to reach into this other hospital and I'm going to steal theirs, right? I rob Peter to pay Paul.

And now that hospital commander has to do without, but hopefully they're still in the States and they can, you know, use the network. The network and in the healthcare example, it's sort of like a balloon, right? Like when the military squeezes, we push patients out to the civilian community. And that acts as like a pressure relief valve, right? When you squeeze a balloon and it kind of squirts out one side, or it sticks out. You know, we can, when you're CONUS, you have the ability to tap into the civilian community, but if you go overseas, I don't have that same ability, right? So I really have to rely on those people to be there. So from a purely objective commander, put my commander hat on, I would say, yeah, you put me in a really bad position to do that, it's hard.

I do think that there are ways around it, but that just creates situations where, you know and that's what we do, right? Our work around so that we can, you know, have pregnant women and the service and give them you know, the time that they need to, you know, have kids and to have their postpartum leave and to be mom and have that, you know, really important first few months with the baby. And to get our care team in place, you know, after those first few months. You know, the way we work around that is we grab other people, you know. The downfall is that, like, if you and I are both, you know, ologists and I, all of a sudden at the last minute my units go and I get out like oh, whoops, I'm pregnant and I don't communicate that well, it goes back to communication.

Well, now I'm, you know, three weeks or two weeks from heading out the door. And some GO is gonna pick up the phone and say, hey, Brock, congratulations. You know, you have two weeks until you leave on this deployment. And you're blindsided and it impacts your life and your relationship. And because this person failed to communicate that they were pregnant or it, you know, didn't become an issue until the last minute. And so that happens. And I've seen it where we had a pregnant female soldier that became non deployable. And then the only other person that could go was the guy, this other guy and his wife was pregnant, right? And so now he's gonna miss the birth of his child and not going to be present because he got deployed in place of this other soldier where it was a pregnant female, right? So I mean, there's no good answer to your question. That's one of those, you're damned if you do, you’re damned if you don’t, I think.

Brock Briggs

Yeah

Josh Thompson 

Yeah

Brock Briggs  1:08:02 

Yeah. And that isn't just picking on pregnant women by any means. That is representative of a much larger problem as you spoke to, readiness. And there are many things that can take people out of the field for readiness issues, whether it be a toothache, whether it be mental or physical health problems, whether it be pregnancy, it's all of those things.

Josh Thompson 

Yeah

Brock Briggs

So, an interesting perspective. I appreciate you dealing with a kind of a hot question. I like it.

Josh Thompson  1:08:34 

I think the mental unit is really quick before, you know, the mental side of it, it's so big now. And for so many years, like a lot of people are like, oh, wow, this hasn't been an issue in the past. Like, there's a great book called The Loss of Division, you know and it's about the, like, 30,000 soldiers during World War ll that were shell shocked. And were basically like, stuck in like a holding company way behind the enemy or way back behind the, you know, the lines in these support areas. That, you know, they were just in combat and effective. But, you know, it was the same thing. It's mental health. And it's just only now that we've really kind of the services really sorted to say like and own it and say, yeah, this is a problem, a legitimate thing and really encouraging soldiers to speak out. So I think that I think we've come a long way. It's still a problem. It's definitely a big issue there.

Brock Briggs  1:09:31 

Yeah, I certainly agree. I think that that is going forward, what are going to be the biggest challenges that the service faces in addition to the other threats and the other parts of the world is like we're really facing a big mental health challenge and not only like, allowing people to come forward and talk about things, but how does that flow into this conversation that we're having about right readiness? And what does that mean for exiting the service? In terms of disability and the impacts to VA health care and all of those things?

Josh Thompson

Yeah

Brock Briggs 

One more question about health care that just kind of popped up on the spire here.

Josh Thompson

Okay

Brock Briggs 

Has US healthcare prices been driven up because we like to go to the doctor?

Josh Thompson  1:10:31 

Sure. Yeah, absolutely. You know, the model is, like, the classic example that healthcare people use is, think about your car, right? Like, imagine if you use your insurance, your car insurance to go get your oil changed, right? Like what would happen to your car insurance rates if every time you needed to get your tires rotated and get your oil changed, you submitted an insurance claim?

