On a recent 710 WOR “Mind Your Business” broadcast, Yitzchok Saftlas (YS) spoke with guest Jerel Benjamin (JB), founder and CEO of Consulting Group, on the subject of scaling a business.
YS: what is the inflection point when a business should consider hiring a professional to advise them on how to get to the next step?
JB: People constantly ask when I do when webinars and seminars, “How do I know I’m ready to scale?” Really, the answer is not what you would think. It’s not a utopia or a certain place you actually come to, as much as it is looking at the areas of heartburn that are recurring. It’s realizing that you’ve hit what is sometimes referred to as a “glass ceiling.” Eventually, anyone running a business will realize that they’re the primary engine, but they can’t get it across that threshold. It’s not a lack of ambition. It’s not a lack of desire. It’s just that we’re not able to cross into that next phase of business. That’s really it. When you say, “I’ve hit the glass ceiling, and I know it.”
YS: So what’s the next step?
JB: Once we’re actually looking at scaling, it comes down to one simple word: systemization. Scaling requires systems. The systems have to do the heavy lifting. Once you make that realization, you have to step outside of your box and outside of your comfort zone because now you need to consult people who have not only scaled but scaled and failed. Failing is just as important here.
Personally, I’ve owned nine corporations over a 27-year period. I always tell people when I speak to them, “Firstly, this is not a kumbaya story.” My first two companies failed miserably. And that had a lot to do with my own arrogance, being young and thinking I knew everything. I had to fall on my face twice to realize I didn’t. So, scaling requires people who have done it, but also failed at it. There’s an old sports analogy I always use, “You don’t know how to win until you know how to lose.” When you consult with people who have lost, then you know, you’re in the right arena. They know what to look for. Twenty years ago, I never thought that those very painful setbacks would be some of the stories and experiences that to this day, I can still go back and use them to resonate with my clients. I always tell them, “Whatever you’ve done, I’ve probably done worse. So, let’s just have that conversation. Let’s get it out on the table.” You’d be surprised at the comfort level that develops very quickly with my clients.
YS: How different is your approach for advising B2C (business to consumer) and B2B (business-to-business) operations?
JB: There are some differences. But ironically, the majority are the same. I’d say about 70% of the engine block exactly the same. The difference is, with a B2C operation, you’re going directly to the consumer. Your outcomes are going to be based upon the response that you want to see from that customer. So, it’s going to be grounded in the response that you want to facilitate.
With B2B, usually your product or service is enhancing your client’s operation. So, you’re looking at it from “when I deliver, does what I deliver and the way I go about delivering, allow for my client to get to what their aspirations were when they came to consult with us in the first place?
There’s similarity there, but B2C is going to be a lot more fluid, you’re going to have more of them. And so, there’s going to be a lot more energy over there. You have to look at a lot more components. But the principle is actually very similar.
YS: How do you navigate around business that may be uncomfortable reaching out to an outsider to help them scale?
JB: One issue is people are worried about how their team will react to the change. “How will people receive an outsider?” “How do I know they know my business?” These are all typical questions, and we can easily navigate those in the first few minutes of consulting with anyone. But I want you to realize that you know your business. Here’s an easy illustration. We’ve been driving cars for decades. If I live 10 minutes down the road, and you said, “Can you come on over right away?” you know that in 10 minutes, I’m going to be there because I’ve been driving so long. But if went to a 14-year-old kid at the mall and gave him a 10-minute crash course on how to drive your car, would you hand him the keys and let him drive from New York to South Florida? You may have taught him in 10 minutes how to drive a car. But you know there’s so many different intricacies – the mirrors, the ignition, how hard to touch the brake. You know those things. Those are all skills that have to be committed to muscle memory. But to that 14 year-old who’s never driven a car before, he’s going to need to know a lot more information.
So, here’s the thing I want every business owner who’s thinking they can do this internally to know. The details that have to be committed to muscle memory to run your business are so intricate, but you know them so well, you don’t have to think about it. That’s why you go to an outside firm. We asl the questions. I can send a professional who knows nothing about your business, and they’re going to ask you all those questions, because we don’t have a clue. But we’re smart enough to ask them. And that’s how you get to that scalability component of being able to articulate what your business is. Someone on the outside has to do it.
YS: Can you unpack the term KPI (key performance indicator)?
JB: Basically, a KPI is just identifying the outcome. This is what you do, and this is exactly where we need to end up. That works in scaling a company and there’s no problem with that. But what we found over the years is that it doesn’t go deep enough. A real KPI, or in our case, what we call KPE (key performance execution), is the step by- step dissertation of how we arrive at that outcome. What foot needs to be put in front of the other? I adopted it from the airline industry over a decade ago. In the cockpit, there’s a preflight checklist and a manual right behind the pilots’ head that tells you, step-by-step, exactly how to fly the plane. Nothing is assumed. So, we’ve mastered this KPI/KPE process by assuming nothing. We record everything in video and written format because that’s what businesses need to have to scale. You need to be able to take the power back, as an owner, and put it in a document where if a person has the ambition, they can read and follow instructions. They can do the job. The number one key to scalability is KPIs and KPEs.
YS: What are some things an individual should consider when they hit that glass ceiling?
JB: There are two things that an individual needs to really adapt and absorb. One is that it’s not a cut against you or your ability to do your job, to seek outside help. There’s a level of maturity you must have if you really want to scale. It takes what’s outside of you to make that happen.
The second key is to realize that when you scale, you’re going to have to step back to step forward. What that means is that while you may be on a trajectory right now, maybe increasing sales month over month, when that system gets introduced for that particular month, you have to be okay with the fact that your sales may stall. You may not get that month over month growth for a temporary moment in time. It’s a step back to step forward. But then you’ll find that when you step forward, you’ll accelerate way past where you would have been. That realism is what the executives and owners have to really breathe in. It’s a process. If you want that systematic, scalable growth, you’re not going to get there overnight. It’s a systematic change, but well worth it.
YS: How does one implement a plan to scale a business?
JB: I’ve mentioned that KPIs and KPEs are the backbone of any scalability because it breaks it down step-by-step. But the way that we get to that point is by using an algorithm of questions. We’ll ask them general questions just to articulate the known steps that they take in executing a position. Then you jump over, and you say, “For each known step we’ve listed, what is the outcome? What is the minimum level of performance that I’m willing to accept for that particular task?” And you define it as clearly you possibly can. What you’ve done now is you’ve created a vision of where you are and where you want to be. Now, you close the gap by saying, “What are the step-by-step details that will take me from this task to that outcome?” That’s the first thing we do inside of every organization. Because what it does is it sets the implementation in motion. Now I can come in, read the task, and I know exactly what details are required to get me to that outcome. So, it has to be a system. Implementation is a system, not simply work.
YS: What is the general timeframe that a company should brace itself and be prepared for when going through the scaling process?
JB: We get that question a lot. And I always try to give people a benchmark. In other words, I’ll say, “you must give yourself 90 days to start seeing permanent change.” And I say, “Start seeing permanent change” because the length of the entire process can vary. But to start seeing permanent change takes 90 days. Usually when we go into a company, within the first 30 days you can feel the buzz and excitement. Everyone starts seeing what’s possible, starts understanding the vision, and starts to realize that they can have a role in that. So, you’re going to see some spikes in certain areas, just because you have that honeymoon phase. You have everyone really jazzed up because they’re on the same page. But the permanent change is another story. In other words, now we’re looking at documents that people can refer to. We’re starting to put the skeletal part of the framing together. That starts at about 90 days. You must give yourself that time, to start seeing what will become permanent changes in trajectory for your business.
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