Podcast Transcript

[00:00:30] Sean: G’day everyone, and welcome to the ScaleUps Podcast where we help first time Founders learn the secrets of scaling so they can fulfill the potential of their businesses, make bigger decisions with greater confidence and maximise the impact they can create in the world. I am your host, Sean Steele. And today my guest is Kevin Cope, Founder and CEO of Acumen Learning. How are you today, Kevin? Welcome aboard! 

[00:00:49] Kevin: Yeah. Thank you, Sean. Appreciate the invite.

[00:00:52] Sean: We're thrilled to have you here. You and I were introduced by the globally renowned expert on how to scale through trust in an organisation, Stephen M.R. Covey, for those who didn't hear the episode, that was episode 28, if you want to track back. And one of the things Kevin you may not know is, I asked Stephen out of all the people in the world that he knows that he thinks I should interview on this podcast. You are the person that He came up with. So, either you're paying him very well on the side, or he's got a great …

[00:01:25] Kevin: He is a good friend, but that was a generous of him. 

[00:01:30] Sean: That's wonderful. So, you guys actually worked together in Franklin Covey a little over 20 years ago, and then shortly after that, you founded Acumen Learning. And for those who don't know the brand, you guys literally wrote the book on business acumen. So, New York Times and Wall Street Journal Bestseller called "Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company." And I've seen it referenced Kevin as an MBA in less than 190 pages, which I love, you know, I don't know whether it's become a trend in the States, but probably 7 or 8 years ago, the first company in Australia to release a 12 month MBA, absolutely went through the roof because lots of us had done a very long stints and MBAs and people were really trying get clearer and clearer about what's the minimum viable product. And what's the stuff that actually we really need to know, all the people needed to know if they want to own a business. I love the fact that you've got a very practical approach to, I guess, teaching sort of business competency. Is that probably a fair way to say it?

[00:02:29] Kevin: Yeah, we like to describe it as kind of business and financial acumen, if you will. There's a lot of things that go into business and business acumen. When you think of staff and strategy and skills, et cetera, but we really focus on the idea of helping people get really clear on how their company makes money, and then how do you make the right decisions around that money-making process.

[00:02:51] Sean: Yeah. Makes complete sense. And you train both companies at the beginning of town, so yeah, the Dells and the CISCOs and the Walmarts and so on, but you also train individuals, right? So, you've got an online course option for people to train themselves through a self-paced learning experience, I assume? 

[00:03:06] Kevin: We do. Yeah. And even that self-paced course can be interactive if a small company wants to make it that way, where they can have chat discussions, they can ask questions of a moderator or somebody at our organisation. And so, it's not just a self-paced where it's sort of stagnant and you're all alone, but we can even hook it up so that a team of individuals can go through together.

[00:03:26] Sean: That's nice. And actually, you know, I've put a lot of my teams and leadership team through different learning experiences like that, and doing it as a cohort is always a really interesting way because you get the rich discussion about how we can apply that immediately on that project or this priority. That's nice. Before we talk a bit more about the business of business Acumen and also then the content of what it is that you're actually, the principles in which you're teaching people. You guys are going to be turning 20 years old, I'm assuming in September this year?

[00:03:56] Kevin: Yes, about October, but yes, 20 years this year. So, it's kind of important milestone for us. 

[00:04:00] Sean: Yeah. Have you got a big party planned? 

[00:04:03] Kevin: You know, we've been doing things throughout the year. So, for example, we've got 20 service projects we're doing, we're looking to provide our digital content that you just mentioned a minute ago, our online course to up to 20,000 individuals. So, we're looking for folks that could benefit from that and may not have the means to be able to pay for it on their own. And we're also going to our first 20 clients ever and connecting with them. And so, we've got a lot of things we're doing around that 20-year milestone.

[00:04:33] Sean: And if you've got 20 billion in the bank, he might be able to buy a 0.2% of Twitter, perhaps instead alongside. 

[00:04:44] Kevin: Yes. Well, if it's 20 billion, maybe a little more. I think it went for 56 or 8 billion, I think was the price.

[00:04:49] Sean: Yeah, pretty amazing. Amazing times. Well, look, I want to get both into the business model that you've chosen for Acumen Learning and how the business, I guess the business behind the business model has sort of grown and then of course, the principles you teach, how did you build pre the genesis of Acumen Learning, how did you build your business acumen? Like obviously I know you had a stint there and Franklin Covey, what was the sort of path before that sort of created the genesis for starting the business in the first place?

[00:05:19] Kevin: Yeah, that's a great question. So, my degree was in Business and Finance. And then I spent three years in banking where we were in mortgage banking, so certainly needed to apply and use my own business acumen or at least tone it at that point in time. And then I joined the Covey Leadership Centre. That's where Stephen and I first met. We joined at about the same time in 1980. And for that tenure period was quite a ride. I mean, the company was at the forefront. The book came out the year, just a few months after Stephen and I joined, The Seven Habits of Highly Effective People, which I think now is sold 30 or 40 million copies. And so, it was really quite a ride at that organisation and had a chance to go from more of a junior position in the organisation to eventually be in the Executive Vice President of the company while Stephen was the CEO of the organisation. And so, through that, I had to manage a good size of the organisation, had to manage P&L for that organisation. And so, it sort of thrust me in to that finance side of an organisation. And I sort of had a natural acuity or at least it was something that felt fairly comfortable for me in the process. And so, I think I had a good foundation, not only sort of in the training consulting industry, but also with kind of that financial bent, if you will.

