Steve Coughran Show Notes Page
Steve Coughran came into a 50-year old organization with a lot of systems and legacy things in place. Needing to innovate, Steve began to break things down into small pieces, executing on them and gaining team confidence and repeating the process.
Steve was born in Fallbrook, California and relocated to Colorado with his mom and three brothers and sisters at age 10. Though Steve’s father abandoned his family at a young age, his Grandpa Clifford stood in as a father figure, who instilled in him the value of education.
Steve’s Grandpa was a deep thinker who taught Steve to question assumptions and biases, listen more than speak, and dedicate himself to lifelong learning and giving. This commitment to continuous growth carried through to Steve’s adult education, and he earned an undergraduate degree in finance and accounting, a Master of Accountancy, and a Global Executive MBA from Duke’s Fuqua School of Business.
Steve’s curiosity and hunger for knowledge is reflected in his career where his entrepreneurial spirit guided him to launch and manage three successful companies. Steve started his first business during high school. He founded a landscape company to help pay for college, which transformed into a multi-million-dollar design and construction firm. On the side, however, he followed in his Grandpa’s footsteps to pursue a life dedicated to learning and teaching. He began consulting different business owners in the industry on how to run and manage successful organizations, teaching them financial modeling, strategy, and management skills.
Today, Steve is CFO of EMJ Corporation, a vertically integrated engineering, procurement, and construction firm specializing in renewable energy. Steve leads the finance and technology teams which provide strategic, financial, and data-driven support for EMJ’s global wind, solar, construction, and development companies. Steve helps lead the growth and innovation of a billion-dollar portfolio of energy related businesses.
Steve’s impact extends beyond his role as CFO. He believes the best way to fight poverty is to help foster market-creating innovation and business growth on a grassroots level. His purpose is to make the world a better, more prosperous place helping small businesses in emerging markets become more profitable so they can raise the quality of life in their communities.
Steve is the author of Outsizing: Strategies to Grow Your Business, Profits, and Potential and currently lives in Chattanooga, Tennessee with his wife and two young children, Ava and Max. When Steve isn’t busy working or volunteering, he enjoys spending time with family and friends, running (as an avid marathoner), or traveling to fulfill his goal of visiting 50 countries by age 50.
Tweetable Quotes and Mentions
“Strategy goes much deeper than mission, vision, values.” – Click to Tweet
“There’s human elements that hold companies back from crafting meaningful, actionable strategies.” – Click to Tweet
“Companies have to power customer centricity.” – Click to Tweet
“Advantages have to allow a company to serve their customers in a unique way and provide a relevant and great customer experience.” – Click to Tweet
“It’s great to have advantages but you have to be able to convert those advantages into value.” – Click to Tweet
“You have to be able to create value but also capture value.” – Click to Tweet
“You have to have value maximizers who can execute and feel empowered in their role to execute.” – Click to Tweet
“Blend art, science and discipline together in a build, measure, learn model for successful execution.” – Click to Tweet
“On your strategy team, if you’re missing the people that are closest to the customer, you’re missing out on a lot.” – Click to Tweet
“It’s not about you and what you do to your customers, it’s what your customer feel.” – Click to Tweet
“If we don’t get into the psychology and the behavioral side of the customer and empathize and understand what motivates them to buy, we’re missing it.” – Click to Tweet
“We can subscribe to self-deception pretty easily in our organizations.” – Click to Tweet
“Advantages are only valuable if the customer cares about them.” – Click to Tweet
“70% of companies that go bankrupt are actually profitable when they close their doors.” – Click to Tweet
“Everybody in the organization has an impact on the financial performance of the company.” – Click to Tweet
“Boosting the Financial IQ of an organization empowers people and gets them to start thinking about how to convert advantages to actual profits and cash flow.” – Click to Tweet
“The key to success is working off of a solid framework.” – Click to Tweet
“Think big, start small, and act quickly.” – Click to Tweet
“In this economy it’s speed to value.” – Click to Tweet
“Be more strategic and use a framework to build upon.” – Click to Tweet
Hump to Get Over
Steve Coughran came into a 50-year old organization with a lot of systems and legacy things in place. Needing to innovate, Steve began to break things down into small pieces, executing on them and gaining team confidence and repeating the process.
