Interviews with CEOs and Entrepreneurs about the frameworks they are using to build and scale their businesses.
Episodes
Tuesday Aug 25, 2020
Tuesday Aug 25, 2020
In this episode, I interview Dave Quick, the CEO of Helping Bulls, leadership and sales coach, Vistage Chair and Culture Index Licensee. We talk about Dave’s career, his sources of inspiration, hiring philosophy and insights to developing your company’s culture.
Time Stamps
[02:52] Where Dave’s desire to coach and mentor people come from. Volunteering in the Connecticut prison system, life at the US Naval Academy, teaching saxophone and why he became a Vistage Chair.
[06:20] Dave talks about the differentiators of a professional services business and how running one is very different from other businesses.
[09:04] How Dave’s grandparents’ retail business instilled a desire in Dave to run a business.
[10:42] How the venturing program at Ross Diagnostics exposed Dave to the idea of pitching a good business or startup idea to get funding.
[12:59] Dave’s shares his darkest moments and how he pushed through them.
[16:10] How having “no other option” can drive success, when you just have to make it work and that he had to recruit people, because he had no other options.
[17:48] The importance of strong company culture. Why core values work and why make them visible to everyone.
[20:25] Dave talks about an email that he received from Roger Penske, the owner of the Indianapolis 500 about how his fan experience on the track catalyzed his “why”.
[21:51] Why the essence of culture is vision, expectations, values, and engagement. Why employees must share a “why”.
[24:35] The importance of the passion of the organization.
[30:36] How high expectations are the key to everything. How Steve Jobs and Elon Musk used them to drive their people.
[32:51] How the Entrepreneurial Operating System (EOS) and Traction can help companies to thrive with a dead-simple approach.
[37:40] Why prioritization is the key to a successful company. How to avoid your fear of missing out (FOMO) from getting in your way.
[41:16] The people who inspired Dave and why?
[46:51] How to find out more about and contact Dave Quick. Links and Resources: Helping Bulls website Helping Bulls Twitter Roger Penske Steve's EOS blog Join a webinar with Steve Book a free consultation with Steve
Links and Resources:
Book a free consultation with Steve
https://StevePreda.com
Tuesday Aug 18, 2020
Tuesday Aug 18, 2020
In this episode, I interview Nick Beavers, CEO of Media Cybernetics, a company that supplies image analysis software, typically used in industrial inspection routines. We talk about Nick’s path to becoming the CEO of Media Cybernetics, as well as his insights from using the Entrepreneurial Operating System (EOS) at a tech company.
Time Stamps
[00:20] Media Cybernetics has been a scientific software provider since 1981. They extract quantitative measurements from images captured by microscopes or digital cameras.
[01:58] Nick’s family background and challenges growing up.
[02:44] His brother’s hardship caused Nick to mature earlier, to prioritize excellence, to make the most of life, and to be considerate of others.
[03:57] Nick had an entrepreneurial spirit very early in his life. Examples of how he always managed to transform his interests into a business.
[05:14] Nick began his career in the sciences, earning a Bachelor of Science in neurophysiology. However, he soon realized that this path was not meant for him.
[06:00] How Nick stumbled upon Media Cybernetics. He began working there as a technical services representative, finding it challenging but fulfilling.
[07:07] Initially, Nick took this job as a chance to build new skills and bolster his resume. How by 2019, he became the president of the company. How Nick bought the company 12 months later.
[10:00] The biggest challenges that Nick faced when Media Cybernetics was still a public company and how he handled the pressure.
[12:05] People management was another challenge. Nick’s transition from individual contribution to building a strong team as his career advanced required a learning curve.
[14:12] Nick’s role models.
[16:42] How Debbie Tyler, and his Vistage group, have provided support and advice. It is important to surround yourself with people who not only support you but are willing to critique you.
[19:00] How EOS has helped Media Cybernetics to grow — Nick had been struggling to find a system where different components complemented one another. EOS gave him a holistic system for managing the business.
[23:26] How EOS uses quirky and specific language to cut through the confusion and speed up communication.
[24:32] Nick’s experience in reconciling EOS with the agile framework that is often used by software development teams, as well as with distribution models used by tech companies.
[31:00] The darkest stage of Nick’s career
[37:59] How to find out more about Media Cybernetics and Nick.
Conclusion
Were you inspired by Nick’s story? Have you faced similar struggles during your entrepreneurial journey?
