FFF S01E106
Transcript
[0:00] Do you know who your core customer is? Because not every customer is ideal and we waste a lot of time on non-ideal prospects.
[0:19] This is the Full Funnel Freedom Podcast, supporting sales leaders and managers to improve their sales funnels from people to prospects. I'm Hamish Knox. In this show, you'll learn how you can improve your results, lead a great team and hit more targets with full funnel freedom. Welcome to the full funnel freedom podcast. I'm your host, Hamish Knox.
Today, we will be getting ideas and insights from Herb Cogliano, not only about what it's like to grow a family business, but also how can you keep your funnel consistently, reliably full. Now let's hear from one of our affiliate partners.
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[1:34] So my guest Herb Cogliano is an international executive business coach.
He is experienced scaling up CEO and entrepreneur.
As an international executive business coach and growth advisor, he advises business owners all over the world who desire more growth, financial freedom, and enjoyment from their businesses.
They have reached a level of complexity in their business and need support breaking through that level to the next level of success.
Herb, welcome to Full Funnel Freedom.
Amish, thank you very much. And very excited to be here with you and your listeners today.
Yeah, I loved our initial visit we had together. Super pumped that you were able to join us today.
So when we first met, I learned that you were actually part of a family business that you grew and scaled.
So tell us the story of Herb, where you came from, how you got to today, and then we'll take things from there.
Yeah, I feel like I've been an entrepreneur since birth. We literally started our family business.
I'm second generation. The year after I was born, Had a wonderful 54 year family journey doing that.
[2:39] We were in the staffing in the education business. So getting people jobs and providing better education was really purposeful and meaningful for our family and the people that work with us.
As a result of that journey came across scaling up frameworks and.
Ideologies were able to implement them.
Grow our company in 2018 we had an exit and i had an amazing business coach during our journey him and my father were my biggest mentors and unfortunately my business coach passed away, several years ago early and i knew then once we exited that i wanted to spend the rest of my life helping entrepreneurs in their leadership teams navigate the different complexity and stages of growth. And that's what brings me here today.
Very cool. And I'm looking forward to hearing about your experiences working with entrepreneurs and this experience you bring to the table. So what is it like from the inside.
[3:44] Scaling a family business where there kind of isn't a definition between like work life and personal life? Then I'd love to hear about the exit, but first let's talk about scaling. How How did you manage to scale a family business without imploding one or both?
Yeah. I think it's about having shared goals. The family business is a vehicle.
I remember my father telling me a million times since I was a kid, think of the business like a cow.
If we feed the cow, we care for the cow, we get milk every day.
The family drinks, everyone's good.
It only takes one idiot to knock over the milk can and nobody drinks.
[4:34] So put the needs of the business first. And if we do that, do the right thing for the right reason, the business can remain healthy and be a vehicle for all of our families, the employees to have a great living. And I've never forgot that. And I still think that applies today. But what happens, Hamish, as you're journeying over five decades.
[5:01] We got to a spot about halfway through where the business started to plateau.
[5:08] And we were trying to grow more, but just couldn't figure out how to break that multi-million dollar.
[5:15] You know, seven figure to eight figure type of business. And I remember saying to myself, A players want bigger futures. And if we can't provide a company that can grow, A players won't want to stay with us. And so that really drove me to figure out how we could go from this great culture lifestyle business to a business that still preserved family values, but was professionally managed and run. And I think that awakening of having to make it a bigger vehicle for all these wonderful employees that were very talented, really drove us to think differently and find solutions to that growth issue. In scaling up, its framework were the way we achieved it and broke through. And I'm a huge fan of scaling up, read the Rockefeller Habits, read the scaling up, we were vibing on some of those stories when we first got together.
Okay, let's double click on A players want bigger futures, because that's absolutely brilliant.
And it relates to a similar talk track that I have with the leaders I work with.
So what did that look like in practice? So I mean, yes, we had a great thought. But us as leaders, we have great thoughts all the time. So what did that actually look like.
[6:43] At implementing that in your organization? Well, if you think about the owner, Your business can plateau, but you still could be making money. You could have a lifestyle.
You can have a freedom of schedule, a flexibility. You'll still have drama, but you'll be okay.
[7:05] But for the A-player employee, they're looking for promotability, they're looking for higher income, they're looking for further development and learning. And if your organization is not going to provide it, they're going to get it somewhere else. So we were looking at the people who were just busting at the seams, who were capable of more responsibility, more leadership, more independence. And we were very focused on developing them to be able to do that.
