023: Robert Sher - Taking the Next Step in Leadership and Growth

Are you thinking about how to grow your business with near and offshore staffing? But you're also wanting to make sure that it's reliable, cost effective and really well done. I think docsa talent is the way to go. Here's why. They don't just fill your jobs. They bring integrity, top talent and a people first approach that's hard to find. I've known the people at Doxa talent for over 20 years now and I say that you can count on them. I have talent. Talk to Doxatalant and you won't be disappointed. Go to doxatalent.com Bill G. Again, that's doxatalent.com Bill g. One more time. Doxatalent.com Bill G. Check it out today. Hello and welcome again to the Scaling Up Business podcast. I'm your host and Gazelle's business coach, Bill Gallagher. Today on the show, Rob Scher. Rob Share is a former CEO or formed CEO maybe, and longtime entrepreneur. He's an advisor to mid market companies today. He's written a couple of books on it. He's got a newsletter and blog and things like that himself, which we'll share with you later. But we're talking about growth today, growth and leadership. And he's going to share a story of a company that he's worked with and then some of the things that are in his latest book. His first book is the Feel of the Deal, how he Built a Company Through Acquisitions. And I knew him back in those days when he was growing a business quickly. And then he's gone on and worked with a number of other companies sharing some of that learning and experience. And his latest book is Mighty Mid Sized How Leaders Overcome the Seven Silent Growth Killers. So we're going to talk about that growth in leadership and the implications for it. I'm so glad to have you on the show, Rob. Thank you, Bill.

Delighted to be here. That's great. So.

Let'S talk, I guess about the company that really illustrates the whole thing. Tell us all about it.

Certainly, certainly. So as many companies do when they're, they reach out for help when they get really, really frustrated. And this CEO was right there. His, his call was essentially, help me fix this beast up. It was just driving him crazy. This CEO had been COO and had been promoted when the founder passed. Essentially this business was founded back in 1980 and it felt like a game of whack, a mole for him. He had a management team. This is about an $18 million business, probably 50 people, but he had a management team but he had to push him on everything. Hey, do that. And then they would go off and do some of it and stop. And he'd have to come back around to each of his leaders and chase him down. Right. And it was just super frustrating. They were growing about 7% per year, kind of at break even. So it wasn't in terrible shape. They didn't have debt, but it was just really, really hard to run. And they'd had a no firing rule. They just didn't like firing people. So many long term people. In fact, the three top leaders had been there since 1985. And this is back in 2013. CEO certainly super bright, super energetic, very introverted and very, very frustrated. So that's where we found ourselves when we first connected.

So pretty established company, established the transition of leadership and. And not able to focus on key things and get things growing again.

Right? Exactly, exactly. And one of the first things we observed is that they needed some help around leadership training and communication, including the CEO. He was on the introverted side, like I said. So he avoided one on ones. In fact, he loved working on his own stuff, being on his own to the point where these other leaders would try to crowd in and if they got, if that door was open, boy, they'd run through it and talk at him for an hour because that was their chance. They got through the door. And he just never had those basics of one on ones. How to communicate, how to listen first, how to let other leaders lead. And there was no process or system around it. It was kind of him trying to hide. And that was where we started is literally observing a meeting and trying to get some of the other folks to talk less. There was two real talkers. Get the CEO a chance to talk a little bit more and guide and direct and a chance frankly for the other managers to speak more as well. So that was kind of takeaway number one. Right. Is got to communicate better. Understand, understand people and how they're gonna, how they're gonna communicate.

Totally get that. And so what did you do? What happened?

