The B2B Revenue Executive Experience
The B2B Revenue Executive Experience

Episode · 5 years ago

Les Trachtman on Why Founders Often Make Terrible CEOs

ABOUT THIS EPISODE

Quite commonly, founders make terrible CEOs.

They often have a difficult time segregating their personal relationships with their founding teams from the objective reality of the situation. That’s not an attack on founders: it’s hard time starting a company from scratch, and you often have to have a band of loyal followers in the beginning. The problem is that a company, once it scales, usually needs much different talent.

In this episode Les Trachtman, CEO of Purview, shares from his experiences taking over the CEO role from six different founders. He also talks about his upcoming book, Don’t F*** It Up (and 31 other things a founder should never say).

Are you concerned about hitting your revenue targets this month, quarter or year? Your answer is value prime solutions, a sales training and marketing optimization company leveraging the value selling framework. visit www dot value prime solutionscom and start accelerating your results. You're listening to the BDB revenue executive experience, a podcast dedicated to helping the executives train their sales and marketing teams to optimize growth. Whether you're looking for techniques and strategies or tools and resources, you've come to the right place. Let's accelerate your growth in three, two, one. Thank you everybody for joining us today. With today we're talking with less Trackman CEO of a review of former Harvard Business School guest lecturer and author of the new book entitled Don't F it up, how founders and their successors can avoid the cliches that inhibit growth. Less as an expert enabling founders to scale the organizations it today we're going to focus just on how scale is achieved a new companies and some of the sales pitfalls to be avoided and best practices to be utilized. The less. I want to thank you again for taking the time especially with the technical challenges we have. The beginning, I know you're extremely busy, so let's just dive right in with a little bit of your background. Tell us how you kind of came up to get to the CEO spot of pure view and and a little bit about yourself. Thanks chat. Well, I took a long and winding path to get here. I would say early on in my career I ended up in a murders and acquisitions function, which was very fortuneous for me because it gave me the opportunity to see the entire operation of a lot of different companies. So I tried very hard to learn from the best practices that I saw as I went through those processes and it was a great enlightenment for me of what you could do right and what you could do wrong and how you could have it up if you were careful. So anyway, I went from there to to my first CEO Gig and that was replacing a founder and a small startup company and because I'm a glutton for punishment, I'm now on my number six of these replacing founders. So that's why I got here today. Excellent. So I the obvious question I have to ask. I know a lot of people are kind of wondering is where did the title don't eff it up come from? I mean it grabs attention and, quite honestly, probably sounds like something I've been told a few times in my career, but I'm curious how you arrived at that as a time. Look, I think we've all been told it, in my case multiple times. The title came from a founder who is a still a very good friend of mine, who hired me to come on of this company. His company was was a pretty large company the time, very successful, but he had figured out that he just wasn't up to playing the game anymore. So he asked me to come in and to replace him, although he would stay around to help and to participate when necessary. But before he gave me the keys of the kingdom, he turned to me and he said, look, I've done a great job in creating this company so far. Don't have it up. And so that's where the title came from. Excellent. In the Florida the book, I noticed that Matt Marks, he's a professor at Mit Sloan School Management, he refers to as the most successful second CEO he's ever met, and I'm curious if you can help our audience understand kind of what Matt was talking about some of the challenges that lead to the decision. For a founder to make that decision mean to bring somebody in from the outside and hand over your, you know, baby, is a big decision. So I'm kind of curious what you've found throughout your career that you know kind of bleeds into that decision would enables them to do that. Yeah, so just like the example I gave you with a with my good friend who invited me to come in to help him run his pretty scaled company already, what happens is many times founders, either voluntarily or sometimes through their boards or investors, realized that the role of a CEO is not what they really signed up for. Founders do a lot of magic to create companies, to begin to grow them...