Brock Briggs  1:10:59 

Going way up

Josh Thompson  1:11:01 

Yeah. Right, all day long. And so, you know, that's what happens is, in our system is, you know, people are basically going in for the little stuff, the routine care and then, you know, the checkups and the physicals and everything else. And every time they do that, you know, they're making health insurance claims. And so, you know, that absolutely drives the prices up, right? Because insurance at the end of the day is just a statistics game. And you know, they pool healthy with unhealthy and then they average out what the spend is per person. And then you know, they use that to based on your demographics of age and sex and what they call social determinants of health, you know, will underwrite like, essentially what it's going to cost you or cost them to care for you, right?

Like the average 21 year old male, goes to the doctor, like zero times a year, right? Like, they don't go unless they're dying. And then, you know, and then like a newborn child goes to the doctor like five or six times in the first 18 months of life, right? Because you're going to get all your vaccines and everything else. And so they know with pretty, pretty good precision what it's going to cost, you know, using all that actual tables and statistics and you know, big data. They know that, you know, when you're age zero to five, it's gonna cost them so much per year to take care of you. And then when you're, you know, ages 6 to 10 versus 11 to 15 and so on, they've got to be chunked into this five year kind of life, you know, categories, age categories, that, you know, we know how much it's gonna cost, right?

And then as you spend a lot of that in the first like, two years of your life. And then starting around like age 35, it just is like a general slope, where then by the time you get to, like 70 and 80, it's huge. There's some data out there and I'm not going to quote it well, but basically, like, you know, it's like 80 or 90% of all healthcare money is spent on like the last like, five or 10 years of life, right? Like, we spent just a disgusting amount of money on, you know, kind of sustaining the final years of most people's lives in proportion to all the rest of your life.

Brock Briggs  1:13:35 

Yeah, I was just curious to ask somebody that spent some time analyzing the financial part of it because it is a really big problem. And it's a convenience that we are afforded in this country. And it's beautiful to be able to hop on a call and ask your doctor to tell you that you have a cold. But I think some of the repercussions that we're feeling from that are I don't know if people are making that connection, that using the healthcare actually makes it more expensive, which you want people to that's why you have it. However, I think health and wellness and just like general health stuff, are you exercising doing all of those things to kind of reduce and minimize those things are not people's first and foremost thought?

Josh Thompson  1:14:23 

No, I think what you're going to see and I mean, you're already seeing it in the private sector is this move towards it called value based care, which is really it's all about like, are you getting better outcomes for the money that you're spending? And then there's another thing called capitation, which is essentially your, the payers, the insurance companies are trying to shift the burden, the cost burden from the, they're trying to shift it to both the providers and to the patient. And so, you know, really the goal is to incentivize and drive behaviors to focus more on prevention. Because, again, you know, an ounce of prevention is much cheaper than a pound of cure, right?

And so yeah, the more that we can kind of change those behaviors, that's the hard thing. It goes back to behaviors, you know, you might only have 20, 30, 40 minutes a year and healthcare providers office, where, you know, they can lecture you and talk to you about, you know, like, stop drinking sodas and start eating healthier and start working out. But the reality is that, you know, your health outcomes are greatly determined by how you're spending all the rest of the time when you're not in the doctor's office, you know, what are you stuffing in your face? Are you actually working out? You know, all of your choices that you make along the way that add up? And that's the hard part is that, you know, the system is still trying to work through how does it create the right incentives to where you're making better decisions that ultimately impact that? I think what you'll see, like direct primary care is, are you familiar with drug primary care?

Brock Briggs  1:16:10 

At a high level

Josh Thompson  1:16:11 

Yeah, so essentially, it's sort of like the McDonald's version of healthcare, right? Like, you can go to a direct primary care provider. And if I need to immunization or I want to get a checkup, it's like 20 or $30 or 50 bucks. Some of them now are doing like subscription models, almost like Netflix, where I pay, you know, 50 or 60 bucks a month per person and I get access to that provider whenever I want, I can text them or call them or do video visits. And then in addition to that, I would have like a an HSA or some type of a catastrophic health insurance that only pays like if I get admitted to a hospital. And, you know, it's this big, huge healthcare expense. But for all your routine care, it's basically ala carte and you're just paying cash for it. So that you're seeing a lot more of that happen now. And I think that we'll see that trend continue.

