S1E3 Starting a Successful Business with Jack Crumlin

Starting and successfully operating a business requires careful planning and continual implementation of the plan, adjusting it as it is executed. 

Jack Crumlin, Director and co-founder of Norton Crumlin and Associates, a leader in providing executive consulting and coaching to major corporate and government Senior Executives, offers insights into how he and his partner Roger Norton founded and successfully operate their business.

Jack offers excellent insights and advice for business people that can be used to start a business and to add value to businesses no matter how long they have been established.

For more information relating to the podcast and how you can gain access to advisory services to assist you with your business, see www.lseconsulting.net.au

Transcript

CEO Thinking with Philip Belcher

Episode 3: Starting a Successful Business with Jack Crumlin

Welcome to the CEO thinking podcast on Philip Belcher successful, CEO, mentor, advisor, and business consultant. On this podcast. I provide ideas for CEOs, directors, and senior managers to use as they lead their businesses to achieve outstanding results. I’ve applied these ideas to start, run, turnaround, and successfully exit businesses, as well as to mentor my clients that have achieved great results. I regularly host eminent special guests who share their experiences and ideas to inspire CEO Thinking.  If my guests and I can use these ideas successfully you can use them too.

Philip:

On this episode of CEO thinking I am honoured to have Jack Crumlin joining me who's one of the preeminent business coaches operating in Australia.  He has a broad background as a chartered accountant, corporate finance specialist, and a partner in two major accounting firms. He was the CEO of a telecommunications services company (which is actually where I first met Jack) and he was the APAC People and Culture director, and Board member of both publicly listed and privately owned companies which means that there actually isn't much that Jack hasn't done in business. His sharp commercial acumen and broad business experience give Jack unique insights into the challenges of leaders in Australia and overseas, but importantly Jack took a decision at some stage to leave this wonderful corporate world and head out on his own.

This programme, CEO thinking, is aimed at people right across the board. Everything from people who, like Jack, were at the highest levels of multinational corporations all the way through to people who have taken the decision, their own decision, which is to remain a sole trader and offer value to their customers. 

Now you may recall that in an earlier show I was speaking about what it is in business that may be an indicator of success and I talked about that there was three key things that I left you with on that one and that was: 

·       Defining what it was that you have that you are going to take to market. That is effectively what the term is ‘core competence’ in other words what you're really good at that you want to promote in the marketplace.

·       The second thing was then to work out who is your target customer group. Who are the people out there that would take some value in you offering your core competence to them. 

·       But that may be a very broad market so it then comes down to saying OK out of all of that market of people that might want something I've got, what is it and how am I going to go about focusing down on a segment of that market where they will pay not just for me to provide my core competence to them but also to pay a higher premium for that so that your business is viable and sustainable long into the future

So Jack, that's a long introduction but a man of your capability and your experience needs a decent introduction. So Jack welcome to CEO thinking.

Jack: 

Thank you Phil, lovely to be here. You’re making me feel very old but thanks for that. When you read out that list of experiences, it does cause one to reflect a little bit on a rather long career, but it's lovely to be here. I think it's a cracking initiative that you're doing and hopefully I can help people as well.

Philip: 

Just to make you feel a little bit older, it was actually 20 years when you first met when you were back there.

Jack: 

Well, OK great, well it's probably just as well we're both on radio then Phil.

Philip: 

Yeah absolutely right, absolutely. So Jack can I ask you the first question. You were at the most senior levels in these multinationals and top 4 in that area so you were there at the senior level. What was it that made you decide to head out on your own and base on your skills and experience?

