Dave Schoenbeck has a long history in managing and operating retail stores like Toys R Us and is one of the founders of Babies R Us where he served as senior VP of operations for 10 years. So what does that have to do with software? For more than a decade he’s been helping business owners in AV and beyond reach their goals as an executive coach.
When I started this podcast, I did not realise how much shifting to software defined systems affects the business models. But the words ”as a service” keep coming up, so I am really excited to learn a lot today from Dave Schoenbeck.
this is software defined survival where we explore how software defined systems are changing the business of IT and today software defined survival most the most business owners are not classically trained in business their technical experts and you’re running a business the network of whom you trust someone I chief information officer most of the people the people that are going to be if it’s the business traditionally is going traditional transaction service why would I should just this here’s the here’s the magic solution for that grow fearless leader that would test different things and throw away really fast this is Patrick Murray just a quick word about our first sponsor before we get started now all the sponsors for this podcast will be products and services that I’ve personally used and believe in and executive coach Dave shame back was recommended to me by a long time colleague who’s been working with coach Dave for many years and after the initial consultation I learned quite a bit about my strengths and weaknesses that I may have been somewhat aware of but never really saw in black and white and never realized or even explored how they affect the decisions I make and ultimately how I run my business we’ve had a few coaching session since then and while I can’t report that I’ve seen an immediate impact on the success of my company nothing happens overnight but my plans and and daily activities are a lot more structured and not alone takes a lot of the stress out of deciding on what to do next and there’s really just a kind of a comfort and confidence in following a plan that was put together with the help of someone who’s been through the process of growing many companies so if you’re interested in bringing your business game to the next level I definitely recommend booking a free consultation session with coach Dave just go to his website at deem Shane back dot com that’s Dave D. A. V. E. Shane back S. C. H. O. E. N. B. E. C. K. dot com one more time D. A. V. E. S. C. H. O. E. N. B. E. C. K. dot com there’s also a lot of great information on running a business on his blog a lot of great free information so go ahead and check that out Dave sheen back dot com hello my name is Patrick Murray welcome to software defined survival today’s guest has a long history in managing and operating retail stores like toys R. us and is one of the founders of babies R. us where he served as senior VP of operations for ten years so what does that have to do with software you may ask for more than a decade he’s helping business owners in AV and beyond reach their goals as an executive coach when I started this podcast I did not realize how much you think the software defined systems affects the business model but the words as a service keep coming up so I’m really excited to learn a lot today from Dave Schoen back Dave welcome to the show thanks it’s great to join you guys out there I say you’re not last name right I have hard hard time saying it would help the German accent well your debts actually the correct way to say it but nobody in the US can say it that way so young I pronounce it Shane back because it’s easier for Americans wow that’s fascinating Shane I never woulda came up with that one yes is there anything about that introduction that you’d like to correct or expand on those perfect thanks for reading it was pretty pretty cool yeah the big secret is %HESITATION just look at your linkedin profile and copy the words to so can you tell us a little bit about your first contact with the AB industry and how you kind of got introduced to me are sure how you started working with a %HESITATION at the control programming Cup companies custom programming company and %HESITATION we’re we’re having great success with with that firm and he introduced me to a systems integrator a local systems integrator in the northeast of the US and they were because of the two of them for awhile and then they introduced me to an audio visual labor installation and commissioning business so it was a little triad of the audio visual love businesses for from that to be really fascinating I thought it was going to be the coach of the AV industry and in a lot of fun %HESITATION working these companies and are you still work with two of those three so I learn more and more about the industry is every week goes on interesting so is there any commonalities are there any things that %HESITATION you could kind of pick out out of the kind of sets us apart in general I mean you work with a programmer systems integrator freelance installer those are really kind of different tasks but in general is there anything you can say about AB life a few of the the common thread between all three of them is just the incredible amount of consolidation and change that is happening in the industry were were you know the little system integrators fuses certainly a huge consolidation and a movement away from selling boxes to selling or suffers a service having a different