How to Manage Through Up and Down Revenue Cycles

Speaker A: Hi and welcome to the crackerjack Consulting podcast. I'm your host, David A. Fields. On today's episode we're going to talk about a topic virtually every boutique consulting firm leader has faced and many of you are facing right now, which is how to manage through up and down revenue cycles. And they're probably listeners on either side of that right at the moment. I know among my clients some folks are having challenging years and some folks are having absolutely record breaking. And my partner in crime on this episode is none other than Colleen Murray, the coo, integrator and partner at ah, JUMP Associates. JUMP is a strategy and innovation firm that for nearly 20 years has helped create new businesses and reinvent existing ones. Colleen told me that recently they've been hyper focused on helping companies future proof their business, which makes her the absolute perfect person to talk with about this topic. So. Hi Colleen, thank you for joining me today.

Speaker B: Hi David, thanks for having me.

Speaker A: Yeah, it's great. It's always fun when we get a chance to chat. I know a little bit obviously about you and a little bit about jump. For the listeners out there who are less familiar with jump, maybe you could just give a few seconds on the firm, how large the firm is, kind of where you are on your journey, that kind of thing.

Speaker B: Yeah, of course, David. Um, well, I think you did a great job. You got our marketing pitch down, uh, with the introduction, but um, I can elaborate a little bit. Yeah, everything that you said is true. Uh, we are a strategy and innovation firm. We've been around for a little over 20 years. Um, and we are headquartered in San Mateo, California, so just south of San Francisco. Though we do work all over the United States and a bit internationally as well. So we have two official offices. We uh, do have another uh, office in New York City and we have some of our um, partners and consultants who are located in different locations across the country. So we spread across um, different geographic domains, if that makes sense. Um, we are a little over 50 people right now.

Speaker A: Got it.

Speaker B: And as I said, I think that we kind of specialize in this problems, our client problems at least where there's an interesting overlap between strategy and culture. Um, and I bring that up because I think that what we end up doing in our business challenges that we solve are by and large solving really ambiguous challenges and really ambiguous problems that our companies, that companies come to us and sometimes they can't even really define quite what the problem is when we start talking with them. And that's kind of a perfect place to help them make Bring some clarity and actually figure out how they can actually go about even doing it. Because half the battle we find is actually defining the problem in the first place, um, as opposed to just executing and solving for that. And so, you know, we really try and help companies, large companies in particular, learn new things, which is quite the challenge. But um, that's what we're in it for.

Speaker A: Got it. So big companies who need to learn new things and aren't exactly sure what the problem is, that sounds like a daunting place to play. But you guys are obviously good at it, you're doing well. You have 50 folks in the firm, which is a nice size to be at. So that will be fun to explore. And uh, what I was really hoping to do because today's topic is managing through up and down cycles. And I would assume that over 20 years that jump has been through a couple of pretty high ups and maybe a low down or two. So it would be great if you could give an example, maybe on the extreme end of one or the other or a few examples, uh, kind of describe the situation and then after you've described it, maybe tell us about the strategies you've employed to successfully manage through those cycles.

Speaker B: Yeah, you're absolutely right. I mean we've seen up cycles, we've seen down cycles, uh, we've had that impact our business, um, in positive ways and not so positive ways. And we're just, you know, knock on what thankful to continue to still be here talking to you. And um, hopefully we are doing some things that will set us up to be here for the long haul and to continue for the future as well. Right. But I think that it's so hard for all of us, myself included, to not get caught up in the everyday and in the near term when you're thinking about these up and down cycles. Right. Because we have to run our business and we have to make sure that we have cash and we have to make sure that we employees and new projects and all these things that clearly are smart things that need to happen in terms of the operations. But I think by and large uh, what I found in doing this for a while and my recommendation is be like to keep the big picture in mind and to continue to the best of your ability, be future focused, um, and keep that big picture in mind. So I think that one of the things that you and I talked about a few weeks ago, David, is that we've had the pleasure, a jump over the last in this certain cycle that we are um, driven by Covid and the pandemic, it's hitting companies differently depending on who you are and what industry you're in. As you mentioned, we have some industry. Whether you are an essential business, you are probably doing really well. I have clients that have record years, um, uncharted territories. And then we have the opposite and we don't know what's going to happen. That's part of the challenge. This is unprecedented in many ways. And so even if we look at historical up and down cycles, it's harder, uh, economists are even telling us it's harder to predict what the future is going to look like.

