Katharine Halpin - 3 Keys to Accelerating Growth Quickly and Sustainably (C2118)

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Well, hello everyone. Thanks so much for joining us today. Pleasure to have you with us as always. My guest today is Katherine Halpin of the Halpin Companies in Phoenix, Arizona. And let me tell you a little bit about Katherine. She is in the business of accelerating accelerating the growth of companies before, during, and after transitions and transactions. And then she's going to talk about the three keys to accelerating growth quickly and sustainably today. Catherine, welcome to the show. Thanks for joining us. Thank you so much, Bill. It's an honor and a privilege to be with you today. Well, thank you. It's a pleasure to have you and what I really look forward to this discussion before we get into that, tell us a little bit about you and your background and how you started the helping companies. Well, I grew up in Mississippi where I'm a 5th generation entrepreneur. I was able to escape from Mississippi a long time ago, and I've been in Phoenix, Arizona for the last 25 years. My dad was a CPA, but his, um, grandfather and great grandfather had owned, they had been really, uh, industrialists and owned lots of different kinds of companies plantations, steamboats, retail stores, and, um, so I'm. Entrepreneur at heart and I became a CPA like my dad was and I was always frustrated that nobody was ever talking about the people issues. So in 1995, a lifetime ago, I founded the Halpin companies to consult with companies to help them get the right people in the right roles focused on the right strategic initiatives, and I just by accident fell into the exit planning because Uh, people that I networked with and that I knew in the community, they're like, oh, we need you over here in our company because if we don't do something, we're going to go out of business when the founder retires or dies. So I've been doing this work now for 23 years. Time flies, doesn't it? Yes, but it doesn't feel like work. It feels like having important conversations with important people. So you, you are having the most important conversations because a lot of people get to the point where they say they want to exit. They go to a valuation person or a business broker and they say, You mean that's all it's worth. So they, they need to accelerate that growth before uh and make their business more valuable so they can retire in style. Um, and so that's what, that's where you come in, right? Right, exactly. Help them often double or triple the value of the company, but sometimes with the right team we can accelerate it by a factor of $5 or even 10. So if they have a million dollars dollar company, we can make it $10 million. If they got a $10 million company we could make it $100 million potentially. So what is the number one thing that business owners can do to accelerate the growth of their company before they prepare for a sale? Well, they have to get the right people in the right roles because if they don't have the right people at every level in the organization and they don't have strong teams that are working in a collaborative manner, then they really don't have an asset. There's nothing there to sell, so we have to. The right people in the right roles and we have to get them on strong effective teams where they're collaborating and communicating and where there's processes and systems. It's no different than what Michael Gerber says in the ebook, you know, without the processes and the systems you've got nothing, but I say before you even have the processes and systems you've got to have the right people with the right mindset, the right sense of personal responsibility, the right skill set, the right attitude. And that's where I come in. And in many cases, ah, ah, do you come across owners who are who think, well, nobody can replace what I do, and are they heading for trouble with that mindset? Yes, most of the founders, I mean, I think that too as a founder of my own firm, it's human nature to think that it's a combination of our ego and our self-confidence that gave us the ability to grow these companies in the first place. But I invite them to consider playing a bigger game. If they're always going to be the man or the hub of the wheel, then they don't really have. An asset. So if they want to have a legacy with their company and their employees, they want those employees to retain these good jobs, and they want the impact they have on the community to stay in this community and not be sold to somebody in, you know, Cincinnati or wherever, then they have to be focused and disciplined starting today. They can't. But, but often when I invite them to, you know, to play a bigger game, people are inspired by that. Yes, I want to have a legacy. Yes, I want this company to continue and so they'll still get into their ego state or, you know, get back into the wrong role be in the hub of the wheel, but then we just keep nudging them. Well, don't forget you said you want to play a bigger game. This, you know, this action today is not going to get you there. So how and when do they start doing that? How do they tackle that that task? It sounds like a tall order for, for most people. Yeah, it's a tall order. Well, it takes a team. I'm often brought in by the CFO because the CFO, I, you know, as a former accountant, I'm partial to the CFOs out there, and I think they do see things more quickly because they're looking at the numbers, they're seeing the patterns and the trends. So often the CFO will see it first and then they'll say we have to do something, we have to find somebody to help us. Um, but then then I can't be there all day every day. I'm not an employee. Me and my