Jack: 

Phil, It's interesting. I think I had always had a desire to try to run either my own business or a smaller organisation and I’d had a number of attempts. Most notably I thought about it first round about September 11 and because I'd just finished a corporate role and came back to Australia after some time in the UK and I thought now's the time and then obviously the world changed quite significantly and I decided that perhaps the market wasn't necessarily the right thing to do so I got another senior corporate role. But I think it's fair to say as I reflect on it the stresses and strains of being the corporate warrior, the travel, the politics, all of those sorts of aspects, to be candid, affected my mental health and physical health and my relationships and things of that nature and I guess it was all about the level of control that you have or don't have potentially in those sorts of roles. And cut a Long story short, I think in April 2007, from memory, and that just came to a bit of a crescendo and enough was enough, so I decided to walk away from that particular life and decide to try and do something a bit differently which led to the Norton Crumlin and Associates story and 15 or 16 years or so that Roger and I have been working together.

Philip: 

So Jack, when you were looking to move out of that, so you had all of those pressures and said “enough is enough” you said “OK well I now want to go out and do my own business” and ended up forming Norton Crumlin Associates, what was it that you had as a skill set that you thought “I can leverage this and do something with it”?

Jack: 

Like all things, Phil, I’m a great believer, you know, that you’ve got to explore. There’s a lovely saying (I think this young chap called Peter Sheehan and he says) “Activity breeds clarity” so I’d be making things up if I said I sat in a dark room and came up with a business plan. It was very much about ‘well I think I might be able to offer this to the marketplace,’ and I'll explain this in a minute, but I really don't know. So the thing that I enjoyed doing, the thing that I had loved doing on all parts of my career since I left, you know, since I started work after I left university in Scotland, related to people interactions and it was something that for whatever reason seemed to resonate, something that I enjoy doing and that's where I guess the coaching piece of it came quite naturally from. 

So I thought to myself ‘well OK, it's probably got something to do with coaching. Do I have enough credibility and reliability in that space?’ That's why I took the people leadership role, was to actually get some flesh on the bone in relation to that particular subject. And then, before we started the business, I went into a programme to become an accredited coach. That was as much for my mindset. I'd have to say, Phil, in all the years that I've been doing, there's no one's ever asked me to prove that I've done anything in that space but in order for me to have enough confidence to go and have conversations with potential clients that was something I wanted to have. But it was also interesting that I very quickly realised that in order to stay in the style to which I'd grown accustom from a corporate point of view, that was probably going to be something that of itself wasn't enough to actually build a business around. And indeed, the concept of perhaps doing nothing else other than working one-on-one with people five days a week from an energy perspective that was going to be quite challenging.

So that then took me down a path of “do I want to work on my own or do I want to work with someone else?” which was, I guess, a key question that I would perhaps suggest that anyone who's thinking about setting up a business consider. And good fortune, as much as anything else, my colleagues who I had engaged to provide me support in my corporate career, you know I brought this particular person in to help me develop strategy and build teams and things, he was just coming to the end of his existing consulting firm that he’d been running for a while and he and I just got together. And we said, actually we've got a lovely match here and so far as he was public sector, I was very private sector, he liked working with teams and facilitating strategy sessions, I liked working with individuals. I had a finance background, he's more from a marketing perspective and strategic planning, and they just fitted beautifully together.

So that's the Norton, my close friend and colleague Roger Norman. And so we decided to put a business together and there's a number of things that perhaps I’ll share with you depending upon where you want to go here, then led to his determining what market we were going to attack and how we how we do so.

Philip:

Thanks Jack that's great, and I think there would be many listeners out there listening to this podcast who could identify with where you were at, whether they're in a very small organisation at the moment and I think “Gee, I could do this myself” or whether they're in a very very large organisation thinking “this is just weighing me down” so you, (and I love that quote that you had there, which was ‘activity breeds clarity’; in another episode we’ll talk about energy and what's actually required to make things drive in terms of a business side of things) so you had a nice synchronicity there if you like (which is probably a bit of a ‘one of those words’) but you had this concurrence with someone that you knew to say “well, we put our skills together here and we can do something quite significant in the marketplace” so that in its own right says there's this core competency you know you had one competency there with coaching and one-on-one and then your partner had this capability that he demonstrated to you with regards to strategy and marketing side of things so that covers off that core competence side of things that we're talking about. 

