Welcome to our Blue Margin Expert Insights Series. We're glad you joined us. This series is for private equity and mid market executives who want to increase their company value their portfolio value through data transformation. I'm Blue Margin's co-founder, Jon Thompson and today I'm hosting Karen Posey, founder and CEO of KP strategies. Founded in 2016, KP strategies as a Denver based SEO consultancy, they work hand in hand with CEOs to navigate challenges and opportunities and to build success stories. In short, they help CEOs put the bulk of their time on the things that only they can do their highest and best use. They offer a six months CEO accelerator core cohort, a program giving CEOs the best practices and tools they need to execute their strategic plans. Karen has extensive experience in strategic planning, organizational alignment and customer experience. She's the current forum chair, forum chair, excuse me for Women's Business Enterprise Council, and an executive in residence at both Rev One Ventures and the Entrepreneur Center. Hi, Karen. Welcome.
Karen Posey:Hi, Jon.
Jon Thompson:So to begin with, could you share a little bit about your career journey with our audience? What brought you to this place that made you the CEO whisperer and so on?
Karen Posey:Thank you, you know, it's, as I reflect, it's interesting, I started my career in sales, sales leadership, then I ran an IT infrastructure company for eight years. And then I went on to work for a management consulting firm. And then, you know, my last kind of corporate big corporate role, I was head of strategy and consumer experience for a $10 billion healthcare payer. And, and I then, you know, decided, Geez, how about I run this med tech startup, and so a CEO of a med tech startup in, we found out we were too late to market. So from there, I decided, you know, I think it's time I started my own business. So started KP strategies. And I was so passionate being an entrepreneur, leading a med tech startup that to this day, I still work with CEOs, as you mentioned, as an executive in residence. So that's great.
Jon Thompson:You broke a lot of glass ceilings along the way, it sounds like I'm curious. So you weren't all sorts of high level high responsibility, probably broad scope, the kind of jobs where you think now how was it the one person can't manage their own backyard? Someone else can run an enterprise company? Did you find that to be sort of an interesting science along the way and find you to begin to lay the groundwork for how you overcome some of those chronic issues that leaders of large organizations deal with? And that's what led you here?
Karen Posey:Yeah, it really, it's very interesting. When I reflect back, you know, I constantly, my changes in my career, kind of reinvented myself several times. And I just always was looking for the next challenge, right? And my husband would always get mad at me, he's like, you're doing great, babe. Why? Why do you need to go conquer the next thing? And I'm like, because I need to. It's just the driving force. But yes, it's, you know, when I made the transition from working from a management consulting firm, where you, you give recommendations and share key findings, and you help them with onboarding with your recommendations and key findings, but then you leave, right. It was interesting when I was I had a strategy in a consumer experience that that that large payers, or the $10 billion dollar pair I was telling you about. That's where you kind of look behind the curtain. And you really see what goes on, right, and trying to drive alignment that became 70% of my job was driving alignment with these, you know, the core team, the the senior leadership team, the 50 directors that we had, in a large organization like that keeping organizational alignment was was tough. So that, yes, it really helped me as I started my business, to be able to look at the difference between running a startup running, you know, something under 10 million, and then what it really takes in the mid market when you've got a board, and other people you've got to answer to.
Jon Thompson:So that's really all interesting, and I've experienced some of that myself not to that scale. Is is that alignment issue. So you're sitting on top of an organization or you're over a large department, and you're trying to coordinate it to get economies of scale and you know, to not have additive value of all these people and resources but multiplicative and exponential value. Is that the is that the core of the CEO challenge? Or is that just one of many?
