Updated: Oct 3
In this podcast episode, guest Augusto Negrillo - Managing Director at Vivero, speaks with Jonathan about transformation in the world of Consulting and the perceptions and expectations of how delivery services should be.
Vivero is a strategy and execution business partner for SMEs with a unique Vision and the ambition to grow and realize value. They specialize in Business Growth, Funding, and M&A for the Technology and Professional Services sector.
Some key learnings include:
Resourcing models: not just local but on a global scale. "People become the product you sell."
Speed of digitalization on Consultancy
The impact of and the mindset required to navigate through the Modern SaaS Economy
Metrics that matter
You can listen to Augusto's podcast here.
Jonathan: Hi, everyone. I'm Jonathan Corrie, co-founder and CEO of Precursive. Welcome along to the Precursive Perspective, our podcast, where we sit down with some of the leading minds across customer success and professional services. In each episode, I speak with people involved in scaling companies of all sizes from hypergrowth startups to mid-market SaaS, all the way through to enterprise, technology and communications companies, as well as, of course, members of the investment and VC community now. And we explore how the best companies succeed in this continually evolving services delivery ecosystem with special guests, also including my two dogs, Cosmo, Ace, my kids, Frank and Arty. Frank, now famous for pulling his tooth out live on one of the shows. Now, before we get into today's episode, in case you didn't know, spoiler alert Precursive is the leading services delivery cloud for Salesforce. We combine award winning task and resource management with easy to use professional services automation built on the Force.com platform. We're 100% Salesforce Lightning native, which means you can better align yourselves and delivery teams, automate project admin so that your staff get time back to focus on driving outcomes and value for your customers. We believe very deeply that there is a direct correlation between faster time to value and retention. So bridging that gap between sales and success is priority one for Precursive. So let's get into today's episode. Hey everyone, welcome back, it's Jonathan Corrie on a Thursday, T minus one day for me going to San Sebastian, Augusto, which is a place close to your heart. I am delighted to be joined by my old friend Augusto Negrillo, how's my pronunciation?
Augusto: Spot on.
Jonathan: Spot on. All right. Well, who is the founder of Vivero.
Augusto: Yeah, even better.
Jonathan: Welcome along, sir. How are you doing?
Augusto: Very well, thank you very much. Jonathan. Did I get that right?
Jonathan: You got it right, very good!
Augusto: I've been practicing it in front of the mirror.
Jonathan: Yeah, yeah, Absolutely. Well, you're looking way more tanned and healthy than I am, which is great. I'm going to enjoy some of your country's wonderful cuisine and hospitality tomorrow. It's great to see you. Thank you for coming on. Give us a little bit of an introduction to yourself and a little bit about what you're doing currently and your history, and I think you have an interesting story about how your wife helped you name your current company.
Augusto: Yeah. Okay. Well, first of all, thank you very much for having me. I'm thinking as a background, so I've been in technology consulting all my life and I fell into consulting without knowing that I was actually doing it. So someone a long time ago decided to set me off to talk to clients, mainly because I was the only one who actually liked talking to people in the technology department, so it's one of those things. But yes, and that was my beginning in consulting and it was absolutely fantastic. I really loved it. That combination of problem-solving and being then the face of things and seeing what clients were doing with our products. And long story, very, very short, I ended up running businesses back in Australia, taking into sales and then getting involved in the whole investment side, running the business first of all and starting one and getting involved into the whole side of investing into consulting businesses. I came back to the UK and my wife is from the UK and I think she was secretly unhappy about my kids accent. It was developing like Australian drove, I really like it, but you know. We came back like all projects for a short period of time. We were thinking six months, but it ended up being seven years. So in that process I joined another consulting business in the UK and turned it around and took it to sell.
Jonathan: Is that where we met?
Augusto: Exactly. That's where we met. That's where I came into contact with Precursive for the first time.
Jonathan: Hey, you know, reliable, reliable.
