"Focus on your hires – especially early on. A bad hire costs so much more than almost any other mistake you make as an early startup because you have fewer people."
Jeff Foley is the Co-Founder and Board Member of Propeller, a management consulting firm he grew to two hundred employees and $40M in revenue. Jeff also sits on the advisory board of Wishlist, Energy Keepers and is now an investor through Oregon Venture Fund.
Tell us about Propeller and how it all started. What was the genesis of the idea?
There was a mixture of serendipity as well as a lot of planning that went into starting Propeller. My co-founder, Amy Weeden, and I worked at the same firm and just happened to have a conversation one day about our long-term plans and realized we both had this entrepreneurial spirit and a different vision about what consulting could be. Both of us came from a big-five background, had joined a smaller firm and helped build that up. For us, the idea behind Propeller was really looking at the market and seeing that there’s a lot of competitors in the consulting space. We felt like our last firm was doing a lot of things right but there were some things we could do to really tweak that formula. It was really focusing on the client experience and the results portion of that, which it seems like a no-brainer. A lot of people say that, but when we talk about recommendations and strategies and how to implement these changes being really specific to a client, to say, “Oh if you’re trying to change operations, let’s not change operations.” It’s “Let’s get really specific about the area. Your business has to change, and here’s the things that you can do to do that.” That’s the client side. But then a big part of us too is looking at the internal side of it and really focusing on people. We were really trying to make the employee the center of the experience. If you take care of your own and treat them the way that you want them to treat your clients, they will do that. And it’s built a really strong culture. So that was the stickiness of Propeller in the early days, and it grew from there.
So as a startup, especially on the consulting side, how do you penetrate really large organizations when they’re used to working with the McKinseys of the world who have a huge brand and a ton of resources?
It really comes down to trust because consulting is very much a trust industry. The trick about being a small firm and relatively unknown is you don’t have that brand awareness, like Deloitte. For us to get to that point of having those conversations with key buyers and executives was around demonstrating value through the conversation itself. So if a potential buyer is saying, “Hey, my friend recommended you,” or maybe you have a chance to meet them at a professional event, it’s really about being interested in their business from the very beginning, demonstrating passion for what they’re doing, and then being able to talk through ways that you would approach solving their problem or discussing different strategies you may employ. I think once you demonstrate that what you’re doing is in their best interest and that you’re excited about their business, then you are able to get to the point of the sales process where you’re talking about the specifics about how we’d engage, how long it would take, and so forth. Then you’re starting to actually compete head-to-head to the larger firms during those conversations.
You said you’re trying to create a much better client experience. What was that around?
You know, this is actually a really interesting area for us because the stereotypical client experience, the brand experience with larger firms— was that when a client would have a consulting firm come in, a lot of times they would swoop in and be the experts. And the result was there was lot of distance between the consulting firm and the client - Do great work, pass it over, and then leave. That caused a lot of challenges in terms of adoption within the client’s company, and it didn’t necessarily get buy-in. The way we did that was to understand the company, their culture, and to really focus on being one team. It’s always good to remind ourselves that in the consulting industry, we’re a services company. If you have that mindset—how can I help you?—it changes that experience to where instead of being the expert and trying to flex your intellectual muscle, you’re actually just trying to help them to understand the business problem, then solve that and make them successful. I think that really resonates with people.
How much of the consulting were you doing versus trying to grow the actual business?
In the early days, it was everything. A lot days would be getting up at four, running payroll, figuring out invoicing, setting up interviews for those next three employee hires we were trying to hire, and then go out to the client and do delivery work. A lot of times in the beginning, I was leading the teams where I’d have a team of consultants that would be at the client site working through a particular engagement. At night I’d go home to have dinner with the family, then go to networking events at night. So you’re kind of wearing every hat. But then as it grew . . . you’re not necessarily working in the business, you’re working on the business. So for us, we had to grow to about twenty to thirty people to have enough critical mass to do that. That was a really strong push for us in the early days: to grow fast so we can have the scale to work on the business versus being forever stuck working in the business because then you just don’t grow.
As a consultant you give a lot of advice on strategy – What was your team’s strategy?
You know, this is a really great question because we actually changed our strategy early on. I’ve talked to a lot of entrepreneurs and folks who are thinking about starting a business and have started taking those first few steps. And one thing I tell everyone to do is always write a business plan, and always do your pro formas. Make sure the business model makes sense. Write down all the classic business plan components and really take a look at it. That should include your overall strategy, your go-to-market strategy, how do you make money, how are you going to grow the business; all those things.
