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Keys To Scale & Grow Your Consulting Firm With Bruce Eckfeldt: Podcast #151

Planning to scale and grow your consulting firm? You might as well prepare to undergo all the changes that go with it, especially when it comes to your role as a leader. In this conversation between Michael Zipursky and management consultant and strategic business coach, Bruce Eckfeldt, you will find that scaling your company means recognizing and addressing the limiting constraints to growth – even if that constraint is you. Educated as an architect, Bruce took his designer’s brain out of the blueprints and into the field of management consulting. With his own firm, Eckfeldt & Associates, he helps business owners and CEOs develop efficient growth strategies and eliminate limiting factors to growth. Grab this chance to learn about what is holding you back from taking your business to the next level.

Listen to the podcast here:

Keys To Scale & Grow Your Consulting Firm With Bruce Eckfeldt

I’m with Bruce Eckfeldt. Welcome.

It’s wonderful to be here. Thank you, Michael.

I had the pleasure of being on your podcast a while back. I’ve been looking forward to catching up with you. To introduce you to everyone here, you are a business coach, podcast host, and former Inc. 500 CEO. You’ve been writing in many publications, Inc.com and Forbes. You’re the Founder and CEO of Eckfeldt & Associates, your management consulting firm where you also do coaching. You’ve been running that for a few years. You have multiple Bachelor’s degrees in architecture.

Things completely unrelated to what I’m doing.

That seems to be a bit of a pattern among many consultants that I have on the show here. Oftentimes, we all start off in very different places. Takes us back to what you were doing with architecture. Did you do much with architecture? You were an architect.

A lot of what I do is very much based on what I learned in architecture. If you abstract the discipline of architecture, it is problem-solving. In architecture, we’re dealing with physical buildings, programs, people, environmental issues, structure and gravity. We’re trying to figure out how to create meaningful spaces. That is the essence of architecture. I graduated and got a professional practice. I ended up taking a different path. I got recruited. I was doing a lot of work in computer modeling and animation. I got recruited into interactive media and more of the digital product and digital strategy world in the late ‘90s.

I was using all the underlying thinking skills, problem-solving, and design thinking in terms of the work I was doing. I shifted it from physical buildings to digital products. I spent many years and got to product strategy and product design. I then founded a tech company focused on the actual software development side of things. We are a big, lean and agile shop. I got very involved in software methodology, organizational culture and how organizations and companies use and apply lean thinking in various ways that give me an organizational change. When I sold that, I got into consulting and advising companies on strategy and growth strategy, how they can grow and scale the business.

You’ve done a lot of work in what it takes to scale and grow a company. That’s what you’re helping a lot of your clients with is the strategy and the scaling side of it. What do you see are the most common challenges that are holding people back from achieving truly meaningful growth and scale?

CSP 151 | Scale Consulting Firm

 

My job has two pieces to it. The first piece is the business model, analysis and strategic thinking. The other half is team therapist. The reason is that there are challenges in both worlds. On the strategy side, you have to figure out some differentiation. You can’t grow and scale a business successfully, quickly, profitably without carving out some niche in the market. Some set of attributes that you’re going to be known for that allows you to charge a premium price. That’s the only way you’re going to grow and scale the business strategically.

On the other side, it’s all about mindset and team dynamics. If the leaders of the company don’t level up their thinking and think bigger, they’re not going to be bigger. A lot of what I ended up doing is getting into that headspace of, “How are you thinking about the problem? How you were thinking of yourself as a leader? How are you envisioning yourself, your role and how you show up and how is that team operating? How is it interacting? How’s it making decisions? What is the communication and the dynamics they have?” Invariably, if we don’t level up the leaders, we’ll never level up the company. It won’t happen.

When you then start working with a client, what’s the first thing that you would typically look at? Where’s the lowest hanging fruit? What’s that starting place that can tell you where to begin the path with them?

I get involved when a company is either starting to put together a leadership team or has a leadership team and they’re looking to level up as performance. The first thing for me is, are we working in a team-based or do we need to build out the team? If we don’t have a team yet, that’s usually the step one, because a CEO, a founder can’t move into a CEO slot and can’t lead a company and grow a company without a team around them. Step one is either helping that CEO understand or figure out what that team needs to look like or working with the team. They have to figure out, “Where is it working? Where is it not? What do we need to change either in terms of the people or the seats or how people are interacting?” Until we got that team in place, there’s limited leadership capacity.

