BOSS Crisis Management

This is part 1 in the BOSS Crisis Management Series. My name is Greg Shepard, and I am a serial entrepreneur, 12 companies and 12 exits, 4 private equity awards. I have a book coming out published by Forbes. I speak at events and write for Entrepreneur, Fortune, and many other publications. Like you, we're trying to figure out what to do with this the situation with the virus and to give you some hope and try to help out with our experience. Before I jump in, it's important to note that I'm not a health expert, obviously. I have no insights into when this will end, but what I do have and I can offer you is over 25 years of business as an entrepreneur and investor. During that timeframe, I've managed to survive everything from the 9/11 terrorist attacks to the 2008 recession and the dot-com bubble. Without losing my business and without experiencing anything that would be detrimental to the companies that I had during those time periods. Boss Capital Partners recognizes the devastating impact of COVID-19 and this crisis and what it's having on all of these entrepreneurs and small businesses. We want to help and do everything in our power to try to get you guys in a place where you can be successful in this current environment. So we quickly adapted to our Proven Boss Method to make it work for the crisis management that we're dealing with and put together this webinar series. Entrepreneurs and small businesses have survived crises like this before. Our idea is to get you to a place where you're stabilized. To that end, we're offering this free webinar series entitled Entrepreneur Crisis Management. COVID-19. This series will provide information and resources specifically to help entrepreneurs and small businesses who are being impacted by the pandemic. I'd like to welcome Scott Tate, who has joined us to try to help you guys out with this difficult time. Scott?

Thank you, Greg. My name is Scott Tate. I served 27 years in the Navy, transitioned out as a captain. In those years, I had the good fortune or not to see and deal with quite a few crises and also had the opportunity to study at the Naval War College, Stanford University, and to serve on some large staffs doing crisis planning and crisis response.

And my partner, Randall Laveau.

Yeah. Hey everyone, this is Randall Laveau. I am a managing partner at Boss Capital Partners and my expertise is in growth. I have over 15 years experience in sales and marketing leadership and spent quite some time developing a marketing practice within a consulting firm called SBI. Specifically focused on helping private equity companies and their portfolios manage growth, scale, and exit.

We're gonna dive right in here and sort of talk about Boss Capital Partners and what we're after. We are traditionally looking for Series Seed stage companies. Our investments are between $1 and $5 million. We write checks as small as $500,000, $200,000, We invest ourselves, so we are the investors. That's something totally different. And we have subject matter experts that help out entrepreneurs as the investment moves forward. And we work really hard to make sure that we identify the buyer of the company upfront so that we have an exit strategy to start out with. So what is BOSS? Well, BOSS is the Business Operating Support System. This is a proprietary methodology and framework developed by me. Over the last 25 years. And I hate to say it was just developed by me. It actually is an open-source product. And as a result, it's got contributions from all kinds of people— Navy SEALs and Air Force and the Navy. And, you know, recently Scott has been an incredible influence on updates to the— Randall has added them. I mean, it's just a real open-source platform, and we look to grow it in the future. So who is BOSS for? Well, BOSS is the idea of taking a startup and turning it into a business. And for 20 years, I've done this with 12 of my own startups as well as other investments. And all of the things that I've been writing about and things that I've been doing over the last 25 years have led up to the idea of creating BOSS. There's 5 stages of BOSS. The beginning is the North Star, strategy, execution, standardization, kaizen, which means continuous improvement. So when we look at this, what we're looking at is the crisis journey. So what do you do now? And a lot of times when you're in the middle of the mix, you sort of get to that analysis to paralysis, or you just feel paralyzed that you can't even move because everything just turns upside down. In 2008, I had a business in the ad tech space, and I woke up one morning, went to my office, And I had my inbox full of about 50% of my customers just canceled. I had to go through a process of laying off 65 people, move into a barn. I mean, it was really, really difficult. I want you to learn from what I learned in these situations. And this model was created to help you cross this ruckus time right now. The first step is the call to action. The call to action is the crisis. Right now. The second one is meeting a mentor, somebody who has the advice, somebody who's been there, and somebody who can help you cross through this process. That's me. That's Randall. That's Scott. And what we're going to do is we're going to walk you through this in a series of different webinars. And that's meeting the mentor. Now we got to get you to cross the threshold on the mentor's advice. This is putting together a plan so that you can get from the stage of panic into the stage of productivity. And then we look at the reward. The reward is getting past this as a better company. Now, it may not seem like it right now, but I can tell you from experience and going through this 3 different times that there is a better company on the other side of this. It forces you to be more— way more efficient, way more refined, and it prepares you for these sort of things that could happen in the future. The 5th stage is return. Now, this allows you to return to business as usual, new and improved. I'm going to go ahead and pass this over to Scott.