Augusto: Indeed. And so I guess you could say my background is in basically running and starting up and growing consulting businesses and latterly taking them to sell and doing that successfully a few times, initially for myself and then eventually now as part of the Vivero for other people. I think it is the result of the bee in my bonnet changing bonnets if you like. So after doing that for a few times, I felt like I was in a hamster wheel that I wanted to change. But I think what happened is that my interest, what I wanted to do was to try to bring a new perspective, a business-centric view to growth, value creation and eventually transactions in the consulting and technology space. So in there comes the Vivero, and you're right, my wife named the business and my wife is English and the name is Spanish, it was her who came up with it. But it's a really good name because Vivero in Spanish means tree nursery.
Jonathan: Oh ok, yeah yeah.
Augusto: Raise your seedlings to become little trees and then they become healthy and strong, and then you take them out and plant them in the forest.
Jonathan: Strong oaks. All right. I love it. I love it. Excellent. Well, in this show, we've spent over the last few years, actually this show started initially as a response to the pandemic because I wanted to talk to customers in a different way to understand how they were responding to the pandemic of remote working, and I just kept doing it because it's one of my favorite things. So this season is going to be all about the world of consulting. So you are the first guest in that area, good sir, which is exciting because I wanted to start with framing this world and what the modern world of consulting looks like, because I know that you've seen it evolve over your career and there are still some of the fundamentals there. But there is this kind of iteration, and I'd be interested just to begin with how would you describe how you've seen it evolve over recent years?
Augusto: It's a very good question. Often when you look online and you've got all of these trends that are changing the world of consulting the thing that I tend to think is the difference now is that some of those trends are actually changing absolutely everything. When I talk to people about the businesses that we work in, the consulting and technology business working, I tell them, the only difference really with any other business is the perception of reliance on people, as people being the center asset of the business. To be honest, that's actually true to many of the businesses. I think consulting actually becomes the product that you sell. And so it makes you more reliable for different reasons. And over the last few years, how people work and interact with each other and also how people deliver services has massively changed and it's the perception and the expectation of how that has to be done that is starting to force the hand of both the clients and the consulting businesses to adapt to the new wishes and desires of people when it comes down to work. But one of the main things is the resourcing models and there is the whole idea of happy working but that's actually opened up the possibilities and suddenly resourcing is not a local activity anymore. There is no need to think about resourcing as a local activity and start thinking about it as a global activity with all the implications that brings. Someone said to me a few years ago, "I'm a digital nomad", I've got no idea what he was. Now everybody is a digital nomad, and everybody is digital. So that creates massive opportunities but as well, great complexities within these businesses. So that's, I think, one of the strong forces of change. There is another one which is very much spoken of and it's the digital transformation that the clients are going through, but that's actually affecting the businesses also that serve those clients. And I think one of the biggest changes is going to be the asset consulting, if you like. It's not good enough anymore to go in and do a large transformation program with lots of people on the ground and so on. So you've got to be agile, you've got to be more fleet to foot, and you've got to move at the speed of digitalization and that requires you to be IP asset driven. And that transforms the model, transforms the way in which you deliver the model and transforms the world, which you've got to build the business itself.
Jonathan: Right. Okay. I love those three themes. It reminds me, I've had a conversation a number of years ago with, I think he was the at the time going to become the chairman of Deloitte in the UK or the managing partner of Deloitte in the UK. We were talking about orchestrated workforce planning, right. And this idea that what they were trying to do was provide or almost be a broker to IP to their clients and they were drawing on this pool of their internal people, augmenting that with expertise in forms of partners or contractors. But what they found over time, as you described, with this whole remote piece, is that actually the pool of individuals became way more competitive because everyone could work from everywhere. So there's a lot of interesting themes there. And I think the last piece around the asset bit and the IP, I would imagine that also the world of SaaS has influenced that, right? Because you know, companies are starting to think about how do we deliver that IP to our customers on a consistent basis? And I'm curious to know how you think this SaaS economy, modern SaaS economy, as we call it. How has that impacted the world of consulting?
