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Episode Overview:
Unlocking and Scaling Your Business with Herb Cogliano is a podcast that provides invaluable insights, strategies, and practical tools to unlock untapped potential within existing businesses. With a focus on scalability, participants gain a deep understanding of how to strategically navigate challenges, leverage opportunities, and implement sustainable growth practices. Our guest, Herb Cogliano's expertise guides participants through optimizing operations, fostering innovation, and building resilient organizational structures, ultimately positioning their businesses for long-term success in today's dynamic market. The program blends practical experience with strategic vision, offering a holistic approach to unlocking and scaling businesses for maximum impact.
Additional Resources:
Skot Waldron (00:01.244)
What's up Herb, how we doing man?
Herb Cogliano-Aspire Growth Advisors (00:03.166)
Hey, Scott, happy new year. So great to hear about your new book launch and also excited to be here with you and your listeners.
Skot Waldron (00:11.516)
Well, I'm excited for my listeners to hear from you because we don't often talk about scaling businesses and a lot of my listeners are people leaders, but a lot of them are also business owners and entrepreneurs and of the source, right? And so, and me, I'm an entrepreneur too, and I have my own business and I would love to learn how to scale my stuff here. Herb. So.
Let's, let's talk about it. Let's talk about it a bit. Um, but tell, tell us about the model of like, why you got into what you're doing because you're affiliated with a certain group and a model that you teach and use to coach your clients. Why that one and give us some background on that.
Herb Cogliano-Aspire Growth Advisors (01:00.758)
Yeah, Scott, I was very fortunate. I grew up in a family business, and as an entrepreneur, was always struggling with getting in breaking through to the next level of company growth. In the beginning, when you're a startup, how do I become a $1 million company?
You're a $1 million company. How do I become a $5 million company? And then ultimately, how do I become a 10, 50, or 100 million and beyond? Each one of these stages has a different level of complexity and takes a different type of operating style in leadership to navigate through it. Did you know in the US,
Out of about 32 million companies, less than one half of 1% ever scaled to 10 million or more a year in revenue. And 4% make it over 1 million a year in revenue. Many of them may be lifestyle companies. You like a small solopreneur. There's nothing wrong with that.
But there's many that want more, but they don't know how to navigate that scaling up growth. I was introduced to a book in early 2003 by Vern Harnish, Mastering the Rockefeller Habits. These were the habits of John D. Rockefeller who scaled Standard Oil, which is now Exxon Mobil. In the day, he was an incredible entrepreneur.
and we researched his habits of business practice, and we put them in a methodology, and we used it in my privately held firm, and we were able to scale to be a multi-year, Inc. 5000 fastest growing company, not one year, several years, repeatable, well becoming a best places to work climate.
Herb Cogliano-Aspire Growth Advisors (03:17.738)
What that told me is that we could do financially well and we could do good by the people we served at the same time. And that was something that I wanted to be part of as an entrepreneur and owner.
Skot Waldron (03:34.568)
So you drank your own Kool-Aid. That's what you're saying. So you, you lived, you lived it.
Herb Cogliano-Aspire Growth Advisors (03:37.574)
That was, thank you. Yes, I've been practicing as a CEO scaling up practitioner now for over 23 years. And I wouldn't start another company unless we embedded the scaling up methodology from the beginning, knowing what I know today.
Skot Waldron (03:49.908)
Wow. Okay.
Skot Waldron (04:01.204)
So give me that initial stat half of 1% scale to what number? A million, 10 million.
Herb Cogliano-Aspire Growth Advisors (04:10.295)
only 10 million or more. Less than one half of 1% out of 32 million ever make it that large. Only 4%
Skot Waldron (04:14.004)
Goodness.
Skot Waldron (04:22.38)
And then how many get over a million? 4% get over a million. That makes me feel a little bit better about myself Herb. Thank you. So I'm just like, cause I sit there and I look around everybody else and I'm going, gosh, like how do I get that? And I, how do I, you know, how do I, and I just, I feel like, you know, cause I'm not quite there yet Herb yet. Yeah, as a solopreneur and doing, building my business and what I'm doing. And
Herb Cogliano-Aspire Growth Advisors (04:25.454)
4%.
