This week, Dan is sitting down with Michael Johnson and Manuel Azuara, Managing Principals at Bridgepoint Consulting. Together, they are talking about the future of Bridgepoint, their advice on how to build smart financial roadmaps, and how planned transformation can lead to manageable growth. 

Guests: Michael Johnson, Manuel Azuara

Host: Dan Dillard

Producer: Myrriah Gossett

 

Transcript:

This is a founding media podcast if welcome to growth and scale insiders I’m your host Dan Dillard on this series experts from Bridgepoint consulting will be joined by current C. suite level leaders to discuss strategy trends financial development processes and more on today’s episode we are jumping into the world of finance transformation and how organizations can create roadmaps to success joining me is Michael Johnson and manuals or both of whom are managing principals at Bridgepoint consulting Michael Malin I dig into how Bridgepoint consulting is expanding their own footprint nationally and what exactly is finance transformation and how it affects growth and skill within an organization before we jump into this interesting topic of financial transformation Bridgepoint  would you both give us the benefit of learning more about your roles and maybe how you came to work together pretty quick and so sure yeah so I’d I spent my first in ten years of my career here in Austin working for a large consulting firm Bridgepoint  relocated to Austin with that and from Boston to Los Angeles with them spent ten years out there and in two thousand and seven I missed Austin or to get home and so I found Bridgepoint consulting through so my personal research and came back in two thousand and seven to start our technology consulting practice and have loved every minute of being back in Austin and watching the incredible growth that’s happened here in the thirteen years since overturned it’s amazing growth personally three four so since you came back what’s in the city going like three times over yeah it it it seems like it at least until Skyland has restored yeah yes got pretty ridiculous right I’ve been here since ninety one so I’ve been here a long time using those pictures with two thousand seven here’s what the sky looked almost like three times a so yeah it can yeah now it’s it’s nuts but Bridgepoint  you know finance and accounting background in Bridgepoint  entrepreneur at heart okay and Bridgepoint  got to know bridge point through one of my second personal clients Bridgepoint  ever and from there just kept in touch and joined in bill to practice and join Michaela team and for the rest is history got it so you all have been working together for a decade naked pressed together the company’s been around for twenty years so it was founded in nineteen ninety nine and the simple principle that there was a lot of a lot of lot of small companies here they were growing they needed financial assistance and so we started working in the Bridgepoint  with the start up companies in Austin on the venture backed companies as they were growing Bridgepoint  you know launching in nineteen ninety nine was a great time it wasn’t really good after that but we’d rather distraught and I continue to focus on our clients and their needs and now we have built a twenty year history of success I imagine the challenges like two thousand one were pretty rough and then again in two thousand and seven two thousand eight yep we’ve been through a few downturns and survive and then work our clients or is it everyone laughs I joined in February of two thousand and nine yeah just like nuclear winter for the business environment since you lost him there’s nothing like a work of with the right skills hello buy low sell high right so what’s next for Bridgepoint man next is national expansion right and so with the wind beneath our wings if you will from Madison and an Odyssey it’s it’s growing consulting practice all across the country Michael yeah and so when we went through the transaction to sell the company in two thousand and seventeen to the Addison group but a large part of that was the ability to build a national brand is built our national consulting practice we can do that on our own we didn’t have the capital or the capabilities Bridgepoint  but without us and we’ve now opened offices in Houston Dallas and word announcing the opening of our other offices across the country we actually have bridge point resources in Seattle Bridgepoint  Philadelphia Minnesota Austin Houston and Dallas males who were in Denver and in Denver yes and emerged while talk about expansion but that’s what you guys do you consult on that so you’re doing yourself any also consulting yeah there’s there’s a lot of that physician heal yourself and put it to our business so most businesses won’t have enough success to deal with the problems of growth in scale so part of the transformation of business in particular is that finance function when I first heard the words of financial transformation finance transformation I gotta admit that if I was a bit stumped and I also have a finance background this is like what is that means a big word inside did researchers are trying to figure out what what exact is that means until I asked Michael who’s very able to simply spell together so Michael can you kind of replay that conversation from yesterday and and and it you know it’s simplest form it and I’ll use that I’ve I’ve fictional example based on a real life experience