mentality so that that permeates all three three businesses certainly up this consolidation is very typical of a lot of industries you think back through my biker career early career working in retail you know there’s there’s hundreds of grocery chains will drugstore chains discounters that were you know morphed into just a handful no never took place over twenty years again a considerable way so now you know see the same thing in the every industry so having gone through that what kind of opportunities in hindsight may have been available to any I think it’s a shitty shift of thinking you know night when I think back to earlier consolidations or or major changes in market places it’s really about us seeing over the horizon being a little more strategic in your view point not tied to old ways in your feet firmly certain countries cheese instead of being rock solid on on what you believe to be true because things change and in many industries so to be aware of that too how you’re in developed different sorts of thinkers I think would be would be a great advice for for the only initially street you should continue to hire people that are just like yourself in your industry is changing you were going to get caught flat footed without the kind of thinker that you’re gonna need in the future so I’m on board with that we’ve spoken to times and you know that I’m all game for trying out new things but there’s also a bit of risk involved with that do you have any advice for managing that kind of risk when you’re so that you don’t shoot too far beyond the horizon and and just wind up waiting for the future to come yeah hired coach find a mentor find somebody in your industry that’s willing to hell the the they can help you with the with section so we all lose our perspective about how far the goal line is well what’s acceptable stress levels were all those things we just you can’t hardly do it yourself yeah well all of us need to get rid of every business owner needs to get rid of that and trash that we all are born with limbic brain sort of fear that those in what I’m doing is to go to work because we need to fight for that and in generally entrepreneurs are like that incredibly tenacious and and then a resilient and fearless but we all have our moments where we doubt what we’re doing absolutely great advice that now that you say that %HESITATION even starting a podcast could keep a good way to just call cut collaborate with other people get your ideas out there make sure you’re thinking clearly and get influenced by by your colleagues yeah mastermind groups are good one %HESITATION a good idea to review have laws locally that are in your industry or in in love you know intact so to speak could be a lot of different though versions of tech businesses but a master mind group would really be helpful for for leaders to just get a different perspective think about things differently read outside of of what you’re comfortable with I collect information in a in a different way there’s so many aggregating of websites now that you can bring information to to your your laptop desktop phone that he has different ideas for example I die I use one call for for many many of you probably have heard of it I die keep the board for just entrepreneurship small business marketing ideas so that sends me articles all of the everyday world and with different viewpoints and so would this be a lesson is useless but so it is like wow I never thought about it that way so the advice is that we all we all continue to grow and develop ourselves and listen to different viewpoints and different ideas so a few minutes ago you mentioned %HESITATION how there’s a lot of change going on consolidation I think it’s clear it’s really obvious that the bigger companies are getting bigger hands the little companies are getting less but %HESITATION you also mentions change the business model on moving to a as a service model and that has come up quite a bit on the show software just lends itself to that as a service model because you don’t do it once and you’re done you don’t just build the system and run away there you know things change software needs to get updated and grow so do you have any advice on how to make this shift from maybe a margin based hardware based type of a business model to more as a service I think it’s going to be done for us Patrick because of this shifting so quickly to look at the new upstarts and yeah your your your your national conferences on what the what the manufacturers are going up is there’s a there’s a groundswell of additional service providers and less reliance on the traditional selling boxes in the so I think I think all of us that are about the industry are gonna be forced to to open our eyes to see that this is this is a major shift that we need to not deny it but to embrace it figure out work where are he said that might be what when you see it will be done for us that customers will start asking for it because it yeah AV is always on the radar like something in I. T. service level level agreement is kind of a common thing managed services are kind of a common thing and it’s just really not that common AV yet maybe in larger enterprises so if you wanted to kind of catalyze that a bit and not and do it in your niche evening space how would you go about doing that well yeah you think about who’s going to be making the decisions and that’s prevalent in the IT industry the I. T. chief information officer the loss of the few the people are going to be making decisions about AB in future okay so