...and to even just get them past the stage of being viable entities, but that's a very different task than running a company with all the processes, in the mundane things that you have to do to be a CEO. So often times what you find is a founder will either self select realize this is not for them. It's no longer fun for them, and they opt out and try to find somebody who can step in to do that role. Or, as I mentioned, happens actually very often in the venture capital world, is the board or the investors will determine that the founder did a great job of getting the company to where it is, but they need somebody else to lead it for the rest of the way. Excellent. So what are some of the challenges that you've seen as you step into that new role? I mean, the founder didn't want that job, as you said. What didn't sign up for that. So are there consistent challenges that you see across these organizations in terms of scaling them? There are, and I wrote a book about it. The book is chocked full of those ideas and issues. I would say some of the more salient ones are that that founders often have a difficult time segregating their personal relationships with their founding teams from the objective reality of the situation, and that's not offensive in terms of what I think about founders. I think it's a really hard job starting a company from scratch and I think oftentimes you have to have a band of very loyal followers to get through those really difficult days in the beginning. But the problem with that is a company wants it scales often needs much different talent than that. So I use the analogy of a snake shedding its skin in order to grow. No analogy there between founders and snakes, just the process. But a snake has to shed its skin because the skin can't grow any further and in fact, in order for the snake to be viable at the next stage of growth it has to actually form a new skin. And that's the same thing that founders often have to do with their initial teams, is they have to be willing to shed some of those initial people and it becomes very, very difficult for a founder who's in the trenches with this team every day in the beginning to ultimately wake up one day, open their eyes wide and say this person who got me to where I am today it's not the right person to take me to the next level. That's a difficult process, a difficult decision to make and one that often an outsider can make a bunch easier. In my experience in working for startups, in early stage companies, the the founders, you know, it's very personal. Right. It is very personal endeavor. Having started that company and that concept of shedding skin of you know, making sure the right people are on the bus is a tough one. Is it easier for you, because I noticed in the book you mentioned that the founders often stick around. So how do they often respond when you say, okay, we need to we need to reorder, you know, who's on the bus and make sure the right people are in a place? How do they how they respond to that? That's a great question. I've got a lot of scars on very sported by Anatomy from that conversation. It's difficult and, depending upon who the founder is and how much they really view you as a successor in terms of your capabilities and your pedigree for getting there, they either will listen to you gladly, in some cases they do, but more often than not they are apprehensive about that. They ask lots of questions, in some cases they're reticent to do it and in some cases they're just downright stubborn and won't do it. And so then you get into that really sticky situation and of okay, WHO's in charge? How do you resolve those guys? You arm wrestling now. Well, you don't know me well enough to know whether I'm a good arm wrestler or not. But what I would say is we typically rely on the golden rules for that decision and that's whoever holds the gold makes the rules, and that's often the investors, or the controlling investors, will make that decision. If the founder is the controlling investor, they will often get their way, and if they get their way in terms of designation of WHO's on the team going forward, that's usually not good news for their successor excellent. Okay, understood, understood when you walk into these organizations, I mean a lot of especially today, a lot of the companies are tech focused that...

...are out there, and what I've seen is challenges with them understanding, you know, the reality of Revenue Generation. I'm kind of curious what you walk into and see from a fromer sales standpoint. How are those teams structured or how are they struggling? What kind of challenges are they running up to in terms of market penetration and Revenue Capture? Yeah, so, so usually when somebody like me and counters a company started by a founder, the issue is one of its time to scale revenue. Usually, not not always, but usually they have a revenue flow. They've sold product. As I like to say, that dog will eat the dog food. So they've got something that people want to buy. But often the initial sales are made through the personality of the founder, who often gets involved in all of their in still sales or sheer brute force of the personality that the team has. So we're known in the market places this. There's very little process behind it. It's all based upon personal relationships. Oftentimes founders come out of bigger companies and they often use those bigger companies as their initial customers. So a lot of the initial revenue comes from relationships and again from personality. Very little process. And is that one of the first things you look at is is instilling some type of repeatable, scalable sales process when you go into these companies. It is what we find is that if you're going to scale a company, although having the founder around is often good news in the sales process because they are good at what they do and they usually have lots of credibility in their market places, what we found is ultimately you've got to hire a team of what I would refer to very affectionately as mere mortal human beings. So so these are people who are not founders. They may be good at what they do, but they are not the same personality as a found that they don't have the same market entree that the founder has. So they have to work the process, if you will, in order to be successful. Excellent. Have you seen any particular things work best for quicker scaling of your sales organizations? Yeah, so what I find it a lot of organizations that are founder sales driven, if you will, is that the founder doesn't naturally like process. Founders are typically the they're typically people who have done things a little bit differently and that's how they started their companies. In fact, that's how they're successful because they, as apple would say, they think different and that's usually part of their success. But when you get to the scaling part, you actually have to think process, and that is different for a founder. So founders oftentimes end up hiring a bunch of salespeople and they don't really know what's required to manage them. So they don't know how to hold sales people accountable and probably what's most important is they fall prey to a salesperson WHO's trying to make the founder feel good and the salesperson may in fact have real sales leads, they may in fact the successful at generating market interest, but they, like most salespeople, I would say, from a psychology point of viewer optimistic in general, which often translates into happy ears. They hear what they want to hear and unfortunately they then take that. US back to founder or to perhaps the executive that the founders hired to run sales and they they create rosy sales projections that often become disappointments for management, and that's a big problem. I can definitely see those a problem for scalability. Is it normal for you to see kind of a host of those types of sales people? I mean, I always joke sales people, if nothing else, should be good at getting a job. That doesn't necessarily mean they're good at perform main the job. But in terms of assessing the the sales organization that may be in place, or assessing the market and the direction that you need to go with with scaling and changing that sales organization, how do you approach that? Yeah, so, so I typically approach a sales organization in a fashion that's as objective as I can...

