The Leadership Traits That Predict Breakout Success

What has kept me interested is the mystery. It's the mystery of how each company works and how each company can grow. And along with the mystery comes adventure. And I found that entrepreneurs just love discovery and adventure. And it's available in every company, in every situation. And there's no cookie-cutter way to make it work.

There's no silver bullet in sales, but on Sales Against the Odds, we're here to give you the best shot at building a sales infrastructure that helps you scale. I'm your host, Lee Brimble. Thank you everyone for joining. This is another episode of Sales Against the Odds. I'm your host, CEO of Sales Acceleration, Lee Brimble. Very excited to have with us today a mentor from my past and somebody I've worked with Bryan Cressey is joining us, a nationally recognized pioneer in private equity, and to my knowledge, maybe the only person to co-found 4 highly successful PE firms. Bryan's been featured in Time, Fortune, and was credited by the Wall Street Journal with inventing the industry consolidation investment strategy. Bryan has a track record of building companies with proven success, most recently with Cressey and Company and Frisk Cressey Ventures. Bryan, thank you so much for joining us this morning.

Thank you, Lee. I really appreciate it, and I've enjoyed working with you, so I'm looking forward to enjoying this.

Great. Thanks, Bryan. So I want to jump right in, and for those, many of us that will be joining today know your background and your story, but for those that don't, you've co-founded 4 highly successful PE firms. What originally drew you to entrepreneurship investing, and what has kept you passionate about it for the last 4+ decades?

Great question. And I think it applies to what you do too, is that I found something I loved. When I was young, I read about entrepreneurs, and this is long ago, growing new companies. And I love the thought of building companies. Now, I would love to help companies grow. So I was passionate and my enthusiasm is what carried me there. So in school, I learned about venture capital. Decided that's growing companies. I wanted to do it. And what has kept me interested is over the last almost 50 years I've done this is the mystery. It's the mystery of how each company works and how each company can grow. And along with the mystery comes adventure. And I found that entrepreneurs just love discovery and adventure. And it's available in every company, in every situation. And there's no cookie-cutter way to make it work. You dive in like a detective, figure out where's the opportunity, what could be done, what could be changed, who do you need to get, how do you motivate 'em, and away you go.

Nothing's better when you have a passion for working something and everything is a new challenge, and the result of it is really creating a successful company. So You've been able to work with hundreds over the years of founders, CEOs. What patterns have you noticed that really makes that CEO truly that entrepreneur that, that's capable of the growth and the vision that you've had with so many of your investments in so many of your companies?

The things that distinguishes, I think, the founders that are gonna make it work, one is they need to know their business really well, their field really well. They can't be a first-timer on it, and they got to have enthusiasm. The ones that really succeed big are the ones that don't just go into the business to make it work. They want to build the best company in the business, and they'll do it creatively. They're going to bring different strategies, different people, different solutions. And so when I was young, I got to start some new companies in areas we chose that we knew would be good and got some great CEOs who were those things— creative. They wanted to build the best. And you know what? They did. Over 15 years, they built big, remarkable companies. That distinguishes them. You don't want someone who just wants to make it work.

I love that creative strategy. I'm going to go on that vein a little bit. So when you're working, you've got this entrepreneur, you've got the CEO, you can tell they're creative. How does that creativity and that vision lead into kind of a sales direction and sales execution? How do you tie that creative passion into delivering a sales strategy that can really generate the returns that you're looking for?

And that's where the CEO gets involved, the founder, because that creativity means they're gonna do something different and better, and they can sell it to the customer. And so they go to the customers first and try it out. And develop, whether it's a product, a service, whatever it is, sell it to a good, smart customer, and then they redefine it and redefine it until it's really, really good. And then they take their creative enthusiasm to other customers. So early on, it's the founder creating and selling the difference. So it is different. If it's not different, they won't get any attention. And it's a good test of, are you doing it right? Are you creating something new? That the world needs.

I love that. And so many of those that are listening, and we've already had this implied, and it's a common theme, is that that founder has to be able to sell it first, right? They've got to be able to have the value proposition, be able to differentiate in the marketplace, and be able to take it. Because if you don't have the founder can't do it, you know that sales team's not going to be able to do it as well, right? So being able to have that founder get in the weeds with it, drive that creativity, and be able to sell it, I think is really Well put. So when you think about some of the leaders you've seen that have struggled, right, where you maybe knew early on that it wasn't the right leader to take this company to the next level, what stood out to you? What are some of the red flags or the warning signals, so to speak, when somebody doesn't have that innate leadership quality?

