We had the opportunity to speak with Robert Sher, Founder of CEO to CEO and author of “Mighty Mid-sized Companies”, about how to grow a business past the stage where most business owners plateau. This is another National Advisor Showcase segment, where we bring in national level speakers that are in Texas talking to business owners.
Please excuse any typos in this hasty transcript.
Matt Register: Hey guys, welcome back to the show,Texas Business Radio. Texasbusinessradio.com is the Web site. This brings us to a regular segment we have every month called “National Advisers Showcase”. There’s a lot of very, very smart guys that come in and talk to groups of CEOs here in Texas. And we like bring them on and have them share with you some of the insights that they’re bringing to some of these CEOs. And this one is no different. Robert Sher is the founding principle of CEO to CEO, out of California. And has a wonderful book called “Mighty Mid-sized Companies”. Robert, welcome to the show sir.
Robert Sher: Delighted to be here.
Matt Register: So tell me a little bit about “Mighty Mid-sized Companies”. Why did you write this book?
Robert Sher: You know, I wrote this book because so many people, myself included for many years. Many of our our clients get a great idea. They get a business to grow from small to midsize because they found something people really need.
Matt Register: Sure.
Robert Sher: And then the business stops growing. It gets stuck. And, and this was really a project, a research project, to say “Why”? What are the things that most often stop those companies?
Matt Register: Well, you know, I find it interesting and as an investment banker, we run into this daily. Right? That there certainly is a plateau, where the skill set required to grow it to a large small or a small mid-size company, is not the skill set required to take it further. And without some, some significant self-awareness by that founder, by that CEO, they languish there for, you know, a long time. Right?
Robert Sher: They do. They do. And, you know, what it’s, it’s what it takes to run a mid-sized business, well to keep growing, is a different set of skills. It’s a different approach and it’s learnable. If the founder wants to. But that’s, that’s where we really come in and help. Right? And that’s what this book speaks to, is “What do you have to do differently to keep growing”?
Matt Register: Now your company, CEO to CEO. This is a consulting company but you guys have, are not just consultants. You guys have been the CEO, you have sat in these guys shoes. Right?
Robert Sher: Yes, yes. And myself personally, 23 years. Right? Grown a company from start up through a mid-size. Stepping in all the potholes, making all the mistakes, all those painful years. Yeah, there was plenty of that and then I joined a Vistage group. And essentially, right, same problems you’d see happening over and over again. And then with my clients, same kind of thing. And, and so this book says “What are those patterns?” and what to do about it.
Matt Register: Well, we say on this show all the time, as unique as we all think we are, were not. Right? I mean, companies take very predictable patterns in their growth cycle. What are some of the things you recommend to do? Right? Not, okay, so they’ve identified why they’re not growing. What are the, what do you recommend that they do to get things moving again?
Robert Sher: So, four big areas. One is around clarity and I call it planning and plan governance. Is it really clear to everyone on that leadership team, who is going to do what, by when? Right? And in writing, not in the head of the CEO. So that as this business gets bigger. Right? It’s, it’s like we’re all moving in tandem, we’re all going in the same direction. So that’s one thing and there’s some specific but simple ways to do that. Another one has to do with communication. You get bigger, you get 20 people, 50 people, 200 people. The left hand doesn’t always know what the right hand is doing. So we’ve got to be thoughtful. It’s our job as leaders to say “All right”. What should be in meetings. How often should we reach out to the team. When do we need to do it all hands. These kinds of things have to be thought through. So that’s communications. Second thing has to do with putting some process around gathering information. You know, when you’re starting out small, you know it’s happening because you’re in the middle of it. But when you’re in two states, you know, five offices, you know, different product areas. How do you know? Well, you got to ask questions. Maybe it’s surveys. But there’s a routine, a process about collecting updated information. Right? So those are three things that just jump out. The fourth thing, it’s the biggie, is the quality of the leaders inside the organization. Small company, you need one leader, bunch of helpers, works awesome. Get to that midsize, you need a team of leaders and the CEO has to lead those leaders differently. And so getting the right people on board, the right experience and then working as a team is fundamentally different and crucial at midsize.
Matt Register: Well, that business owner gets to the point where he realizes that he is no longer doing what he got in the business to do. Right? He is no longer doing what he loves. He’s now worried about other things; collections and HR and other things that he never really even signed up for. Right?
Robert Sher: Right.
Matt Register: And he’s got to learn how to be able to delegate and get some of that off its plate. And that’s harder to do, than it is to say. Right?
Robert Sher: Well it is. Actually, there’s kind of three choices. He can learn not to do that and say “Hey, I got a $6 million dollar business that is paying me 400 K a year and I’m happy”.
Jay Curry: Yeah, lifestyle.
Robert Sher: That’s totally OK. Yeah, there’s nothing wrong with that. Second thing is he could say “I want to do, what I want to do. I’m going to bring in a team to do the stuff I don’t want to do”.
Matt Register: Sure.