if they if they have a good have many are used to service level agreements in in their current industry what why would they the man that to be similar in any AV roll out if if if the business traditionally is is your is going for away from the traditional sort of selling boxes and and a transaction to a service well why would why should we just jumped in front of them the anticipated are there any common mistakes that you see a business owners make there’s tons of because the worst ones hello mistakes I think one is the that I think I can do it myself where the cuts that’s a big when we touch on that a little bit other common mistakes business owners make is %HESITATION not spending enough time understanding financials okay you know we run it too much out of the out of the checkbook in cash flow instead of the fundamentals balance sheet understanding can all budgets %HESITATION metrics that’s a huge issue for for most smaller businesses for sure and how do you get better at that well you get you find yourself a mentor that can that can help you with that colored so your accountant or culture or take a class it’s not that hard to understand but most the most business owners are not classically trained in business or their technical experts they are really really good and well leave your products and services that deliver but maybe not necessarily have the experience that they need something need some outside help trusted CPA okay see rule number one right don’t do it yourself told to do so the the other common mistake is that we hire for the most inexpensive person that we can find that much night could possibly get the job done instead of me doing investment spending into higher better tell investment spending yeah so you think about this is buying buddy like buying a machine you’re buying you’re buying your your biggest asset which is in the in the up and coming high performance individuals so we have a tendency to make to to buy on the cheap earlier or even passed earlier I understood I can understand early on better than them two or three years and into a business and I really learned my lesson on that from mobile babies R. us experience that that the folks that were loyal and great in the beginning were not necessarily the people that have the horsepower to handle it is to get better and it took me awhile to really see that my understanding is it’s an emotional decision why don’t these loyal people perform like they used to uses more complex and it’s more difficult there’s bigger decisions and that’s that strategic viewpoint the best the best people you wanna hire folks they concede that strategy meant that after working all the time but they can see where they’re going that they’re great communicators and this this is a really interesting point that how companies can change as a gross I think that’s a real challenge to us to have the same team when you’re a group of less than ten people and then you grow into a couple dozen fundamentally the yeah a different beast every sort of babies R. us there was three of us while you’re working on the original idea and at the end there was there was ten thousand people reported to me so you don’t think they get more complex as thirteen direct reports for or for a vice presidents and a bunch of directors and now the complexity of just managing brown would deliver telling people is completely different from what I did in the early days so roles changed for me and my viewpoint change and that’s what happens with all that I worked with some of those people just couldn’t grow to that capacity right so I’m still waiting for those problems so I’m do you have any stories of %HESITATION anybody in the V. or any other industry of somebody who just made up a good turn around that was kind of stuck with something at a problem that they just couldn’t get through and %HESITATION and really turned around yes we have a one one of my clients in the industry is when I first started work working with this guy he was he was out on his own a book keeper and self and on the net business through grew from that to you know a fairly significant companies use of language we don’t want to see the sales line with the staff is now about seventy people so in some highly profitable business so here’s the here’s the magic solution for that growth fearless leader that would test different things and thrown away really fast they didn’t work invest in and give it time to to percolate and grow look it didn’t work bone gone we’re gonna move on to something else so tirelessly create of yeah in trying different things the new he’s really really very impressive to me just because you don’t see them that often throughout the normal heart so let business six borderlines use daring Russell and and fearless grossly grin were there any armed practical things any exercise or practices that that you noticed in in what he was doing or what that company did that may have a attributed to that yeah I guess it just sounds like courage just having the courage to try things out and and see if they work on their own and Pat myself on the back but I think we’re I help this individual was was having bouts of being able to bounce ideas off of it and and because we all get when you’re running a business is very low in the years to really know your network of whom you trust is somewhat limited self coach by providing that the discussion so I’m gonna be I want to listen to what you say I’m gonna help you shake that idea think about a little different so the end result in the system success that he had was