...get and that often runs I would say counter two or is somewhat antagonistic to what the founder is used to or what a founding organization is used to. So I like to hold sales people accountable. I think it's not a bad thing to do, be held accountable, but I think it's a little bit abrupt when you change out a founder who lives on their personality more than their process and you now and still process or install the process that you're asking people to abide by. So what I try to do is I try to create a predictable environment. So I think number one is obviously we have to sell more, or we wouldn't have hired all these salespeople and be paying all this money. So we obviously have to grow our revenue, but in addition to that, we also have to be able to be somewhat predictable. We have to know when our revenue is going to grow or know that we have a problem in the revenues not growing. So what we typically fall back on is we fall back on this thing that I like to refer to as confirmations. I know you guys do a lot of it in your practice, but it's making sure that we just don't listen to what the salesperson thinks. We listen to what the salesperson has confirmed with the prospect at the prospect actually thinks. How do you execute that confirmation? Because sales people are Great, Oh, this deal is going to close in thirty days, you know, and since in the pipeline for a year, how do you make sure that the sales reps have done those confirmations? Is it a technology thing, conversational? If it's process and we need to be repeatable. So how do you put in place something that you feel comfortable, that you validated to those confirmations have taken place? Yeah, well, a lot of that I learned from you guys and from and from the sales process that you guys have been preaching for years, and that's what you typically refer to as a plan letter. I just call it a confirmation, but a plan letter, which effectively is the reiteration of a structured conversation that you've had with a prospect, that reiterates what you think you've heard as a salesperson and that does a couple of things really, really well from my perspective, from a from a perspective, CEOS perspective, and that is it. Enables me to communicate what I heard to the customer, which makes typically makes or prospect, which makes the prospect pretty happy that I actually might have been listening when we had a conversation, because that doesn't always happened, certainly doesn't happen with a lot of sales people. So that's number one. So the prospect now thinks that I was listening. But perhaps more important in Germanic, to this conversation is I tell the prospect what I think I heard, and that enables them to do one of probably three things. So they can say, Yep, that's what I told you, in which case you actually now have something that looks a lot more objective than the I think the customer is going to buy in three weeks. So that's one. Or to the customer might say, Nope, that's not what I said, and then often the customer will say what I did say was this, in which case the salesperson is now clarified their thinking and you have an objective view of what that customer is really thinking. And so you go from the happy years to that, perhaps the sad ears in this case, but the reality. And then the third piece, which is probably the best of all worlds is the customer says, well, you got most of it right, but this is wrong and they fix it for you. And what I like to say, and I think you guys probably would agree with this, is when the customer starts to fix what a salesperson has proposed for them, they're now brought it to the solution, they're now part of that solution. So there you have a connection in addition to much more objective information. So I tend to think you can rely on confirmation letters or plan letters much more so than you can rely on the I think, or I expect it comes out of a salesperson's mouth, and it's always amazing to me how many throughout my career, how many people don't try to get that type of confirmation right. That that I want to work with you as a prospect to come over with the solution that fits your need. I personally get bored sitting around rattle and off features and benefits. Really rather understand what their problem is. And I've seen repeatedly those plan letters, like you said, when they engage back,...

