Executive Fireside Conversations: Building an Army of Problem Solvers in a High Growth, Entrepreneurial Disruptor
By Eric Michrowski
I was recently meeting with the CEO of a professional services firm that has developed a business model, which is quietly disrupting his industry. Founded in a dislike in the conventional business model that his competitors have been reinforcing for decades, he has changed a few key variables to transform the service offer, namely:
– Shifting from “à la carte” pricing to “all-inclusive” value-based pricing;
– “Leaning” the end-to-end service offer to create a highly repeatable, optimized and even-loaded delivery mechanism at a significantly lower cost – while this limits his target audience, it provides significant value to the segments that he serves;
– Embracing the “future of work”, shifting from an office-based workforce to a virtual workforce – this allows him to tap into higher levels of discretionary effort, while unshackling the high cost constraints of an office based environment, including high rent costs and higher wages;
– Increasing the use of technology as part of their delivery mechanism.
His business model is taking off and rapidly gaining market share. In the past year alone, he’s already doubled in size. I will touch on Entrepreneurial leadership styles and the “future of work” theme in future blog posts given their individual importance.
Our dinner conversation spanned many key themes key to his current growth trajectory, namely:
– Building a sustainable culture of critical thinkers – starting with recruitment tactics;
– Building a sustaining an engaged virtual workforce;
– Compensation, incentives and reward systems in a high-growth business;
– Understanding your highly profitable customer segments – and firing your other customers;
– Pricing and repricing tactics;
– The value of failing fast and often;
– Focusing on Customer Effort to drive retention, increased wallet-share and likelihood to recommend.
One of the biggest challenges he’s encountering through his growth, is the need to rapidly develop critical thinkers within his business. The traditional professional services model, is built through a hugely archaic hierarchical web of roles and development paths. While this model is effective at ensuring a high degree of decision making consistency, it generally means that only very senior leaders have breadth of advisory experience, understand business, selling, pricing and, customer experience. This model has also allowed academic circles to abdicate their responsibility to develop independent critical decision skills in key programs in favor of developing technical skills. For this reason, he has to develop his own talent and focus on developing a culture of critical thinkers.
I was impressed both with some of the similarities between his learnings and mine, as well as the successes he has had. He recognized the immense value of coaching to develop critical thinking skills. He invests significantly in coaching, to help develop critical thinking skills – exploring ways to allow them to understand the desired outcome and start exploring ways and approaches to achieve it, creating psychological safety to fail-fast and rapidly.
Given the amount of autonomy that he affords key team members, we also discussed the importance of creating a tight alignment to a few key decision-making parameters, to ensure that autonomy is guided more consistently. He had shared examples of team members going above and beyond to delight customers on items that didn’t bring value. In a fixed-price environment, this can be highly problematic. Beyond themes such as “customer profitability”, “customer value”, I always recommend introducing the focus on “customer effort”. In other words, ensuring that decisions consistently drive the right end-to-end profitability, deliver value in the eyes of the customer and make you easy to do business with (ETDBW).
To drive a culture of critical thinkers, we also discussed the importance of recruiting diverse and eclectic candidates, creating collaborative work teams, creating appropriate reward systems that encourage team-based collaboration (he generally focuses on experience-based rewards) and rapid feedback loops.
This CEO has a very interesting and diverse history and path. Like many disruptors that I’ve met, his background is unorthodox, which allowed him to see an alternative path. He also is one of the most well-read CEOs that I’ve met, reading on a range of themes inside and outside of the industry, including Social Psychology and Behavioral Economics. This innate curiosity is key to most transformational leaders that I know.
My favorite quote from him came from a story that he shared, which helped shape his desire to disrupt the industry. Early on in his career, he needed to reach out to a client with a simple follow-up item that was requested. The Senior Partner replied “there’s no f*%& way you are speaking to a client” – that day, he knew that he couldn’t operate in an environment that didn’t support personal growth. Contrast that with an experience with a different firm led by an eccentric leader, where in response to a similar request he was told “why the f*%& are you asking me – just don’t lose the file”.
Executive Fireside Conversations is a series of blogs focused on conversations and learnings from successful senior executives – both entrepreneurs and senior leaders of Fortune 500 enterprises. While typically anonymous, the focus is on understanding some of their drivers of success, the unique experiences that shape leaders and sharing some ideas from our broad range consulting expertise to support their next step major success. If you’d be interested in taking part in an Executive Fireside Conversation with our President & CEO, please reach out to Eric Michrowski.