[00:06:48] Sean: Yep. Makes a lot of sense. And can you talk to me about what's the business model of Acumen Learning and why have you chosen that kind of business? Obviously, you've got a message that you're trying to get to as many people as possible to help them improve their results in their business with themselves and their teams. What business model have you chosen underpins the revenue and how Acumen Learning makes money. 

[00:07:11] Kevin: Yeah. And so, we're much aligned around the service model. So, a lot of what we do is actually in person or whether that's face-to-face or virtual. And so, we find the nature of what we deliver is very customised. Because of that customised nature, so for example, when we go into a client, it's not a generic course on let's learn how to read a P&L on a balance sheet and the statement of cash flows. Let's get really clear on how your P&L balance sheet statement of cash flow reads, what are your key strategies around your financials, and what are the key levers we can pull to improve those financials. And so, because of that customised nature, we find ourselves delivering it instead of an off the shelf solution, it's something that requires either a person on site or either we're delivering that virtually. And before COVID, we were probably I guess 80% in person, 20% virtual. Right now, we're probably about 90% virtual and maybe 10% in person.

[00:08:14] Sean: That's what I was going to ask. Is it going to be a natural kind of rebound, resettling, new normal, whatever you want to call it. What do you think that'll settle back out? Do you have a sense? 

[00:08:25] Kevin: That's a great question. You know, I've pinged folks in the industry a little bit. My own read is, I think it'll be somewhere around 50-50, and maybe if it's more than that, it would lean towards virtual. And the longer people are used to using the virtual platforms, the more they're getting comfortable with it, more and more companies are deciding to sort of take a virtual office scene approach versus a hybrid or an in-person. So, the longer it goes, the more I give that 50% virtual, the odds of even being higher than that, maybe even 60% virtual and 40% in-person.

[00:09:00] Sean: And I'm sure like the rest of the education industry, you learn a hell of a lot during that COVID period about actually how to deliver a rich experience that is going to work virtually because on the one hand, we all sort of got forced into it and people had to suck it up, and maybe our first attempts as educators, weren't as good as they could have been. But over that period of time, you really start to learn how to create a room, how to create smaller rooms, how to create social engagement, how to create it, not just like a talk and talk, looking at somebody on zoom, but how do you actually make that interactive so it's still an enjoyable experience. And actually, for so many people now, they going; oh man, like to actually travel and lose all that time when I could be doing this at home, and can't you guys just do this virtually? Are you having to do much hybrid where you're actually doing some face-to-face and you've got other people dialled in virtually, have you had to yet? 

[00:09:46] Kevin: Yeah, we are doing more and more of that. I think fortunately, about 20% of our delivery was virtual before COVID. So, we were already in the game. So, our ability to pivot, but you know, it happened quite quickly. There were quite a few organisations that had no experience with it and it's different.
You can't just do a live rendition of your content, or your teaching, or your interacting, even in a meeting. You can't replicate what you did in-person, virtually there are some real important nuances you need to understand with that, and how to engage a team or an audience. And so, we were fortunate to already had some good experience in doing the virtual. But I'll tell you, the virtual world, and well, the pandemic probably pushed us 10 years further down the road at a kind of a forced pace. In a lot of ways, organisations are finding the real benefits. We're finding that we can reach an international audience much more readily and obviously lost a lot more cost-effective than we were before. So, the good news for us is, we were already doing about 10% of our business internationally now. We're I'd say it's probably closer to 15 or 20%. We're also finding that you can go deeper in an organisation. You know, maybe companies had the budget to take a certain level of employee through an experience, but now you can go deeper in an organisation because you don't have the cost of travel associated with that.  And so, we're finding that our reach is and our market opportunity is bigger than it was before.

[00:11:18] Sean: That's great. And fundamentally for a purpose led organisation, it means that you get the skills into the hands of more people, which really fuels impact, which I love. Just one final question on the delivery models, given you've got this sort of blended and virtual and hybrid and face-to-face model going, are you guys already looking at the metaverse in terms of whether there is a way for in the future for you to deliver this through VR kind of experiences. Are you thinking about that already?

[00:11:44] Kevin: You know, it's on my radar. I was at a conference not too long ago, where there were a couple of folks really pushing it, thinking that's the new frontier. And it may be a little more bleeding edge right now, but it could become cutting edge before too long. So, I'm certainly keeping my eye on that as well. 

[00:12:01] Sean: Yeah. I think it'll change a lot when 5G is really ubiquitous and the cost of headsets and gear and stuff is all coming down. But to your point, it's still very much early days from what I can say, but I think in someone who has, I think people who really rely on a sort of blended experience that, to your point, one of the things that's always missed or that’s difficult to recreate when you're in a sort of Zoom type experience, is the conversation between people, either in between sessions or in the way they work in groups. And I think there's some opportunities coming up. How big is the organisation now, Kevin?

[00:12:37] Kevin: Our organisation, we've got about 30 employees and contractors. And so, we've had a pretty good steady growth curve for 20 years. Of course, COVID knocked that back a little bit, but this year we'll be at our 2019 revenue.