[7:41] And although that did not happen overnight, it was a focus to help the grow the right people.
[7:49] And if we grow the right people, the business will grow with it. Where I think before Hamish.
[7:57] We could have been the best salespeople in the company, we could have made every decision in in the company, but it wouldn't have grown the people in it who were the real instruments of helping the business grow.
Because you and I know you individually being very talented is good, but not scalable.
True.
And that's why we needed to have an ecosystem, a culture of developing people first, and in that, being able to develop the business with them.
Very cool. is the question that I'll ask a seller who's looking to get promoted into a management role is, do you want to be successful through yourself or successful through others?
And either are okay but what that story just recalled is you and your father, the people who are running the business, you were looking to create success through others, these A players that you were talking about. Is that an accurate statement?
That is an accurate statement and your question to the producer to become a manager is a great one, Great point.
So then when we roll this out, because we have human beings, they're not robots, right?
It doesn't work 100% of the time. What were some of the challenges that you ran into when you started rolling out this, A, players want a bigger future mindset strategy across the business? Because I got to believe that not everyone was like, boss, great idea.
I think the first challenge is looking in the mirror and being able to let go.
[9:26] Oh, you're used to making all the decisions. You're used to being the answer man.
And now you have to let go and become the question man.
Because I believe if you ask talented people the right questions, they can figure out how to answer and learn and develop themselves.
Almost like the Socratic method of coaching and educating people.
So that was the first big one is our realization of you can't just say it, you got to do it.
[9:58] And then the second one is not everybody wanted to grow Boy, it gives out a lot.
Okay, so the eight players all did. But there were some people that maybe were not committed to a bigger future if they stayed in the same role at the same level for the next 20 years to be fine. And let me just pause for a minute. That doesn't make them bad people. They're just comfortable in their shoes. They know what they want. And they're good at what they do.
[10:29] But for our business to grow, we needed people that could become good at things they currently didn't know how to do. Fair enough. Fair enough. Yeah, we – my mantra is wonderful human being, bad fit. And doesn't mean that they weren't great when business was here. Now business is here, they've kind of plateaued. And that's where they're – to your point, they're comfortable and they're still a wonderful human being, but they're just no longer a good fit for the organization going forward.
And so we can support them in transitioning into something else, typically with another organization.
So we've rolled this out. And I am curious if you would touch on the exit a little bit, because exits are something that can be very emotionally draining.
They can be very emotionally challenging.
They're usually not as simple as we would like them to be on the seller side.
So from your experience, what was that exit like?
And I'll ask you something else after the fact. I'm curious to hear about what it was like first.
Yeah. No, I would say it's definitely an emotional phase in a family business.
[11:35] We had some wonderful people years earlier that were discussing, advising. And I think, one of the best pieces of advice I got is get alignment early. What does success mean to the family if we do exit, whether it's financial freedom or whether it's next step in career path freedom, whether it's legacy, if they're going to stay with the new owner operator.
It was getting clear years in advance on what that was and then architecting a plan to help everyone together achieve that. So a lot of the work was the pre-work of asking the questions, what does success mean? And then the follow through was architecting, putting it together, making sure the business is operating, we're consistent, we're building, we're not falling back. Not easy to do because as you can imagine.
[12:39] Exiting can be very distracting and it takes your eye off the ball and your business sometimes can take a dip.
And that's something every owner just has to be very careful of.
And something I like to share with my clients and other business owners, you're all going to have an exit.
It's a question of who is going to write the final chapter, circumstances or you?
[13:09] Because we'll either pass, we'll either do an ESOP, we could sell to an internal partner.
[13:17] We could sell to a third party, or we could dissolve or go bankrupt. So it's not if you'll have an exit, it's when. And the second part to that, which is really crucial, is the distinction between exiting and succession planning. They're different, but extremely complementary and equally important. Getting your succession plan right. Who is the leadership team that if you want to exit or let's say you want to exit from day to day, you don't want to sell the company, but you want to be a silent partner. But you have a lot of risk because your earn out is still in the company or if you do an ESOP, you have a lot of risk if you take on debt to structure that.
[14:13] So you want to know that the people you're going to leave the business with are capable to carry on the legacy and the mission of all your work.
Nobody wants to get a lot of money and then see their company reputation go down the tubes and be worth nothing for all the decades you spent building it.