Karen Posey:I think, you know, a couple of things that I see with with CEOs is, you know, in the mid market, where I specialize in, like, like blue margin, you know, some of the biggest challenges they face is one, a lot of them are getting mediocre growth. And it's really challenging in that, I find it challenging because when you really pull the covers back, and you start asking the CEOs, you know, the bottom line is over 65% of CEOs don't have the confidence they need to make the bold moves to the business. Well, that's, that's why they're getting mediocre growth. A lot of them are, you know, a couple times a year, I get asked to help facilitate a strategic planning session. And what they want is a certified facilitator to facilitate sessions with their leadership team where they sit around the table and figure out what they're going to do for the next couple of years because they want that board checkmark, well, it's no surprise, they're getting mediocre growth, there are key strategies to give them the confidence they need that we can talk about a little later. But bottom line is mediocre growth is a big challenge. Second one is that, you know, being a CEO is a lonely job. It's a very lonely job. And it's interesting stat that just came out, over 61% of CEOs that are lonely, guess what they have, they have poor performance. So they're struggling with performing in the organization, because they're lonely. They don't have what I call a kitchen cabinet. Andrew Jackson, really, former president coined that phrase, you know, having that group of peers that you can talk to, and really share things with is so important. And that's why I've created this cohort in my master clicker in our, in our CEO accelerator. So that's the second thing. The third big challenge, I find is that CEOs really struggle when they are growing, if they're in that market, or they're, they're doing the right things on the growth side, they're really growing, but guess what operations can't keep up. And so they're having a lot of trouble in operations, billing, not, you know, bills, not going out on time. receivables, you know, cash flow overall, could be IT infrastructure. So that's the third. And I think the fourth biggest challenge I see which kind of leads in from the third challenge is just overall transparency. The board wants it the CEO desperately needed to really work with our leadership team, but they don't have it. And transparency is a big deal.
Jon Thompson:If they're stretched thin, the last thing they want to do is process work,. Aggregating numbers, building reports and so on. I felt that pain myself, Hey, do you want me to produce for you? I'm gonna give you reports. Exactly. Exactly. All of those are really interesting points. The loneliness one, it's not so much someone you know, walking in the rain, wishing they had a friend, but someone who is in a very difficult struggle. And even if their instincts are dead on every step of the way, they can't know that unless they're some sort of freakish genius, or Elon Musk or something. Unless there's those around them to say, I've got the same issue. Every time we have gotten into a brain trust a cohort, we kick ourselves to say, we are never not doing that again. And I'm not I'm not just blowing sunshine your way. I think it's critical because you need confirmation. You need commiseration, you know, hiring a sales leader is difficult. All that stuff is, is challenging. And it's great to get that feedback because it gives you the umph you need and just trying to sustain that through sheer, you know, what's inside your head and force of well, this is near impossible, at least in my experience. Is that what you found?
Karen Posey:Absolutely. And it's interesting, I've been leading a group of 14 CEOs since 2019. And it's the same thing Yes, they love being together. They it's a lot of benchmarking and making sure that they're staying in line everything from not only their their high tech it CEOs, you know, not only from the services they're offering the compensation, you know, how you know, talk about something that's really changed as well as how you go to market from a sales standpoint, that is forever have changed since the pandemic so yeah, there's, it's it is being a part of some kind of community or mini mastermind or mastermind where you can really have that kitchen cabinet appears just to share information is critical.
Jon Thompson:You also mentioned operations, which is obviously half the battle at least coming from the biz dev side of things, the marketing the commercial side. I hear from our CEOs cohort, that one of the biggest challenges how do you Get demand in the market. How do you get enough sales? That's sort of the you know, the the fuel to the fire? Is that a common issue? And do you guys work on that in your in your cohort?
Karen Posey:Absolutely. 100%. Yes, we do. And matter of fact, that's why I have a lot of partners that I pull in to help with some of those conversations. So you know, marketing and sales has forever changed, and how you the key strategies you use in the, you know, in the value of the website and the value of how you're positioning yourself, it's interesting, I'll give you a silly example. But it's, it's so important. Content is everything now, right. And social media. I mean, people want to see your content, and you guys do a great job of that. Our company, we try to do that as well. But content is king, people don't want to, I mean, they don't want you to hear about you boast about your company, they want to hear what you have to share and what your thought leadership is. And that's a big change as well.
Jon Thompson:When you talk about transparency and the need for the need for that the board needs to see what's happening, the companies see what's happening. Do you have any stories of CEOs who don't have data visibility? What's that been like for them? How do you how do you address that with them?
