Michael Richardson on How to Build a Better Business and a Better Life

TechnologyTrailblazers.Club – Startup Interview Series

Trailblazer: Michael Richardson, Founder and Managing Director, Tech Azure

The trail he's blazing: Helping companies drive transformation by matching technology with business needs. The below article is a summary of the Podcast Interview.

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99.7% of all US business are small and medium sized - 28.8 million. Many are adopting new technology to proactively manage the Covid-19 crisis. But as Michael Richardson, Founder and Managing Director of Tech Azure points out, "‘what got you here won’t get you there.’ His firm provides Interim Executives and Tech Advisors. He says it's common for leaders of SMBs to be running to a point of growth block in their business - and their life.

The companies he works with are experts in some specific domains of their businesses. But they’re not experts or seasoned in business transformation. In this interview Richardson points out some early warning signs leaders of small and medium-sized businesses should watch out for as they scale. He also shares tips on how to not only create a better business, but a better life. 

Q — What would you say are some of the weaknesses that SMBs have in these leadership roles like CIO, CTO, or even CEO?

A — People at the leadership level of these SMBs often rise within the organization. This may be a five, ten, fifteen, or even twenty year-old-organization. The CEO started the company when they were in their twenties or thirties.

They understood the domain, and the challenges they were after. And they’ve somewhat grown with the position. Also, it may be that the CIO was the one that developed the first version of the product. Sometimes even helped put together the first ERP system that the company runs on.

They don’t actually know what their blind spots are, which is the most challenging.

The CIO might also have developed the CRM system for the sales team, or other similar systems. These people may have experience within the context of the company. Yet, in the context of the outside world, it may only be their first, second, or third rodeo.

Very often, they lack the depth of experience in the outside world. So they can’t see around the corners. They don’t actually know what their blind spots are, which is the most challenging. And they feel like ‘those of us at the top leadership level are the only ones working very hard.’

They feel this way because they've refused to change their approach to work. The approach is the same as when there were only five of them in the company. So now there are fifty-five of them in the company, and they don’t understand what happened.

How did they lose the formula? Why doesn’t it work like it used to? They feel the pain. They understand the results of the blocks to the system, but they can’t identify what they are.

Q — So what are the more common obstacles that you see?

A — There are very common patterns that we run into, regardless of the domain of the client we work with. This is often an interesting scenario. It’s always a bit of news to these organizations.

This is because companies often feel like they’re special. They feel that the thing they do is so unique, so they can’t be like everybody else. But what they don’t realize is that people deal with common issues when a group of people is trying to work together.

This is especially so when they work around a business challenge. For example, the methods and tools that they’re using may be out of date. Also, their technology may be disparate, or in fact, they may have no technology in use at all.

" Generally, most of these organizations have grown, over time, in stovepipes. With the growth having no collaborative methods"

Reliance on a combination of traditional manual methods is a very common scenario. We see things like lots of emails and what companies often call ‘tracker spreadsheets’. Tracker spreadsheets is where everybody has got a spreadsheet.

Using this, everybody is able to run their piece of business. And in some cases, hard copies and different static reports from different sources. Without having any real seamless collaboration capability as a team.

Generally, most of these organizations have grown, over time, in stovepipes. With the growth having no collaborative methods between the stovepipes. Including the very manual tools such as spreadsheets and individual point solutions.

"There's this sense of ‘we need to add some people, but we don’t have the time."

So, they’re dead-ending the information. The whole process becomes very opaque. And the management, such as the CEO and the CFO, get frustrated. The frustration being that they have this sense of ‘we don’t know what’s going on. Why doesn’t everybody know what’s going on? What we need is more reports’ and so on.

Information gathering is difficult when people are hiding information from each other. Bringing information together and sharing it will be difficult. And it'll be very painful to try and get things done in that environment.

Also, it is tough if you want to change, grow, scale, or add to the team. If you want to add to the team, there's this sense of ‘we need to add some people, but we don’t have the time. We can’t stop doing what we’re doing long enough to go hire somebody.

And it'll take many months of training and experience to get them up to the point where they’re productive. So if we hire somebody they’re actually going to slow us down.’ This perception is a very common challenge to growth.

Q — Are there any other warning signs leaders should watch out for?

A — There’s a warning sign in the form of a breakdown in trust around the organization. Sometimes, that could be the breakdown of trust between the partners. Especially the partners that started the business in the first place.

Or the breakdown of trust between layers in the organization. So one department doesn’t trust that the other department is going to get their work done. So they’ve come up with all kinds of elaborate workarounds, to avoid the need for that other department.

"They can’t trust the numbers that they’re given, and that’s a symptom of a process breakdown going on."

You feel the engineering folks don’t trust the salespeople. They aren't sure the salespeople will actually sell what they make. The manufacturing folks aren’t trusting that the specs they’re going to get are correct.

The management may feel that people aren’t using the information that they’re given. And that information is usually stale by the time they see it. They can’t trust the numbers that they’re given, and that’s a symptom of a process breakdown going on. Traditional methods of correcting these problems frustrates everybody up and down the chain.

Q — What’s your approach to deliver what you call ‘the future state’?

A — It’s important to connect with and join-in with our client’s operations. We do this so that we can conduct what we call an initial situation analysis. So, generally, we want to set the table and study the current conditions.

We want to do this so that we can analyze and look for familiar patterns that are showing up. And then, we share those results with the leadership team. That’s an important first step.