Herb Cogliano-Aspire Growth Advisors (04:30.274)
Yes.
Herb Cogliano-Aspire Growth Advisors (04:34.734)
I won't!
Skot Waldron (04:50.612)
And I feel there's a lot of people out there like me that look around and go, what is wrong with me? Why can't I scale that? Why can't I get there? What is holding that individual back from getting past that million mark?
Herb Cogliano-Aspire Growth Advisors (05:06.574)
Yeah. We look at four decisions that need to be thoughtful and done correctly. In the area of people, what holds you back is typically the owner is the bottleneck. Scott, you created your consultancy because you loved something and wanted your freedom and independence to do it.
So you were very good at leadership or thought leadership or leadership type communication styles. You have IP in your head that you're delivering to the world and you personally get enjoyment while you do that. But to scale a company, you have to work on it more than you work in it.
So then you end up saying, well, wait a minute. I don't want to give up working with my clients. I want to continue to do that. So how do you let go? And yet, how do you spend time developing a team around you that can scale it to 10 million versus you, getting the enjoyment of doing all that work? The second part is strategy. Go to market.
You can love doing something. I was in the staffing industry, IT technology staffing for decades. I could do something well, but it was becoming commoditized. So even though I could deliver, was I unique? Because you and I know to have a competitive advantage and scale my company, I have to be valued, but I have to be distinctive.
Otherwise, I get margin pressure commoditization, and I won't grow. And it will be very tough to maintain. So are you clear in a moving, evolving market, are you clear that you have a go-to market strategy that will allow you to be distinctive and valued? And a lot of people don't see it, they don't evolve with it, and they get stuck.
Herb Cogliano-Aspire Growth Advisors (07:25.986)
The third one is execution. Your practice may be able to help, I don't know, 10, 20, 30 people at a time, and you do a great job, and they're very happy. But executing at scale, could you do that for 1,000 people or 10,000 people at a time? And having the system, the playbook, the people in the execution accountability?
to deliver at scale? A lot of owners are not prepared for that, and they stall. And then the final one is cash. Growth sucks cash. Do you have healthy bottom line and margins where you can take profitable growth and use it to fund the next stage growth of your company, or do you have to beg, borrow?
family or friends to do that, which can be expensive and risky. And that causes people to stall. So those are the four major areas that we have to help you navigate to get through. And what's interesting about this, as you can imagine, Scott, otherwise everybody would be doing it. You may begin with people being your biggest challenge, but a year later,
It's cash. Six months after that, it's execution. And the ball is always moving, and you need to be able to adapt and navigate to deal with that biggest gap. And that's what we teach people, how to diagnose it, and then how to fix it.
Skot Waldron (09:13.844)
So there's not necessarily one of the four you start with. It's going in and running audits and kind of doing some of that initial digging to understand which one you start with.
Herb Cogliano-Aspire Growth Advisors (09:26.938)
Yeah, so it's situational and you do your diagnostic and begin with the lowest gap first.
Skot Waldron (09:35.668)
Do you find it's different with companies trying to reach a million versus companies trying to reach 10?
Herb Cogliano-Aspire Growth Advisors (09:41.534)
Yeah, I find the ones trying to reach a million, it's normally go to market. It's normally strategy. Because think about it. If you can't get a million in revenue, you may not have the ideal strategy. So is your go to market strategy strong in compelling enough to attract at least a million dollars worth of client acquisition? When you can prove that.
It's probably repeatable. And now it's a question of getting the right people on the bus to help you scale and execute the next 5 million.
Skot Waldron (10:21.512)
Okay. And then for the bigger companies, what do you find it being?
Herb Cogliano-Aspire Growth Advisors (10:25.206)
Um, so that normally gets to people and it gets to execution because once my go to market strategies, right, then I need to get enough additional people on the bus and I need to get them aligned in executing at scale. So it's either people or execution. If you're very good at putting the right people on the bus, it's typically execution.
