In this episode we talk with strategic business coach and Inc 500 CEO, Bruce Eckfeldt of Eckfeldt and Associates. He shares his experience with strategic planning to maximize differentiation. He takes us through creation to implementation for growth and long term success.
Sam Schutte 0:23
So in today’s show, we have Bruce Eckfeldt. He is a strategic business coach and Inc 500 CEO. And today we’re going to talk about growth strategies and creating high performance executive teams.Bruce, welcome to the show.
Bruce Eckfeldt 0:37
Thanks, Sam. I appreciate you having me on the program.
Sam Schutte 0:40
Absolutely. So maybe a good place to dive in here is what’s your background? How did you get started in your career before you were an entrepreneur?
Bruce Eckfeldt 0:49
Yeah, so long story fairly short. So I started out as an architect, I trained McGill University to two degrees in architecture got into the profession.And while I loved the study and the designing kind of discipline of architecture, I found that kind of professional practice a little a little slow, I had an opportunity to get recruited to New York, to work with interactive media to do 3d modeling. And that kind of got me on a software path. So I did a little work on product strategy, product design, really working with companies on this kind of digital transformation they were going through in the late 90s, early 2000s. And then got more tech. So I ended up founding my tech company in 2000, to focus on lean Agile software development. So we were, you know, building products for folks, we had a couple of different systems. We were kind of developing for companies, both kind of back end and front end systems, and then got very involved in Agile transformation. So I did a lot of work coaching companies on adopting these kind of lean agile principles and in engineering, but then ultimately in operations and business strategy, and I sold that company a couple years ago and transition to more formally on strategic coaching for growth strategy for these high growth companies.
Sam Schutte 2:04
And you and you’re based in
Bruce Eckfeldt 2:06
I’m based in New York City.
Sam Schutte 2:10
And so I guess what? I’m curious, you know, just because I obviously am in that space of agile development, what, you know, what were some of the most important strategies you think there that led to your success?
Bruce Eckfeldt 2:24
So I think the, you know, when we were kind of first started early 2000s, you know, honestly, agile was kind of this crazy idea. companies were, you know, got to seeing, you know, we were extreme programming, so it was kind of like, we were jumping out of planes with parachutes and laptops kind of thinking. And, and so in the beginning, it was it was companies that were really kind of pushing the envelope, they wanted something really pretty new and different and innovative. So, in those cases, it was, you know, really kind of pushing the envelope really kind of finding, what are the newest tools and use methods, we’re doing a lot of, you know, test driven development and continuous integration.I mean, these things, a lot of the tools were even built at that point. So it was really kind of pushing the envelope on that stuff. So most of our clients were reasonably cutting edge. And they were bringing us in because we had enough experience, or we, you know, we had six months more experience than anyone else. So we could actually kind of lead the process and we can kind of help navigate those things. You know, as it developed, it became more of kind of an organizational change work, we’d go in work with existing software teams, and it was really kind of getting larger teams to kind of adopt these practices and things became a little bit more standard, but I think always It was about, you know, understanding not just how the systems work and how, what it meant to work in a highly iterative, agile manner. But how do we help people make that transition. So really work with them based on where they are at the time and kind of move them through, you know, changing their thinking, changing their process, changing their tools, changing their habits, and really kind of showing them on the way and leading it and it was that kind of guidingcapability that we had that I think ultimately made us really successful.
Sam Schutte 4:03
Cool. And so as you kind of moved out of that business and started moving into coaching and strategic, you know, coaching and so forth, what was was there kind of a first,you know, customer or project that that helped you sort of really take off and cement that that was the thing you should be doing? Or kind of, you know, what was the first big project you did in that, in that sort of new effort?
Bruce Eckfeldt 4:27
Yeah. So, you know, I always say that, you know, I found it and ran a technology company, but, well, I can write code, if I’m writing code, something’s gone horribly, horribly wrong, right? Like, I shouldn’t be the one writing code. Right. So my, my focus has always been how to kind of think strategically whether it’s at a product level or a project level or at a company level. And so after I sold the technology company, I got asked to come on, you know, work with a couple of different really friends at the time. You know how to other companies they needed either help figuring out strategy, turning around a department, you know, working with their executive team. And I realized that I liked it was it was really kind of fun going in kind of assessing a situation kind of seeing the patterns that were in place, what were the positive patterns? What were the destructive patterns, how to kind of coach them into a new different way of working. And quite honestly, I was using a lot of the same tools that I had developed, you know, kind of lean agile, just applying it to a different set. So instead of looking at, you know, how do we create, you know, a software solution? It was really how do we create a process for a leadership team or a management team to execute? How do we set strategic goals? How do we work on those iteratively like I was applying a lot of same things. And I had used a lot of different tools in my business, I used EOS, the entrepreneurial operating system, I use some scaling up tools, a lot of lean, agile tools. And so I knew a lot of these frameworks pretty well. And once I realized that I did enjoy the coaching side of it. I enjoyed going in and working with the executives and working with the leadership to figure these problems out using these tools. At some point, it just kind of triggered for me it flips it, maybe this is what I need to be doing. Rather than starting yet another business, I can just focus on that. And I think the really nice thing is, is that, you know, as I work with lots of different companies, you get to see patterns across different organizations, different industries, and you get a perspective and you can kind of insights around it. And so really, my value now is I can come in and help See, see diagnosis situations, sort of see where the major problems are, that are affecting growth, bring to bear, you know, cases, bring models bring kind of patterns that we can use to help them start operating at a higher level, and then work with them on the execution of that.
Sam Schutte 6:43
Gotcha. And so, you know, and I’m curious if you could sort of define strategy, or how you know how you see that because I think that’s a term that, you know, every leader in business everywhere throws around a lot, but then you see how folks implemented or what they actually understand of it, and sometimes they don’t, yeah. So howYou define that? And how do you teach that?
