EP8 - Creating Enterprise Value from any Seat

In this episode, Makenzie and Jason explore how anyone, regardless of title or department, can create enterprise value from their seat in the company. In an employee-owned environment, revenue generation isn’t limited to sales roles; it’s a mindset rooted in ownership. They break down how every function contributes to profitability and long-term value, and how both extroverts and introverts can leverage their unique strengths to drive impact. If you’ve ever wondered how your role ties to the bigger financial picture, this conversation will challenge you to think and act like an owner.

Transcript

[0:10] Hi everyone welcome back to another episode of Journey to an ESOP and Beyond where we of course speak on all things ESOP in efforts to provide an accessible and understandable resource, um I'm your co-host today Mackenzie worthI'm Jason Miller. And today we will bediving into a topic regardinghow to create Enterprise Value fromany seat. Any seat being any role within the company I think. Often timeswhen you think of creating Enterprise Value or creatinggrowth for the company. Oftentimes we immediately think of anyone in a revenue producing role um maybe that's primarily a sales rolehowever. Being a salesperson and creating Enterprise Value every role can create Enterprise Valueeven if you are not. In any sort of Revenue producing rolewhat do you think about that Jason.

[1:36] This is 1 of my favorite topics um and McKenzie I'm going to put you on the spot a little bit uh, as an accountant and experienced CPA um if I told you uh that. We were going to talk about sales and that you were going to be sellinguh what tell me the first reaction that comes from your gut on how how that makes you feel. Uh nervous for sure that is not my that's not why I went into accountingI think most people know accountants are typically introverts um not your. Typical salesperson personality so yeah that that makes me uncomfortable so let's talk about those those sales personalities a little bit uh if if if we could and we we'll park that for a minute I I would venture to say that it's a it's a at least an 8020 rule it's not like a 9010 rule that most people have that same reaction if leadership came to them and said you now have a sales role.

[2:48] And sales. Does lead to or contribute to value and I think all all of our listeners know as business owners you have to have revenue and then all the things that that are related to that but revenue is the lifeblood of any business and so to get Revenue you have to create sales however you go about doing that in your business um but noteveryone is is designed to be a a salesperson. Um with that idea or that concept of being a a producer so the first thing that I I I'd like to do is I say this every job is a performance job.

[3:34] But every job can also, be a a producing job and producing is definitely different than sales even though often cultures kind of mix those those 2 things up. So what. What do you think the qualities of a salesperson that came to mind when I asked you about that what what were those um you mentioned 1 of the inverse like your accountants are typically introverts and. What what would that lead us to think I would say sales people are typically extroverts they're outgoing um they don't mind walking into a room of people they don't know striking a conversation with strangers um, and. Being 1 of the primary people that are speakingum I would say those are the the qualities thatcome to mind. And not to mention being able to sell and persuade heryes sell persuade negotiate uh, all of of those elements are are key to certain people that have an outsized responsibility for producing new Revenue, umso.

[5:01] In a kind of a traditional thought is everyone else is designed not everyone but basically everyone in an organization is designed around salesuh to support, the sales team um because what we want them doing is selling our product selling our service which creates the revenue that pays everybody down the chain the more that they do um you know the better every everyone is, umand I think that's the mindset that many people havewhere. If we we pull down underneath of that. Is is that is there really a 2-tier system within organizations where its sales people first and then everybody else underneath of them or or do you think that it's something different. No I think that's fair I mean I think.

[5:57] I think that's generally fair I guess where I was also going withum how you mentioned everyone else. Supports the producer cell and everyone else supports everyone else. Is taking the results of that Revenue whether they're in you know accounting or whether they're in inventory they need to manage what, is being sold um or what sales are coming inbound so everything kind of. Trickles down fromthe producers in thatsales aspect. Each of those elementseach department if we want to call it Department, um and again looking at a revenue Centric model uh not because we want to not because every organization is set up that way but again in priority Revenue lifeblood trickle down idea without getting into an economics debate um on on an ESOP podcast um, but as as per our usual if we unpack that structure. Uh each department has its own function that has to function optimally.

[7:16] In order to do its part to deliver whatever was being sold to the client to meet the client's expectation, or surpass it uh in order to uh continue compounding Revenue over time andmaking things happen, so what ifuh what if the inventoryDepartment, um what if what if their Department looked was representative of what my desktop looks like uh stuff like everywhere uhwould they be doing their part.

[8:00] No and I think that iskind ofgoes into our point that you're not just.