Brock Briggs  1:17:05 

I want to talk about what you do now before I use up all of my allotted time here with you. You say on your LinkedIn, I help startups and SMBs doing 1 million to $10 million with bookkeeping, accounting, FPN and fractional CFO advisory services. Let's maybe start with what does that mean for the layman? And obviously, your background has greatly illustrated why you're capable of doing that. Would love to talk about why choosing to go fractional? What is this opportunity that you're seeing? And like, why are these small businesses struggling with that? And maybe we'll get into where the industry is going. Is fractional, the future?

Josh Thompson  1:17:54 

Yeah, okay. So, you know, at a very rudimentary level, like, I just hope business owners understand the numbers, right? And at the most fundamental, like, I can do that I can, I can own that whole process and, and from their bookkeeping, all the way up to like, helping, you know, small but fairly large growing businesses make strategic decisions, we can also do like, both buy side and sell side M&A transaction advisory, like so if you want to buy a business or you're looking to sell your business and go to market with it, I can help you with, you know, making sure you get the best valuation when dealing with private equity or venture capital. So, you know, really, we can do everything from bookkeeping, your accounting offering, if you want to do like modeling and build financial models and really look at the data and some analytics around that we can do that.

And then the, you know, just the strategic level advisory on the CFO side, the way that I got here was so I literally retired out of command and I did like I did absolutely what they tell you not to do, like I was in the Middle East, in command all the way up to like, three weeks before I literally came off the rolls. You know, and now they've got all these transition programs where you can do these like 12 week long like internship programs and all this like there's these great programs where you know, they kind of help you get your resume ready and do all this stuff and prepare for transition. And I literally like was deployed, came back like went through CIF, turned in all my gear and you know, did my reintegration stuff. I did all my VA separation physical stuff while I was in the Middle East, which is also like, not recommended. And then I got out and I had been away from my family. I was deployed.

And so when I first got out and like I wasn't even thinking about a job. I was just like, man, I need to, it's summertime and I need to reconnect with my kids, we PCs, my family had just moved. So it was all about like, I'm just gonna spend the first couple of months as I got out, like, hanging out with my kids and being dad, being present because I'd been gone. So I did that. And it was awesome. It was amazing years, played football and volleyball and soccer with my kids. And then in that process, I didn't know what I was going to do. I didn't reach out to kind of to your point when we very first started talking, you know, I like didn't leverage the veteran community at all. And you know, hindsight being 2020, I probably should have. But I did reach out to a couple of mentors because I was like, I don't know what the heck I'm gonna do. I don't have anything lined up. I just needed to like, go home and be with my family.

And I'll figure this out later. And so one of my mentors that I had worked with, he was like, hey, man, you're so good at this finance stuff. Like, you know, when you were doing all that internal consulting for the Surgeon General, like, why don't you like, you could totally do that for your small business. So I was like, okay, cool. I don't even know how to like, start those conversations. I know a friend who is non military, he owns a landscaping business in Kansas City. And he's like, dude, you should join this BNI group, which is a business networking international honor, if you're familiar with the group, but it's basically business owners that come together. They meet once a week. And they agree to pass referrals to each other. And it's exclusive. So like, unlike if you join, like the Chamber of Commerce, like you might show up and like, there might be 20 other business consultants or 20 other realtors or whatever.

And it is sort of a sword fight, right? Like everybody's in there and you have competitors are in their wellness BNI group, it's exclusive, so only you, like, if I'm like, I'm in the group now. And as a business consultant, I'm the only business consultant who can be in our group. And anybody has any consulting type of clients on the exclusive person that they will pass referrals to. So I joined this group, I didn't have any connections, we just moved to this new town. And it was actually a blessing. It was such a great thing that my friend was like, do just do this, like I get a ton of business from this group. So yeah, like I just started, one of the things that they do in these BNI groups is they call them one to one. And in each week, they want you to meet with at least one other business owner in the group.

So in my group, we have 48 other business owners that meet weekly. So we all meet corporately, once a week. And then outside of that, I mean, for at least 90 minutes once a week with one other member of the group. Sometimes I'll do two or three in a week. But you're just going deep, you're sharing just like we're talking now. And learning about each other's backgrounds or your body, each other's businesses, what's the ideal business referral for you and your business? So that way, they kind of learn you they learned to trust you learn to pass business too. And it was awesome for me because you know, one of my command philosophies was I saw my army friends make fun of me, but I always used to say it's all about the ships, right? And they're like, hey, bro, this is the army, not the Navy.