So getting them clear on what does exiting look like, whether it's five years or 25 years in the future, and then separately, what is the succession planning goal and how do we develop that along the way because you need both.
[14:53] Very cool. Yeah, and that totally makes sense. Just for some of the listeners who may not be as familiar with Exane, ESOP means?
Yeah, that's an employee stock ownership program where you sell the company to all your employees.
[15:08] They go out and get financing either from an SBA loan or a third-party lender, or the owner takes the debt and allows the ESOP to pay them out over time.
Got it.
And as long as the company is healthy and running well, the owner can sleep really well at night.
But if you didn't put the right people in charge, you have your retirement at risk because of the business faltering when you leave. Absolutely. Absolutely. Thank you for clarifying that. So the other thing I was curious about and not a very common story from my experience talking to, entrepreneurs who have exited where it sounds like you had a very clear plan early on and said, okay, if we're going to do this, we need to document this and this and this and this and this, not very common from my experience. But I would imagine that there might be one thing that you wish had gone better or different or you had done better or different throughout this process. Would you be comfortable sharing as you reflect back on that, what might have you done better or different to adjust how things went, even though it sounds like they went really well?
You know, I'm not a person that looks back and kind of Monday morning quarterbacks myself, but.
[16:26] I can tell you, I didn't know then what I know today, circa 2023.
So always surround yourself by the best advisors, whether it's legal, finance, wealth planning.
And if you can assemble that best team externally, and you can assemble that best internal leadership team, succession plan wise, you have the best opportunity to making the exit of your dreams. And the one thing that I found out, exit success means different things to different people. So you have to be clear on your definition of success. There's a lot of stories about people making a good billion dollars with their exit. You and I know that's not the normal case for everybody. So as long as you've defined success and you've led your group to get there, that's all that matters to me is that you're happy and you're proud of what you did.
[17:30] Yeah, absolutely. Absolutely. I know for a lot of our clients, it's getting a check on closing down.
Now, ESOP is a bit different, but if they're not doing some sort of sell to the employees, I know that the entrepreneurs that we've worked with who have successfully exited, they don't want an earn out. They just want to get, hey, Herb, here's a check.
Thanks very much for setting us up for a successful business. We will take it from here.
Your people are in good hands. Enjoy your check. That's my experience at the very least from what success means.
[17:59] Now, Hamish, one other thing you may find interesting is sometimes it's not preparing them for the money. It's preparing them for what they're going to do after.
[18:14] One of the exercises that we'll do with a entrepreneur is years in advance, we'll say, say, Joe, Tina, I want you to take a week off, totally uninterrupted, and you're not allowed to call in or check any reports from the office whatsoever. Zero. And you're not allowed to go on vacation. This is a staycation at home. Now, what that does for them, and Here's the challenge.
If you look at a report, if you call or check in once, you got to start over again until you get seven days in a row.
[18:56] Now, you might think this is pretty easy. It is not for the entrepreneurs that try it, that have spent 25 years working in the business mentally, emotionally, seven days a week. Let's say they get through that.
We then say, next period, you got to do two weeks, all disconnected.
And then over the course of a year, we build up to a month.
Now what happens? Number one, the internal team gets used to being completely independent and having authority in building confidence in handling stuff when the owner's not there.
And the owner gets to be more comfortable with what they will fill their time with, whether it's charity, whether it's health, fitness, travel. And that's a key part of this.
[19:52] And if you can help them with that, then when the time comes, they're ready to go and they don't even think twice about that succession.
Yeah, very, very well said, because that oftentimes I know from the family businesses, we've worked at, that when mom or dad theoretically retires, quote unquote, they still have an office, they still come in every now and then. And there's that Japanese mindset of Ikigai, which I read about in the book Blue Zones, which is like a reason for living. And for a lot of entrepreneurs, to your point, their reason for living was their business. And when the business goes away, you know, it gets into that, like, well, what am I here for? And to your point, if we can practice in advance not being in the business, then when we're no longer literally in the business, that transition I would guess from your experience goes a lot smoother.
Yes. You know, there's one thing too, I've met so many amazing entrepreneurs, some of them.
[20:50] Don't want to exit anytime soon. So for that person, you love your business, you love being involved with the business. I would just challenge you to think this way.
I want you to think about how could I spend more time than working on the business than in it?
[21:11] What does that mean? Think of market facing activities that would be building your business, your brand, you are the brand as the owner.
