The Handbook: The Operations Podcast

Board-Level Thinking, Sale-Ready Ops – with Sam Wood

• Harv Nagra • Season 1 • Episode 33

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Your ops might be ticking along just fine.

But what if your founder got sick tomorrow? What if your top client left? What if you had to make a big decision with zero visibility on the numbers?

You might not be planning to sell your agency – but you should run it like you are.

Because when you adopt that mindset, you zoom out. You stop firefighting. You start building a business that runs without you.

This week on The Handbook, Harv sits down with Sam Wood – fractional COO and founder of consultancy Ottesu – to talk about how agencies and consultancies can apply board-level thinking without needing to set up an actual board.

Because a business that’s sale-ready is a business that’s well run.

In this episode, Sam breaks down the five areas every agency should be reviewing regularly – whether you’re building to exit or just want better control of the ship.

Here’s what we get into:

  • Why applying board-level thinking doesn’t mean setting up a boardroom – and how to start
  • How to define and operationalize strategy (it’s not just a slide in onboarding)
  • Why culture starts with leadership behavior (not beers and pizza)
  • How to build capability and resilience so your business doesn’t depend on heroics
  • How to reduce risk and spot gaps in capability before they break you
  • The one performance metric every service business should be tracking if they want to be profitable

Whether you're an ops lead or MD, this one’s packed with practical ways to futureproof your agency.


Additional Resources:

Follow Sam Wood on LinkedIn: https://www.linkedin.com/in/sam-wood-gaicd-9023a54a/ 

Check out Ottesu’s website: https://ottesu.com.au/ 

Follow Harv on LinkedIn: https://www.linkedin.com/in/harvnagra 

Stay up to date with regular ops insights. Subscribe to The Handbook: The Operations Newsletter.

This podcast is brought to you by Scoro, where you can manage your projects, resources and finances in a single system.

Sam Wood:

You can't build a profitable agency without running profitable projects. You can't run profitable projects without measuring and managing cost inputs. So if you're not measuring and managing profitability, how do you possibly expect to build something overall that's profitable? It's akin to a widget factory, not knowing the price of their metal or how much metal goes into each individual widget, how are they ever going to run a successful business? So I think, this sort of thing can feel hard or boring to put the right systems in place to actually make this possible. but if you've ever been in the situation where you've had to try and save a business from insolvency, I can absolutely guarantee you that's a hell of a lot harder.

Harv Nagra:

Thanks for listening to The Handbook. This podcast is brought to you by Scoro. What's the difference between Scoro and a project management tool? Well, to answer that question, the hint is in the name. Project management tools help you get work done. They let you manage and collaborate on tasks with your team. But Scoro, think of it as an operating system for your business. You quote the work, turn it into a project, assign your team, track tasks, time and expenses, invoice and report on performance, all in the same system. Full visibility, past, present, and future. That's what we needed when I brought Scoro into my previous workplace. Go to scoro.com/demo to book a call and find out how Scoro can help you in your next chapter. And for the VIP treatment, tell them Harv sent you. Now let's get to the podcast. Hey all. Welcome back to the Handbook, the Ops podcast. I'm Harv Nagra. Agencies and consultancies are pretty great at telling clients what to do. But when It Comes to looking internally and sorting things out for themselves, It can be a different story. Over the past year, I've heard smart people say, you should run your business like you're sale ready. Even if you're not planning on selling, I mean, it makes sense because when you adopt that mindset, you start to zoom out. You look at the business as a system and don't spend all your time firefighting or just prioritizing whatever flies into your inbox. This is where the idea of governance also starts to come into play. Not the corporate boardroom version, But the kind that helps you take a step back and ask, are we clear on where we're going? Can the business run without the founder? Are we measuring the right things or just what's easy to track? You could set up an advisor board, but you don't need a board to benefit from this way of thinking. What you do need is the right lens and perhaps someone to help guide the shift. That's where today's guest comes in. Sam Wood is a fractional COO and advisor and runs a consultancy in Australia called Ottesu, helping agencies and service businesses build more resilient and scalable operations. Sam's been sharing a brilliant series on LinkedIn, breaking governance down into five practical areas. In this episode, we're gonna talk about what good looks like across all of those and how to apply board level thinking into your business, whether you're looking to sell or not. This is gonna be a great conversation for the ops leaders listening, but I'd encourage you to share this with your founder or MD as well so that you can get the support on the initiatives you should be driving in your business. Let's get into it. Sam, welcome to the podcast. I, I love starting off, talking to people about their journey into operations. So I'd love to hear about yours.