A couple of things, and I'll tell you a funny story that applies to what you said about selling. One would be, We had a public company CEO we merged a company with or bought once, and he told us upfront, look, I don't do customers. That meant the CEO saying, I don't sell. We did the acquisition. And of course, unfortunately, he wasn't around a year later. I know your listeners won't believe it, but it really happened from public company CEO. The other things are a person that has no prior record of Success. We want to invest with people, partner. You want to partner with people who have been successful at what they've done. They don't have to have run the world, but they have to have been successful at it. That's a non-starter to me if they can't show that. Second is arrogance. They have a big ego, want to take credit for everything that happens. The ones that really win give their teammates credit and say, I didn't do much. I have a great team. And they get a great team. They're really good and have high standards for recruiting people. Folks that will take anyone that shows up, those are not people you want to partner with. So those are the 3 things I look at and are non-starters.

When you talk about building that team and passing over, you know, giving the credit to others, any examples that stand out of where that leader demonstrated that early, where they were— you could tell that they were about the team versus them first? And how do you continue to inspire that? How do you, how do you make sure people recognize that? And because it's easy at the beginning, right, to say it's a— I'm a we person, but then they get into it and all of a sudden you start to see that shift as far as them talking about more of what I've done versus the team. So have you seen great leaders do that well? And how do you continue to encourage that as the company continues to grow with that leader's vision?

2 things. One is I look for that. And so I, in talking about their past accomplishments, when I ask them about their past accomplishments, if they explain how they did A, B, and C really well, then I'm concerned because the good ones will say, look, I saw the strategy, but I had a great team. They did everything. Operating guys, salesperson was a great— on and on about the people. They don't do that. They're not the right people. And then to keep it going, we listen and talk about it a lot. What are your different teammates, your sales head in particular? What are we accomplishing there? What are we doing on operations? I just stress it and they'll keep it up if that's their persona. And you can identify it if it's not their persona.

Obviously, the amount of experience you have doing it, there's subtleties that you can see versus Others that are giving you lip service to it. Yeah.

One example, I can say we started a company. I was, I think, 30 years old. We started a new company in cable television when it was young. And the guy we backed was about 31 years old. And so, I talked to him about how can you make this succeed? And he said, Bryan, I know the mathematics. I know how this business works. I know all about it. But I'm going to have the best CEO, best sales leader, best market development guy. I'm going to get great people.

And he did.

So, that's when you can get confidence that a person understands they are not the be-all and end-all. And I was even willing to back a young person because he understood that. And that was a major— became a major company because He just kept riding the great people. And I learned from that, to be a great CEO, you don't need to be the smartest or the best at anything except hiring great people in the right roles and motivating them. Those 2 things.

You want people in the room that challenge you, that, that get you to think differently, that push you. And when you get that great team together, I think we both think the magic can happen. We've talked about some of the people. Right. So obviously you've had a history of Cressey and Company of picking exceptional companies, right? When you're evaluating a company, what attributes or early indicators help you spot those that can be exceptional? What are you looking for when you're looking at that company that can go from, you know, $5 million in EBITDA to $50 million? What stands apart as you start to identify the right company to be a good investment?

Yeah, there's several things that I think I look for. One is, I look for a company definitely has new ideas and better ways of doing things because without new ideas, better things for customers, or in our case, healthcare patients, you have nothing to sell. So you've gotta have something superior and new. And secondly, I mentioned earlier, but great aspirations. You've gotta have The idea that you're going to be the best in the industry. And then third is, from a business perspective, you want to look hard at the business's gross margins. Can it make big margins so that it— as you grow, you're going to turn profitable and then very profitable? Because being very profitable allows you to have the motive force to get large. And get high growth. So you've got to have a market with high growth potential and high margins, and you've got to look at that from a business perspective. So it's more than ideas, it's also possibilities, and it's also reality.

So I love the 3 areas: your new ideas, your aspirations, and your margins. How do you continue to vet through as you go through looking at this company that may have that potential? How does Cressey and Company really continue to look at Is this new idea truly innovative for the marketplace? Do you argue— is it a numbers perspective? Is some of it just a history perspective? Or are you talking with competitors in the marketplace? I guess what I'm trying to get at is how do you make sure those new ideas and aspirations truly are a differentiator in the marketplace?

It's one that you've got to do your homework on every one of those. So you've got to talk to customers. And ask them, is this really better? Do they really desire it? So, you know, it can be sold. Talk to competitors and see what they're doing and if they think it's different or they think they're already ahead of that and it's yesterday's news. And then what I do financially, I get monthly financial statements from different periods. So give me one from a year ago, 6 months ago, last month. And I look at the difference in gross margins as revenues grow. What's the increment of gross margin? It should be growing faster than revenues so that you've got some leverage on your growth. If it's not growing faster than revenues or it's not already very high, then you're not going to get there. So I look at different monthly income statements for the margin and for the growth. And a lot of companies say we're growing fast and it's not fast when you look at the facts. So you've got to get different periods, monthly income statements. You will know so much so fast and they won't be able to BS you at that point.