But think about creating new partnership, launching new joint ventures, acquisition, new product R&D, going to different conferences or various industry conferences to look at different industry intelligence and ideas and innovation. If you could spend your time doing that, While a great leadership team is working in the business, delivering on results and outcomes, boy, what a great business you've built right there.
Love it. Love it. And that sounds like a great transition into the work you're doing today because you were inspired by the coach that supported you and your father. And so tell us a bit more like when you start getting engaged with a CEO, with an entrepreneur, and especially with a sales leader, where are you starting to see some challenges, especially as it relates to that revenue generation side that might resonate with the audience.
Yeah. So the first thing that a lot of companies are dealing with Hamish is leadership bandwidth. Okay.
[22:30] You look at the important functions in the company, you have sales, you have marketing, you have operations, you have finance, HR, IT. When I go into a smaller mid-market company, The CEO is normally in two or three, if not more of those seats.
Or his number two and his number three are in two or three or more of those seats.
So if you think about it, not one of those seats is being focused on 100%.
So how can we look at the business and look at what it needs more of, more attention?
Where can we create leadership bandwidth so that we can start to focus in the area for some companies that may be sales or marketing for other companies to have an operational issues and they need operations help for some companies it's in cash flow in finance and they're not managing and reporting correctly but we identify the current state and then we look at incrementally adding functional bandwidth that will support the needs of whatever their biggest problem is, their constraint. Fair enough. The second thing that I'm finding with the full funnel right now, Now, there's more one-to-one conventional selling.
[23:56] Versus one to many and we want people to leverage their time more efficiently by balancing not only one to one but your podcast is a great example if you have several thousand listeners how much more effective is that.
Writing a book that maybe twenty thousand people would read.
You're getting your message out so much more quickly, broadly than one-to-one emails or voicemails or phone calls.
Totally. So it's helping them understand the different channels and leveraging one-to-many channels.
And then the second part is, do you know who your core customer is?
Because not every customer is ideal and we waste a lot of time on non-ideal prospects.
Who's gonna pay you the most? Who's gonna value you most? Who is gonna refer you the most?
Those people need to be focused on and then you develop a marketing message that resonates for them.
And the final thing I'm seeing in the full funnel right now is that people are equating that clients value what they do.
[25:22] And they do, but they don't know what makes their company distinctive over their competition.
So they get commoditized. And I think customers have to do, I think entrepreneurs have to do more work at understanding the voice of the customer. It doesn't matter what I think the client values and is distinctive. You got to go out in the market and hear it from them.
Yeah. And then develop a strategy around it. And I got to tell you, there's a lot of.
[26:01] Amateur hour type work done in that area and it's essential for a winning strategy, and the best company leaders are going to go out in the market and do that work.
So is this like an undercover boss type thing? If you were coaching me, if I'm one of your clients, and you were coaching me, what specifically are you going to coach me to do to go out in the market and hear it from my buyers firsthand? Yeah. So let's do homework. Let's get some research. Internally, I'd be looking at running reports either through accounting or my CRM.
What was my customer base in the last year or two? Let me break it down by revenue and gross margin dollars. Who were the top quartile companies on that list? And not only the company, but the individual I did business with, because you and I know we don't do business with companies, we do business with people in companies. Absolutely.
We're going to look at that list together and we're going to start asking questions about what is their profile?
[27:12] What was the type of usage, the way they bought Omnichannel, B2B, B2C, Direct, Retail, what was their profile?
We're going to talk about the types of products, the frequency of use, and their mindset of why they bought.
They bought out of fear, they bought out of availability, ease of access.
We start to look at those attributes and together, put together an ideal customer profile.
[27:45] Once I have that profile, I then start picking up the phone, getting in the car, grabbing a game of golf. And I go, Hamish, we're really grateful for the work you've done in the last year with our company. Can I ask you one question? Out of all the coaches you could have picked? Why did you choose me? What did you value most? And what was distinctive from the other coaches you could have chose? Now I'm going to tell you what's happened going to happen.
They're going to give you generic answers.
You're nice, you get me, you have the right experience. Now the work begins, Hamish, because you've got to probe.
[28:32] What do you mean by nice? What do you mean by the right experience?
People say, I love your quality.
What do you mean by that? Materials, durability.
By that really peeling of the onion and looking at the layers and doing that with 10, 12, 20 top clients, I guarantee you over time, you're going to zone in on the uniqueness of what they value.
And that's where you're going to look at a messaging and a strategy to get more like-minded ideal customers coming to your door.