We would love to hear your questions and comments! Here are some resources that you might find helpful:
Book a free consultation with Steve
https://StevePreda.com
Tuesday Aug 04, 2020
Tuesday Aug 04, 2020
In this episode, I discuss why serving your clients is a disservice. I provide real-world examples of how business owners brought success by learning to delegate, and share key tips for building a self-sustaining business.
Time Stamps
[0:30] Given that business owners are often very knowledgeable, they tend to fall into the trap of selling their own services, rather than the services of their business to clients. The success of their business is too often heavily dependent on one person, usually the founder.
[1:05] Reasons that business owners are reluctant to delegate — they worry about not providing the best service to clients, they worry about affecting the brand.
[2:00] The various hats that the owner of a growing professional services firm ends up wearing — promoting, closing deals, managing people and projects, quality control, firefighting, executing projects
[3:12] Why building a business around yourself is a ceiling for business growth. The process of transitioning my business to a self-sustaining one, starting from tasks that were the easiest to delegate to the more difficult tasks
[3:33] My experience of delegating administrative tasks to an assistant — he had to switch assistants six times
[4:19] How I delegated the execution of transactions — delivering documentation for investment banking deals, financial modeling, info memos, books
[4:59] Concerns about quality control — how I used to iteratively make tedious corrections to any info memo draft or financial model
[5:45] How my heavy involvement in quality control gave other people permission to be more lax with their work outputs
[6:04] Suggestion for delegating quality control — creating processes, using things like checklists that people can use to regulate the quality of their work
[7:47] Delegating management tasks to other people
[8:09] Delegating sales tasks to my colleagues — gradually speaking up less at presentations to potential clients etc.
[9:01] How delegation entails including newer people who are more excited about a task — and this excitement reflects well on the business. The newer people pay attention to details and are less prone to treat a task as purely routine
[10:22] Delegating promotion to other people. Promotional tasks are especially difficult to pass on because they require passion, intuition, vision and communication skills
[11:05] How creating verticals such as “healthcare” and “engineering” within a business generates self-sustainability. Each person is strongly invested in their area of expertise
[11:51] How to generate traction in a purposeful and meaningful way — using the Entrepreneurial Operating System (EOS) helps with creating structure and designing major roles
[13:22] How providing and communicating vision is central to the task of delegation. Steve recommends using the Vision-Traction Organizers (V/TO) provided by the EOS, which allows you to think about the vision of a business in eight simple questions, and to set up short-term and long-term goals
[13:55] The impact of using V/TOs — people have clear direction and know what is expected of them
[14:35] Helpful resources for transitioning to a self-sustaining business (linked below)
[16:01] The most important benefit of delegation — you may think your clients appreciate your personal attention, but they will be concerned with the sustainability and credibility of your business if you do not delegate
[16:42] How delegating can free up a business owner’s mental space for more important questions. “By systemizing the predictable, we can humanize the exception” - Gino Wickman -
[17:24] Real-world example of the success of delegation — a CEO of a commercial bank requested to talk to a managing partner at McKinsey who had advised a competitor commercial bank. If this managing partner had been too active in his projects, he would not be able to help in this important situation which more strongly required his experience and expertise
Conclusion
Are you transitioning towards a self-sustaining business? What problems have you faced during this process?
We’d love to hear your comments and questions! Here are some resources that you might find helpful:
Steve’s EOS Blog [https://tractionequity.com/eos-blog/]
Join a Weekly Webinar with Steve
Free Books by Steve Preda - the Traction Equity Library
Free Chapters of Books on EOS - the Traction Library
https://StevePreda.com
Friday Jul 31, 2020
Friday Jul 31, 2020
In this episode, Steve Preda discusses several examples of successful value-added resellers and how the practice of customization of mainstream software packages expanded their profits and helped grow their companies.
