The Real Growth Problem

David 0:01

What if the biggest growth problem facing many successful benefits advisory firms isn't sales or marketing at all? But the simple fact that no one has clearly defined who's responsible for what inside the business and whether the whole team is even rowing in the same direction? We'll find out on this episode of Shift Shapers.

Meet The Fractional COO

Announcer 0:22

Change either energizes or paralyzes. The choice is yours. This is the Shift Shapers Podcast, bringing the employee benefits industry interviews with individuals and companies who are shaping the industry's shifts. And now, here's your host, David Saltzman.

Founder-Led Growing Pains

David 0:41

And to help us answer that question, we've invited Forrest Durer, a fractional COO who works with mostly founder-led companies, to build the operational structure, leadership accountability, and organizational clarity they need to scale successfully. Welcome, Forrest. Thanks for being here. Appreciate the invite. Glad to be here. So let's start at the very bottom. A lot of benefits advisory firms, as you know, start as founder-led practices. What operational challenges tend to appear when those firms begin to grow beyond the founder doing everything?

Forrest 1:12

Yeah, the operational challenges are many with respect to founder-led businesses because a lot of times the founder has done everything. They've done AR, AP, sales, marketing, operations. And so it's very difficult for founder-led organizations as they scale to back out of the tasks and responsibilities and feel comfortable delegating those tasks and responsibilities to others as they start to add employees.

Roles Versus Titles

David 1:38

So we hear a lot of talk about defining seats and responsibility inside a company. Why is it that so many organizations, even some successful ones, struggle to clearly define roles?

Speaker 1:52

I think it's because they try to make them too complicated. So when I'm working with an organization and they may have an accountability chart or organizational chart that builds out the structure of the business, many times there's no roles specifically defined in those organizational structures. They've got a job description that may be two pages long, maybe three pages long with 35 bullet points on it. And it's very confusing for not only the other operators inside the business to know who is responsible for what, but even the individual seat holder, it's difficult for them to know how they are scored on a daily basis, a weekly basis, how do they know that they're winning and they're having a successful week. And so clarifying those roles and really simplifying them down to five to seven responsibilities makes it much easier for the organization to operate fluidly. So it's not so much about titles? It's not so much about titles. It's really more about who are you accountable to and what are you accountable for for each seat. That's really where the magic can happen.

David 2:55

So if you had a benefits advisory firm that had, let's say, five to twenty employees, what would a healthy accountability structure actually look like?

Speaker 3:03

Yeah, a healthy accountability structure should look like a visionary uh or founder, if you want to call them that, in the business. And they really need to have a second in command. And in the EOS space, that second in command is called an integrator or a COO. That integrator is somebody that helps uh orchestrate the business, basically, make sure everybody's rowing in the same direction. And from there, you would have a finance leader, a sales leader, an ops leader, uh, maybe some type of production leader that meet with that leadership team and make sure that everybody else in the organization is is functioning properly. But you don't want to make a completely flat organization because then it gets very confusing uh about who does what. And I find that a lot of times in founder-led businesses, they have 27 people reporting to the founder, and that's not uh scalable at all.

David 3:53

So you've got to have kind of a pyramid structure.

Speaker 3:56

Yes. Yeah, you need to have pyramid structure, but a clearly defined pyramid structure where everybody knows who does what in the organization.

Accountability As First Principle

David 4:03

At the end of the day, is it really about accountability? Is that really the coin of the realm?

Speaker 4:07

It really is. The accountability uh piece is something that so many companies missed. They focus on the titles, like you mentioned earlier, uh, like you got somebody that's the office manager or the finance manager, but it's really about who owns the finance responsibilities in the business. And if you can clearly define those five to seven things, then it's then it's clear on whether that person is successful and also clear to the other individuals who they need to go to for information.

David 4:35

One of the problems that I know a lot of firms have is even if they've got a structure, it's being able to differentiate between somebody who's just busy and somebody who's really accountable for an outcome. How do you set the stage so that that behavior that you want takes place?

