Scaling Up: Deb Thompson's Tips for Business Success

Welcome to the B2B Growth Blueprint podcast, where we talk with entrepreneurs, founders, and leaders at B2B services, tech, and SaaS companies to learn the systems and processes they've used to create success for their business. We'll also learn from marketing and sales experts to provide insights to help you grow your business. I'm your host, Mark Osborne, and the podcast is brought to you by Modern Revenue Strategies and their 10x ROI B2B Growth Guarantee. Schedule a free diagnostic call to learn the fastest path to double your B2B revenues in just 90 days. Hello and welcome to another episode of the B2B Growth Blueprint Podcast. I'm your host, Mark Osborne, and today I'm very excited to welcome my guest, Deb Thompson. Now, Deb is a certified Scaling Up Coach. She's committed to mastering leading-edge business disciplines and working with leadership teams to bring about lasting change, enabling them to leverage the capabilities they learn to have consistency, predictability, and enjoyment in their business. She also works as an adjunct at Babson College, which is actually rated the number 1 college in the U.S. for entrepreneurship. She's a Senior Fellow and Leadership Award recipient, and her coaching program is part of the FastTrac Babson Accelerator Program and the Summer Venture Program. When she's not working, you'll find her hiking in the woods with her dogs, open water swimming, in yoga class, or spending time with her family. So, Deb, welcome to the show.

Thank you very much. Great to be here, Mark.

So, I'm so excited for our conversation, and I'm really looking forward to it. But before we dive into some of the topics we have planned, Why don't you kind of tell us your story? How did you get from where you were to where you are? And really, what do you spend your time on today?

Oh, okay. Watch out. Let's see, started life in high tech. So started life working for very large companies, IBM, 3Com, Hewlett-Packard, helping them to decide what kind of technology businesses to invest in. what kind of, how they call them venture groups, didn't they at that point in time in life?

Yeah.

Or, you know, which things were we going to invest in to create the next new business going on out there? So that's how it began. It was a beautiful place to begin for anyone that's a business owner out there. It's like having an IBM checkbook and you're trying to create a new business, you know, a lot easier. I have to say a lot easier than running a real, starting up a real company and you're with your own paycheck.

Right.

Sorry, checkbook. That was beautiful. And I left that land of, I have to say, red tape you wouldn't believe and went off into my own working with as a fractional sort of consultant first, but then actually as a business coach. So I've been a business coach for a number of years, like 20 years now. And I'm a bit of a junkie when it comes to learning new ways of helping businesses to achieve what they want to achieve. So started off with something called the EOS, the Entrepreneurial Operating System. I was a certified EOS implementer for 5 years, decided to, to move away from EOS to a couple of other operating systems and have finally ended up at Scaling Up. Which is kind of the grandfather of them all. The person who created Scaling Up is Verne Harnish, and Verne actually has had all of the operating system CEOs within his class at any one point or another. So— That's right.

They all quote him in the structure of their recommendations. That's right.

And if you're a coach and you've been at it for a long time, there's no way you're gonna avoid, you know, that kind of body of work, if you will. I also enjoy Scaling Up because Scaling Up has some fantastic partnerships with some big problems. Like they have a partnership with TopGrading, the number one kind of people-oriented services, et cetera, et cetera. So I really like the way TopGrading works and the fact that it's very open and it introduces me to new tools that my business owners can use. So scaling up coach for the last, I don't know, 5 years. And I've worked with, I've worked with all kinds of businesses out here. You've already talked about Babson. So I work with startups through to billion-dollar banks. And, you know, that's usually a top question for me is what kind of clients do you have? Do you focus in on any type? Not really, not really. And I enjoy, love The variety of the types of clients that I meet very much. What else can I say? Anything else about my background?