Karen Posey:Yeah, I've got, boy, Jon, I've got lots of stories. You know, the board demands a lot. I've got a company right now. They are 60 million. And they're running their company on Excel spreadsheets. And it's it's the classic of they've grown so rapidly. And this is the one of the examples I gave earlier, where operations just hasn't kept up. They've tried dashboards in the past, and they just have not been able to get where they haven't been able to get over the hump. And so actually, this is example where I brought, I have brought blue margin in and you guys are helping here, because one of the biggest things that they didn't have is they didn't have a repository for all their data. So it was hard for them to have effective dashboards if they couldn't even start with basic data lake. So we have we just did the workshop with blue margin and this client to really look at what are the biggest priorities, and we came down to two, right? There's two huge priorities they need for the business right now that they need dashboards to give them total transparency. So yeah, that's one example. Another examples I just picked up, I just start working with a new client. They're about 75 million. And they, you know, they have some level of sophistication, they've got some workflows, they've done Power BI, but they, they still are struggling with their dashboards. And it's kind of the classic of, they'll work for a while, and then they break the work for a while. And then they break. They've got some expertise in house. And I'm in the process of kind of working with them to figure out okay, do you do they have a data lake? Where is their data? And so we're just in process there. But I mean, those are just two examples. But candidly, this is so important. Not only when when they CEOs do the six month accelerator, are they getting their three year strategic plan, done their yearly operations plan done. But one of the other key things that we focus on is financial alignment, because I am blown away every day. And how many organizations I work with, that don't have their three year strategic plan aligned to their financials overall. And they don't have their yearly plan aligned to their budgets. And so you know, what happens is it's the classic. You know, one of the organizations I'm working with right now, the issue is, there's, you know, everybody kind of turns in a budget, but nobody's really managing to a budget, and they can't figure out why they're having cashflow issues. And it's like, okay, wait a minute. It's one of the books that one of my favorite books is fit for growth. And so it really what it talks about is, at the end of the day, organizations need to be able to have that financial alignment. So they can say, Hey, Bill, Joe, Sue over here, right? You got core businesses, hang on, keep doing what you're doing. But I'm gonna reduce your budget by 15%. Because Joanne over here, we've all agreed she's got the growth for the company, she's leading the growth initiative. We're gonna give that money to her because we got to hit the gas over here. Right? That's what's missing in so many organizations when they don't have financial alignment. It's, it's a huge problem.
Jon Thompson:It's saying yes to everything, which is not saying yes to anything.
Karen Posey:100%
Jon Thompson:It's funny, it's deceptively difficult to develop a data platform that really drives that transparency and that ability to get aligned. We work in the same realm midmarket we'd, we'd estimate 95% gives derivatively of companies are working on Excel still. When it comes to CEOs and other key leaders being in a cohort, but CEOs especially, do you have a guesstimate of what percent out there in the mid market are actually involved in a formal cohort and getting that support.
Karen Posey:You know, I don't but here's what I find interesting. I did read a stat and just anecdotally, I'm hearing from folks, things are changing, things are really shifting. People don't want to go all day, there's, this organization will remain remain nameless. But people don't want to go all day and sit in a meeting with the, with the cohorts, where they're talking about, they'll have a guest speaker maybe talk about a couple challenges. And then they all go home. CEOs today really want to work smarter versus harder. They want to get in learn what they want to learn, and get what they need. And they want to be able to to really work with, you know, their cohorts, if they can, in a virtual platform. I mean, they don't mind occasionally getting together. But they really want to do things smarter now, they just don't have the time to burn all these on site meetings. And ironically, some of the chairs, I've got seven chairs of this, this group that will remain nameless, that are now following me. So I don't know- I think I'm doing something right, Jon!
Jon Thompson:Yeah, I think you are. It's interesting, when you you mentioned execution and the challenge around that. And, and I think often as executives and business owners, we're looking for that person that has the X factor that executes it's amazing to have someone with, you know, Stanford MBA MBA and great credentials, and it seems like they can't get stuff done. I don't know that it comes down to a certain DNA, I think it comes down to framework and how you approach it, how do you help CEOs that are struggling with, with execution? Generally?