[8:10] Being a salesperson you're not the only 1 producing Enterprise Value you may be producing an actual sale butothers within the company, contribute to the entire Enterprise Value because if, your inventory department or manager is making errors or doesn't have enough inventory on hand orhas obsolete inventory whatever it is um. You may create issues to your point to whatever end uh gets delivered tothe End customerwhich in turn impactsEnterprise Value. So those those systems within departments matter. And if you don't have a system uh then you are owned by whatever systems are around you above you or underneath of you that inhibit or enhance the way that you create value for the companysalesperson can't sell anything if nothing's getting made.

[9:15] In a manufacturing context people have to make things they're not selling a service that the expertise can't be there to support.

[9:26] So all of those, different departments need to have their own expectations their own systems um and what's really happening is instead of kind of top down it it's it's Grassroots its bottom up, if I don't have a product or a service to be able to sell to a client in order to generate Revenue um, than anything that a person that would be selling something that doesn't exist. May resonate with people that have heard that from certain sales folks over over their lifetime um, you know or there wouldn't be a need for a salesperson so really from the bottom up producers amplify what happens underneath of them in order to create the product or the service. Which means the more that the producer produces uh the more the system needs to scale in order to make that happenyou can sell a million units but if you can only produce 10 how many unhappy people are you going to have. I think Beyond um an actual tangibleproduct being sold and the systems in place to make sure all that's. Being executed I think if you're in like a a business whereum. Your product is your servicethen.

[10:52] Not only of course like sales are important butbeyond that is. What is your quality of service and how does that impact your reputation which all of that drives and contributes to Enterprise Value.

[11:21] And then I changed my mind before I said anything uhlet me let me back up a little bit there um.

[11:32] Ifno I'm gonna back up again I'm sorry uh because I was going to go somewhere else with a new person showing up on day 1 and then we get back into systems and documentation uh but here we're going to be focusing on creating the value and kind of where that comes from so we can move move through that and I would say and every every role and this is that performance function every role is a perform every job is a performance jobuh it's not every job is a a producing job even though it can be but everyone can create value by doing those things that you mentioned and that's being more efficient being more effective uh thinking about what introduces risk into the system that they're using and then how to eliminate or de-risk that uh and then how predictable can we be uh my favorite economics term is widget, I think everyone who's ever had an economics class uh or or done it it's always about widgets how many widgets can go out and then if we do this or do that supply and demandand um.

[12:38] If if you can create a repeatable experience or you can create a product of, um of qualityuh with increasing predictability those are the things that create value just by, being more efficient or being thoughtful and and an ESOP contributes to that by allowing workers to think about how their role.

[13:05] Impacts the financial framework of of a company so that's the doing partum 1 of the doing partslet's move to we've mentioned systems and documentation. Yeah so why is that importantwe've kind of kind of I guess redefined what producing is and how thatcreates value um but with growth and with scaling.

[13:34] And we actually kind of touched on this a couple weeks ago in our episode um. On how documentation creates valueand when we say documentation we literally mean documenting your processes your workflows your. Um decision Frameworks checklistsand I think to our conversation a few weeks ago this all contributes to reducingkey person risk. This reduces the risk of all of the knowledge and all of these systems being. Just up in the air and someone's head just kind of. Always done it this way so they're doing it this way but as soon as they leave if that's not documentedit could very well just go right out the doorif everything hinges on 1 person.

[14:34] How how does how is that viewedin light of an ownership transition.

[14:44] I think it kind of defeats the purpose of. Employee ownership specifically if if you are transitioning to employee owned andum.

[14:57] If that mindset isn't able to be shiftedto the employees. Um if everything is still kind of held at thethe owner level or at that 1 person everything's. Decided by 1 person everything is done by 1 personumI don't think thatthat doesn't allow for growth.

[15:22] When um when anycompany, thinks about transitioning um this is 1 of those huge pieces because the buyer isn't going to be the seller it it you're not the same person so, what the buyer is buying is the results of the seller, and in order to repeat those results they have to know what to do, and if like you had said if all that knowledge is in an individual's head and that person decided they didn't want to work anymore um then those results can't be repeated. With the same level of of predictability as we we talked about a few minutes agoand so literally anything that you can do, to document, what's happening within your company so that someone else can come in and pick it up this is where kind of the idea of the worker on the first day H how efficient would they be on day 1.

[16:29] And how can you make that personmore. Capable at the role that you hired them for with as little friction as possible with as um. Depressed a learning curve as as easy to make it piece by pieceso that they are then contributing to the the overall whole faster better easier the the whole 9 yards, um so saying please document your workflows please have standard operating procedures think about why decisions are made to do things that way, and give this next generation of leaders the why like we've talked about in the episode that you mentionedum so that they they're able to to take what's written and replicate it because if it can be replicated once how many times can it be replicated.