I love that. Also, you highlighted the fact that we're not just there to get our emotional needs met and check a box.
It's not like, oh, Herb thinks I'm nice or Herb likes my quality.
It's like, okay, but to your point, what does that mean?
Because this is not a check the box exercise. This is not to go out and get our emotional needs met and be like, oh, Herb loves me.
Like it's literally we're trying to understand so we can go find more of those ideal buyers.
And Justin Breen, who runs Brepic out in Chicago talks about looking for buyers who look at everything as an investment.
[29:40] He does not wanna speak to someone who looks at his services as a cost.
And for him, that's a disqualification.
And he was a guest on the podcast previously, which I thought was really, really brilliant.
So Herb, as we're wrapping up our visit today, and I love this stuff.
I could visit with you all day long on this.
If you could go back and coach your younger self, and I appreciate you sharing earlier, you don't Monday morning quarterback, but you are reflective, I know that about you, and you have knowledge, right?
Like you said earlier, if I knew then what I knew now. So if you could go back to younger Herb and say, hey, if I knew then what I knew now, what would you say to younger Herb to get you to the same spot, but maybe a little less scar tissue, fewer bumps and bruises?
I read the Scaling Up book in 2000, late 2002. Mm-hmm. I wish I had read it back in 1980.
Fair. Because I think the one thing which is just very transparent, our leadership team was a smart group of people and they worked extremely hard and that still wasn't enough. It's what we didn't know about the different levels and stages of growth and how to handle the complexity of going from from a 5 million to a 20 million to a $50 million company from tens of employees to hundreds of employees.
If you haven't been there before, you don't know.
[31:10] And so having that framework that guide us through the different levels would have made tremendous difference if I did that 20 years earlier.
The good news is it's never too late to start.
[31:27] And the final thing I wanna offer to fellow business owners and entrepreneurs, how many times have you seen a company where the business runs the owner?
You're a slave to your business, the hours you're working, the pay you're taking or able to take.
I want you to build a company that fits your dreams, not a business that's trying to imprison you. And we all have that opportunity together.
I love that. That's wonderful advice for not only Younger Herb but for all of our listeners today.
Herb, you are someone who is an ongoing learner and we will certainly put a link to Scaling Up in the show notes. What else are you listening to, reading, watching that you'd like to share with the audience today for their own professional and personal development?
Yeah, just quickly, if anybody wants to reach out, check me out on LinkedIn. You can go to to aspiregrowthadvisors.com, check out my website.
But one of the recent books I'm reading, Hamish, is a book by Daniel Priestly called A Key Person of Influence.
And it talks about the steps to make yourself an industry thought leader, somebody with reputation and distinction.
And I don't know of a better way to get a full funnel than being the de facto guy to go to in your space.
[32:54] Absolutely. So men and women entrepreneurs out there, check out scaling up, check out key person of influence if you're really looking at how to position yourself as that brand leader.
And thank you Hamish for your time very much. Yeah, I appreciate you being here today Herb.
I have one last question for you and we will certainly put a link to Aspire Growth Advisors in the show notes as well. So if you like what you hear from Herb and you'd like to get a bit more of his insight, we certainly reach out to him.
Herb, closing thought, you've given us so many amazing insights today about what it was like to be in a family business and scale and exit. And then also how as an entrepreneur, we can get that full funnel and keep it full by getting more of the right client.
One last thing you'd like to leave us with something to plug a closing thought the floor is yours.
[33:42] You know what? I a lot of people don't know what they're what their readiness is to scale, So we we have a very simple assessment that helps people Internally uncover where their biggest gaps are whether it's around people or their strategy So, take advantage of finding out what are your biggest gaps to scaling your company.
You can see that on Aspire Growth Advisors, but just selfishly for you, do the homework, assess what your biggest challenge is, and then get moving on trying to solve it because I think a scaling up journey with my employees was one of the most memorable times in my my career and I wish everybody that same journey.
[34:34] Amazing, Herb. Love the visit. Look forward to continuing our visits offline.
Thank you very much for being our guest on Full Funnel of Freedom today.
Thank you, Hamish, and good luck to all the wonderful subscribers you have as well.
You've been listening to the Full Funnel of Freedom podcast.
I've been your host, Hamish Knox. Today we have had some amazing ideas and insights from Herb Cogliano, not only about scaling a family business and exiting, but also what you can do to keep your funnels consistently reliably full by going out and finding more of the ideal clients for your business.
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[35:50] Music.