in Bridgepoint  so let’s say a couple of guys get together and and form a sign company and so the three of them you know start the sign company and somebody walks in and wants a sign made one of the guys is responsible for production and so he goes and makes the sign and somebody else is responsible for shipping and they ship it so very simple business you’re all sitting in the same office doing the same thing well if that company continues to expand and add more people and now you have multiple sales people multiple functions Bridgepoint  it gets more complex so you can’t just say Hey do we have that sign material in the back you need to be able to go into the system to see if that’s available before you sell it to the customer well it gets even more complex right when you start scaling that company and you say okay well let’s go online and so now we’re gonna take orders online well you don’t want to sell an online order unless you have the materials to make it in you can ship it according to whatever your shipping guarantee yes right and everybody expected two days now that seems to be set by Amazon prime so if you see a company that started by three people now go to where you have a hundred people you can’t all just talk to each other about what’s going on you need a system to coordinate the activities between that organization a system that automatically takes the orders on on the web but while it’s taking in checks to make sure you have it in stock bench didn’t communicates that order to the to the floor so that it can actually be produced on the floor when productions finished it has to notify shipping that it’s coming from which have been used to notify billing that to build a customer I need to send an email to the customer so all of that automation is really finance transformation kind of if it’s if it’s just the three of us you know you can take the credit card over the phone process their credit card rate even email that to order when the order shipped Bridgepoint  and that just doesn’t scale and I imagine because you’re here this whole time where companies grew too fast and then they failed well when I mention this what you’re talking about which described as there’s more prepared for that growth and things systems just broke down well the systems break down and and Bridgepoint  they may have revenue growth but there’s not profitable growth right and so that’s where the finance side of it I talked about the technology so maybe manual you can talk a little bit about finance I will just go later on on to this and I think that’s why Michael my work so well together it’s it’s there’s a process side to it too right so so many times we were just in a meeting last week where Bridgepoint  this company was getting excited about the tool Michael the tool’s gonna fix everything right right so if people think finance transformation is just this tool does this thing I can stick can plug into a fix everything but it’s the processes that have to grow up with the business and take advantage of all of everything the tool has to offer right and so everything that Michael talked about also involves a change of a big change in processes how I did it yesterday is not how I can do it tomorrow I would imagine that because I’ve experienced this myself messing with a vengeance like when you’re doing cells yourself as a CEO you just kind of in your head you got it right but you bring in sales people all of a sudden they need sales material and universal’s training so that is the process you’re talking about sure sure or they need you to look at activity or are they going to the right places are they meeting the right people on from a sales environment writer how are we tracking all that an old by the way how do you measure right so it’s all in your head all you remember all the wins exactly yeah actually I know it’s over we do great I go let’s talk about the you know the fifteen we lost exactly so that’s how it is out of your head and how to improve on them sure so at what point does leadership particularly maybe the CFO need to start thinking about company transformation is it like is it in years or is it an assets or how does it look like it’s it’s early right there’s there’s this question Bridgepoint  that that any CEO should constantly ask right in and that is what do we need to do to double in size right what do we need what’s holding us back from doubling in size and funny and this is a you know all poker CEO friends a little bit because you know they want everything done yesterday and everything’s easy on a take a minute Bridgepoint  but it’s really digging down to you when you ask that question and you see some of the management team score men get really uncomfortable it’s digging down into the why what what is what’s holding us back white what do we need to change whether it’s technology processes people which people don’t like to talk about right what do we need to change to double in size and start working on that as soon as you can Michael yeah and and that’s that’s it that’s a great metric right is it’s when you start thinking about it if if I have to sales people and I hire two more I should have twice the revenue right well if I if I do that and don’t think about the impact on the warehouse environment and my reply chain now I have an issue because I haven’t thought I thought all the way through that in I think for us to read you know serial entrepreneurs that have been successful