Brian Kinahan - Run Your Business Like You’re Going to Sell It, Even If You’re Not!

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And now here's your host, the exit coach Bill Black. Welcome back. Thanks so much for joining us. It's always a pleasure when we have repeat guests, and my next guest is Brian Kinnahan of the Alliance Advisory. Let me tell you a little bit about them. We're going to talk about the path to sustained profitable growth, and Alliance helps companies with under $20 million in annual revenues to become bigger and more profitable. And as a company grows, it has to continuously improve management practices to meet the needs of a larger, more complex enterprise. And Bryan guides his clients through a systematic process to upgrade practices. In the top 6 areas, you're ready here they are purpose, planning, people, process, information, and meeting rhythm and the results are as predictable as they are exciting. We're going to talk about all of this with Brian right now. So Brian, welcome back and thanks so much for coming back on and joining us again. My pleasure. Hello, Bill. I love what you hey Brian, I love what you do. I, I love the the story here that I have in front of me. I didn't wanna tell it all because I wanted to leave some for you. Is that OK? Tell refresh our memories, Brian. You know, our listeners, you can go into our audio library and and plug in Brian's last name Kinahan, K I N A H A N, and you can find his his prior interview. But Brian, just refresh our memories. How did the idea for the Alliance advisory get started and what's it all about? Well, um, it's really, you know, I, I spent a long time over the last 35 years working with businesses and what's always going on in the back of my mind, having started off at Security Pacific in the workout department and then doing turnarounds. And then running companies, starting companies, it's always been in the back of my mind to try to figure out a way to make running a business successfully more accessible to, you know, us mere mortals, people like Richard Branson and Bill Gates, and they have some kind of a special knack and they're able to do extraordinary things. All of us can't do that, but all of us should be able to run a successful business. And yet when we're in the middle of it, it sometimes just seems so confusing and overwhelming. That, um, but, but it doesn't have to be, and I thought there must be a simpler way. And so I've been working on this, on this approach over time trying to understand what the key elements are that if we just do certain things, all of us and do them well, that we will be successful and having in essence found that and I'm not the only guy. There are other people that have the same kind of philosophy, but really zeroing in on that, I decided it was time to start alliance and share, share this information so that people could have predictable results and stop worrying and start having more fun. Right, and so many business owners that that you and I talked to out there in this space are feeling like they're hitting a brick wall. I noticed in your notes it said your clients generally fit into three different categories. Some are stuck and want to rekindle profitable growth, so they've hit that wall. Some like clients I'm I'm working with all the time, they're preparing to sell their business, but they have to get it in shape to get a higher price. And others that are successful and ambitious ambitious, and they look to you to maximize their growth and profitability. So when, when companies are doing this, how does the role of the CEO change as a company's revenues grow from, let's say 1 to 5 million and then 5 to 25 million? What what do our listeners need to know about their CEO role? Well, the, uh, you know, the talents and, and, uh, skills and activities that allowed us to start and run a small business are, are not the same ones that are going to allow us to run a larger business because the businesses are very different. By virtue of the fact that there's essentially a lot more people in them. Once you add customers and products and so forth, of course you have to add people, and when you add people, then the whole, the whole game changes. It's not about being entrepreneurial and being able to, you know, the owner being able to do a little bit of everything and, and being in a room with 4 other people, everybody knows what the game plan is. Now suddenly there's multiple offices, multiple people. And so you have to now extract yourself from being really the person who does the execution. And be the person who builds an execution machine which is made of people and processes and planning and so forth. So you're changing your role from the doer to the leader and the leader has essentially two roles. One is to to create this, this, I call it a machine, an execution machine where you have planning and people and processes and information and so forth, build that out, put in those practices, make sure that it exists in a form that's adequate. The size of the of the company and ideally a little ahead of the game so you can your growth kind of goes into your capability. You're not always playing catch up. So that's one, but the other is the company needs a navigation system and so as the CEO you're the leader of this navigation system and you're also making sure everybody understands where the where the enterprise is going. So that means having a good strategy which in essence is having a competitive advantage knowing what that is. Um, it's establishing a good culture. It's establishing a vision of exciting place the company's going to be in a few years, so everybody gets excited about that. And then communicating that and some other, you know, navigational types of things to the entire workforce. So everybody's on, on board. So it's a navigation and then building the execution machine. That's the new role. You know, and that's, that's very well put. That's very clear, and I think a lot of people get stuck in thinking that they're just going to run their $10 million business like they ran it when it was $2 million but then they realize it doesn't work. It's too much work, and they start to burn out. And it's never more clear than when someone, than when you say to someone, If you're going to exit your business, you've got to get out of the day to day nuts and bolts of the business and put yourself into that CEO or chairman visionary role, correct? Yeah, because when a company, when somebody buys your business, they don't want to buy you, they want to buy the business, and so you have to separate you from the business exactly as you said, extract yourself from the day to day. And there's, by the way, if, if you do that, it reduces the risk to the