I call it the game of whack-a-mole where there is going to be some limiting constraint in the business. I’m a big theory of constraints like old rat philosophy, but there is something in the business that is capping its current performance. The challenge is finding that cap. You can have all problems in the business, but unless we find that limiting constraint, that limiting problem, we won’t see a performance increase in the business unless we’re focused on that thing. That can be anywhere. We have 3HAG and Scaling Up coach. We use these frameworks and questions, but we talk about people, strategy, execution and cash. Those are the four main discipline areas.

I bring in company culture and planning as two other things. I’m looking at six factors inside the company and we’re on a hunt for where is the limiting constraint. Sometimes it takes a little while to find, but if we can address that, we know we can elevate the performance of the company. The challenge is it moves. As soon as we fix one problem, that limiting constraints can jump and it can go from people to cash, cash to strategy, strategy to execution, execution to culture. It will move around a little bit and we need to be aware of that.

For the consultant that is doing well, their business is growing and maybe it’s just them or it’s them and small team, but they want to get to that next level. They like the idea of scale and growth. What is something that you think they should consider before they commit to growing their business? I’m asking that because everyone’s throwing around the words, “Scale this. Scale that,” but not everyone’s necessarily prepared from a mindset perspective or to put in the work to achieve successful scaling. What should people know before they go down that path? What do they most often need to change that they’re not going to feel super comfortable doing initially?

There is always something in a business that caps its current performance. The challenge is to find that limiting constraint. Click To Tweet

I start the conversations with people that have ambitions or are setting goals to grow and scale their company, particularly when it’s maybe themselves, a couple of associates, or things. They’re like, “I want to be a big company.” The two things that I have them think about is imagining yourself at the next level, $20 million, $30 million, what does that company look like? What are you going to be doing? Do you like that? Half of the time, I’ve worked at a lot of situations where people scale the company, then the founder or the CEO is miserable because they haven’t envisioned. They haven’t realized what changes they’re going to need to make, what they’re going to need to give up and what the world’s going to look like operating a large company like that.

The two that I find most challenging is, one, if you love sales and if that’s what drives you. Unfortunately, that’s going to be a big cap if you do not get out of the sales process and you don’t create a system that is selling for the business, not you. If you love sales, that’s going to be problematic. Two is if you have a particular craft or you love the process of making. Particularly that comes up in technology and design or architecture or stuff like that where there’s a love of the product and of the process. The fact is as you grow a company, that leadership roles are going to be much more around strategy and management and less about delivery.

If you’re going to be unhappy not doing the work, then growing the company may not be the best option. You can grow the company and not hold that CEO seat or hold the leader seat. You can have a senior-level role inside your own company. I’ve seen that work out several times. It takes a very confident and humble person to grow their company and not be the leader. He’s willing to say, “I want to be a $20 million company, but I’m willing to be head of sales or chief technology officer,” and let someone else lead.

You talked about bringing in different frameworks and systems when you’re working with clients. How important is it for the professional services firm or the consulting firm owner to ensure that they have their own systems and frameworks inside of their business, especially when it comes to growth?

I’m sure there are ways to grow businesses without clear systems and frameworks, I just don’t know what they are. The only way that I know how to repeatedly, consistently, and confidently build a business is through some framework, system, or process. I know there are lots of them and we can talk about all the different systems that are out there. Honestly, they all have pros and cons. We can make arguments for different situations and different ones. I’m less concerned about picking the absolute perfect one and more concerned about picking one. Sticking with it, getting good at it and leveraging for everything it does. You may need to evolve it and you may need to switch systems at some point. Pick a system, run it well and get good at it. That’s going to be your best bet.

You also do a lot of work with OKRs, Objective Key Results. For those people who aren’t familiar with what OKRs are, maybe start off and break that down a little bit, but then I’d love for you to explain why they’re important and how you and your clients are using them?

As with systems, there are all ways of setting goals. My main thing is to have a goal. You can set it lots of different ways and use smart goals and SMT goals. The reason I like OKR or Objective Key Results is they do a particularly good job of connecting strategy to your execution. Your objectives, which are directional areas of focus, help you align your activities towards strategic objectives. Your objective needs to clearly put you on a path towards your 3HAG or BHAG or whatever highest-level goal you’ve set. That is what your objective does. Your KRs are your milestones against that path. Your KRs are the measurable doable things that you can accomplish in a particular period of time. We set quarterly, I usually work on a quarterly basis. We’re setting quarterly OKRs that aligns the team to a strategy that gives them very measurable, doable things that we can look, feel, and confirm that is being done or not done over the quarter.

CSP 151 | Scale Consulting Firm

 

When someone says, “That makes sense. Maybe I read or heard, I should be doing something, but I don’t know if it’s going to work.” What do you tell them? What do they need to be doing to move things forward even if they’re not certain that they’re going to get a specific result from doing it? There’s some doubt in their mind because they haven’t done it before. Maybe they know or believe they should be doing it, but they’re not taking action because they don’t know what’s going to happen.

