Freddy Learns to FLIP: Shifting from Manager to EntrepreneurJun 04, 2018
Fred was a structural engineer. He started out working for a general contractor in the construction of small bridges at first; and then gradually worked his way up to some large projects.
While he loved what he did, it was difficult to predict how much work his general contractor would get in any one year. The problem was that the only people that would hire Fred's company were municipalities who wanted a design-build bridge project. Since most bridges were designed by firms who were separate from the contractor, Fred didn't get much demand for his structural design services.
Fred decided to leave his job working for the general contractor, and start his own structural engineering firm. At first, his only client was the old general contractor he used to work for.
It was a great arrangement. The general contractor didn't have to pay Fred unless they had work; and Fred could seek design work from others when his old company didn't need him.
It was difficult at first. Fred earned half of what he made as an employee of his old company. As Fred developed some solid sales and marketing skills, he was able to generate more interest in his design ability; and was eventually working full-time as a structural design engineer. Eventually, he hired an administrative assistant to do all of his paperwork and billing; an Auto-CAD technician to draft his drawings; and a junior engineer to help him with some design work.
While he seemed like he was doing well, the money wasn't that great and he was working all the time. He found that he spent 40% of his time doing design work, 40% of his time selling his services to municipal, county and state government officials; and 20% of his time directing the work of his underlings. After he paid his expenses, he tended to make just a little more than he had made in his old general contracting job; with twice the stress level.
In one of Fred's networking events, he met a guy named Coach Russ. Coach Russ indicated that he helped business owners grow and become profitable while reducing the amount of time they spent at work. Fred remembers laughing when Russ told him this.
He joked, "You must perform miracles, because that seems quite impossible!"
Now that Fred was facing a sort of busyness that yielded little in the way of profits and consumed a lot of his personal time; he was curious what kind of magic Coach Russ could perform on him. He called Russ and they set up an initial consultation.
Fred had delayed his initial consultation four times before they finally met at Russ's office. It seemed like every time Fred wanted to meet, something would come up that required his personal attention.
Russ started, "It seems like you're a busy man. Four reschedules is probably a record for an initial consultation."
Fred responded, "I know. I'm sorry for all the delays. I had intentions of meeting, but something else always came up at the last minute."
"No apology necessary. I'm glad we could meet. I am curious. Why couldn't others in your office handle whatever it was that you were called to do to make you reschedule our meeting?"
"We're a really small design firm, Russ. I do most of the work and my staff basically helps me do my work. Two of the delays were due to design deadlines that were pending that I needed to meet. I was already working nights to meet these deadlines as it was; and I couldn't afford the time to drive over here and meet with you."
"Interesting. What caused the other two delays?"
"Those delays were caused by a high-maintenance customer demanding I meet with them at the same time I had scheduled our meeting. Because they had to coordinate their meetings with so many other players, I couldn't force them to reschedule the meeting."
"That certainly makes sense. Could someone else in your staff have attended those meetings?"
Fred laughed, "These are pretty high-level meetings with very important clients. I have a rookie staff with an Auto-CAD technician, a rookie engineer and an administrative assistant. The best they would have done is taken notes. My clients would have been furious that I wasn't there in person."
"Got it. Let's talk about you. What has prompted you to seek business coaching?"
Fred told Russ his story, how he broke away from being an employee of the general contractor only to find himself in a more stressful situation and working more hours for only a little more money with his engineering firm.
As he finished his story, he said, "In our networking event several months ago, you claimed that you helped business owners grow profitably while spending less time at work."
Russ smiled, "Yes, I did. If my memory serves me, I believe you chuckled."
"Yeah. Sorry about that. I guess I'm now curious if you can do this for me?"
"I probably can. However, it's not really my work that will help you; it's your willingness to shift the role in your company that will make the difference."
"I'm not sure I understand. I am working really hard, Russ. I don't know what more I can do to make my small engineering firm work better."
Russ smiled again, "That's the point. You are doing all of the work. You delayed our meeting four times because you are too busy working IN your business to work ON your business."
"That's where you lose me. If I were to hire all of these people to do the work of my business, I would make even less profit than I make today. I simply can't afford to hire the help you say I need."
"How do you know that you can't afford to hire help, Fred?"
"Look. If I'm barely making enough now; and I'm doing all of the work. How can I afford to hire more people to do the work that I'm doing?"
Russ dodged Fred's question, "I'll tell you what. I want you to answer your own question. If you want to work with me as your business coach, your first objective is to create a business plan that is profitable and doesn't have you doing one thing in your business."
Fred reacted, "That's impossible! Are you listening? I told you that I'm barely making it now. How on earth can I create a plan where I'm doing nothing in my business and still making money?"
"Fred, you are used to earning a paycheck as an employee. And you are now engaged in a practice where you have some assistants; but are overwhelmed with work. In order for you to grow, you need to shift your thinking. You first need to become a manager; and then become an entrepreneur."