...when they say hey, you kind of got this wrong, or maybe we should do this or hey, reward this because I'm going to afford it to my boss and I don't want them to see it written like that. That's when you know you've actually got a nice engagement prospect, or a customer it is, and it makes you unique as a salesperson. Again, just it does say that you were listening, but, more importantly, you have a natural follow up to whatever your last engagement was with that prospect which can get you to the next step. It's a what I call a move ahead. Give you an opportunity to move ahead, even if that move ahead it ends up being too the move ahead to the you know to did that for I'm not going to make the sale. At least you are making progress towards understanding whether this will turn out to be a yes or no. Excellent. How have you found the sales teams in these organizations? Have they've been receptive to this type of, you know, putting in place process or I would assume, much like you have to look across the organization and decide who should be on the bus, and you shouldn't have to do the same thing with the sales organization. And some sales reps really kind of you know, they pull back and don't want to engage in a process. They have a tendency to say and I know what I'm doing. How often do you have to really kind of recreate the landscape of the sales organization? Yeah, I would say it's mixed. I would say that in my experience, sometimes you get salespeople who craved this process because perhaps they want to be held accountable, because they think they're better than the average sales people, and sometimes they are, but they're missing that process to get it done or they're missing the accountability that sort of muffles their progress, if you will. And sometimes you find the salespeople who have done what you suggested earlier, a great job of finding a job, but they're not necessarily good sales people. Being that founders are often not tuned into the to the I'll call it, the bits and bites, the real details of how great sales people how their DNA is really made. Oftentimes they've just simply persuaded the founder that they're good people. I've seen a couple times we're somebody that was selling something to a founder. Turns out that the founder bought something from them, said wow, that was a good sales guy and they hire them. That it has. Their skills have nothing to do with the attributes that they need in their company going forward. So it's a mixed bad but I think reasonably pleased with the with a good portion of the sales people that I found in the field. Excellent, excellent. Have you run into founders saying we're smaller company, saying, oh well, we don't, we don't need a process because we hire a players? Like everybody on our team is a players. Have you ever seen that and, if not, just kind of what's your perspective on if I have ten people on the sales team and they are all a players, do they still need a process? Yeah, so what? I've never met a sales team that had ten people that were all a player, but I can't tell you that. I've probably never run into a founder who doesn't think they know how to sell better than me, and many of them are better sales people than me, but not very often do they understand the process it's necessary to run a sales people, sales team, to make a sales team itself accountable, predictable and successful. So I would say, you know, I ready I ran into one not so long ago where I had a a CEO say to me. Well, the only thing you won't have to worry about is sales, because you know I'm really good at that and that's you know, my antenna went straight up in the air and I said, okay, so that's the first place I have to worry is about the sales team. And it was actually very true that the sales team needed a lot more help. The founder was a great salesperson and the organization had really just coasted based upon his personal capabilities, but the rest was missing. Yeah, I can see. I could definitely see that being a challenge. I'm going to kind of change gears here for seconds, since you are Seeu of pure of youew. Can you give us just a little overview of what pure view does today? Yeah, so we're in the medical imaging space, and by that we work with companies, we work with health carebanizations that generate medical images, so just cts, MRIs x rays, ultrasounds, things like that. The biggest problem that we found in our industry is, although there are a lot of big players, there's the...

SEAMANS, the access the GE's of the world that have been doing this for years, it is very difficult to transport these images. They're very dense, very large size files. They're hard to transport, their heart, to share, their hard to aggregate in the location that they're needed in order to do the diagnosis for that patient in a timely matter. So what we do is we make those studies images available where they're needed, when they're needed and on any platform. So we are a supplement or a common eplement to the big systems that are out there and and we work in a lot of environments. One of the biggest environments that we're found in is second opinions. So many large healthcare organizations offer out their experts, their specialists, to provide second opinions, so not primary diagnosis for their patients, and patients more and more these days, especially if it's an egregious illness, Wat a second opinion and in order to get that second opinion they have to have their images sent to that doctor, wherever that doctors located. That is a difficult process and so we play that intermediary role where the transport layer, if you will, for that image and we get it there at a time, we manner and we can do it pretty efficiently. Okay, actually, as a CEO, your what our sales people would refer to as a target or a prospect. So I'm kind of curious, when somebody's trying to sell to you, what is it that gets your attention or what sets, you know, a salesperson apart from the pack when they're trying to interact with you in order to get your business? Yes, that's a great question. I can tell you. I can probably do a better dealb with telling you what what doesn't attract. That's fine. That's fine. What propels me, because it happens most of the time, and that's that a salesperson will, without any introduction, will try to contact me and will start small talk with me less how are you doing this afternoon? That's a really bad intro, so one. I don't know who you are and, too, you have no right to ask me how I'm doing, because I don't I don't care who you are and I don't I don't think I care to tell you how I'm doing as a CEO. Usually you're not doing well, things that you're aggravated about it, try to change them, whatever that is. So that's one. So it's the it's a salesperson who has no permission to contact you, asking you a name, questions. That's one too. It's the salesperson who says to you, people like you have to do these things and I can provide you with those things. And the same approach I take with that one, which is I'm not like everybody else. I have special needs and you have no right to tell me that I fall into the category along with all these other people that you're selling toive. So treat me special and then we can potentially talk. So I think that's that's those are the two, I'll call them, repulsions that I have as a CEO target, as you call it, which I think we are, because people, people buy our names off of Meilist, I'm I found. But I think the thing that's most important to me is if somebody takes the time to understand my business and understand me and they want to be persistent about getting to me, but they show that they know something that is not obvious about me. That's what gets my attention. So if somebody's taken that time, I say hey, you know what, if this guy's going to take this much time before I've even said hello to him or her, then perhaps they're going to be smart enough to figure out that they can help me with something and at least I'll listen, and so that's kind of where I draw the line. Do you instill that same type of practice to send to your sales teams at Puer view are other places that you've been? I do one of the things. I have a pet peeve with salespeople and I say to them all the time you should never contact somebody unless you've done all the research you possibly can to understand them and their business. You know, I started out before there was this thing called the Internet, and back then it was a little bit more difficult to do research on people. But today, you think linkedin or something else, you can go right on there. You can find me, you can find where I went to school, you can probably find my kids names where. You can find anything on the Internet...