It gives us a great background and great perspective. And before we were, you know, sort of jumping on the recording, you and I were chatting about something that— and you have this really great visual that I'll ask you again to sort of pull up and share because I think it does a great job of illustrating this really interesting point. That, you know, and especially when you think of the idea of scaling up, you know, so many companies just sort of think of it as this, you know, continuous line of, you know, and maybe it's an S-curve where it takes a little bit of time to get going. But then once you get going, it's just gonna be smooth and explode and go right up that curve. But the visual that you shared, I don't know, do you want to pull it up again or you want me to share it? There we go.

Yeah.

It tells such a great story that I think is so accurate. Why don't you kind of walk us through some of the points you were making to me on this?

It's so funny. I give presentations and sometimes I don't care who am I, what am I doing here? I go like, there's a myth that growing a company, scaling a company is a straight line and I stop and the audience, usually business owners will go like, Is that right? You know, like, is that true? Because this is— they're feeling this pain every single day, right? So, so the world wants you to think that scaling a business is a straight line. They really do. And it is so false. I have articles that Harvard has produced or all these different— this is not true. A straight line is not true. So this is basically a visual that says, okay, 32 million companies in the US. I believe it's a couple of years ago, but that's not the fact of this slide. This slide is saying, you know, there's 94% of companies. And I, you know what, you could probably transpose this to a different country. They are this close as well.

Yeah.

94% are below $1 million. And look where you get to it. The ones that are greater than $50 million, There's only 0.06%.

Yeah.

So, you know, and I usually also say at this point, so you are really crazy being in this business.

Yeah.

This is like a track record that is not one, you know, most people would not take this job, but, you know, okay, we know you're crazy. You like running your own businesses. You like the challenge. Well, so what is happening? that 94% of the US companies are here, and to get to the over $1 million mark, there's 6% that survive that valley of death, right? So what's standing in between this and this? And, you know, I usually show this slide, which is all about you have a strategy on one side and you have execution on the other, and it's that— Gulf or canyon or whatever it is. That's, that's the problem. It's that it's how can I translate what I want to do, where I want to go? I know that. I know that so clearly in my head where I want to go. How can I translate that into actually doing it?

Yeah.

And, and there's a million things in this, in this canyon, if you will, I bet you know a few of them.

Yeah, for sure. Well, and you know, it's funny that that visual triggered a memory in my mind that's so clear, which is, you know, A+ execution of a C idea wins over the A ideas every time.

I like that. That's a perfect quote. It is true though. You know, that's true. Like, don't let the perfect get in the way of the do. All those kind of sayings, they're all there, aren't they?

They're all there. Don't have to get it right, just gotta get it going. Yeah, I like that one too.

Well, I can see my business owners in this graph. You know, I can see scenarios in this graph. I can see, you know, the less than $1 million. I'm $500K a year and I really enjoy it as my lifestyle business.

Right.

I just really wanna keep the chaos under control. You know, I might have a few people problems. I might wanna document some processes. Wouldn't it be lovely to have a $500K a year business without any hassle? Okay, I will take that. I can see that business owner here. And 94% of the world, that might be the truth of that fact, right? Because to get to the 1 million or over, it takes such a lot of growth. The complexity involved, probably first on that complexity is people, right? Well, where would you like to begin there? You know, what kind of problems can we think about? How many different categories of problems can you think about when it comes to adding more people into your organization and the complexity of adding more people in and what kind of roles you're going to put them in and how are you going to measure them. And I don't know if you've seen the new Gallup poll stuff. I should probably pull that up as well. But it is crazy, the numbers that are coming out of Gallup at the moment. I think I can probably, while we're talking, I'll bring it up. But it's just—

What specifically?

Engagement of people. In, in, um, the work Othard has founded. I'll just quickly—

Yeah.

You'll have to tell me if I'm going off the, off the scale here.

No, it's a great conversation.

Um, Gallup's just done this brand new, brand new, uh, study. Here we go. So, so here's the new numbers. Um, employee engagement. 21% are engaged, 62%, 62% are not engaged, and actively disengaged, 17%, right? So—

Almost even the numbers that are actively engaged versus actively disengaged.