Speaker A: Almost like the weather's gotten a little more extreme.

Speaker B: Exactly, exactly.

Speaker A: So the cycle is maybe getting more extreme. Is there example, as you think back over the history of jump, is there an example where jump hit a real wall from a revenue standpoint?

Speaker B: Yeah, I think 2008 comes to mind as a particularly challenging year. It was for us. And I know I'm not alone in that. And I think that we did unfortunately have to make some big, um, cuts in our business. Uh, we had to do unprecedented, uh, layoffs that we had never had to do before, which, um, were incredibly challenging for many, many reasons, as you can imagine, um, particularly tough to our culture. But we had to do it, um, to survive, frankly. And I think that one of the biggest learnings there is that I think that we were too slow in making business decisions.

Speaker A: Oh, interesting.

Speaker B: Yeah, I think that we are too slow. And we were pretty optimistic. We continued to be to the point of being. We are hopeful. I guess I would say, you know, it's going to be another day, Give us another, a week, give us another month and the business is going to come in. Yeah, there's stuff out there, but it just, it wasn't happening until a point where you got to make a decision or you don't have enough, you know, cash to continue. And so we had to make those calls. But I think that, you know, we have learned from that. To be more pivot ready if need be, is the language I would use. Pivot ready. It's not just to unduly, um, make quick, harsh decisions that aren't necessary. And I don't want to bring like, panic. We don't want to be panicked. But you know, what that has looked like for us is to be much more connected as a leadership team. To be much more, uh, fluid maybe and continuous in, uh, looking at all different aspects of our business so that we can all be much more, um, real time in tune with the situation. And Thus then able to sort of make longer term decisions. So then for it to be really concrete, you know, our leadership team would meet, you know, we try to meet every week. We might have met like twice a month. And then we'd have quarterly planning, you know, this time around, uh, partly driven by Covid, and we're working remotely, but, you know, we're checking in every day and if there's a burning issue or something, we will bring it to each other. And so we're having significant conversations about the business, you know, certainly every week, if not daily, which just helps us to be more informed about what we need to do. And I think I'd recommend that for, you know, our clients as well. I mean, I'm speaking more as a consultant and I know there's a lot of interest for, um, folks listening to our podcast around, you know, running their consulting firms. But I think it's true for all businesses. Like, how do you continually assess where you're putting your time and your resources and attention? It's really easy to kind of get complacent and be like, this is our strategy, this is our plan, and we're just going to check in in a month or a quarter or whatever it is. But, you know, when do we need to pivot? How do we need to pivot? You know, what should we be leaning into? What should we be killing potential? You know, um, it just doesn't make sense. And so how do you kind of inform your gut, so to speak, so that you can make smarter decisions along the way?

Speaker A: Okay, so you brought up a whole bunch of topics to explore, which is, uh, which is awesome. Here's what I'd like to do is let's go back, uh, a bit. Let's go to 2008. So obviously that was a recession. You got hit by that recession and you said you were a little too slow to react, yet you did react. So tell me, how did you eventually make that decision? And tell me with 2020 hindsight, how do you think would have been a better way to make, have made that decision if you were facing 2008?

Speaker B: Again? We, um, yes, you are correct. We ultimately made that decision because we were looking at how much cash we had. Right. And what it takes to run the business. And, you know, there's just a black and white practicality in front of us that we need to make some drastic cuts to be able to survive the next few months.

Speaker A: At some point, the cash flow picture was undeniable.

Speaker B: Correct.

Speaker A: Because you said you were being optimistic. Optimistic, optimistic. But Then at some point, you were looking at the cash flow and said, guys, we're going to be in the red. We're running out of cash. Can't keep the lights on. All right. And so at that point you're like, okay, we better let some people go.

