I have… Yeah, so the best way I can describe traction is that there are some businesses out there where the leaders of the business are getting everything they wanna get out of the business, they’re spyware venue to have to… I probability of that time it… But they also have work-life balance because they’re spending their time doing the phase, they love to do the stuff, I really… The business, they’re not just putting out fires, their workers are fully engaged. They’re getting things down, the processes, the systems that work with bell boys on a effort to creating a product or service that their customers like, so that’s what… We describe it a great on the business, and it’s read a 5% of all the businesses out there, the other 95% are varying degrees, not that, but trying to become… As the best way I can describe it, it is a complete system of simple tools that are designed to help a company to make the journey from wherever they are to become a great business.
Welcome back to The prospecting show. Today is June 11th, and we have Michael Holborn on the call. How are you?
Good. Kind of how you doing? I am doing fantastic. So the format, everybody knows that with the prospecting show here, we have really three parts to the show, we have the past, the current in the future. So to kind of introduce yourself. Maybe give us a little bit of background on who you are and what you do, and then we’ll talk a little bit about your story.
Okay, so the short story is, I help people implement something called the Entrepreneurial operating system or ES… And I do this in Pittsburg, so most of the clients I work with are in South Western or Central Pennsylvania. The longer answer for how I got here is that I really grew up in the IT industry, kind of worked my way up and ultimately became the chief technology officer of a 90 services company, but all along, I had that tug in my heart that I kinda knew I needed to be an entrepreneur, and one day I just sort of came to the conclusion that I had become a lousy employee, so I jumped off the cliff and founded my company free Bridge in January of 2009, right in the midst of the Great Recession.
I did it without having really a detailed plan, I just kind of figured I’d be doing some coaching and consulting and started getting traction in the IT services industry, ’cause that’s what I know.
And about a year in kind of a funny story, I accidentally co-founded a mergers and acquisitions company, so did that for about a year and a half, and one of my consulting clients recruited me to do a turnaround of their IT services practice and a turnaround of a business is something I had always wanted to do. So I did that for a couple of years, and then we got it to where we wanted to be rode off into the sunset, took a step back and said, Well, I don’t know how to buy these companies, I know how to run one, so let’s buy one and run it, so I did that.
And with other people’s money, I had a couple of PE companies back me, and it was a really fast run, we grew that company by 30% in less than three years, we went from less than 20 employees to over 75, which was frankly pretty overwhelming how they say that it’s a marathon. It’s not a sprint.
It felt like sprinting a marathon, so a friend of mine introduced me to the book Traction by Gino Wickman, which is the book that introduced the entrepreneurial operating system is to the world, and I implemented as in my company, Appetit services, and for us, it just had a game-changing impact on our alignment, our focus, our traction, and after about three years at the home of Apogee, we kinda got to the point where I just couldn’t sprint that marathon anymore, and well, agreed it was time to transition out, I took that step back for what I wanted to do next and realized that I just had a passion for the COs and it’s just a fantastic way of helping other companies be successful, so I became a new implementer, and today I’m working with 18 companies, helping them to get where they wanna go, and I’m having a huge impact in… More fun than I’ve ever had working.
Yeah, and one of the things that I think are very interesting is a lot of people read books and don’t actually implement it, and that’s not to say that just traction is just a reading implement kind of book. It’s a lot more than that, but there’s a lot of Four-Hour Work Week and traction, and there’s a bunch of other books out there, self-help driven books that give you some steps and guidance on how to do it, but the interesting thing, I think in my experience with the OS is Geno win has put together this implement or program in experts like yourself to actually deploy these skill sets into the business.
So what made you want to go from reading the book to actually becoming an implementer and then doing that service, primarily, it was really the experience that I had when I made the decision to implement, is I was introduced to an implementer who was part of the community that geneon-Ed called EOS worldwide. And I worked with him in the experience that he had, and I read the book, and I’m a pretty smart guy in the can generally figure things out for myself, but I thought it might… We might go a little bit faster working with somebody who done it before, and it was just a great decision I… A subtlety of it, and some of the things that are at the surface are a lot more than I probably thought after just reading the book, but the other piece about it that my implementer had Callahan did for us was he held us accountable.
There’s a little bit of an aspect of your reading the book and you’re kinda moving along on what we think we’re doing it right, but I don’t necessarily have the confidence, and you get to that table because every other leadership team on the face of the earth are there’s issues we’re imperfect humans and wording, perfect team, and there are certain things that we don’t necessarily want to deal with.
