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Know and Grow [Taking Your Business from One Level to the Next]

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Every large and successful business started somewhere—and we’re guessing it probably wasn’t with hundreds of employees and multiple locations. So how did they get there?

In this episode of The Wrap, our hosts welcome Doug Pace, CEO of Stonehill Innovation and David Capece, CEO of Sparxoo and CROOW (authors of Level Up: Management Secrets to Create an Agile and Growing Services Organization), as well as Warren Averett’s own Richard Huckaby, CPA to discuss a framework for how small businesses can progress through the stages of scalable growth.

In this episode, you’ll hear:

  • Stories about what is important to organizations at certain stages of their growth
  • Examples of why mission, vision and values are important for organizations
  • An overview of the stages of business growth, as well as the corresponding needs and priorities
  • Lessons learned from challenges with expanding a small business’s sales team
  • Commentary about the importance of processes and structure to support scalable growth

Mentioned in this episode:

Commentators: (00:00:00) Hey, I’m Paul Perry. I’m Kim Hartsock. You’re listening to The Wrap, a Warren Averett podcast for business leaders, designed to help you access vital business information and trends. You need it so you can listen, learn, and then get on with your day. Now let’s get down to business.

Paul Perry: (00:00:17) Hey Kim.

Kim Hartsock: (00:00:21) Hey, Paul.

Paul Perry: (00:00:22) How are you doing today?

Kim Hartsock: (00:00:23) Awesome. Glad to be back with you for another episode of The Wrap.

Paul Perry: (00:00:27) Absolutely. And, this is a special edition The Wrap episode that we’re doing here to close out season six. It’s been a good conversation with a lot of external parties to Warren Averett and what they’re doing and I’m looking forward to this conversation today.

Kim Hartsock: (00:00:42) Yeah. And you know, on my favorite podcasts, they have experts on special episodes. So I’m glad that this is going to be one of those. And we’re really fortunate to have the authors of a really cool leadership book. The book is called The Level Up: management secrets to create an agile and growing services organization.
And we have with us today, the authors, David Capece and Doug Pace. So welcome David and Doug. Nice to see you. We also have Richard Huckaby, who is one of our partners down in the Tampa office. And we’re excited to have Richard on the podcast.

Richard Huckaby: (00:01:18) Thank you so much, Paul and Kim. It’s a pleasure and an honor to join. I’m excited cause this is the first time that I have been a part of your podcast and I’m really excited because of the guests we have today. So thank you for including me.

Paul Perry: (00:01:32) First time caller and a long time listener to the podcast. Why don’t you introduce yourself to those that listen in and what you do for Warren Averett, Richard?

Richard Huckaby: (00:01:39) I am the Tampa Office Managing Partner. My main role is to help lead the growth and sustainability, uh, of the Tampa practice. I’m able to do that because I have great teammates. Uh, it’s a lot of fun. Every day is different. But the most fun is working with great clients and seeing the entrepreneurial spirit in folks like Doug and David.

Kim Hartsock: (00:02:08) We’re glad to have you, Richard. I don’t know how you’ve gone, how we’ve been able to go six seasons and not have you on, but welcome. We’re glad to have you.

Richard Huckaby: (00:02:15) Thank you. I have not taken it personally, but I do appreciate my opportunity.

Kim Hartsock: (00:02:21) We saved it for a great one. So thank you for bringing David and Doug to us, Richard. Richard reached out to Paul and said, “these are two people that we think that our listeners need to hear from. And they’ve written this book that we think is very important to leaders.” And so we’re glad to have you David and Doug, if you could just take a few minutes and introduce yourselves a little bit more to our listeners.

David Capece: (00:02:42) Absolutely. Richard, first off, thanks for the recommendation and I appreciate you hosting us, Kim and Paul. Uh, so I’m David Capece and I head up the digital agency Sparxoo. Along our journey, we realized some opportunities and challenges in the market and came up with the idea to launch a software company.
That software company is two years old. And along that journey, Doug is somebody that I’ve really looked up to over the years. And in many of our coffee meetings, we talked about how there were so many lessons we were learning that we’d love to share them with the world, which led to the boo.