Advice for others
Be more strategic and use a framework to build upon.
Holding him back from being an even better leader
Distractions. We have to say no and focus on the essential things.
Best Leadership Advice
Be kind to people and empathize with people.
Secret to Success
Running. It helps me clear my head and come up with crazy ideas.
Best tools in business or life
My financial acumen.
Contacting Steve Coughran
Resources and Show Mentions
Show Transcript:Click to access edited transcript
239: Steve Coughran: Advantage is determined by customers
Intro: Welcome to the Fast Leader podcast where we uncover the leadership life hacks that help you to experience breakout performance faster and rocket to success. And now here’s your host customer and employee engagement expert & certified emotional intelligence practitioner, Jim Rembach.
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Okay Fast Leader legion today I’m excited because I have somebody on the show today who’s really going to help us get some understanding into how you go about getting the buy-in and then therefore creating a more customer centric organization. Steve Coughran was born in Fallbrook, California and relocated to Colorado with his mom and three brothers and sisters at age 10. Though Steve’s father abandoned his family at a young age his grandpa Clifford stood in as a father figure who instilled in him the value of education. Steve’s grandpa was a deep thinker who taught Steve to question assumptions and biases, listen more than speak, and dedicate himself to lifelong learning and giving. This commitment to continuous growth carried through Steve’s adult education and he earned an undergraduate degree in finance and accounting, a master’s degree of accountancy and a global executive MBA from Dukes Fuqua School of Business.
Steve’s curiosity and hunger for knowledge is reflected in his career where his entrepreneurial spirit guided him to launch and manage three successful companies. Steve started his first business during high school. He founded a landscape company to help pay for college which transformed into a multi-million-dollar design and construction firm. On the side however, he followed his grandpa’s footsteps to pursue a life dedicated to learning and teaching. He began consulting different business owners in the industry on how to run and manage successful organizations teaching them financial modeling strategy and management skills. Today Steve is CFO of EMJ Corporation, a vertically integrated engineering procurement and construction firm specializing in renewable energy.
Steve leads the finance and technology teams which provides strategic financial and data-driven support for EMJ’s global wind, solar, construction and development companies. Steve helps lead the growth and innovation of a billion-dollar portfolio of energy related businesses. Steve’s impact extends beyond his role as CFO. He believes the best way to fight poverty is to help foster market creating innovation and business growth on a grassroots level. His purpose is to make the world a better more prosperous place helping small businesses in emerging markets become more profitable so they can raise the quality of life in their communities.
Steve currently lives in Chattanooga, Tennessee with his wife and two young children Ava and Max. When Steve isn’t busy working or volunteering, he enjoys spending time with family and friends running as an avid marathoner or traveling to fulfill his goal of visiting 50 countries by age 50. Steve Coughran, are you ready to help us get over the hump?
Steve Coughran: I am ready, thanks for having me.
Jim Rembach: Oh man, I’m glad you’re here. Now, I’ve given my legion a little bit about you but can you share what your current passion is so that we can get to know you even better.
Steve Coughran: Yeah, absolutely. I’m super passionate about two things really, it’s strategy and finance and how those things marry together and a lot of companies to gain a competitive advantage and provide a great customer experience.
Jim Rembach: So, you and I we’ve had the opportunity to have some really good dialogue prior to this interview and I want to make sure that I capture some of that because it was so important. I had mentioned that I actually double majored in finance real estate and that financial decision-making class was one of the last classes that we had in our senior year prior to graduating and it was one of the most challenging and most difficult. But when taking that type of thinking into the business realm it just really doesn’t exist very much at all. I think that’s part of the problem with companies understanding why being customer-centric is so important.
Steve Coughran: Absolutely. If you look at most strategies of companies, I’ve seen so many companies and I’ve worked with so many companies and look after strategic plans and oftentimes they’re rooted in mission, vision, values and those things are great and it’s great to start with that. Some companies go a little bit further and they start listing out initiatives. One company I was working with they had over 80 initiatives listed out for the year and success for them was accomplishing 20 or 30 of those. To me that’s not strategy. Strategy goes much deeper than just mission, vision, values it has to incorporate this customer-centricity it has to incorporate advantages the financial side in order for a company to go out there and actually win. So that’s what I’m excited to talk more about today.