Completely. It's just crazy. And then, I mean, the, the, this just, can you believe these statistics? Like, Life evaluation. They're thriving, 33%. Struggling, 58%. Suffering— suffering, that's like an awful word— 9%. Um, daily emotions, daily emotions, 40% are under stress, 21% are in anger, 23% are sad, 22% are lonely.

So, uh, All right.

So that was a little, little bit of a segue on the kind of problems you could possibly have with people in this, in this mix. But that's one of the— any operating system worth its grain of salt is, is definitely going to have people at its center, right?

Yeah.

And how to deal with people, how to engage people, how to motivate, how to have a culture that's thriving. All this kind of stuff. And it's funny how quickly it rears its ugly head. It's not like, oh, only the $10 million and above companies are going to worry about that problem. It starts down here. It, it, it grows in complexity and, and importance, if you will.

Yeah.

I see the, you know, $30 million company. that's trying to get ahead, that's dealing with a lot bigger competition than they were dealing with before, or that has a lot more competition because the competition has noticed their success and now they're kind of coming on into their markets.

That's right.

And it's making them kind of struggle to stay where they were, you know. So what is the— what goes in there? better strategy, better knowledge about what's going on in the marketplace, better looking at the trends and trying to figure out how to identify the key things, not the laundry list, the key things to work on that will help you to scale. So the financial discipline, if you want to put it that way, of that scale of business will bring you down if you don't have that discipline and that skill set. So, so I can see all kinds of stories, all kinds of stories in this one.

Yeah.

Um, that even the leadership, you know, the type of leader that starts off here that ends up, up here, they are such incredible human beings, to tell you the truth. I just really I just look at them and deal with them and think that the most disciplined people I know, they learn, learn, learn, learn constantly with a book in their mind, or they're listening to somebody that's telling them something new or trying out something new. They're not the— maybe I just, I'm just lucky, but they're not the, I'm not ambitious, I just want to stay here for the rest of my life type.

Right.

This is not the typical business owner that I know.

That's right. So I'm curious. So you see these stages around, you know, kind of different milestones. And it's funny that you say that because on the sales and marketing front, we've identified very similar breakpoints. There's this like to get to, you know, your kind of million a year in revenue. These are the challenges that you face. And then to get— we actually see it's kind of around the kind of $1 to $3 million and then in the $3 to $10 million. They're kind of different classes of challenges that they have. And it's also very interesting that if they don't solve the ones from the previous stage, they kind of can't break through to the next. And so, oftentimes we see companies that are at this sort of 8, 9 a year range and they're like, why can't we break through 10? And it's like, well, because you've just been, you know, grinning and bearing it through things you should have solved at 3 to 5. Uh, and, and that's what's holding you back is a thing that you've figured out how to, you know, duct tape and baling wire and, and, and make a workaround, but you really should have solved a more fundamental issue, uh, that would then make it easy or not, or easier possible for you to break through that 10 and then start, you know, staring down 25, uh, and that sort of next, uh, layer of growth. I'm curious if you see that the same thing is true. Like, are, you know, we've got these kind of similar milestones outside of marketing and sales where, you know, I don't have as much expertise. Do you see that operationally there are similar challenges that hold people back from breaking through that million-dollar mark or breaking through to that $10 million mark? Or, you know, and you talked about people problems exist sort of all the way through, but Are there other sort of key things that align to these milestones that you've seen?

I think, you know, to take the sales example because it would be found in all the different areas of the business, right? So if I were to take this sales example, I could go on forever. Sorry. Okay, the owner starts off as the best salesperson.

That's right.

Right? That's the deal. And oh, to get that owner to kind of give up the reins on being that the best sales— well, the operations guy is exactly the same. The operations guy can do it faster and quicker and easier and all those kinds of things than anybody else can.

Operations person.