Karen Posey:Yeah, it's, um, 92% of executives struggle overall with execution. That's a big stat. And I think there's a couple of reasons for that. But overall, where I help them is first and foremost looking at, where are they going? What's their vision, clarity. let's reframe what, what really winning means for their organization. I'll give you an example. Reed Hastings, who's former CEO of a co founder of Netflix, you know, he, I'm a big believer, mission is timeless vision is 10 years out. And then strategic, what I call strategic intent is three years out. And that's why I work on the strategic plan three years, I want to know where they want to be in 10 years, but let's, hey, let's get down to the three years and really focus on that. And then we work on the yearly operations plan. Well, it's interesting, Reid, at the time, looked at Netflix and said, I really need to reframe what winning means. I want to look 20 years out and let me dream of what Netflix should be. And he said, I want to be the global entertainment channel. distribution channel. Now, think about that. Bold. Yeah, extremely bold. And today, in today's world, you got to be bold as CEOs, you've got to make those bold moves. But what's interesting about that is if we really think about it, if you just said, and we can all hear this, right? How many when you look at people's websites, you talk to organizations, how many say, I want it, let's take the Netflix example, I want to be the premier DVD company in the world, right? Or I want to be the premier X supplier in the world. So many organizations say that well, Netflix would have said that their company would have been called DVD by mail, and they'd be out of business.
Jon Thompson:They'd be Blockbuster. Yeah. In fact, Blockbuster was one step behind jumped into the DVD business late.
Karen Posey:Right. Yeah. So I just really, execution is so important. But you know what, John, here's why I get so passionate about this. You know, there's so many organizations out there that can do strategic planning. But what I've learned over the years, and the reason I created my company, is because most people don't understand strategic planning. If you really want to get out there and drive sustainable, predictable growth, you need insight from your customers, your employees and your key stakeholders, and you need some market intelligence. That's what gives CEOs the confidence to make the bold moves. It's not just sitting around a table trying to get a checkmark with your board. It's really getting that insight. And then once you have that insight, then you can feed that into your SWOT for your strategic plan to really know where your three year plan where do you need to focus right in the example I gave earlier, where do you need to hit the gas? Where do you which is going to be your growth area? Where do you need to hold steady and really focus on those areas and get After it and then put your yearly operations plan together to deliver. And when you do that, that helps immensely with execution. But that's all be honest, that's just the first step. I think what really separates our organization is we're not afraid to get our hands dirty. Because guess what this is, this is where the rubber meets the road on organizational alignment, when you're talking about how you're the design of the organization, you know, the financial alignment, as we've already talked about, and then you look at the culture, and the talent 72% of the success of any organization, revolve around culture, and talent. And you know, what, candidly, I find that a lot of CEOs don't put the time there. They don't they delegate it. And that's a missed opportunity. And that's why the other thing we we focus a lot of time and attention on, is educating CEOs on doing the things that only they, as the CEO can do. And then even with our leadership team, which is, you know, clearly the linchpin in any organization, making sure you've got a high performance leadership team also is critical for execution. But then making sure that your high performance leaders also know, what are those things that only you can do as a CEO, CEO, or only you can do as a CFO? Or only you as a VP of sales, and so on and so forth? Right? That's what's important, because so many organizations I work with, they're so busy, these a C suite is so busy kind of managing, and that leading
Jon Thompson:Yeah, they're not struggling to find enough to do I know the struggle, they're struggling to stick in their highest and best use in the things that only they can do. Is that fairly consistent across CEOs? Or is it depend on the company and the CEO?
Karen Posey:Well it certainly depends on the CEO. I'm pretty passionate about it. And I find it's probably 50/50.
Jon Thompson:Yeah. So there's some things that every CEO needs to do. Is culture one of those it sounded like that's where?
Karen Posey:Well, it certainly I think, the leadership team, you know, culture and people talent are absolutely something that are important to the CEO. And those are things they should do. But, you know, first and foremost, starting with themselves, thinking about personal, what's their personal effectiveness, right? Also thinking about how do they manage their time and energy? I mean, that sounds so simple. But honestly, that's a big deal. Right? spending, you know, if you're a morning perfect person, then put your big, your biggest, most important meetings, and then in the morning, right, but also surround yourself with people that really protect you. Because that's the other thing I do find. And actually, you know, through the course of our program, we ended up, you know, obviously, doing a lot of coaching as CEOs. That is a big challenge, I find is that CEOs have some good people, but they don't protect them. They don't manage their time and protect their energy and their time. And I think it's a missed opportunity. And then, you know, leadership modeling and perspective, I think is important to for CEO, and the things that only they can do, you know, what do they want their legacy to be? What do they stand for? What won't they tolerate? I think more CEOs need to better educate their leadership team on that, because I find that their leaders don't understand that about their, you know, the CEO. And then the final one is, you know, I think the key is being humble as a CEO, being that servant leader. But you know, woven into that is absolutely, as you look at all for those is talent culture. Yeah.