Sam Wood:

Yeah, for sure. So my whole career has been in agencies. I very quickly realized that being on the tools wasn't really my thing. It wasn't for me. And, after a couple of years, transitioned into a general manager role at the, the most recent agency I was at, and then eventually into the CEO role. which was, a great journey. was the first employee through to leaving, um, when the agency was about 50 odd FTE, uh, based in Australia, one of the La Australia's largest indies. And, um, yeah, from there kind of went. I liked that. I liked the business side of things. Again, I'm not too keen to get back on the tools, and thought that there was space in the industry for someone like me coming in with more of a strategic operational and governance lens as a consultant. And here we are.

Harv Nagra:

Excellent. that's amazing. I have been following your content for a while and, you've been posting this really excellent LinkedIn series, getting into the topic of governance and boards. I'm wondering what prompted that focus into this topic.

Sam Wood:

I mean, it's not the, the sexiest topic in the world, but it's something that I think is a massive opportunity for agencies. I mean, my experience has been that governance is a body of knowledge that is largely, I. Ignored, for most independent agencies until it gets to that key time when they might be looking to sell or step away, at which point you're probably a couple years behind where you realistically should be. And that impacts timelines. It impacts valuations if you're looking to sell. And it can even impact, the different options that you have available. To exit the business if that's the decision that you've made. So I'm a big proponent of, considering the option of setting up the agency separate to the founder, running as a system so that the founder can instead step away, sit on the board, for example, rather than spending every single waking moment as the key bottleneck in the business. And if you've set up the agency properly and you've got great governance, that's an option that becomes available to you. So I think having that governance lens from early on, even taking some of the learnings, not necessarily setting up a formal board, can be really key to options, I guess, for the founder in running and leaving the agency.

Harv Nagra:

some really interesting points there. I love the idea of getting the founder sitting on the board. additionally, what I really like about what you said is that, that there's this kind of reactivity in agency land a little bit, isn't there? Like we, we tend to be. Dealing with things a step after the fact rather than being really forward looking and being proactive about

Sam Wood:

Hmm.

Harv Nagra:

I, I think, that's what I love about what you're talking about here and gonna be talking to us about today is really getting into that mindset to be looking forward and getting yourself in great shape. on that note, I was reading something you posted where you were saying it's not as important to set up a board so much as. Benefiting from that kind of board level thinking, which any of us could do. So tell us what you mean by that and why it's so important.

Sam Wood:

Yeah, I guess a bit of, context, so when we're talking about a board, you've got a couple of different, I guess, modes that you can be working in. One is what we think of as sort of the formal board. The sitting around a boardroom table relinquishing a level of control to independent or non-independent, non-exec directors. So that's kind of the, the really formal method. That is a big step. it's important, it's incredibly valuable, but it's a big step. That means there's costs involved both kind of compliance costs, so financial and non-financial costs. So the time, the admin, the overhead, all that sort of thing. A step back from that is an advisory board. So that's an informal, it's not binding, so you don't have to follow the decision, so you're not relinquishing any level of control. then a step back from that again, is this kind of board level thinking. So that might be bringing in, an advisor or something like that to work with. It's you as the founder taking on that helicopter view, that mindset of, I need to zoom out, look at the business from a top level, rather than being reactive in the business day to day, as you said before. And you can do that using mechanisms like a monthly or quarterly a. Board pack that you're putting together that might include your key financial reports, but then also looks at some of the strategy of the agency and the key metrics that help to define whether or not you're achieving that strategy. And that's when, like, looking at those, um, five areas that I mentioned. And I think that the post that you are referring to being. Purpose or strategy, culture/leadership, capability, risk/oversight, and performance, really come into it. so again, that's just pulling yourself away using some sort of mechanism to pull yourself outta the business a little bit. And I mean, I've been there. I know that it's all encompassing, it's all consuming. so you need something in there to pull yourself out and help you to separate yourself from the business and have the business as a going concern. As I said before, the system that works without you, and you can only really do that by first getting a better perspective, a better oversight of what the business actually looks like.