[00:12:52] Sean: Nice. 

[00:12:52] Kevin: And so we will have kind of recovered everything that we dropped in COVID. We were fortunate to stay profitable. We teach business acumen. And so, I believe it's important that we practice what we teach. And so, we run an organisation that really focuses on the numbers as well. And it's important because, you know, you mentioned a minute ago, a purpose driven organisation. I admire companies that get both mission or purpose orientation as well as running a strong organisation. And so, a good business and also a good company. And I think both are important. If you've got a company that's profitable, the numbers are solid, but there's no real purpose or mission orientation it's not very engaging. And if you've got a business that has a great mission but no ability to make a profit, that's not going to be sustainable. And so, I really admire companies and they try to model our organisation after the idea of a strong mission and a strong margin, or strong people and strong purpose, and really finding that unique combination of the two. And a few companies out there, big companies do that well, but it's amazing how there aren't that many that really rise to the level of getting both really done well.

[00:14:06] Sean: I think it's become more important than ever because, you know, attracting top talent in the absence of mission these days is no easy task because people want to do meaningful work and want to feel like they're contributing to something. But to your point, I love that language actually around strong mission and sternal margin, that's really nice. So, I'm keen to talk about the content that you teach in the principles and some of the practical takeaways for our audience that they can learn. But I guess just in terms of the Acumen Learning journey, what do you think of been one or two of the key decisions, mindsets, investments, or sort of success ingredients that you feel have been a big contributor to your growth and your ability to continue to grow sort of 20 years on?

[00:14:49] Kevin: Yeah. You know, as I think of probably the two or three milestones that would be in place for our last 20 years, one is definitely getting the right people on-board. You know, one of the best hires is my current business partner. And I'll throw this out, admittedly, it's my brother-in-law. And I know that goes counter to all business principles, but this is a person that I trust implicitly. It's an individual that is very like-minded, but also very complimentary to my skills. He is strong in areas that I'm not, et cetera. Now, I've also had other hires that didn't go so well, family relations that didn't go as well. And so, I recognise there's a big risk there, but the point being I'm getting the right people on board, and so I can point to several of our key hires that have been very instrumental in our growth stress. You know, I was reading, I'm trying to remember who it was, but even if you've got somebody with all the smarts in the world, but somebody you don't trust or they don't have kind of the right cultural-fit, it just doesn't make sense to go that direction. So, hiring good people, smart people who also fit well in the culture. 

[00:15:59] Sean: What was one of the biggest, you know, there's always when you're growing, because you're sort of 30 people now, there's a point in there where you're going; Well, I might see a great person that I think is going to be a really key hire, and I think they're going to bring some incredible skills, but they're super expensive, and I don't know if I can afford that person yet. Do I sort of take the punt and go for the bigger player because I think they can take us to the next level, but it's the sort of scary moment. What role was the first key hire that you had to double down on, and what impact did they have? 

[00:16:29] Kevin: Yeah. And it would be probably getting somebody to fill that COO role in the organisation. In my role, I focus now more as CEO of the company, Founder of the company. I focus more of my time on culture, the financials and then our strategy; kind of a mid to long-term strategy. And so, I really needed somebody that wanted to be focused on the business of the business, who had run the day-to-day stuff. And so that one was probably one that I'd come up to the edge a little bit and then back off a little bit. But that was an important move for us to make as an organisation to get somebody in there full-time who'd pay attention to the data day-to-day details.

[00:17:08] Sean: And sorry, I sort of cut you off there. What was, you were thinking of some other key inflection points or key milestones? 

[00:17:14] Kevin: Yeah. You know, another one was really codified our content in the form of a book. And the book was important because it gives you a credibility. It also, I self-published and that was a very well thought out strategy because I knew I wanted to use it like a brochure. So, we wrote a book and unfortunately, as you mentioned, a number one Wall Street Journal and New York Times Bestseller. So, we actually send the book out. I can get it printed for a couple bucks each. If I were working with a publisher, that would be a very different story, but because I self-published, I used to hybrid publisher, so I got help in the process. But I own the rights to the book. And so that allows us to use the book as a brochure. You think of the amount of materials people get out there in the marketplace, and they very quickly throw a nice pamphlet away, but very rarely is somebody going to throw a hardcover book in the trash. And so, that was probably a big strategy for us, a big move for us as an organisation, to not only codify the content, but doing it in a way that we could make it most usable for our marketing efforts. And then we also included it, those that go through the program, they get a copy of that as part of it. So, it's a way to reinforce the content as well.

[00:18:26] Sean: I love that. And in that, can you give me an example of, because I know there's plenty of business owners out there, some of course who questioned whether they've got enough experience or do they know enough to be able to write a book, which is also always a scary moment and it's a bit of a labour of love putting it together for the first time. How did you use it as a brochure? So, was it given to every sort of potential prospect, somebody inbound or somebody outbound? It's like; Hey, you should have a rate of this. And then there's a follow-up process. How did you sort of practical use that to generate business? 

