1641 – Two Things Needed to Successfully Implement Initiatives with Vici Partners’ Alec Hudnut

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0:58with us right now alec hudnut alec you are the managing partner at vici partners that is on the web at vici partners.com vici partners.com alec thank you so much for joining us josh thanks for having me on i appreciate it yeah and and in a nutshell what does vici partners do Beachy is a management consulting firm, and we help companies improve their operating income. And we work from companies in the$100 million,$200 million revenue range all the way up to very, very large companies. And typically, our efforts result in a 25 % improvement to operating income within a two to three year period. Well, that sounds like a good value proposition.

1:47Yes, we think so. And I understand it. So in terms of like management consultant, your processes are a little unique. You mind kind of explaining what that ends up looking like? Absolutely. So we have a different philosophy towards consulting than most of the big management consulting firms. We believe that to successfully implement initiatives, you need two things. You You need the quality of the idea and buy-in for the idea. And only when you have both in equal weight, they're equally important. You actually get the value. So we oversimplify consulting into a formula. Q times B equals V. The quality of the initiative times the buy-in for that initiative equals the value that you're going to get for that initiative when you try and implement it.

2:42And because of that, we spend a lot of time on the B, the buy-in part of consulting. And so our consulting is very different than typical management consulting firms. We don't make many recommendations. We don't make presentations. We do not tell our client what to do. Our philosophy is that the answer already lies inside of the company. And that if you really want to get buy-in for something, the best way to get buy-in for something is to have somebody from the company themselves present to the CFO or present to the EVP. And so our role at Vici Partners is really more as a facilitator. So we'll go into a company and generate a few thousand ideas with frontline workers, with suppliers, with customers, with our own partners who've worked in a lot of different industries who might see something that the client's not doing, say in the call center that we've seen work other places.

3:41will generate all these ideas and then we'll bake them down to a much smaller group say 10 to 20 percent where there's a good business case there's low risk and there's buy-in and then the client themselves is presenting the idea to the executives and that way you get buy-in right you're a guy in the call center and you came up with the idea and you worked on and you built a business case and you got your vp to sign off on it and then you and the vp went and got the cfo to agree to it? Guess what? You own that thing. It feels like your idea. It is your idea. And we, Vici, our value added is, okay, you can't go after 3 ,000 ideas.

4:22What are the hundred you can actually go implement? And let's make sure the business cases, implementation plans, the metrics, the milestones are very tight and that there's buy-in from all the people in the organization who need to say yes or who could say no to the idea. So we spend a lot of time on the buy-in. And because of that, we source most of the ideas from inside of the company. Because if it's coming from your own team, you're much more likely to want to implement it from an outsider. You know, I love this. It's much like, so my wife is a family therapist and, you know, in her work with individuals, You know, a good therapist is not just going to run around and spout off all their opinions and advice on what you should do.

5:07You know, a good therapist is going to ask really great questions that are going to evoke, you know, kind of this natural finding of the truth kind of thing. And it sounds very similar to your approach. definitely we we believe that co-developing the solution yeah is better than imposing the solution most consulting firms they just want to they just want to be smart right they want to say the right answer well in our worldview the answer is usually the easy part the business case is usually the easy part. But getting buy-in for it, especially since the organization hasn't been doing it that way before, there must be a reason why, right?

5:56How do you break down those barriers? Are they politics? Are they bandwidth? Are they lack of capital? Are they lack of understanding what the positive customer impact would be? What are all the barriers that have kept the organization from doing something that seems like a really good idea. So we spend a lot of time on that. And I suspect that in your legacy or just kind of being in the consulting world, I'm sure you've heard of stories, maybe working with clients and kind of having conversations about how they've engaged with consultants previously. I'm sure there are plenty of stories of, well, listen, we invested$150 ,000, we had all this work, we did all this stuff, had great findings.