And he forced us to deal with those things and he forced us to hold ourselves accountable and actually execute and build the habits that you need to build in order for us to be successful. So in my mind, I think there’s tremendous value that the implementer added for us, and I wanted to do the same thing for other companies, the… To make that trip.
Yeah, and with the companies that you are working with right now, these local ones that you have, what would you say the common thread is… What is the one piece… Does is very diverse, but what is the one piece in the business that you see time and time again that people just aren’t getting right, and that’s ultimately one of the causes that lead to all these other problems… That’s an interesting question. I’m trying to think through the common threat, because actually there are a lot of different scenarios, I’ve got teams that are everywhere from… They’re just stuck, they hit the ceiling, they can’t move forward, and they don’t know how to get unstuck, two companies that are just going getting Busters, but looking in the horizon and saying, this great run is not gonna run forever. At some point, we’re gonna need to do something different to continue the growth that we’re on, I guess if there’s a common thread to their at a point, or they can foresee a point where as they say what God is here will not get us there, we’re gonna have to make some changes. We’re gonna have to do something different if we want to get out of this business, what we really wanna get out of this business, whether that’s growth or profitability, or valuation, or just work life balance, they’re looking for something that they can implement for the long term, that’s gonna enable them to continue to evolve that business over time, and with looking at revenues in these companies, and I’m sure some of them are small and some of their large… I’ve heard, and this is true of a couple of companies that I own and other companies that we worked with, really that 1 to 5 million dollar transition seems to be from a revenue standpoint, seems to be where a lot of difficulty occurs on… So 1 million, it’s kind of controlled and organized, once you get maybe 5 to 10 million over, you have enough systems and people in place to make it work with that one to five in the middle is kind of this standing point where people aren’t really sure. Do we grow… Do we have a lifestyle business, do we have a scalable business, do we have the right people? Do you find that that kind of revenue range is where people start getting stuck?
So the smallest companies that I’m working with are right around a million dollars and the largest what I’m working with is I think about 150 million implementers in our community have work with public companies up to a billion dollar, so there really isn’t any top stop it really comes down to, is the leadership team capable of making decisions and implementing those decisions without permission from the Board of Directors or a parent corporation of… Those kinds of things.
So it really runs a very broad game, but you raise an interesting point, and that’s the idea of the inflection points, and I work for a company one time, I had 10 million… Do I got stuck?
I have seen other companies at 25 million get stocked the company where I always Chief Technology offered Officer in about 100 million and got stock, so there are these inflection points where what you’ve done just won’t get you there and you… Further, there was a book in the 60s written, but I think it was a Larry Grier was his name, wrote a book called The evolution and revolution of business, and scientifically proved that businesses are always getting these inflection points in the evolution stage of a business is… Yesterday is an option of today, and tomorrow is an offshoot of… Today was an USA today, but when you hit that, Well, I… You can’t involve your way out of it, you gotta do something dramatically different to get over that hump, and then you can go back into another evolutionary phase, at which point, of course you’re gonna get stuck again, and that’s just a cycle that continues. That’s how every business grows, and when you get stuck, you either gotta figure out a way to break through that ceiling or you’re gonna flat line or you’re gonna fail, and when you come into these businesses and you start, what is the length of time you spend with them to actually start making changes, ’cause I know in the book they talk about a ton different techniques. But one of the things that’s always interested me is, how long does this take effect?
So the initial start-up phase with the OS is three full-day sessions that happened over prior to 60 days, and then that period of time, what I’m doing is I’m teaching and the tools that they need to execute, and concurrently with that, we’re building out their vision, and we stretch out that vision over the 60 days, just because that’s typically how long it takes them to master those foundational tools, so it ends up happening is at the end of that 60-day period, the two things align, they’ve got a vision, they’re aligned around the vision, they’re excited about the visions, I like to say No light between their shoulders across the leadership team, they believe it, they want it, and that’s the time when they actually have the muscles to forward and go, and they just get out of the gate.
And for that point forward, what I do is I go through this cycle of quarterly and annual meetings, record at least one annual over the course of the year, and we just continue to refine things, identify the issues they need to resolve, prioritize things, get things done, and I’m facilitating those and coaching them, and then usually from the time I start working with the company until we get to about their second annual, so it’s roughly in the neighborhood of two years, that’s the point at which it just kind of all clicks in for them and they’re like, Yeah, we got this now, we’ve built the habits, we know the tools were in a good rhythm, we got the right people in the right seats across the leadership team, and they’re ready to fly on their own, and that’s the point at which I typically back out, so it’s usually about two years, sometimes it’s a little less, sometimes it’s a little bit more, but that’s a typical journey, and do you find that some of these companies as they start scaling back up to a different number, they have acquisitions or mergers that happen that you come back in a second time and work with the same company. Have you ever had that happen?