But you know, my philosophy was, we're in the shipbuilding business, we build relationships, friendships, mentorship, leadership, right? Like, you know, all the ships are great things in business. And so that idea of being a ship builder that I had in the military, and my philosophy really was like, fit perfectly with BNI, right? They're all about these, these relationships. And that's why helps you grow your business. So I started meeting with all these other these 48 other small business owners and just talking to him, like, hey, like, you're doing the same thing I would do when I was doing my internal consultant for the army. I'd show up and I'd say like, how's it going, right? Like, how's business? What's the biggest thing that you know, what's your biggest challenge? What are you struggling with? And it was amazing that like, these guys, I kind of expected people to be guarded. But all these business owners were just like, totally open kimono. Like, here's where I'm struggling. Here's what I don't understand. And like, long story short, like 95% of them, struggle with their finances.

They didn't understand their numbers they were having, like, like, you know, one example like I just met with a business owner yesterday. She's got a business and her annual gross revenues are like 1.5 million a year, which is like, for all like, externally you look at and go man, you know, you're crushing it. But she's like, I'm cash poor, like, I'm literally like, you know, paycheck to paycheck here. Like just trying to get my employees paid. And she couldn't understand where all the cash flows were going in her business, right? And where like, where's it all going? I don't get it. And so you know, I just started talking to him about that and helping him with it and just over time came to the realization that the great Sneed was like, you know, these guys don't have the same finance background that I have.

And the numbers are just super confusing to them, especially when you start getting into the, you know, the million dollar plus level and scales and it gets, you're writing these big checks and it doesn't, they don't see how it all connects together. So that was really kind of the, you know, when I started my initial consulting, that's what I was seeing. And then for my current company and business Cordis, one of the companies that I was doing some Lean Six Sigma type of operational consulting with their numbers were a disaster. And I was like, dude, like, who is doing your books, and they're like, oh, it's the CPA and I was like, I'm gonna fire this guy. So we fired their CPA. And I wasn't doing finance stuff with them, I was doing this Lean Six Sigma process consulting for them at the time. And like, like your numbers are dumpster fire, like you need to fix this.

And because it's impacting these other parts of your organization. And so via Twitter, I had found like three other guys that were CPAs that had a good presence on there and doing some advisory stuff. So I pulled those three in, the business owners interview them and one of them ended up choosing this guy, Devin, who's my partner now. And so they chose Devin to go forward. Devin came in and cleaned up the books and kind of got all the financials on the, on the right track. And anyways, we started working together. And then through that, like, Devin and I were both like, hey, I like the way you work. You like the way I work? Like, you know, we should think about partnering because he had this software offering, like, let's scale it, we'll bring some more CFOs in and so we'll start hiring some people. And that's really kind of curious how it started was you and I partnered up, he brought this software piece, I brought the CFO piece. And we've just been growing the business from there so good. It just happened, you know, it was not planned.

Brock Briggs  1:26:59 

Yeah, no, I feel like a lot of the best opportunities come from mixing stuff around and kind of getting out into the weeds and you start to see things like, oh, you know, there's an opportunity here and maybe we had to kind of chase this line down a little bit. Can you maybe give us a sense for, like, how many clients you’re serving, any numbers if you want to share. You can kind of give us a sense of scale for what you guys are doing on that and maybe talk about why or like what it would cost to hire you if I'm a small medium business owner to come in and take a look at my books and go through that process?

Josh Thompson  1:27:40 

Yeah, sure. So right now we have eight clients that are on board. You know, we just partnered up in February. So it's April now, so we're got 8 that are on boarded. And we're providing software and services for and so the software again, is our dashboard that connects up to your QuickBooks or your Xero or fresh books or whatever accounting software that you have and visualizes you know, kind of what your KPIs are and what your cash flows are. So it helps business owners see it without looking at a bunch of numbers. And then you know, from a services offering, like we have some folks that are just on board for the bookkeeping. We have some that's like bookkeeping and then full, like monthly accounting and reconciliation, all of that. And it's more of like, like once a month, I'll basically go through their financials, I'll record a loom or we'll have a 30 minute lead meeting.