...these days, and if you can do that then you are in a much better position to engage with that prospect. So don't try to engage with a prospect unless you have that information first. Excellent, excellent advice. That I agree one hundred percent. It's it doesn't take a lot of time and it makes all the difference in the world. So we're getting close to the end here and as we wrap up up, we have this tradition, or I don't know, call it a cute little marketing trick that we do as part of the podcast. I asked all of our guests if you had one acceleration insight to give to a sales professional or a marketing professionally, the one what would it be and why? Well, putting me on the spot, the one acceleration. Well, other than I think it goes on said that this confirmation thing really is very, very helpful. But what I would say is this. For most else, people starting out, there is no substitute for prospecting. So a lot of sales people that I need say you know what, I'm pretty smooth, I'm pretty debonair, I'm pretty handsome, I'm pretty good looking. I don't need to do all that prospecting and, by the way, I have this really big roll of Dex that I took from my last job, hopefully without a noncompete, and so I don't need to do all that prospecting. There really is no substitute for prospecting. Ultimately you have to build a pipeline, so you have to engage, as I like to refer to it, sales as a contact work. You got to have some contact or you can't make any sailed, and so you got to do that prospecting at some level. Now a lot of the new technology that's out there, and we use a lot of it here at perview, which is in bound marketing to lead generation, and so a lot of our prospects come to US already half warmed. That's great, but you got to avail your sales to those contacts. You have to contact them, you have to reach out, you have to make the that ingratiating contact which says you know something about them. But if you don't do prospecting, as I like to say in sales, a funny thing happens, which is nothing. It's very true when you ask sales people, we ask in class, you know who love sales and what's your favorite part? I can count on one hand a number of classes I've been in where somebody says they love the prospecting process. But without it there's there's no other right, there's there's nothing left in the funnel to do. So one thing I want to make sure we do is I want to make sure we tell the audience where they can get a copy of your book so where would be the best place for them to go to get a copy of don't eff it up? Yeah, the book will be available on Amazon starting about the fifteen of July of this year, so it's about to come out. You can find it either by searching don't eff it up or, if that's a problem, just search under my name, Trackman Tra a ht man, and you will find it. Excellent. And what's the best way for people who might want to connect with you after the show to do that? Yeah, the best way to connect with me is right through my email address. Email is for me. Email is always the best way to contact me, because that way, if I'm busy, I can get back to you. The email address to use is less elies at pervew DOTNET. P you are view purview dotnet, and that'll get right to me. Actual I would I'd love to hear from anybody that's that has any interest in the topics that we've talked about. I'm pretty passionate about this whole process and happy to help. Excellent less, this has been great. I can't thank you enough for the time and when everybody in the audience please go out get a copy of less's book in July when it hits the his the shells. I've been lucky enough to see a early copy of it and it's definitely worth the read, not just for founders, I think sales people could get a lot from it as well. So thank you again, less and until next time, I wish you nothing but the best. Thanks chat. I appreciate it. You've been listening to the BB revenue executive experience. To ensure that you never miss an episode, subscribe to the show in Itunes or your favorite podcast player. Thank you so much for listening. Until next time.

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