[17:24] RightI think it's it's very simple and kind of like a low hanging fruit to. To help create Enterprise Value but I think it's often something that's just notdone butcan easily be implemented.

[17:46] So I think our next our next piece here regarding value creation isanticipation as production. I think this 1 is interesting. But very true in that valuable employeesare. Constantly anticipating needs essentially just being proactive, rather than reactive and that inherently I think contributes to a better to to growth and overallEnterprise Value.

[18:26] So I'm going to give you an exampleum we we can kind of walk through this together so I I I want to build a building. You are the the world's best contractor.

[18:48] When I give you my ideaof the building that I want to buildyoucan absolutely build that building for me and my vision.

[19:03] I know that it's going to look great because you say that you can build it you're the world's best contractor so I know that it's going to be done wellwhat I don't know because I'm not the world's best contractor is in 5 years, the way that I have designed the roof is going to create certain problems. For whatever reason hurricanes snow storms wherever we're building the building. And in hearing why I want to build this building you as the world's greatest contractor have heard this fits me today um but I have repeatable replicable processes and people and I'm going to be growing, for forever um and and 3 years and 5 years I'm going to add 200 people to to my organization. What are you is the world's greatest contractor going to say to me with that informationmight need a bigger building.

[20:07] You have other factors to considerbased on me I guess in this scenarioI'm the valuable employee even though. We're not speaking in employer employee contacts but still I'm anticipating based on what you're communicatingneeds that. You may not know or be aware of that need to be consideredin building this building. That's right and you're going to say to me, the this I get your vision um but here are your options you're gonna have to build a second building in a couple of years, um but you're still going to have roof problems orwe can think about different design ways, and we'll we'll get the architect involved to come back so that we achieve your vision by allowing you to expand this building versus getting another 1 or what whatever it may beand that comes from your expertise, but you're listening and then anticipating that need now as the trick question here is as the world's greatest contractor would that have been difficult for you to identify.

[21:31] And that's part of this and we're going to get back to um the the kind of the that bandwidth consumption piece and how employees working can can create more capacity for certain roles like salespeople and producers to to do more but this gets back to what I mentioned in the beginning is my my job and or your job in this scenario was build me a buildingum. You have to perform you have to build the building.

[22:05] If we get under contract for the building right but you you can be a producer by then saying here here's this. And it's not a huge lift it's not a sale it's a based on my expertise and what you told meum you're going to have to make some changes here's here's what I recommend, based on on what I do every dayand every employee in every seat across every organization. When they are freeto think about their role. Because the a lot of the structure is taking the the bandwidth for them those documentation procedures and everything else allows them to go oh I heard this uh here's what I'm thinking.

[22:52] And that becomes production that becomes sales and that could come from an estimator it could come from an accountant it could come from where wherever in your organization, just by alleviating that that pressuredoes that make sense. Yeah definitely I liked your point onum executive ban with consump consumption, it allows, others to take on and feel a sense of ownership in their tasksum in anticipating needs ofyour executive leadership team. To kind of like take things off their plateandproducein a different way.

[23:43] This 1's fun, um and I say that because we we talked a lot about owners that wear a lot of different or roles and perform at a lot of different levels and then we talked about um decision making bottlenecks in our last episode and how to alleviate thoseand the highest, function of an executive is to execute at an Enterprise level or within a unit level uh and they're there for a reason when they are free to do that, than the capacity and potential for the unit or for the company to growit expands exponentially, because those if you have the right people in those rolesthe second part of that is the other your leadership team and your management team and your staff at all levels, have the opportunity to reach up, outside of their daily performance but they have to do every dayand try out responsibilities that maybe uh the shoes are a little big today but they're going to grow into them.

[24:58] And I love the point that you made in in that last episode around you try that in areas that aren't going to be the building's going to collapse or or burn down if that's the decision that you choose to but make it safe so they can constantly reach up and grow and it helps to generate, that next generation of of leadersall the while alleviating bandwidth from the top down. So that the machine of the business is operating at at full efficiencywhat do you think happens to a company that operates like that.

[25:37] That allows for that kind of DelegationI think it it allows for growth. And scalability umwithouthaving any sort of bottleneck.

[25:52] And thus creating enterprise Enterprise Value.

[26:02] I was going to say it and I have to because it's it's it's actually the next phrase so I I think. Umthat that this is the difference between Enterprise level thinking and task level thinking what do I mean by that. So I think when you'rejust tasks thinking you're onlyfocused on what are my specific tasks today. Whereas Enterprise thinking it's more big picture like what am I doing today that contributes to the overall business. Rather than just specifically focusing on checking off a task.