Augusto: It's a very good one, that one. I think what often happens, well the grass is always greener on the other side isn't it? So you've got management consulting thinking SaaS is a lot better, and SaaS businesses thinking, well you haven't got the cash requirements we've got, so your business is better. There is an interesting model which you and I have spoken about before, which is that I suppose, the convergence to a point of collision of the world of services and product, and it's interesting how much more investment has gone into the world of product and attracted more entrepreneurial mindsets that's driven what was traditionally, I bought a CD and that's originally my background, is I came together with people eventually building the golden source into the golden CD that gets copied. So you get that thing and then you sell it and then that's it off you go. Maybe you chuck support and upgrade and so forth, and someone very cleverly took that and said, Oh no, I'm going to turn it into a service. You pay me on a monthly basis forever, as long as you're using this in whichever model, commercial model. That's a much more sophisticated way to engage with the clients because your focus is on the clients using the product, so shelfware now becomes your problem, not the client's problem. It's a fantastic idea. Consulting world is lagging behind because whilst it provides services to do it on a very immediate basis. So what was starting to happen is that the traditional service probation model is starting to move into technology enabled services and eventually into a similar SaaS commercial model. You can still deliver the same thing, we just need to think about it in a slightly different way. There's a few moving that way. Not enough yet, but just slowly evolving that business commercial model to provide the client with what I believe brings a lot more value, which is centric to the change of the problem. And also, again, one that I've mentioned to you before, that the focus of the SaaS business on customer success. I think it's essential for consulting businesses to start bringing it into their floors, if you like. There is this assumption, I know because I'm generalizing and generalizations are wrong, but there's this assumption that just by delivering what the client asked for, what you wrote in a contract, then the client should be happy and that is not the case. Because the needs change and you've got to be continuously focused on customer success. SaaS businesses actually, many of them have nailed that. They continuously focus on the customer. They're more outwards focused. With so many consulting businesses are still a bit behind that. But the worlds are coming closer and I think it's good, by the way.
Jonathan: Yeah, yeah. Well, I often hear if you ask a consulting manager, or someone who runs a consulting firm, you've got revenue, margin, happy clients, you know, choose two, because the third one always gets left behind, but no, that's interesting. Do you think, though, you mentioned some of the innovation. I know the guys have found it, you know Kubrick? The data guys. I think I told you this, they were my old bosses, and so back in the day what they were doing was they were innovating on a recruitment business model initially by providing business technologists - they'd spotted this gap between business and I.T. and large corporates, particularly in FS. That's what we went out and sourced and that's where I started my career in recruitment for those guys. They've really innovated on that. There's a problem within, you know these companies around data. We need to make better use of data. What is the most efficient and cost effective mechanism to bridge that gap? And there's a people component to it. So they are identifying the problems, then training up this cohort of people, placing them in almost as a contract recruitment, translating them into a permanent hire, and they've got all these different revenue models associated with it.
Augusto: It's very clever.
Jonathan: Yeah it's very clever, but it's supply and demand. So fundamentally they've just innovated on a better and more interesting way to do that with maybe less risk with their clients. And I think SaaS has influenced their thinking on that. There's a couple of good podcasts from Tim and Simon now and they talk about that a little bit. So in the current climate, which is erratic, I don't know what's the word to describe it? You're talking to people who run consulting businesses, and what would you say the mindset is of the best consulting leaders that you see right now in the current climate?
Augusto: First of all, Kubrick is a fantastic business and a great business model and the idea of building multiple strengths based on effectively the same base asset, which is the person that you place, is absolutely fantastic, it's really clever, and I agree with you, it's entirely inspired on the SaaS commercial models. And a few have done it very successfully like Kubrick, it's really clever. Also using the data angle which has been invoked for so long and it's so important. So in terms of at the front of the mind, why would you say consulting business? You've got to be out of your mind, it's relentless and it never stops.
Jonathan: Why start any business? I'm asking myself constantly.