doing this our best customers because they’ve done it wrong before they get it they get it and they know we need to start investing early or at least think about it put together a plan we know we’re going to need an automated system for warehouse management when we get to five nine right and which by the way it’s gonna take a year to put it in or whatever six months of that that time let’s let’s plan that and and they think I had to think strategically about the systems and processes that are going to need a need to be in place to help them achieve the growth that they want and in a surprise it comes out a lot of times is that these discussions aren’t in a silo right so it’s funny I laughed at the word financial transformation a little bit because it it makes it seem like it’s transformation only in the finance department right wing it’s it’s organizational wide variety so many times up the food chain you’re talking about sales so many times our processes up the food chain and people up the food chain that have no visibility on to the chaos to creating on the back all right and so having that conversation on on the table constantly again what is it what do we need to do to double in size is just keeps everyone thinking about and it’s not just limited to one group or one person it’s it’s the whole organization so most businesses have a financial roadmap and it makes me think that they want to plug in financial transformation as part of this process is that right that’s fair I mean when when we’re having a conversation and we’ll get this call hang out we need a new financial system well we don’t just say oh here’s one right take it also what we do is we go when we meet with the executive team and say what your business goals what are you trying to accomplish and it may very well be and we see this quite a bit we’re going to triple in size in three years we know that we’re going to do it organically and through acquisition and Bridgepoint  by the way we’re going into four new countries that’s a totally different discussion because now we’re talking not about the systems that need to be in place what do you have the right people in place to to make that happen well in so that whole road map is important to develop up front because you may need a new person that serve as a sales leader you may need a new person that really understands international supply chains to handle the supply chain to man you know I’ve I’ve I’ve thirty million dollar company requires substantially different resources and capabilities to manage than a three hundred million dollar company there there’s a big difference and it’s a huge drop and we have clients that go through that into three or four year period Bridgepoint  and it puts strains on everything if you don’t think about it up front so many companies have this mentality of if I build it they will come and then later find out it doesn’t quite work that way so they need to be plenty of thought that goes into the marketing and other types of planning so my question in regards to consulting is at what stage in growth is a thirty million dollar company should be talking to you guys or is it a ten min or companies that should be asking for consulting help or is it just whenever you just feel that pain so I need some help it’s very similar I don’t think you can put a straight size on it trades but if you know you’re going through rapid growth and whether that’s ten million to fifty million or thirty million to three hundred million right you’re going to feel that pain quickly right and so thinking through what has to happen even if you’ve never done it before because back to asking that question and in but you can ask that question of us you can ask a question for team what is it that we’re not thinking about your cut it back to your road map poignant and not to get too far over the road map but just knowing just asking just writing it down somewhere and of what do we need to watch out for Bridgepoint  there’s a lot of founders and entrepreneurs in town that’ll get that through a mentor right so what are those questions are are talking to their peers right there and then threaten and Austin’s one of those wonderful business ecosystems where Bridgepoint  there’s cooperative shin right not even competitors and and we’ll talk to you about what’s going on because they’re all experiencing the same thing if you’re if you’ve got a company that’s trying to double in size there’s other companies here and so there’s just great networking events as well said to code go to to to get that that information Bridgepoint  just reach out to somebody respect we whenever we done that and it made an introduction from you know peer to peer the other side’s always willing to meet have coffee and and and and so that you get out of your day to day Hey I’ve got to get all this done think about the future look through the windshield instead of the rear view mirror for some time right respectively a different perspective one thing I love about Austin is is that that feeling of being able to grab coffee with pretty much anybody in and I was convinced that same growth mindset like we’ve got to get out there and get to the next level what is that so that that different perspective makes lot of sense I’m curious without mentioning names can you talk about stories that have either been hurt because of what they wait too long to transform and maybe we can just do the opposite the second sure