[00:18:58] Kevin: Yeah, that's a great question. And so certainly we'll give it if we go to a trade show or a conference, we'll get those out quite freely, but we will actually acquire lists of buyers that we're looking for in our industry. And so it might be that we're sending out a thousand books in a book campaign. And that, you know, we don't hesitate to do that. It costs more for the shipping than it does now the cost of the book, but that's an investment, so we'll send the book out. And just before we do that, we've got a whole campaign around it. So, step one is we reach out to a potential client via email and say; “Hey, we're getting ready to send you a book. Be sure to look for it in the mail.” We'll then send the book and then immediately after we'll follow up. “Hey, wanted to make sure you got the book.” This is via an email. Then a second email would follow up on that; “Hey, we sent you a book a week ago and would love an opportunity to chat with you about the content in that book.” And so, we've got kind of a beginning to end marketing process, with the book being sort of the centre piece around that. 

[00:19:56] Sean: Nice. I love that. Thanks for sharing the practicalities of that. Now, I guess if we turn our attention, because I could talk to you all day about your business, but I'm also really keen to extract some value of the actual content itself for our audience. So, you've got the privilege of seeing, before I get right into the content. One of the things that you have as a role is because you service all these clients and you are training these clients in business acumen. You get to see the patterns of Founders and CEOs in the work that you do. What are some of the key and common mistakes that you see Founders or CEOs making, which may or may not be addressed by your curriculum. But are things that you see are triggers that often lead to pain that may have been otherwise avoidable? What are some of those things that you see? 

[00:20:48] Kevin: Yeah, well, Sean as you and your audience will know, business can be tough. Business start-ups can be tough. And the last statistics I've seen is that about 65% of businesses don't make it four years. So, the failure rates about two-thirds for those that make a legitimate trap. There are a lot of folks that have an idea but they don't really get down the road. So, you've got about a one in three chance of making it four years. And I find that, they say one of the big reasons is they run out of cash. But you know, if I were to nutshell it, I would say that a lot of folks starting or trying to grow a business, they're very passionate about the product or service they have. And maybe that's why they started the business because they love for example, cooking, so they start a restaurant. Or they love the idea of writing, and so they start a writing workshop. And what they don't realise that more of business, it's not about the product and service. That's critical. That's important. But it's also how do you run and scale and organisation. And so, while they're passionate about what they do, they don’t have as much of an understanding of the business and how a company makes money and the right decisions to make. And so, I'll tell you one of the first things that really surprised me when I started this 20 years ago. I started it with the idea in mind that this would probably be really good for front level individuals, not leaders or owners of accompany because they all got it, but you know, maybe just the frontline employee. And what I quickly found out is, you can go very senior in big organisations and you can even go to the executives and owners of companies and their understanding of the business and business acumen is really lacking. And that continues to be validated with me. People are really brilliant in their function. You know, whether it be sales or operations or HR or marketing, people really know their functional expertise, but when it comes to understanding the overall business, I mean, seeing the big picture, that's where the gap is a lot bigger than I would have ever imagined. And so, that's one of the real surprises. And fortunately for us, that's a gap that we try and address in our business.

[00:22:56] Sean: I remember, it brings to mind my career path as an executive. And I remember getting into my first executive leadership role, you know, running a large sales and marketing function, business development, product strategy and stuff. And having that exact experience, you know, we had these great external coaches, they said, everyone needs to think and act like the CEO. Like all of you guys, the CEO shouldn't be sort of adjudicating, every one of you needs to be putting on that kind of hat. And I was like, I've never had any formal training whatsoever in how to read a P&L, Balance Sheet and Cashflow Statement. So, how is it that I'm going to make those decisions?  Yes, I can have empathy for the other functions, but actually I've never even had that training. So, I, of course, I'd go off and I do an MBA and you start to go through that process. And I realised that actually, it still wasn't teaching me what I needed to know. And so, it was mostly through seeking out mentors and getting people to help in specific areas where I could see that they understood those things to actually really help me build that business acumen. But to your point, there's a lot of people that come up the functional chain into very senior roles and manage very large teams who have just never had any training at a broad sort of business acumen level.

[00:24:06] Kevin: And Sean, some of them are afraid of it a bit. They sort of fly under the radar and hope they're not in that meeting where somebody says, “Well, you know, what do you think we had to do to improve our cashflow?” And, they're a bit terrified that they're going to be put on the spot in that situation. So, part of it is they've never had the opportunity. And part of it is they've sort of run from the opportunity a little bit, because either they don't feel it's in their sweet spot or they're a little afraid there'll be found out in that kind of process. And so, again, we've got to get some people over that hurdle of, first, not having a background and sometimes too it's kind of getting them over the fear, of getting them into this area that they may have felt like that's not their sweet spot, that's not me that somebody else.

[00:24:50] Sean: Yep. And so, what kind of skills, when you talk about business acumen, what kinds of things are you teaching in that program? What are the core elements?