Augusto: Same here, but the thing is, you wouldn't do anything else would you. I suppose on the mindset of, well, this is what you're going to do because you're wired to build something and you start building and you think at some point this is going to have to become more than I can make it by myself. And then you start bringing people and so, over the last few years with things that can be shaken up very easily. And right now there's all sorts of things happening, all sorts of things, I mean, from changes in the monarchy to political changes to war, to pandemics, all of that is just creating an uncertainty in the market. And that brings to the forefront of people's mind resilience I think, which is how do we make this more resilient to that kind of change? I always tell people the key for a successful business is resilience and predictability. If you can tell me this is going to weather this storm and you can predict what the outcome is going to be depending on the circumstances outside, then you've got a good business asset, you're cooking with gas. So resilience has become really important because what we saw is people behaved to the uncertainty of the pandemic in very, very polar opposite ways. Some people let people go, some people held onto people, all of which have an impact on the businesses. And we see now there is a massive surge of work and there's loads of work coming up potentially because the work agenda got postponed for a couple of years. And now it's all that needs to happen before next year because something terrible could happen. So the businesses that managed to nail resilience and weather the storm but retain the assets are doing really well right now and everybody is well aware of that. So that's one of the key things. So loads of people are looking into, okay, so how do we continue to build this? How do we do it? I had a conversation earlier this week with a really beautiful business datum payments. They had a center in Poland where they had all these amazing engineers, really good cost center, very high quality people delivering services to the international client base. With the war in Ukraine, the prices have gone up. That has become an untenable center, it has trebled over the last few months. So they've entirely changed the model and it's either continue that, continue to grow, but to start looking for how we're going to create the leverage that can't create anymore. But because they are a very resilient business, they quickly can jump over, adopt the model and then come up with a solution. So I think that's going to be a key one. And then, I love saying this because I think it's essential that long term thinking is going to be key. Short term thinking doesn't pay off. I know it can make money, but if the ultimate goal is not to make money, long term thinking will always serve well, the stakeholders, the clients, the shareholders and this stuff, and I think now more than ever is key, it doesn't matter whether you can see what's going to happen. None of us can, but it shouldn't stop you from thinking about the long term. Don't make any decisions now that you can clearly see aren't going to help you and your team and your clients get through it.
Jonathan: Okay and so through this lens of resilience as you describe, how do we find that predictability, this search for predictability, if you will. What should consulting companies be thinking about in terms of the revenue mix to drive that predictability?
Augusto: It's the $100 million question, isn't it? Let's see if we can answer it.
Jonathan: It might make someone $10 million in their consulting business to begin, let alone 100, not with the evaluations of PS but there we go.
Augusto: Well, that's another subject. I think my view is that this brings us back to that conversation we were having earlier, around the SaaS commercial models, the influence of those onto the consulting business models. So the predictability is impossible without recurrence. So how do you achieve that with recurrence? It has been tried in many different ways, and this is one of things the Kubrick guys absolutely nailed. They came up with a model that was 'the more you engage with me, the more value you get', and when you want to stop engaging with me, you'll still get value if you paid me, absolutely fantastic. And that's the idea. The only thing is that in consulting that's difficult to create unless you've got long term contracts with money services. But it shouldn't stop people. What they should be thinking is about real occurrence, and there's a little 'o' in the word, and that is in fact very achievable. And in fact many of the good businesses are already doing that, but they don't track it, a happy client is a client that will buy more, and they will come back and buy more, maybe more of the same, maybe more of something else, but they will buy more. And that recurrence in itself with certain parameters is as valuable in terms of the quality of their revenue. But undeniably, again, you made reference to this earlier, having different revenue streams that compensate each other, kind of flatten your revenue curves and move the peaks and troughs. That's absolutely key, and importantly, that your revenue is profitable, so profit is king. So it's got to be high quality revenues. It's much better to have less revenue, but a decent profit, than to have very high revenue but very, very low profit.
Jonathan: Yeah. Okay. I think that it's super interesting, that Nirvana state that people are looking for, right? Because I think a lot of people have almost got brainwashed by SaaS and it's like, Oh, I need recurring and therefore let me build a product and I throw all of this money into building this product and then it turns out we don't know how to sell product, we know how to sell services or the product's ****. Whereas as you say, if you work back from, "we want people to buy more from us and advocate for us and buy more over time", then actually that reoccurrence, as you describe it is easier to achieve. I think from my perspective, what I see, though, is that consulting businesses can chase those big ticket deals. So they're going after the six figure deals or the seven figure deals, whatever it is, comparative to the size of your consulting business, which is great. You don't bill all of that up front. It's not like, yeah, here's a million pounds upfront. It's like, no, no, no, it's on delivery milestones or it's a phased engagement. And so then you've got this pressure on your delivery quality and your execution, and as you referred to at the beginning, the agility, your ability to be agile and phase this work, and I think almost you've got to strike that balance in your in your consultancy sales of you sell the vision, you've got to sell the vision of digital transformation and ideally it's over multiple months or years, whatever your time horizon is, but then it's broken down into such a way that you can drive outcomes in value more quickly, so that you're not carrying that risk of, 'well, this big program only works when I get to the end', and I don't know how that resonates with you.