So then Jack you had to say “OK well, we're going to make this thing a business, who are we going to go and talk to here and but you mentioned that you then started to think about that.

Jack:

Yeah, so I'm sure you'll touch upon this in another podcast as well, but there's a lot of the purpose. What was the purpose of the business, and that very much later is to actually really a simple sort of, quite clear way of who we were going to market so if we thought about purpose in the sense of what's the action, what’s the focus, and what are the results? 

So the action was help, OK. The focus was leaders, and I’ll come back to that in a minute. And the results piece was that we wanted to help leaders succeed but we also wanted to keep them safe and sane. And the safety and sanity piece was a direct correlation to the experience that I felt that I've had in the corporate world. So we come out of this, and you know, that sounds as if it was worked out over a cup of tea but it took us a couple of years to really get comfortable seeing it, to be frank, because it felt kind of uncomfortable but we realised again through activity and testing and talking to people but it landed and it resonated and you know anytime we would see it with a prospective client there would be a wry smile that came across the table from us which just suggested that that particular individual knew exactly what we meant. But really simple, so as I say, we wanted to help leaders succeed, to keep them safe and sane in the process.

So the leaders piece then leads on to your question.

Philip.

That then said, it was a broad market of helping leaders. So that's a pretty broad marketplace there. So we've got core competence. You worked out exactly what it was that you and with your decision to say “I don't want to be on your own” so you worked out what your competence was. You then said “OK who is it? What's our customer base that we're going to go and offer this to that will value what we're doing?” So Jack, can you share some more with us there on this Third Point of did you try and go wide to start with or did you focus down? 

Jack:

It's such a great question for that, I think both Roger and I remember that day specifically. We had an office in North Sydney and I went out for a run, and I don't know for whatever reason when I came back from this run I felt mentally quite stimulated, and but we've been wrestling with that very question because leaders [Philip: The endorphins had kicked in] Jack: Yeah that's right, that's right, and leaders as far too broad a market, but got back and I put these sheets up on the wall and I said “right, OK, let me think about this target market for the moment” and what came out of that was we could go to people that we don't know and try and create all sorts of paraphernalia, electronic media, et cetera, et cetera, and try and hit this market that, to be honest, was pretty well serviced by a whole bunch of fantastic consultants. 

Or we could go the other way and so we developed a concept whereby we said right let's who are then in our inner sanctum are actually defined in really clear terms the attributes of the inner sanctum. And, for example Phil, the bits of paper (I've still got them you know front of mind, 15 years on I still use it) but someone in your inner sanctum doesn't ask you to pitch for any business. You're guaranteed that you're going to get paid. It's probably going to be a reasonably significant assignment. It's going to coincide potentially with when that individual transitions. For example you've been working with someone in organisation X and he or she moves across, they're trying to set a new agenda, that's when they're going to need help.

So we worked out that at any given point in time we perhaps had 12 individuals who may fit within that inner sanctum, and at any point in that maybe only six of them would be active, and be looking for help. So we said, well who are they, where are they, and let’s double down on that. For the first three years of the business, we did nothing else other than focus on that small group of leaders. We didn't even have a website for the first couple of years because we didn't need it. But what happened, and part of the strategy was, that the inner sanctum then started telling other people within their network and so over the passage of time we just continued to grow. And obviously if someone in the inner sanctum referred us to another customer, that might mean that we've got to do a small pitch or a proposal but as a small business we didn't want to waste time and energy and money quite frankly having to prepare big proposals and all sorts of things. And it was a strategy that just worked so perfectly for us, Phil.

And because of the way that Roger and I, you know, one of the core competences we did we also felt we had was we had a pretty extensive network of people anyway that we'd worked with over a long period of time so it's really quite easy just to go back to these dozen or so people and say “hey we're out on our own and this is what we're doing. And the first three years of the business it was done I think probably 90% of our revenue came from that inner sanctum item in that period. 