Harv Nagra:

so we're gonna dig into that a little bit further. Just moving back for a moment. You know, you were talking about the costs involved in setting up a formal board, and then there's the idea of an advisor board and that kind of thing. So if I was just to pick on that point for a moment, what are the implications of that in terms of. how many people should that involve and is there compensation involved in something like that? Sorry to get into the nitty gritty of

Sam Wood:

No,

Harv Nagra:

thought it might be

Sam Wood:

it's a really good question. it can be whatever you want it to be. Really, this is kind of a, a self-designed thing. You're not working towards a particular kind of compliance based model. A really good way to look at it though is what are the skills or competencies that I don't have as a founder. I need in order to achieve whatever the strategy is for the business. So if you are thinking about international expansion, obviously that's a key part. If you've got some knowledge gaps or capability gaps around HR or finance or even AI or something like that, at the moment, How do I bring those skills in? So it's, rather than hiring consultants or full-time employees or whatever, it's getting people who are really skilled in those areas to meet with you once a month or once a quarter. and then, uh. Working to a set agenda. So being as formal about as you reasonably can, and that kind of is what drives the amount of time. Uh, it can be a board pack similar to the one that you're already hopefully putting together for yourself, but sharing that in advance, having a three, four hour meeting with those people, running through that, having them challenge you on decisions you are making on paths, you're going towards and seeking advice from them. You mentioned compensation. I think that is a really important point. I sit on a not-for-profit board. Uh, not-for-profit boards are, fairly well known for not paying, for being volunteer positions, which is great. I. There is a shortcoming with that approach though, being people who are sitting on those not-for-profit boards, feel like they're giving something. They're already giving value and therefore they do have an issue with people not seeing out their terms on the boards, not necessarily giving everything that they could or should be giving to those boards in terms of their own time and effort. So I think compensation is important, and it doesn't have to be a huge amount. We're talking maybe a couple thousand dollars. Per meeting per person, and that is

Harv Nagra:

Okay.

Sam Wood:

than enough. Usually you will get people who are keen to get involved and then paying them that little bit extra just gives that level of, okay, I need to put some effort in. I need to make sure that I'm delivering value beyond just me sitting in a seat.

Harv Nagra:

Excellent. that's really, really helpful. I'm glad I asked. And thank you for clarifying that a little bit. you know, we were also talking about like, the step back from that is kind of, you know, doing this yourself internally, perhaps bringing a coach or an advisor. in that kind of situation. how many people would you tend to recommend getting involved? Is this kind of, would you typically just be dealing with the MD or would you get the senior leadership team in there as well? Ops and finance, perhaps? any kind of advice on who should be part of that kind of core

Sam Wood:

Yeah, it's a good question. I think it. Will depend on what's being talked about at that point in time. a common thing for formal boards is that CEOs are involved for part of it and then aren't involved for part of it. So it's what is being talked about at that particular point in time. If it's very much operational, then yeah, bring in your senior ops leaders. If it's financial, bring in your finance team. Absolutely. But you don't want that to be the default because you wanna be able to talk about all of those functions. And sometimes those functions include the individuals in those roles. So you don't want the standard to be everyone's invited and then suddenly, oh you are not invited to this one.'cause then you're going, oh no, hang on, something's wrong. So yeah, the standard should be it's the senior team, it's not the exec team. And then as needed, pulling in the right people.

Harv Nagra:

Got it. That makes a lot of sense. well then let's get into these areas that you were mentioning, Sam that we should be looking at. Uh, the first was purpose and strategy. my question is, where do you see businesses falling short and how should they be looking at this?

Sam Wood:

I think there's probably no more overused and misused word in agencies than strategy. So I guess to define strategy here, I'm talking about a pretty specific thing. From an overall organizational and board level, we're looking at what are you building? Why are you building it that way? Who are you building it for, and how are you gonna be better than everyone else? So if you don't have clarity on these questions, then you've got no idea where you're going realistically. But having that clarity also creates a negative space, which is really important. I think it's, Porter says that, you know, strategy is also, I'm gonna absolutely butcher it. Strategy is also about what you choose not to do. So having clarity on those points means that you. Have that negative space to say that you're not building for this person, you're not building it in this particular way for these reasons, and we are not building this thing A, you're building thing B instead.

Harv Nagra:

Right. Mm-hmm.

Sam Wood:

Knowing what you're going to do also means knowing what you're not going to do, which is super important in my experience. If you're unclear and you're stuck on making one of those really big, meaty strategic decisions, it's because you haven't got clarity whether you're doing A or whether you're doing B. And so I think you need that clarity in the first instance.