And I'll send that to them as a business owner, it's just sort of like a you know, a situation report, if you will, to use military language on like, you know, where they're at with their financials. And so something like that, like just the software in the accounting, depending on the size of the business is going to range anywhere from, you know, 800 bucks to like 3000 bucks on that scale of like 1 million to about 10 million, that's sort of our sweet spot. Once you get over 10 million a year, you can usually afford like a controller and a CFO. So those businesses usually have, you know, someone full time on staff. And so we try to straddle the gap between like I've got a bookkeeper. Like most small businesses, if you're below a million bucks or even I would say to the like, 500,000 a year annual gross revenue, usually a bookkeeper is sufficient, right?

But they're not going to be giving you those insights and really helping you understand like how to grow and scale. They're just going to be doing the transactional work and making sure invoices are tagged and processed and all that. And then you know, really just kind of stepping it up from there like if you want full CFO advisory, you know, like I said, that can go anywhere from, you know, 5000 and all the way up to 20,000 a month, depending on the scale and scope of what you're looking for. You know, we have one client that essentially wants us to work as, they have a CFO, but they want us to work as a controller. And so we're sort of working to augment their financial team. We've got another client, that's a YouTuber, that we're basically just kind of doing the books and the accounting.

We've got another client, we have two clients right now that we're just doing pure M&A work for, you know, quality of earnings, cash proofing, you know, they're in the acquisition phase and they're trying to roll up some other businesses. And so it's different from like our long, you know, ongoing, you know, working with somebody all year long, we'll just work with them through the transaction, but CSRA, there got a few in the pipeline. They always get an increase, you know, kind of here and there. As the weeks go on, which is fun, a lot of engagement. Almost everything has come through Twitter, which has been interesting. That's how you and I met. And then so Twitter has been very fertile ground for us. And, yeah, did I answer all of your questions there?

Brock Briggs  1:31:22 

Yeah, no, I think so. Yeah, I have to be careful about I've told myself, I have to limit how much I talk about how great Twitter is because it could easily make this entire show just about all the interesting people there but yeah, very great place to find new work, new business and a lot of SMB folks on there. So that's right up your alley. I've seen this kind of proliferation of and popularity of fractional roles. Is that like? I don't want to say is that new? I'm sure it's always kind of existed to some extent, but it seems like they've really gained in popularity over the past couple of years. Is that something like a trend that you see continuing and like growing? And like, why is that? Or is that not important?

Josh Thompson  1:32:15 

Yeah, no, you're right. I think COVID really was kind of the catalyst to help the fractional anything take off. Right now you've got fractional CEOs, fractional CXOs, CEOs, CROs, CMOS, like, you know, name, the C level and there's somebody out there doing a fractional version of it. I think before COVID, there was a niche where there were a lot of people that were, I don't know, if I would call them fractional, but they were like transitional. So like, let's say a company got rid of somebody, like somebody wasn't working out that fired them, they needed an interim COO or CFO. There was a niche of people that would just kind of come in and fill the void and be like, the full time CFO, for example, until they could, you know, do the executive search and fill the gap.

Because the executive search can take quite a long time and when you get to the C level, you know, they're very much more interested in that culture fit. And you know, all that sort of the intangibles. And it's not always about just what's on the resume and the skill. It's a lot about how you connect and fit with that particular, you know, C level team. And so there's a lot more that goes into that. And so there was a niche of, I think, a healthy niche of people that were just doing the sort of interim C level roles or transitional roles where they were just come in, fill the gap until the executive search was complete. And then they would help transition they knew exactly and then step away and then go find the next one. Now, I think with, you know, COVID and everybody working from home and the advent of all this, you know, zoom and everything else, I think it's just created a lot more opportunity for that.

I think people just got more comfortable working remotely and with people like asynchronously. And I think that really served to, you know, open the market up and I do think you will just see more and more of it. You know, especially now like, why, you know, as a finance guy, I love it, because, you know, look at how much it costs to have an office building, like Salesforce just laid off, you know, 1000s of engineers and people out in the Bay Area and they're vacating these, you know, like 800,000 and million square foot office buildings because it costs millions of dollars to have all that infrastructure. And if I can get the same productivity from people when they're working from home. And all I gotta do is like, give them a laptop and make sure they gotta get the internet.

