Many boutique pro serv firms are hesitant to pursue large deals without a delivery team in place or have concerns that they can hire to meet demand without compromising on quality. Join this session to learn from a pioneering firm that has developed a unique approach to solving talent supply chain challenges when pursuing large deals. Ben Johnson, CEO at Particle41 will share the innovative strategies that the firm uses to ensure they have the right people in place to deliver on large deals.
TRANSCRIPT
Greg Alexander:
Hey, everybody. This is Greg Alexander, the founder of Collective 54, and you’re listening to the ProServe podcast. This is a podcast for Collective 54 members as well as other founders and leaders of boutique professional services firms. So if you’re in IT services, management consulting, marketing, or marketing architects and engineers, pretty much anyone who markets, sells, and delivers expertise for a living, this is for you. On this show, we talk about three things: how to make more money, how to make scaling easier, and how to make an exit achievable. We do so by interviewing interesting folks who have figured out how to grow, scale, and exit their boutique professional services firms. Today, we’re going to talk about innovative approaches to the talent supply chain, specifically hiring for large deals. We’ve got a fantastic guest. His name is Ben Johnson. Ben, would you please introduce yourself, your firm, and tell us a little bit about who you are and what you do.
Ben Johnson:
Yeah, so my name is Ben Johnson. I am the CEO and founder of a firm called Particle 41. We are a software development agency, but we also do data science and cloud engineering. My background is in online advertising. Software development, data science, and cloud engineering fit really well together. About a year ago, I also added CTO advisory or fractional CTO services to our practice as an additional practice area. We love doing complex digital projects, and we’ve especially gotten into the field of application modernization, helping folks with slower or outdated technologies get up to speed with industry best practices and benefit from the latest breakthroughs in technology. In short, I love to say we fix slow in software development, whether that be slow execution or slow products, we fix slow.
Greg Alexander:
I like that. We fix slow. I like to go fast. Let’s go fast here. Let me tee up the topic for you, okay? Many boutique professional services firms, which we define as having between 10 and 250 billable employees, are past the startup stage but not at the level of Deloitte. Some of these firms are hesitant to pursue large deals without a delivery team in place or have concerns about hiring to meet demand without compromising on quality. This is the issue. Inside the collective, we talk about the talent supply chain: how you recruit raw material, develop it, and deliver a finished product to the client. Tell us a little bit about your concepts around that problem statement.
Ben Johnson:
Yeah, well, let me first say that this was hard-fought. I made a lot of mistakes in this area. A couple of years ago, we implemented scorecards and operated those scorecards manually to ensure we knew our criteria for hiring an engineer. Instead of letting people in the interview process wing it, even myself, I was winging it when trying to hire certain resources. The first thing we did a couple of years ago was implement scorecards. We put a basic workflow through Trello but realized that one person was operating that workflow. If that one person was out, it wasn’t working. When we got big deals, we’d be under pressure and might start making compromises. We needed to get out of Trello and manual workflows to maximize our visibility. We looked at our pipeline much like a CRM for sales; we needed a system for hiring. We explored the market of application tracking software. Being multinational, with offices in India, Mexico, and the US, using our HRIS software wasn’t feasible. We went to the market of pure-play application tracking software. Without turning this into a commercial, we looked into Ashby but ended up going with Greenhouse as our application tracking software. We configured it extensively. We realized our interviewers didn’t have an employee value proposition that made sense. As we started recording interviews and looking at the scorecard, we saw our team wasn’t selling why they wanted to hire this person. We did a lot of training to get our hiring managers and interviewers to take part in the process, understand the scorecard, and know the questions to ask. We ensured the hiring process and SOP were so defined that anyone could run it. Once they saw a promising candidate, they could turn the table and say why they liked working at Particle 41. We did recording tests to ensure they were genuine, giving them a few reasons to choose from. We dialed in the process and went from hiring three key employees a month to ten. Right now, we can pull in ten people a month if we close a big deal, but it would take effort from everyone to hit our target. We don’t have to hire ten people every month, but we wanted to ensure we could hit that capacity if we brought on a big deal.