Harv Nagra:

Super, super interesting. I love what you said about the negative space. Actually, I almost find that more clarifying than. in the positive way because, you know, somebody calls you and says, can you help me with this kind of project? That's where that kind of negative framing can really help you, identify if, if that's the right decision for yourselves.

Sam Wood:

Yeah.

Harv Nagra:

Otherwise, I think we open up the can of worms and start um-ing and ah-ing about it and, and going through that process.

Sam Wood:

doing lots of things that you're not particularly great at and isn't aligned with your strategy. You know, no one wins.

Harv Nagra:

And things get a, get a bit messy. Right. Before we move on, Sam, I'm reminded by something that you said in one of your posts that a lot of times like. That the way we think about strategy is often about just kind of a slide in, in a presentation or something people learn about in their onboarding on their first day, and then it's kind of forgotten and a little bit meaningless as well. So the way you've presented it here is really about focusing on what you're doing and for who, and, and that's the most important thing.

Sam Wood:

Yeah, absolutely.

Harv Nagra:

Alright, let's talk about, culture and leadership. You know, too often we look at that as kind of vibes, as well. You know, weekly beers used to be a thing when we used to all go into the office, team lunches, office playlists and stuff like that, that's what maybe we, we used to call culture and I think there is probably anxiety about that disappearing a bit in this kind of work from home or hybrid era, but from that kind of board level perspective. is culture really just about pizza and beer or is there a better way we should be looking at

Sam Wood:

Culture should never have been about pizza and beer. That's not, that's not culture. It's... culture is how people behave when no one else is watching. It's the way we do things around here. It's not, oh, we have Friday beers, or we have pizza every other week. It means that. When the founder is not there, when the exec team is not there, how is the team behaving? What are the decisions they're making? What are the behaviors that they're actually exhibiting day in and day out? What that does mean though, particularly in a founder led agency, uh, kind of those independent agencies who still have the founders very much involved. The culture actually often reflects the founder themselves. So that means that behaviors being demonstrated, being championed by the founder are the ones that the team are implicitly being told of what's important and what is valued at that organization, and therefore the sorts of things that they're going to mirror. So, of course you can put in place incentives to try and nudge the culture in a particular direction, or initiatives or whatever it might be. But if what you're saying and what you're doing are two different things, you know, at best it's just gonna be messy and confusing. At worse, there's kind of something a little bit more toxic brewing in the background. So. The, I mean, one of the things that was, was drilled into us in some of the governance training that I've done, and it's to do with the exec, it's to do, even with the board, is

Harv Nagra:

Hmm.

Sam Wood:

fish rots from the head. When we're talking about culture, the fish rots from the head. If the founder or the people at the top of the organization are rotten, if the culture there is rotten, if their behaviors are toxic, Eventually the entire organization will be rotten. You cannot separate the two. They are one and the same. So as a founder or leader of an organization, we are absolutely talking about the exec team. We're talking about senior leaders in the organization, whether or not they've got skin in the game. We are talking about the people managing the business. The saying goes? Yeah, the standard that you walk past is the standard that you set. I would say that it's actually the standard you personally endorse. It is the one you are saying, this is important to me. I agree with this. And if what you're walking past is something that's toxic, that's the standard that you're setting to the rest of the business.

Harv Nagra:

Absolutely. And I think the words rotten and and and toxic are quite strong. And that's maybe an extreme example and it doesn't need to

Sam Wood:

No.

Harv Nagra:

It just, sometimes it's also just like the bad practice that you're kind of passing on or I can do it this way, but not you, like do as I say, not as

Sam Wood:

Yeah.

Harv Nagra:

that kind of stuff, and that that's just as bad, right? So that's not as extreme, but it's still. Just as bad in terms of that kind of, um, mentality trickling down and that's what you don't

Sam Wood:

Yeah, for sure. And I think, you know, using the word rotten, I'm more mean as against what you want the culture to be. So if you are an agency that you want a high performance on time culture, that you're delivering the best possible thing for your clients, but you are okaying stuff going out the door that isn't quite right, that's a couple days late, that's kind of rotting the culture from within.

Harv Nagra:

Got it. Hey all, just taking a quick break to ask whether you've heard of Operations Nation. It's the global community for ops leaders of all stripes, they've got a buzzing slack space. I know that because I'm a member myself, A COO course and an annual conference that's coming up on the 20th and 21st of October in London. Go to operations nation.com to learn more and use code. SCORO for£30 pounds off conference tickets. Now, back to the episode. We've talked about capability maturity in a past episode. You know, whether the business can run. Without the heroics of individuals or, or everything depending on one person and that person being kind of the bottleneck. so if an ops leader wanted to proactively build more organizational resilience, where should they focus?

