Business Transformation is simple, easy and quick, when you use the right approaches.
A female CFO brought me into a company where the Founder was still bringing in 80% of the revenue in spite of their growth and maturity as a 25-year old professional services firm. She knew they needed radical change.
Somewhere along the way, one of the Partners had attended a seminar about how to sell your company to your employees using Bonuses and an internally computed annual valuation of the business. This company was well on their way down this path before they engaged me but they had never addressed the transition of the leadership roles; only the financial and legal aspects. I see this every day; where decision-makers are focused almost exclusively on the legal and financial aspects and never give any consideration to the people aspects of business transitions and transactions.
I asked the Founder how often he met with the two dozen leaders who had been identified as owners and who now owned a very small percentage of equity in his firm. He replied with aggravation, “Never! I never meet with them, they are idiots, why would I meet with them?”
Over the next few months the Founder took 3 very important simple, action steps that led to the business transformation.
First, he stopped unintentionally sabotaging his people. One key way he had sabotaged them was to take the firm’s clients to lunch regularly. He did this with former clients and prospective clients too. When he scheduled the current clients, it never occurred to him to also invite his own key leader who was heading up that client’s projects. In effect, he was undermining his people by having these meetings independently. Once he started including his own people the meetings became more productive, sales grew and most importantly, he let go of being “the go to guy”. Now the client’s issues were resolved collectively and in ways that let his key leaders shine instead of being inadvertently thrown under the bus. This created the future of the firm. Clients were no longer dependent on the Founder to brainstorm new potential solutions.
The second action step he took was to meet with those two dozen key leaders regularly. Because he was so intuitive and curious with the clients, I suggested he simply use the exact same approach when he met with each individual leader. This was truly transformative on so many levels. Within 60-days, six of the leaders had wonderful job opportunities with the firm’s clients, across the country, and even in locations where someone from Phoenix would rarely be open to relocating because of the cold, cloudy weather. However, these key leaders saw that the Founder was very gently but very consistently holding them accountable and they chose to leave the firm rather than be held accountable even in that soft, easy manner.
The third action step he took was to create a work environment where everyone felt safe to step up and speak up. Where people felt safe to share their ideas and, more importantly, their concerns. When concerns can be addressed proactively and strategically, when they are only a burning ember, we can eliminate all the fire-drills and burning platforms that eventually arise.
At the end of the engagement, there were fourteen key leaders left and each one of them felt encouraged and empowered to invent whole new service lines. These fourteen leaders grew the company from $8 million in annual revenue to $25 million. This business transformation was simple and easy but it did require the Founder to be willing to get out of his comfort zone. No change, no transformation, no evolution can occur as long as people stay in their comfort zone and refuse to experiment with new and different approaches. It’s the definition of insanity, doing the same thing over and over but expecting different results. I see this with founders and C-level leaders every day. Hoping and praying are often their only approaches. Of course, they are doing a lot of good things; they likely bring discipline and transparency to the goals and metrics but they fail to address the elephant in the room; their own actions that are sabotaging their people and their company.