In a post-Covid world, does geography still matter? Should you pursue clients, and employees, based on where they reside? It used to signal to clients that you were legit when your name was on a building downtown. Is this still true? On this episode, Ashok Sivanand, CEO at Integral, shares how he thinks geography is still a mission critical element of strategy, but not for the reasons you might think. He moved to Detroit and is building a firm based on mid-western values. And it is these values, concentrated in this geography, which is contributing to his success. Hear from Ashok his remarkable story which started with him driving a forklift in a factory during the graveyard shift.
TRANSCRIPT
Greg Alexander [00:00:15] Welcome to the Pro Surf Podcast with Collective 54, a podcast for leaders of thriving boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community dedicated exclusively to the needs of leaders of thriving boutique producer firms. My name’s Greg Alexander. I’m the founder and I’ll be your host. Today on in this episode, we’re going to talk about geography. I know that’s a weird subject. Probably weren’t anticipating that. However, strategy and a boutique processor firm is where to play and how to win. And since our community is made up of boutiques, many of them choose geographies that they can dominate. And it’s a very effective strategy. And we’ve got a great example of that today. Middle America, if you will. And we’ve got a great role model to discuss with us how he is factoring geography into his strategy and how he is trying to dominate middle America, if you will. His name is and I’m going to do my best here. My man. A shook, son of honored. How do I do?
Ashok Sivanand [00:01:28] Cos that’s probably a six out of ten.
Greg Alexander [00:01:30] Oh, sorry about that.
Ashok Sivanand [00:01:32] It’s a showcase debate and a shock. Savannah.
Greg Alexander [00:01:37] Savannah. Okay. Sorry about that. I tell you what, I gave you permission to call me Joe Smith for the rest of the call. We can. We can get even that way. So please introduce yourself to the audience and tell us a little bit about your firm.
Ashok Sivanand [00:01:51] Yeah, sure thing. So I started in a girl about five years ago, and what we do is help companies with transforming into technology companies. And we do that by building software products with them and using techniques like pair programing, where it’s very much like an apprentice style of teaching, learning almost like a pilot and copilot. Where are the companies that are looking to really transition their operations to being more tech enabled? Can do it at a very grassroots level in service of a strategy that most companies have today of wanting to become more like technology companies. The Fords of the world trying to go after the Teslas of the world, if you will.
Greg Alexander [00:02:34] Yep. Okay, very good. So I was drawn to your story because to simplify strategy, which I’m dramatically oversimplifying where to play and how to win, where to play can be many things market segments, industry verticals, etc.. But one of the components is geography. And you have an interesting story on your take and geography and and how your focus on the automobile industry and as I understand it, middle America. And we’ll talk about what that means and in particular smaller cities. So just by way of introduction, would you mind explaining that part of your strategic approach?
Ashok Sivanand [00:03:14] Yeah, sure thing. So we’re based out of Detroit, Michigan, and that’s where I founded the company. A little short history here. I moved to Detroit for what was meant to be a six month engagement with my last employer, and I was supposed to start their local practice here and go back to my hometown of Toronto. There was some reading between the lines about a promotion and everything that was waiting for me at a company that was going public. One thing that I did not factor into my spreadsheet was that I would really like living here. And I remember moving into this apartment in downtown Detroit, opening the windows all the way and looking out at the street and realizing this was never part of the spreadsheet. And we’re going to have to go back and address that. And this was in 2016, and Detroit is in you hear this in the news a lot about the revival story. And I think it’s true of not just Detroit and the auto industry, but can be said about a lot about middle America in many ways. It’s folks that you don’t see a lot in the news when it comes to up and coming technologies or up and coming services and a butt of jokes in some cases. And moving here, I realize that there’s a lot of myth busting for myself and a lot of invalidation of assumptions that I had coming in here and that there’s a lot of smart people here trying to do a lot of cool things with much more of a strong sense of community compared to a sense of competitiveness. But I was used to in the big cities and that’s something that stood out to me and I’ve got a little bit more of a history in the auto industry as well that made these really strong personal reasons for me to jump in and try doing this.