Bruce Eckfeldt 7:02
Yeah, no, it’s a good one, I take a very kind of practical approach to strategy, meaning that whatever we do in strategy should help us make decisions on what we’re executing on from an operational and task point of view. Right. So strategy for strategy sake isn’t very interesting, you know, unless it’s going to guide our decision making, in terms of how I approach strategy, the kind of operative phrase that I always use is strategy as an you don’t, you don’t develop strategy to when you develop strategy to be different, right? So it’s not about head to head competition. It’s about how do you stand out how do you become unique in your market. And if you look at kind of the history of strategy and kind of the the different sort of ways to develop strategy, there’s kind of two fundamental ones one is kind of a low cost, high volume, low cost, so kind of the Walmart, right where you dominate the market. You’ve dominate the supply chain such that you can drive down costs to the point where you can out price anybody else on a on a set of commodities. And the other one is being a differentiated strategy, which is you have a unique set of capabilities and unique value proposition that resonate with a particular set of needs for a particular segment in the market that allows you to command a superior price and a superior profit on and fundamentally, those are the two areas. The low cost strategy is hard. Development takes a lot of volume that really only is possible once you are, you know, at the really upper end of the market. So when you look at earlier stage growth companies the only viable the really only viable approach is to take a differentiated strategy. So I’m looking at creating a differentiated strategy and then there’s a series of steps we kind of go through but the end result is identifying a set of needs in a market with a core set of customers or with a with a set of customers or ideal customers focusing on a couple of needs that they have, that other people are not delivering on very well. And differentiate yourself against that, once you have those attributes, those things you’re going to be known for. You then look operationally say, Okay, what do we need? What are the specific operational capabilities we need to deliver on those? And that’s what you focus on executing on. And obviously, there’s a lot of steps in there. And there’s a lot of kind of details how you get it, but ultimately, it’s this, how are we going to be different in the market? And then operationally, what do we need to do to make that differentiation true?
Sam Schutte 9:30
Yeah, that’s the tactics, part of it. You know, I think folks confuse strategy with tactics sometimes.
Bruce Eckfeldt 9:36
Yeah, no, absolutely. And, you know, there’s, there’s kind of, you can have all sorts of discussions on where the differences between those are and there’s various lines you can draw. But yeah, for me, you know, strategy is the position you’re going to own in the market and everything else is then how do you get there and so you whether you call it the operational side, I talk about strategy development, and strategy execution, right. So the development is what is the vision? sure you’re gonna own the execution or what are the operational capabilities are going to put in place and we we break those down, I usually work on a 12 quarter, you know, a three year 12 quarter roadmap. So we’re looking at what do we need to do over the next three years, whatever forecast and our key milestones. And that guides our quarterly planning, right. So that’s every quarter when we sit down to figure out our 90 day goals. Everyone on the leadership team is setting up objectives, things that they’re doing in the next 90 days to advance strategy against the plan, above and beyond their day to day functional roles. And that’s how we make strategy true. That’s how we put the pieces in place, whether it’s a system we’re going to implement, whether it’s a policy we put in place, whether it’s a market, we’re going to open. Those are all things we do on a quarterly basis to make strategy true.
Sam Schutte 10:45
And is there any particular industries where you’ve sort of worked the most on strategy or you know, I mean, obviously, having that technology background, I’m assuming that a lot of your clients are have been in that space, but many of you worked a lot in manufacturing or healthcare as well are where we’re sort of some of your focuses there.
Bruce Eckfeldt 11:03
Yeah, so certainly technology. So just having having a background in technology has gotten me into a lot of tech companies, whether they be you know, tech startups that are fundamentally technology or just companies that have strong technology components to them, you know, that rely upon technology to deliver their products and services. My background in architecture gets me into a lot of real estate construction related stuff. So everything from kind of real estate development, property management financing, I can we can do a three hour episode on low income housing tax credit, syndication, you know, so there’s these different domains that is kind of this combination of tech and architecture and kind of real estate that that I’ve done. Having been an architect also kind of gets me into the creative world. So I do some fashion and branding agency kind of Creative Services. And then I picked up a couple of clients in the cannabis space a few years ago. So I do a lot of work at Cannabis, which is actually fascinating from a business point of view, because of the way, you know, where the federal regulations are set up creates all these interesting market dynamics. And it’s combination of, you know, it’s one part consumer goods, one part agricultural science, one part, healthcare, you know, it’s this kind of mash up of several different industries. So the strategy on that is actually fascinating as you as you kind of map out strategy, because you do have to deal with all these external factors. Well, I like retail, operations and branding and everything, I think ties into that those absolutely security. I mean, this, I mean, it’s literally everything from you know, doing, you know, healthcare. I mean, there’s a whole medical side to cannabis, which, you know, involves the medical healthcare system, which is, you know, because it’s federally illegal, the, the medical system actually doesn’t want to touch it directly. So you have this whole gymnastics that happens when a state sets up a medical program that you have to get a medical card and you get an authorized, you have an authorized condition to get to the card and so it’s there’s all these kind of you need to know about healthcare you need to know about regulations you need to know about, yeah, retail like how do you set up retail sales, there’s, there’s huge actually one of the interesting applications of blockchain is in what we call seed to sale tracking of, because of the regulatory requirements, you need to every piece of cannabis that gets sold, you need to be able to track back to this literally the seed that was planted on the farm, to know that it’s actually been in custody, because you don’t have to have any, you know, you don’t want to have any loss of product or in the way so. So there’s a lot of interesting kind of tack that happens in it. It’s it’s really it’s an agricultural sciences fascinating as well.
Sam Schutte 13:40
And how do you you know, is is that sort of strategic planning and such as that different you think, when you’re in an industry like that, that it’s pretty much the Wild West, or at least, I mean, nobody really knows like, what is the way to succeed? Because it’s too new, you know, versus something like real estate perhaps that you know, Like, I mean, if you’re building apartment buildings in New York City, I mean, there’s kind of a way. I mean, are you gonna? Are you gonna deviate less from some sort of like, common ground that everybody’s doing? How do you kind of? Do you think that’s different for those two types of fields?