Greg Alexander:
Okay, so I’ve got a bunch of follow-up questions. Thank you for walking us through that process from start to finish. It’s fantastic, and congratulations on going from where you were to where you are right now. That’s quite an improvement. I want to first talk about the pipeline management of this. I like the analogy you used, which is similar to how you have a sales pipeline. You now have a talent pipeline. I think the thing that our members struggle with, particularly in pursuing large deals, is they want to win the deal, but they’re almost afraid to because they’re like, “Gosh, if we win this deal, I have to hire 10 people right away. I don’t think I’ll be able to do that.” The challenge with that is matching supply and demand, meaning I’m pursuing this large deal. Am I going to win it or not? And then how do I match that with the demand side? So how do you do that? I mean, it’s one thing to be able to hire 10 people a month, but how quickly and tied to what deal opportunity. Do you understand what I’m asking?
Ben Johnson:
Yes. So we never stop hiring. Now, that doesn’t mean that we’re pulling the trigger and maximizing our bench and reducing our margin. It doesn’t mean that. We never stop interviewing. We keep a regular flow of interviews for our ideal candidate going so that when we finally close that deal, we call the people we already know are good. Some of them have found other jobs. Some of them we need to negotiate with again, but we keep that pipeline moving. We don’t wait until the deal closes and then start interviewing. We want to know the market. We want to know our supply, like what supply is out there. I think there’s a huge amount of learning that our team gets from talking to people who are out in the market. Like, “Hey, what are you guys doing over there? What did you just run into?” So we’ve opened up our interview process to a level of curiosity that benefits the interviewer, not just the interviewee.
Greg Alexander:
Yeah, I love it. Never stop hiring. For members that are listening to us, remember, you’re in the talent business, you’re in the services business, and understanding what the market is so important and managing it like a pipeline is absolutely critical. Let’s talk about the applicant tracking tool. You described it after describing a sales pipeline and a CRM. So is the applicant tracking tool basically like a CRM, but for applicants? What are the basics of it? For those that don’t have one in place, how does it work?
Ben Johnson:
Yeah. So, you have your job descriptions or your jobs, and then you have the candidates that have applied to those jobs. This particular tool kind of fixes everything on these job templates. Think of a job template as the stages that a person is going to go through. I have an application review stage. I have a technical testing interview. I have a culture test. One thing we did that maybe is a little creative is we made sure that if we wanted to do it as a panel, like if we got really pinched, we could have three people show up to one interview and just ask the technical questions, the culture questions, and the soft skill questions all in one go and say, “Hey, thanks. We realize that we had to stretch this to an hour and 30 minutes, but we’ve now completed your interview process.” Sometimes that compression is necessary. We also found that sometimes high-talent people want it to take some time. They don’t want to do the panel interview. They want to interview with one person and get to know them, and stretch it out a bit. But if we get in a pinch, we know we can panel the interview and move quicker. All of that is managed in the application tracking system. The scorecard, the script is all there. So even as the interviewer, I’m just following the script and logging my scores right there in progress, hitting submit. Then my opinion is there, and now everybody on the management team has visibility over where these applicants are sitting in the process. So yeah, it’s managing just like a CRM is managing all the calls and emails and marketing touches. This is very much the same way. Another key feature is the scheduling. One person can get access to all the interviewees’ or interviewers’ calendars. The scheduling has become much easier with the features within this tool.
Greg Alexander:
Which is a huge help because we’re trying to herd cats here. You’re probably talking to passive candidates. They have a job. They have to be careful when they take the interview. Then you have a panel on your side of it. That can be really challenging. I’m assuming there’s a layer of analytics so you can track conversion rates and stuff like that from one stage to the next.
Ben Johnson:
Absolutely. That is probably something we could even be better at and use more of the tool for. We’re still manually tracking some open roles and how many interviews. It’s there. We just need to do a better job of digging into the pipeline metrics. We’re just kind of crib sheeting on how many interviews we got going and who we are offering. At the tail end, we just want to know if we filled the requisitions that we need for billing.
Greg Alexander:
And who inside your firm is doing this? Do you have a full-time recruiter? Is this a part-time job for several people? Who owns it?