yeah definitely don’t want to name names there Bridgepoint  but you know we’ve we’ve had clients that that Bridgepoint  that just out grow their ability to execute and that sounds really simple in its so difficult when you’re not looking throughout the entire supply chain or you’re not looking at processes from beginning to end and this reluctance to invest in back office technology and back office process redesign it is fascinating to us riding in it it shows that that FIIs it is a matter what market share and write messages shows this mindset of what we’re going to go grab all the revenue we can grab and in not put enough emphasis on our ability to execute and measure it there’s just been some significant hick ups and a lot of it is just in that underinvestment that makes a lot of sense to me I feel like in the low these conversations you have this income expense and that’s all they’re looking for is in comics and how can I make the most income and keep my expenses as low as possible right and the missing link is investment invest how do you invest back in your company whether that’s whatever it takes it’s it was marketing whether it’s branding what whatever’s missing holes are in the business plan Bridgepoint  it’s really an investment not an expense and I think you know that mindset yeah you have to you have to treat it that way if in ask yourself and the team how are we going to get R. O. Y. on this investment right we can’t scale of this company and every time we reach a new milestone it requires us adding ten people like that just doesn’t work yeah yeah I’ll give you a good example we had a Bridgepoint  experiencia fo that called us and and she said you know I can’t give a reliable revenue numbers to the board and we’re growing twenty five percent quarter over quarter I mean dramatic drop off and and they didn’t have the automated systems in the Bakken to handle the growth and there was no wind scale so if they they were they weren’t completely broken you know they were still taking care of their customers so we put together a road map for them in over a year period put together Bridgepoint  in integration with thirteen they had a chance to make some changes on the website and to make sure the the orders were coming incorrectly we handle the credit card processing components all the back end components there now four times the size they were when we were engaged with them and have had tremendous success in the market but that’s CFO knew she needed help and she picked up the phone and she called us and how does come in and help and it’s it’s been a great success but if she had had not had the right leadership and you know from the CEO down were involved in the discussions with us Bridgepoint  that understood that this investment needed be may it would be a very different outcomes there was a real simple everybody’s got to be on the same page and and it was it wasn’t cheap right but it added huge value to the to the business and allow them to you know what what is four times your business website that’s my mindset right yeah everybody having an investment mindset that makes lot of sense so since you’re both growth and scale insiders if you were CFO or CEO of company that’s experiencing rapid growth what is your number one piece of advice on how to manage that growth I know we talked about some ideas now but just like what’s the number one thing Bridgepoint  I I think is what I mentioned before right it’s it’s being open and honest about off and being open and honest about if we want to scale this company we want to double triple quadruple in size what’s broken nothing runs perfectly right okay and Bridgepoint  by the way this is all much easier said than done we get it everybody has full day jobs mmhm but boy you have to take a minute to get with your team and say we’re going to scale we are going to grow what’s broken what can we not keep doing manually because you’re just no way we can keep up pride and sometimes that’s here AP automation sometimes it’s an automated cash flow forecasting who knows what it is but there’s always pieces that break right and you have to be open to that eyes wide open knowing that the group in the department’s probably never gonna run perfectly and so what is going to keep breaking and then let’s go address it let’s go fix it with that investment mind set to know that us fixing this and addressing this today it’s going to provide a ton of value in the future yeah right I think that that’s that’s that’s good advice I’ll circle back on the you know the investment mind set treat your company like an investment it needs to be have money put back into it and in order for it to continue to scale and grow Bridgepoint  you know when we look at companies that are successful many of them are private equity back in and I think that the private equity firms are bringing to them are not just the money right now because in this market actually money is relatively easy Bridgepoint  and it you know it first Kaplan things like that it’s that expertise to focus on the business and focus on this key metrics well there’s no reason that the company can’t do that as well open yourself up gets an externalized whether be peers Bridgepoint  you know of providers like bridge point or or other companies to come in and look at your business as an investment and start having those conversations of Hey we want to double that means we need to expand geographically and if we do what