Greg Alexander [00:04:56] If you wouldn’t mind, I’d love to hear of those personal reasons and your history in the automobile industry.
Ashok Sivanand [00:05:01] Yeah, sure. I think so. One of my first real jobs was as a forklift driver in a manufacturing plant, and it was nightshift in East Hamilton in Canada. And Hamilton is a manufacturing town. Not too dissimilar from Detroit, was growing faster than Toronto was at a time when Detroit was growing faster than New York. And as manufacturing got outsourced and offshored, the city is kind of gone. The different towns that we know about now. And so the east side of the city is like many cities, the rougher part. And I was an international student. And so let’s just say I learned a lot that summer. And one of the things when it comes to that sort of my professional career was just getting to apply the systems, thinking that most electrical engineers have to do kind of watching electrons move through a circuit. I was able to see kind of how production was happening here and got to learn things like lean principles in terms of I was a forklift driver where I could really bring the most customer value by making sure that all the different parts of the lines were not blocked or starved and so forth, and then went on to work at GM at a plants in southern Ontario where they make the Chevrolet Equinox and now the GMC terrain. I believe it was actually a half Japanese half American plant. So Suzuki owned half the plant from General Motors, the other half. And we had like the movie Mr. Mom, we had like white shirts, blue pants. I had my name embroidered, and it was very different from most car factories that you’d see. And there was definitely a very strong Japanese influence to do how the production was done. I have in fact just this, but I’ve been told by a few people that it was the most efficient GM plant and a lot of folks kind of chalk that up or rationalize it to the the kind of Japanese influence. I, I shut the line down for 8 minutes one time. And at the time, gas prices are really high and these activities are selling like hotcakes. And I thought that I was going to lose my job the next day. And I called in. The general manager kind of conducted what I now know is a five rise exercise, and they made the process improvement right there. And then with all the right people in the room, understood the root cause of how this was allowed to happen. Where we’re burning turned to shut the line on for 8 minutes. And he, instead of firing me and thanked me for my transparency and I got much more confidence and got to learn a lot more about the mean. And so a couple of things that have happened since then. Number one, this was led to thousands. I was really bummed that all the software engineering talent was put on the building and manufacturing the cars more efficiently, and I couldn’t work on the vehicle itself and make it a more compelling vehicle to the consumer. And then flash forward, about ten years, I was working at a company called Pivotal Labs, and number one, they had taken a lot of these leading principles that had originated for building factories more efficiently and to running software teams with more humanity and ultimately getting more value for their customers. So a lot of it clicked for me. I didn’t understand a lot of the jargon, but the first principles were very obvious because it was all borrowed directly from from the Toyota production system and Lean. And the second thing is around 2015 was when that thing changed, where Consumer Reports said that more people were buying cars based on the technology in their compared to horsepower and torque, which were the the traditional selling factors. Right. And that was also the time that I was doing this little thing in Detroit. So the third part of the story was that I had I had I had, you know, be careful what you wish for type of thing, where I wanted to really be part of a compelling value proposition of the vehicle versus being hidden in the back room. And that was a time when when Detroit was really investing and becoming more of a technology town, companies like Ford were making big investments. And and I was at the you know, you could call it right place, right time for something that I’d hoped for ten years prior, understanding a lot of those first principles that somewhat ironically, the auto industry wanted to move their technology teams to working more like their manufacturing teams, believe it or not, in terms of getting the most efficiency and the best customer value out. But looking to Silicon Valley to teach them, even though a lot of it had originated in middle America the first place.
Greg Alexander [00:09:23] Man, I tell you what, that is an incredible story From driving a forklift on the midnight shift to founding a software company and embracing a new small city, hats off to you mad. Respect for your courage and enjoying it journey. And thanks for sharing it. All right. Well, let’s talk about this concept of geography. So you just laid out what you’re focused on and why does the opportunity exist and how have you been able to, I guess, walk away from the temptation of being the next hot shot in Silicon Valley?