Ben Johnson:
Yeah. So definitely our people manager, our head of, I don’t like using the HR, we call them, our VP of people. She happens to be an Indian national and she’s super gifted at all of this. She has an HR generalist that owns recruiting. So that person owns recruiting. We have stopped using in the US and in most parts of the India market, we’ve stopped using outside recruiters. The job boards give us enough applicant tracking flow. The savings on that have more than paid for Greenhouse and that HR generalist’s salary. So by stopping the use of outside recruiters, sorry to any recruiting firms that are watching this, but by subscribing to Greenhouse, we’ve actually saved money on outside recruiters.
Greg Alexander:
Yeah. When I was on my journey, when I was you guys, I was a founder of a boutique. At some point, it made sense to bring that in-house because when you’re hiring a lot of people, recruiting fees can get very expensive and it more than justifies hiring your own staff and investing in tools. Recruiting in a services company is not like recruiting in general. It’s a mission-critical task. If you have it in-house, you can get really good at it and constantly improve. My last comment, and then Ben, I’d like to get your comment on this. I teed up the struggle that our members are having, and it’s really two flavors of it. One is they’re anticipating they’re going to get the big deal, so they staff up and then the big deal doesn’t happen. They get all these people on the bench, crushing payroll and profits. We advocate against doing that. Never hire ahead of demand, always secure the business and then hire into demand. When I tell members that, some of them say, no way, I’m not doing that because I can’t step up that quickly. Or if I can, my quality is going to suffer. So, they either don’t pursue the big deal, which to me is a sin. You have to go after the big deals. That’s how we grow our firms. Or they hire ahead of demand and cross their fingers and hope the deal’s going to close, which to me is a mistake. You’ve been able to thread this needle. So where do you come down on this argument? Either don’t pursue the big deal because you can’t staff up quickly, or put a bunch of people on the bench and pray to God you’re going to get the big deal.
Ben Johnson:
Go get the big deal. Find the people second. Absolutely. 100 percent agree. I like making money. I also find that our attrition is much higher when people don’t know what their mission is. Having people on the bench, then you have to find work for them. They’re getting bored and boredom is a new kind of stress. We don’t want bored people in the company because they will distract others and pull down your culture. That’s your fault, not theirs. One thing that we’ve done is we’ve looked at the first few months of the engagement. Rather than saying in the first month of the engagement, you’re going to have the full team that you want, we say no way. We want to come in with some key people, like our senior people that we already have, and a lot of times the fractional people that are going to be involved, the project manager, maybe a senior engineer. We start doing that kind of discovery or the onboarding or the get-to-know-you stuff right away. We can tell the client we can start that part of it right away. We usually phase in and ramp up. We call it ramp up. It buys us some time to bring in the right people. When we look at the whole timeline of the cost, it rounds out costs. It helps us take a little off the total price tag. It just makes sense. Also, realizing that this can be an advantage to the client where they’re not expected to pay full billing month one because you’re ramping up, getting to know them. It prevents a certain amount of waste and is mutually beneficial. We’ve figured out how to articulate this as a win. We have a little more time to find the right people and fully staff up. They’re not getting bombarded with all the pressures to get us fully ramped in a short amount of time. The first couple of months are key. Call it a ramp up and use that time to do what you need to do to get ready to fully execute.
Greg Alexander:
That is a great idea. I love the term ramp up. It’s self-explanatory and it allows you to win the big deal, deploy some resources to make the client happy, and then pedal like heck to fill out the rest of the team. That’s fantastic. Let’s conclude here with a few calls to action. If you’re a member of Collective and want to learn from Ben a lot more about this subject, keep your eyes and ears open for the invitation that we’ll be sending you to attend the private Friday Q&A session that Ben will be our role model on. You’ll be able to ask him questions directly. If you are not a member and want to become one after listening to this, go to collective.com and fill out an application. We’ll get in contact with you. If you just want to consume more content from Collective, I’ll point you to our book. It’s called “The Boutique: How to Start, Scale, and Sell a Professional Services Firm” written by yours truly. You can find it on amazon.com. Ben, on behalf of our membership, you made a real contribution today. Thank you so much. We look forward to the upcoming role model session.
Ben Johnson:
Thank you for having me and looking forward to the questions.
Greg Alexander:
Okay. Sounds great. Thanks, everybody. Have a good rest of your day.
Note: This transcript was generated by Zoom.