And I created COVID kind of forced people to create the systems and processes to be able to manage remote workforce. You know, there's been a lot of just in the business world, a lot of just collective knowledge growth and abilities around in doing that better and having those skill sets and capabilities. I think you're just going to see more and more businesses, like shun having a big infrastructure overhead expense when they can get the job done asynchronously, you know, using remote. I think, yeah. Long answer to short questions, I think you're just gonna see it continue to grow.

Brock Briggs  1:35:49 

If you had to pick one major thing that small business owners constantly mess up when it comes to their finances and something that you could articulate that they could go and maybe do in their business today or kind of change the way that they're operating today, what kind of advice or input do you think you would offer them?

Josh Thompson  1:36:15 

The first one would just be like, do monthly reconciliations. You'd be amazed at how many people have never reconciled their books like I look at people’s QuickBooks all the time. Oh, my gosh, have you ever logged into this thing you've been in business for how long? Seriously like, I'm not kidding. I think like, that's probably the biggest one is just like logging in, do the monthly reconciliation. It's not hard. You know, if you're a small business, like take your bank statement, QuickBooks has tutorials online, that'll walk you through it. And you take your and a month balance from last month, you take this month, you know, closing balance and you have your bank statement and you have the transactions that are in QuickBooks and you just go in and say yep, it matches, it matches the matches and matches, right? And categorize it.

And that's really it. And like once you learn it, it should take you, you know, 20 minutes or so. You can pay, like that's another one, pay. If you don't know how to do it, go hire a bookkeeper, you don't have to hire them to do your books. You can actually pay a bookkeeper just to sit with you for an hour or two one time and walk you through whether it's on Zoom or, you know, in person, how to sit with you over your shoulder and just walk you through a monthly reconciliation. And there's so much value in knowing that, like, when I open it up and I look at my financials, I know they're right. There's, you know, there will be little things where there's inconsistencies and you want to catch that.

The other thing that that does is like I've I've worked with five or six business owners now, where they've had employees that were basically stealing from them. And it wasn't until we dove into their books that they figure out like I wasn't writing that check? Like, who does that check to? You know and it's like, holy cow, man, like your guy has been writing checks to himself and stealing from you, you know and sad to say that that's happened, like, a handful of times, you know and this is even in a very small sample size of business owner, so it happens. And if you're not paying attention, it's gonna happen to you. I think the other thing that I would encourage business owners to do, if they don't have one, is like get a good CRM or like field management software.

Like, that's the other thing I like, made my mind explode, like I was like, melting down inside, like, I was sitting with these business owners and they've got like, 500,000 to $600,000 a year businesses. And they're literally like, they've got it's a classic like, military officer with their little green notebook. And it's got like papers falling out of it. And that's their whole entire business. And like if they dropped that thing, like all their business knowledge or they leave it somewhere, it's all gone. And so it was just sort of almost hard to believe that there were so many business owners that didn't have like a basic system for like, here's all my customers, here's what they were, here’s you know, like the simple stuff that would be in a CRM. You'd be shocked to see how many people don't have that.

Brock Briggs  1:39:23 

Josh, this is a really, really fun conversation and insightful into many areas that I wasn't anticipating. I'm grateful for you sharing your knowledge and time with me today. What can myself and or the listeners do to be useful to you?

Josh Thompson  1:39:39 

Useful to me? Oh, man, well, if you know anybody that's running a business and need some help with their financials, yeah, you know, I'd love an introduction. I'm passionate about it. I love working with small business owners that are like, hungry to grow. You know, that's one thing that, you know, you get into government and there's sort of a malaise, you know, there's some hard chargers, but a lot of government is like status quo, right? Don't walk about, you know, we're just trying to get through this without any problems.

And it's not like this, you know, high performing an organization and other parts of it that are but not all of it. And the thing I really love about all the clients that I've been working with and the small business owners is like, this is their livelihood. So they are like, they're all in, they're hungry to grow and succeed. And so if you got somebody that is just like, their gunner and they're getting after it and they're hungry and they just don't have the skills, like, I would love to work with that person. I'll be awesome. I'd love to help them grow and scale their business and help them understand their numbers.

Brock Briggs  1:40:44 

Fantastic! Josh, I really appreciate your time. Thank you so much.

Josh Thompson  1:40:48 

Yeah. Thanks, Brock! This has been fun.