The numbers in the data, right? Proof is in the pudding, so to speak.

Absolutely. So those are the things you mentioned, but get the monthly income statements over different time periods. And that's like truth serum. Suddenly makes you the master of knowing what's really going on.

Love that. So we've kind of touched upon this a little bit, but I'd love to say, when you think about the companies that you've had with Cressey and Company and now Cressey Ventures that you've helped build, is there any commonalities for those companies that have had the strongest results? So a lot of our listeners today will be, Bryan, in that, as you know, the SMB space. So they're $5 million company trying to get to $10 million. When you look at these companies that have had that exceptional growth, any commonalities that stand out to you that some of our listeners be able to take with them?

I think the commonalities are you want to spend your time in growth markets. Just got to be in growth markets. Or if you have a superior way to grow, you got to put your resource into growth. Often that's more salespeople. And sometimes it's new product, but often it's just you're getting good productivity per salesperson, et cetera. But the ownership's got to be investing in that growth and in the sales force. Secondly is you want to have big markets so that you can do that, so that you can really grow somewhere. Otherwise, sometimes you want to start a new company instead. If you're going sideways and that's the future, don't do it. Life is short. Start another company that can really grow. You don't want to be there very long. And then make sure your company is always formulating change, bringing change. And that's sometimes talking to customers a lot, say what would really make them happy, what would make their life easier. So you've got to keep bringing change. I think our best entrepreneurs over the years, we had a company in the '80s that grew to a great success. They started a new type of hospital that took care of people that were badly injured, but specialized in it and grew and grew one hospital after another. It was just specializing to take care of a narrower set of patients that really needed it, and it reorganized the industry. So thinking about your business, should you go broader? Should you go narrower and deeper? And sometimes you find your growth. asking and answering that particular question. So I think those are the key. And then finally, if you're not a great CEO, get one because a great CEO makes it go. And you don't have to be that. I wouldn't be a great CEO. I'm good at seeing opportunities to build companies and helping getting the people and making it happen. And then seeing the vision. There's a lot of things I'm not good at. That would be one of them. So I make sure I get great CEOs. You can too. There's no shame in not being the CEO. What you want to be is an owner, a partner, and happy. You want to have a big smile on your face, and sometimes you get a good CEO and you have a big smile on your face.

Most companies don't have the bandwidth to build a high-functioning sales department to allow them to meet their revenue targets. With Sales Acceleration, they don't have to. Our experienced fractional sales leaders consult and implement your sales strategy, infrastructure management, and team development. Discover how we deploy these proven sales solutions to address your sales challenges by going to our website and filling out the contact form. We'd love to hear from you. You know, we talk a lot about, you know, people can be in that visionary seat and have the great ideas, but they may not necessarily be that integrator, the person that can bring together the team. Recognizing that and bringing somebody in that can help you for an SMB company, I think is critically important. I love what you've talked about so much today of interviewing customers. That's really not a common theme that we hear. So much of what you're saying to me today is you have great ideas, you have a great vision, but you need to make sure that it's representing the marketplace. So talking with your customers, learning from your customers, how do you encourage your companies to do that? Is that just a matter of telling them to pick up the phone and have a pulse at the leadership level of what's going on and— In the marketplace? Like, talk to me about that customer engagement, because that seems to be a common theme that you've alluded to today.

The reason I allude to that is it's— I've learned a lot by doing young venture companies and startups over the— in the startups, you have to do that. You've got to talk to your customers and make sure they want you more than any other company to work with them. So getting it right for a young company is really important. What I try to do is say, okay, if learning what a new company would do to be the best really makes companies grow, why wouldn't you do that if you're a mid-stage company? Do the same thing. Talk to your customers, find out what's going to make you way better, and then do that. And so the way I accomplish that is I ask the CEOs, the head of sales, I ask them questions. So what are you learning? What do you think is going to be better than the competition? What are your customers saying to you about that? And they have to talk about discussions they've had with customers about that. So if you ask them about their conversations with customers about that, it won't be long until you start hearing back from them about their conversations with customers.

As you mentioned, company continues to grow, but it's so much of what you're saying is they continue to keep a pulse on what is happening at the customer level. And again, it's very tempting to, as you get scale, Right? Well, other people are doing it. And I think what you're saying is the leadership needs to continue to have that pull. So I love how you ask the questions to draw that out. What trends in healthcare excite you today? Where are you seeing the marketplace move? Where's some of the innovation that's coming in healthcare right now that has Cressey and Company excited for the future?