colleagues in the helping companies, we're just consultants, so we're in and out, you know, 2 or 3 times a month at the most. So it takes the team, the current leadership team has to buy in and has to, you know, I call it holding their hand. We have to hold their hand and make it safe and comfortable for them. And what I find the two things that um are required in order to get somebody to to let go, and this is in any size company, and not just an entrepreneurial company, is they have to have assurance that their high standards are still going to be met like as if I was going to do it myself, and they have to have assurance that they have to have assurance that they're going to be kept in the loop and you just think about your own, uh, financial planning firm and wealth management firm. You need to be in the loop as you delegate and let go and train other people to replicate. The same experience with your clients. So those are not difficult things to put in place, but it does require everybody get the same mindset. Yeah, they, they wanna, they wanna continue to, to feel relevant. They just need to change their role at some point. How soon do you think in advance of a, of a sale or a transition that they should be working on that, uh, that, uh, as a task? Well, I think I heard you say on the radio before that you like people to start at 5 years. I don't think 10 years is too soon because we don't know where that next layer of leadership is going to come from. It might not come from the existing team. They might not have the personal or professional maturity. It might come from the summer intern or maybe two generations from now that summer intern will be a CEO. So we need to have time to evaluate people at every level and give them opportunities to step up and collect all those data points. I ask people to act like they're a scientist running a series of experiments. They, they, based on the information they have, they form some theory or some premise, and then they conduct a series of experiments with everybody in the company and they just see who steps up and who demonstrates the professional maturity and the personal maturity. To lead and then we get to figure out what their strengths are and get them in a role that's aligned with those strengths. Yeah, that's, that's uh. It's a good, it's not what it is. Because how one question is, how, how in the world do you know if you do or do not have the right people in the right roles and focused on the right priorities? Where do, where do you start with that? Well, uh, how you'll know you don't have them is if your revenue's not growing, if your profits are not growing, if your shareholder value is not growing, then that's the key indicator, and that's easy to know because you have that. And then other key indicators are are cycle times improving and getting condensed? Are we getting smarter about building our widgets and selling those widgets, um, and are we in compliance with our industry standards if you have all those things. If your shareholder value is growing, your revenues and profits must be growing, and if you're in compliance with the industry standards and you're reducing cycle times because you're making continuous improvements, then you then you know that you're, you've got the right people in the right roles. But if any one of those things is not in place, then you've got to look at that area of the organization and say, OK, OK, I got to put these people on the step up or step out program. I like that. You know, I run across a lot of situations where it's like a game of catch. A father wants to pass the business on to his son, for instance, and he says, I'm going to throw you the ball and you've got to catch it and throw it back, and he throws the ball and the son, the son never catches it. He just doesn't. In other words, he's not getting the knowledge, he's not getting the fact that he needs to get fired up because in a lot of these businesses. The the patriarch is the chief, in some cases, the chief face of the company, the, the, the chief business getter. So, so what happens if your, if your family, your family business target of of owner transition. Isn't demonstrating, can, can that be changed or I mean, can, can a person, can a leopard change its spots? Yes, I do believe a leper can change their spots, and it's all in the context that you give them. So, you know, maybe a, you know, somebody's still in their 20s or 30s might not have the personal maturity to step up and drive that business at the same level that their parent has and might not have the um just the the fortitude. But if the parents sit down and have, you know, a come to Jesus conversation and say, you know, you can either, you know, be a playboy your whole life, or you can take this asset that we've grown over the last 40 years and you could exponentially grow it. You have to decide, but we have to know quickly and then if the if the Next generation doesn't want to step up and of course you've still run all the experiments with them too because they might not, they're most likely not going to have the same strengths as the parents, but they might have better strengths or other strengths or different strengths that would. A even great value like maybe the, the father, the original entrepreneur was a salesperson. That's how he grew the company. But now maybe this guy's more like an engineer, more reserved, more quiet, but guess what? He could fine tune the widgets and make a faster, better widget, and then he could hire a sales team. So and he could hire a COO. So, um, it's all about finding the, you know, what are people's strengths and giving them permission to get in the right role. We can't make people be just like us. All we can do is invite them and