Bruce Eckfeldt 14:15
Yeah, well, it’s it’s different in the sense that to the underlying principles of strategy are the same. You’re still looking for a differentiated position, you’re still looking to understand what are the things my best customers care about? What are the attributes that they make buying decisions on? How does my competition address those needs? Where are there gaps and opportunities? Where can I own particular attributes that allow me to differentiate myself and how do I build operational capabilities to deliver on those, all of that is the same. What is different is kind of the underlying attributes is understanding that well, the things that drive the real estate industry are quite different than say the cannabis industry rather, you need to know the drivers in that industry. And then the cycle time it’s kind of the industry dynamics can be quite different. So, you know, in cannabis, you know, we’re dealing with lots of regulatory changes, you’ve got a lot of it’s a, it’s a very frothy kind of industry. So you need to be doing this on a much more regular basis. Whereas, you know, in healthcare or, I mean, if you were in, you know, forestry or something like that, where the cycle time is so long that you just, you’re not going to make a whole lot of strategic change, you know, within a quarter, you know, you just don’t need to do as much strategic planning or you don’t need to do it as frequently. My kind of general rule is your, your rate of strategic planning or the frequency of strategic planning is going to be a function of the rate of change of the industry. And the more frequently the industry changes or the more dynamic in industry, the more frequently you need to do your strategic planning. The only other thing I say is, you know, a strategy is worthless strategic planning is what’s valuable. So it’s the process of planning that that is where the value happens once you finish the plan.It almost immediately becomes outdated. It’s, it’s how quickly can you update it? How can you respond? How well do you have those tools set up such that when you do find a change in the market or something dramatic changes in the market, you can quickly pivot or incorporate that into your strategy. That’s really where that muscle gets developed.
Sam Schutte 16:18
That makes sense. I mean, I think it sounds seems like a lot of, you know, the other problem and sort of new industries like that would be that you don’t know how accurate your assumptions are. Right. You know, like, it’s been in the news a lot here in the Cincinnati area, that, you know, there were like two or three hemp processors in Kentucky, and they’ve all gone bankrupt. And effectively, I mean, some of them, you know, are being accused of even stealing the, you know, crops and such of their customers and all kinds of problems. And, you know, I think it’s because they thought Well, now, I mean, you know, probably you would say they didn’t have a very good strategy, right?
Bruce Eckfeldt 16:54
Yeah, and certainly strategy I talk a lot about confidence level. Like how there’s going to be certain underpinnings or certain assumptions you have to make around strategy. And some of those, you’re you’re always going to be dealing with uncertainty. And in it, the question is, is how confident are you on some of those things? And depending on your confidence, you can be more or less reliant upon it. And so some of those things, you may have a very low degree of confidence, in which case, you need to look at alternative scenarios, right? You need to say, well, this could be anywhere from 20 to 80. So we need to kind of have a plan for each for each range right now. And then as we start to know more as we can dial that in as that cone of uncertainty starts to shrink, we can dial in the strategy, but we need to, we need to know we need to know what we do if it’s going to be a or if it’s going to be.
Sam Schutte 17:42
Yeah, well, that’s a good point, because I know the other thing that’s killed that industry or hurt that industry in Kentucky, because I know a lot of folks who are, you know, in Kentucky government trying to promote that as a sort of second tobacco, you know, in Kentucky, and you know, obviously they all were told by various suppliers is the sort of level of THC and what not that that their stuff would have and a lot of the crops have end up too hot. Right. And, and so they should have maybe said, okay, it’s you know what happens if it’s too hot? What are we what are we going to do? Like what if it is that B option? You know, we think it’s going to be a, because they’re telling us it’ll be whatever the number is percent. And so, you know, because they chose sort of the fiber market, I guess is what they were really going after. They’re kind of they’re kind of screwed unless the regulations change. Some of the folks
Bruce Eckfeldt 18:36
Yes. So it’s interesting. There’s, there’s multiple levels of uncertainty or different types of uncertainty that I would categorize I mean, some of this is kind of context uncertainty. So like, in that case, whether a particular you know, are they going to pass new legislation to allow for certains for a, you know, a different level of THC to happen inside of plants or not like that would be kind of an external uncertainty the the actual THC level of your plant, I think would be more of an operational uncertainty where it’s like, Hey look, there’s a variable here right? Like you’re dealing with an agricultural product and you know as much as we can choose genetics and we can grow in certain conditions that traditionally have led to a particular THC level in you know, in a cannabis plant to make it hemp you know, you don’t know Yeah, like there’s there’s variability there and so operationally we need to you know, have some kind of either wiggle room like we need to have a buffer there. So that we’re we’re planning on producing lower and we know that there’s statistically it might be a little bit higher or we’re gonna have some testing that happens during the during the way so we can replant if we’re running hot.But yeah, I know a lot of these hemp industries, these hemp growers were severely negatively hurt because their their final product was outside the the limits of half the point three percentage
Sam Schutte 20:00
When it’s Yeah, and it’s interesting, you know, you talk about sort of your I guess one way to say it is how frequently you readdress or reassess your strategy can vary, perhaps in different industries based on how quickly that industry is changing. And, you know, you look at in this time of Coronavirus and COVID-19. I’ve talked to have had a lot of conversations with with friends and folks recently about just, you know, people in restaurants and such, how much that industry all of a sudden, you know, is completely changed and disrupted in a very negative way, obviously. And, you know, a lot of folks are saying, like, basically, we’re, you know, there is no going back, like, at least for the next few years. Yeah. You know, if they’re going to survive in that space, they need to, they need to come up with a new strategy. Right. Yeah. I’m curious what, you know, if you’ve worked in that space, what kind of or what kind of recommendations you might have. Yeah, I know what kind of ideas do you have there?