Sam Wood:

I love the heroics point. I think if the whole business is reliant on a person pulling heroics out of the bag time and time again, it's not a particularly resilient organization, which again, from a governance perspective is super important. and so then I would actually say that the business doesn't have the right people or capability in place. In order to do what it's trying to do. So that's, I think where the ops lens can really come in because there's some areas, some key areas that we can then look to. So the skills of the team, do the right people know what they should be doing? Do we even have the right people? So again, that's becomes a bit of a systems question in addition to a HR and P&C question. Systems, can the work run without being manually shepherded throughout the organization? And do the systems actually allow for clear oversight and, you know, direct line of sight from management or account service or project management, through to the delivery team? Uh, structure. Is the org chart actually fit for purpose? or is it just, it's been like this for a while? It's gonna be too hard to change it. We're just gonna keep building and building on top of something that's already pretty rickety. Or a a, a way to look at that. One of my team members mentioned this to me, years and years and years ago when we were having trouble, with a client, that we were making our org chart our client's problem. They don't and shouldn't care that we're structured in a particular way or we're split up in a particular way. They care about the thing being delivered, and if there's a problem with the org chart that's for us to resolve, that's not, the client doesn't care. It's not for them. and then scenario planning. so you know, what happens if someone's sick or quits or a client moves faster. Again, going back to resilience. So the ops team, I think has almost first vision, along with the delivery team, first vision on whether or not these things aren't working. And I think, can point out where there's some weak links in the chain.

Harv Nagra:

Absolutely. I'm glad you brought up the point of systems actually, in agencies and consultancies. going back to the point, uh, a few minutes ago, there's a bit of a lag in sorting stuff out, and certainly a lag in the tech stack, being fit for purpose, I think as well. Having that really in place to drive efficiency, automation and visibility on how the organization is performing. and I think it's probably that lack of awareness of what good looks like. I think a lot of us have worked in agencies where it has been a bit chaotic and stuff is just a little bit all over the place, so no one really knows how that should be run until they put in the effort to sort it out themselves. so things are very reactive, have you seen that too is the question. And you know, what are the red flags that are giveaway to you that things are a little too chaotic and they really need to, uh, go in for an upgrade.

Sam Wood:

Uh, have I seen that before? Yes. Uh, I think at this stage I've worked across a couple dozen agencies, uh, in some capacity and yeah, more often than not. We see this. I think the giveaways are, there are a couple of things. Uh, maybe the team doesn't have a clear handle on what they should be working on and then what their teammates are working on. And, a weekly standup or a, a WIP every other day does not count as a solution to this. management maybe doesn't have clear line of sight as to what's being done or what's being planned. Maybe we can't get important numbers at, At the tap of a couple buttons, like capacity or utilization, like profitability on a client or product level? basically I think of it as if in order to run your business effectively, you need to export data from a whole bunch of different platforms, manipulate it in Excel, then it might be time for a bit of a refresh. yeah, I think if you're having to manually manipulate data and it therefore immediately is. Decaying in terms of the data quality'cause it's outta platform. I think you potentially have an issue that could be resolved with a better tech stack.

Harv Nagra:

Mm-hmm. And you mentioned a few kinds of, um, metrics there. We're gonna come back to this in a little bit'cause one of the following points touches on that a bit more. But, before that, let's move on to risk then, specifically threats. I mean, this is another area where I just don't have faith that businesses always take risk, seriously, until something breaks or something happens that triggers that kind of panic. What would a board advise in that kind of situation?

Sam Wood:

Yeah, I totally agree. I think, and I'll put my hand up as well, I was much the same when I was running an agency. We're kind of, sort of vaguely aware of the different risks or threats that we might be facing in an organization, but there's kind of nothing formal about quantifying that structuring thinking, and therefore starting to develop solutions. and there's no planning. So once we actually have a better idea of what the threats are in an organization and we've put some thinking behind it, put some structure behind it, we can then either manage down impact, manage down likelihood of those particular risks, and therefore how we should respond. So I think even a small amount of planning and preparedness can lead to better outcomes than just, you know, shooting from the hip, as you're lying in bed one night thinking, oh yeah, if these tariffs come into play, I reckon I'll do this. It's actually sitting down and planning out what that looks like, putting it into a framework. So framework, uh, risk matrix is a super easy one to start using. If you just Google risk matrix and it plots risks, of impact, severity of impact against likelihood that risk is gonna occur. Once you do that and you start thinking about that, it helps you to prioritize how you then move things down and to the left. So how you make them less severe, how you make them less likely. To occur. even just that and making a bit of a habit out of that in those quarterly board meetings that you are now doing with your advisors or just with yourself, considering that every single time and reviewing it every time.