Thank you, Greg. So it's really, really easy in a crisis to get focused on the urgent tasks of the day and lose sight of the big picture. So what we did was put together a phase flow to help people have an intellectual framework of where they are, where they're headed, and they can see their path through to the end of the crisis and the world on the other side. Now, this is flexible. It's a guide list, not a checklist. You need to tailor this to your company, but the general questions apply everywhere. So the first thing you do is initial assessment and damage control. Stop the bleeding, figure out where you're at, take a look at what's happened to your market, what's happened to your stakeholders, your customers, and just assess what's left that you can work with. Phase 2, we want you to get into stabilization. stabilization and think about a crisis pivot. Now, what's a crisis pivot? You still have customers, you still have assets, you've got people working for you with incredible talent. How can you use that stuff in new ways? How can you bring in and adopt new technology? How can you do things differently today to continue to bring in revenue, keep your people employed, keep your customers engaged, and keep your stakeholders aware? Stabilize yourself, look for some sort of a pivot, And as you pivot, you're going to also get a sense of what does the new market look like. The world is never going back to the way it was before this crisis. Your end state is going to be different than your starting state. When you're in that pivot mode, you're starting to lead that instead of following and getting run over by it. That takes us to seizing the opportunity. If you think of the world before the crisis, there was sort of a curve that you understood. Imagine what the world might look like after the crisis. The difference between those 2 curves is opportunity. Whoever sees that opportunity clearest and seizes it earliest is going to be leading the market as this crisis comes to an end. What new pain points have been created that create new customers? How do you position yourself now in the crisis to not only survive, but be ready to thrive on the other end of it? And lastly, return to deliberate operations. It's easy in a crisis to get hooked on adrenaline. At some point, you have to go back to doing things deliberately. And you, as the leaders of companies, need to have a set of criteria in your mind for when the right time is to do that. If you go too early, you could be in trouble. If you go too late, you definitely will be in trouble. And it's going to be a little different for everybody. But you need to have criteria that you all agree on. You say, yep, this is it. We're out of crisis mode. We're going back to deliberate operations, and we're going to go take charge in this new world. The last thing that I'll say about this is that different parts of your organization are going to be in different phases at different times. As leaders of companies, you should embrace that. If you try to fight it and move the entire company phase by phase, you'll lose out on a lot, you'll frustrate people, and some of your folks will be underutilized. But if you also don't coordinate it, you could have chaos on your hands. So as an example, your finance people might be in damage control For quite a while. They got to find new capital. They got to stop the bleeding. Your salespeople, the minute you start to pivot, should already be thinking about jumping into phase 3 and seizing those opportunities as quick as possible. As a leader of the company, it's up to you to sequence those phases, communicate, make sure everybody knows what phase each other are in so that they can mutually support and be ready as a team to move into phase 4 and return to deliberate operations in a very new world that you're well positioned for.

Thank you. Randall, would you mind talking about the pre-crisis circle of concern?

Yeah, so this goes into a little bit of the psychology, right, behind day-to-day business or business as usual and the intervention or a crisis popping up out of nowhere, right? So we find ourselves in that situation today. Now, before the crisis, You look at your circle of concern, and your circle of concern is typically made up of things that we do not have control of, but they're constantly coming at us in terms of noise and things that could be potentially influencing the direction of our business. Prior to a crisis, our circle of influence within our circle of concern is pretty big, right? There's a lot of things that we could do as a business. without the pressure of a crisis in order to control the strategic direction. Now, in the next slide, as we look at being in the crisis, right, you notice that your circle of concern stays the same, right? Those factors that you cannot control. However, in the crisis, your circle of influence contracts, and it contracts pretty sizably. So the point of this is really during a crisis, there are going to be a lot of things that are just outside of our control, things that could be distractions to what we ultimately need to accomplish, which is surviving the crisis and coming out a better company in that journey. So what we've done in terms of our experience, Scott, Greg, and I, is rather than have you do the guesswork, right, of what kind of things you can control within a crisis, we went ahead and put a list together. So on the next slide, What you'll see here is 2 boxes. On the left and in green is the circle of influence. These are things that are industry agnostic, business agnostic, right? Anybody could take these— this list right here and start to action off of it. On the other hand, the other side is made up of the circle of concern, which are things that we can't control. So these things in red, you're typically going to want to avoid. These could be distractions in you ultimately reaching your goal here. Now, it's important that as you go through this list that you have a process to dimension how to handle these initiatives, right? So, Greg, going into the next slide.

So when you look at BOSS, again, that's the Business Operating Support System. Normally there would be a North Star that you start out with. In this case, your North Star is still there. You're setting it aside to But just for the situation at hand, the crisis that we talked about before. So now that you've isolated the initiative and what you're going to do, you have sort of this idea, the plan that you're going to go with, and you want to test that up against a SWOT. A SWOT looks at tailwinds and headwinds. So you have strengths, weaknesses, opportunities, and threats. And this allows you to sort of disclose those things that may be hidden, that it takes this exercise to bring up. You'll notice that when you do this, it really— if you think correctly, you really think about the way you do it and don't rush through it, you'll find things that you miss and you'll open up some blind spots. You want about 3 to 5 of each one of these in each one of these 4 quadrants. And then you move into a mission. Now, the mission is the top. So if you look at your business and you have growth, margin, retention as your value drivers, those value drivers also drive through to the 4 functional areas. The 4 functional areas are sales and marketing, service delivery, product and technology, and shared services. And so now you have a mission for each one of those areas. That mission is from X to Y by date. So you want it time restricted and the from X to Y are integers including dollar amounts, percentages, and numbers. Now that you have that, you need to prioritize things. You have this big list. Not all things are created equal. So you use the Eisenhower urgent versus important structure and figure out what is urgent and what is important. Typically, normally I say that urgent things happen when important things are ignored. In this situation, you're having urgent things handed to you because you're in a crisis. So then you look at impact versus effort. What has the highest impact and the lowest effort? Now you have the ability to prioritize things. And now you can move into execution. Randall, could you talk about the case study?