On some level, no one knows anything. There are no guarantees. If the person is looking for it, “I’m not 100% confident that this is going to work.” It’s like, “I’m not 100% confident it’s going to work either, but I’m a lot more confident that it’s going to work if we do this process, then if we wake up every morning and decide what we want to work on and work whatever whim comes across our plate.” If you’re stuck in the thinking trap of, “I’m not 100% convinced,” that’s going to be problematic. I do a whole exercise with teams on confidence intervals.

We talk about this 80% sweet spot where the vast majority of business decisions need to be made in perfect situations with limited knowledge and information. If we can get to an 80% confidence level, 4 to 5 times, we’re pretty sure it’s going to work, that’s great. Once you get to 80%, you go. Stop thinking, stop doing anything else, make the decision, move forward because that last 20%, it is going to be impossible to close the gap completely and it’s huge diminishing returns. Trying to get another couple of percent on that confidence level takes a huge amount of time and energy and that ultimately is going to get in the way of success.

My clients always hear me say, “Imperfect action,” because it’s about taking action. You don’t know, but taking the action is how you do know. That’s how you get the feedback and then you get to get clear on whether what you thought works or doesn’t work, and you can go out and take more action. If you’re not taking any action, you’re not going to get any results at all. You coach organizations, you’ve got your firm, you host two different podcasts, you write for multiple publications. Some people look at that and go, “That’s a lot of different stuff.” How do you manage all that? Take us through your approach to getting all these things done. How do you break down your day and are there any tools or strategies or systems that you use to get a lot done?

I’ll do some strategy and then I’ll talk about some of the tactics. Strategically, what I realized is the thing I am exceptionally good at is having conversations and developing insights around those conversations that give little epiphanies. I’m good at reframing things. What I focus on is creating as many of those as possible, and then putting those into content that can circulate out into the world as much as possible. I know that if I can take that insight, get it out into the world, someone can connect with it. They will contact me saying, “This was in my head and you clearly know what’s going on in my head. I need to have a conversation with you about this.”

I know you do have through your podcast as an example. I would love to get a tangible example from you of what you do and how you do it.

The two processes I have in place, one is the podcast. By getting the right guests on and having the right conversations, we create great content from there. The other thing I do is I keep a little journal. When I’m meeting with clients or prospects or anyone, and something comes up like the challenges they’re having, something they mentioned, it can even be slight. I will write it down saying, “If I can create a little piece of content around this issue,” and I’ll write it into an Inc. article. The way I’ve set it up now is I do very rough first drafts. I’ve got an editor who then cleans it up. I’ve got an EA who gets it onto the Inc. platform and does all the things that they need to do.

CSP 151 | Scale Consulting Firm

 

I have got it down to the meat. The thing that I need to do and I’ve gotten myself out of all the other processes. People look at the amount of content in podcasts. Quite honestly, I set up a day of podcasting and I interview. Now I’ve got a tool that audio recording is automatically saved in the cloud. My EA goes in and pulls them all down, creates the pages, does the audio editing, makes a podcast. I never see it again. For me, it’s been a bit like, “What’s my unique skill or capability and how do I just do that and find systems and people?” It’s taken a while. I’ve had to write lots of SOPs. I go through a couple of people. I have to train them. It takes some time but once you get that engine running, it creates value.

Out of everything that you’re doing in terms of the podcast or articles in different publications or maybe something else, what’s working best right now for you to generate qualified leads and get new clients for your business?

The things that have worked particularly well for me, the podcasts have been good. It’s two-fold. One is it creates content that gets a lot of traffic. Meaning that it’s good, insightful and valuable content that people want to listen and read. That’s worked well. Two, it ends up being a great calling card. I can use that to knock on the door to people that I potentially want to do business with or referrals, people that are going to know people. The way we ended up doing it is we do a lot of work on LinkedIn. Once we do an interview with someone on LinkedIn, we then use the concentric circles of connections that they have to engage those circles to expand my circle. I probably went from 10,000 to 25,000 first degree contacts on LinkedIn over the last few years and they’re all good-quality connections. They’re either common friends of guests or friends of guests. It’s a great way to expand the network.

What’s one thing that you’ve done and implemented into the business that helped you to get greater results for your clients?