Jim Rembach: Well, in your book, Outsizing you put together a system that enables an organization to hit all of those core elements and then become more customer-centric. So what we’re talking about is customer-centric transformation here and so when you start talking about those six steps, please share with us what they are?
Steve Coughran: Yeah, absolutely. Before I get into those I’ll talk about the book, when I started looking at other books out there there’s great strategy books and then there’s deep finance books I get really deep and technical and their equation based and so oftentimes people would say, Steve do you have some great recommendations? And I’d find myself saying, yeah, here’s some great strategy books but make sure you read these books too. I didn’t find a framework that incorporates all of them. With Outsizing there’s six steps I walk people through.
The first thing is this idea of overcoming the human side of strategy. What I mean by that is change management stuff, people are involved in strategy. There’s biases that get involved and there’s other human elements that hold people back and companies back from crafting meaningful, actionable strategies. So that’s the first thing.
The second thing is companies have to power customer-centricity. They have to put the customer at the very, very center of the business. So often I’ve worked with companies and they have great strategic plans but they forget about the customer and there’s no plan to serve the customer and provide a great experience. So that’s number two.
Number three, companies need to start with their advantages or strengths. You can’t just build advantages to build advantages the advantages have to go back to the customer and the advantages have to allow a customer or a company to serve their customers in a unique way and provide a very relevant and great customer experience.
Number four, is it’s great to have advantages but you have to be able to convert those advantages into value, you have to be able to create value but also capture value. So that’s where I get into the financial piece the finance side of strategy.
Then we get into the people side in step five. You have to have the right people you have to have value maximizers who can go out there and actually execute and feel empowered in their role to execute.
And then finally in life we all follow patterns. Imagine trying to make a t-shirt from scratch or a shirt from scratch and you’re just cutting out random pieces of fabric and sewing them together that’s why we have patterns to follow. Or when we drive to work we follow a pattern because otherwise life becomes too difficult and complicated. The same thing is true for companies, strategy is a pattern, it’s blending art, science, and discipline together in a pattern in a build measure learn type model for successful execution. So those are the six steps that I talk about.
Jim Rembach: As you’re talking I start seeing something that a lot of times people don’t understand is that as an organization sometimes you need to stop doing something because it no longer has financial viability. However, we’ve been doing it for 15 years but we didn’t quit. I think having people at all levels kind of understand the business acumen understand all of that will help them better to accept the fact that, hey, we’re not doing this anymore because of this and therefore we need to do something else and it makes that whole change, if you want to call it an argument or that hump, much easier to get over.
Steve Coughran: Yeah, absolutely. In that’s smart Jim. In organizations to stop doing something is difficult. There’s a lot of legacy thing that companies do. Oftentimes they go into organizations and they have these processes and I say, why do you have these? I don’t know, because Sally or Dave put it in place years ago. Well, where are they? Oh, they’re gone they left the organization but we’re still doing these things. So it’s really asking the why behind everything that we’re doing and asking ourselves, okay, are the things that we’re doing or adding to are really contributing to a relevant and unique customer experience? If not you to cut. But it’s so easy to add you touch that it’s so easy to add it’s very difficult to take away.
Jim Rembach: As I’m going through the book—I have had the opportunity to be in the discipline area of customer experience for the past several years. When I start talking about the discipline of customer experience there’s really a couple different models that are associated with that. Meaning that I have to have somebody own this transformation process this governance process this you know activity associated with helping us be more customer centric. There’s four different models that organizations use in order to deploy a customer centric-group or team within the organization. How do you see that structure actually working best for companies that you’ve worked with?