Bruce Eckfeldt 20:59
Yeah I would say the last six weeks of my life, having having these calls with with both clients as well as people that have come out of the woodwork looking for help. But look, there’s a couple of different layers. I mean, obviously, you know, in a crisis, like a real crisis like this, you know, the initial stabilization you need to make, I mean, we were dealing with things and I had I had one of my CEOs was in ICU, I had several members of leadership teams that were hospitalized. So at some level, you need to kind of start with stabilizing, stabilizing the business, figuring out how to get people working from home, you know, getting the new system set up, if you’re not used to that, you know, but then you really need to start thinking about what does the world look like in six to 12 months? And how do I start making some decisions that are going to leave me possibilities then because the problem is or the challenge is you can start cutting costs and you can start you know, right sizing your expenses, you know, based on not being open or only being open for delivery and things like that, but you know, if you if you cut the wrong things or you you hobble yourself in the wrong way, you know, when you actually, you know, start looking at a recovery, you know, if we start looking at some kind of opening up in, you know, say, three, six months, and then over the next 12 months, you know, having, you know, some kind of capability of being able to resume the services, but it’s going to be really different. Unless you’ve got a pretty good idea, you’ve made some educated guesses on what that’s gonna look like, you may be cutting the wrong things, or you may be cutting things that are actually going to serve you well in that world, and keeping things that may not serve you well. So my, the work that I’ve been doing, in most cases, is developing a model developing, you know, potentially several models about what the world might look like in 3, 6, 12 months. And then let’s start looking at the business day and saying, what capabilities do we need? What talent do we need? What systems do we need? What resources do we need? And how do we keep those how do we make smart cuts that are going to allow us either to keep those services or quickly ramp those things back up? When we do see an opening up or less have these restrictions? And I think that’s the big strategic challenges that, yes, companies need to right size or they need to deal with the immediate crisis that they’re in from a, from a cash and operational point of view. But you kind of need to have some sense of where it’s going to be. And yes, at some point, you need to look a couple years out and say, Look, there’s my fundamental business model even still exist, or is that really where I want to be? Do I need to just look at a new possible business model? And it’s hard. I mean, you know, when you’re in a crisis, you’re you’re kind of looking at everything that’s right in front of your nose, it’s hard to look out several quarters, potentially several years. But you know, ultimately, good, solid strategic review companies do that. It’s much easier if you already have a strategic plan, because you can kind of build off of the plan you have if you haven’t been doing strategic planning. It’s it’s hard because you kind of need to, you need to create your first plan while you’re creating your long term plan. And it’s hard to do that in a crisis. But but that is really the work.
Sam Schutte 23:55
Yeah, it seems like you know, it’s hard to know whether you should invest heavily in whatevernew approach you think is coming if you’re not sure if you’re going back to the old way or not, right?Like, because I think, I mean, people are still desperate for entertainment, you know, and that’s the thing is, you know, you look at restaurants, bars, all these things. I mean, you know, the product they’re selling, of course, is not just food. And so if you were, if you wanted to say, you know, say like, for instance, here in Cincinnati, we have a lot of local breweries and such. And if you wanted to say, Well, you know, we’re not going to reopen the taproom anytime in the next three years, we’re just going to be complete at home delivery. Well, how do you how do you Is that enough? Because, I mean, obviously, we want to buy trucks. I mean, is that the right thing to do? Because you’re not sure if we’ll maybe we will have an open taproom in 30 days, you know,
Bruce Eckfeldt 24:43
Well, I go back to your strategic plan, I mean, if if, if on your strategic plan is a you know, creating a fun festive atmosphere, right, if that’s one of the ways you differentiate yourself in your market, you know, you need to kind of think through is that like, how do we do that in the new world. Like, what is look like. So so some of this is figuring out well, what is what is the value we provide? And is there a different operational context or different operational strategy we can use to provide that. So, so maybe there is a different format, maybe there’s a different kind of physical environment that you can create in this post COVID-19 world, that that is going to deliver that, but it’s going to be operationally different, right? Because we have a new context. Or if your strategy had really been, you know, creating, you know, a premium, you know, beer of some sort, like it could be more about the product, in which case, you look at and say, you know, what, the taproom itself is really more of a function or ability to connect with customers, that was not the core part of our value delivery. But then you can make that decision much more easily to say like, we don’t need to worry about the top because that was that was a minor that wasn’t part of our core operational model that delivered on our differentiating values.
Sam Schutte 25:56
You can probably see this I’ll even just reflected in sort of how much companies are being hurt. Now. I mean, if you were a small craft bourbon distillery that was really kind of all about people coming in and having events and all this sort of stuff, because all those folks rely on a lot of that type of revenue. Right? Then obviously, you’re in big trouble, but, but I bet you, you know, Jack Daniels, and those guys right now are, I mean, maybe they’re not as I don’t know, if they’re selling as much as they ever did, but they’re not hurting near as much right. Yeah. Now. Exactly. And they might be doing better just because people are buying a ton of Jack Daniels, you know?
Bruce Eckfeldt 26:32
Yeah, interesting. One that I think a really good example of this is the big event space, you know, the world of conferences and events. And I think that’s one that will, we’ll see that not only is hurt, you know, by the COVID restrictions, right? I mean, if these events are not happening, but you know, most likely they’re not going to be happening for a while, right? We’re going to have ongoing restrictions, at least my guess is for 1224 months of gatherings of certain sizes and things like that. So you know, we’re not going doing these big conferences for a while, and all of a sudden people are doing all this online stuff, right? People are becoming really familiar with Zoom. And people are doing these webinars, and they’re hosting drinks. And so there’s kind of these two forces of one, we’re gonna have restrictions and two people are now, you know, educating themselves or becoming more comfortable with a different format. I think that is a really interesting space where I’ve worked with a couple of these companies now in the last couple of weeks, where I was like, What is the new model? That is really reinventing themselves and I have to go back to the core of what do they do right, then yes, they cannot connect people in the industry, the trade shows, you know, connect buyers and sellers. There’s a certain amount of community building their social connection. I mean, they’re really kind of going through, like, what is it that we do and what are the new possible formats that we could create? And it’s not just, you know, kind of recreating the trade show online, right? That’s not, that’s not going to cut it. Like they really need to think through what is the value and what are the new operational things that we can do? What’s the new business model we can do? That could create that value.
Sam Schutte 28:02
Yeah, I mean it, you know, it’s introducing new forms of competition, right to these other folks. I mean, you think about, like, you know, if what you want to if the reason you go out to a bar is because you want to have a fun time, and perhaps have like cocktails that are, you know, really upscale cocktails? Well, so if somebody invents a service where you can go and have your Zoom meeting, and I mean, you know, I don’t know, maybe this exists already, where you can, you know, get something shipped to you, that gives you the tools, the techniques to make these to make some fancy cocktail, right? Well, if you can do that at home, with people all, you know, remotely via video chat, and you need to go out, right.
