Make Sure You Don't “Outgrow” Your 2 Greatest Strengths
Carter Schelling explains why people and culture are the strengths acquirers care most about, and how PT business owners can scale them through better recruiting and fewer unsuccessful hires as they grow.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon. I'm Carter Schelling, director of business development at Martin Healthcare Advisors. For this past several years, my studio production company has helped Paul create his terrific series of video interviews and presentations, many of which have been shot right here. In addition to that, I'm chairman of a consulting group called 3655 Incorporated. We help business owners create extraordinary companies in ordinary industries. And for the last 42 years, I've been helping business owners reach their goals. So, I've asked Paul to do a series on business planning because now's the time of year that you should be creating the most valuable business plan you'll ever create.
The plan that'll prepare your company for the best possible deal when you sell it. And today, we're going to talk about your two greatest strengths. In our first episode, we talked about how important it was for you to focus on you got to get the best money, the best structure, and the best acquirer. And to do that, you need to focus on more than just what your company has on the day it sells. You also need to plan for what it can do for the acquirer after you sell.
Last week we talked about the importance of when you create your SWAT analysis as part of your business plan that you make sure that you get the best available information on the real opportunities in the marketplace and the real threats. And we heard Paul tell us about how what he offers gives you bar none the best possible intel on those important elements of your plan available anywhere. Your strengths and weaknesses are particularly important because your strategy comes from finding opport ways to connect your strengths to relevant opportunities in the marketplace and protect your weaknesses from relevant threats.
Now, this week we're going to start talking about strengths and weaknesses as the basis for your value. Next week, we'll be interviewing Dave Pearce from our preparatory consulting group, who'll tell you how we can help you increase your strengths and decrease your weaknesses. But before that, I want to share with you my thoughts about your two most powerful greatest strengths. You know, whenever we do strategic or business planning, I'll ask an owner, "What are your greatest strengths?" They always say our people and these days they almost always say our culture.
Great. Wonderful. The problem is you can't measure them. But let's just go with that for a minute. They're right. When a acquirer buys you, they're very concerned about the quality of your people and they're very concerned about your culture. And they're very concerned about them on the day you sell. But if you want the best possible deal, you have to reckon with the fact that the acquirer is expecting you to grow after the sale, which means you need great opportunities, right? Good. Fine. Great opportunities are available in the marketplace.
The limiting factor is this growth is going to require more great people like the ones you have now, more facilities at which you need to have more of that terrific culture of yours. How long has it taken you to build the team you have today? How long has it taken you to build the great culture you have today? You know, there are famous stories about recording artists who work for 10 or 12 years to develop their best songs and they put them all on their first album and the album goes platinum and the record company's thrilled and says, "You are famous today.
Let's have a second album." And the artist says, "But that one took me 12 years." You need to take what you have and scale it. That's probably something you haven't had a lot of experience with. Let me tell you what that requires. When it comes to people, it requires getting increased qualified candidates. You need to get more flow and you need to change your perspective. The perspective that most employers have about getting employees from basically a specifications approach. I mean, look at most of the ads that appear on Indeed or wherever for people.
They're not like advertisements for the company to convince a candidate to join us. They're specifications. You better have this, you better have that, you better have this, you better, oh, by the way, we're a good company. We offer good benefits. In today's labor market, you are competing for candidates attention. You need to have real promotional advertisements, but not just for employees. You need more employees like your best employees. So, what you need to do is what very few employers do. You need to gather up when you're hiring for a particular position, the best people you currently have in that position.
Put them in a room and do a brainstorming session where you ask them why did they first come to your company? Why did they stay? How would they explain to someone in their job elsewhere? Why that person should come here? What language would they use? If they were help and if they help you promote your company, where would they do that? Where should you advertise for people like them? Where should you go to meet people like them? Where do they hang out? And what can you say in their mind that will have the greatest impact on a candidate like them?
Because I have to tell you, there's more than one person out there. And if you hire people who aren't like your best people, they will actually slow you down. You want to put your best people in the driver's seat for this effort. And of course, when they're helpful to this process, when they refer someone in who's hired and is successful, you have to be willing to pay them. The second thing is after you get a stream of qualified candidates, you need to be able to make sure that you decrease unsuccessful hires because there's only so much you can learn in the interview process and you want to learn as much as possible.
Now, what we do and what we offer our clients is what we call something in addition to a job description. Job descriptions are pretty classic, normal, ordinary and very boring. We create something called a person description. The person description is the place where you list all the criteria by which you will evaluate candidates, especially when more than one person is doing the interviewing. And that person description will include what technical skills are required. Only three fundamental skills by the way, not 50. What people skills are required.
And by that I mean when you study once again the best people we have in that job, what technical skills do they have? What people skills do they have? And when they came to you, what job experience did they have? Some of them have been developed from down below. Some came with a lot of job experience. You need to have a list that everyone interviews from to compare candidates to your template for what a very successful person in that job here is. Like employing that will help you reduce unsuccessful hires.
You want to know more about that? Put your name and email in down below and we can talk about how we help our clients develop a person description. So culture, how do we put structure into culture? The reason I say structure is because scalability requires replicability and replicability means structure. Unfortunately, in most companies, even companies who have great cultures, when you ask them, "What are the components of your culture? What are what are the what's the rebar that holds your culture together?" If we have to set up your culture in a brand new facility with mostly new employees, how do we start it?
What's the starter like you know, sourdough starter? How do we start that culture quickly in a foreign land? Most owners don't have great questions. Sorry, answers to those questions because culture is kind of in the atmosphere, you know, or they may say, "Well, we have values." But if you study most companies with great cultures, the values aren't what makes the culture. What makes the culture is behaviors. The way people act is what makes the culture, not the values written on the wall. For that reason, many culture creation programs that are based on values are not that great at getting a new facility off the ground with the appropriate culture quickly.
David Freriedman, good friend of mine and a former client, decided to get out ahead of that and to solve that problem. And he created a program for culture by design that allows a business owner to [clears throat] stimulate and build the culture in his or her company consciously based on a behavior-based approach. They don't teach values. They teach behaviors. And how those behaviors, the behaviors we ask of people, can quickly and powerfully create and sustain what he calls a championship culture, what I call a competitive advantage, and what you will call.
When we opened up the new place, it was quickly just like home. Now, if you'd like to be able to on the day of the sale have the best possible strengths, least possible weaknesses, and have strengths that can be scaled so that you can tell an acquirer, we can grow fearlessly without losing the quality of our people, without losing the special quality of our culture. Then put your name and email in down below. Let's start a conversation about what we can do for you. And thank you for your time today and I'll see you next week.
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