Speaker B: Exactly. Um, and make other cuts as well. Right. Where we could. Luckily, we, uh, were in a situation where we were certainly able to recover from that. And a lot of our big investments still, um, we were able to follow through with that. But, um, yeah, we definitely lost some valuable people as part of it. And to answer your question, like, what would we do differently? I think it's more concretely, I guess, back to what I was saying before, I think that to be able to daily check in on our BD pipeline in terms of our cash flow, in terms of our profitability, in terms of our utilization, all of these metrics that, um, hopefully most companies are utilizing in a way to operationalize and effectively run their business, I would say we're just a lot better at. Right. And more of us on the leadership team are doing that collectively. It's not just our head of finances doing it. Like, we all need to know what's going on, um, and we all need to be in there so that we can collectively, as a team, makes our decision.

Speaker A: So do you have specific targets? One thing I took from what you said, you didn't say this explicitly, but, uh, you were saying, don't hold onto your plan beyond its usefulness. Right. So you have a plan, you have goals, you've strategic initiatives, you've decided, here's what we're going to do this year. But you also need to be able to let that go if exigencies or the world changes or, you know, whatever happens forces you to make that shift. So how do you know, when do you have, at this point, have you set markers, um, triggers, anything like that that says, okay, guys, we need to make a change.

Speaker B: We are constantly, um, evolving those. But, yeah, you're right. I think I like to use the word pivot. Like, when do we know that we need to pivot, and how much do we need to pivot, and what way do we need to pivot? So, yeah, we have a plan, but we sometimes change that plan and throw it out the door if it doesn't make sense anymore, which can be a little crazy. Making for those of us, including myself, who, uh, like to execute against the plan and kind of know where you're shooting for and know what needs to happen, and, uh, I go in and do my job. But I have realized and come around to the value of having a smart group of people that you trust that can help you, um, decide when it is time to pivot. Um, which is maybe a soft answer to your question. No, we don't necessarily have, uh, I mean we certainly have some watch outs I guess, in terms of the financials that we're kind of keeping an eye on, but they're not part of FAST Rules in terms of when today is the day that we pivot, you know, it's not that black and white. I think we, you need to look at the numbers and you need to look at the business performance, but you also need to really think hard about the impact of those decisions. And um, you know what that's going to mean going forward.

Speaker A: So if you get to jump in the time travel car and talk to The Colleen from 2008, and Colleen from 2008 says, well, I get that I need to keep an eye on this. I hear that as a leadership team we need to communicate more. We need to be looking at cash flow, we need to be looking at margin, we need to be looking at our pipeline and how healthy it is, profitability, these sorts of things. And I hear that we need to pivot. How do I know which way to pivot and how do I know how much to pivot? What do you tell her?

Speaker B: I think at least for. So I can speak for myself, right? Um, if I'm going to tell myself, to answer your question that um, and for the organization that I am a part of, it is very helpful to have a North Star for us to continually come back to and to assess those decisions we are making with it. And so for us it is our purpose. And I like to think that we are purpose driven organization that that North Star guides the decision making. And so you kind of have the heart in the head, if you will. Right? The head is the logical, the numbers, the like assessment and the heart. Well, who do we really want to be right? And why are we here and why are we doing what we're doing every day? Our purpose for jmp. And we help organizations um, articulate and become purpose driven organizations as part of um, our offering as well. But ours, um, specifically is around improving lives through learning and growth and growth being ongoing, development and learning. And so I bring that up because the learning process, the process of learning how we're feeling, what we're learning, um, is just as important almost as the decisions, right? And if we can, as leaders and as people bring that heart to the table and sort of marry that with the head and the logic and the rigor. I think it's helpful. Of course, easier said than done. But that's one thing that really has driven us going forward. And so I think you can look at those decisions and everything that we're doing, like, is this going to help us further our purpose or. Not exactly.

Speaker A: Uh, as I've often said, because it was said to me early on in my career, one of my very first bosses in marketing talked about the freedom of a tightly written strategy.

Speaker B: Love that.

Speaker A: Right. It makes decisions extremely easy because you know exactly what you're trying to do with the business. And so if you know what your purpose is as a firm, is what I'm hearing from you, then you can always turn back to that and say, okay, well, look, given how things are headed, given what we're trying to do, are we likely to fulfill our purpose or do we need to make an adjustment? Yeah. Is that kind of what I'm hearing?