Augusto: Yeah, I absolutely agree. I mean, there's two points in there. One is how to commercially engage to be more successful, and the quicker the client can see results and the quicker those results actually make an impact onto the ultimate goal. And often, by the way, I see people get too focussed, if you like, on what they're doing rather than what they're doing that the client will achieve and the client goals are really the ultimate reason why you're there, and that's what you should be thinking about. But the quicker the client can see an outcome and realize what they will be doing, the easier it is to continue to not only stay but also grow. I think what we discuss with people often is service architecture . We go to people and say look, and what you said is spot on I think, which is sell dreams, sell the vision. But the thing is, how do my services fit in with our vision in order to enable you through the whole journey? So I need to be able to tell you that very simply, in one or two sentences so that you can say, okay, well, we start here and how do your services come together? So that is clear to me that if I buy A plus B plus C over time, I'm going to be more successful because that's going to enable me. And very, very often that's not something that has been thought through. So how do these services come together? How does that make sense for me and therefore for you so that I can buy more of your services or your solutions. So that's one that I would say to people, you know, go and think about your service architecture and go and think about how that service architecture provides value with time, your lifecycle of your engagement with the client. One you said, which is an interesting one is the one with product creation. And I talked about Asset Consulting earlier. I really like Asset Consulting. I come from product and many of the technical businesses out there, they spot the patterns. I think they’re in a great position to actually see what really is the problem for a client that you could potentially automate or build a solution for. But unfortunately, you're right, most consulting businesses are not set up to build product. I'm not going to use the word that you use, but they're not terribly good at it. And like I said...
Jonathan: I don't know what it is in Espanyol.
Augusto: But it doesn't mean that they're not good at spotting the patterns, the provenance that could be automated. So I believe there is a crossover there somewhere to create the venture, built there within the services industry that helps and realize these products. But that aside, and thus, I suppose a different focus, I think the ones that I see that are very successful are the ones that create the assets and they use those assets to improve the service and deliver better services, effectively to enhance the service architecture and then to deliver better and deliver quicker and so on, and there are very successful people doing that out there.
Jonathan: It doesn't necessarily need to be a product though, right? That’s the thing. An asset as you say can be a delivery mechanism for insight or capability. So it could manifest in a few different ways.
Augusto: Yeah, exactly.
Jonathan: So moving on then. So there's a couple more questions that I have. So, we talked at the beginning about how the world of consulting has evolved. And you talked about a few things. You talked about the need for agility, the need for a globalized model, you've got a more responsive and mobile resourcing capability that's got more flexibility. and the recurrence of revenue so and then we talked about the resilience of the mindset. But if you break down the anatomy of a consulting company, what are the key components? Talk us through, in your opinion, particularly from an investment maybe, or an acquisition perspective, what are those key components?
Augusto: I think it's a shame because I don't think it's going to be rocket science, but I suppose the best things are common sense.
Jonathan: Elegance and simplicity.
Augusto: Yeah, exactly. I think,simply put, a clear vision is the key driver of the piece. So where are you going with these? Why does this make sense? If you've got to sit down in front of someone and really have to explain at length what the business does, and why it’s there, then it's certainly not an investable business. An investment in the form of potentially investment coming from outside of the market, but also the investment that people are going to put into buying your services as well as people that are going to join your business. You have to be clear, you've got to have a vision of not only why you exist, but also what you want to achieve with that existence. And that makes a huge difference.
Jonathan: Yeah. Hold on a second Augusto, my son’s here. Hey, buddy. Can I just finish up with my friends? Hey, everyone, this is Frank joining our broadcast. I'm just recording this, and then I'll come downstairs. I've got to make Lego, everyone, so. Okay, I'll pop down in a minute. Cool bud, yeah carry on.