[26:49] Mental capacity. General overwhelm um I mentioned how cluttered my desktop is if everypart of your business if every role in your business.

[27:05] Has a a cluttered role. It's not the expectations aren't clearthe operating procedures aren't detailed they don't have, um PE they only have people to fall back on they don't necessarily have a resource to fall back on very distinct differenceum. It doesn't allow them to be aware.

[27:33] But if the process if the documentation if the O overarching goal it isthere to support them then it alleviates overwhelm allows them to do their tasks, and gives him breathing room that space to say huhI wonder if. The reason that I think esops, help accelerate this is a lot of people are motivated by money A lot of people are financially motivated and this explicitly creates the tie of your work your effort Your Role matters to the value of the company and you're going to receive this benefit that grows with your effort. In companies that aren't in Esau it's not as explicit but these fundamentals would still apply.

[28:28] I think that's part of the magic of of an ESOP company. I think awareness there is huge because evenyou just in an ESOP company you have to be aware of how you can contribute to value. And if you can't kind of change your perspective or see that perspective then. That benefit may not bemeaningful to youas meaning as meaningful as it can be.

[29:05] If you gave every person in your organizationa sales goal go back to where we started.

[29:14] How would that feelwhat would that feel liketo them.

[29:23] What's the word that you would use to describeyou're suddenly responsible for X dollars of sales.

[29:34] Maybe pressureI feel pressured to meet thosequotas. I'm not saying that that's wrong umand every organization is differentI think that there is. Room for healthy tension around how am I contributing to the success of a company uh as a part of my role as a part of our cultureum. But there's a difference between healthy tension and and undue pressureso imagine and I've used this before so all of the documentation procedure systems are structure, if that structure is weak and you apply pressure what happensit breaks.

[30:24] Yesso what goes away isn't just oh well if I take the. If we add the sales the sales don't happen because nothing's supporting it the production part doesn't happen because the day-to-day falls apartand if the the system if the structure underneath, can't support itthen not only do you not get those sales but you're probably not able to perform what's already been sold. Right. So I would encourage people to think about uh the this this idea of what are ways that we can contribute to value that each role everywhere can produce. But how are we communicating that and is that communication pressure.

[31:13] When I apply that pressure do I have the system or structure in place to be able to support itbecause if I did and it could support it then I'm probably going to get results from that, production doesn't mean that they're going to be making cold calls until midnight, you're trying to to generate New Leads or new business and it doesn't mean that it has to be consistent like here you have to do 12 tick marks by the end of the day um or or else you know you don't get a bagel like I whatever it may be, and it shouldn't burn people outwhat do you think it should mean.

[32:01] I think tying back in into.

[32:06] It should mean having awareness of your contributionsum taking ownership of your role and how it impacts the overallbusinessum. And with that just like approaching your day-to-day with intention.

[32:31] Every workerwho's engagedproduces more. For themselves for the company for the lifestyle that they want for the career path that they wantand employee engagement, is a high priority engaged employees are happy employees, to retain and maintain and grow engagementall of these structural things support that and most specifically, and an ESOP structure I've talked about this on 1 episode when I tried to tackle astrophysics a couple months ago go back and listen to it if you want to nerd out on thatum, the idea of alignment that we've been we've been talking through and hammering home, add that that Financial extrinsic motivator to help make this more of a reality. And so everyevery rolehas its ability to contribute. But the Enterprise Value isn't created by what the role is by the titlelike McKenzie said it's really created by them being aware.

[33:57] And that's super valuableand an employee owned company. Tip to be able to put those 2or maybe separate those 2um as an employee owner. And what that means to you or what that can mean to you.

[34:18] Um in the form of your benefit. Well I thinkwe've covered this pretty well today at least I hope so umand. I

[34:36] Developed the idea of and I don't know that I I would say that I can take credit for it just realizing over the course of my career everyone has to perform at their role everyone has to perform the expectation, but everyone can without all the undue pressure associated with sales specifically still serve their client very well and contribute meaningfully to the Top Line and the bottom line uh and therefore the value of of every company um and some of these elements that we've talked about todayMcKenzie how can our listeners interact with us. Yeah as always um please subscribe share like our podcasts and if you'd like to interact with us or ask us other questions or give us any, feedback on on topics you want to hear on our on our podcast go to journey to an ESOP calm and engage with us there. We hope you enjoyed our episode and we hope you continue to join us next week and thank you for listening.