Jon Thompson:Well, I'm glad to hear you say it's 50/50. 50% being hey, every CEO needs to do this and 50% is what's your personal makeup? Because if you if you are trying to fit yourself to a role, versus saying, hey, where do I thrive? Where don't where am I best? Where am I most effective? In my morning person? How do I manage my energy and my time? If you don't have someone to say, hey, you need to believe in that you need to lean into your strengths. I could see where CEOs would really struggle and say I'm not doing the job right or I need to be this I need to be someone else. And I imagined that is a recipe for burnout and disaster.
Karen Posey:Yeah, it absolutely is. I mean, the job is hard enough as it is. And that's why we you know, one of the other pieces that I work a lot with the CEOs on and it's in our six month program. It's actually the last session within our six month program is the board because you know a lot of CEOs when you first take over CEO most of us aren't happy with their current board. So you've got to get the right board members, you got to understand what a good board looks like. But I think the missed opportunity is it shouldn't be a reporting board. This is a board that should really push you. And when you have critical decisions, talk about when you want to make a bold move, going to the board is your first step, here's what I want to do, here's why I want to do it, here's all the research and the insight I have behind it, and you need their support. And also, you need them to challenge you. And I think that's, that's really the missed opportunity. It's running, you know, having a board is not an easy thing to do. But doing it well separates a company from everybody else. It's separate.
Jon Thompson:Not to be stuck behind data lenses. But I imagine and I'd love to hear your take on it managing a board well is largely about informing them, keeping them informed. But also being able to make arguments strategically that are data backed, if I'm sure there are those that are so charismatic, they just do what you know, whatever the CEO says, but in the vast majority of cases, I imagine it's about having good empirical backing for your arguments.
Karen Posey:100%. And in point, well taken, Jon, you've got to have that. And I'll take one give you an example. Customer Experience is a game changer, every organization now if they're not focused on the customer and their employees, the employees isn't another conversation for another day. Because employees really is they're the number one stakeholder in an organization these days. What if you're not focused on the customer? And really understanding what's the lifecycle of your customer? And what are those critical moments of time? And I don't know if you ever saw that show on TV, love it are listed? It's yeah, we're real estate. Yeah. Well, I look at it that way. What are those critical moments of time, when you look at the lifecycle of your customers, or your clients working with you? What are those critical moments where they'll either love you, or they'll leave you. And if you're not measuring and managing to those, which is right at the heart of what you're talking about, you know, kind of correlating to the board, you are missing huge, huge opportunities in an organization.
Jon Thompson:So measuring what's their spend, how consistent is it? How many complaints do do we have a good NPS score on them, etc, etc.
Karen Posey:That, but it's also when you look at the lifecycle, every lifecycle for customer might be different from organization. But once you map out what that lifecycle is, when they come on board, you know, let's say they join your organization, you might have an onboarding program. You know, they they become an official client. And then there's or potentially in most in most organizations, there's a renewal period, and then there's there's a use period or renewal period, etc. And then the life cycle starts over. What are those critical handoffs between each of those phases? And what are those critical moments of time in that lifecycle where customers will either love you or leave you? And those I think are huge missed opportunities and organization? And a lot of them are leading indicators.
Jon Thompson:That was the focus of your work at that multibillion dollar company? Yeah. Just a quick summary, I can think of about 250 things a CEO needs to think about. But at the high level and your six month course, what are the what are the five or six blocks? I could I think I could take a stab at it. But I want to hear from you really quick, just to summarize, and I might want to drill into one or two more of those two wrap, the
Karen Posey:critical things are that they need to focus on is three really reframing what winning means making sure they've got the insight to make the bold moves to their business and have that confidence, right. So they can put a great three year strategic plan together. So they can put a really strong yearly operational plan together, and then tie those to the financials and have transparency and the reporting. Absolutely critical. Also, you know, having the insight into the board, and being able to leverage the board that the way they should. And we talked about financial alignment, you know, blue margin actually is one of the speakers that in our six month cohort, because what you do is so specialized and what and I think it's what you guys do also is very unique, that that's why I wanted blue margin to be the the main speaker when we talk about financial alignment because I think so many companies miss that opportunity. So that's the first six months not to mention. We'll be doing mini masterminds as well as twice a quarter and then one on one coaching and then the next six months is all about people and culture, doing things that only you the CEO can do. That's the second six months if they want to stay with us for a 12 month period. So but those are the critical things.