There’s one I’m doing that with right now, where they had a lot of change in the organization, and then they brought me back in to kinda help them reboot, they kind of broke down some of her habits and they wanted to… We built the discipline, so I’m working with them for a little… For the wildly, that does happen, there’s a lot of cases where we get to that, to your point, and I’ll say, You know what, once a quarter would like you to come in and just do one session with us, or they’ll say, We’re gonna do all our quarter lies, but we still want you to do our annual just to keep that accountability, that discipline and that confidence that they’re still doing it the right way, because that confidence is critically important, and that’s one of the things that companies that try to do this without an implementer kind of mess. Is your tentative… Well, I think this is right, but when you know that it’s right, when you got somebody saying, Yes, that’s the way it’s supposed to be, you’re just gonna move faster, so whatever journey it is you’re trying to take with your business, whatever you’re trying to get out of it, you’re gonna get there faster if you’ve got the confidence that you’re doing it the right way… Yeah, and also with organizations that are really small, and there’s small number employees on the team, they wait or the workload is probably pretty heavy for these people when they’re still doing their day job and all the work that they have in place, but now they’re gonna go take us strategies and try to change it, that mindset in that pivot is probably a greater impact with smaller companies because there’s lost people to take on the workload. Right, yeah, you can have a lot of impact because what it does, it allows them to narrow the focus, be one of the things about ACES were about, yes, there’s this list of 60 things you could be doing, but you can’t do 60 things, so let’s pick the six or the seven really critically important ones that we wanna focus on for the next 90 days, let’s put the other ones on a longer term issues, and let’s just get done what we need to get done, and it definitely has a big impact on the smooth organization but it actually… That principle applies to pretty much everybody we work with, and from a success standpoint, what would you say to date the most successful kind of story is that you could share with us where a business having some difficulty either in scaling your finances or organizational structure or anything that the US system can help with… They were failing in some part of their business, you came in and helped them later… Did you share some of those pieces?
There’s one in particular I was working with that we sat down for one of our sessions and I said, we’re not sure we’re gonna be here for the next quarterly meeting, they had been just financial issues, cash flow issues for… In a long time, and they’re afraid they’re gonna have to close the doors, so in that session, got together. We spent about an hour and a half just going, Okay, what’s the gap? And where is that gap coming from, and what are some things that we need to do in order to close that financial gap?
And they had to make some really hard decisions.
But they decided what they needed to do, they committed themselves to executing on it, and two months later, they had their first cash flow positive month in years, and then the cover situation had it locked down and they were pretty much out of business for a few months, and I a, they had their second cash for the positive a month.
That’s one that I’m really proud of, that the work that we did in the work that they did, and the commitment they made doing executing some pretty hard things to get there, but the other thing that has just permeated over the last two months is the number of clients that I’ve spoken with who have told me, My god, we are so fortunate that we decided to implement this when we did, so that when this cove situation hit, we had an arena where we could have the conversations, we had the open honest culture within our leadership team to talk about the hard things, need to… We knew how to prioritize, we knew how to execute, and I have one client who told me they love situation had happened in 2019 when it did, we’re not sure how we were to survive as a business, but where we are right now is we feel like we are completely prepared to thrive as a business, and I’ve got a number of different companies that said, rather than running right with our hair on fire, we simply say, This is a great opportunity for us to take advantage of the downtime and just execute on a whole bunch of stuff that we knew we were gonna get to at some point to position our business to operate better, and I’ve got a number that feel like they’re just in great shape coming out of the gate compared to their competitors.
Yeah, and I think the really tough thing with core take a lot of these large businesses, they’re probably gonna be… Okay, yeah, there’s some… For Laing some, maybe some bankruptcy on some of the huge corporations on the retail side, but you look at the small businesses, and that’s the ones that are really gonna get crushed by all this, probably towards September October, we’re gonna see what the economics of the country look like mostly because there’s gonna be some time for people to actually get back to their business and see if they can come back or not. Where do you see things going over the next three to six months, and then where do you see things going over the next five years post Cove?
So I think over the next three to six months, it’s gonna be interesting, and I think the one thing that everybody knows is gonna be the big issue, is there a second wave, ’cause if we have to go back into another lock down, I think that’s gonna really… That’s really gonna be tough.