Bruce Eckfeldt 28:39
Yeah, I know. There’s someone I was talking to recently, they’re talking about some wineries that were doing at home tastings, right? So they’ll ship you, they could ship you know, they ship your group, like you put a whole group together. They’ll ship everyone, the one and then they’ll do a zoom call and they’ll have some on and they’ll talk about the winds and everything. So everyone’s got their little bottle everyone’s online, they’re talking, you’ve got, you know, an educational experience. Right. So that they’re, they’re working on it. Right. And it’s there’s going to be innovation, right. I mean, you know, we’re dealing with, you know, very early kind of evolution of these things. But yeah, I mean, some of the business are going to need to completely reinvent rethink themselves, you know, other businesses, it’s going to be like, yeah, I need to figure out a strategy for 12 to 24 months, and then the world should more or less go back to normal. You know, but, yeah, but it’s, it’s all about taking the time to think about like, what the future might hold, what are the forces at play? What are the possible outcomes? What do we need to kind of keep in terms of capabilities, what new capabilities might we need to deliver? You know, how do we make sure that we’re, you know, making good strategic choices rather than just, you know, cutting everything? Maybe you need to you need to reduce expense? Well, depending on your industry, some cannabis has been pretty good, but you know, most industries need to cut expenses because they’re just not doing the revenue. The economy’s not there right now. But you know, do it in a smart way.
Sam Schutte 30:02
Yeah. And I know, you know, a question a lot of folks are always asking me about this, you know, is how much of this will stick? Right? Like you said, when we go back to normal, how much sticks? And, and it’s interesting, you know, if because, clearly, two years ago, like no winery anywhere would be really worried about serious competition from some kind of at home wine tasting company, like, Yeah, whatever. But I mean, if you asked taxi companies a year before Uber came out, if you would get into cars with strangers via some app that you hailed, they’d be like, yeah, we’re not worried about that. And what’s interesting is, is like, you know, so even if taxi companies today like have their, their fares or their rates, how many people would switch because they’re used to the technology, they’re used to the app, and, you know, so and so forth. But people get accustomed to it. And to me, it’s not worth picking up the phone and calling for a taxi then versus just, you know, using the app. And, I mean, granted, some taxis have apps too, but usually they’re not as nice. Yeah. So it’s kind of interesting like that stickiness of a solution that people used to?
Bruce Eckfeldt 31:03
Yeah, I think it’s I think it’s, I think the difference in this case is that in, in some of those cases, it’s kind of evolution of an industry or kind of introduction of new kind of models and technology into an industry. from an evolutionary standpoint, in this case, you know, with COVID is fascinating because it’s this external kind of public health externally imposed kind of set of changes. And I don’t know, my, my guess is it’s not going to be as it’s not gonna, it’s not gonna be as sticky in the ways that we think it might be sticky. I think we’re going to be surprised. I think a lot of things will actually go back to somewhat being the way it was before. I think certain things will be forever changed, and I’m not sure we’re not sure of our ability to exactly see which ones are gonna be. I think there’s some things that that will, will be forever changed. I mean, just because once once we start doing something in one way, or once we’re kind of worried about this thing now. It will forever change the way we do something. I think other things, you know, people are gonna slip back into the old routines once once the restrictions are lifted. It’s just tough to figure out which ones those are right now.
Sam Schutte 32:11
Yeah, I mean, I think you know, folks who have for a long time been afraid of allowing people to work from home for instance, you know, once after a few months of this, they’re like, Oh, that’s not too bad. Maybe they, you know, allowed to continue but but you know, clearly like, eating the pizza at home while you talk to your friends on zoom virtually is a kind of a poor substitute for doing in person. Yeah. so, I don’t think maybe some people will do that longer term, but most of us will kind of switch back probably.
Bruce Eckfeldt 32:39
Yeah, I think I think you know, things like that things like gyms, like, I’m really curious about how gyms are going to work about these kind of shared facilities where we now have this, you know, either PTSD around, you know, potentially being infected or you know, being in close proximity. You know, where some of that stuff happens like movie theaters like no like, do people want to go to movie theaters or not, you know, technology’s pretty good at home now to people to start investing in that, you know. Soit will be fascinating. But I think, you know, if you’re a business in this space, you know, part of this is, that’s why I say the muscle of strategic planning is what’s important, because it’s not about trying to sit down and guess what’s going to happen in 24 months. It’s about having the process to keep gathering information and processing that and updating your assumptions and updating your plan, as you get more and more certainty. So yeah, I mean, if I’m a movie theater chain, I’m probably, you know, putting a couple of different possible outcomes in the future there and figuring out what do we do if this happens? What do we do if that happens, but it’s really about how we sit down every month, and well, what more do we know what else has happened? What data we’ve connected? What else, how is the context changed? Is there new consumer behavior that we can incorporate and like it’s that process of gathering and processing information quickly that is going to it’s going to allow certain companies to ultimate be successful because they’re gonna, they’re gonna outpace You know, they’re gonna out iterate on strategy faster than than the other companies.
Sam Schutte 34:07
And I guess that also affects sort of like, I mean, because it’s one thing for a company to be able to iterate and look at their plan and see change and sort of update. But, you know, that has to kind of go all the way down through their company, that ability to kind of pivot and change quickly, right? Because, you know, it’s all well, if I’m a tire manufacturer, and I see some big strategic change happening. I mean, that’s great that I see it, but if I just spent 100 million dollars on a new assembly line that only does things the old way. Yeah. So what, right, like I can’t change, right. So how do you I mean, is that something you see help to have to help people sort of structure that sort of agility elsewhere in the organization so that they can actually take on the strategic changes?
