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Seth Morgan Of MLA Companies On How To Take Your Company From Good To Great

Don’t procrastinate scale. That thing you think you need to put off, you probably should start working on. For me, I would so often make excuses in the early years about what “couldn’t be done.” For instance, we had already started our unique service set offering, but believed it was so unique, so customized for every client, that it couldn’t be outlined as a process. I was wrong — so wrong.

As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Seth Morgan.

Seth Morgan is the President and CEO of MLA, which he founded in 2006. Seth leads MLA Companies, serving as a strategic advisor. In this role, he brings insight and accountability to leaders. He also represents sell and buy sides in M&A transactions.

Seth’s experience includes mergers and acquisitions, operations, internal consulting, controller operations and general management, bank negotiations, compliance audits and negotiation, business valuation experience, risk management, budgeting, and forecasting, and dealing with the pressures and dynamics of small business ownership.

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?

I was a young CPA starting out in a regional firm. I loved finance and business, but quickly realized how frustrated I would get with the CPA approach to growth and advancement. Traditional accounting is all about standardization and eliminating risk, whereas entrepreneurship is about creating opportunities and embracing uncertainty. I learned I was more an entrepreneur than an accountant.

I had an older friend and mentor who recognized this and asked me to come work for him. That was really my first taste of CFO work and I loved it. He and I recognized that I had an energy for that work that went beyond what this opportunity would provide, so he offered to form a partnership with me. That’s what got me started, and I was able to buy him out a few years later.

Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?

It’s funny, I’ve had those thoughts too many times to describe. If people knew how many times the leader feels like retreating, they’d probably be terrified. People regularly see the good side of being the leader, CEO, or owner, but they forget the deep and abiding fears and stresses those people are normally managing.

Ironically, the best moments of inspiration for me have come when we perhaps were at our weakest, or we were confronting the biggest fears I had.

In the early years of running MLA, I was distracted by being very involved in local and state politics, but in 2012, I finally really started to focus on growing MLA and attempting to create a business that would extend beyond me. That generated so many more fears and uncertainties (and if I’m honest continues to do so). But when I face those fears head on, I find I’m even more inspired to move forward.

For instance, in 2015, I was hit in the head with a softball bat while playing in a softball game. I was out of commission, in ICU and the trauma unit several nights, and the original prognosis was grim. Because of my injuries, I couldn’t really talk, struggled to breath, and of course wondered whether my mental capacities had been impaired.

The team wasn’t near as strong as it is today, but they stepped up. They calmed the clients, rallied around each other, masterfully handled internal and external communications, and largely held the course while I recovered. Through God’s grace, I was back in the saddle much quicker than anticipated, but I had learned a valuable lesson.

As the years have continued, I’ve faced other moments like that — where I was in need — and over and over I’ve learned that I just can’t do it all well. And when I’m forced or learn to empower people who have the time, energy, and passion to focus on the task at hand, not only can I leverage my abilities, but the work that needs to get done is done better.

These experiences have grown my respect and trust for the team and helped my development as a leader. I’m very grateful for each time I’ve been pressed to face those fears.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?

I got involved with a company that had been started by 5 friends. What started as a group of young cowboys grew, and with growth came the tensions of alignment and expectations. We stayed involved and supported one partner who offered to buy out the others.

Our team orchestrated the buy-out and towards the end of that process, humanity’s irrationalism came into full light. One night two of the owners were in the same office together in another state, and I was at home. We were literally about 1,100 miles apart. I started getting texts from them, asking me to tell the other one to do this or that. They were a few feet from each other but were texting me to relay their messages. It was so absurd; all I could do was laugh.

This was just one more lesson where I learned that while we measure business in terms of dollars, behind it are people and people have fears, concerns, strengths, and weaknesses. It’s those people who are making the decisions, setting the course, running companies. It’s those people who need to be understood, mentored, held accountable, helped in perspective, and cheered on. And all of us, in one way or the other, are one of those people.

What do you think makes your company stand out? Can you share a story?

MLA has created a way for talented people to be creative and courageous in the highly disciplined field of finance. That is a rare thing. This means pulling together teams of various experience and skill levels and finding a way to let them pull together to solve a problem for the client. We had an experience early on that really solidified this ability.