incredible amount of focus because we we kept clarifying what you’re trying to do bring it back to what was the original idea was are we methodical about this so when we come to believe but some direction and well discourse about about strategies that was how I ended up either interesting I’m just taking notes so as he was going through this process it must’ve been a different thing when the company was smaller so trying testing out different things it’s an investment of time probably capital as well and %HESITATION dead needs to come from somewhere was there kind of like a base of business that he had that allowed him to try out these different things or she so so there were a few things that worked out well early on yeah he understood understood his costs were very well and his margin requirements which is also another weakness in most businesses the idea of understanding be gross margins in overhead which I guess ties back to my earlier comment about understand your financials but there there is a definite weakness of most small businesses about understanding gross margin and how to use that had a price and and he had a extremely strong ask you then when it came to that so he knew where every nickel was he knew what his costs were in what he needed to make so there was a underpinning of profitability to allowed to grow it was you who you can grow in margin as time went on it a solid margin excellent that that’s kind of exactly what I was looking for because we can talk about courage and and and %HESITATION creativity and innovation but in the end it does come down to a very practical things and %HESITATION understanding the financials of the company seems to be what gives what could give you that confidence to take those chances because if you don’t know if it’ll work out or then you could plan on it and and you know what things look out I look like on the other side regardless of what happens well you service mentality to is really important for all small businesses to be really focused on on your client satisfaction in the you know I think a lot of us we view it as a we don’t hear any complaints everything’s cool and then that is probably not the right way to do it we need to do more surveying we need to be asking the right questions we need to be close to those decision makers so we understand how to fix things earlier so some of the most businesses certainly strengthen those individuals so a character in India quite you mention customer service what would that look like on a practical level just about the way one of the smartest decisions are made and when the babies R. us days that I tied the compensation of all the store managers to to guest satisfaction so we did service and then rolled up and number was a scorecard they at once we had a bass line and we know what what date where they were at in that store that clientele and then we give them a little left of this is what you need to do you need to get to this level and you get to make money your books so so that can be done in any business maybe not to that extent but it could be you have to measure first so you know there’s SurveyMonkey there’s a lot of different tools that you can use that electronically probes your clients to get you know three or four questions then you get a bass line and how you’re doing types of jobs that don’t work so well we’re get markdowns identifies process breaks and weaknesses you understand very clearly of what customers like you and which ones don’t and and it is a lot easier for a client to to give you a mark down on paper or electronic surveyed than it is to do with your face so when you were listening in and we’re not hearing any sort of problems we get in we get dolled into thinking that literally school but then if you look at what how they really feel in a in a in a return electronic digital Sir right well who we didn’t do so well what’s that all about yeah great stuff so that’s kind of like at the end of every stripe call you get asked that the return yeah is limited to learn a route we all want to collect way too much information and we’ll have the service in on the go on for fourty minutes you really I think most customers most clients want to help businesses they want help shape they want to have influence but just don’t warrant so what is the most important metric customer customer delight just what were you happy those five stars are really all you need to know yeah I think there could be some opportunity there for a TV industry to to build in a little feedback loop just like this guy called right have those five stores whenever somebody shuts down the system or not so if anybody would like to get in touch with you how would they go about doing that you can you can contact me at %HESITATION Dave Shane back dot com so many emails Dave at a machine that can really hurt remember that’s probably the easiest way I have a contact form on my website you’ll ever and ever needing help %HESITATION just click on that and I are for one hour complimentary coaching sessions for anybody that’s interested of a problem that let’s let’s schedule time willow will talk about excellent Dave thanks a lot for the talk today my pleasure Patrick thanks for listening to software defined survival I hope you found it useful and maybe it inspires you to try out something new this week if you have any questions does software defined survival dot com and click the appropriate I’d love to answer questions on the air and if you’d like to help spread the word please subscribe comment and share it with your friends