So, in effect, level-setting on what is the current state, where we actually are, is step one. And then, step two is to begin to synthesize. We ask what the desired future state is going to look like? And that often turns out to be a very collaborative process.

"Once we’ve done our situation analysis, we use that as a roadmap."

It’s not only about saying sales should be up, and cost should be down. It is much more nuanced, and it connects with each different stakeholder.

So once we’ve done our situation analysis, we use that as a roadmap. We begin prioritizing and addressing the obstacles to progress using this roadmap. And to address the obstacles in a structured way, over the years at Tech-Azur, we’ve developed our own method.

Our method combines things like Lean Six Sigma method and Agile Business techniques. With this, we can create different ways to visualize the business processes. Furthermore, we can then go in and diagnose what’s going wrong, process by process.

" We'll ask questions such as: How are we actually doing this thing today?"

A key tool that we use there would be Kaizen improvement events. There, we’ll get the cross-functional groups together. We will get their stakeholder in a given process. Then walk them through the process of understanding and instrumenting.

We'll ask questions such as: How are we actually doing this thing today? How are we selling our product? How are we creating invoices and tracking payables?

And by walking through the view as a process, we are able to start to help address the stress and the anxiety. And, in some cases, we address the distrust in the room. We do this by helping to teach a philosophy of problem-solving in process terms. We teach this instead of problem-solving in people terms.

"We can start to help people define interactive improvement. Even small incremental improvements which are achievable right away."

So dissecting a process becomes a matter of looking for what’s going wrong in the process. This is better than saying ‘let’s go around the room and witch hunt. Let's decide who’s getting it wrong, or who’s not doing their job, or where are the personality conflicts'.

So we can help calm the nerves and put the focus on the actual business processes. We can start to help people define interactive improvement. Even small incremental improvements which are achievable right away.

Let’s visualize what the future state is, and then let’s break that down, because it’s too much to go after at a go. Let’s break it down into lots of incremental improvements that we can actually see, and get to in days or weeks. Rather than in months, or even years.

Q — Can you give me an example of a client’s challenge that you helped solve and how that worked out?

A — A company that was providing business services to a large number of customers comes to mind. This company has about seventy or eighty employees.

We found that the company was very divided into small clusters of project teams. And these project teams were going after individual client services projects. They were, generally, isolating themselves from one another.

So we have little clusters all around the company. These little clusters of people were running their projects. And they do that with their own independent spreadsheets, notation, and even language.

"What we were able to do there was to first of all start to characterize what the processes are."

This created lots of friction when it came to connecting with any kind of shared resources. Shared resources being the finance department or technical experts. These shared resources help service specific parts all the different projects.

So what we were able to do there was to first of all start to characterize what the processes are. We did this by engaging with people from each of those clusters. We brought each of the people into rooms, and got them together across a common table.

Then we held talk about the five ways we are doing the process. We were then able to sort out and rewire down to a common way to do that process. Once we had done that with the core processes of business, we created an architecture diagram.

"It was a method of putting something in their hands that they could start to use right away."

The architecture diagram showed the business architecture. We asked: what are the three or four key processes that the whole company actually operates on? And now, let’s bring technology to play, to support those core processes.

So, we were able then to bring in a solution. In that case, we built a custom solution that started with Salesforce. We also engaged some plugins to that platform. This was a very light-coded method of modeling the process. It was a method of putting something in their hands that they could start to use right away.

And by doing that, we started to build faith in this method. The kind of faith that people could trust. And one people could now say, ‘okay, I understand now we’re trying to do this process in a new way. I’m willing to play along as long as someone’s listening to me, and as long as I have visibility to the information I need.’

"They did this as a way to grow and become the national leader in their market space that they are today."

So we were able to, over time, bring all their processes into their system. We were able to actually operate the whole company in a common system. And it was then possible to create dashboards and process visibility tools.

With these tools, the management were then finally relieved. They got information and felt ‘wow, people are working hard. They are keeping up. Now we’ve got current information.’

That particular client was then able to raise significant private equity. Soon after, they started acquiring other organizations. Besides, they began to import this technology and method to the acquired organizations. They did this as a way to grow and become the national leader in their market space that they are today.

Q — Is there anything else you can share about your process?

A — You know we made a lot of friends in that process because everyone came in a bit skeptical. At Tech-Azur it’s important that we address that with respect and inclusion. So we have a very inclusive process.

We tend to talk to every person in the organization. And at some point, every person in the organization has a part to play in the process. So, they should have a part to play in improving the process.

We find ways to make that happen. This helps break down the barriers. Especially barriers between former stovepipes or former echelons within the company.

"We teach this instead of the ride-along-and-learn-the-hard-way method."

We found people working together and respecting each other. They were finding it easier to bring on new staff. If you have a process you can show, and a tool that supports the process, you don’t have to have someone work for years.

I remember one client, one of the real skeptics of the process. Who said, “we can’t hire any new people because it will take them five years to learn what we know.” Their position later changed to "well, I guess then we should hire about 25 people right now. We need to do this so that five years from now we can have at least 20 of them.’

So, we were able to get through that skepticism. We created the ability to onboard people by being able to show them how it works. We teach this instead of the ride-along-and-learn-the-hard-way method. The unprofitable method they had held on to for years.

Q — What is the best way to learn more about your services or reach you?

A — A good starting point would be our website, which is www.tech-azur.com. We’ve got a lot of information there. You can also find us on the web, on Twitter, and on Instagram. We are always putting new information out there. You can also find a way on our website to connect and request an appointment. I would be happy to provide a free consultation.

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