Steve Coughran: Yeah, so I encourage companies to put in place an S team, the S standing for strategic team or strategy team. I think strategy rest on the president or the CEO or whatever that position is. Somebody needs to actually lead the strategy. But in that team you need to have representation from all aspects of the business. Where people make a mistake is when they’re putting together these S teams. They often just include senior executive leaders. If you’re missing the front line, the people that are closest to the customer, you’re going to be missing out on a lot and your finger is going to be off the polls. I think courage companies to put together these teams they need to meet on a regular basis to review the strategy to measure the performance and then make adjustments. And the team needs to be diverse enough and skill set, background, customer proximity so on and so forth to make it really successful.
Jim Rembach: I think you said a really important word right there that has to kind of be one of those governing elements and that’s the proximity piece. Because it is too easy to get so far removed from where the action is and the action is actually going to have impact that we could be sending ourselves in the wrong direction.
Steve Coughran: Absolutely. I’ll give you a relevant example here. It’s easy as a CFO to just sit in my office and try to create policies and procedures and create systems for people to go execute and put the governance in place and the structures for people to be successful and feel empowered. But in April, I had to get on an airplane at 5:15 hours to Australia because our office out in Sydney is responsible for building one of the country’s biggest utility-scale solar farm and then the other ones right behind it’s about half the size, but two massive solar farms. I had to go out there and actually meet the team, meet the people, and experience it and walk to the jobsite drive through the jobsite touch, feel, smell, and experience everything they’re going through. Because our customers aren’t just external customers there are also internal customers but if
you don’t get it out there with that proximity, that proximately was my team I had to get close to my team and experience what they’re gone through on a daily basis, for others it’s being close to the customer and seeing what they experience, if we’re not doing that Jim as you know we’re so disconnected from what we need to be doing.
Jim Rembach: That’s too easy to happen. Okay, this book is really, as I had mentioned, all about how to become more customer-centric but I think it’s really important for us to talk about the difference between customer service and customer experience from your perspective.
Steve Coughran: Great. Customer service from my perspective is something that you do to a customer. It’s very reactive in nature and you’re doing stuff and then you’re going back and measuring it and then you’re trying to be reactive and correct course and it’s a bad cycle. Imagine you call and try to get your phone number change we try to deal with a cellphone provider and you go through the whole process and at the end of the call they say, are you willing to take a survey? And then you take the survey and then they get a bunch of responses and then they try to correct action and it creates this reactive type culture. We’re doing things to our customers we need to experience it from the customer standpoint we have to be proactive and anticipate where the value is and then act upon it. It’s entirely different. Companies oftentimes say, what differentiates us is our customer service. It’s actually not about you and what you do to your customers it’s what your customers feel and what they experience when they work with you.
Jim Rembach: Definitely. I think part of that goes into what you are talking about in the book in regards to what has been the traditional viewpoint of persona building. And you talked about the statistical expect and viewpoints of being able to separate out certain types of customers but you’re talking about something much deeper than that.
Steve Coughran: Yeah. The trap that we can fall into is by trying to put our customers into certain buckets and try to define them by socioeconomics or by demographics. It’s easy to say, okay our ideal customer is between 35 years and 50 years old and they have 1.7 kids and they live in a 2.3 bedroom home and in this zip code and that’s our customer base. But if we don’t get into the psychology and the behavioral side of the customer and really empathize and understand what motivates them to buy we’re missing it. I could tell you there’s times where I may go to a certain grocery store to buy produce because they have the best organic produce it’s expensive but it’s worth it because I know it’s good and it’s high-quality and it’s great experience. But there’s other times I go to another grocery store because the kids are throwing a fit I’m tired and it’s the closest thing to my house on the way home. That’s the behavior that I’m talking about it’s I don’t shop somewhere because I think, oh, that grocery store is very accepting to people of my age group. I do it based on behavior. And that’s what I talk about in the book, understanding what motivations are, the circumstances of our customers, what they love and what they hate and really how that drives the buying experience.
Jim Rembach: I think for me—so I’ve done a couple different coaching projects and workshops around helping to build empathy and that whole type of customer journey and persona building process and I use empathy mapping, I’m certified in emotional intelligence, and it really does focus in on when you’re going or have completed your identification process so that you can really get closer to your customer that it’s a person that comes out as a result instead of a statistic.