Augusto: Yes. So the vision is a very important strategy.
Jonathan: So, after my son briefly interrupted the recording. Hey, Frank. So we started with the vision.
Augusto: Yeah. basically the vision, the strategy all put together, where you're at, why do you exist and where you're going. Those are the key things, as we were saying. And then the things that follow at a high level, obviously you've got to have a great execution engine, which is a combination of really high quality delivery and engaging with the client and we were talking about that, bringing in some of those concepts from the SaaS world to making your business more client centric, on an operation that is slick. One of the things, I typically think that strategy, that vision, needs to be first, and one of the things that's become more apparent because of the changes and the need for resilience is that that operations engine has to be solid. You need to have a way in which you are engaging and it's making them lean and mean, if you like, for you, but really efficient and smooth for the clients. From the onboarding resourcing, finance, so when the market looks at your business, they look at having a clear vision. They look at having a great team that delivers. They've got a few parameters that are here and there, having an operating engine that actually manages and services this that's scalable and you can build more on top is very, very positive because it effectively moves you from potentially being a bolt on investable business to being a platform one which is an entirely different ball game.
Jonathan: Yeah. Okay. Interesting. Yeah. I mean, I think that when people talk about pillars sometimes in businesses it evokes this siloed mentality, right? It’s you’ve got to do this, you’ve got to do this, you’ve got to do this. And in reality, it's way more holistic and I just think that, like you said, you've got to have that vision, you've got to be able to do the top down piece because that's the bit that helps bind everyone together in the business about what you're pushing for, particularly at a senior level, but also it's really difficult to be creative with your customer, do your best work, drive the most value, come up with the best ideas, if it's like the Tasmanian devil in the background for organizing the work and people can't do their best work if things aren't organized, and I sometimes think that people shy away from the term ‘people process’ in technology because it became such a cliche. You'd see it on all the gifs and all of this type of stuff, people would be like, I'm not going to put that on a slide. But it is that, it really is. It's just if you don't have the right people, you're not going to get anywhere. And if you don't have good process for the way that you work and the way you work with your client, you're not going to get anywhere. And then if you don't have tech that helps you sell, deliver and bill, you know, and arguably just smoothly. I remember you did that training for some of our team and just the reputational damage that comes with, you know, you might be a little bit behind on an engagement and then you've sent the wrong invoice and you're like, well... then you look like a bit of an idiot, right? So I think it's keeping it simple and realizing that it is holistic and that people process and tech kind of wraps it all together.
Augusto: And even the management structures, if you look at how management structures have developed over time, we've had all sorts of different things. And of course you still need leadership, you still need management, you need all of these things. Thinking about roles as a combination of different activities that come together to achieve an outcome. It’s a much more successful way to do it than saying, "Well, you're going to be the boss always now and forever, because you've got a title." And in a business like in consulting, where you offset these people and you've got lots of people with different skills that could be suited for different problems in a different way, you’re shooting yourself in the foot if you make it very, very static and very stiff and siloed. The key to scalability is that platform. And the thing with the invoice is that in some organizations, if you send the wrong invoice, they'll be checking every invoice you send and they'll be delayed payments. And then, when procurement, when they come. I asked procurement, was it easy to interact with these people,they say no, cut them off. But equally let's say that you're trying to onboard someone. "I joined your business and it was an absolute nightmare to be onboarded. Well if I've got good friends somewhere, then I tell them don't join. It's not great." Exactly as you say it’s holistic and a cohesive group of activities, functions, when are we going to call them? We can break them down and say, okay, you need people, delivery, you need service development. And it's much better to think about it as a whole and then you start putting the pieces together.
Jonathan: Now, one of the things you mentioned earlier was this, sometimes lower revenues and higher profits is better, no, not sometimes, it is better because you don't want to have unprofitable revenue. So again, part of what you do is help consulting companies to maximize enterprise value and create value. So what should people be thinking about in terms of dissecting that growth and making sure that it's the right kind of growth that creates value? Because ultimately, at some point, probably these people want to sell their company or raise investment or some form of liquidity.