Jon Thompson:Yeah. Is the people and cultures that encompass the talent piece that you were saying?
Karen Posey:Yeah. It absolutely does.
Jon Thompson:Yeah. So So strategic strategic planning, aligning your, your finances to that. And then organizational alignment and lack of alignment you call the silent killer. What is organizational misalignment? You talked about? In that one position you had that, that really what it came down to was trying to get the gears meshing together, what is misalignment? And what is what is alignment for that matter? Organizational? Yeah, I
Karen Posey:Definitely call it the silent killer, because it is it will kill an organization, if you're misaligned. And in symptoms are, you feel like everybody's rowing in a different direction, right? Nobody's in there. They're not in sync. The the leaders overall aren't. They're just, they're not aligned. But also you start losing talent. That's a big symptom when you have misalignment. But because it all comes down to the talent, the culture and the organizational design. And when you think about that, in from a misalignment standpoint, the dangers are, you lose a lot of talent, you're working, the organization just can't get it, they can't get out of their own way. They're working harder versus smarter. And also, they're really struggling a lot of times you could be struggling with operations and with growth. So there's a lot of dangers to being misaligned. It's painful, it really painful.
Jon Thompson:Yeah, I have no idea what that's like. I'm glad I was gonna ask you what you're reading but but having worked with CEOs for nearly 10 years, and having been in all sorts of very high level, broad scope, complex positions, what are one or two, or even three, whatever you like, books that you would recommend to your typical CEO, they've got, they're running on on Excel spreadsheets, they're struggling to align their financial financial plan to their strategic plans, struggling with their board, talent and culture and so on one or two that you that you would point to?
Karen Posey:For sure. strategy that works. I love that book. For companies that want to take a deeper dive beyond the work that we're doing, if they really, you know, if they're really passionate about figuring out the strategy piece, although I certainly helped them with that fit for growth is one of my favorites, that kind of goes to the heart of what we've been talking about as far as financial alignment, and the transparency needed and how you need to know if you can align to your financials, how you're going to know where you're going to invest, and where you need to hit the gas and put on the brakes, right? I would also tell you to give blue margin a big plug, obviously, I love dashboard effects. I want to get some more of those copies to give to additional CEOs I have, because there's a lot a lot of good, a lot of good points in that book. And then I would say, you know, finally, a book I'm pretty passionate about when it comes to customer experiences about the outside in. Because I think it really gives the CEOs a better perspective of what is customer experience all about? Because a lot of them are, you know, there's still I think, a lot of misunderstanding about really what customer experience is all about just like what really strategy is all about.
Jon Thompson:It's easy to get myopic on your operations, and forget that the premise of a business is providing value to the market therefore, that customer is really the centerpiece of the whole thing. And you can lose that he was you know, you think he wouldn't forget that this is the football. But one more question. You're so KP strategies do you borrow from various frameworks? Do you use a known framework? Have you have you gathered together your favorites from various philosophies and approaches to execution and strategy and so on?
Karen Posey:Yeah, great question. I, I borrow from a lot of different I love I'm huge McKinsey PwC fan. I also have just those are the biggest that I really like I really also like LSA, they do a lot of organizational alignment work. So yeah, there's there's several organizations I've I've really look at him and decide based on the middle market, because you know, sometimes it doesn't always fit middle market, right, based on what you read and whatnot, what's going to be the best approach for the middle market and I've created my own framework that I've been using now since I started my company. And it's really worked well because what I love about the framework we use is it's highly scalable. I've used it with the entrepreneurs, I'm coaching all the way up to some of my biggest clients, right? So it works and it's highly scalable.
Jon Thompson:That's great. If folks want to learn a little bit more, or if they just want to reach out to you with questions, I would encourage them to do so based on the work we've done together. What are the best ways?
Karen Posey:Best way? You can certainly reach me on email, kposey@kpstrategies.net. Or you can hit my website, which is kpstrategies.net.
Jon Thompson:Well, thank you so much, Karen. It's been great to chat with you again. And look forward to many more and look forward to presenting to your to your folks, and we'll talk soon.
Karen Posey:Look forward to it. Thanks so much, Jon.