business because now it's not dependent on one person who may be leaving and when you reduce the risk, as you know, Bill, you you increase the multiple and therefore the value. How much of this uh resistance to change is, is because people are just control animals. They, they, they, they want to control everything and um and how much of it's just bad practice? Well, it's a little bit of both, but it's also, it's kind of a virtue that that's uh that's gone, that's gone bad because when you're an entrepreneur you have to have a lot of self-confidence. You have to believe that you know what you're doing even though you know half the time you don't know, but it doesn't matter because you just keep pressing ahead and you, you make mistakes. It doesn't matter. You just have that incredible sense of confidence that you know what you're doing and you can figure it out. And that gets you to a certain point, but when it gets more and more complicated and you enter kind of foreign territory where now you have to be a leader of the business, not inside the business, you need help and you're, you're over your head and you get stuck. And unless you say, you know, I can do everything, but I can do everything with help and that there's some things I don't know and there's, you know, it's the old, there's a lot that I don't know that I don't even know and so I need, I need help doing that and that's that transition. And you have to say, OK, I'm still strong. I'm still confident, I'm still capable, and because of that I'm going to get help from someone, otherwise I'm going to get stuck going around in circles, which happens unfortunately to so many smaller companies except for the ones that either get in such pain because they're now they're going backwards and they just have to have help or they suddenly get this realization, yes, there is another way I can master it, but I need somebody to show me what that is. The word help has so many connotations, you know, and a lot of times it's I need help because I'm in trouble, but in this case it's I need help because I need to grow and I need to to grow effectively. How important it is when somebody's looking for help with an adviser like you that that you, the adviser, be an expert in their industry. Everybody asks that of course, and it makes a lot of sense because everybody knows that that their industries are nuanced and complicated and they have certain particular ways of operating, but at the end of the day sound business principles prevail and and what I do and people like me do. is we take these sound business principles and based on our experience working with with many, many companies we're able to guide the company into using those principles. So let's say if you're if you're going to hire somebody and it's a it's an engineer that has a special technical skill, I don't personally have to know that skill. What I'm looking at is What is your process for hiring? Have you defined the, have you defined the job? Have you gone out and, you know, I won't go into the despells, but how is your process for doing that? Same thing about setting up key performance indicators in weekly meetings. I sit down with them and I say, OK, what's important in your company for you to know on a weekly basis, both financial, operating, sales, there must be booking, shipping. Whatever that is. And so the key is to know what the process and practices are that are necessary and then to be able to guide the company so that they can, they can, uh, they can adapt those processes to their particular industry. And of course when you've worked with 50 or 60 or 70, I haven't even counted, but so many companies, you become a pretty quick learner and things start to look similar as well. Yeah, in some ways it's kind of like the mechanic. The work under the hood is a lot different than the detail work that's going on on top of the, on top of the vehicle, if you understand those nuts and bolts and what makes a good company run. It's it's people, it's processes, it's systems, right? It's the, it's the mechanics of what make any company run well, the communication, that's the important stuff. A good point, very good point. Now when you're selling a business, I mean, a lot of people are heading, you know, the baby boomers are what, age 70 at the oldest now. So a lot of them are coming to the age where they're saying maybe it's time I sell the business. I'm going to look around and they're finding that there's a lot of competition out there, a lot of sellers are coming to the market. What do they need to do to start Thinking about getting top dollar for their business. Mhm. Well, there's, there's 3 areas and, um, the part of a presentation I do that's like it's the title is run your business like you're going to sell it even if you're not, and the idea is you want to run your business so that it's running the best possible anyway because you own it and you run it, you might as well have the best business, but of course if somebody else comes in to look at it, they're going to be impressed and they're going to say this is the kind of business I want. And the three primary steps there are, um, the first is to have a uh an exciting growth plan and uh over the next 1 to 3 years actually have that plan and then if you can show progress against that plan, then that really helps the seller, uh, become excited about your business and believe that those great things are are going to happen. The second is what we were talking about before, which is to take yourself out of the day to day, extricate yourself from the day to day so that at some point when somebody buys the business, you can pretty quickly kind of peel off and um and the business still runs on its own. It's sort of the level 5 leadership um that Jim Collins talks about, you know, you go on vacation for 6 weeks and nobody notices that that's, that's where you want to be ultimately. And then the third is, and I, I call it good housekeeping, but when somebody comes, uh, to, to look at your business, if you have all your information already ready and your contracts all lined up and uh and all the documentation that they would want or Most of it available then it makes a very good impression. What happens is you get buyer fatigue if they ask for a bunch of documents and then you say, OK, I'll get them to you, and then 3 weeks later you finally get them to them and then you email them and say yeah, that one wasn't right. Let me get you another one and They start losing confidence and then they then they lose interest. So it's really important just generally for good housekeeping, but especially for a possible buyer to have all your, all your documents and information lined up. And so those are the those are the three pieces. Those