So you know perhaps for your listeners I'm not suggesting that going broad is not the right approach. but for us, bearing in mind our core competency and the network of contacts that we had, we thought why would we go and talk to someone we don't know who’ve already got a Jack Crumlin and a Roger Norton doing work for them? Why don’t we talk to people we do know who trust us, who have demonstrated their credentials with over a long number of years and by and that was the business model.

Philip:

Awesome. Jack in the programme where I talked about this, I talked about the Pareto Principle, which was the statistician out of Italy that came up with the 80:20 rule, and what you've described basically perfectly fits that. You said that you had 12 individuals that you we're going to talk to, and then out of that, talking with them you burrowed down to six and there was probably just one of them that kicked off to start with. And then the next one, and then the next one, but then out of your network. So you've gone from, if you just defined your market as leaders then I believe in (if I remember the statistics) and there's something like 2.3 million businesses in Australia. If you said “right we're going to go and talk to the 2.3 million leaders”, good luck! 

But you went exactly the other way around and said “no”. And it was very interesting you said there Jack, and we've touched on a couple of things now, where one is the cultural aspect of it, said you went out for a run and came back with an idea and then put charts up and started to draw things on the wall. Well last week I talked about business plans and it doesn't matter whether it's on a piece of butcher paper hanging on the wall or whether it's on the back of packet where you eating some fast food takeaway, in its own form, you actually put down a plan there and then you got it on with it. [Jack: yeah] So we'll go and we'll talk about that later down the track, but so that was to start with, but as you continued on with the business, Jack, did you follow that theory all the way through or did you start the spread wider?

Jack:

Well, Phil, the thing that was so beautiful about it was it was almost like, best way I could describe it is like cascading buckets. So the first bucket, which included the unassigned, from out of that came three or four quite significant consulting assignments for some clients and we did a good job. We got the outcomes that the organisations had saw and so they just started telling other people and they became our marketing and our advocacy piece and then from our point of view Phil it was quite a simple part to make sure that we turned up because one of the other things that Roger and I focused on was we decided at the outset that we were going to be really easy to do business with.

I find it quite interesting these days how hard some people make it to do business with them. When we won a piece of work, the first thing we would do is we’d go and talk to the procurement team in the organisation and understand their systems and processes so that we could make their life easy. Now as a Scotsman it probably wouldn't surprise you that was actually to make sure we got paid, you know. So we're working with NSW government, we're working with major ASX listed companies who have procurement of 60 days and whatever. We got paid in a week because we just went and we invested the time and relationships on it and for a small business as you know, and I'm sure your listeners are thinking the same thing, “cash flow is king”. You have to make sure you get paid. In 15 years we never had a bad debt except for one where we decided we weren't going to chase them up on it because we just felt that the spirit of the relationship was such that we didn't bother. [Philip: You don’t want to do business with them anyway] Jack: Yeah so that that easy to do business with peace stood us in good stead throughout and so, Phil, it just went from one client cascaded into the next. Someone else would hear about us. 

We did have a focus, just coming back to your earlier question.  Roger had worked extensively in State government so that was his wheelhouse that's where he operated but he then brought me into some of the State government pieces and that ended up with me having some Advisory Board roles and things so that was interesting that work. And then I had a professional services background and a telecommunications background so that was an easy place to then go and have credibility in, and before we knew we were doing work all over the place. 

But as well, as I reflect on it, I could bore you and your listeners for ages. I could not have predicted under any circumstances where a number of the assignments came from and that might be something for your listeners to think about. The most of the work that we got in the early stages, in my case, came from people I’d worked with many years previously. All I had to do was take the time to get the old Rolodex out (maybe some of your listeners will remember what that is) but go back through and say “actually I haven't spoke to Philip Belcher for many years, I must check up and see what he's up to”. And the warmth and generosity that came from that network that I've grown up with was fantastic. 

So, before we knew where we were it had grown and then we started bringing in associates into the mix to help us leverage and service that. And that was pretty much the model through out. 