Harv Nagra:

You brought up one example there, kind of, of the tariffs. I wonder if you could give us some other examples of, of, risks or threats just get our imagination going in terms of what kinds of things we should be planning for.

Sam Wood:

Sure. Um, cybersecurity and attacks. Really, really big one at the moment.

Harv Nagra:

Mm-hmm.

Sam Wood:

is a really big one, and that's one that I would suspect people have given a lot of thought to, but perhaps not structured it from. Risk management perspective. So thinking about how it could impact your business and then therefore how you can change your business in order to take advantage of that, uh, key person risk. Really, really important one for small medium businesses. So you might have a senior employee or the founder. so maybe the founder gets sick for a couple weeks. Does the business grind to a halt, maybe a senior project manager? Gets sick, it does the business grind to a halt. So thinking about this key person risk if someone gets sick or someone leaves, how you're going to manage that. any sort of important policy document, and I know we've got an international audience here, but it's, you know, things like work from home policies, health and safety policies, bullying, harassment policies, all of these sorts of things. Having them in place and actually circulating them out to the team, ensuring the team has seen them and read them. cashflow management, client concentration risk, all of these sorts of things. They're all risks or threats that can be managed in terms of reducing the likelihood, reducing impact of severity.

Harv Nagra:

I wonder if one reason some of this stuff doesn't get tackled is'cause it's not the most exciting stuff to be working on. but you know, you could bring in an external supplier that can help with that

Sam Wood:

Yeah.

Harv Nagra:

So the point isn't to stick your head in the sand and say, oh, we're not gonna deal with this.'cause it's just. Boring.

Sam Wood:

Yeah.

Harv Nagra:

you, you, you can get it sorted and it, it doesn't need to be like hundreds of pages.

Sam Wood:

Yeah,

Harv Nagra:

it

Sam Wood:

that's right. And I mean the, I talk about risk management and so doing something about them, the solution could be, okay, we need to bring in a HR consultant and redo all of our docs. Great. You've just reduced the likelihood of that thing actually happening. Uh, so it doesn't have to be, oh no, I'm signing up for 30 hours of rewriting policy documents. It can be, okay, this is a problem. I just need to find a quick solution to help manage it.

Harv Nagra:

Perfect. Okay, so we're moving on to our last pillar, which was performance. So, I, I was at an operations event recently where I ran a poll and I'm gonna read some stats to you. Hopefully you're not too shocked. Okay. So 14% said we're only focused on cashflow and survival. 15% said we mostly track project delivery and deadlines. 27% said we only have some visibility on project profitability. So that's 56% of the audience saying they at best only have some visibility on project profitability. I mean, what are your, what are your thoughts when you hear some of that?

Sam Wood:

Ouch. That's, uh, that's, I'm glad I took a sip of water earlier.

Harv Nagra:

Yeah.

Sam Wood:

you can't, it's unfortunate to hear, uh, on the other side and, uh, you know, let's flip the coin. Massive opportunity for them to start running a way better business than they are running at the moment. So, huge amount of upside for them. but you can't build a profitable agency without running profitable projects. It feels silly to say, but it's realistic. Uh, you can't run profitable projects without measuring and managing cost inputs as well as revenue. So if you're not measuring and managing profitability at a building block level, how do you possibly expect to build something overall that's profitable? It's akin to a widget factory, not knowing the price of their metal or how much metal goes into each individual widget, like how are they ever going to run a successful business? So I think. This sort of thing is another one. maybe similar to the risk conversation where it can feel hard or boring or whatever to put the right systems in place to actually make this possible. but if you've ever been in the situation where you've had to try and save a business from insolvency, I can absolutely guarantee you that's a hell of a lot harder.

Harv Nagra:

And you know, the whole point of this, was not to shame anyone that was in that kind of situation. That's not what we're saying at all here. The point is that you're trying to run a successful business, and you can't do that if you're expecting to kind of tally the books at the end of the year to figure out if you were profitable, that is too late and you can't do anything about it.