Augusto: Yeah, I think one of the learnings for me going through the process of raising investment or selling businesses was that the stuff that the investors were looking at and that the advice they were telling me, oh, well "we need this, we need that we need this, you know, can you present this", and we tried to put it together. Quite a lot of that stuff actually made sense from a management perspective. And what I mean by that is had I known that I needed that or that that existed, whether that is cashflow management, for example. Early on, I would have done things differently because I would have had a tool or the knowledge of a tool or something that would have made my business better. So the principle of, if I know what I'm going to need at the end, and I know the end is not the right word, but the point in which I'm going to, some kind of financial transaction, which I'm going to be scrutinized as the quality of my business and I know what the outside markets going to say. These are the things that we're needing or let's say you've got high quality business. If I know those and upload them backwards and I say, okay, at this point, because you don't want to overbuild, I need to have a good structure of financials put in place so that I can manage my performance in a slightly different way. At this point, I need this, at this point I need that. So effectively, building the right thing through the different stages of development of the business helps you build it better. That's the principle really. It's not terribly clever, but it's simple and I didn't have access to that. So that's why we're doing it now for other people. And what it is, is prioritizing the activity that will help build resilience, predictability and quality on the business, the revenue, the profits and all the structures of the business, so that as it grows and develops, it evolves in more efficient ways. So that's what it is. What we do is we look into how do we prioritize the different things. And at what point should you build a sales and marketing engine or at what point should you start looking into a PSA instead of having a bunch of spreadsheets and notepads somewhere? And how is that going to help you? What difference does that make? Or at what point should you engage with the proper finance person to look into the numbers? All of those different things, and that's just a few examples, but all of those different things, we try to plot them, if you like, on the journey of the business and we engage with the business at many different stages. The focus is grow by all means and do what you've got to do, but focus on the right activities and again it's long term thinking. So whether you're going to raise investment tomorrow or in three years time with thinking about the whole lifecycle of the business after investments, this is how you do it. And some of those are actually going to come afterwards. Some you really need now.
Jonathan: Yeah. So I remember, you may not remember this, but we were in this meeting when you were a client, my favorite client, obviously. We were in this meeting in our first office in Brixton where you came down and you're like, 'this is edgy.'
Augusto: Much nicer than mine.
Jonathan: Yeah, but I remember you said something because you were like, Precursive is like the heat map of my revenue, It was a nightmare, but you'd asked us to color code everything in the product, so you knew this was sold, this was forecast, this is booked, this is billed. And you were like, I switch it on and I can see my revenue like a heat map for this month, and at the time we were like, ok is that good? And you're like, yeah, because I know where I'm going to land, right? But it was interesting hearing you talk then, that's where you said, if I'd have known that stuff then, it's interesting when you start to get the information in front of you, whether it's our tool or it's a spreadsheet or something, and you've actually got real time information in front of you that tells you what's going on. The way that you make decisions and the speed that you then want to make decisions afterwards totally changes, right? Because you're like, ‘I'm actually looking ahead’. Not, ‘I get to two weeks after the end of the month’ like we were talking about before we started the show. Or you're getting to the end of the month going, ‘am I going to make payroll or not?’ Right?
Augusto: You don’t want to be there, do you?
Jonathan: Well, yeah, I think what's interesting is the ones that I come across is, again, regardless of whether they're using our product or a competitor product or whatever it is, but it's the people who've got it locked down in terms of that knowledge and that certainty, they're much more confident in the way that they run the ship, because they're not worried about it crashing into the rocks.
Augusto: Absolutely. I mean, just again, another example earlier this week, talking to a beautiful business who we're working with and they were saying, we could hire 15 more people. So what’s stopping you? ‘I don't know how much cash I’ve got’. It’s like, I've got the work, the client wants me to take the work, but I've got no idea if I can do it. That cannot be the thing that stops you, because that's the difference between the client getting what they want and need and you growing or evolving the business, and often we see businesses that get a little bit stuck on trying to actively move the pieces that should be clear to everyone. It’s because of the lack of information to make the decisions. I’ve always prided myself on the ability of making decisions, often wrong, but making decisions quickly with a reduced amount of information at my disposal. That's not how we want to do it, certainly not when you've got a hundred people.