Speaker 4:51

Once you've defined those five to seven or so responsibilities, you really need to create scorecard metrics around those. And a lot of companies, you know, struggle with scorecards or don't want to do scorecards. But it's important to have those metrics, those KPIs, if you will, for that individual to not only the manager be able to adjudge whether that person's successful, but also the individual to know what's successful. And if you focus on those individual scorecard metrics that are leading indicators on a weekly basis, then it becomes clear whether that person is busy or whether they're being productive. Because anybody can be busy. Uh, anybody can get throw through the motions and make it look like they're getting things done, but are they moving the ball forward for the organization? Are they making uh the company worth more money, servicing more clients? Uh so creating those metrics, I've found that if you if you create a scorecard for somebody that is that is a high performer, they're gonna absolutely love that you have a scorecard for them. Uh the low performers are the people who really run and hide from scorecard metrics because they don't want to be held accountable.

David 5:58

So let's talk a little bit about what a scorecard might look like. It is it just a collection of KPIs and a checkbox, or does it go beyond that?

Speaker 6:05

Yeah, it really goes beyond that because it is a list of items. So let's just say uh somebody has five different items that they're responsible for on a weekly basis. Uh sales is usually easier. It might be how many phone calls they make, or how many proposals do they generate, or how many new outreaches do they have uh for prospects. It's based around activity that creates the result. A lot of people get scorecards wrong because they they will use how many deals were closed last week. Well, the deals is is important, and that's something that I look at on a monthly basis. But on a weekly basis, I want to know what are the activities that that person is doing to get that we know that will create the outcome, like you said earlier, that will produce the outcome that we're looking for. So it's not the uh outcome that we're checking off every week. It's the activity metrics, the things that they do each week to get to the outcome.

David 6:56

Do you favor weekly check-ins or does that vary by where somebody is on the chart?

Sponsor Message: BenePower

Speaker 7:01

I I favor weekly check-ins absolutely. Uh the weekly check-in is really where that uh understanding and clear accountability between the manager and the direct report is.

Signs You’ve Outgrown Ops

David 7:12

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Letting Go To Grow

Speaker 8:33

One of the big signs for me is asking that founder, can they take a week off? Uh, if they cannot take a week off without answering the phone and answering questions, they've scaled past their capabilities, their operational structure. Maybe not past the number of people that they need, but past their structure. And so the founder really has to sit down and delegate things and get things off their plate to where they can operate at a level where they can take a week off, a month off. Uh, I politely tell founders a lot of times that they created a job, not a business. And if you can't take time off, then you've definitely created a job, not a business.

David 9:11

But for an awful lot of founders, especially in the small entrepreneur space, it's really, really difficult, even if they understand intellectually that they need to let go of stuff, it's difficult emotionally for them to let go. How do you help them over that problem?

Process Before Personalities

Speaker 9:29

Yeah, it's it's definitely a challenge for founders to let go of things. I call it let go of the mind, so to speak. But what they have to do is accept that people are not going to do it exactly the way they do it. They're not going to do it 100% of the way. And so the concept that I have is it's 80%. If somebody can do it 80% as good as you, get the same results, but do it 80% of the same way. Let them do it. They've got to take baby steps and start letting go of things. And it's it's a process. It's not something that happens overnight. They wake up on Monday morning and all of a sudden uh the founder is ready to delegate things and give authority to others. But they just have to take one thing at a time. Make a list. Make a list of the 20 things that they need to delegate, do two or three a week and just start peeling those things off. And before you know it, they'll be free of those things.

David 10:20

Do you have to help them understand that an inability to let go of tasks and things like that is an impediment to growth?