For us, we were going to focus on the space between the standard business consultant/high-level adviser, and the staffing firms. I thought there was a big gap there, so kind of like a junior-level consultant just below the Accenture or Deloitte consultant. We quickly realized there really wasn’t that big of a market there, so we shifted within six months. We started focusing more on strategic delivery, that high-level execution, solving business problems. And that’s when we really started taking off.
I think the lesson there is that if you’re thinking about your strategy as a founder, you want to write it down so you know. What are you doing? What is your North Star? How are you getting there? What are those steps? Then always reevaluate. It is almost always a guarantee that the strategy you had starting out with, six months before you launched the company, will be wrong twelve months down the road or twenty-four months down the road. The very least, you’ll have learned something and you can add it to your strategy. Then you’re in a better place.
You’ve consulted with so many entrepreneurs and executives. What would you say are the key attributes or the things really good executives do well?
I think that some of the best executives I’ve interacted with are direct, authentic, have high integrity, and are decisive. It’s been interesting working with different sets of executives and clients. Some of the ones I’ve been most impressed by are ones who say, “Here’s where we’re going. Here’s why.” They’re open to ideas, but they have a purpose, and they have very direct conversations with people. They use few words in ways that are very powerful. Those are the ones that seem to really do well. And the decisiveness - You need people who are thinkers and can really weigh complex decisions and understand the pros and cons and all those things. But in the end, they have to make a decision. And if it’s good or bad—ideally, they make good decisions—but if it’s bad, they are able to quickly pivot and redirect staff resources to go down that different path.
And what would you say your team did really well in the beginning of Propeller that set you up for success that you’d advise others to do?
Focus on your hires – especially early on. A bad hire costs so much more than almost any other mistake you make as an early startup because you have fewer people. So I think being really smart about who you hire and then making quick decisions if it doesn’t work out.
And that goes back to being an authentic leader. If it doesn’t work out, you can walk through what happened, how that’s not aligned with who you are as a company, and why it wasn’t a good fit. It’s important t have the conversation in a supportive, caring way but also reflecting the realities of what’s happening in the situation or within the business. I think being really focused on having the right people, at the right place, at the right time made a huge difference for us.
You’re now on numerous advisory boards in this next chapter of your career. How are you advising your CEO’s having been there in their shoes?
I’m a big believer of focusing on the business fundamentals. There are a lot of things to get excited about or distracted by, but I think strong and steady growth of your top line, as well as a really healthy bottom line, are the first things to focus on.
The next thing is the long-term plan. What are the goals and objectives, and how do we get there? Between the shorter-term vision as far as performance metrics and the longer-term vision . . . making sure that’s clear. I think that always seems to work well regardless. Even the nonprofits are like “Okay, make sure we’re healthy as a nonprofit, but then where are we going? What are we doing? What’s our purpose?” Make sure the organization is focused on the activities towards that purpose. If we have those things figured out, then we can be successful and can build on it.
Do you have a favorite book you’d recommend?
For me, the book that I recently finished and am inspired by is the Race of Aces by Jon Bruning.
I love history and all the lessons that you can learn from different eras. Race of Aces is about airmen in the Pacific theater of World War II. It started when the U.S. wasn’t doing well. They really had to come back from behind, so to speak, and it talks through this series of pilots who turned the tide in the Pacific theater.
I liked it not only from being a pilot myself, but also it kind of grounds me in terms of the risks that generation took versus the risks I take in terms of starting a business or helping people. They’re really not comparable.
Hearing about the things people did then seem almost inconceivable now. It gives me a lot of confidence to stretch because if I really think about starting a business, the risk of failure is there for sure but it’s not the same. There’s a monetary and professional risk. But in the grand scheme of things, it’s actually a very small risk. I’ll always come home at night.
How about a favorite quote?
“Always run to something, not from something.”
Any parting advice for your fellow Co-Founders and operators?
Before you start, always write a business plan and do the pro formas.
Another bit of advice I give is if you’re going to have a business partner, pick the right one. It’s like getting married. Make sure you’re smart about that.
The last piece of advice I’d give is be really honest with yourself for why you’re doing it. Better yet, write it down. That way when it gets tough you will have the motivation to really dig deep to figure out how to move forward or solve a problem, because there’ll be times where it may not be working out and you could lose a lot.