There's 2 or 3 big areas in healthcare that are now major opportunities. One is that it takes so long for someone who's ill frequently to get an appointment with a specialist, maybe 6 months. With virtual technology and virtual visits and computerized scheduling, we can move that up to 1 day instead of 6 months. And then patients can get their diagnostics testing the next day instead of 6 months. There's huge opportunities there. The healthcare that'll be improved is mammoth. Same thing in terms of overseeing between doctor visits is the next big opportunity. Maybe those are 6 months apart. You can monitor and ask the patient, you can even do it with texts about different signals of how they're doing, and you can track it and you can take care of them really well so they don't go to the ER. They don't go to the hospital in between. There's a whole lot that can be done there today. So it's looking at what really will improve. In our case, it's our customers, our patient. Oh my goodness, there's so many ways it can be improved because our system is antiquated, as we know, and digital technology is coming that allows us to solve a lot of our customers' biggest problems, and they are big. And we can do it. But it's mainly companies that are forward-looking. So mid-sized companies that say, I want to really grow. What are these big things and how would I implement it? Or you do a startup. Startups are clean because you can get good people, good technology. They have no customers to start with. So you need a really good sales force, but you can really grow these companies. So I'm excited about those over the next 20 years. Those are going to be mammoth opportunities. There'll be probably 500 great companies built out of that, what I just talked about right there.

We hear so much of technology, right? And how it's going to impact different companies. I love how you're saying though, technology, it's still to the root issue of how does it make the patient's life better? And it's a great example, right? You do have a specialist, you do have to wait 3 months. We can use technology to solve for something that's important to our patients and to our customers, that's where we drive the results. So it's always back to patients focus, back to customer focus. I think that's what you're saying drives that technology utilization.

An important point, Lee, that you made is that technology alone fails. It's happened that in healthcare, a lot of technology, brilliant companies have come in and said, we're going to fix healthcare. They know nothing. It's like the customer, they know nothing about it and they can't interconnect with it. So they fail. But when you marry a patient, your customer, their needs with a technology that suits those needs and figure out how to fix it, you're driving downhill at 100 miles an hour. With that sensitivity on both sides, that's where you win. And most companies don't go there to that intersection that you just mentioned. It's critically important and creates The difference between success and failure.

Yeah, absolutely. And again, I think so much of is making sure that technology, as you said, is looked at it from the right way. And there's just so many ways where it can actually make a company step back. And what we're saying is make it customer-centric and it really drives right results. So when you think about leadership, and we've talked a lot about this today, the role of the CEO is evolving. What will the next generation of leadership need to master? So as you think about what a CEO had to be 20 years from now, what a CEO needs to be today, what you think a CEO will need to be 10 years from now, where do you think our leaders need to continue to evolve to and master from that perspective?

I think that leaders today, tomorrow need to become more sensitive to change because change is coming faster. There's opportunities to leverage that using technology correctly to solve the biggest problems or opportunities your customers see and feel. But the sensitivity to change means the CEO's got to show some vision. It's going to go here and here, and we are going to go there too. And here's how we're going to get there. But then you've got to have a CEO That deploys that with excitement. And the way you do that is you talk about the end state 10, 20 years from now. We are going to look like this, do this for our customers. And the way you get excitement, you talk about how's the customer going to benefit? They are going to be so much healthier. They're going to live longer. They're going to be with their family longer. And everyone's excited by that. Same thing with other customers. They're going to get their product throughput 3 times faster. They're going to have better margins. They're going to be able to develop new products faster because of what we're going to do for them. You talk about the benefit to your customer 10, 20 years from now, everyone gets excited. And then you keep talking about that over and over and over. And when you do that, your people will get excited. They will do the right things and they'll get it done. You don't have to specifically tell them, Do A, B, and C. They get it. They're smart. Once they're motivated, it'll be hard to stop your company.

If I'm hearing you right, it really is painting that picture of where that company can go related to the patient, casting that vision of what that looks like, and then having leadership that's able to be nimble enough to pivot to make that happen and get it done. Is that a fair way to tee it up?

That is. I would just add one thing to what I said, and that would be When you do it that way, your team gets excited and it becomes an adventure. You challenge them, we could do this, no one has done it. And that challenges them. Then it becomes an adventure and you tell them what you're figuring out are discoveries. People do love discoveries, adventure, and mystery. You tie that into it once you've painted the picture and you keep talking about that. And how you're going to become the best. You are the best, and you're going to remake history with what you're doing, and people won't stop running.