Jonathan: No, it doesn't give you much longevity, does it? So then finally, just picking up on that then. So you talked about how you want to make decisions. Talk to me a little bit about the metrics that matter for you guys.
Augusto: So I mean, the traditional metrics are still as relevant as they’ve always been. I like to think about it in groups, if you like, and you think about your clients first and foremost, because that's the reason why you're there. One that has always been really useful for us, for me in the businesses that I've been part of and interestingly enough, the investors really like and it's often not followed, not measured, is customer satisfaction. So are your customers satisfied? When you go into a product business and ask them what’s your NPS and everyone talk about…
Jonathan: CSAT and all this.
Augusto: Very, very seldom would anybody know, that is all that means in a consulting business, I think it's key to track that from the very beginning. Are they satisfied? Are we doing what we have to do? And also because clients are the source of your service development and architecture, they're going to tell you what you've got to do. They’re the best people to tell you, well do this, or do that and then we’ll be better off. I think customer satisfaction is the key one to measure with whatever metrics and obviously the number of customers you've got. And going back to the revenue, the repeatability of business within those customers. So by service, however you’re going to measure it, are customers repeatedly buying from me? Are they buying the same thing? Why are they buying different things? Are they buying more? Are they buying less? And a few other things, but those are key, I think for the client and the view of the clients. And then obviously you have to measure your people, so start looking into ‘am I attracting the right people?’ So all of your process from the beginning, for attraction, retention and development. And exit also, are you getting the right feedback when people exit the business? Because eventually they will, and that's a key one, and of course, because of consulting and how they work they need to check the right ratios in terms of your permanent and your contracting staff. You will have this right level of flexibility in my team, and you look at your services and your market. So am I addressing the market? How is my market developing? And then go and generate the right leads. All of those beautiful things that you get through marketing. Again, very seldom measured in consulting. I'm not sure why, but it's a key one because it helps you develop your marketing and sales engine. I like to tie that back to the service development metrics. So if I learned from the market and I'm developing leads, think how am I feeding that into developing my services? What kind of assets am I creating? And finally all of that combined, is it producing the right results? So am I getting the right revenue? Is that revenue profitable to growing? Concentration is a big one. So am I very concentrated and therefore a risk. So have I lost sight of resilience from a revenue perspective? Things like that. So, everything that we've been discussing, we use it to look into input and output KPIs and then put them together. And then because obviously it's very important to measure the input KPIs, also the effort that you're putting into things and are they producing the right results at the end? All of which, by the way, far from potential employee satisfaction and customer satisfaction that are seldom measured, and they should. We often see them just not all cohesively linked. Sometimes people are measuring these things, but they're not putting them together and saying, ‘I do this. I get that’.
Jonathan: Yeah, they're not looking at the correlation and in turn the causation. I like the hierarchy that you used though. You worked back from the client, client satisfaction, employee engagement, employee experience, ability to attract and retain talent. You do those things well. The revenue in the margin takes care of itself. And I think too often in consulting they're like, What's my billable utilization? What's my revenue? So, great, if your billable utilization is 96% and you're really busy, probably your staff are going to leave quite soon. And by the way, is it profitable revenue? So sometimes I think the customer success or the client success mindset, you see it seeping into the right firms because you see those job titles in those companies. You'll see the delivery leads, particularly in the world of I.T. or Tech Consulting. We operate a lot in the Salesforce ecosystem, as you know. You'll see head of delivery and customer success or VP delivery and customer success. And you see that in the firms where they've modernized and they've got that kind of thinking. You know, some of them are invested in by Salesforce ventures or by product investment companies who are bringing that mindset to them. But it's interesting. Thank you, sir. Really interesting conversation as expected. So thank you for taking the time and the effort to prepare and everything else because, spoiler alert people we do prep. Makes it up on his own. And thanks to my son Frank, who has come home. So for those of you that are paying attention, I now have to go and put together a Lego Ninjago car prior to packing for our holidays to San Sebastian tomorrow, which is just my wife and I, Augusto, so that will be nice. Work out who’s looking after the kids. Gracias amigo. Thanks very much. All right. See you later.
Augusto: Absolute pleasure. See you.
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