I will tell you that then the great companies and working with every single company, I don’t know, there’s been a better piece of legislation pass an American history than that PPP loan program. It’s saved hundreds of thousands and maybe millions of businesses are still around because of that, so I… That was tremendous.
So hopefully, we don’t wanna have to go back and do something else like that, but those are the kinds of things that I’m seeing out there.
I do believe that there are massive changes in the landscape of business, and actually wrote a blog about this at cost up on my website, and it’s about the idea that when there is a flood, a major flood, the landscape completely changes and whether you’re a winner, whether you’re a loser, has something to do with the landscape itself, but a lot of it has to do with how you perceive that landscape and how you adjust to what the changes are.
I’ve been spending a lot of time with my companies that are really focused on the here and now and say, Can we take a step back and think about what this is doing, how is it changing your customer’s attitudes, how is it changing your competitors, how is it changing market expectations, are there adjacent markets that you couldn’t get to before that you can now… And what’s changing out there? The lines, Ape, that you either need to prepare for that could bite you if it’s not good, or that you could take advantage of out there, and they’ve come up with some pretty creative things and companies that are thought they were just hunting down trying to hang out of their people, suddenly realizing, Wait a minute, we have a heck of a time trying to find really good people, and there’s a whole… Bought there, they’re employed. Can we go out and find people? And is there a way we can scrape together our pennies and actually bring people on board that are available now that we haven’t been able to find for the last three, four or five years.
So I think looking at those opportunities is one of the things that’s out there for companies, it’s not just all bad stuff, we tell that there’s an economic downturn. There are some companies that come out much, much stronger than they went in, and uh, a lot of companies to come out a lot weaker, so I’m proud of the fact that most of the companies we’re working with seemed to be the one here to come out stronger you know, as I look into the longer term, at least for me, I think the big change that I’ve had is I always did my sessions with my leadership teams face-to-face, and obviously I couldn’t do that anymore, so I started doing remote sessions, which I’d never done before, and they’ve actually gone way better than I thought they would, to the point where now I’m starting to think about if I come across somebody who’s really interested in the… WHO is it in Pittsburgh? I could do an entire relationship with them, help them through the process and do it Monty, which is something that three months ago I probably never would have thought of doing.
Well, and that’s the adaptability factor, to go back to what you’re saying before about buying talent or buying people for the organization, hiring the right people and put in them in place. I think the very critical piece right now, there’s a whole recruitment industry, right, head hunting, talent acquisition, recruitment, HR that has always been for the last, I don’t know, three, four years. When unemployment is been at 3%, it’s been very difficult to come in someone from a nice job to kind of take this new position that they have offered, but now that that has changed substantially, I think there’s a lot of opportunity there, and there’s some great recruiting people that have talent or represent talent or have other people in their pipeline that don’t have a job now, not necessarily because they were bad at what they did, but because of the way… Just everything got restructured. There’s a lot of people in the marketplace now a specific skill sets that are looking to get back into the workforce, and it’s kind of a win for them ’cause they could become employed, it’s also win for the business because just like everything else, there’s a discount on labor time, money effort, and pretty much every asset that exists out there, so it’ll be very interesting over the next, I don’t know, three to nine months to see the employment rates or the unemployment rates rather, and then also the type of talent in the transition from one company to a next, I think you’re gonna see some companies that restructure departments, restructure talent and go in a different direction, and at the same time, people or employees in those companies that consider other alternatives maybe are remote working environment as opposed to an office. Maybe they have some kind of other benefit that doesn’t require commute… Maybe they stay away from the big cities.
I think people have realized now that it’s not all… It used to be driving downtown New York or living in New York, I think people are gonna really change the way they do things, so just to your point, remote session zoom online, lower cost of labor, and I think the benefits packages around a lot of these people who work in corporations are gonna change, and I think people like yourself that are on the outside consulting inwards, there’s gonna be a much bigger need for people like you, because an organization is gonna realize, Hey, I don’t have to spend 200 a year for the HR kind of directive people, I can have an implementer, whether it’s CEOS or some other system, or just some kind of consultant come from the outside in restructure and kinda fix a company without having to have someone on payroll that’s their full-time job.