I’ve doubled down on some strategy framework tools. This may come across awkward for some clients. I have learned that the less I say, the more value gets created. I used to do it and in the sessions that I would run, I would be super active. I’d be talking a lot, moving stickies around, doing a lot of the work and running the show. Now, if you come to one of my sessions, I ask a question and I sit down and let them talk. I’ll make some comments and guide things, but I realized that the real value I create is helping them have the conversation they need to have, not telling them what to do. I think that when I started I was much more like, “I’m here to tell you what to do,” and now I’m here, I was like, “You guys know what to do. You don’t know it yet and I’m here to help you to figure that out.”

Talk about how you’ve grown your LinkedIn connections and these qualified people. I wanted to get tangible. Specifically, what are you doing? What’s the process that’s allowed you to see a lot more momentum and traction on a platform like LinkedIn?

The two keys that we figured out or that I’ve realized having worked on LinkedIn for a while, one is creating good quality content. You can do like the five tips to do X, those are fine, but a 30-minute interview with somebody and get into their business and what they do. It’s high-quality content.

Is that an interview that you do on a different platform and then you upload that interview directly to LinkedIn?

As you grow a company, leadership roles will be much more around strategy and management and less about delivery. Click To Tweet

We’ll transcribe it, tag it, put pieces of it on LinkedIn and saying, “We just launched this episode with so-and-so.” That goes on LinkedIn. We then tag the guest, then what I do is I go through all of our common connections. The one thing is creating good content. The second thing is to use LinkedIn’s messaging tools. Once I got a podcast episode up there, we then take all of our common connections, people that were both first degrees with, we message them saying, “We did this interview. It’s been posted on LinkedIn.” We do that quickly. It can hit the first hour of LinkedIn, if you get a lot of activity, it will push it. Someone’s now getting a request saying, “This friend of mine who I know and Bruce who I also know did this episode. I’ll go and like and share.”

You and the guest are going in and you coordinate the same time, you’ve asked the guest or you’re not doing that?

I do it on my side.

Are you picking specific people to send this message to or are you getting the LinkedIn of 50 people at one time sending out a bit of a blast email? How are you messaging this to a whole bunch of people to check out one-to-one?

I look because I’m usually connected to the guests at that point. We’re both first degree. LinkedIn will show you all of your common connections. I go through each one of those common connections and I’ve got little scripts and things that automatically send a message with a link to the post on LinkedIn and I’m saying, “We posted this and we’d love a like or a share.” What happens is all those first degrees click on it and say, “That looks great. I both know these people. I’ll give it a like and a share.” The more activity you can generate on that in the first hour, exactly what the algorithm is. No one knows, but it seems the first hour of activity has something to get, that will then push it out to both of our networks much more. It extends the reach of that. I look through the second degrees of the guests and I find people that I think are going to be good connections for me. I reach out to some, “We did an episode with so-and-so. We’d love you to check it out and give us some feedback.” A lot of those people will come in and first degree on my side.

Are you doing that yourself? Is your EA doing that?

I’m not doing any of that. I’ve got an SOP, we’ve got a checklist and it’s all part of the podcast episode system. We produce the podcast, it gets distributed out through the podcast networks, then when we post it on LinkedIn, it goes to connections. We do a first degree, we do a second degree, it goes through a series of stages. I’ve got two different EAs or VAs that handle that for me.

In the last few months, what’s something that you’ve done differently? Something new that you’ve implemented into the business that has created more revenue for you that has worked out very well?

I’m always increasing my prices. That’s the easiest and simplest way to increase revenue.

CSP 151 | Scale Consulting Firm

 

With new clients, you increase your prices, but do you ever do that with existing clients?

I did this many years ago. A coach friend taught me to do this. My contracts have automatic renewals at an 8.5% increase in price. If I get up, probably half the clients never even look at it and never even question it. The ones that question that, my answer is, “If we’re doing our job if you’re a $20 million company and we take you to a $30 million company and we go from 10% profit to 15% profit, we’re going to drop several million dollars into your bottom line. If we’re not able to cover us 8.5% increase on my rates, in that year, then you shouldn’t retain me. We shouldn’t be doing business together.” It goes back to what are our goals and what are we trying to do? We’re trying to grow the business, grow the profits so we can put money to the bottom line. If I’m doing that, I should be doubling my rates every year and they should be like, “Thank you.” Increasing rates is probably the number one thing.

How can people learn more about you? Where should they go to check out your work, your writing, and your podcasts?

My home base is Eckfeldt.com. That’s my home website that has links to everything. Scaling Up Services and Thinking Outside The Bud are the two podcasts, those are fun and easy. You search me on Inc. and I will come up and my articles will come up. I probably have about 150 articles on Inc. There is a lot of content there.

Thanks, Bruce, for coming on.

Thank you, Michael. I appreciate it.

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