Philip:

Fantastic. So Jack thank you. You've covered a wealth of those three areas and given extraordinary examples of how you went from being in several corporate, you know, a corporate life, took a decision, and decided that “no this is, I'm going to go out my own”. But then systematically, all be it as you said you initially just said well, using the quote “activity breeds clarity”, but you were motivated to go out there and give it a go. And if there's something that I associate with Australia it is “give it a go”. And hence one of the motivators for me to want to do this programme and talk to those people, because I really feel that we don't talk enough to the people who just “give it a go”. And whether now, and I really mean and I've said this earlier, that as far as I'm concerned if you are out there and you are providing some service to somebody you're in business. I don't care whether you re not-for-profit, for profit, or where you are, a lot of this thinking, and listening to what Jack, you've been talking about there, that would be as applicable if you said “I just want to go out there and help the community” and “what am I going to do to go and help the community?” And then you work out what it is that you've got that you can add value. Then you work out who you're going to do it for. But you're only the one person or a group of people. So then you go and work out who you are really going to focus on.

So you know I don't want this to get too confused between mega, mega organisations with billions of dollars or little local areas here, and I will be talking to some people who are doing some great initiatives around community service work who are making a big difference. And it's not actually that profit, so you know everything Jack’s said here I'd love the listeners to think about but adopt it into yourself and your situation and then say “Yeah, no, I hadn't thought about that, and that works for me”. 

Jack:

Phil, one of the other things that I reflect on; when we started the business that I think the benefit of hindsight, the most successful thing we did. So there’s two blokes going to work together. We got someone independent of the two of us to sit down and talk about what was going to be in the shareholders agreement between us and that set the tone for how we were going to operate over the next period. And having that independent person who just facilitated a discussion between the two of us. And for example, one of the key things that came out of that was that we agreed to split everything 50:50 rather than “well that's your client and you did the sales pitch and you're doing the delivery” and try and come up with some complicated formula. We just said “no we're both in this together I'll look after the finance. Roger you look after the IT. We’ll both do the marketing together.”

We never had a moment where we felt that one of the other parties was working harder than the other. So I just really encourage, you know, again if your listeners are thinking about setting up a business, setting up with someone else, you’ve got to get the fundamentals sorted at the start. Get it documented and have someone independent who can just have that conversation. But, benefit of hindsight, that’s the best thing we ever did.

Philip:

Fantastic and that comes down to that clarity so you were very clear in talking with each other and again that really formed part of your plan. You were very definite and your business plan, whether it was called that in a full document, but you were quite planned about what your competence was, who you were going to focus on, then really who you were going to double down and focus on, but you also had great clarity around the structure of the business and the way it translated itself all the way through to you as shareholders, so not just operators of the business, but you as owners of the business, yeah? 

Jack: 

Yep, that's exactly right. So I really encourage listeners to think about that. It's not just about the business plan but it's also that shareholder plan as well. That's what stood us in good stead.

Philip:

Fantastic. Yeah, well thanks, thanks for that advice Jack. I'm sure the listeners will reflect on that and they should go back and have a look at their endeavour, whether, however it's structured, and think about that. Everything you've talked about here Jack I really do thank you so much for sharing your time with us here and sharing your experiences and what worked for you and Roger of course in your business and what worked for all of your clients 'cause I know that you've made a big difference to all those clients all the way through and will continue to do so 

Jack:

Thanks Phil great to talk to you.

Philip:

Great to talk with you Jack, I really appreciate your time. Thanks very much.

Jack:

Pleasure! Cheers.

Thanks for joining me for this episode of the CEO Thinking podcast. 

If you gained value from this episode here are three actions for you to take:

First. Click subscribe on Apple podcast or on the app you used to listen to this podcast, so you don’t miss future episodes. 

Next, please leave me a review in your podcast app so that other listeners can learn how you gained value and… 

Finally, to help you to use the ideas to drive your business, go to lseconsulting.net.au for the show notes and other resources you can use. 

I’m Philip Belcher and I’ll look forward to talking to you in the next episode.