Ashok Sivanand [00:10:00] Yeah, I think some of it is really values driven. And I know that you talk about iOS. I was lucky to have found iOS multiple years ago and we always knew we had what we had read the Netflix Culture Deck and said, Hey, we got it. We got to build one of our own decks this way. And I’d show up to the office on a Sunday and say, Okay, today we’re going to do culture and I’m going to write the culture down today. And I’d go home with an empty whiteboard. And just having ordered a lot of Uber eats iOS really helped us. Yeah, use a framework to arrive at the values and I think the values that are really important here, how we build software, our values work and melody, accountability and kindness and kindness is the one that stands out a lot to both our talent base as well as our customer base, because they both talk about, Hey, this is something that’s often forgotten. It’s something that’s often overlooked because we need to make a quarterly deadline where we need to hit a milestone, and that’s the first one to get out the door. Accountability is oftentimes kind of front and center. And I think the values that what kept me here in Detroit very much aligned with how I think software should be built. We’re building these code bases not to get one big launch out, but a long term iterative process. And we’ve got to think of the long term and we got to think of the team that we’re building it in the long term, the people that we’re building it for. And so taking the humanness out of it, taking the kindness out of it, really makes it a very short term prerogatives. And I think I haven’t fully understood the causation around it, but there’s definitely a huge correlation between finding folks who can act with those kind of values at the same time, deliver, show up, hold each other accountable. Kindness isn’t the same thing as niceness. Doesn’t mean we’re we’re not. We’re not we’re shying away from having difficult conversations. It means we’re really understanding that the other person I’m trying to problem solve with here is a human, too. And whether it’s a customer or whether it’s an end user that we’re trying to build for and have that rooted back in. And for some reason it’s been a lot easier to find. To find that kind of talent in middle America compared to the cities on the coasts or big cities like Toronto. And I think the customers also start to see that. Where when they engage with us, they see that come through in the engagement and every interaction in the meetings and the weekly cadence where as much as we want to be service oriented, that we do show up and we push back and we do point out some potential flaws in the way they’re thinking and offer them better opportunities as opposed to falling in line just because they’re the customer and the customer’s always right. And and I think that’s that’s something that, you know, exists both on the supply and demand side around here. And and interestingly, there’s folks, especially since the pandemic, is that us folks have kind of moved all over the place and we’ve become more of a hybrid company hybrid in the sense that we hire folks across the country and we come together or very specific in-person engagements or in-person workshops or conferences and folks on the coast to tend to want to come and work in this kind of Midwestern vibe, as you call it. And, you know, more objectively, the values that are that are listed on their careers page despite being based out of California or New York City, because they find that the employment opportunities that they have available to them there don’t necessarily align with who they have. And I think, as you know, I’m not the first one to say it on here. I’m sure that if you can find a value alignment with your colleagues and with your clients, a lot of the other stuff, like salaries and stuff, no longer are top of mind. You just have to pay market, make sure you’re not ripping anyone off. And folks feel like a stronger sense of purpose and community and working together and building is building these products together, solving these problems together. So I think that’s something that I haven’t fully been able to get into a spreadsheet, but it’s it’s a hypothesis that seems to keep paying off. Yeah.
Greg Alexander [00:14:08] So you answer one of my questions, which was, you know, COVID now makes everybody remote or hybrid. So is geography still as relevant as it once was? It seems like it still is being applied slightly differently. The other side of the geography question and back to strategy, where to play, how to win in geography is part of where to play is. Back in the day, not too long ago, the clients at times would prefer local providers for a whole variety of reasons. You know, and I have read about what Ford Motor Company and the other great companies in Detroit are trying to do to revitalize Detroit. And I admire them for doing that. But now it’s post-COVID, you know, is that does it do the clients still want to do business with local providers or is it now geographically agnostic?