[00:25:00] Kevin: Yeah. If I were to think about the four or five takeaways that we want people to really come away with, one is we teach them a business model. We teach them about five business drivers, and quickly, if you'll picture a diamond, the top of that diamond is cash, then down the right point is profit, the bottom is, the left point on that diamond is growth, and then right in the middle of the people. And so, first of all, we want them this, and by the way, the first three drivers; Cash, Profit and Assets simply reflect the three financial statements. The Statement of Cash Flows, Profit & Loss and the Balance Sheets. That's why you have Cash, Profit and Assets, three points on that diamond. The fourth is Growth because that builds value in business. And right in the middle of People, which refers to employees and customers. And so, one is we want them to understand that model because it's a model you can use to assess your own business to evaluate another business. You can use that model to make a decision. And so that's kind of step number one, is getting that basic framework. Step number two is then we want an individual to be really clear in their organisation, how was the company performing around those five; Cash, Profit, Assets, Growth and People. And then we like to also benchmark a company's performance against others. And if it's a smaller organisation, hard to get benchmarks, you can at least get some industry averages because you want to get a sense of how we're performing. Some companies think they're great. They read their own press clippings and don't realise that even though they're surviving and seemingly doing well, they could be doing better as they stack up against others. And then a third takeaway is we want them to have a good working knowledge of the three financial statements, the Statement of Cash Flows, Profit & Loss, and the Balance Sheet, and not just theoretically, but their own companies. And as part of that, being really clear on what are the levers you can pull to improve performance. So, you talked earlier about an MBA in 180 days, to some degree, we want people having an MBA in their own organisation, not just a theoretical understanding of financials, but a real understanding in our company. What does our performance look like around those? Another, a fourth takeaway, we want every individual having as being really clear on Monday morning or the next day, what actions they're going to take. I love the Chinese saying that says “To know and not to do is not to know.” So, if somebody says; yep, I understand it. I know how to read the financials. And they do nothing with that, it really suggests they didn't get the learning in the first place. And so, number four, they need to be really adept at making better decisions for the company. And then last I'd say, be a real good communicator of the financial performance of the company, to their teams and to the others in the business. So go from knowing themselves to now leading others in the process.

[00:27:51] Sean: And so, when you are helping companies look at the levers they can pull, are you looking at all five of this? Are you working with them on, here's how you can improve performance with people, here's how you can satisfy customers better, here's how you can drive growth more, so therefore you probably sales and marketing discussions, as well as, service discussions, like you looking at all of those or the drivers, obviously they impact those three financial mechanisms, you know, your P&L, your balance sheet and cashflow, but do you cover all of those five elements? 

[00:28:24] Kevin: Yeah, where we spend the most time is on the first four of the cash, profit, assets and growth. Now people in the middle, we spend a fair amount of time on that, but we also recognise that a lot of organisations are already focused on developing the leadership skills, the time management, their employees, they're also helping them better understand their customer. And what their customers are looking for. So, we touch on that one, that fifth driver in the middle, by the way, it's the most important. Employees meeting the needs of customers because that drives cash, profit, assets and growth, but there are a lot of other complimentary programs that address that. So, our primary focus is on the first four.

[00:28:59] Sean: Got it. So, what would you say are some of the, if we talk really practical terms and things that people could take away from today and actually implement straightaway or ask themselves straightaway or teach their team tomorrow, or take action on what are some of the golden nuggets in the training that you teach that you always notice tend to get sort of ‘aha’ moments or create impact or create movement quickly. What are some of those things that people could take away from today and start implementing straight away? 

[00:29:25] Kevin: Yeah. You know, if I'm thinking of an entrepreneur that's listening to this and they're wondering; Okay. So, where should I start? What should I do? I would think about it that this way, number one, I would become a student of business. If you're not naturally towards the financials of your organisation, maybe you're sort of the product leader or the innovator or the visionary. I would encourage you to become a student of the business and not business in general, but also the business of your business. Now that doesn't mean you need to become an expert, but don't delegate all of that to somebody else. If that's not you, make sure you've got a good partner you trust, but I would also encourage you not to wash your hands of it completely. I would encourage any CEO to have a good understanding of how their company is doing financially and how its performance, that's step number one. If that's not you, I'd get down that path, become that student and daily spend some time in the business news, looking at other books or articles, just to build your own acumen around that. Number two, I would create dashboards for your organisation. I call it the five faves for my business. And so, you know, once or twice a week I'll ask my assistant, I'll say; Hey, can you give me the five faves? And it basically refers to key measures that I tracked for organisation, you know, like revenue and our revenue growth year over year. Our current profitability year to date and at profit year over year. What's our receivables looks like, what's our cash on hand, and then what's our profit margin. And so, that might not have totalled exactly five, but it started as five and expanded it. But point is have a dashboard. And this I believe is especially important. Sean, you talked about targeting sort of the 2 to 10 or 2 to 20 million range for organisations, make sure that your dashboard includes measures for profitability and cash. I think, many organisations sort of in that start-up or they're past the start-up, but you know, they're trying to grow. It's really easy to focus on revenues. Really easy. I mean, Amazon, went eight years before it turned a profit. Now they’re unusual, because investors believed in the model and they were willing to put money in. But by that eighth year, they were quite impatient with Amazon assert turning a profit. And so in your dashboard, I would include profitability and cashflow numbers. Those you ought to be tracking. You know, you'll look at Sears Holding right now, I read the other day, they're down to four stores. They just closed one in New Jersey. They have four left. So, here's a brand that was outside of North America, Sears K-Mart brand, and here they are a hundred and almost 30 years old. And they're about out of business. And my point there is you're never too big, or you've not been in business too long where you can't pay attention to the fundamentals. And Sears really lost its way, and had negative cash flows, run out of cash and they won't be around too long. So, that's number two, a dashboard.