And for the people that don't hire well, coach well, develop well, it's people first, then execution.
Skot Waldron (11:02.304)
So where does cash come in? When it's like, you didn't mention the cash part yet. I would think that would be, that would definitely, I mean, it's one of the four. It's obviously a big player in all of this. When does that come into play?
Herb Cogliano-Aspire Growth Advisors (11:15.702)
Yeah. Well, if you think about the beginning of most solopreneurs or entrepreneurs, you're bootstrapping. So you're kind of living within your means. You're not hiring 12 people day one. So I never see cash as the immediate panic. It's normally when you start picking up steam, and you're like, do I hire eight people?
Or do I hire one? And some people go overboard and hire too many people too quick before the market allows them to pick up more adoption, more clients, and more cash flow. But I never see that because most of my clients are not startups. Most of my clients have hit the million dollar, and they want to go from startup to scale up. And that's normally where I meet them.
Skot Waldron (12:17.248)
So let's talk about cashflow for just a minute. How do we improve cashflow in our businesses or profitability? Is there a secret to that element of the business that you instill in clients? Is it a mindset thing? Is it an operations thing? How do we improve that inside our businesses?
Herb Cogliano-Aspire Growth Advisors (12:43.526)
We talk about something called the power of one. And there are seven levers that help you grow cashflow, profitability, and the valuation of your company. The first lever is price.
The second lever is cost of goods. The third lever is volume. The fourth lever is overhead. The fifth lever is AR days, inventory days, and then accounts payable days. And it's called the power of one, Scott.
Because if I can show a leadership team how to increase any or all of those seven levers by just 1% or one day better in the right direction, you would not believe the exponential impact on your company. Now, what I've learned is when I do the analysis,
Skot Waldron (13:54.58)
Hmm
Herb Cogliano-Aspire Growth Advisors (13:59.206)
Not all levers are equal between companies. In your company, price may be the most impactful lever of the seven. In somebody else's manufacturing company, it may be cost of goods. So we look at the uniqueness of your business model and financial economics. We help you identify if I can't change all seven.
What would the top one or two be that if I did improve it would have the most dramatic impact? And we start there. We had a $1 million improvement in our bottom line the first year we learned about the power of one in which lever truly if we put effort would make the biggest difference. We were all over the map. We're trying to touch all of them.
and not doing any of them really well. Who went to school for pricing? Do you know anybody who took a course on pricing? Most of us are not good at it. We started reading books, checking out, how do I become a pricing guru? And what does that mean? And as we looked at the seven levers and had people focus on KPIs in their job that impacted the seven levers, everything started to go up.
We just didn't know that. So it wasn't magic, it was awareness that changed.
Skot Waldron (15:34.432)
It's not magic, it's awareness. I like that. I like that a lot, man. If, if I would have had that quote for my book, you just came a little bit too late herb to that's for volume two, that's for volume. But that's for the new, the new edition that I'll launch, you know, one day. Um, it's not magic, it's awareness. So I love that idea. And I love that we can. You know,
Herb Cogliano-Aspire Growth Advisors (15:37.164)
Yeah.
Herb Cogliano-Aspire Growth Advisors (15:46.579)
Second book, volume two.
Skot Waldron (16:03.468)
And I think it comes down to that focus element. And I will tell you from my standpoint, as I feel that a lot of entrepreneurs may be, a lot of people building businesses, a lot of more of the visionaries that start businesses, they come into a place and they want to build something and they start building something and it gets really exciting. And then it gets kind of maybe mundane or they start seeing other shiny objects of going, ooh.
Herb Cogliano-Aspire Growth Advisors (16:27.701)
Yes.