what’s strange is that Bridgepoint  that gonna going to put on the business and in my example you know we had to have a small design company well what happens if they are open an office in London right how does that change the whole dynamics or any organization and things that used to happen over coffee not to be need to have structure process sees but I think continue to look at at at how you invested in the business and looking at it as a as an investment and getting broad advice about how to how to grow this makes me think about the word consulting I think that I’ve heard since the work consulting for years and years and years and its means different things to different people Bridgepoint  sometimes it’s like web consulting sometimes it’s it’s it can be very Bridgepoint  in in sales right sounds like what you guys do is very broad you can come and look at all the needs so if I’m a business coming to you and just say Hey I need help what can I expect a lot of questions I need help boy that is opens up a million questions and so I think it’s at heart those of us a bridge point were all business nerds I mean it really was a balls down to so we could talk shop all day every day so when you ask that wide open question it’s gonna invite us an opportunity to ask you a fifty questions that I want to write incidence speakers were interested right we were really interested in so and it may it may not end up with anything other than here’s some advice for someone we can introduce you to it and boy that’s that makes us happy but with fantastic but it it I think for us when we were having those in this initial conversations were trying to understand what the business objectives are and a and R. focuses as a management consultant right and so we’re working with the management team on how they accomplish their objectives and so it’s a very different conversation when you’re talking to someone about how to how to grow the business I think one of the most valuable things we bring is a portfolio of customers where we done similar things right and we seen it done right we’ve seen it work done wrong well if you want to do it right more than wrong we can probably tell you those examples where it was done correctly and the patterns that we see that successful companies follow and and we talked about some of those but it Mandel’s absolutely right we’ve had meetings in the classroom L. tell say come in and and tell us all about Bridgepoint will bring a big deck set on the table and just have a business conversation the entire time Bridgepoint  and and maybe given the deck maybe not but it does tell us is not remembering the deck yeah I it has been great well it makes some sense now listening to you guys chat about this because I know it now I think about my background in financial planning what it was like you brought in clients and you wanted to understand the overall picture before you ever get any advice yet Austin where they’re at as a supporter of so you guys are doing a diagnostic on the overall health of the company before you can give any advice so it’s very hard to bring a second door on the second easily bring it you know here’s here’s all these books that we’ve come from that one but it’s like this knowledge transfer to how worthless is that deck if it doesn’t touch any of the issues that the company is it is a feeling right all right that’s worthless that never was it will blow over got to the end of the meeting and and there it’s been a great meeting and and add up the CEO will turn to us and say so can you tell us something about your company I will go to the elevator pitch in like a okay yeah if we qualify ourselves through interest in the business right right and and that’s the most the best way for us to engage us to actually you know have a consultation process with the customer up front so they get a feel for what it’s like to work with that because this is a very personal service in it and it and you’re talking about people’s livelihoods and their business there’s nothing more sacred to them right and and so we really tried it to have that personal and the reality is not not everybody we talked to is a fit for us right right and they’re just not doing so going in with that mindset of look we’re gonna be helpful however we can even if the answer is Hey you’re probably not a fit for Bridgepoint which might be a fit for somebody else or somebody else for me to do this step first whatever it is it’s that back to the kind of B. R. infinitely curious mindset running mate the help does all the difference in the world for sure just being able to understand the big picture and then kinda prescribing whatever the solution might be yeah well I want to thank you both I really learned a lot and I know the audience also was able to garner some wisdom offer this conversation so we look forward to dive into much more topics on finance transformation in our next episode thanks very much for sharing your time right thanks thank you again Michael Emmanuel I love hearing about how making connections and really listening to the client needs has to come first Bridgepoint  there a plan can be made and with proper plans can become successful growth if you enjoyed this episode please make sure you subscribe and maybe start with a friend or coworker Rosenstiel insiders is created in partnership between Bridgepoint consulting confounding media to learn more about Bridgepoint please visit the links and options