Robert Sher: And I’ve got clients, that’s fine too. But you can’t ignore the responsibility of being an owner. So, you’ve got to keep a watch on that team. And then some founders want to develop their own skills. They want to be able to be the CEO and drive a $100 million dollar business. Then they got to grow and learn. And if they’re up for it, there’s ways to help them develop that as the company grows.
Jay Curry: Now you’ve talked about Vistage. You mentioned Vistage. As a Vistage chair myself, I see this in all kinds of companies and all different sizes. I don’t think you could say it’s a 10 or 15 or 20. It’s based upon the leader but it’s going to be there. You can’t get away from it. Where you see any consistency in that or is it just?
Robert Sher: Well, I think you made a great point, it’s that it’s not one to one and done. So at $5 million, some businesses get complicated enough, where they need a team of leaders. That’s a big clue. It’s like one leader is not enough. We need two. Uh oh, we’re in mid-size.
Jay Curry: That’s an interesting point.
Robert Sher: Yeah. And so, at that point you need a little bit of process, a little bit of change. But not too much. You do too much, you got bureaucracy, people have no patience for it.
Jay Curry: Yeah. Go right back down.
Robert Sher: But then you get to 20 million. Your like “Wow, all right. We’ve got to step this up the next step”. And it steps up all the way through, and midsize is considered up to a billion dollars. So there’s companies at 400 million. They get to $600 million and they’re like “Wow, we got, we’ve got to clean this place up”. So it’s incremental.
Matt Register: No. It’s very interesting. And it’s something, like I said, that we see on a daily basis. Talk to me a little bit about the research that went into this book. Because “Mighty Mid-sized Companies” is the book. Guys, I highly recommend you read it. It’s going to be there on our essential reading list. Tell me a little bit about the book and some of the research goes in the book. Because this isn’t stuff that came directly out of your head. There’s a significant amount of research involved in this.
Robert Sher: It is. And so it started with my hypothesis. Right? Like what I had seen, being in a peer group. Right? And all that consulting. But then we actually interviewed 110 different companies. Some,a few were big, a few were small, most mid-size and we recorded those interviews. We transcribed and we said “What are the lessons? Who handled, you know, running out of money?” Which is one of the, one of the growth killers. “Who handled that well?”. And that research is what informed the book and in the book there’s a ton of examples from that research.
Jay Curry: So, one of the things, the subtitle is “How Leaders Overcome Seven Silent Growth Killers”.
Robert Sher: Yes.
Jay Curry: And I love that. You need to know this. If you’re running a business, you better know these seven. Okay. And you better read the book and learn about how you deal with it. This is, this is very valuable. I think it’s, I’m going to give it to every one of my CEOs.
Robert Sher: Well, I appreciate it. And it is a hands on book. Right? So I’m, look I’m not an officially trained consultant. I’m a CEO and a founder that figured this stuff out. So the books I like, say “So what do I got to do?” Right? “Here is a problem. What are the best practices?” And that’s what I put in this. When you read through it, you will see, you know, specific advice and steps that you’ve got to do to mitigate the risk of those killer.
Jay Curry: Of those seven killers.
Robert Sher: That’s right.
Jay Curry: I love it.
Matt Register: Yeap. So talk to me about CEO to CEO. Because you have put a consulting group together that can come in and help companies execute this breaking the stagnation and getting, getting to the next level.
Robert Sher: Yes.
Matt Register: What is it you guys are doing in your consulting group? Who has a problem, that you guys are the solution?
Robert Sher: So, it’s all different industries because we help with management and leadership in that area. And so sometimes it’s getting some real simple business plans in place, so we all know what we’re doing. Sometimes it’s a little bit more about strategy. Sometimes, honestly, we get a CEO, it’s kind of lonely and we’re there thinking partner. Right? So, we talk to once a month, twice a month and we’re helping drilling and dig in. So, that’s a couple of things. Sometimes it’s how teams work together. Right? Teaming is an issue in and of itself. So, that give you a pretty good idea.?
Matt Register: Yeah, absolutely. So we got Robert Sher, who’s the founding principle of CEO to CEO. He’s the author of “Mighty Mid-sized Companies”. He’s a Vistage speaker. You need another couple of jobs is what you need. Yeah, right? Now, he was nice enough to hand us a few copies of this book. So guys, get your calls in. We will make sure, we’ll give them out, as we still have them. Right? This is a great book, I highly recommend it. You can go to our essential reading list and buy it from Amazon there. But thank you very much for joining us Robert.
Robert Sher: You’re very welcome.
Matt Register: So what’s the easiest way for somebody to get in touch with CEO to CEO, should they want to.
Robert Sher: Just go to the Web site, www.ceotoceo.biz and all the contact information is there.
Matt Register: Yeah and we’re going to have that linked as well from Texasbusinessradio.com. If you are driving and can’t take notes. Understand there’s no reason to take notes. Right there on the Web site we’ve got everything you need. However, we do have to go pay a couple of bills. We’re going to be right back, right after this, with a whole lot more Texas Business Radio. Don’t go anywhere.
Sponsored in part by:
In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.