Doug Pace: (00:03:25) I’m Doug Pace, CEO of Stonehill Innovation, we’re a strategy and innovation firm. And like David was saying is, the book came around because we’ve known each other for a long period of time. I used to own a pretty large digital agency with multiple locations. And as we were both growing our companies, we said, “There’s all these lessons. We keep it in our heads and figuring it out as we go along. But if somebody could actually put it in the book. Help somebody avoid it before they get to it and help everybody to grow faster and a little bit more streamlined. It would be a good thing.” And then finally, you know, we got together and we’re like, we’re just going to go ahead and write it.

Paul Perry: (00:04:04) Richard, I know that you saw this book and felt like it was going to be really helpful to our listeners and clients and prospects out there. What was your take on that book? And why did you want to have this conversation with Doug and David?

Richard Huckaby: (00:04:19) I know the first time I met David probably was shortly after he had moved to Tampa and his company Sparxoo was actually a finalist for the Tampa chamber “Small Business of the Year” award. I was one of the judges and listening to what he did and, you know, being an accountant, I’m not quite sure I had a grasp of everything. But I was like, “This is one of the coolest companies I’ve ever seen.” Um, so I really, I’m always drawn to entrepreneurs because that’s who we mainly serve it more than ever.
Doug, I think we may have met through mutual friends. I know we’ve been on a board or two together. I really, really respect that. They want to help others. So they’re really servant leaders in the fact that they got together and said, you we built a business and as most entrepreneurs who have built a business will tell you, they did a lot of things. Probably they would do different. Looking back. So to get together and write a book to help others is really, really remarkable and great.

Paul Perry: (00:05:22) That’s a great way to segue into the book. Um, David and Doug, y’all want to give a quick synopsis. You know, if somebody wants to pick up that book, you know, what’s the, what is the inside cover say? What is it going to tell you once you get into that book? And then later on, we’ll dive in a little bit.

Doug Pace: (00:05:37) David, take the lead.

David Capece: (00:05:39) All right. So most entrepreneurs, CEOs, leaders are looking to take things to the next level and are hopefully never satisfied with where they are. And so, you know, if you’re in that situation and looking to get to the next level, we said , “From a professional services standpoint, what are the levels? what are the steps that you take to get to the next level?” And Doug and myself, you know, spend a lot of time reflecting on our journeys and speaking with others to break down those levels for simplicity by a team size. So the first level, you’re small, starting at a team of one to 10, the next level team of up to 25, et cetera, et cetera, through a hundred plus.
And as you’re at each level, trying to get to the next level, there are a few critical factors to get to the next level. And with, we also built the agile management system framework, which helps you get through each of the levels, but also helps ensure that you’re building the best infrastructure possible for scalability.

Doug Pace: (00:06:40) Exactly. And then along the lines, one of the biggest things that helped me when I was growing my last company and we took it from zero employees to over 200 employees is knowing your numbers, knowing your financial, it’s not just the outcomes, i.e. revenue and sales, but the leading indicators that go into it.
So through the book, through the different phases and through the different gates of growth, so to speak… David and I looked at the different things that you had to be aware of on your scorecard. And we have some tips and tricks that are called out in there.

Kim Hartsock: (00:07:16) in there. The thing that I really liked, and I think the readers of the book would enjoy is that it’s interactive. They all have tools kind of scattered throughout. It’s not just you reading what you have to share, but there’s points to stop and reflect and use the tool. So I think that’s very beneficial. I personally like books that are like that make you stop and think a little bit yourself as you’re digesting the wisdom that’s being shared. So if someone, you know, is trying to figure out if this is the right book for them, maybe help us understand what kind of the big framework is of the book and how someone would dive in at some point throughout the book. Right? Cause you go through different levels of a business, right.
And so kind of, depending on where you are in the lifecycle of your business and the growth of your business. Be in the middle or at the front or at the end. So how does that, how does that matter to leaders that are wanting to read about how they could progress and go to the next level?

David Capece: (00:08:20) I mean, the easiest way to talk about that is to give you examples, right?