Yeah, exactly. So here's in sales. All right. So you kind of, oh, you grow and you grow and the owner can't do it all, right? And so now we're gonna start to maybe look at, Dealing with different people, deal with different salespeople and approaches. We're gonna start to look at process. Process and how, oh, there's a process here. It's not just gut feel. It's not just, you know, winging it when I know I can do it myself. No, no, you gotta have that process so that you can train more than 2 or 3 people to do it, more like 10 or 20, you know, so you're scaling. Then you have all your financial stuff, right? So all your financial stuff is gonna come in. If it's the single owner, then he's got his, his nice little playground and he can manage all the costs involved and the margins involved, et cetera, et cetera. Same thing happens with all the other departments. But the, the, the, the literal jumps you have to make each time I say, oh, there's a process involved. You know, every, I don't know how many million, you're going to have to have a new process that evolves or a new approach or a new strategy and move those goalposts a little bit more. So it does, if I were to answer this in this kind of scaling up discipline way, Yeah. it comes to the questions around people, the questions around strategy, how you're actually going to do what you're going to do. the strategy around cash and finance and then your execution skill.

Yeah.

So, you know, that golf, it really is true to me. There can be the most beautiful business plan in the world and it can have the most beautiful people sitting there in front of you. But if you don't know how to execute that, then it's going nowhere, absolutely going nowhere and execute when you get up to this level, Is crazy hard. It's crazy hard.

Well, and it's so funny because execution becomes adherence to a process.

Yeah, it's full circle.

That's right. Well, because sort of early on, it's oftentimes sort of one person having either the grit and the, you know, sort of work ethic and then the knowledge on how to execute. But they can't break through to the next stage until they can turn that into a process. And then once that— and then that process takes you to the next stage, but then it becomes a process for creating processes because otherwise it bogs down. And it's so interesting to see sort of this cycle as people grow.

Absolutely.

We talk about it in Marketing and Sales. about it being sort of a phase shift. Like, you have a phase of where it's founder-led growth, and so the founder is the face of the company and is, you know—

Right.

And in fact, the intel that comes from those prospect-customer conversations being in the marketplace, it's very important for the founder to have that early on because that shapes the direction that they take the company into. But they become a bottleneck, and then you need to, you know, sort of bring in the processes that can allow it to transition to sort of marketing and sales-led growth, but still not lose that market intel that the founder needs or that the leadership team now needs in order to take the company where it needs to go and that enables the company to grow without those bottlenecks. It's so interesting to see that.

I love the new pitch by Verne Harnish.

Okay.

He always evolves, but I love this new stuff actually because he actually talks about You know, what is the founder or the CEO's job? What must the CEO and the founder be? Absolute bottom line. And he says, the soul of the company.

Interesting.

So, you know that story you just told? That's where the soul was born, or says Vern. I'm just copying his words, but you get that, don't you? You would understand me saying that. It's the place where he made all the mistakes, he or she, excuse me, He made all the mistakes and figured out what would work, what wouldn't work, what the margin, whatever the story, the absolute ins and outs of the process. And that ingrained knowledge is, by the way, what Vern would say, she must keep, must keep and preserve and not delegate away.

Yeah.

That's a really hard thing to do, by the way. That's a really hard thing to do, to keep that continuity. And it's certainly, I think it's another reflection of this, this graph, right?

That's right.

Because sometimes you have an owner that listens to what we're saying by saying, you can't be the only one. You have to make sure that you have a scalable organization. And they interpret it to mean, I have to get out of the way. Yeah, you don't have to get 100% out of the way. You have to provide as much leadership. What were you saying?

It's about removing the bottleneck, not necessarily being hands-off.

Yeah, yeah, completely. Well, it's like such a difficult thing. This— we're talking about skill and discipline that you're not gonna read about in some book and know how to do.

Yeah. Well, and I guess that's why there's so much emphasis on building a culture because the culture then takes the soul of the organization that was at one time embodied by individuals and then spreads it throughout the entire organization. And people talk around culture so much that sometimes you're like, well, what do you even mean by that? And I'd be curious to get sort of your definition, but one I've sort of latched onto and can't exactly remember where it came from. But it's sort of your values. So, what do you value? What do you think is worth doing? But that by itself really isn't culture. It's your values plus your habits. So, it's the values that you have and then the behaviors that you do on a regular basis. Those 2 things together are what create the culture of an organization. And that's what allows You know, the person who's 5 steps down from the CEO who may have never been in the same room with him to approach each task with the same mindset that is going to deliver the promise to the customer or the promise of the product because it's that combination of values and habits or behaviors together.