So in addition to what we did there, we came in and we helped create an operating plan set. And it's relatively straightforward and we like this one page plan process that we find very powerful. Hey, what are the goals and objectives for the company? And then for each of the six managers that reported up to the CEO for each one of them for finance, for example, what's their specific targets and goals and what's their specific projects? And we had the whole team build that as a set Together until it all cascaded down to where there was, you know, one plan for the business, the other plans added up to it. Everyone knew exactly what they were responsible to, things like dates and measurables as a part of all that. This was all new for the team. And then they said, okay, we've got this plan now. Every month we're going to come back and we're going to look at how we're doing. We did it in a positive way. But that was really the next step for that team. And it was unnerving for them to have to stand up and say, I'm behind on my project. But it also felt good when they could say, I nailed this metric. It was very, very powerful.

Well, folks will recognize that stuff from our work on prioritizing and for quarterly and annual planning, they'll recognize some of the work on developing a culture of accountability from the disposal functions of a team or the highly functioning teams and what they do in the positive. Right. From Lencioni's work, the one page plan process that uses very similar to our one page strategic plan and the work that we do there annually and quarterly. So all familiar stuff and really solid. And then what about the leadership work?

Well, so what was interesting, after a year of doing this, when we were kind of looking back, one of the managers leaned back in her chair and she said, you know, it really felt like a year ago you had us in the trunk and we were just along for the ride. We couldn't even see anything. But now it feels like we're all in the car and we can all see what's going on everywhere and it's so much better. The CEO, to his credit, said, well, I hope by the end of next year you all feel like you have a hand on the wheel. And this empowerment of managers starting to step up from just the basic lowest level of supervision to people who said, hey, I have an idea of where I want to go and I'm fighting to get there. And it had been a year of that. I mean, discovering things through measurement, right? And I measure inventory turnover. Holy Toledo. Look what I learned. I mean, there was every month these kinds of things coming through, and what it did is in terms of results. And then we'll get to how we added some leadership. But profits jumped from break even to about 3.5% profit. Sales didn't grow. But I mean, just that alone put the organization in a positive cash flow situation. This was a wholesale food distribution, so margins normally thin, but gosh, 3.5 on, say, 1820 million. That's pretty darn nice. And so that was awesome. But when we looked back and said, gee, sales were the same as the year before, we said, look, the person leading sales has been there forever. They've never led sales anywhere else. They had no mentor. And so the CEO elected for the first time in this company's history to bring in an external executive, a VP of sales. And this person had real experience at a much bigger company. And it was wow. And he was carefully selected, used a headhunter, did all the right way, all the right things, but having this person who'd been there done that was incredible. And that's the start to leadership. And of course a lot of leadership being developed. I'm fully supportive of that. But sometimes if you want to really grow, you need to buy in some leadership. And they did.

So they recruited some key people to start to build more of an A player culture.

Yeah, yeah, well, they recruited one. And I'm not sure this company was so dedicated to having all A players. No, I mean they still to this day have not dismissed any of their leaders. But they needed more performance. And so they brought in someone from the outside. And this was not a fire breather executive. This was a warm, personable person who could lift the business up without breaking anything. And you know what, after that guy had been in the position, VP position for a year, their growth went from 7% to 18%. I mean that was dramatic. And he didn't fire anybody. All he did was manage diligently, right? Gotta put the stuff in the CRM, gotta get out. What are the behaviors, all the stuff you and I bill know is normal for sales management. Yes, did all of it. And in addition to the jumped up growth rate, profits went up to 6%. And all of a sudden they sat back and they said, wow, this is working. They had the money to pay for that first executive and more. Now's the time. Now we're ready to do some strategic shifts, we can grow into the next territory, we can tackle another customer type. And they said, but gosh, if we're going to do all that, it's time to step up on the operations side. And they went out and hired a VP of operations. Again, external experience didn't fire anybody, just a new person. The prior person now reports up to this VP of operations and appreciated it because guess what? That guy had been, it was a short time of nine years and he'd never run a business in operations at this scale. He didn't have any outside experience. And all of a Sudden he did. And we expanded their plans up to about 12 different plans. Not because there was a few more people, but they added in a marketing manager as well.

And how things continued to grow.

Well, so, so this VP operations came in, that was actually early this year and sales is continuing to accelerate. It's in the 28% range now.