[00:32:34] Sean: And on the dashboarding side, do you tend to spend, some of those of course lag indicators and outputs, I guess, of efforts in the business, of sales and marketing, of customer satisfaction, of a whole bunch of things. Do you spend as much time focused on tracking the inputs as you do the output? So, do you look at the outputs as a health measure, and then the moment you see if there's any kind of red flag or a trend that's going in the wrong direction, you then jump and dive back into the inputs, or do you spend as much time focused on the inputs knowing that they should, hopefully they don't of course just take care of the outputs because to your point, if you're not really watching profitability and which I've seen some great, like you said in COVID, you know, you want it to make sure the business remained profitable. It's very easy to spend your crisis time, making sure that the revenues continue in some way, but actually if you're losing money, that's not going to last for too long before you run out of it. So, how do you think about the input side on that from dashboarding?

[00:33:25] Kevin: That's a great question. And so, I'm looking at those five faves that's sort of high-level view of the company, probably once or twice a week just to track trend lines very carefully. As it goes to the other inputs to that, I meet weekly with my senior team, and that's where we go much deeper into the inputs.
Now, on a weekly basis, we're still probably at a higher level. And then we meet monthly, usually about monthly as leadership team. And that's where we go much deeper into the inputs. And it's really nice to use, as you described sort of the outputs, those five faves kind of thing, you know, overall revenues, profitability and cashflow, do you give context for the input discussion to say, you know, as we look at our overall trends. It looks like our profitability is starting to get squeezed a little bit. So, let's start looking at the big areas of spend and what are the key inputs where are we spending our money? What kind of return are we getting on those investments, et cetera? So, I find that the output discussion as you described, it is happening for me once or twice a week with my leaders at least once a week, and then more of the inputs that's happening more on a monthly and then probably quarterly basis.

[00:34:37] Sean: And no doubt, your managers are spending more time on, because you're the CEO and you're trying to make sure that you've got that helicopter view, but they are probably seeing the inputs far more frequently. You know, whoever's running sales I'm sure, within an inch of their life knows where every lead is and wherever the deal is, current conversion rates and all the rest.
So, I'm sorry, I cut you off that. You talked about number two was dashboards and what from there? 

[00:34:59] Kevin: Yeah, number three is, educate your team. And so this is what we do as an organisation. And I think there's several reasons why it's important to do that. The obvious is, when people are really clear on how the company is performing, then they can create better line of sight to how their actions can impact that. And we're finding, you know, we've got the great resignation going on we're employees are finding in a virtual environment, they can work nearly everywhere. And so, they're much more mobile right now. It's really an employee's market right now. We're finding that helping people be really clear on how the company makes money and what they can do to impact that is helping with engagement. Sean, if you look at employees or millennials and gen Z folks, they want to know how they matter, how they fit in, and how they make a difference. They're hungry for that. And so, the more they can be really clear on how they make a difference in the organisation, they're going to be more engaged. And so we're finding not only as business acumen, helping employees be really clear on how the company makes money and their role in that. It not only improves business results, but also to increases engagement for employees. So, which is especially important right now. 

[00:36:13] Sean: I couldn't agree more. You know, I purchased a large business as part of my group CEO role some years ago, we purchased a large business that was to be honest doing very, very little profitability. And so, day one priority. Um, after sort of moving on the pre-existing CEO was to work on culture and make sure that we actually had some cashflow, and the business profitability-wise wasn't doing great. And we were the first people in five years to actually show people the profitability of the business. And I remember doing our roadshow and sticking up the last five years of financials where their revenue had gone sideways and the profitability going backwards. And I remember saying to them, in every room that we'd gone around the country for these roadshows and saying, “What do you guys think that profitability should be?” Because you have one person that looked at the profitability and made a joke about the fact that the coffee cart downstairs was probably making more money than we were. And we had 120 people. And what was great about that was then in the next six months we had a bottom-up built, we had a live dashboard going every day or that everyone could see, I think every week perhaps where we were reporting on all the cost savings that the team had actually found themselves. So, you know, the people on the front desks were going well; Hey, we're getting five papers delivered here, newspapers delivered here a week, we could probably drop that to a digital version. Okay. Bang. There's a thousand bucks. Bang. It will be up on the dashboard. We completely rebuilt the culture of engagement around saying; it's okay to talk about financials. It's okay to know where the money is going. And it's okay to participate in that, because you know why? Because the profitability represents our ability to reinvest in this business and create better opportunities and new products and things that allow you to grow and try new things in the business. And once I think people got that and profit stopped being something that was sort of dirty or left to management, and it was everybody's job to create an environment where we had sufficient profitability to invest in growing the business in the future. Everybody got behind it and it built credible engagement in the business. So I couldn't agree with you more. And I think too many people hide the numbers from their teams, because they did not sure about how they're going to feel about it or whether it's appropriate to, but I think it's the opposite. I think the more transparent, appropriately transparent that you can be, engaging people in that process, not just so they know, but so they know their role, they participate, they know what the drivers are, and they know how they contribute. That can really help to create culture. 