Doug Pace: (00:08:21) And then obviously we can, we can talk about where in the book you can get it. But man, when I was growing my last company, we were growing and as you’re growing a company, it’s never easy and you’re always hitting your head on something. And I can tell you when we got the 50 employees, it was kind of the hardest thing we would get 60 and boys, and then we’d ratchet back because we do something wrong. We ended up 35, then we force our way through and then we ratchet back.
Well, finally, you know, one of my mentors said, do you have any middle management? Do you have any people that take the onus off of you that, you know, kind of, kind of make it through?
And I go, no, I can’t afford it. No, we’re growing and we can’t do that. And until I finally stopped and said, yeah, you know what, he’s probably right. And then, invested in middle management. We could never get over there. As soon as we invested in middle management, it’s almost like we went to a hundred employees overnight and that’s kind of like what at least, um, parts of the book walk you through is, you know, what should you be concerned about at what size of the company?
A lot of people, when they start off, they’re really concerned with process. Reality is most companies die pretty quick, right? Unless you have sales, you’re not going to make it too far. So, you know, that’s obviously the first gate and, you know, so on students, so on and so forth as you go through. And then the other part is the management system that we have.
It starts to bring you through things that you need to do. First, for instance, if you asked me 15 years ago, when I was a young manager, if you asked me how important mission, vision values. I would have told you, it’s not your work and get the work done and move forward. But you know, as I’ve become older, wiser, and had to align people, which is extremely hard, uh, I figured out that, you know, that is one of the most important parts of running.
And then once again, our management system walks you through.

David Capece: (00:10:13) Yeah, I would agree with everything that you just said and maybe to add some stories and perspective, as Doug was speaking about the levels and I would talk about the importance of middle management as you break through that 50. My story is interesting because as we were breaking through 25, we invested in people infrastructure without any processes.
So we actually, uh, were too fast investing in the few people. Whereas Doug, might’ve been a little too slow. Um, and so then we kept on going backwards. So we would break through 25, gets to 28=30, come back down to 20, um, breakthrough 25, get the 28-30 break come down to 20. And, uh, finally… almost the same way that Doug had a mentor share, you know do you have your processes set?
And the answer was not really. And so, we spent 18 months solving the wrong problem. And once we had that, we said now we know the problem to solve, let’s solve it. And that has really set the foundation for the next wave of growth. The other thing I would concur with on Doug is that mission, vision and values are so important.
And that is something we did solve for when we were focusing on people. So that is something that we can take with us forever. So, you know, there is a little bit of a choose your own adventure at the same time, meaning that you can go through and see all the things that you could focus on.
We have our recommendations on what order you might want to focus in on but certainly you can look at the book and self-evaluate grade yourself and kind of reflect on where you want to focus your attention to download your free editor’s cut of the Level Up book.

Kim Hartsock: (00:11:51). Visit cru.com/LevelUp, that’s cru.com/LevelUp.
So at that reminds me of one of my favorite phrases that I use a lot with our team is what got you here won’t get you there. And, just the, the, the reality that as you want to get promoted and take on more responsibility, you must have a different skillset. And so it’s the same kind of premise of what you’re relaying as an owner, as a leader is the same concept for a business, right? Like what got you to 25, isn’t going to get you to 50. 50 isn’t going to get you to 100. And so, um, maybe if you could just give us kind of that general framework of, of those different levels and we’ve touched on a couple of them, but maybe just give us  the overview of what that framework is.

(David Capece: (00:12:46) Sure, I’ll walk us through the stairsteps. So again, uh, and this is all laid out in the book, uh, when you’re first starting zero to 10 employees, it’s all about sales. If you don’t sell something, you’re not going to have revenue, which means you’re not going to have a business and there’s nothing to scale.
Anyway, from there, as you have demonstrated that you can sell that, um, folks want your service, uh, then you need to build processes because you need to be able to deliver. So, if you think about it, phase one and phase two, make sure you’re really good at delivery at those processes. Then once you get the selling and the processes down, then you move on to, as Doug was saying, turning into 25 to 50 employees, building out your people, your middle management, building out that expertise.
Then as you ramp from there, the next level is 50+. We start to focus on profit to ensure that you can scale from a top line on the bottom line. And then as you get to a 100+, there’s an opportunity to not only look at organic growth, but also to look at mergers and acquisitions.
So the other thing that I’ll just point out in the agile management system framework is the end of the first phase, which is unify one of the keys is a strategy map. And Doug is a big proponent of the strategy map and was so kind to include essentially the blueprint for a strategy map in the book.
And that strategy map is so helpful for any business. And what I love about the way Doug has it as building it in a way where it is useful for a good period of time. But thinking about it in an agile way, where as you achieve your goals, then you can go on and refine the strategy map to the next set of goals, because what got you here won’t take you there.
You need to be reflecting on that and not to use that strategy.