are excellent tips and anybody listening, I hope you wrote those down. If not, go back and listen to it over and over again. And get those committed to memory. Hey Brian, you're, you're not just an adviser, but you also get people together in CEO peer groups and how does that work and, and, and how do people benefit from being in a CEO peer group? Well, a CEO peer group is, is, you know, business owners and CEOs tend to be, you know, on their own a lot because they're so busy with their companies that you know, their heads down on that and they don't really get out much, so to speak, and a lot of them, especially smaller companies, don't really have a strong board of directors or board of advisers, so. A peer group allows CEOs and business owners to get together and in effect help each other be be an advisory board for each other. And so the peer groups, there's a learning element where people come, some experts come in and present new topics so it's a learning kind of a half day learning element. And then the other half days where attendees, the members of the group, present problems that they're working with, and then there's a protocol for asking questions and of them and thinking it through and then giving those giving them some ideas and advice and what happens is you get an amazing perspectives from other CEOs who By the way, once you've been meeting together for a long time, you get very attached and so people really care about helping each other and they bring all their experience and knowledge, uh, to the exercise and so you now have a very, very powerful board of advisors and so that you're, you're helping each other. And then also every month then I also visit with the members and do a one on one for 60 or 90 minutes and go through some particular issues that they're having or just keep track of how, how the individual CEO is making progress. So that's kind of a coaching coaching element. And it's just very powerful. I think the average, uh, in general peer groups, uh, CEO peer groups, the average tenure is something like 7 or 8 years because once, once you get into it, uh, you just, you just stay with it, it's so valuable. Well, it's a great way for them to learn from each other and in an environment like you said earlier, it's lonely at the top. They don't have a lot of people to talk to on a day to day basis. And this is a way for them to really say, Hey, I'm dealing with this issue, or hear other people maybe say issues they're dealing with that they wouldn't even bring up in the first place. So I think that's fantastic, and I applaud you for your efforts in that. I have a question for you, and one of the things I mentioned at the beginning of the show, you mentioned that you help upgrade practices in the top 6 areas of purpose planning. People process information and meeting rhythm. Can you talk about the meeting rhythms part of that a little bit and what that means? Yeah, the meeting rhythm really is where it becomes all together because if you have a goal and you have plans and you have good people and you've got your processes so they're repeatable and you have access to good information, you're in, you're in kind of a plan to check adjust loop, meaning you make plans, you execute the plan, you get information to see how it's going, and then you have the opportunity to Adjust. So meetings really is about getting people together and saying how are we doing and against what we plan to do and what can we do to make it better. The great, great irony of meetings is that meetings is they're the most powerful, I guess you could say the most powerful element of a successful business, and yet meetings are what people kind of hate the most. And it's a shame because, and it's not hard to fix, but it's because we haven't really been trained and we're not disciplined in how we run meetings. And so I make it a point to teach my my clients how to have more productive meetings. So for instance, if somebody's in a meeting and it doesn't apply to them, they should just be able to stand up and say, you know what, this has nothing to, this has nothing to do with me. I'm really sorry. This has nothing to do with me and so I'm going to leave now. Uh, as an example, so anyway, don't, uh, you know, embrace meetings, learn how to have good meetings because that's where all these people that you're are helping you come together and do their best work. It's, it's more about what have you done to make that meeting relevant and interesting and preparing and don't, you know, and the whole thing about, you know, have a meeting to talk about something new, not something you could have communicated by email. You're rehashing a lot of people are rehashing in meetings, right? And so I like the I like the concept of a meeting of the meeting rhythm. In a business now you have a couple of free presentations. One's called Achieving Sustained profitable Growth, and the other one's called How to Get the Most for Your Business, and you offer a free 30 minute phone consultation. Why wouldn't anybody take advantage of that? I don't know why. So with those presentations are, is that available for groups or for individuals or or for companies? How does that work? Yeah. Yeah, well, I can, I can just send them out. I also do. I was just recently at a conference in Las Vegas, an owners' conference, and did a A presentation there for 2 or 3 hours, a little workshop. So I really, I love what I do. I'm just so enthusiastic about it and I love helping people. It's very rewarding. So I'm happy to share the presentations if you do the 30 minute consultation, there's no arm twisting. We just talk about business, have a good time. Um, so, um, so those are, yeah, I just do, so I'm happy to share it. Yeah, you know, that's why I love to have you on the show, because just like, just like us, you know, business owners are really our heroes. It's like, you know, we respect so much what you go through to start and run a business and grow it and all the pain that goes with that, and you just want to help them, and I think that's fantastic. So Brian Kinnahan of the Alliance Advisory, how do our listeners get in touch with you best, especially if they live here in the Los Angeles area? Well, they can, uh, call, uh, uh, 310. 256-2608 Or um my email is Brian B R I A N at alliance dash CEO. That's A L L I A N C E dash CEO.com. I love what you do, Brian, and you're welcome back anytime. Thanks so much for joining us today. I really look forward to the next time that we speak, and I wish you all the best of luck. Great, thanks, Bill. Really enjoyed it. All right, we're going to take a short break. We'll be right back after this with another guest, so please stay tuned. 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