Bruce Eckfeldt 34:53
Yeah, it actually goes both ways. So I talked about information, cascading information up and down the organization in sort of, if you look at the kind of the strategic planning process, I always started with a collection of information. Right. So how do we get information from, you know, people on the ground who are interfacing with customers with suppliers with the market? What are they noticing, right? When you when you sold that last project when you visited that last customer when you went to that last supplier site? You know, what, what did you notice? What was different? What was the same? What were they talking about? What were the concerns, and I want to bubble those up the organization to leadership so they can incorporate that into strategic planning, right? So we’re, we’re always kind of awareness, developing awareness. Looking at what is similar and different in the industry? What trends do we see happening, what new information what’s happening with competitors, all that goes into updating our strategic plan and then once we’ve got once we process that and turn that into a new or you know, an updated set of strategic priorities, like how we how we once we set those for the organization cascading them back down through for implementation. And depending on your cycle and how frequently you’re doing that, whether you’re doing like quarterly or monthly, you know, it’s about collecting that up and then pushing it back down in terms of setting the organizational priorities. And I always say, strategy, that the key strategy is you can do anything you want, just not everything you want. And so it’s about making a set of choices to align the organization around. And there’s different models. I mean, you can, and I’m a big OKR fan. So I like setting objectives and key results and kind of cascading them down. And and yes, I mean, you’re you’re looking at how do we change operations? I mean, in the case of the tire manufacturer, who’s got a product line, you know, it’s got a operations and assembly line that’s producing something at a certain rate. I mean, if that line is pretty fixed, that would make sense if your strategic plan said that this is this is not likely going to change over the next 1224 to 36 months. You know, there’s lots of great case studies of how companies, new startup companies or smaller companies overtook big monolithic companies because they’re more agile. So there’s the Nucor steel, you know, the mini mill steel model that basically, you know, it started chipping away, right, they went off to the low cost, rebar, rebar. Exactly. And, you know, made made that effective at a small agile level, and they just kept iterating and, and quickly changing what they could do how they could do it. And they basically were able to change faster than the big behemoth steel mills. And, and so they outpaced them now, you know, that worked because the industry was changing or they were able to make, you know, capitalize on chain a dynamic industry, you know, industries that are pretty staid, you can have more confidence and make your longer term decisions, which is why we kind of don’t need to do strategic planning quite as often. But kudos to them and uh, you know, what’s happening now with COVID is, you know, is unfortunate situation that where, you know, company companies have a lot of change coming out, the ones that are good at changing quickly and processing change quickly are going to fare better than those that have not developed that kind of strategic muscle. So and it’s a trade off, right? I mean, it cost, you know, cost the organization in terms of resources and money and time to be good at changing quickly, right? So if you, you don’t want to do that every day. That’s not it’s gonna it’s not going to be a good ROI on developing it to that level. But you know, if right now, your strategic planning is only once a year, you know, you’re going to get crushed by a company who’s really good at doing that once a month right now.
Sam Schutte 38:39
Yeah. Well, I think that’s why you know, like, whether it be tire manufacturer or any kind of information company, I mean, that’s why you see stuff, you know, people moving stuff to the cloud or outsourcing or leasing equipment, anything you know, I mean, some of these factories you go and everything’s leased, they don’t have anything, you know, or it’s all I was walking through a brake manufacturing plant recently. And I mean, you know, the actual plant owner is not doing anything or the operations, it’s all subcontractors and vendors in there with their stuff that can, you know, not exactly be ripped out easily, but it could, but you know, you could bring in a different vendor and have them put their line in. Right. And, and I’ve heard recently, like, you know, a lot of companies I’ve been dealing with that are going through acquisitions, trying to sell off divisions, you know, they want to be everything to be in the cloud as far as servers and apps and stuff, because they don’t want to have to try to split up some data center they own between the companies that they sold the pieces off to write. I mean, how do you even do that? How do you move the physical box? stuff?
Bruce Eckfeldt 39:40
Sam Schutte 39:42
And, you know, if you’re in the business of entering something and then selling it off in a few years, I mean, that’s something that’s kind of a core strategic decision you have to make, you know,
Bruce Eckfeldt 39:52
Yeah, generally what I look at is, you know, once we map out the attributes that you want to compete on in the market, you know, how you’re going to differentiate yourself. That’s gonna lead to a pretty clear, concise sense set of operational capabilities, right, and we call it an activity fit map. And it’s a set of differentiators and supporting activities, but it’s basically a collection of things that you do that work together unique way to deliver on your differentiators. But things within that core set of capabilities, I generally say you want a fair amount of control over so either you want to own, you want to have exclusive relationships with you want to have, you know, protected IP around everything else, you want to figure out how to deliver as quickly and cheaply as possible because everything else is basically a commodity inside your business. So if it’s not in that core set of capabilities, you know, you shouldn’t you should be looking for the easiest, cheapest way to deliver on it. But things that are inside are going to be the things that really are core to your strategic differentiation. So that’s the stuff that I would say, you know, focus focus on really owning and developing IP around and protecting, you know, both from information and from a control point of view.
Sam Schutte 41:06
Yeah. So you bring up developing IP, that kind of segues nicely into a question I was going to ask. We talked a little about, you know, when you’re working with services, businesses, how you sort of design them to be sellable, around designing those businesses for sale. You know, you mentioned earlier that you had sold your technology services company, you know, a lot of business owners that are service businesses, you know, that’s something that they talk about a lot is, well, I can’t sell my company, it’s, it’s, it’s just, we’re just a bunch of consultants. It’s not worth anything. You know, how do we figure out what it’s worth? How do you kind of advise businesses to do that or what’s your approach there?