6:41And guess what? We did nothing with it. I'm sure that happens. Yes. Of course. I used to be one of those guys 25 years ago when I worked at McKinsey, right? You make a great blue book. It's super smart. It has all the answers into it. You know, you hand it to the to the EVP or the CFO and they're like, well, that's great. You know the answer. But how am I actually going to get it done? Right. So a lot of, you know, we believe that the value in consulting is to actually get a change in behavior in the organization that leads to an improvement in operating income because people are now implementing, you know, dozens of things that have been rolling around in the company for a long time.

7:26Most of our clients are like, but most of these are our ideas that we've been thinking about for years. And we say, you are absolutely right. That's the point. Because if it's your idea and it hasn't gotten done, we're here to help you get it done, help you build a better business case, help you understand why buy-in hasn't been created, break down those barriers so that you can then implement it with greater chance of success. You know, another podcast, I don't know if you've connected with Doug Knoll, who hosts a podcast called Listening with Leaders. By the way, you would make a great guest for him.

8:03I'll make that connection afterwards. Happy to meet him. Yeah, yeah. He's one of the podcasts that we've launched. And yeah, and that's one of the things that he really focuses on is helping top-level leadership develop much better listening skills and empathy. And something that you're pointing out, I think we all are aware of this, and maybe we don't have, and I'd like to maybe just kind of bring this up a little bit more broadly here to talk about this culture of listening, because I suspect that there probably are within our organization, a lot of really good ideas, particularly those folks that are right there in the trenches, they are on the front lines, they are seeing things, they're seeing trends, they're getting customer feedback.

8:53And sometimes it can be really challenging to encourage, that dialogue because it ends up, could be potentially a lot of communication or, again, we kind of have to sift through everything. But I think a lot of times, oftentimes, it's those folks that might be on those front lines don't feel that that input would be valued. Any ideas on developing better cultures of listening? Because it seems like that's what you're advocating for. Yeah. And that's what we do on our projects. The net result of our projects is the frontline feels it has more voice and the company is more profitable because of that.

9:37So I've been a CEO of three tech companies. So I understand the executive's perspective. So the executive's perspective is when a frontline employee comes to me or any employee comes to me, it's usually a complaint. And it's unclear what I'm supposed to do with it. And it's unclear why it improves the profitability of the company or improves our relationships with customers. So as a CEO, I only have the bandwidth to listen to things that basically say, here's the situation we face. Here's why it's a problem. Here's the proposed resolution. I need a little bit of investment. I need 10 ,000 of investment, and I'm willing to sign up for $100 ,000 of cost reduction because of it.

10:29And I've gotten the three or four people in the organization who would need to say yes to this to already say yes to it. Now, when a frontline employee comes to the CEO and starts talking like that, the CEO can sign off on 100 ideas in a day because they're not complaints. And so So the executives stop listening to the employees and the frontline in large part because it's noise for them. How can I take action on that, right? I mean, of course, if it's something extreme, like the refinery is about to blow up, right? Something like that, you can move on quickly. But most things come as complaints without a solution.

11:14And on the other side, if you're a frontline person in the call center, you don't know how to talk to the CFO. Right. And the CFO wants to say, what's the business case? What's the risk? How does this impact my quarterly financials that are coming up? Did you get a bunch of people to review this and sign off on it? And who's going to implement it? And how am I going to know that it's successfully implemented? Right. And so we're in building in our programs at VG Partners and building these initiatives with frontline workers, we're teaching them how to build that case. So that they can talk to the executives in the language that the executives understand.

11:56So I think the big problem with communications is that frontline workers and other other mid-level managers don't know how to talk to the executives in the language that they're comfortable listening to. And the executives have been so overwhelmed by complaints or, you know, things that they can't do anything with, that they're more comfortable with the big customers, the senior executive team, the board, because they all talk the same language and they don't just vomit out complaints, right? Right. So we are helping. The executives understand that there really is value in the front line and mid-level management, if they're if if those ideas are presented in a different way and we're teaching the front line and mid-level managers how to talk to executives in a way that an executive can make a decision.