(00:14:41) Paul Perry: (00:14:41) So, Richard, I want to kind of bring you in on this for a second. You know, as you’re working with companies, uh, at all sizes, you probably see a lot of synergies or you probably see a lot of companies having these same issues, you know, what are the things that the book talks about that you kind of relate to your customers or your clients on a daily basis?

Richard Huckaby: (00:14:59) Uh, thank you, Paul. Absolutely. I think a lot of companies get stuck at certain levels. And I think the reason they do is because they don’t focus on building a team, building out processes, automation, what can they do with technology. A lot of companies, small businesses, you know, they started out as a key man business and they never get past that. And what I see a lot of is at a certain level, if you don’t make the investment and slow down, there’s only so much a person can do. And I am actually in a very involved CEO group that meets once a month and it’s mostly smaller companies and I see it time and time again, where the CEOs and leaders are just they’re burning work-life balance because they’re taking on everything on themselves. So I was real happy when I found out about this book that David put together because I really think it crosses over industries. Um, you know, I know there’s specific guidance for professional services, but you know, the concepts here can be used by any small business owner as they’re going through different levels of growth.

Kim Hartsock: (00:16:13) You know, kind of a risk analysis too, right? That a lot of entrepreneurs, what is making them so successful is themselves, but that’s a big risk too, because that means the business is solely dependent on them. So if something were to happen to them tragically unexpected. You know, what’s the backup plan and then same thing for growth, how do you sustain grow when you have max capacity with one person?
Right. And so embracing the idea that, that you have to start to put together processes. Can make the company operate without you, when you have to start to bring along people that can do things. And it’s not just on you when you start to look at bringing more businesses in, right? It’s a little of letting go, which maybe entrepreneurs have a difficult time doing that because it is their baby, this business that they’ve built. And I know David, Doug, you both done that. And so maybe, maybe you can share with us some stories, um, some, the experiences of various different parts of that framework, maybe some success stories or maybe some challenge.

David Capece: (00:17:22) Yeah. I’ll start with a challenge. And probably Doug’s in my, uh, favorite story is that it is around sales. It turns out I’m a pretty good accidental salesperson. So I was able to blow through the one to 10 company size pretty quickly. As we reached the next stage, I was thinking well, in order to grow farther, we’re really going to have to have more research sources on selling.
So the first experiment I tried was get a low-level hunter in, um, you know, see if that low-level hunter could open some doors and it turned out that wasn’t a great approach because in our business and most professional services, there’s a bit of a consultative sale. Um, so then I said, okay, got it. Learn that there’s a consultative sale. Let me find the most expensive selling resource I can, because I know. They’ll be able to do consultative sale. So I did that and it didn’t really work because of, you know, they weren’t necessarily in the day-to-day of Arbonne, so they weren’t consultative, but they didn’t really, uh, come from the DNA of our products and services.
And then I tried one more time. I said, well, maybe I need a hybrid hunter consultative seller. That’s mid-level. And it actually worked a little bit better, but still didn’t work great. And so then ultimately were selected and talked to others and we net it out and it’s been working better is just to, uh, recognize that, um, at the end of the day, your senior team as is responsible for selling in part.
And I know not everybody loves sales, but uh, there’s just gotta be some contribution to selling for most senior team members and partners. And so that was the conclusion that we reached and that ultimately, um, has worked.