Completely.

Yeah.

And then, it's making sure everybody understands them. And can translate them in what they do. You know, the value is precision or something aligned with precision. Okay, how do I interpret that in my own world? What means success in my world? And then you can put another layer on it that says, okay, how is the company going to judge the fit? of this person against that value because you've got to— I don't know if it's the right word— is police. You got to make sure that your culture remains strong and that you are keeping to those central values that you've decided are like the platform of your culture. Yeah, that's right.

So this is such an interesting conversation and I don't want to I hate to cut it short, but I do want to get to some other topics. So, I think it's interesting the way that— and so, you and I met at an Exit Planning Institute event. And we were talking there and in subsequent conversations about how you've taken sort of the discipline of, you know, sort of business improvement that you've built over many years. Worked with entrepreneurs and very small companies and very large ones. And now adapting this specifically through the context of how companies can have successful exits. And I've been doing some similar work as it relates to taking the marketing and sales revenue principles that I've built working with companies of all sizes and at all stages of their lifecycle and helping attach that to companies as they prepare for sale. And so, I'm curious what that journey has been like for you and what you see on the horizon relating to the sort of burgeoning industry around exit planning and exit advising. And I know you're a Certified Exit Planning Advisor through the Exit Planning Institute. And I'm just sort of curious, like, what do you see happening in this space?

First of all, the reason why I started on the exit planning stuff. Thank you for mentioning, I should say, first of all, thank you for mentioning I Am Assertive. What a devil of an exam and process that was. Oh, ouch.

It's one of the ones you want people to call out a lot because it wasn't easy.

Like, I didn't just buy this badge. It was a killer. But it made me appreciate, honestly, it feels good to have like knowledge of this thing that's pretty complicated thing. Why did I do it? The reason I went after that was I appreciated the knowledge they have, and I actually do believe that they're an education organization, the Exit Planning Institute, and they are doing a great job at accumulating studies and information and knowledge that people have to have when they're gonna go about leaving their business, transitioning their business, exit. But of, I don't know, I probably deal very strongly with 20 clients a year, good clients, good solid client base every year. And 10 of them were transitioning in the last 2 years. So we're talking about a trend here that is not a small trend. It's huge with the baby boomer generation sort of aging out, even if they don't want to. They're aging out. For sure. Yeah. And the next generation down, by the way, don't want to resemble the baby boomers and becoming, you know, you kind of the baby boomers are part of their business.

Right.

They don't wanna leave their business, but they are, we're making them leave their business because of age. The next generation down wanna actually retire in their 50s. So between the 2 top generations at the moment, every, there's a huge percentage of them that want to sell their business. And I'm recognizing that trend. The second thing I'm recognizing, however, through my own internal knowing, dealing with customers and through the stuff that Exit Planning Institute are saying is they don't know what they're doing.

Yeah.

And so third thing is, um, and I heard this at the Exit Planning Summit last month, the guy started his presentation, he said, business owners are showing up to sell their businesses And the analogy is they are showing up to a gunfight with a knife.

Hmm.

And he goes on to say, this is John Warrillow actually, who's the, who runs a business on valuation of your business. But anyway, so he goes on to say, the people you are facing, the alternatives you have when you're selling your business, Are you, you know, you have the PE guys, you have the people out to buy your business, the, what would you call them? The whole tranche of people beyond the PE guys, just the mechanics of people that are the brokers, I guess you'd call them. Yeah.

Okay. Brokers or entrepreneurs that are looking to buy a business.

Yeah. Well, that's actually the third way is entrepreneurship through acquisition, ETA. And he said all of those groups of people do this buy a business stuff 8 times a day. You know, they just do it in volume. I think that's a better way of putting it.