Ashok Sivanand [00:14:53] I think geographically you still have to be willing to show up. Okay. And we’re seeing different companies come back to the office in different ways. GM is doing it a slightly different way than maybe I would where they’re saying, hey, twice a week, three times a week, we’ve got to come into the office. And that’s one way to go about it. I’ve noticed at Ford they seem to be a little bit more specific about what type of interactions they prescribe for in-person interactions. So they’re like, Hey, we do quarterly plannings, we do workshops. I’d like for you to come in so we can do that on a whiteboard versus trying to figure out how to do it over Zoom. But once you know what the work is and when it’s due and who your stakeholders are and why we’re doing it and everything else, the strategy part is all understand we’re lying and we feel like there’s trust between the team. Then go do it wherever you need to do it. When you put your heads down and get the execution done. And so we were always huge proponents of in-person. The the fact that we were one of the catch 22 is about being in a city like Detroit, is that we there’s a lot of opportunity, but there isn’t necessarily the talent base that you move to meet the demands of that opportunity. And so going hybrid allowed us to expand to a larger power base. At the same time, we set expectations pretty early with our folks that, hey, you’re going to be commuting way less than your last job or you’re going to be traveling a little bit more. And we make sure that every time we start a new engagement that we we go out of our way and make sure that the client’s willing to come in person and do it as well. And we fly in from wherever. So I think in terms of your question, I notice that there are some other firms who are still maybe stuck in that convenient space of just after the pandemic hit where no one had to travel. Travel costs were lower. There was a lot more convenience to it. And I don’t necessarily think that convenience outweighs the community that you can build with those in-person interactions, especially when you try to build trust with a new to meet or with a new client where that trust goes a long way six weeks later, and inevitably you’re going to have some friction. Do you earn the benefit of doubt with the client where they will get into problem solving mode versus people solving mode? Those are all things that we’ve noticed. Go right away when when we spend that time to show up in person. And again, I don’t want to speak for Midwesterner as being somewhat of an impact here, but I do sense that there’s a little bit more of a midwestern value of showing up to someone’s house, breaking bread with someone and building those trusted relationships before really getting down to our own and the bottom line. And so it’s maybe a little bit more metaphorical in terms of does the geography still matter? I think the the Midwest, the Midwestern values are still very much valid, whether you’re local or not. Yeah.
Greg Alexander [00:17:42] Well said. Well, listen, we’re at our time window here. I could talk to you about this forever. But, you know, just to put an exclamation point on that last statement, we’re in the service business, so relationships matter. And relationships happen when they get face to face. It maybe it’s happening differently now. Maybe it’s not every day, but it does matter. So I think for the folks that are listening to this boutique service rooms, you have an opportunity to differentiate there, you know, and because sometimes big companies like the big auto companies, they do business with smaller firms because of that relationship factor. I mean, who wants to be just another client of Accenture, whereas they can be, you know, your most important client kind of concept. So try to take advantage of geography when you can. Well, listen, on behalf of the membership, just wanted to thank you publicly for being here. I’m really looking forward to the Friday Q&A session with the members. I know they’re going to have a ton of questions on how you learned learned the Toyota production system and the five whys off of a forklift and how that made its way to Detroit. You often don’t hear people say, I live in Detroit and love it, and that’s contrarian by itself. But and we’d love to hear all about that. And, you know, we’re now that it’s post-COVID, we collectively are starting to do some event events. So when the weather gets warmer, I’m going to call you and say, hey, I’m going to get 1012 collective 54 is going to come see you in Detroit. Want to show us around the city. So like fun.
Ashok Sivanand [00:19:08] Okay, that sounds great. I look forward to it.
Greg Alexander [00:19:10] Awesome. All right. All right, listeners, let me give you a couple of calls to action. So if you’re a member, be sure to attend the Friday Q&A session regarding geography here and with The Shook. Couple of tools I want to draw your attention to. So in the Boutique companion course, that’s the e-learning modules built around the boutique framework, There’s a strategy template that you can download and it talks a little bit more about geography. We also just wrote an EO slash collective 54 integration plan, got a lot of members that run the U.S. We run our firm in the U.S. We love it. We think it does need to be customized to be relevant to professional service. So if you’re in your iOS shop and want to learn more about that, go to the resource center and download that. If you’re not a member and you want to be because you want to meet really cool people like you did today, go to collective 54 dot com, fill out the contact us form and somebody will get in contact with you. If you’re not ready to be a member but you want you want some more outstanding content like this podcast. Subscribe to collective 54 insights and you’ll get three things. Monday, a blog, Wednesday, a podcast, and Friday a chart. Okay with that. Thanks for listening. And until next time. Best of luck.