Speaker 10:26

Absolutely. Uh have to shine the mirror on them. You know, ask them how many hours a week are they working? And that's usually a trigger uh if they're working, you know, 60, 70 hours a week, which a lot of times I've found founders that are doing that. And that it's hard to look in the mirror and say they have created a monster, so to speak, uh, in the business that they have to where they've got to let go of those things. And so walking them through the process to think through, let's let's take two things this week. What are the two things that are the uh lowest hanging fruit, the easiest things that we could let go of that would make the biggest impact on your week? Start there, get some momentum, and and and just start small.

David 11:07

So I've got a firm hypothetically, and I see my pipeline starting to drive up, my service is getting messy, um, or my teams are stepping on each other. What's usually the root cause or causes of that kind of a problem?

Speaker 11:21

Uh a lot of times the root cause is the founder getting involved too much and not providing adequate processes that people can follow to make sure that they're staying on track. And so, again, founder-led businesses a lot of times operate uh out by the seat of their pants and make decisions uh very quickly and without thought, without thinking through the cause and effect. And so taking some time and documenting uh the proven process on how somebody should do something is a big way to get those uh those people aligned and get those things lined up.

David 11:56

I imagine that also helps with onboarding and with also keeping your structure in place.

Document Vision And Values

Speaker 12:00

It really does, yeah. Because then you don't have uh everybody calling the founder, asking them questions about where is this, where is that. And again, the the larger the firm, the easier it can be because there's more opportunities and areas to delegate. But even small firms with three or four employees, uh they again they can start small and start getting those things documented. I tell everybody it's better to document and build the structure now while you're small, because as you scale, you don't want to wait until you have 20 employees and then try to do it. It's kind of like investing. The time to do it is now, it's not to do it in 10 years.

David 12:35

Well, a lot of advisory firms talk about vision and they talk about culture, but that rarely gets documented. Is it important to document that stuff? And why does it matter for execution?

Speaker 12:46

It is vitally important for the founder to document the vision uh and the core values of where the company is going. I find this very regularly in talking to founders that uh I'll ask them, Do you do you have some core values? And they'll they'll say yes. And I say, Well, can I go out there and ask anybody in the in the office what their core values are and will they get it right? And more often than not, they say no, they will not get it right. Um and I'll ask them, you know, do they does anybody out there know where the firm is going? You know, what are the revenue targets for the next five years, 10 years, whatever? And nobody knows. And and so everybody is just operating uh blindly, out of gut, which makes it very difficult, if not impossible, to scale. So I'm a big believer in in transparency and open and honest communication. And you have to document it. You have to put it down on paper, so to speak, or put it in some type of document so that it's referred to on a regular basis and everybody knows this is the North Star. This is how we make the decisions today.

David 13:46

And how do you reinforce that? Do you quarterly meetings or you just talk about it, or is it enough to post a bunch of signs?

Reinforce Culture Daily

Speaker 13:54

It's it's something that has to happen every day. So it's it it definitely signs, definitely quarterly meetings. But what I've found is if you can really define what those core values are and use those in hiring and firing, uh, not just in a sticker on a laptop, but actually using them as points of reference to say, you know, you are uh doing something wrong, and here's the core value that you're breaking. It it's daily interactions uh as well as the quarterly in the signs.

David 14:24

Do you ask those questions or touch on those every time you do a weekly review?

Speaker 14:28

Not every time a weekly review, no. No, it doesn't have to be that often. It's it's more of when somebody does something well, point to a core value. Hey, I wanted you to know you you uh exposed uh grit, if grit's a core value. That way you really did a good job, or you know, humbly taking on something, you did a great job at that. So it's it's using them in everyday conversation is what really builds the culture, but you have to have it documented before you can review it every day.

David 14:56

So how can a benefits firm make sure that everybody, from producers to account managers to even operations, is rowing in the same direction?