Skot Waldron (16:31.348)
There's an opportunity there and we could leverage that and we could grow that. And then we could try this and then this isn't, nah, I don't know if I'm really, this is kind of boring me now. I'm going to go over here and do this. Focus. And I will tell you that when I ran my previous design firm, um, when I was running that focus was an issue for me. And it was a lack of self-awareness. I didn't understand that was part of my issue, you know? Um, but that was part of it. And.
I hear that with the cashflow piece. Like we don't have to do everything. We can just focus on that one thing. Do you see that happening?
Herb Cogliano-Aspire Growth Advisors (17:07.114)
Yeah. All the time. I was a victim of shiny objects, flavor of the day, whatever you want to call it. And I think a lot of visionary or strategist leaders are the same way. I truly enjoyed working on the business versus working in it. Some people are opposite, but.
A lot of visionaries do their best work as a strategist working on the company. And if you think about it, when you're small and you don't have a lot of bandwidth and you don't really have an established leadership team, you end up spending 80, 90% of your week working in the business, dealing with clients, dealing with suppliers, dealing with project status update. And that's just the nature of the beast.
What you want to be doing over time is building up and developing the bandwidth of the leadership team, which will allow you as the owner to spend more time working on it than in it. And what do you do with that working on time? Well, if you're a growth oriented company, what I wanted to be doing,
was doing more market-facing growth activities. Major prospect acquisition, joint ventures, partnerships, rolling out new products, rolling out new locations. These were all working on activities that had eventually filtered in to be working in for other people. Now, when I was younger,
and the business didn't have the bandwidth, I never had the luxury to look at joint ventures, acquisitions, partnerships, go look at locations in Canada or Australia versus North America, just never had the time. So the business didn't benefit from those growth opportunities. But over time, we ultimately were able to build that up.
Herb Cogliano-Aspire Growth Advisors (19:27.87)
And that's where the business got the most value from me. And that's where I enjoyed spending my time in the business.
Skot Waldron (19:36.564)
Do you feel there's a time to hand over the reins? If you're a visionary, if you are the, you know, the, I love to be the strategist. I love to do those things. And I'm, I established something. I start something and I'm growing it. Is there a time to hand over the reins to somebody who's more operational? Who's more kind of in the weeds, I guess, as far as.
production is, you know, production mentality and whatnot. And we're okay. We don't need visionary strategy anymore. Like, okay, we all, we kind of need that. But once we establish the vision and the strategy, we have to operationalize it. Is there a time to like hand over the reins or do we just bring in people that can supplement?
Herb Cogliano-Aspire Growth Advisors (20:28.962)
Well, first of all, when can you afford to bring in these people is one thing, right? It's a question of your business financial viability. In the beginning, you may not be able to afford a chief operating officer or a general manager. So you're not only the CEO, but you're the COO and the CFO and the CIO all rolled into one.
Over time, we have a tool called the functional accountability tool, which is basically building the top tier level leadership that will support a scalable company. But we can't build it all at once. So maybe after myself being established as the head of the company,
I want to bring in somebody, and by the way, I happen to be good at sales and marketing. I have another person pretty good at operations, but I don't have anybody handling finance. So I need to bring, if it's not a CFO, full time, some type of fractional person that can augment and give me bandwidth in the financial function of the company. And let's say I'm doing that for a year.
and that worked too, and the company grows, and now I can fund a full-time controller CFO. But now I need a chief operating officer. And so now I'm saying to myself, I've done it, I'm not good at it, and I'm only doing it 20% of the week. So now I wanna get a fractional, or I wanna promote, or I wanna hire somebody to come in and be my COO. Over time,
I'll build that out and I'll narrow what I'm able to do, which is work on company activities, growth facing market stuff. Now let's fast forward Scott a couple of years and say, I don't like doing that. I don't like working on joint ventures or acquisition or key prospects. I wanna golf.
Herb Cogliano-Aspire Growth Advisors (22:48.962)
That's a choice where we have companies where the head of the company said, look, I love being an owner, a shareholder, but I don't want to work in the company at all. And then they go out and hire a president or a head of the company to take that. But they've put all the other pieces in place as well. They have a good culture. They have good functional leaders. And they decide to opt out.