Speaker B: Absolutely. Yeah.

Speaker A: Okay, let's flip things around just for fun, because we did say managing through up cycles and down cycles. We talked about down cycles. Tell me a little bit about an upcycle. When was there an upcycle? If you can give me a year example, that'd be great. When was there an upcycle? That was a challenge for you. And then how did you manage through that?

Speaker B: Yeah, it's interesting. Uh, now that you put it that way, I do think that in some ways it is easier to manage through down cycles. Or let me reframe that. In more challenging times, where there is a crisis, so to speak, or a real problem that we can rally around and say, this is a problem to solve, how do we solve it and get ourselves into a better situation versus in good times? Yes, they're good. And you know, when you're. When people are happy and they're ripe with cash and business is good and prospects are booming, unlimited potential, sometimes it's not clear what to do with that as much. Right. So I don't know. It's just interesting that. How do we continue to. To me, I'm reflecting a little bit, but I love the idea of giving ourselves as types of continued challenges as leaders, even in the good times, as we might feel in the challenging times, uh, because you don't want to waste an opportunity. Right, Right.

Speaker A: So water drops. Right. All the rocks are exposed, and you have to really focus to navigate your way through the rapids.

Speaker B: Exactly right.

Speaker A: It takes a lot of attention and detail and all of that. And then the water Rises, there are no more rocks. You're just like, okay, we'll just like hang out on the boat and get a suntan.

Speaker B: Yeah, exactly. So. But, you know, I'm sure you'd love an example, um, as you're so good at doing and getting concrete for all of our friends out there. So, you know, I do think I'm sort of going to back to answer your question a little bit. Going back to. Even today we see some industries that, as we mentioned at the beginning, that are like, going like gangbusters and others that are not. Right. Right. We are lucky to work with a few clients that are doing particularly well right now. So one of the things that Jump has been doing a lot of in this time is helping, as you mentioned, we help companies future proof, um, and really thinking about what the future is post Covid, which is a very highly ambiguous problem. And we've been doing this with companies that are really struggling right now, but we've actually done it with a couple organizations that are really doing particularly well right now. I think this is something that we all can relate to in good times is like, well, will this sustain? Right? Like, why are we doing well? And like, will it continue to do well? Because things tend to be, you know, happen in cycles, um, and you might predict that maybe we wouldn't always be doing this well. And so I think that, you know, we've been so specifically been, you know, helping companies figure out what the next new normal is looking like. And really it's sort of the trick to say beyond just general macroeconomic forces of like, what's going on with economy, what is specifically going on with my business and my customers, my stakeholders who and what are driving my particular business model and the behaviors and mindsets going forward. Right. And so if you think about what we are living through right now, this pandemic, you have to believe that some behaviors that we, our clients, our customers, their clients and customers are doing will probably return to normal after this. Some will transform a little bit and some might actually go away, um, and are not coming back. And so the trick to figure out what, you know, what is what we have, like this whole really cool behavioral change model that we've been playing around with, um, to help companies do that and kind of figure that out based on the specific of their business, which I'd be happy to talk about. Um, I think every company should actually get exposure to this because it's a really better way to think about the future. But I think in regards to your particular question, it's helpful for all of us to assess this, uh, even in good times. Right. Because how do we continue to have good times and prepare for whatever future holds, good or bad?

Speaker A: Okay. And so now I'm still going to push you. And yes, we should make a note to come back and have a conversation about your behavior change model, because that sounds pretty cool. And, uh, so I'd love to learn more about that. And you may have given me the answer, but have you hit up cycles that were difficult, or have you only hit up cycles that allowed you to not pay it? Um, I don't want to say not pay attention as much, but you hit up cycles where you've kind of just relaxed and done your job. So has there been a challenge at the upcycle side or not?