inspire them to want to step up, find their strengths, and align their job, and then we can, once we know that, then we can figure out what the rest of the organization needs to look like. And if a child just doesn't have any interest. Um, then I'm a big proponent of selling to the employees because you know those people and then you know the other option of course is to sell to an outsider, which is, I mean it happens every day with all these baby boomers. It's, it's a robust method and so there's nothing wrong with that method if the first two don't work. That's, that's just great advice, Katherine, that You know, the person that you're handing the ball to doesn't have to be like you, but they do have to have business owner, an idea of what it takes to build a business and run a business. They can always find people that complement whatever their skills are, but it's It's great advice. Now you have a success story of a company that went from $8 million in revenue to 25 million. I am dying to hear that. OK, well, this is the individual that invented the, well, he didn't invent the phrase, the step up or step out program. He invented the program and then I gave it the name. So this was an individual that had founded an accounting firm on the East Coast. And I knew his CFO. We had grown up together and she brought me in because she said when he goes when he retires or dies, he's still bringing in 80% of the work and so we're going to go out of business. We're not going to be able to hold this together. And so I invited him to consider his legacy, and he loved that and he wanted to leave a strong legacy. He was highly motivated, very community oriented individual, and so I knew it would be, he would be motivated by. Even that legacy and now that doesn't mean he was perfect, but he, he, I said when, how often do you meet with your, you know, your managers and supervisors that are actually doing the work, the tax returns, the financial plans, the audits he had 22 of those people in his firm. I said, how often are you meeting with those people? Well, well, I never meet with them. They're idiots. Why would I meet with them? That's what Bobby got, you got to meet with uh. They're the future of the firm, so he set up, he got his assistant to set them up. There were 22, so he had 11 on one Monday afternoon and the other 11 in 30 minute increments. That's all he was going to invest in each of them. And of course he couldn't get to 11 people in one afternoon because some people took an hour, an hour and a half. But within 90 days, 6 of those 22 people had wonderful job opportunities in places like Toledo, Ohio. They, they went to work for one of their client companies or their spouse had a promotion across the country or they wanted to be closer to family. They all had valid reasons and they left with their head held high and their dignity intact, but they saw that Bob was now engaging them in a way they didn't want to be engaged. They didn't want to be accountable to Bob. To get the audits done more quickly or more systematically or to meet the client's expectations sooner. So then, um, that left um 14 no 16, and then over the next year two of his senior people, very senior people, one had been with him since the beginning of the firm. I came to him and said, Bob, you know, I'm not really that good in this people leadership role. I can't really lead these teams. Why don't you let me be the subject matter expert in these areas of corporate tax, and then the entire firm can come to me when they have a tax situation. That's a full-time job because we have so many clients with these tax issues, and we said perfect. And then the other one came back and said, you know, you promoted me to manager and my next promotion would be to partner, but I'm not really good at manager. I'd rather go back and be the supervisor. I liked that job. I was good at that job. Let me take a step back. And he knew that Bob would treat him fairly with his compensation. He might not be able to ever get to the partner level of compensation, but he wasn't going to, he knew he wasn't going to have to take a cut. So then that left 14 of these senior managers and supervisors, and they're the ones that grew the firm to 25 million. They were smarter, more technologically advanced. They had ideas and so by meeting with Bob regularly, even if it was only once a month, they had a chance to say to Bob, hey, I was thinking we could, you know, get our, you know, upgrade our software and get it to do this instead of that, and so they just got, uh, and then they started um getting bigger clients. So when when Bob and I first started working together, I helped him stratify all the clients and figure out which ones were eligible to have him be, you know, the review partner and the partner in charge and the face of the firm, and we, we cut that off this line of demarcation. That line went up by a factor of 25 by the time um we finished because they were getting bigger clients. Yeah, right, bigger engagements, yeah, is that. It's fascinating, you know, but it comes down to the fact that a lot of business owners that we work with that are talking about exit planning are tired, and they feel like they're they're in the last two miles of a long marathon, and it takes someone like you, Catherine, to come in and say, Look, hey, hey Bob, we're not going to walk to the finish line, are we? We're going to run. We're going to, we're going to get re-engaged in this business and we're going to push hard because there's only 2 miles of the race left. Let's go. That's right. Well, and part of my methodology, you know, a CPA has to have a methodology. So when I started doing this work, I developed a methodology. Part of that, a key piece of that is everybody