Yeah, perfect. So, you know, exactly what Greg was talking about, we brought that to life here. And, you know, as everyone in the audience today is facing this crisis, so are we, right? And so this is a live case study from one of our current portfolios who just enacted this process. So want to show you some of the results and how they dimensioned it, how they went through it. So this is a high-tech company in the SaaS space, about $2 million in revenue, 10 employees. The product is focused on automation, so a relatively quick sales cycle in about 60 days. And the situation is the social distancing with the pandemic has caused the workforce to abandon the field. So some of the large clients that they had been very familiar with visiting in person, going on site to do live demos. Now that's just impossible, right? And so that could impact a very key piece of the revenue channel. So the issue that they chose to pick out of the circle of concern or circle of influence list, the things that they can control, is the customer acquisition cost, right? Having the sales force removed from the field is obviously going to impact the customer acquisition cost negatively. So what they did is they went through the BOSS initiative development process that Greg just walked through. They used the list to select the initiative, and then they started working through that process. And the output was 2 things. One, deal triage. So rather than focusing on net new opportunities and net new pipeline development, which is a big contributor of CAC costs, They chose to focus on securing those deals that were late stage in the pipeline and even forecast it out for future months and double down their efforts within those deals to try to pull them in early. The second thing that they wound up doing was repurposing the event budget. So the demand gen team had a big focus on attending events, industry events and conferences. And with the social distancing and the pandemic, not only will those likely be canceled, But it's going to be hard to generate the type of activity that they used to from it. So moving that budget over to the digital side was very helpful. And what this resulted in is a 20% reduction in CAC almost immediately. And the way they were able to understand that is through the deal triage initiative, which resulted in 4 net new deals, which were originally projected to close in future months. They were able to pull those in early and capture that revenue now before the uncertainty You know, piles on and gets even worse. So on the next slide, we walk through the process, right? So we alluded to a lot of this in the initiative development process that Greg walked through. The SWOT analysis is the first component to that. And so looking here, you could see an example of how they went through their strengths, weaknesses, opportunities, and threats. And this was a big part of this, right? And it's important to do SWOT in this instance, even if you've done it prior to the crisis. You're now looking through this initiative through a new lens. Market conditions have changed, buyer behaviors have changed. So it is very purposeful to do a SWOT in this instance. Then on the bottom, what you could see is this is impacting the sales area. So they had created their initiative, right? And you can see that in the description, which is to reduce customer acquisition costs. Now they have 2 objectives, which we had talked about before: deal triage and repurposing event budget. And from those objectives come 4 different tasks that are critical in order to complete those objectives. And you see those listed out in the key results there. Now, as Greg mentioned, Everything is measured as a from-to perspective. So in some of these instances, like the first one, you see going from 0 to 69 deals in terms of auditing the total pipeline. And in other instances, you see a percentage, 0% to 100%. And this just indicates the level of work that needs to get done. You're starting from ground zero and you're working all the way up to complete. So from 0 to 100%. Now the next section, the UI and IE, is urgent, important, impact versus effort. And this is very important, as Greg mentioned, in terms of helping you to prioritize how these tasks should be completed. So you could see as we go through each key result, we dimension it in an impact versus effort, urgent versus important, and the results are here on the screen. Some are very important, some are very urgent. and some not as urgent, right? So that's going to help dictate the prioritization. And then on the right-hand side, all the way, you could see the prioritization of each of these tasks. So for the audience here today, taking the, the, the crisis management checklist, focusing on your circle of influence, those things that you can control, you could take those specific initiatives, drop them into this process, and start executing tomorrow.

Right?

And that's the purpose of this webinar series, as well as some of the resources that we're providing. We believe that there's a theory to all this, and we want to make sure that it's sound, right, and that we have the processes. But more importantly, we want to make sure that each member of the audience has something to do directly after this, right? Because time is critical, right, in a crisis. So with that said, we have a landing page that offers a free toolkit to everyone in the audience today. Simply with your email address, you can have access to that toolkit with a lot of the things that we mentioned today, so you and your team could take that and go execute tomorrow.

We really care about you and we really want this to work. I decided to not retire and do this, and this is the moment that matters the most. So really, honestly, if you have any advice or anything we can do to help you, please put that in there. And we look forward to the next webinar where we can tell you the next step as we walk you through this. Thank you.