Steve Coughran: Yeah, that’s definitely as far…
Jim Rembach: Another thing when I started talking about the advantages piece that you and I had the chance to chat about we really talked about that whole value component and trying to get a little bit deeper in that. If I talk about my advantages and I talk about being able to, now look at it from a financial perspective, there’s some short term, midterm, and long term impacts and unfortunately we’re talking about one of a bias, we’re very biased towards the short term. How can we keep ourselves from falling into that trap so that we look at it in more of a longitudinal manner?
Steve Coughran: That’s excellent. Because advantages—we could trick ourselves we can we can subscribe to self-deception pretty easily in our organizations. It’s easy to list out, oh, these are advantages these are things that were great at these are our strengths but at the end of the day advantages are only valuable if the customer cares about them if they don’t care about the advantage who cares if you have the advantage. And you’re right, the short-term, the medium-term, the long-term when it comes to the financial side so many companies are caught up on the short-term and that’s measuring success from the income statement. They look at the income statement go down to the bottom look at the profits say, wow, we’re making money we’re successful. However, 70% of companies that go bankrupt or when they close their doors, Jim, you may say, Steve, how is that possible? How can they be profitable but go bankrupt? It’s because the real action happens on the balance sheet but more importantly on the statement of cash flows. The cash is king. In the book where I talk about short term values accounting profit, look at the P & L say, yeah, we’re doing well here and there. Medium term you’re looking at economic profit which starts incorporating the cost of capital and then the long term is really looking at the cash flow stream that your business is producing. So you have to look at all three sides and have the long term perspective with the short term.
Jim Rembach: Talking about that short term and long term timeline I think that’s also going into that whole customer service versus customer experience component. Customer service is dealing with the short term, the interaction the transaction, however, though we have to see how that fits into that overall or long term or midterm customer experience that can affect the whole retention, the referral, the additional purchase rates and additional product sales and all of that.
Steve Coughran: Absolutely. I love running so I have a running watch and I had an issue with the GPS and how I was connecting. So I called up the company, it had been over a year since I had the product, I bought it online through another source, and as I was having some issues so I called the company talked through it they couldn’t solve it over the phone so you know what they did? They did they said, you know what, just send us your watch back we’re going to send you a new one. I have the receipt I went through a third party they sent me that customer service— customer service company would say, what are you doing? You know that just cost us so much to replace this watch. Customer experience says, long term. I’m going to send this watch because I know over the lifetime of this customer he’s going to refer so many people and he’s going to buy this for any watches, you bring up a great point there.
Jim Rembach: I think one of the things too, as you said that, it kind of brought to mind there was a show, I don’t want to say it’s called like the bar makeover with Jon Taffer or Tapper or something like one of those TV shows where he coaches people how to actually have a better business. And he talked about that issue as well that made a very real and understandable for me for a restaurant perspective. He said, the first time that customer goes in he goes, give them 50-75% off the bill. So what you’re going to lose money and the next time you do it again and then the third time you do it once more and you give them away because by the third time you now have a customer for life.
Steve Coughran: That’s smart. But it’s tough that takes a lot of guts takes a lot of moxie to just do that kind of stuff with that murse because in the short term we got these financial pressures we got to hit the numbers we have to bring cash in the door it takes guts for this if you do it and your bold big success can come your way.
Jim Rembach: Yeah, most definitely. I think that’s something that also going back to that whole connecting that front line to that top line strategy is that maybe we need to do a better job and it goes back to the business acumen piece saying, hey, take care of the customers problem it’s small it’s something that in a long term will come back to us with some huge dividends and getting everybody to understand that.
Steve Coughran: Absolutely, that’s the key. I think everybody in the organization has an impact on the financial performance of the company. Whether its revenue, the very top line you have sales people, you have business development, you have other individuals that affect the top line in the middle you have your frontline workers you’re impacting direct labor cost their job materials or materials or other cost to be sold related items, you have people in functional leadership roles that are responsible for the overhead, the GNA of the company. And then you have people below the line from depreciation decisions, working capital decisions that ultimately lead to cash flow. I go into companies and I used to do workshops on this stuff more and I teach financial acumen because financial IQ, based on the financial IQ of an organization, empowers people or gets them to start thinking about how a company can convert advantages to actual profit and cash flow.