12:48because the most important part of any company, it's not the strategy, it's not the product, it's not the culture. It's how a company makes decisions. You can determine the long-term of success of a company by how it makes decisions. So we're teaching the company how to make decisions in a different and new way. And it's not like a training program. We implemented these 100 initiatives, they were worth$50 million. Guess what? This is a valuable new way of doing things, right? It's not some two-day retreat where you're teaching everybody stuff. It's actually, let's do it together and show how that new communication can unleash value in improved operating income and voice, right?

13:37And it's beneficial to the employees. Now the guy in the mailroom who came up with the$6 million idea at the big insurance company to cut FedEx costs, next time he's in the elevator with the CFO, the CFO turns to him and said, I love that idea. You got any more? And the guy feels valued at work, right? You know what's unique, Alec? And I'm thinking about this as you've been talking about, you know, we think about where, as a consultancy, right? You know, where your business comes from. But your approach is kind of interesting because it, usually, you have to have a champion on the inside. If someone's like, you know, we really need to bring Vichy partners in.

14:14But it almost feels like you've really opened up that potential champion. It could be typically a lower level manager is not going to recommend necessarily a consultancy to come in. Whereas I bet that there's someone listening to us right now that's somewhere in the chain of command and they might feel that they're kind of lower down the pole, but they're listening to what you're talking about. You're like, you know what, there's a lot of good ideas. I've got a lot of good ideas. And, you know, we need to, you know, kind of work on, I'd love to, I'd love to share that in a way that I feel like it would be valued.

14:50And so it seems like it kind of opens up, you know, who I was, because my next question, I was kind of thinking about this is, you know, it's like, who should be reaching out, you know, what types of organizations, companies, and specifically within the organization, who can be, sharing this episode with someone else within their company so that they can have a hear at this and then potentially find ways of engaging with Vici? So Vici, typically we engage with companies that have greater than$100 million in sales. And typically the CEO or the CFO is the decider. They're the ones that choose to buy their services from VG partners.

15:35However, a lot of times we get introduced to those CEOs and CFOs because the head of HR thinks it's a great idea to improve employee voice or a VP worked with us at another client and he saw how well it worked. And now he goes and talks to the VP of marketing says, hey, this really worked. We saved a bunch of costs. We invested half of it in better marketing. We have a much stronger brand and it allowed the company to have lower churn rates and sell more products. So we do have advocates inside of companies that help us get to the decision makers. And then after the project, we have hundreds of advocates, right?

16:14Because we have hundreds of ideas that have been approved. And it was that person's idea who came up with it, right? And we're just helping them get it over the finish line. Yeah. Your website, vicipartners.com, V-I-C-I partners.com. For someone that's been listening to our conversation, what would you recommend they do next? Maybe they're kind of listening to this as part of their research on Vici. Where do they go from here? Well, they're welcome to email me directly. And my email is a hudnut, a h-u-d-n-u-t at vichypartners.com. Or on the website, there's a more information button you can email us there.

16:56but we're you know we're interested in companies that want to improve their earnings and you know improving earnings wasn't a sexy word a couple years to a year ago in the tech industry it was all about growth and we think that at the end of the day it's always about profitable growth not just growth if you have a high growth company and you're still losing money or your margins are really low, at some point, your shareholders are going to want that to be different. And we can help you get ahead of that difficult conversation by getting yourselves profitable. And typically, on most of our projects, a portion of that profit, if we find$100 million of savings at a billion dollar company, the CEO and CFO is going to be reinvesting$25 to$50 million of that in growth initiatives.

17:49That's right. New products, new channels, new partnerships, new marketing. So it supports the growth and it supports the profitability of the business. I love it. Alec Hudnut, again, managing partner, VG Partners, V-I-C-I Partners.com. Alec, it's been great having you on the show. Thank you so much for joining us. Josh, thank you for having us on. I enjoyed the conversation.

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