I think that there’s the people who’ve really had their eyes open to run a number of things, I know that there’s a lot of people who just had this feeling like, I need my people in the office every single day, and then it just became impossible for three months, it’s like, Well, how am I gonna make sure they’re still working? And long be old, they are… And now they’re like, What? Maybe this works a little bit better. And now they’re thinking, just like you said, Well, I’m no longer looking for people just in my own market, I might be able to find people who are 100% remote. And now all of the sudden, the entire United States and beyond becomes part of the pool that I can start recruiting from…
I know the… When I was running the IT services business, finding people who could do what we needed to do with the right cultural alignment, it was extremely difficult, and I’ve seen that when I go out and talk to businesses that are interested in the OS, not asking a question, what are your biggest challenges? People is always one of the top three, and it’s usually around finding people, especially when it’s skilled people that they’re looking for, and I think this has the potential to really shake things up in some really good ways for business and ultimately I think in good ways for the workers as well.
Well, the cost benefits. Unbelievable, I was just speaking to a guy in my community here in Pittsburgh that is been full-time sales for the last two years for a San Francisco company, they pay San Francisco salaries, but he lives in Pittsburgh.
And so it was kind of an interesting thing, I got my brain thinking like there’s the East Coast, New York, there’s the West Coast, California, big giant companies that are headquartered there, used to cost of living being extremely high, but now they’re picking talent that are in lower cost areas like Pittsburgh or maybe parts of Michigan or some of these other states that the cost of living is lower, but the talent pool is… And it could be just as good.
So I think these companies will have lower payroll, get the same result, if not better, and like you’re saying, they’re getting more globalization, who knows, maybe you get somebody from Hong Kong or something to work on your team because you realize, I really don’t need him to be in the US, it’s just not necessary at all.
Absolutely, and it’s also occurred to me that there could actually be some communities forward-thinking communities that actually positioned themselves as tele community centers. So I grew up in Erie, Pennsylvania, about an hour and a half north of Pittsburg. And whether a side are is a very nice standard of living, it’s inexpensive, everything is accessible, there’s a lot more cool things going on in here than probably a lot of people would think, and it’s always occurred to me that if you could do… Just like you said, you get somebody who’s in San Francisco earning a San Francisco salary tele community from a place like are, that could be a really good place for people to be, and if a community like that started thinking of themselves as a tele commuting hub and putting in the right infrastructure to attract people and support that it could really be a boon for the community to… Yeah, and what would you say your biggest piece of advice is going forward now, you’ve had this experience in the past, you’ve been doing these implementations, you’ve seen everything that’s happened with code and you kind of give us your thoughts on… It is gonna happen in the future. What’s the piece of advice that you could give people right now, small, mid-sized business owners, people who are trying to get out of this whole code, but then what’s the piece advice you could give them going for…
I think it’s to think forward, I think it’s to not get sucked into the bunker mentality, no question about it, there’s some businesses that have actually done better because of coat has actually helped them, but… And there’s a lot that have just been absolutely cratered because of this, but for everybody who’s kind of in between there, maybe is thinking in a defensive posture, don’t forget about playing offense, I don’t think about what could we do to structure ourselves and position ourselves and get ourselves aligned and really get ourselves in a position where we could execute and outrun everybody else, because this opens up, it’s gonna be… Nobody knows what’s gonna happen. Nobody knows what to do, everybody is gonna be… All we know is it’s gonna be different, so it’s different gonna be better or has different, gonna be worse, probably has less to do with were you land then it has to do with how you understand, assess, plan and adjust your plan for what your opportunity is to move your ISO 100% agree. So to wrap things up here on the prospecting show, if somebody wanted to reach out to you, talk about us, talk about some implementation, meet you virtually, whatever it is, what is the best way for them to get in contact with you?
The best way for anybody to reach me is by my email, which is Michael at free bridge in dot com.
They can also go to my website, which is www bridge in dot com, is to make sure we clear. That’s free with a free bridge I anecdote, and there’s a contact page there that goes right to my email, and anybody who’s interested in this idea about the opportunities… There’s a blog up there. What can I Simonsen ship? Tell us about the reopening economy that it’s a quick read, but talks really very much about this idea of where businesses go from here has a lot more to do with the businesses that it has to do with the outside environment.
Awesome, well, for anybody who’s listening on the show, if you’re looking for some S or just some implementation guidance, reach out to Michael, you have the contact details there, I appreciate you coming on the show, thanks for showing your wisdom and kind of… What do you think the future is gonna bring? It will be interesting to see how the world changes over the next six months or so, but I appreciate your time, thanks for coming on the show and have an awesome deck.
Thanks for having me. Kinda really enjoy it, the
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