But whereas you run this business for 10 or more years, they've never done it. And in fact, maybe never even thought about it before, not that long ago.

Right. They're only going to do it maybe once. If they're lucky, question mark, they will do it less than 10 times. But there's certainly— there's no comparison of the amount of knowledge, capability, how they're doing the deals that can be done from this table are not very equal. They're not very balanced. They, you know, it's so the business owners in the world need help. They need a better understanding. And that's why, that's why I jumped right in. I can see that it's headed in a lot of people's direction. And I mean, the worst caricature, I think the statistic is something like of all the businesses that go out there, 20% of them are sold successfully.

Right.

That is crazy bad.

And even of the 20% that do sell, something like 75% of them regret it within a year.

Totally.

Either for personal or even kind of professional reasons. Like, so, like, think what a very small percentage of people have a successful sale.

Yeah.

Yeah.

Yeah. So, and at the heart of that success is actually having a very strong business operating system, having a strong business, having a great strategy, which the strategy is start to think about how you're gonna exit your business when you start your business. I'm gonna start this business and I'm gonna exit it You know, here's my goal, but don't do it the year that you've had it, you're exhausted, you're getting too old, blah, blah, blah. You can't— don't do it then. It's not going to be the most positive, the most profitable outcome if you start late.

That's one of the things that I really both like and embrace about the Exit Planning Institute's approach to the Value Acceleration Methodology, which is Running your business as if you could sell it at any time is actually a great way to run your business because it means that things are all operating. Like, think about— and you use the analogy of one of my friends recently sold their car. And so, to get it ready for sale, like, they had it totally detailed and it was beautiful and engine was purring. And they were like, now, I don't want to sell it. Like, I like driving this car now. And it's the same kind of thing of If you ran your business in that way of the engine's purring, all the seats are polished, it's gleaming off the hood, like then what a better way to run your business. And then when you do decide, you know what, it's time to move to the next thing or to let it go or whatever it might be, you maximize the outcomes from that as well. And it's such a smart methodology that they've developed. That emphasizes sort of both aspects. It's better to run the business that way today, more enjoyable, better outcomes, as well as you're going to maximize the largest financial exchange of your life, most likely.

Yeah, totally. I like that example a lot. I'm going to steal it from you.

Absolutely. I'm coming up with stories all day long. It's all I do. But, Deb, I've so enjoyed our time together, but I got to be mindful of your time. But before I let you go, You know, give us the pitch. Like, who do you work with? You said you work with all kinds of businesses and you solve all kinds of problems. But who should reach out to you though? For our listeners that have been listening and love the way you approach things like I do, who should reach out? What would they reach out to you for?

If you want your business to scale, if you're dealing with chaos or pain or you can't figure out how to do that scaling thing, you're falling in, you're about to fall into the Valley of death, but you're a really ambitious person and you want to get ahead and you you're trying as hard as you can try. Then I'm your man. I know some techniques. I know some tools. I know some processes that will that will put you on a much easier. No, nothing's ever completely easy. We realize that, but you don't have to redesign the wheel. Right. You can come in and you can learn some techniques that will benefit the scaling of your company, your daily life, all the way through to your valuation of your company.

Fantastic. And what's the best way for folks to get in touch with you?

Really just an email. My website's bostonbusinessgrowth.com. But my email is deb@bostonbusinessgrowth.com.

Awesome. Well, Deb, thank you so much for taking the time to connect with us today. I've really enjoyed our conversation.

Pleasure. It was a real pleasure. Thanks very much, Mark.

Thank you for joining this episode of the B2B Growth Blueprint podcast. We hope you've gained insights to grow your business. If you enjoyed this discussion, please rate, comment, like on your favorite platform and share to who will find it useful. Do you know a CEO, founder, or leader at an early-stage B2B services, tech, or SaaS company who would like to be a guest and share their story? Send us a note. Let's schedule a conversation.