doing more to invest in themselves. So Bob was playing more tennis as we were going through these difficult conversations because um I had. Him up front you've got to. So every getting out of the office early every Tuesday afternoon, say at 3:30 or 4, to play a couple of rounds of tennis, that gave him a broader perspective, a more balanced perspective, even when he wanted to sabotage himself by going back into that role of being the man and being the problem solver, he would catch himself. He'd say, No, no, I don't want to do that. I want to have a big legacy. So yes, they're tired. My dad died at 55. He was so tired, and that that's what inspires and motivates me to fix this situation because we, I mean, you know, we don't want people to die at 55 years old. That's just way too young. So they have to take better care of themselves. They have to get out in nature. They have to get their heart rate elevated on a regular basis. All that helps them think about things from a bigger, broader, more balanced perspective. Yeah, the first part of recreation is recreate, so that that's a good point, and you know that the benefit of, of this type of planning is a lot of times. It comes to light that they're just running the business. They're putting too much pressure on themselves. They need to delegate more. They need to be more of a part-time chief of part-time CEO instead of an overtime president of their business. And you know, I would imagine you come back to a lot of times to people several months later and they're going, hey, I'm really enjoying myself now. It's just it's a whole new ballgame. And then it allows them to, it allows them to work longer. There's not, there's no fire drill now to sell their company because they're enjoying work in a way they haven't, you know, maybe in 25 or 30 years. Because it, you know, have more balance. That's a great story and it really illustrates the points. Well, share with our listeners if you would a couple brief tips, ideas, or precautions uh that they can, they can walk away from this, uh, this interview. Well, all my clients have to be willing to take personal responsibility because that's the key to get everybody to step up. If you go to somebody and say, What were you thinking, you idiot, then they're only going to defend and justify and rationalize. So you have to be willing to say, Oh, I'm so sorry, Betty Sue, that you weren't successful on that project. I can see now that I should have been meeting with you more regularly and take that responsibility and then Betty Sue can say, Oh, I should have come to you because I had questions. So take personal responsibility and then like I said run the experiments, be like a scientist that brings focus and discipline. Don't step over anything. The smallest little missed deadline, you've got to go back to Betty Sue and say, Betty Sue, I'm confused. I thought you were going to get this to me Tuesday at 2 o'clock instead of Thursday at 8 o'clock, and then put everybody on the step up or step out program so you can evaluate everybody at every level, engage them differently, more effectively, more consistently. And um and then you'll they'll tell you if they want to step up or not. But you just got to get, you know, put that discipline and focus around it so you'll know, Katherine. So, so listen, uh, for our listeners out there, uh, you probably want to know more about Katherine helping and the helping company. So here's what you do. Number one, she has a complimentary confidential consultation available for anybody who hears this, uh, just call or email, and here's the email address k. Period. Halpin, H A L P I N at helpingcompany.com or go to the website at helpingcompany.com. You can call Katherine at 602-266. 1961. I'll give that to you again, 602-266 1961, and she has a book out called Alignment for Success bringing out the best in Yourself, your teams, and your Company, and you'll find that on Amazon. Catherine, I think we, we covered a lot of ground and you gave us some great, great information today. I really appreciate you coming on and sharing with us, um, and ah. I hope, I hope a lot of our listeners take advantage of your offer to get in touch and more even if we only have a 20 minute telephone conversation and they never hire me, I can give them great value and help them see measurable improvements the very same day we have that chat. So I hope so too. I hope people will reach out. That's terrific. I hope so too, and that's, you know, that's a hallmark of all of our guests, everybody. That listens to this knows that our guests are open to conversations without commitment just to learn more. And of course a lot of times that leads to some vast improvements in business. So Catherine, thank you again so much for coming on and I look forward to the next time we speak. Yeah, yeah. All right so we're going to take to take a short break and we'll be right back. Hey everybody, it's Bill Black, the exit coach from the Exit Coach radio show. One of the questions I get asked the most is how do I grow the value of my business. I'm so busy working in it. I need to work on it. So we've created a special report for you on 10 tips to grow the value of your business. Just text the word drivers to 44222 to get a special free report right to your inbox. That's drivers to 442-22 text drivers to 44222. Thank you for listening to Exit Coach Radio. Want to keep your personal number private but still stay connected with line 2, you can get a second phone line right on your device with a super simple app and no need for another phone. Whether it's for online shopping, dating, or shielding your main number from spam, Line 2 is an easy way to manage. It all. 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