I wasn't that. I loved being the head of the company. But there's four major things to be a good head of a company. I think you have to either love it or find somebody else who does. Number one, you are always in charge of your company's strategy. I'll have people give me input, insight, but you own your go-to-market strategy as a CEO. Number two, culture.
The strength of your company culture, your values, your purpose, your employee engagement, you own that as a CEO. And if your culture is crappy and you got high turnover and A players don't wanna work for you, that's on you and you gotta fix that. Number three, capital allocation. Where the money you have as a company, you place the bets.
Where am I going to put that money? R&D, go to market, operational efficiency, equipment, staff, you own that. And the fourth one is the overall talent assessment of your company. If I have a hundred employees or ten, what percent of them are A players? And the CEO, one of their top KPI?
is the A player percentage rating of their entire company. You're willing to own those four things and work on developing and improving KPIs that go with them, you're gonna be great in that job. If you don't like them, find somebody else to do it for you and stay an owner.
Skot Waldron (25:07.416)
Nice. What about these assessments? We've talked about a couple of times, you mentioned a few assessments throughout the interview. Are these things that anybody can go access at any time or are they things that are conducted through you, like facilitated through you?
Herb Cogliano-Aspire Growth Advisors (25:15.052)
Yep.
Herb Cogliano-Aspire Growth Advisors (25:24.97)
Now, so on our website, Scott, anybody can go to aspi and you're going to see simple links for the scaling up readiness assessment. If I'm a business owner and I want to know how ready is my company's scale today, take the simple assessment and it will give you results showing your current readiness.
The second assessment is how ready am I as a leader to run a scaling up company? And you can take that assessment and it will give you a leadership readiness score to help you determine where you're at in that development. And for those that want a followup, I would review the results with you in
give you some ideas and next steps on developments in either of those through the scaling up methods if you wanted. I've been fortunate that I've had many other people help me in my entrepreneurial journey. And my goal is now to help others in their quest to scale purpose-filled impactful companies and helping them do that with less drama, more money.
and more growth. That's really why I'm here.
Skot Waldron (26:58.208)
Awesome. And I don't really know a lot of entrepreneurs who don't want that. You know, I know people that are building businesses that don't want that freedom, that, that growth opportunity, that, I mean, they go in, I mean, I'm, I'm assuming people build businesses not to have them fail. So I think there's an opportunity for people. They go and they build a dream, uh, something they've been dreaming about for a long time, they build it because of what.
The opportunity is for them in the future, them and their families and the livelihood, the impact they can make or whatever that thing is, is the reason why they're building this company in the first place and, um, that's cool. Like that you get to play a role in that for them is I'm sure very fulfilling for you personally.
Herb Cogliano-Aspire Growth Advisors (27:50.514)
Yeah, it's a lot of fun and not easy, not for everybody, but for those people that want to scale impact and purpose and profit, it's a great methodology to help you do that.
Skot Waldron (28:08.168)
Herb, thanks for sharing. You've given us, like, you've given me, and I know if you've given me, you've given to others really practical insights. I've got a page full of notes of like everything you've dropped on here. I would encourage everybody to go take those assessments. They're free, yeah? Free for people to take them and check out your website, other opportunities that they have to possibly engage with you. Where?
else can they go to connect with you?
Herb Cogliano-Aspire Growth Advisors (28:38.858)
The simplest thing is aspi and I'm also on LinkedIn. Either one of them work.
Skot Waldron (28:47.608)
Okay. Easy enough. Yeah. I see you've got a healthy following on LinkedIn. Um, and you provide a wealth of content on there. So, uh, thanks. Thanks for doing that, sharing your knowledge with the world and I wish you good luck and everything you're doing. And thanks for, uh, again, sharing your wisdom with us.
Herb Cogliano-Aspire Growth Advisors (29:02.542)
Thank you.
Herb Cogliano-Aspire Growth Advisors (29:07.438)
Happy to be here and a happy 2024 to you and all your listeners.