Oh, solid.

Pardon?

Solid.

Yeah, totally solid. And they're, they're kind of at the limit of their ability to self fund, which is right where they want to be. They're looking at automation and growing on to the next level. But you know, this is a CEO who drank his medicine and changed how he led and brought in a process like you said, for accountability and clarity. He brought in.

It sounds like you did dashboard work in there too.

Oh yeah, absolutely. That's part of it. You bet. Everyone's got to be able to see it. There's no hiding. Everyone can see it all. The monthly plan reviews, the amount of communication inside the organization is far up from where it was just the monthly plan reviews, the one on ones. There are some team meetings and so on and so forth. Super powerful. And it's a great case study of how, if management's ready for it to bring in some process, make some changes and take what was a business that was bumping along into a pretty darn high growth business.

Nice. Yeah, nice. Nice indeed.

So let me make another point here, and that is that all of this did not happen in one month or one year. This was a gradual change. This is now year three. And much as I would love to, and I'm sure you would too, Bill, jump into a company and instantly fix everything and poof, it goes to that. People and organizations don't work that way. And so we did this one step at a time. That first plan set was not gorgeous. It wasn't like, wow, big time executive plan. No, there was some pretty simple stuff like let's have a KPI on whether we hold a customer service meeting once a month. Gosh, that's so basic. But you know what? They were never holding them. And this was completely controllable. And so customer service leader started out with, what would I talk about if I had a customer service meeting once a month? He said, well, you'll find something. Well, six to eight months in, it's like, why wasn't I doing this before? We have a list of things to talk about. This is super powerful. She was all pumped up. That's powerful now. Since then, that's off the list. That was like starter stuff. Yes, It Was what? Was there another example? So when you measure customer service, right, call times, first call, resolution, there's all kinds of great metrics. You know what, they didn't have any of that technology. They couldn't measure any of those things. So guess what? We decided they would measure the number of wows. So the number of times they got an email or phone call where someone said, wow, you went over the top. Wow, I can't believe you delivered that level of service. We just counted those. You know, it wasn't amazing, but guess what? The whole team was like, hey, Joey got seven wows and I didn't get any. What's Joey doing? And then they started tracking by person and they were celebrating the winner of the wows. Well, it did the trick because everyone's thinking about, how do I deliver better, more, faster? And it was fine. And that's about to get replaced by fancier measures. But it worked really well then. So that's just a point. Doesn't have to be fast and immediate and we don't have to wait for fancy computer systems. We can measure some simple stuff because it's really the behavior that changes because we're measuring it we care about. We actually don't even care if we actually hit the target. It's just fighting to get there that delivers the benefit.

Totally get that. I can see how companies need to develop over time. You can read about a beautifully well run company and you can see the opportunity of doing each of those things and yet you can't do it all at once. There's a story about how do you eat the elephant, right? You just can't eat it all at one sitting or one bite, right? So it takes something to figure out the steps and which things you're going to do first and so on. And it takes some time to get through to healing up the things that have a company just kind of treading water for year after year. And I think it points to the two things that have anybody reach out to an advisor like yourself or to one of our coaches is one of a couple things. One is they've been growing like crazy and now everything's chaotic and they need to bring order to all of it to hang on to the growth that they've been achieving. And that one generates a pretty urgent call. And then the other one is they're stuck and they just have no idea, like how to. They're looking for some new approach because they've sort of tried and they've worked hard, harder and put in more hours and it isn't making the difference. And they're often missing some just basic disciplines that really can turn things on. But then they have to figure out which ones to do first.

Right. And that's where guys like you and I can really help to say, where do we start and what's next? And even with this particular case study, now we're talking about a shift of thinking more into the future. They've got more leaders now. We're working on saying, look, I know we're thinking about today and tomorrow, but what about next year? Let's get more strategic. Let's look ahead, let's push today's task down level. Because the CEO and these top two leaders need to really be focused on six months or a year from now, so that when we get there, we're ready for it. And that's another shift. And it's uncomfortable and not normal, but it's the next thing.