Keep Everyone Rowing Together

Speaker 15:05

That really starts off with the top. So the top of the leadership, you know, if it's a 20-person firm, that top leadership team needs to be meeting on a weekly basis and discussing topics and making sure issues are being solved and cascading those messages to the rest of the teams. Uh having those one-on-ones, like we talked about earlier, where the manager and the direct report are meeting on a weekly basis for a check-in. Uh it doesn't have to be two hours or an hour, it could be 15, 20 minutes. But just giving those uh individuals opportunities to share with their managers some concerns or what things are going on in the business where they need help and providing that course correction. Almost like uh, you know, if everybody's rowing in a right direction on a crew boat, you've got somebody in the front shouting, giving, you know, not orders, but giving direction about which way we need to, what's the speed we need to, you know, move the oars? That type of cadence has got to continue to happen to keep that organization moving forward.

Start Operations Discipline Now

David 16:00

So I, you know, in my experience, a lot of advisors assume that operations is something they'll fix later. At what point in a firm's growth, and we touched on this a little bit, does operational discipline become mission critical? Is it something you've got to start with?

Speaker 16:14

It it's something you really need to start with, but I always tell everybody start wherever you are. So if you're you know two years into your firm and and you're having chaos, go ahead and start now. The time it's the start is now. Uh but building those processes and procedures, even if you're a one-man advisory firm where you're just starting out, documenting how you do things is important not only for as you scale, but also to make sure that you're following all the steps that need to be followed, but uh also looking for ways to optimize what you're doing, whether it's through technology or outsourcing to a virtual assistant or whatever it might be.

David 16:51

So if a if a benefits advisor listening to our podcast realizes that their firm lacks structure, maybe has unclear roles, and then therefore unclear accountability, what are the first, say, two or three steps they might want to take to start fixing it?

Speaker 17:06

Yeah, I would reach out to uh somebody that can help them think through that. Uh they're an advisor, they need to get an advisor that would help them think through their business and build that uh vision and make make sure that vision is clear even to themselves. That'd be the first step. And then the second step I would say is to build out that accountability structure. Uh who reports to who, what are the roles and responsibilities, uh, including even outsourced responsibilities. So you might have your CPA included in that or your attorney included in that, so you know who does what in the business.

David 17:40

When firms are looking at what they need and what they might lack, is a good interim step to bring in somebody on a on a temporary basis like a fractional CMO or CE COO or whatever, does that help bolster the team?

Speaker 17:55

It really does. So there are fractional CMOs, CFOs, there's fractional COOs, which is what I operate in. And bringing somebody in that has uh years of expertise in the field of just organization and structure, regardless of the industry, can help uh bridge that gap before you need to hire a full-time person. So that fractional space can can really catapult an advisory firm much further along without having to uh fight through learning things on their own.

Building Trust With A Fractional COO

David 18:26

What are the challenges in integrating somebody like that when you bring in somebody who's part of the team but they're not part of the team?

How To Reach Forrest

Speaker 18:32

Yeah. Yeah, one of the challenges is trust. And so when I start working with a team, uh I I'm very open and honest about the fact that I am from outside of the entity and I'm here to help. Uh I'm not jockeying for a full-time position. I'm not politicking, I'm not after anybody's job, but to make it clear that I'm there to remove obstacles. And part of the way I do that is to just listen. I don't come in with a sledgehammer. I don't come in with, you know, 16 different slide decks to teach people how to do something. Just listening and observing and asking questions and then offering course correction throughout the process builds the trust and makes it so that they understand that I'm there to help.

David 19:12

Forrest, if somebody wants to learn more about what you do, what's the best way to get in touch with you?

Speaker 19:16

Best way to get in touch is on dirconsulting.com, dr-rconsulting.com, or you can find me on LinkedIn.

David 19:23

Forrest, a great conversation. Thank you so much for spending time with our audience today.

Speaker 19:28

Appreciate it.

David 19:28

Thanks for the invite.

Announcer 19:30

The Shift Shapers Podcast is a production of Shift Shaper strategies and may not be reproduced or quoted in whole or in part without our express written permission. Copyright 2020, all rights reserved.