Time Stamps
[00:15] Steve recalls a client of his — a software developer who was very good at motivating dealers to become committed to distributing software. This client was a value-added reseller, and Steve decided to dive into the concept of value-added reselling
[00:58] Where value-added reselling comes from — began as a concept from smaller companies which were struggling to sell their software due to the advent of large companies like Oracle and SAP. The smaller companies began to provide integration and customization of the larger companies’ software. In other words, they became value-added resellers
[02:23] Example 1: How Steve’s former client, Zoltan Schwarz, expanded his small company, XAPT through value-added reselling. The company began by implementing Microsoft’s ERP systems for the Hungarian market
[03:15] In 2006, XAPT implemented a customized solution for a Caterpillar dealer. This set off a series of projects to customize solutions for other Caterpillar dealers — ultimately making XAPT an international success. In 2015, they reported a 60% net profit margin
[04:52] How larger companies can be platforms for smaller players to create a very profitable business
[05:10] Example 2: Steve recalls purchasing a CRM system for his investment bank. This system was a customization of Salesforce for investment banks, but was sold at about 10 times the price of a standard Salesforce CRM license
[06:03] How using customization to create a community for your customers can increase profits
[06:41] How XAPT expanded to three times as large as the original business through value-added reselling
[07:45] Call-to-action to become a value-added reseller and to leave comments
Conclusion
Do you have any experience in customization, or how have you seen customization to be beneficial to other companies? How might your business benefit from value-added reselling? Consider becoming a value-added reseller to increase your profits and build proprietary solutions.
We’d love to hear your comments and questions! Here are some resources that you might find helpful:
Book a free consultation with Steve
https://StevePreda.com
Tuesday Jul 28, 2020
Tuesday Jul 28, 2020
In this episode, Steve Preda discusses three types of professional service firms in terms of their organizational structures, pricing structures, and overhead. He then describes how these factors interact to produce varying degrees of profitability and scalability.
Time Stamps
[0:27] Introducing the inspiration for this episode, David Maister’s book, Managing the Professional Service Firm.
[0:49] Stating the three types of firms — brains firms, gray-hair firms and efficiency firms.
[1:09] Type 1: Brains Firms.
[1:11] Defining brains firms — typically composed of a handful of highly paid and deeply knowledgeable experts.
[1:29] The pricing structure of brains firms — hourly — and specific examples of brains
firms — top-notch criminal attorneys, top-notch doctors, taxation experts and accountants who specialize in vintage cars.
[2:02] The organizational structure of brains firms — two to three partners and a few administrative staff such as paralegals or secretaries.
[2:30] Type 2: Gray-Hair Firms.
[2:34] Examples of gray-hair firms — corporate law or family law firms.
[2:45] The services that people expect from gray-hair firms — people who might not be cutting-edge but who know their stuff, provide comfort and will not screw up their client’s case.
[3:28] The structure of gray-hair firms — typically composed of three to four partners, senior employees and junior administrative staff.
[4:00] The pricing structure of gray-hair firms — the partners make money and take a cut on their junior or senior employees.
[4:20] Type 3: Efficiency Firms.
[4:22] Defining efficiency firms — a classic professional services firm with a pyramid structure.
[4:30] Describing the junior people at efficiency firms — auditors or analysts who are talented but not deeply knowledgeable and work long hours.
[5:04] Types of senior people at efficiency firms — audit seniors, managers, senior managers and partners.
[5:12] The path to partnership in an efficiency firm — nine to fifteen years and encouragement to leave if an employee does not make partnership.
[5:26] The pricing structure of an efficiency firm — the partners make the most money and leverage the cheaper labor of lower-level employees.
[6:20] Comparing the different types of firms in terms of profitability and how buyable they each are.
[6:33] Brains firms have the highest short-term profitability due to low overhead and strong expertise at the very beginning.
[7:00] Gray-hair firms have the second highest short-term profitability. They have more overhead than brains firms and require some grooming of senior employees.
[7:49] Efficiency firms have the lowest short-term profitability. They have high overhead and require lots of training of junior employees.
[9:26] Efficiency firms have the highest long-term profitability. The numerous junior employees sustain the firm and make money.
[10:00] Brains firms have the second highest long-term profitability. They are robust against recession because the demand for strong expertise remains. They also have low overhead costs.
[10:32] Gray-hair firms have the lowest long-term profitability. Their higher overhead costs, compared to brains firms, are not sufficiently balanced out by the benefits of having more employees.
[10:53] Efficiency firms are very buyable. The exit of partners does not impede profitability due to the pyramid structure consisting of many employees.
[11:32] Gray-hair firms are the second most buyable in that they do have assets to sell, provided their partners are all not too close to retirement.
[12:19] Brains firms are the least buyable because if the partners exit or retire, the firm does not have much to offer.
[13:05] Overview of the three types of firms in terms of profitability and how buyable they each are.
[14:13] Call-to-action for comments & questions.