Yeah.

So, you know, we continue growing.

Yes, yes, yes. Totally get that. How's it going now with them? What has that led to since then?

Well, you know, we got you pretty much up to current there. The CEO first of all, is having more fun than ever. It's gone from being a pain in the neck to being fun. CEO's natural competitive urges have come out. He's got two great VPs that are bringing in new energy, new ideas to the business. And what went from just get this thing stable and easy to run is now a business that's incredibly more valuable. It's growing. CEOs looking at new markets, new areas to grow in, new partnerships. I mean, it's a whole world of difference. The energy in the place is dramatically up. So it's become fun again.

Isn't it interesting, that phenomenon? I think you and I see that again and again. When people start being winning, they may actually put in more or less hours, but things become more fun. And I think a lot of people around growing their business have a concern or an anxiety about, geez, I'm not sure if I want to grow or grow aggressively because it might not be fun. My life might not be fun, but I think that there's a lot of fun in growth periods. You feel like you're winning and you put in long hours, but it's, it's winning hours. It's times where you feel like you're making some headway on something and the whole team's altered by it. Yeah.

And I think that's especially true if you have the right process in place and you have the right team. That can make winning comfortable.

Right.

And it's, you know, that's even true on a downturn. But when the business is growing, it won't take control of you if you're planning ahead and putting those things in place at the right point.

So the points I saw, that I heard through there and that we picked up in our prep before were that one, developing the leadership. So expanding their ability to communicate and connect with people and then bringing clarity to the team. People creating a full written plan that's updated and kept consistent over time so that big ideas go from lofty notions into something concrete that can be executed, executed on. And then I hear the importance of rhythms. So we talk about execution habits, about setting priorities and then having appropriate metrics, but having the right rhythms. That communicating on frequent enough base with enough of a tight agenda that you're actually touching on what needs to be moved forward on a regular basis and then bringing in some new stimulus. So new people, new approaches, new ideas for things. Some novel element brought into the mix of things. Someplace where you're going to innovate, where you're going to add to something, and of course, actually spending the money or going through the effort to do something right the first time rather than cutting every corner, compromising everything and not doing anything right ever.

Absolutely. As a business grows, you gotta have got to put the resource in to keep it growing.

Yeah. So what did we miss?

I think, I think you. You got it. You obviously have a lot of experience in this area as well. But those are, those are five good summaries. And I just cap it off with saying, how do you make it more fun? Do it right, Build a mighty business. Tying time back to my book. When you're running a business and it's mighty, boy, it can be mighty fun.

Yeah. Really can tell the difference. Well, companies experience a feeling of power and control when they start winning, when they start dialing in these things and they have the capacity to go into newer and other areas. And it's not just about being the biggest company in the block out there or having raised, in fact, companies that raise a lot of money and that are struggling or that can feel just as much struggling or failure as they can at any other size. So you really can experience being mighty even as a midsize company.

Absolutely.

Yeah. So we're going to put up a whole bunch of. Put all the links to your stuff, to the book, to your LinkedIn, to your website and so on in the show notes so people can go and read more about you. Get the book, download the book, read kind of your perspective, your story. I assume you've got a couple other companies in there as well. I do and some other great experiences. But I think this opens up the idea and it validates so much of good basic things and the idea that doing some of those basic things makes a real difference. And you can hear in the change in the growth rate, the cash, the profit position of that company in addition to the experience of everybody really just being engaged and having fun and like.

Absolutely.

So great. Well, this is really helpful. Thanks so much for being on the show with us today and for sharing your experience with this in particular this company and some of the big ideas that reinforce it. I think the folks, the followers of Scaling up and our work will and our podcast will get a lot from this other approach on very similar territory.

Terrific. Hey, thank you Bill for having me.

Thanks so much for being on the show today.

Rob.

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