Bruce Eckfeldt 41:44
Yeah. So you know, it’s a challenge. I would say service companies are easy to start are hard to scale hard to sell. I think on one hand, there’s kind of two things that are going to drive valuation or drive saleability. You know, one is having kind of a clear differentiated strategy being known for something in a market, right? So if you’re, if you’re a will do anything for anybody kind of company, there’s really not much strategic value in that, right? Like I can, I can stand up another company that can do anything for any money. If I’m really focused on Hey, we only work you know, we’re experts at this particular situation with this particular software and this particular configuration for these types of industries. I now have a reputation I’ve got a known kind of capability in the industry that has value right that is that that another company can say, hey, look, you know that that is something we can leverage in some way. You know, all sales are effectively some kind of discounted cash flow, right. It’s some kind of well, you know, this represents either, you know, something that will be generating cash on its own or some something that we can use to generate cash, we’ve got a whole bunch of widgets that we can sell to the customers of this company. So we can, you know, we can create sales at a much cheaper level by buying this company than to build our own sales team around it. Or it’s in the end, it’s going to be some kind of value that that, you know, is is created for the company to buy. The other way to do it is I always say the more that you can make your service company look like a product company, in terms of, you know, having processes, having standard operating procedures, having ways of doing things that are repeatable, that are scalable, that that is the other kind of key thing around it. If you look at the contracts, I mean, there’s lots of things you can do in terms of moving from kind of one off contracts to developing reoccurring revenue or longer term contracts or you know, if you’ve got some kind of committed sales or stickiness to the what you do, you know, those kind of things are going to increase your valuation. But ultimately you kind of have to look at as well, why would they buy? Like, why? Why would somebody buy you like what is what is it that they could do with you either in terms of being able to generate revenue through the services that you provide or leverage your service in some way to other to their other clients or their clients to you? So, you know, you have to kind of look through, where could you create value on those things. The other thing that always happens in service companies is that if you if, if the process of the company, whether it’s sales or operations or product development is reliant upon key people, so whether it’s the owner or you know, parts of the leadership team or, you know, founding partners and things like that, if they are a key to the process, and as a percent of the time it’s around sales. You know, it’s just not going to be very valuable, right, because the moment that person leaves, you know that that company doesn’t really run very well on its own or as a buyer, I would need to figure out how to replace that person. And so one of the first things we do is look at making sure that you’ve got standard ways of generating sales that don’t involve equity holders, make sure that you’ve got standard ways of delivering value. delivering your product and service or delivering on your services that don’t provide don’t involve the equity holders. Because you want to figure that those people at some point, they’re going to sell the company so they can leave otherwise they would hold on to the company. So you need to kind of make sure that you’ve got processes and procedures around that to make sure that those are going to happen then obviously depends on the business model in terms of what else you need to put in place. But fundamentally, that’s that’s that’s how you make it kind of saleable, and that’s how you increase the valuation.
Sam Schutte 45:49
I suppose that’s, you know, part of some of the risk if you look at companies, you know, media figures like Gary Vaynerchuk or Tony Robbins and these guys that they are their company, I mean, they have, you know, I mean Vaynerchuk or VaynerMedia, I guess it’s called, you know, it’s obviously its own big company, but he is so much the face of that, you know,if you’re in that kind of coaching space, it’s gotta be hard to sort of extract yourself from that and still, you know, not have an acquirer say, No, no, you’re not getting out of this, like you are this brand, right?
Bruce Eckfeldt 46:21
Yeah. I mean, I would say, yeah, they’ve done a great job of scaling. But I would not say that they’re super sellable. Yeah. Because they that that asset would be very hard to transfer to somebody else. I mean, like, at some level, you know, like, if the brand if if the brand abstracts from the person enough to give a good example, like, you know, you have some big names out there for, you know, Ogilvy and Mather or something like that, right? I mean, Ogilvy is, you know, one of the world’s largest advertising agency isn’t Ogilvy is no longer around, right? Like they’ve they’ve they have done but it was not easy. And at that point that the scale has to be such a scale that you would be able to do it for midsize growth companies. It’s not I think it’s a real option around it. But you know, it is possible at a at a very low scale. But I think that’s the difference between scaling a company and making a sellable, you could you could scale a company and still have these key people I talked about the rock star strategy, right, you can, you can make the owner, the figurehead, a rock star and develop, you know, systems around them. So they just, you know, they go on stage, they do their thing, they leave and everything else is taken care of. And you can scale a company that way, but it’s hard when it comes to selling it.
Sam Schutte 47:41
So, you’re talking about engagement structures and such before? You know, I’m curious how, how are you structuring your engagements with your customers, when you’re doing coaching with them? Is that you know, do you do that remotely? Or do you have masterminds or, you know, how to how do people kind of work with you?
Yeah, so the big the big kind of fork are the decision processes if if a CEO has a leadership team in place or not, if they have a leadership team in place, or they’re, they’ve they’ve, they’re at the point where they really are ready for a leadership team to get put in place. I work with them on getting that team in place. And then I start with essentially a strategic planning process. So we take a couple of days. Sometimes it’s a retreat, and we’d kind of dig into it all at once. Sometimes we spread it over a couple of weeks. But we basically go through, there’s about 14, 15 kind of steps to develop your 12 quarter roadmap, but it’s really getting into that whole question of why are you here? What is your what what business are you in? Who’s your core customer? What do they really care about? How do you want to differentiate yourself your key operators? What are your three what’s your three year forecasts look like? 12 quarter roadmap and I do a 36 month cash projection, we basically we develop a three year plan that really covers strategy and how we’re going to execute. And then I work with them quarterly. I usually come in two days every quarter and we go through a quarterly planning process.
Bruce Eckfeldt 49:00
Which is all that you know, collecting all the data, updating the strategy coming up with priorities, and then I do a lot of team development to help them figure out how do they level up the leadership team, I always say that the company is only going to grow as fast as the leadership team grows, we need to constantly amping up and, and leveling up our leadership team capabilities. So that’s if they have a leadership team. And we just keep going through that quarterly planning cycle and I help them get that in place. If there’s no leadership team in place yet, I’ll either work with the CEO one on one or I do have a couple of mastermind groups where I basically put put a group of CEOs together, we work through the quarterly planning process, we do the strategic planning, but I’m really there helping coach them as leaders and getting them working together to kind of share experience. So they can grow their business to the point where they they’re ready to for a leadership team to be put in place and that’s really a you know, not only growing the business but growing the leader. There’s a lot of transformation that needs to happen on a CEO to go from, hey, I founded a company to Hey, I’ve gots several hundred people working for me and I’ve met making you know, 10s of millions of dollars. There are several stages of, of transformation that needs to happen. And there’s the, you know, the coaching phrase that I’m sure everyone here has heard is what got you here won’t get you there. Like you need to shed a bunch of things at different points to be able to adopt the new way of thinking. And that’s can be hard. Right. And that’s a lot of what I do as a coach is help with that transition.