[00:38:25] Kevin: They're hungry for that, Sean. You're spot on. Absolutely hungry to know how they can make a difference in an organisation, how they can matter to the business. And with that, I find most CEOs, most business owners, and especially if it's a CFO or a finance type, they talk over the heads of employees. And so again, don't overestimate what your employees know. You really need to start sometimes with the basics and start with just a few concepts at a time. So, if you're meeting with your team monthly or quarterly, start with some of the basic principles and don't overwhelm them with a lot of data, but start with some basic principles. Talk about what they mean, why they are important, how they're measured in the company, how the company is performing, and then finally, what can employees do to help improve those measures? So that goes along. You also said something Sean, that got my attention. You've talked about that profit is not a bad word. You know, there were a few years, there were profit was that and people were really against it even in companies today sometimes there are folks that might say, look, I'm not about profit. I'm all mission and purpose driven. Well, remember if you don't have profitability, you can't sustain a mission. And the president of the company made a comment and I’ll sort of paraphrase, but he said ‘Profit is actually the most benevolent thing we can do for employees and our customers because generating a profit is what allows us to reinvest for their benefit.’ And so, if you view profit for what it can do for an organisation and further its mission and its purpose that is powerful, we ought to all be interested in that for the good that it can produce for an organisation.

[00:40:04] Sean: Yep. Couldn't agree more. I know a company in Australia, they have a standard operation. This is the second, they’ve built and sold very successful professional services firm. And in the second one round, they've actually just got a standardised model where 30% of the profits are distributed to the team on an annual basis. And so, everybody's very interested in the profitability of the company, both because it creates those opportunities for growth and more resources and new products and new services and all those things that help them be able to learn new skills and develop in their careers. But of course, they also get a sense of financial return from the contributions that improve profitability.

[00:40:43] Kevin: And that leads me to the fourth thing that I'd recommend. And that is, bonus your employees on what you're trying to accomplish most in the organisation. So certainly, if you're not sharing profitability and if you're not, I get that, for an entrepreneur or a business. But certainly you can focus on revenue, but to the degree that your leadership team can be involved in profit measures and be bonus not only in revenue growth, but profitability and even cashflow measures, that's where you're going to get much better behaviour in an organisation. 

[00:41:14] Sean: Can you give me an example of how you would bonus an executive on a cashflow measure? What might that look like? 

[00:41:19] Kevin: Yeah. So, for example, you could have, let's say you've got a revenue forecast of 10 million for the year. That's certainly easy to bonus on. Your profitability might be, let's say you're looking for a 10% profit margin. That would be average for most big companies. So, you know, you'd bonus them if you hit a million dollars in profitability and then most companies are actually looking to improve cash flow a little better than that. So, if you've got a million dollars in profit, it may be that you're looking for a million too in cashflow. And so, you could bonus your key leaders on hitting a cashflow number for the year. And so that would be one way to consider doing it.

[00:41:57] Sean: Got it. And I imagine another way, even like, as a lead indicator, maybe, I guess it's always about the study of consequences, isn't it? If I incentivise this behaviour, what's that going to do? And what's the second and third and fourth order consequences as a result of people having that measure. But I imagine almost the preceding indicator to that is how do I get up my cash conversion cycle for might be 45 days or something. How do I get that to 30 days as a result of knowing that's going to build cashflow? So, this is interesting. And I've never actually bonused an executive later on cashflows, so that's an interesting thought. I like that. So, alignment of incentives, number four 

[00:42:33] Kevin: Yeah. Well, along that point, if you think about it, cashflow is more important than profit. A company could be losing money it had positive cash flow. A Boeing was doing that for a couple of years, had that negative net income, but they still had positive cash flow. And so, it's a number that I would encourage entrepreneurs and business owners to think more about as an organisation. And Sean, you hit to the point of, if you want to go a little deeper into the inputs to cashflow, you mentioned days sales outstanding, that could be one, days turnover, you could look at inventory, amount of inventory hand on hand or inventory turnovers. You can look at your payables. And so, if you wanted to go a little deeper, not just bonus cashflow for the year, you could insent the payables department to make sure that they're getting collections down, the receivables department and make sure that they're getting a days down, et cetera, so there's a way to bonus the inputs.

[00:43:30] Sean: Yep. Got it. So that was number four. And was there a fifth?

[00:43:34] Kevin: Yeah. Those were the four things that come to mind as I think about, if I were to give you advice on four years to focus on, it'd be those.

[00:43:43] Sean: How do you suggest, let's say there's a Founder who hasn't put their, a Founder who's maybe only got, I don't know, 10 to 20 people in their organisation, and therefore they've got very few senior leaders. They might have a manager or two, but they want to build the business acumen of the greater team. Do you see people going to your online learning to take our whole business through that kind of model? Like if they're at that size, what would be your recommendation to a Founder who really wants to just start to increase that level of business acumen from the top to the bottom, in that size of organisation?

[00:44:21] Kevin: Yeah, no, I think there are books, a lot of good books out there that can help people sort of get down that path as well. I think there's a lot of online content. We think ours is good, but there's a lot of good stuff out there, but if I were an entrepreneur, a leader or an owner of a company, I'd be involved in that learning process. So, I would really approach it, not from; “Team, here's what I want you to do.” I would really roll up my sleeves and make it a team experience so they're going through it together. Even if a CEO is a financial wiz and an expert, I think there's real power in doing it together. Because remember, understanding the concepts, it's just part of the equation. The other part is, so how do we apply that in our organisation? And that's the conversation that you as a CEO, want to be part of in that learning process. And so, I would pick the learning approach, you know, books, online content, you would even be a part of delivering some of that as well, possibly as a leader, but be immersed in the process with your team, especially if you're a smaller team so that you really have those rich discussions about how do we apply this to our own business.

