What does success look like? 

Propeller Industries is a New York City-based company that performs outsourced finance and accounting for emerging businesses. Instead of hiring staff to do financial reporting, accounting, inventory management, and related tasks, start-ups can use Propeller to handle those jobs remotely, on a contract.

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Propeller had reached a certain level of success—about $28 million in revenue—that had attracted attention and investment from private equity. Now, the investors were looking to see more growth at a faster rate. The goal was to reach $125 million in revenue in five years. I was introduced to CEO Chris Fenster by those investors, and after a few meetings, several things became clear.

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First, the organizational structure wouldn’t support a sales increase like that, even in a best-case scenario. The business had been built by three partners who were doing the same things in three different parts of the country. And instead of a sales organization, they had a team of account managers. The account managers were good at facilitating conversations with clients and helping solve their specific problems. Still, they weren’t adding value or bringing in business outside lead generations from client referrals. If referrals were the only pipeline to increase business, Propeller would be lucky to grow faster than inflation—especially with account managers who weren’t skilled at helping expand the services Propeller could offer existing clients.

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Next, Chris was the ideal kind of CEO to work with. He’s open and very knowledgeable—and he knows what he doesn’t know. He asks many questions and evaluates what he hears, and he trusts—while also keeping those around him accountable. He knew he needed to scale his sales and scale his revenue, and he knew that the team around him had very specific skills—of which those weren’t included. He was willing to let somebody like me come in and help him make significant changes to the organization’s structure to build the scaffolding it would take to reach the ambitious revenue goals pegged by private equity investors.

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CEOs' traditional mistake in situations like this is to believe that simply doing more of what got them the revenue they have is a viable solution. If you send out X number of solicitation emails to your current customers, you send out 2X. Or, you flood the zone with more salespeople with the hope that they strike upon some messaging that resonates with potential customers.

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But those efforts have several significant flaws. First, if you aren’t crystal clear about what works in your operation—and what doesn’t—you won’t have a firm grasp on why a particular strategy was successful. You might have a good quarter or year, but you won’t truly understand how to make that happen again. And if you have a bad quarter or a bad year, not only will you not have sensitive enough tools to warn you about tough times coming, you won’t have any tools to help you dig out of that hole.

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The other significant flaw is that those strategies don’t address the company-wide needs with increased sales. I often ask a CEO what would happen if a new client came in today with a single order that would produce all the previous year’s revenue or if it took 100 new customers. Would the company be ready to handle that? How would that impact everything from account services to supply chain, fulfillment, budgeting, and staffing?

            The answer most CEOs give?

            “I don’t know.”

But if you’re establishing as a company goal that you want to increase revenue X dollars or Y percent and you don’t have a handle on the infrastructure that will take—and have the buy-in and the accountability from not just sales and marketing, every member of the management team, you’re setting up for a scramble in the best case and failure in the most likely case.

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 My job was to come in and show Chris how to build the organization to support where they are and where they want to go. We audited the existing customer base to examine what they were doing and why—and where Propeller fit into that.

 

What made Propeller their choice?

What made it a successful relationship?

How did they buy?

What were the most important criteria?

Where did they get their information before making a choice?

Who were their main influences?

 

By comparing those answers to what Propeller did day in and day out, we could see the gaps and mismatches and develop a plan and structure to address them.

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After a comprehensive review of the customer base, we took a closer look at revenue, and the different categories it represented. We built a full-detail model of the path a prospect had to take to become a customer, and how Propeller touched them during each part of that process.

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Just like building a car on an assembly line, it’s evident if somebody on the line doesn’t understand their responsibility or isn’t going fast enough. Body shells start getting to the end missing a door or with bolts that aren’t screwed all the way on. Understanding the process and what touchpoints were necessary gave Chris a template for what skillsets his people needed to have. The company didn’t have a designated sales leader, just a vice president of business development. Those are two very different jobs. New hires on the sales side needed to have specific sales skillsets, and the account managers needed to be trained to be more sales oriented.

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The specific emphasis on sales—and even using that word—required a significant cultural shift in the company. For years, Propeller had avoided referring to its business that way, and Chris even recoiled at the word itself. But what was Propeller really offering its clients?

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It was selling an outcome. A solution. The delivery of additional information. Trust.

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By not thinking of what it did in terms of sales, Propeller was becoming more and more inefficient and delivering customer success—and it was costing the company resources.

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A six-month project morphed into 18 months where I became a kind of adjunct, acting growth officer. We hired a head of client engagement, whose mission was to help build the connective tissue between the client and the company so that those relationships could continually evolve to support new and expanding needs.

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It took nearly a year to get those gaps filled and skillsets addressed. But then, average transaction sizes began increasing. By implementing a sophisticated CRM system to track the client journey, conversion rates increased dramatically. We created detailed sales forecasting programs, and we started hitting those forecasts by the 22nd day of the month—which let us start adding to the next month and getting ahead of the curve.

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As the team gets better and the analytical systems get better and you get more sensitive to both internal and external factors, you can see the microtrends and adjust to them. Maybe something in the outside world is causing the decision cycle to slow down. You’ll see the warning signs in your management tools—and in the pipeline.

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Chris could see the changes coming, which meant that he was prepared instead of being surprised and frantic. The more sensitive you are to what’s coming, the more accurately you can deploy all of your assets—whether that means product mix, investment, staffing levels, etc.

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If I’ve done my job, I can help take a CEO and their team through that process and provide the coaching, mentorship, and structural advice they need to move forward without me.

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I’ve taught them to teach themselves.

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With Propeller, that’s exactly what happened. With a more sophisticated sense for what the organization is and what it needs to grow, the CEO has been able to revamp the leadership team to include members with the dynamic skills that the mission indeed requires. The new team has built an entirely holistic approach to the customer experience—which means Propeller has touchpoints all along the journey, not just when a sale initially closes. The company will finish this year with more than $40 million in revenue, and next year projects to be more than $50 million—nearly double what it was when I was retained. And that’s without any of the dramatic, disorganized increase in headcount and expense that most organizations accept as a necessary part of revenue growth.