Sam Schutte 49:11
Gotcha. Yeah, and those mastermind programs can be so viable I think just to get just the insights you get from other leaders that are in the group that see things that you just completely blind to. Absolutely, yeah, it’s just like, wow, I never even thought of that. Yeah, I was in one that was sort of more on like the marketing development that was kind of the topic, you know, marketing, consulting and such and growing your consulting practice. And yeah, just the insights other consultants have they’ve been doing it much longer than I have.
Bruce Eckfeldt 50:50
Yeah. Was all well, different industries. I always find that you know, I enjoy putting together mastermind groups that are different either different industries or different facets of an industry like I do in cannabis one which is, you know, there’s some cultivators, some processors, there’s some consultants, there’s a retailer, there’s product people, and all they’re all in cannabis, they see it from such different angles. It’s kind of a, you know, the story of the elephant, like one person touches it, you know, the, the think of it’s the group of blind people touching the elephant and one person thinks it’s a tree and other person thinks that’s a, you know, piece of paper and other person thinks it’s, uh, you know, I can remember the different ones, but a wall, you know, but it’s all because they’re touching different parts of it well, by getting these people together, and sort of everyone kind of benefits from different perspectives and different kinds of understandings of how the the industry is operating can be really insightful.
Sam Schutte 51:34
Yeah. Very cool.So if we look at some projects you’ve done recently, or just activities you’re involved in, what’s kind of been the most personally rewarding project that you’ve worked on recently. Yeah, so I, one of the things I love doing is mentoring earlier stage entrepreneurs.
Bruce Eckfeldt 51:53
So I do some work here in the city of New York with both minority and women owned businesses. And, you know, the fascinating thing there. I just find that there is so much untapped talent when it comes to entrepreneurs and leaders, just because of, you know, social political situations, and you know, people having different levels of opportunity. And the thing I love, I’ve had a couple of these cases now where people that I mentored four or five, six years ago, all sudden come back to me, you know, and they were just starting a business. Maybe they had a couple hundred thousand dollars in revenue. And they’ll come back to me said, Okay, well, we just hit 5 million in revenue. We need your help now. And it’s just it’s like, there has been times where I’ve just like, I kind of, like I even forgot about them kind of thing. Like it just it just escaped. I’ve worked with so many of these over the years. But it’s such a pleasure to kind of have these things like oh my god, you did it. And, you know, it’s just, it’s fun. I think I realized that one of the reasons I love coaching is I love, you know, just helping people be more successful, and ultimately just giving them the confidence or giving them the just the possibility that Oh yeah, I really could have a company that’s bigger I could get to this level. You know, and that’s really, that’s impactful for me, right? Ultimately, my, you know, my goal is to, you know, create, you know, create more jobs, create more business to, you know, fuel the economy by helping create more of these high growth businesses, because there’s so much opportunity in these spaces.
Sam Schutte 53:35
Yeah, it’s awesome. And, you know, a friend of mine just started a new business. And he’s, you know, worked his entire career as a sales person for a lot of different companies and, and so he just started a business I’m just like, oh, man, you just you don’t know, you won’t even realize what you’ve been missing out on. Like, you know, just getting into that space and the freedom and just the the ability to steer your own ship and opportunity. And, you know, I don’t think I’ll ever hopefully never regret that I’ve never looked back.
Bruce Eckfeldt 54:02
Sam Schutte 54:04
So great. Awesome. So I guess just to wrap up, what are the three main reasons that someone should reach out to you for help? What kind of what are the three main things that you can help people with?
Bruce Eckfeldt 54:16
Yeah. So I mean, typically people come to me, I mean, one is they they feel very stuck, right? They’ve taken a business or certain level. And they’re not sure what to do next. Right. So that could be around strategy. It could be like, we’re just we’re, we’re not really sure how to compete at the next level, or we’re kind of struggling to figure out how do we create really a premium situation rather than worse kind of feel stuck in a commodity. That’s, that’s a typical situation. Another one is where there’s conflict on the leadership team. Right? So where a CEO has, you know, either a formal or informal leadership team and it’s just not going well, maybe there’s open conflict. I get involved every once in a while with some conflict resolution where there’s, you know, strong you know, sometimes borderline violent disagreement, leadership team on things. And so, you know, and a lot of that is really, you know, it’s a question of alignment. It’s a question on goals. I mean, sometimes there’s been some historical things that need to get worked out. But you know, without a high quality leadership team, it’s, it’s really tough to grow a business. I mean, it’s just not gonna happen. And then I do some one on one SEO coaching, where it’s just, you know, CEOs that are kind of trying to figure out how to sharpen their skills and realize that, you know, having an external kind of coach, mentor observer, who can kind of give them some feedback in a constructive, but pointed way to help figure out where their next stage of growth needs to happen. Those are, those are typical reasons I get involved
Sam Schutte 55:42
in what’s your contact info if folks want to reach out?
Bruce Eckfeldt 55:45
Yeah, so you can always go to my website. It’s eckfeldt.com is kind of my website and that’s got a only information about the coaching work I do has information on the podcasts and you can always email me at firstname.lastname@example.org and I’d be happy to start dialogues there about anyone that’s facing any of those challenges or has questions about anything we’d spoke about today.
Sam Schutte 56:11
Great, awesome. Well, really appreciate you coming on the show and speaking with me, Bruce, you know, I think this kind of real, you know, end up thinking and, and new thinking around a business can be so valuable for folks who just are used to doing things the old way, you know, I’ve never really figured out how to change how to be more agile. So I certainly hope folks will reach out to you for help if they’re in any of those situations. And like I said, Yeah, thanks for coming on.
Bruce Eckfeldt 56:41
Sam. It was a pleasure. Thanks for having me.
Sam Schutte 56:43
Yeah, absolutely. Thank you.