We had a good-sized company in the area that we had been meeting with for some time. Then on a Monday morning we got word that they had fired most of their finance team and asked that we come in and take over. We were on site on Wednesday with no support or transition team. All we knew is that the situation was grim, and we had to figure it all out.

We spent the morning learning what we could. Then our engagement team assembled to compare notes in one of their conference rooms. I grabbed a marker and began drawing out what we knew, with the team filling in the details. It became clear very early that there was one important piece missing or needing streamlined to their system and that was an authorization to invoice for work already completed. As silly at that sounds, this large company’s processes had stalled out, negative inertia had taken over, and they were literally days away from running out of cash but didn’t know why.

Soon, we had team members literally going to office to office to pick up the “forms” that had become part of the bureaucratic bottle neck. “Oh,” people would reply. “You mean those?” They would point to a stack of papers on their desk. “I’ve been waiting for someone to come by and pick them up.”

After a couple of hours of this, our team started the detailed work of pushing out invoices. The backlog of unissued invoices was large, and enough to bridge the gap financially and explain why management, while making money, felt such a cash burden. The engagement went on from there and accomplished many great things tackling both simple and complex problems. Eventually, we rebuilt a finance team and turned control back to them. But literally the President has told us that in the first couple weeks, we had saved the business.

They were a very successful client of ours for years to come. I was so proud of our team and the work we did, and it really gave us a vision for how our services could make a difference in the lives of others.

Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?

You must develop leaders around you and then let them lead. This is hard for an entrepreneur like myself, and I haven’t always been successful at it. I love what we do, and when I was anxious about things inside the firm, or even in my personal life, it was easy to suppress those anxieties by just doing more work. But that is not sustainable, and I began to realize that I was the thing holding us back. I’ve begun the hard process of letting others lead, and I am more hopeful about our future than I’ve ever been.

None of us can achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My first partner, Harry Loyle was that person to me. He is the “L” in MLA, since our firm was first called Morgan Loyle and Associates. He had a huge impact on me, and many others in this region. Harry had a saying that has stuck with me, which is “Hope is not a strategy.” This does not mean that Harry was not hopeful, he was a very optimistic person. But he was also caring while being callously realistic. He valued people while not putting up with their excuses.

But he’s not the only one who has helped along the way. So many have in so many ways they may not realize. For some it’s that encouraging word when they didn’t even know it was necessary. For others, it’s the piece of wisdom that came at just the right moment. There are these kinds of helps everywhere if we are humble enough to listen for them.

Today, we have a leader in our business who just knows people. He’s not financial and as a result, many on the team have wondered why he was in our firm. But he knows people, understands what makes them tick, understands how to motivate, and hold people accountable, and helps me tremendously decipher what is often confounding — including in my own psyche.

I’m sure as time continues, I’ll find others who were “there” in the right time — and I’m confident a lot of finding those others is simply being willing to listen and realizing the best thing you can do as a leader is surround yourself with people who are better than you — even if it’s in just one important area or discipline.

The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?

A good company is one that accomplishes its purpose in a sustainable way, while providing for its employees, partners, and owners. We see many good companies. They have applied sound business principles in a disciplined way, and they have success to show for it. They may not be flashy, but they play an essential role in their community and industry and take that role seriously.

A great company is a good company that intentionally develops people while being successful. That means placing long-term growth ahead of short-term profits because relationships and communities change over the long haul. That may not be as exciting, but for us, it is much more rewarding.

Over the years, I’ve had many people tell me I could be more successful if I would focus on one service set. But that’s not the point of MLA. Our mission is to bring those things together in a way that serves the unique vision of good a business owner sees in the world. That means we have seen others succeed where we could have, but that’s ok. We believe we have a unique opportunity, and we must be faithful to it.

Honestly, sometimes it’s hard to remain focused on “great” when there’s such a call to just be “good”. These calls for me sound like statements or opinions that would give up the transformational change and stewardship we drive and trade it for a focus on a service set or product that would be more scalable and arguably more profitable in the short term.

This is compounded as we’ve experience so much disruption over the past two years. But, again, we are relying on our people to help us figure this out. They’ve bought in to that mission and remained faithful to the values to accomplish that mission. And we collectively believe that great is better and it’s worth the slog that sometimes comes when you are committed to figuring it out.

Based on your experience and success, what are the five most important things one should know to lead a company from Good to Great? Please share a story or an example for each.