You've talked a lot about this vision, right? And I know obviously with the success you had, but it's hard. I mean, people say it, but to truly believe that we can take a company from $5 million to $50 million to an industry leader, how do you get people to really buy it? Because Bryan, you've done this with so many different leaders, how do you get them to really buy in? And how do you know they're bought into what the aspiration is? Because everybody can say it, but do they really believe it? And I think what you're saying is you've found people that really believe it. How do you get them to believe it? How do you continue to make sure that's instilled in them, that they're making that down, that leadership is then funneling down to their employees? Like, that belief's a hard thing to do, right?

Yeah, it starts with the leader. I have to believe it. If I don't believe it, I don't waste my time. Like I said about going sideways with a company, I'm not doing that. Life is going by. I want excitement, thrills, fun, and success. So I won't waste time if I don't believe it. So the leader has to come up with a vision that could overtake the industry. So they got to think about it for a while. Leadership is not watching what's happening in operations. Leadership is looking forward and taking the time to think about How could we pass everyone in the next 20 years? What will happen? How could we be the one that does that? If a leader don't believe they can, then they shouldn't. But when they do believe it, other people start to believe it. What I found is when the leader talks about it, we're going to do this, here's how we're going to do it, great people are attracted. You attract the people that can do it because 90% of them are bored where they work today. The real ones you want are bored. They're looking for adventure, and you have to have a challenge. So it can't be easy. Make it a challenge, make it an adventure to do something no one has done. Great people come to that, but the leader has to believe it. But once they do, you will, by talking about it, attract great people, and others will self-select out. There'll be one or two you've gotta release from the team to go do something different cuz they don't fit. Not that they're good, but they fit somewhere else better. But you will get a great team and you talk about the vision, they'll make it happen.

Yeah. Love that. And making sure that that vision casts down and goes to others and they're believing it, it really is inspiring. But they've gotta be able to get somebody that is in that leadership seat. They can take them to the next level and is evangelizing that. So there will be a lot of entrepreneurs that listen to this today. Any questions that they should ask themselves if they're starting to think about investing in their first company, in a new company? If you were going back and investing in that first company, what questions would you ask yourself as that starting entrepreneur?

I would ask, if it's myself or if it's someone else, is it unique enough? Do I have something different? You need something different to penetrate a market. Don't start unless you're going to do something different. And then secondly is what's the vision? You got to have— we're talking about vision— a vision that's strong and really take you somewhere. And then third is what people fit the vision. Does this company have the people that fit that vision? They're going to make it happen. I think those are the keys. And then finally, don't want to leave out money. Does it have the resources to get to the proving point where it can prove it can do it. You got to have, I'd say, those 4. You can make it work, or you can walk away and find a different opportunity. Feel free to walk away from 9 opportunities before you find the 10th one is the right one, because then you're going to have a good life.

Yeah, I love that. And again, looking at, you know, as you mentioned, it's not easy to find that company that can differentiate. So doing your due diligence to get there And then building a team that believes in that vision, I think is is well put. So, Brian, this has been excellent. I think our audience today has captured really what it means to be a leader, what it means to have a vision, what it means to think big, which is so often the biggest challenge. Anything else that you think we haven't hit today that that owner in the SMB world that's struggling to get to the next level they need to focus on? Anything that stands out for that company that can't go from Again, 5 to 10 million that would refocus them as they listen, a last parting thought that that business owner needs to take with them today?

I would just add that if anyone has a big question, contact me. I'm happy to see if I can help, 'cause it's important sometimes to get outside thought. So I'll be there if someone is serious about growing and doesn't quite see it. Just gimme a call or text me or something.

Well, Bryan, I've seen that firsthand, the way you've done in mentoring people throughout. in my career, but so many others. And I think that that genuine, as you mentioned so much of that genuine willingness and want and desire to help people cast that vision, I think has served us so well. So thank you so much of not only helping me grow, but others, other companies, other leaders in 40 to 50 years of helping companies grow. Thank you so much for all you've done in that respect.

And Lee, thank you for all the great things you're doing to spread the good word about growth and entrepreneuring. And how selling helps customers and patients. Really appreciate what you're doing. Thank you.

Well, this has been a great episode, again, for thinking about sales against the odds, thinking about leadership, casting your vision, engaging with your customers, having that idea, but making sure it, it really works with what your customers need and want. Thank you, Bryan, so much for joining. You've been listening to Sales Against the Odds. Be sure to hit that follow button so you never miss an episode. And if you want more resources on scaling sales, check out our website at salesacceleration.com.