Sam Wood:

Absolutely, and that's why I started by saying like, this is scary, this is bad. But there's also a huge opportunity here. If you've kind of been running a business that's been getting by, maybe not killing it, but getting by, but you haven't been doing this stuff, there is so much upside there for you to capture now.

Harv Nagra:

on that point, what should we be tracking? You mentioned a few things earlier, but I wonder if we could just go into that a little bit more.

Sam Wood:

Yeah, sure. I think, I'd bring it back to the organizational strategy, for, I guess the most important metrics for running a business from the board level, from the governance level, but

Harv Nagra:

Yeah.

Sam Wood:

guess taking it a step down or step into the ops team, Which is, as I said, my background, uh, it's looking at profitability by client or service line. preferably both, but definitely by client. So to my mind, that's, that's the most important thing. If we're talking about running a profitable, sustainable business, it's looking at things like team utilization and not just. Whether it's as high as it possibly can be, whether it's healthy. So whether the team still has time to do the things they need to do outside of billing work. pipeline health, not just number of leads, but how healthy those leads are, how healthy the pipeline is, looking forward. Client retention, satisfaction, depth of relationship, which is one that I find often isn't considered. So that means how high up. Your relationships go within the client organization. So it's, is it just the day-to-day contact that the agency has a relationship with, or is it their boss and their boss's boss. And their boss's boss. Uh, and then how many people on your agency side. Have relationships on the client side, have you got a single point of failure where if that client service person leaves, suddenly no one at the agency has a relationship. And that's something that you can absolutely report on and should be doing. So, uh, and then strategic progress. So going back to my first point, what are the important metrics from a strategy perspective that the exec or the board has said, this is something that we need to measure because this is important to us.

Harv Nagra:

really great, points there. One I wanna go back to just for a moment is pipeline health. I think that's really interesting because, you know, you can get excited about an overinflated pipeline or one that's really stagnant. so what, what does that mean, pipeline health and how do we filter out stuff that's been stagnant and how do we know it's healthy, really.

Sam Wood:

I mean, I know you've got some fantastic episodes with other guests who really dive into this in detail, which I would definitely recommend people have a listen to if they haven't. Uh, but it's things like, are they actually still responsive? Are we talking to the right people? Do they have decision making power? Are they committing to particular dates, or. Conversely, have they gone silent? Is the person that we're talking to, do they not hold the purse strings? and then are they actually progressing through the pipeline rather than just being stuck at one particular point? So it's all of the metrics in totality, not just what's the total value, the total theoretical value should all of these people sign off, even though we haven't heard from 50% of them in a month.

Harv Nagra:

Would you ever say that if something sits in the pipeline too long where like, if, if it's sat there for, I don't know, X number of days, that it's moved to lost and you bring it back if they come back,

Sam Wood:

Yeah, I think you should only have something in there that is a realistic opportunity. So to my mind, it's, clients that you are, or prospects that you're still reaching out to and hearing from pretty regularly. So depending on the type of business that you run, that might be every week or every other week or something like that. But if it gets to a point where you haven't heard from them in, I would say probably 2, 3, 4 weeks. I like to move them away from active to kind of a nurture, type pipeline where it's, I'm just gonna keep reaching out to them. It's not gonna clog up my actual active pipeline. And then if I'm still not hearing from them after a couple of months, not gonna spend the time.

Harv Nagra:

Yeah, good point. Otherwise you're only misleading yourself if you're letting that build a false sense of security about saying your pipeline is X value and it's in great shape. It's really not if no one's responding to you.

Sam Wood:

Yeah.

Harv Nagra:

important to keep it clean. cool. So Sam, we've been talking about this kind of, board level thinking. how can businesses bring in this kind of accountability, what, what would you say are the steps to get that in place?

Sam Wood:

I've mentioned it at the top, but I think the first and easiest step will just be to get that board pack reporting. So that's deciding on what metrics are important in your business, putting together a set format report that you're producing even just for yourself every month or every three months. That's kind of the first easiest step because it's just a mechanism to try and pull you away from the business a little bit more. the next step would be bringing in someone, someone like me, a fractional C-O-O-C-F-O, something like that to report to each month. so the same kind of thing, still producing the same kind of document, but then you've got someone else saying, okay, why is that number, that number? Why hasn't that project progressed the way you said it would? they've obviously got no control over the business, but it's an accountability measure to work with you that you've already said to them, I want you to hold me accountable. I want you to challenge me. so it's just that additional layer and then it's getting something more structured like the advisory board I mentioned before. Then finally it's that formal board, but that is a significant step.