1. Owning a company is a stewardship, not entitlement. This becomes particularly evident when family-owned businesses are passed to the next generation. We worked with a business owner who was a well-known celebrity in our area. He had a very wholesome perspective on his company and had built it through good relationships. But when his children got involved, they lacked the perspective to continue this approach. Ultimately the company closed because the children could not allow any risk to be associated with the family name. They felt entitled to his legacy without supporting its role in the community. It was sad to see how much fear the success they inherited created in their lives.

2. Get a clear picture of your finances. This sounds self-serving, but we exist because this need exists. Let’s face it, very few people go into business because they are good at finance. But you can’t lead a business without understanding how money works, and where it flows in your company. That means you need someone you trust, but who can also be honest and objective.

We encounter many businesses who have a family member leading their finance team. They may be excellent at what they do, but the relationships can cause an inherent weakness when it comes time to communicate hard truths. And business owners aren’t always willing to hear that truth. We had one client who knew a family member was stealing from the business and manipulating the process to cover that up. And the owner refused to do anything about it. We ended the relationship because we could not help them. It takes time to build that trust with someone, but it is worth it in the end.

3. Be clear on your mission. I recently came across a quote that struck me. It says to be unclear is to be unkind. As a business owner, you live and breathe your company day and night, but not everyone else does. That means you must be clear on what you do, and your reporting and metrics must support that. It may be hard as a business owner to see what you are so passionate about reduced to a few words on a page. But to be unclear is to be unkind, and kindness is an essential motivator of people.

We work with many businesses that don’t understand their initial success, and so they are confused when their growth stalls out. One company saw phenomenal growth but did it with a profit-sharing contract that turned out to be at odds with their strategy for growth. This created a rift in the management over what was most important in the business, growth, or sustainability. This rift was so deep they would even bring competing sets of financials to meetings, each reflecting their different visions of reality. The owner wanted both objectives and couldn’t see that the numbers would not allow for it. It didn’t matter what version of the financials we produced, there was always disagreement over what it meant, so that relationship eventually ended.

4. Always have a plan to exit. My mentor, Harry Loyle talked about having a “Red Folder Plan.” This was a simple exit or contingency plan that was always in an owner’s desk drawer. His reasoning was simple. When you need the plan, you won’t be in a frame of mind to formulate one. And it was a reminder that something can happen to you at any point, and someone else is going to wonder what you intended to do.

5. Don’t procrastinate scale. That thing you think you need to put off, you probably should start working on. For me, I would so often make excuses in the early years about what “couldn’t be done.” For instance, we had already started our unique service set offering, but believed it was so unique, so customized for every client, that it couldn’t be outlined as a process. I was wrong — so wrong.

It wasn’t until a part-time sales lady, that didn’t even survive at the company, kept pressing me to outline a process, that one started to take shape. I realized there was a theme to our service set, that it could be defined, just not in the way most people would define it. And that was the beginning of what we call our Business Redeemed Process ™ which reflects our mission priorities and is the backbone of our service deliverables, quality control, and even pricing strategies.

I now tell entrepreneurs that are starting out, especially in the service sectors, to work at building into their day the discipline of defining what makes them unique and looking for every possible way to drive scale into their processes, hiring, and client service. I wish I would’ve started earlier in our history.

Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?

I think “purpose” begins with a personal sense of why you do what you do. When we see examples of businesses with a social impact, it’s often because there’s a founder’s story that illustrates that purpose in a relatable way. It can be tempting to “stick on” a purpose after a business is successful or find a cause you like and give it your support. This may be a reasonable strategy from a tax or organizational culture perspective, but it does not guarantee the success that comes from being “purpose driven.”

Ultimately, if you’re using purpose to gain success, then success is your purpose. The alternative is to care for the people right in front of you, including your employees, customers, and suppliers. Look for ways you can improve their experience, or better still, ask them. We’ve done client surveys and employee surveys, and most of the feedback comes down to better communication. They want to be included more in what matters to us.

What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill? From your experience do you have any general advice about how to boost growth and “restart their engines”?

We have a step in our Business Redeemed Process ™ which asks, “Why am I in business?” This is not where we start, which is one way our process differs from others. Rather, it comes after the business is running well and the owner has some margin to reflect on where they are going. It may be that the standstill is to be expected based on industry or economic trends. The question becomes, do you have the energy and vision to move in a new direction? If yes, then let’s define that. If no, perhaps you should sell what you’ve built to someone else.

Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?

Our services are generally in higher demand during economically turbulent times. We had been in business just two years when the 2008 financial crisis hit. We saw major clients loose big sections of their market, or have their customers go out of business without paying. That meant the value of our services was even more clear because every bit of financial savings mattered to the ongoing survival of the company.

The one thing we have focused on is maintaining a consistent message about our services. It can be tempting to riff on a recent economic trend, like PPP loans, and define our product as providing that service. Don’t get me wrong; we filed for a lot of PPP loans for our clients. But we also communicated the larger context of our overarching goal of helping good businesses survive these uncertain times so they would be there for those who depended on them.

Uncertainty always means opportunity. For us, that has meant even being steadier on the controls and learning not to overreact. I think that’s great advice for most businesses, but the specific application will always be unique to that situation. But one thing is true — uncertainty always means opportunity. It’s when you should make your move.

In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?

Honestly, the answer to this question very much depends on the stage of the company. For instance, a brand-new company run by an owner, often struggles most with thinking about scale, defining processes that are consistent with the mission, and sometimes even defining the mission. For a larger company, this often seems to be an area that has lagged compared to the other disciplines.

For instance, we have a client who had seen excellent growth but whose finance department hadn’t kept up with that growth. Their processes, procedures, and even policies weren’t right. The result was mounting frustration for both the department and the CEO. After some time with our team and after the Controller illustrated a great attitude of teachability, that Controller is now making more money, has a larger staff, has things locked down well, provides the information to the CEO and the management team that is needed. And that company is now almost twice the size it was when we first engaged with it.

I guess the best advice I could give is to be ever vigilant. Pay special attention to the area that you value the least, but you see others valuing and be insatiably curious about those areas. Often, that’s the area you are underestimating the most.

As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?

Be authentic. Period.

Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?

Be authentic. Period.

Seriously — it starts there. Trust is earned, not given. And that’s true in business too. So be authentic. Be real about capabilities and what you need and want. Be real about what you can provide. Own mistakes. Learn from your customers and thank them for it. And then be bold. Your customer or prospect is talking to you for a reason. Treat them with the respect they are owed — and that includes not shrinking away from the opportunity to carefully confront them and provide them the answers and solutions they so desperately need — those they know about and those they don’t.

Be authentic. Be bold. Be honest. Be humble. Be direct. Be a servant. That’s a powerful recipe for a great brand.

Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know to create a Wow! Customer Experience?

You need to know how a customer experiences your services, not just what they tell you. In our case, our customers are business owners. That means we initially get very little information about “what’s keeping them up at night.” There is often a specific, relatively small problem that they ask us to solve. But over time, we can begin to assemble a bigger picture of who they are and what’s important to them.

Our Wow! experiences come when our team goes beyond expectations because they sensed what was important to the client, even if the client didn’t know how to define it. This is risky, and can go unnoticed, or worse, can simply raise expectations for next time. It takes time to understand how those opportunities will be received, and to establish a baseline of good service so the exceptions stand out.

What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?

You start a business because you know something, or you can make something. As a result, you start as the smartest person in the room. That can so easily become your identity. And as a result, you start to attract people who are attracted to that identity. That will get you down the road a little bit, not all the way to a sustainable business. To get there, you’ve got to be willing to separate your identity from your business’s identity and clarify both. I think most CEOs and business owners tackle that question later in the process than they should — and I was one of them!

Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I’m awestruck at how God made us people who crave, fight for, die for, and insist on liberty. But once we have it, we often spoil it by misusing it. Everything in our world thrives off that desire for liberty if you think about it. Consumer demands are individualistic at their core; business owners desire to create wealth for their customers, employees, vendors, and themselves for security and the liberty it brings; and we thrive on choices and even demand them if they aren’t there. Understanding liberty and safeguarding it is transformational and could change our world for the good if we’d do it!

How can our readers further follow you online?

Most would say I’m “young” — but young or not, I just don’t have time to keep up with the social media engines of the day. So best is to just follow me at LinkedIn. It’s really my favorite place to meet and keep up with others. You can find me at https://www.linkedin.com/in/seth-morgan-5b878a1

This was very inspiring. Thank you so much for the time you spent with this!

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