"An entrepreneur? I am an entrepreneur. I answer to no-one but my customers."
"You are striving to create a practice. There is nothing wrong with a practice, if you plan on providing all of the expertise. However, practices are limited to your ability and your time. That's why you're so busy."
"Okay. How can I create this business plan, if I don't even think it's possible?"
"Your an engineer. A business plan is simple math. You can create a spreadsheet that shows your expenses with several employees doing the work; while you simply manage these workers."
"I suppose. I'll put together the business plan... but I'm not convinced it will actually work."
Russ smiled, "That's all I ask. If you hire me as your coach, I will help you shift your thinking."
It took a month for Fred to get back to Russ with his business plan. The plan took little time; but trying to set up a meeting time that he wouldn't have to continually reschedule was a different matter. In fact, they decided to conduct their meeting via a video call because it would take Fred too much time to drive back and forth to Russ's office.
Fred started, "I have to admit, Russ. This business planning exercise surprised me."
Russ asked, "How so?"
"I created a fictional engineering firm with three full-time engineers, an office manager, a sales person, an Auto-CAD technician. I am managing these folks, not doing any actual work, and am able to bill enough time with my engineers to make it all work."
"It sounds like your thinking may be shifting."
"While I've made this work on paper, making this work in real life is another problem."
"Tell me the opportunities you see arising with your plan.'"
"What? I didn't say opportunities. I said problems."
"The word problem indicates that you see obstacles. The word opportunity implies that you have yet to come up with a solution. Which word would you prefer to use?"
"Okay. Here are my OPPORTUNITIES. I do all of the engineering now and I'm quite good at it. In fact, I believe that most of my clients hire me because of my expertise."
Fred paused expecting that Russ would respond to his first OPPORTUNITY. Russ commented, "Please continue."
"Then there's the problem with sales. My prospective clients expect to talk with me. I'm the expert. They want to see who they are hiring in order to give me their business. They won't trust some wet-behind-the-ears sales person to convince them to use me for high-profile bridge designs."
Fred paused and Russ asked, "Is that it?"
"Those are pretty big deals. How can I solve those prob... I mean opportunities?"
"Fred, you are going through one of the roughest transitions any manager ever has to go through. I call it the FLIP. In order for you to grow, reduce your working time and make real money as an entrepreneur, you have to FLIP your expertise from you to your team."
"Are you saying that I need to train my people?"
"Quite the contrary. In order to successfully navigate the FLIP, you need to change the direction of how expertise flows in your enterprise."
"I don't get it. My clients hire me because of my expertise. If I hire rookies and expect them to deliver for my clients, I'll lose business."
"In order for the FLIP to work, you can't hire rookies. You must hire experts who are the new creators of your firm's expertise."
"That's going to cost a lot of money. How am I going to come up with this money?"
"You have created a viable business plan that demonstrates that you will be profitable paying your new experts while you simply manage them. Right?"
"Yes. But how do I get to this place, if I can't afford to hire these people today?"
"As I said before, this FLIP is not easy; and it's certainly not intuitive to most high-producing workers like you. Let's engage in a coaching relationship; and I will help you through it."
Fred took Russ up on his offer and attended Coaching Sessions once a week at first. He was amazed that he found time for these sessions and that each session was easier and easier to schedule.
His first step was empowering his current rookie engineer, Robert, to do more work. Robert attended meetings and was able to weigh in on some critical engineering topics. Russ coached Fred to keep his mouth shut and give Robert a chance. Fred was amazed at how well Robert adapted to his new role as expert instead of helper.
Next, Fred hired a sales person. She was an engineer who worked for a competitor; and had relationships with the government officials he needed to sell to. Veronica was looking for lower hours and less engineering; and the sales position that Fred offered was ideal for her.
As sales picked up, Fred hired an additional veteran structural engineer who was amazing at bridge design. He offered solid expertise in engineering and brought in some design processes that made Fred's techniques look primitive by comparison.
It was a financial challenge at first. But week after week, Fred noticed he had more time to work on the business; and his new employees were taking ownership of their individual areas of expertise.
Within a year, the FLIP was complete. Veronica was fully in charge of sales. Fred was a little embarrassed when his long-time clients claimed Veronica was much more pleasant to work with than he was. His new engineering team was completing all of the design work; and Fred was doing the true work of a CEO.
Fred was creating a vision of how he could duplicate his team in other states and compete for large bridge projects that he could have never completed with his one-man practice.
Not only was Fred working less, but his firm was starting to make serious money. He reminisced about how he would have driven himself to an early grave had he continued on his high-stress, heavy workload life that he had a few years earlier. He now had sessions with Coach Russ once a month and was working on his shift from Manager to Entrepreneur.
Get Notified When I Write Again
Join our mailing list to receive notifications of new blog posts and podcasts.
I hate SPAM and will never sell your information, for any reason.