Harv Nagra:

Good advice. And I think what I really like about having an advisor, that you're presenting to each month, so that you are actually taking the time to get that data together, getting in a format where you have a clear narrative of what's happened, uh, to understand, you know, anything that's gone wrong or really well. And just kind of maybe the external point of view as well, like you were saying, to challenge and ask those questions so that you can't just brush it over like you might if you were just working with a couple of people internally, you know, justifying X, Y,

Sam Wood:

Yeah, that's right. And all of this depends on what you want to get out of it as well. I'm about to start on an advisory board for a large agency in Australia. And their brief to myself and the three other people on the board was that we've actually got great governance already. We've got a great CFO. We produce all like the, we produce our board packs ourselves. they're running a really tight ship. I think if I went in there, I'd probably just go. Okay. I dunno what to do now.

Harv Nagra:

Well

Sam Wood:

Uh, yeah, well done. so instead their brief was, we want to be challenged to do more. We wanna know what the blue sky is that we're not seeing. We want to have someone that we can bounce opportunities off. We don't need to be held accountable for this sort of thing because we're already doing it and we're doing a very good job. We want bring in people who can broaden our thinking, broaden our horizons a little bit more. So I've hammered on about this accountability measure, but it's kind of whatever you want it to be.

Harv Nagra:

I love that. I love that. Sam, we're coming towards the end here, you know, most of our audience is operations. I'm wondering if you have any parting advice for them?

Sam Wood:

Yeah. I know, you know, from personal experience as an ops leader, it can get, it's pretty easy to get hyper-focused on the details because that's kind of the job. So I think sometimes, and you will probably need to work with the leadership of the organization to do this, but sometimes It's best to step back and understand, one, what's the strategy? Two, what are the numbers that show whether we're actually successfully pursuing that strategy? And three, what are the drivers of those numbers and the levers behind them that we have available in order to actually impact them. So that's. Now we're getting really deep into this is the ops role, this is the core of it. what are we able to do as ops leaders to support the team in doing the work that actually pulls those levers, that moves those dials, that then ladders up to the numbers that are important, that ladders up to us successfully executing against our strategy.

Harv Nagra:

that's kind of been a recurring theme this year where it's all about making sure that ops is strategic and not just worried about the firefighting and the details. Um, where can people connect with you, Sam, if they want to learn more and, and reach out to yourself?

Sam Wood:

Uh, I mean, you've mentioned my LinkedIn a couple of times. I'm, I'm pretty active on LinkedIn. I do a lot of posting of content on there, on whatever I'm thinking about at that point in time. So here, it's governance. Uh, so connect with me on LinkedIn. Uh, lots of strategy, ops, governance chat. send me a DM if you wanna have a chat. they're always open. or you can reach out to me on my email, which is s.wood@ottesu.com.au. but best place, LinkedIn. Come have a chat.

Harv Nagra:

Excellent. We'll do that and we'll put links to all of the above in the episode notes as well. this has been such a good conversation, Sam. I really want to thank you for that. Really, really, uh, interesting and really valuable. So thank you so

Sam Wood:

Thanks. Thank you. I've had a great time.

Harv Nagra:

What a great conversation. Sam gave us so much to think about. What stood out for me was this idea that governance doesn't have to mean a boardroom full of people. You just need to look at this as taking a helicopter view of your business. Stepping back from the day to day and looking at the big picture. We talked about strategy being less about vision decks, and more about knowing what to say no to. About culture being set by the senior leadership team's behavior, not your weekly beers. And about how capability, risk, and performance aren't things that you should only think about when the wheels are coming off, but things that you can plan for, that you can track and measure. Sam also made a great point that I want to echo that Ops leaders can play a huge role in bringing this board level thinking into their businesses. whether that's building your own board pack, bringing in external accountability, or just asking better questions. It starts with choosing to zoom out. Which is something we've been saying over the course of the year. I've only got one ask for you today, and it's to share this episode with someone that would appreciate this conversation. I'd really love your help in growing the audience, so please do that now. Links to Sam's contact details and to the Handbook newsletter where we send you a cheat sheet with the key takeaways is in the episode notes. That's it for me this week. Thanks very much for joining.

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