Speaker B: Yeah, I would say the biggest challenge that we've had in upcycles is one of culture, um, and particular culture for our employees, or jumpstarts, as we call it. So when things are good, business is good. We have tried to make the most of that and hire good people. Um, for us, we look for what we call these hybrid people. So people who are one part social scientists, one part technologist, one part business strategist, um, and can really bring all of the different disciplines into their head, because we're solving those in bigger those questions. And some people look at us and they're like, you guys are crazy. That's like looking for a needle in a haystack. Right? And so we need to keep finding those people out there in the world, and if we are lucky enough to have time to, uh, find those people, to pay them great competitive salaries to move to the Bay Area. You know, we hire a lot of people in good times, which is really great. But having people, having smart people is just the beginning. Um, and I'm sure this is true for all of the folks listening to this, um, podcast who are searching for talent. It's one of the biggest things. But being able to get people trained up, understand the mindset, um, kind of really be able to go in deep. It takes time. And the more people, we have to be able to do that at scale very quickly. It's something I wish I could say that we've cracked. I think that we have learned a lot over the years, but it still remains a challenge because it is a very individual process. Right. And we can do a training for 50 people, but that's just going to scratch the surface. And the more people you have, it just gets exponentially more challenging to be able to kind of see that Culture through and live it every single day.

Speaker A: So it almost sounds like for the upside, you have to be prepared to work with the bounty that you're receiving. Right. And in this case, uh, you have the ability to expand. But simply saying, okay, well, I'm going to hire a bunch of people or whatever that's not prepared, right? Uh, no.

Speaker B: And just. Yeah. And I'm sorry to interrupt. Absolutely, yes. And you know, if we're lucky, with that bounty comes more business and more projects. Right. And, you know, just throwing a bunch more people at that is not always a great thing. Uh, because you got to do great work and it takes time and attention and culture to live that purpose, as I mentioned before, which means you have

Speaker A: to manage through the upcycle. You have to know how to replicate your current success at a higher level, how you bring on new people, how you deliver high quality work, have those systems in place. It sounds like. Am I right in saying those are some of the things that then you've kind of, uh, been learning along the way?

Speaker B: Yeah, absolutely. Absolutely. And I think, um, yes, you've got it.

Speaker A: Perfect. This has been really outstanding. It's been, uh, enlightening to me and educational. I know it's a short chat. We're going to have to revisit and come back and have conversations about other things like that behavior change model. I really appreciate you sharing some of your experience. If there are people listening and they're thinking, like, I think that Colleen, she's the cat's meow, she's the bee's knees, I want to talk with her more. Or they want to just maybe partner with jmp. What's the best way for them to get a hold of you to learn more about jmp?

Speaker B: Yeah, absolutely. Please reach out. I would love to chat with you guys. Um, you can reach me at Colleen C O L L E e n@jumpassociates.com or check out our website, jumpassociates.com perfect.

Speaker A: So I'll put that in the show notes also so people can reach out to you and get the pleasure of learning from you or learning with you. Uh, just like I have. That will be our episode. For those of you who are listening, stay tuned. You'll get to hear about the prize that goes along with this episode with Colleen. Colleen, thank you again so much for joining me today.

Speaker B: Thank you for having me, David. And I just, you know, thank you for doing this podcast. I love hearing from other folks who are, you know, on the same mission to do what you and I do. There are other folks like this, and, uh, you know, I want to learn, um, because we're all smarter as a collective and can really help each other and push each other to grow. So thank you for doing it.

Speaker A: You bet. That's right. We're just a bunch of smart people, hopefully at least reasonably smart, learning from each other. So that's excellent.

Speaker B: Hope so.

Speaker A: Perfect. Thanks again.

Speaker C: The Crackerjack Consulting podcast is produced by the David A. Fields Consulting Group, where you'll find everything you need to build a more successful consulting firm. Download this Episode's prize@crackerjackconsultingpodcast.com We'd love to get your feedback and hear about any consulting firm leaders you think we should have on the show. If you'd like to appear on the show or know someone whose insights would be helpful to others in the consulting industry, please send us an email@infoavidafields.com that's infoavidafields.com let a friend know about the show, and don't forget to leave a review on itunes or Google Play. And if you subscribe, you'll be notified about every new episode. The next podcast episode is a wiener. A whiner. Wait, what the heck does that say? A winner. That's it. Don't miss. Don't miss our next episode, where David learns to type in bigger letters. At any rate, I'm, um, Robin Epstein, and our host is David A.

Speaker B: Field.

Speaker C: Thanks for listening.