Entrepreneurs are a different type of business leader. They see “the holes in the cheese,” not the cheese itself, as Kim Shepherd, serial entrepreneur and most recently, CEO of Decision Toolbox, described her view of the world. As she confided to me: “If men think things through, women feel things through.”
Since we know from the neurosciences that we buy with emotion and justify with logic, it is the power of emotions in building businesses that I now want to examine, and in the process, hopefully help you become the successful entrepreneur and CEO you aspire to be.
The common traits of successful business-builders
Successful CEOs of startup, early stage and mid-market businesses typically “see” something that needs to be fixed (the holes in the cheese), “feel” the scope of the problem and then develop the processes to solve it. Intuition is key in turning their observations into innovations, and yet while they are not fans of rules, successful business leaders believe in processes, systems and accountability. And, they watch the hard data to ensure their “gut” feel is turning into the desired results before it is too late to pivot.
A successful serial entrepreneur shares her story
To learn more about how “idea discoverers” convert their observations into great businesses, I have been interviewing women CEOs who have built companies with the right mix of processes, people, purpose and products to thrive — even soar.
Kim Shepherd, most recently CEO of Decision Toolbox, is one such amazing business builder. With a model that has worked not once but several times, Kim has built three businesses in the recruiting industry, most recently transforming a $700,000 family firm called Decision Toolbox, founded by business partner Jay Barnett, into a recruiting business worth $10MM with employees in 14 states. In 2016, Decision Toolbox was sold to Engage2Excel (E2E), a leading provider of employee engagement solutions.
As I listened to Kim describe unmet needs and the power of processes, I realized she, like many entrepreneurs who succeed, are great observers. They see things with fresh eyes and successfully implement new ideas by creating systems that enable people to not just do their jobs but do them remarkably well.
Kim is very much a “Blue Ocean Strategist®” who doesn’t want to do more of the same, cheaper. Rather, she creates entirely new solutions for nonusers by addressing their unmet needs.
Do you have to be a trained business professional to achieve results?
Kim will tell you that she was not at all trained in classic business theory. Before entering the business world, she spent 10 years as a TV and Foreign Correspondent, performed marketing for Club Med and narrowly missed making the US Olympic ski team. And she is not unique in that regard. Over 75% of entrepreneurs obtained liberal arts educations, not business degrees.
With limited exposure to large companies, Kim joined a recruiting firm in 1990 to obtain a corporate position. What she found instead was an industry that needed major retooling. As she told me: "What kind of business takes a large fee from a client to find an employee that neither the client nor the recruiting firm knows will be a good hire." And because of the high fee (30% of starting salary), Kim said that such firms are de-incentivized to present a candidate too quickly, lest they undermine the assumption that recruitment takes a lot of time and research.
Irritated by the lack of logic in this business model (those holes in the cheese) which the entire recruiting industry embraced, Kim decided to rebuild it. First, she switched to a company, South Coast Rehab Services, which believed it was in the healthcare business placing staff in hospitals, nursing homes and other healthcare venues. After much pain, Kim was able to help the company realize that it was not in the healthcare business but in the staffing business and that their model required a complete rethinking. As Kim's concepts took hold, the company grew from $3MM to $100MM in 4 years. Applying what she learned, she then built her own company and sold it to CB Richard Ellis.
Then in 2000, Kim joined Decision Toolbox, a startup with great systems and a product line designed to improve the recruiting process. But what she saw as she became 50% owner and CEO was the opportunity to build this company into a highly innovative recruiting service that transformed the way businesses could find employees — without high costs and uncertain success, for a much lower fee (7-8% not 30%) and with more engagement with the recruiting staff. What Kim wanted to build was a business that rethought the way recruiting was done.
Three areas of focus that made all the difference
To convert Decision Toolbox in a new type of recruiting firm, Kim focused on three important areas that reflected her own cultural values and beliefs:
1. Make it easy for people to work where they want to. Staff members don't need to be in one location to be part of a company and share its culture. Decision Toolbox is completely virtual with 100 staff scattered over 14 states.
2. Processes drive profits, along with people. While Kim is clearly motivated by results and profits, she believes that these are products of and driven by strong processes, systems and data. Decision Toolbox has systems that almost autonomously manage the flow of incoming job requests with recruiters who best match that particular industry and the prior success those recruiters have had placing people in that industry.
3. Culture counts, a lot. Despite the geographic separation of staff, Decision Toolbox has built a strong culture of highly engaged staff who believe in teamwork and collaboration, and even fun. Each recruiter is independent yet closely tied to the corporate culture through team-building and socializing methods, often which the employees have created themselves.
With the sale of Decision Toolbox to E2E behind her, Kim is now ready to start looking for “holes in the cheese” of the new entity. In her spare time, she helps other entrepreneurs coming to her to help them “see” unmet needs so that they too can be value innovators. To me, this is the mark of a truly successful entrepreneur — someone who does good and does well.