Conclusion
Have you made similar observations to Steve about profitability and scalability when working at brains firms, gray-hair firms or efficiency firms? Which of these structures would you choose if starting your own professional service firm? We’d love to hear your comments and questions! Here are some resources that you might find helpful:
Book a Free Consultation with Steve
Managing the Professional Service Firm by David Maister
https://StevePreda.com
Friday Jul 24, 2020
Friday Jul 24, 2020
In this episode, Steve Preda condenses his personal experiences into six key reasons why you should work businesses that interest you. These six reasons reflect a symbiotic relationship or two-way street that benefits both you and your client.
Time Stamps
[0:29] Introduction: David Maister as the inspiration for this episode and why this topic is important.
[1:16] Statement of the six key reasons why you should work with businesses that interest you.
[1:40] Reason 1: Curiosity
[1:47] Curiosity as a driver of motivation, regardless of the topic
[1:58] Real-life example: Upon being hired by a molding company early in his career, Steve educated himself by reading multiple books on the topic.
[2:24] Reason 2: Excitement
[2:40] Excitement as a mobilizer for absorbing knowledge and subsequent deep thoughts & ideas on a topic which are beneficial to the client.
[3:00] Reason 3: Depth
[3:47] How becoming an industry specialist enhances your relationship with your client and adds to the opportunities and relationships available to you within an industry.
[4:22] Real-life example: How Steve’s excitement when building his investment banking career bred insights and ideas that inspired a successful newsletter
[5:32] Reason 4: Experience
[5:34] How your interest attracts other people’s interest, leading to a perfect breeding ground for more experience.
[6:00]: Real-life example: Steve’s friend, the Global Managing Director of Healthcare at a major investment banking firm. This friend is frequently an obvious choice when clients want to perform a transaction because he is a leader, friend, and rich source of information within the healthcare industry.
[7:36] Reason 5: Transferable best practices
[7:39] How repeatedly working in the same industry leads to an awareness of what works versus what does not work
[7:58] Real-life example: Steve’s boss, the CEO of commercial bank hired McKinsey that had been supporting a major competitor to capture the other bank’s best practices.
[9:48] Reason 6: Connections with industry players & resources
[10:13] How your connectedness becomes an asset to your client, and lightens the labor of the networking required to complete a task or to obtain important information.
[10:44] Synthesis of how the six reasons complement one another, benefiting both you and your client.
[11:31] Helpful resources related to Steve and his experiences.
Conclusion
Do you often prioritize working with businesses that truly interest you? Have you considered the impact of interest on the quality and quantity of your professional contributions? If you want to think further about these kinds of issues, look into the resources linked below:
https://StevePreda.com
Thursday Jul 09, 2020
Thursday Jul 09, 2020
ProfServ Traction Podcast
Episode Run Time: 8:43
Welcome to the ProfServ Traction Podcast, dedicated to exploring how professional services and technology businesses break through the ceiling.
In this episode, Steve Preda breaks down the key aspects that make professional services companies different from other businesses, and the unique difficulties involved in the leadership and management that these kinds of businesses must overcome in order to break through to the next level.
Time Stamps
[00:15] Introduction: How managed professional service firms are different from other businesses
[00:47] Why managing a professional services business is much harder than other businesses
[00:59] Reason 1: Highly skilled and trained people require compelling leadership
[01:09] Reason 2: Career structure hierarchies within professional services firms
[02:00] Difficulties in leading and managing a team with expectations of traditional business hierarchies
[02:16] Reason 3: The focus on billability of people in a professional services firm
[02:55] Identifying disincentives for people who want to become leaders and how to open the door towards creating the leaders a company needs
[04:01] Reason 4: The firm is a collection of solopreneurs
[04:25] Managing and overcoming challenges when leading a team that sees themselves as solopreneurs/entrepreneurs
[04:53] Reason 5: Dispersed ownership
[05:00] Examples of dispersed ownership structures and their complexity
[05:40] Reason 6: Challenges in decision making and leadership
[06:55] The first steps involved in starting a professional services firm’s EOS journey.
[07:10] Examples of identifying some of the major functions of a business.
[08:00] Strategic questions business leaders can answer through EOS in order to take a company forward to that next level.
Website: https://StevePreda.com
Wednesday Jul 08, 2020
Wednesday Jul 08, 2020
Welcome to the ProfServ Traction Podcast, dedicated to exploring how Professional Services and Technology businesses break through the ceiling.
Steve explains why he is launching this podcast, the reason for picking professional services and why he is passionate about this sector. He also shares his personal story of starting his own professional services firm and his trials and tribulations.
Website: https://StevePreda.com