[00:45:29] Sean: Beautiful. Thank you, Kevin. I think there's a lot of great golden there for Founders to think about in terms of how they can practically start to make some steps between towards building the business acumen of their teams. If we take a step back and put ourselves back in the seat of you as the CEO of Acumen Learning, what are you hoping the business looks like in sort of three years? 

[00:45:50] Kevin: Yeah. So, we've got a growth goal, certainly revenue wise, you know, growth is important for a business. Again, this is very much in your wheelhouse, Sean, but in addition to forcing a company be or encouraging a company to be innovative, to be credible, to be relevant, it's also the right thing to do for employees. They want to be a part of an organisation that's growing and thriving. And so, I'm really motivated by that. I mentioned earlier, my desire to have a real focus on a good company, that's a well-run financially viable company as well as a good organisation where people really find they're engaged and get their most out of it. And so my future is continuing to focus on both of those. And as I turned 60 in January, so I'm closer to the end of my career than I am the beginning of my career. And I find myself thinking a lot as a business owner about the kind of legacy I want to leave for my employees. And so, my financial goals are important, but equally we call it 1A and 1B. 1A is Culture, 1B is the Business itself. And so, I find myself equally really wound up about doing both of those well. I also talk about sort of our motto is we're going to grow as long as it's fun and profitable. If we're growing just for growth's sake and it's not fun, so why do it, and if it's not profitable, it doesn't make sense. And so I really, um, look for opportunities and we definitely want to grow, but it also needs to be fun and profitable for the organisation.

[00:47:20] Sean: I love the context of fun because you know, usually people are having fun when they're doing something that they're great at working with a customer that's ideal for them because they’re right kind of customer, the customer is getting value. You're delivering a great service. You're playing to your strengths and usually most things are working. So fun is are really nice way to think about that. I love that. Well, look, we're almost out of time, Kevin, I'd really like to acknowledge the way that you have built this organisation. You know, I don't think I've actually seen, and there's plenty of people that of course have different content/curriculum that teaches businesses about different things, but you're the first company I've actually ever seen, really try to own that concept of acumen in a business and define what it is, and then actually build your curriculum that's available in lots of different formats to allow individuals to get through that content as well as leadership teams. So, I think that's really exciting and I'm going to go and have a look at the stuff that you've got in case that could be suitable for the kind of clients that I support. But yeah, I really value the way that you built this business. I love that also, you've been in the game for 20 years, and you haven't gone for scale as the number one priority. And you can hear that in the way that you've talked about the business. If it's not fun and it's not profitable, we don't do it. And so, you're very comfortable with the business that's at 30 people and that's a good-sized business and you still got room for plenty future growth. And it's really exciting that that's now starting to grow internationally as the world's become a little bit easier to access. So, I certainly hope to see you in the metaverse and us both educating people on how to grow their companies in new and interesting ways. And thank you very much for sharing all of your wisdom with us today. How would people, if people wanted to know more about Acumen Learning, or to sort of follow on with the journey of the company or get engaged with the content, where would you direct them to?

[00:49:01] Kevin: Yeah, thanks for asking. Our website is www.acumenlearning.com. My LinkedIn is Kevin Cope with a capital K and a capital C in that. So, Kevin Cope, you can connect with us on LinkedIn and we'd love to share more about what we do. And also, Sean, want to thank you for having on this program, and you know, I'm an entrepreneur at heart as well. I've also helped my boys start a business, that's also growing quite well also. And so, I'm an entrepreneur, so I'm not only a teacher of this, but also a practitioner in my own organisation, my son's organisation. So, it's a pleasure to be involved with folks that are thinking about these kinds of things. So, thank you, Sean. 

[00:49:46] Sean: That's awesome. My pleasure. Well, thank you very much, Kevin Cope. Folks, I hope you've enjoyed the show today. Big thanks to Kevin. Before you go, if you liked what you heard today, please make sure you subscribe, if you're on Apple Podcasts or Spotify, by the way, if you don't realise, I think Spotify has just made a release which hopefully, and by the time this goes live, we'll be ready to show you a video version so the video version of the podcast is already available on YouTube, so you can watch it on there, but if you are on Spotify as a player, you're not going to be able to see video versions of the podcast as well. You can go to the website, ScaleUpsPodcast.com. You can leave your email there and we'll let you know when new episodes are sort of ready to drop or of course you get pinged on your phone and if you love the socials, then please come and find us on @scaleupspodcast on any of your favourite socials except Twitter. Because I still haven't got my head around wanting to be involved in Twitter, you never know, maybe one day. So, to everybody listening today, just remember that, the only thing that can guarantee that you won't be able to scale is giving up. There's no guarantee that if you stick in that you will scale, but at least if you stay on the horse, you've got every possible fighting chance. You've got to stay unshakable in your faith that you're going to get the, but remain flexible in your approach and continue learning, and you had some great insights today, hopefully, from Kevin. You've been listening to ScaleUps Podcast. I'm Sean Steele. Look forward to speaking to you again next week. Thank you so much, Kevin.