Doug Pace: (00:19:14) David and I laugh about that because I just tell him, I screwed it up bigger than he did is that when, when we were growing, we got to about 25 employees and I said, well, we need to hire 10 salespeople and we need to go into different markets.
Let’s go home. And as you can imagine, we spent a lot of money. We failed miserably and then, you know, after it didn’t work, I said, well, what was the problem? I said, oh, we didn’t have a sales manager. So then we need to hire a sales manager and 10 more salespeople to only have that not happen again. Um, so I, I screwed it up twice. I said, now, man, the people that seem to sell or that are the people that do this every day, our operators are middle managers or our VPs. And, you know, we just need to make sure that they’re supported and they have the structure and the framework to be successful now to David’s point, those VPs didn’t want to go out and drive leads and, and, and do what I thought sales-wise.
So we ended up just changing the model. Right. We said, we had to help the VPs drive their leads. We have to build the marketing around it and give them at least half the leads that they need to make their sales book happen. And then the other half they can get from clients, they can get from their team, they can get from their own efforts, whatever, but we have to support them.
We have to make sure that they have the tools to be successful. And when we did that, you know, once again it worked, but until I messed it up twice and spent a lot of money to fail, we didn’t get it. So once again, why write the book to tell people that until people instead of saying you made a mistake twice, you learn twice.

Paul Perry: (00:20:55) I think what’s interesting from a sales perspective, it would always comes back to us. It’s just service, service sells itself, right? If you just do well in what you’re doing and that’s, I think what you were trying to say, Doug, is if we can just get our folks the support they need and when they service our clients more sales will come from that.

Doug Pace: (00:21:19) Well, exactly. I mean, it’s one, it’s one, right? They want to work with somebody that they trust on your side that can solve your problem. And if it’s, you know, unfortunately, if it’s somebody that’s not drained in solving the problem, you’re not getting too far. And when you really look at it, what accounting firm, law firm, you know, large professional services, all professional services firm really has a lot of salespeople, not too many. It’s the partners, it’s the senior managers that are coming up. It’s those, those individuals. So it’s just a skill.

David Capece: (00:21:47) If I could just share, uh, another story about lessons learned, uh, early on, we thought we were amazing and could do anything and everything. And then of course, if you do that, it’s hard to do anything and everything really well. So over time we started to figure out where, where our sweet spots are and where we wanted to invest in building out more structure productization standardization, and that has done wonders to help. Um, so there’s productization that we’ve done on, on some of the digital,  services side, where we have templatized how projects work, we have systematized, we’ve automated elements. Uh, we’ve looked at every single step and task to see where we could make it easier, make it quicker and in doing so. It makes it profitable. Well, but it also delivers a much better experience to our clients helps us run, you know, on time on budget sometimes even ahead of time. That’s actually the genesis of Cru. The Cru is the platform that we’ve used to automate and systematized how we do a lot of our projects.

Kim Hartsock: (00:22:55) So here on The Wrap, we always wrap it up in 60 seconds or less. What is the one thing you want to leave the listeners with when it comes to this?So Richard, we’ll start with you. What do you think listeners should take away from this conversation?

Richard Huckaby: (00:23:07) Well, as I said earlier, I think regardless of your industry, there are some tips and guides in here that will help you. If you’re struggling to get to the next level, look at this book and pick out pieces that will help you. And I’m just thankful that David and Doug care about helping other people.

Doug Pace: (00:23:27) I mean, I would say that this book, we wrote it in efforts to help people. We wrote it in efforts so that people wouldn’t screw up like we did, and they could learn from it.
And at the end of the day, it’s all about knowing where you want to go. You know, how you can get there. And then what pitfalls to avoid. And we have all of that in here. It’s easily referenced and it’s not meant to be a slog to read. It’s meant to be pretty light and easy and give you some tools to use to get there. So that’s really, it it’s, it should help you grow faster and it should help you avoid spending a lot of money on things you don’t need to do.

David Capece: (00:24:04) If you look at our framework, the last step is accelerate and what’s interesting is most folks want to start with acceleration because we all want to go faster and grow faster and, uh, make it happen yesterday. So what I would just say is it’s a journey and yes, ultimately everything adds up to acceleration, but it’s really about taking each of those steps in the processes in order to build the infrastructure, to get to acceleration.

Paul Perry: (00:24:32) Doug, David, Richard, it’s a pleasure to have you here. The special edition of the podcast, the Level Up book is definitely a good read for folks. And thank you all very for being with Kim and I today.

David Capece, Doug Pace, Richard Huckaby: (00:24:41) Thank you. Thanks so much.

Commentators: (00:24:44) And that’s a Wrap. If you’re enjoying the podcast, please leave a review on your streaming platform. To check out more episodes, subscribe to the podcast here, or make a suggestion of other topics you want to hear, visit us at warrenaverett.com/thewrap.

 

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