Jim Rembach: Arguably we all have to do that from a personal perspective as well. People talk
about the aging of, at least the US, and how very few people have actually saved for their retirement. I think we need these whole financial acumen on personal and professional side.
Steve Coughran: Yeah, very true, very true big missing thing.
Jim Rembach: Okay, so when I think about this transformation aspect though—you and I shared or I shared with you there’s something that I read the other day talking about business growth, talking about the outsizing, how our business is actually getting bigger and the reality of it is they’re not going through these types of activities. Like for example even digital transformation has a 90 percent failure rate companies are struggling with pivoting. And a lot of companies are growing actually through acquisition. Well, you know that you can’t keep just growing through acquisition you have to actually go and start doing some transformations. This isn’t a quick fix going back to what we were talking about this is going to take a long time it’s going to take a while. So how do we get started?
Steve Coughran: You have to start with the framework. We’ve done three acquisitions since the beginning of the year, our company alone, and try to incorporate a new culture, new processes, get new customers comfortable with the company and the new way of doing business it’s a lot of work. But the key to success is working off a solid framework and it goes back to those six steps. If you can follow those six steps in the company by overcoming the human side of the strategy by being customer-centric by building off advantages by converting those advantages into actual financial value by putting the right team in place and then empowering them and then having a pattern to do this all over again you could be successful. But if you don’t have a framework it’s difficult because then you’re scattered you’re all over the place and there’s no way to scale this. So that’s the key.
Jim Rembach: You’re definitely need a whole lot of persistence and motivations and energies all of those things. And one of the things that we look at on the show in order to help us do that are quotes. Is there a quote or two that you like that you can share?
Steve Coughran: The thing I always say, and I don’t know what the origins are but I always say, think big start small and act quickly. Then what I mean by that is you have to have a big vision, where there’s no vision the people perish. You have to have this big vision and understand where you’re going and you have to communicate that so there’s clarity and direction. But then you have to start somewhere and sometimes starting small is a lot easier than starting really big. And then you got to move quickly you have to be agile. In this economy it’s speed to value. You got to move quickly. But where most companies stumble is that they think big they start big and then they move slowly and that’s death. I mean, it’s death to morale. If you have entrepreneurs or entrepreneurs within the company and they’re not seeing action those people eventually
get frustrated and leave. So it’s really this thinking big and starting small moving quickly and seeing results from that.
Jim Rembach: I would dare to say too talking about moving quickly, you kind of have learned how to do that—writing this book and all of that. However, I’m sure there was some humps that you had to get over in order to get you to where you are today. Can you share with us one of those times where you did get over the hump?
Steve Coughran: Absolutely. Anytime you come into a new organization or organizations 50 years old–we’ve been successful over the last 50 years there’s a lot of systems and legacy things in place, so coming into an organization and trying to innovate certain parts of the business you have to overcome a hump. And the best way that I was able to accomplish some of these successes along with the team was by breaking it down in small pieces executing on it giving the team confidence and getting them excited because they’re seeing results and then just repeating that over and over again. So that was definitely a hump to overcome coming into the company and we’re seeing some positive results.
Jim Rembach: And when I start thinking about this book, when I start thinking about—you’re Chief Financial Officer within a very large organization a lot of people when they’re writing books they have some other types of goals and aspirations, so if you could help us understand what is one of your goals?
Steve Coughran: That’s a great question. My personal values revolve around two things, growing and giving. That stems back to the introduction about my grandfather I’m a growth guy I love growing businesses I love growing personally I don’t like standing still. So if I’m growing learning and doing new things I feel great. Part of that growing experience is getting myself out there and uncomfortable things that’s writing a book that’s getting up in front of audiences and speaking and then giving is just helping people along the way. Helping them understand this passion that I have the strategy and finance side so really what I’m trying to do is get my message out there. I love speaking I love running this company and working with smart individuals and seeing this thing grow that’s really what I’m about.
Jim Rembach: And the Fast Leader legion wishes you the very best. Now before we move on let’s get a quick word from our sponsor:
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