Joe: [00:00:00]

Hello and welcome to On Boards, a deep dive at what drives business success. I’m Joe Ayoub, and I’m here with my co host, Raza Shaikh. Twice a month, On Boards is the place to learn about one of the most critically-important aspects of any company or organization; its board of directors or advisors, including the important issues that are facing boards, company leadership and stakeholders.

Raza: Joe and I speak with a wide range of guests and talk about what makes a board successful or unsuccessful, what it means to be an effective board member, and how to make your board one of the most valuable assets of your organization.

Joe: Our guest today is Lisa Thompson. Lisa is the founder and CEO of Sturbridge Growth Partners, a virtual network of experienced consultants and globally-renowned thought leaders which create [00:01:00] growth strategies for their clients.

Raza: Lisa is a nationally-recognized pricing and profitable growth expert. Her expertise includes product marketing, pricing, and sales strategy. She has served on several corporate boards and has served as an audit and finance committee chair, and as a member of the nominating and governance, risk and compensation committees.

Joe: Welcome, Lisa. Thank you so much for joining us today on On Boards.

Lisa: Thank you so much, Joe and Raza. It’s really exciting to be with you today.

Joe: Let’s start with Sturbridge Growth Partners, tell us a little bit about how you founded it, what it does, and a little bit about its background.

Lisa: Sure.

I’ll go back a little bit further to how I got to Sturbridge. I started at a really small firm, which was called Strategic Pricing Group. We sold that to a mid-sized [00:02:00] firm and then we sold that to a really large firm, which was Deloitte. I was at Deloitte for several years as a partner. I really enjoyed it, loved the work I was doing, loved my clients, loved so much about the culture, but having a different lifestyle was sort of an impetus of mine for looking for something new, and having a degree from Babson and having studied entrepreneurship, I thought about starting something on my own.

I decided that there was a segment of the market that I really wanted to serve that I thought was being underserved. It was companies in a variety of industries, a variety of different sizes who wanted really customized, actionable advice and strategies that they could use, but they didn’t want to pay a million dollars every single time they had a question that they wanted to get answered, which is often the case with the larger firms because of the nature of the work they do.

I [00:03:00] founded Sturbridge Growth Partners basically without a payroll. Technically, I’m the only employee and I have a number of experts and people at all different levels, just like a consulting organization would have, but for the most part, they’re highly experienced people. We do a lot of the work ourselves, and because I don’t have a payroll and I don’t have fixed costs, I’m able to bring that really top-notch expertise and guidance that’s really actionable for people, and we can do it at a fraction of the fees, so that’s how I started it.

Joe: Thanks. Tell us what is strategic pricing?

Lisa: Yes. That is something we do a lot of at Sturbridge, and when we think of pricing, people think about putting a price tag on something, maybe it’s like some bottle of shampoo that you buy at the store or if you buy a car. [00:04:00] But when you think about pricing strategically, specifically in B2B markets, which is where I do the vast majority of my work in business-to-business markets, strategic pricing is about understanding the value you create, how that value differs for different types of customers, and how to maximize the amount of it that you can capture in a way that’s a win for you and a win for your customers, so that’s how we think about strategic pricing when we do projects for our clients that help them understand each of those things at a pretty deep level.

Joe: What are some questions that boards should consider asking about pricing?

Lisa: I like that you asked me that because I think because so many companies still don’t think of pricing as something strategic, in many organizations it certainly does not rise to the level of board [00:05:00] discussion because of that. But I’ll do a little exercise with you, do you guys mind if I ask you a couple of questions, put you on the spot and turn the tables a little bit?

Joe: Sure, give it a shot.

Lisa: Okay. When we think about pricing, pretend you have your own company, you have a new product that you just developed and you have to figure out how to price it. Not a trick question, what are the things that you would think about, what kind of inputs do you need to determine your price?

Raza: Yeah, maybe I will think how much money does the customer have? What can they pay me?

Hmm,

Lisa: what will the customer pay? Yeah. What else?

Joe: What are my competitors doing?

Lisa: What are my competitors doing? Yeah.

Raza: How much does it cost me to make it?

Lisa: How much does it cost me to make it? Right there, you basically asked the questions in the three categories; cost, customers, competition, that every company asks themselves about pricing. We haven’t [00:06:00] created some new buckets that are suddenly relevant and making those obsolete. In essence, what we do is just ask slightly different questions about each of those areas.

Raza, you said, for example, how much would people be willing to pay. The challenge with that question is often your customers don’t know what they should be willing to pay, and if they do and you’re negotiating with them, they’re not really likely to tell you how much because they want to pay as little as possible.

Instead of asking how much people will pay, we ask questions like, what is the economic value that we deliver to our business customers above and beyond what our competitors do? And given that in factors that affect their price sensitivity, how much should we be able to convince them to pay?

You see, we’re altering the question, but now instead of [00:07:00] going out and doing a survey to just ask everybody, here’s the product, how much will you pay for it, now we go down a different path where we’re trying to understand how our product impacts the customer’s system, and what kind of cost savings it drives for them. Does it increase revenue? Does it decrease risk? We’re trying to understand all those factors to really know the value.

From a cost perspective, your costs are important, but instead of just saying, how much does it cost me to make this and how do I look at my costs like from an accounting perspective, we say, given the value that we just determined that we should be able to capture in the form of price, how much cost can I afford to incur in serving this particular customer or serving this particular segment and make a profit for myself.

Then from a competitive perspective, we’ll ask questions like, not just how do I win the [00:08:00]next deal, but how do I use the next deal as an opportunity to reinforce my competitive advantage, and where are the places that my competitive advantage is strongest and that I should win all day long, and where are the places that I might want to cede to the competition because I don’t have an advantage and I don’t want to lower prices in those markets and then have them be desperate and have to jump into the markets where I have a strong foothold. These differences in the questions we ask lead to really different answers.

Raza: It’s not the “price is right” kind of show, but it’s rather figuring out the ROI and either the increase on the top line or saving in time or increase in the bottom line that you are judging, for example, for the cost.

Lisa: Perfectly said.

Raza: Lisa, you mentioned the midsized organization when [00:09:00] you talked about acquisition of the organization, and I believe that is The Monitor Group. Tell us a little bit about The Monitor Group and then your role at the board for The Monitor Group.

Lisa: Sure, so The Monitor Group was founded by, among other people, Michael Porter, who many people know in the business world. We were most famous for having marketing go-to-market strategies that were driven by competitive advantage. That’s really what Michael Porter instilled in the organization. About five, six years after I joined The Monitor Group, I was elected to the board by my peers, so my peers were the other partners in the organization, and I served on the board. Basically, we had a chairman, but the majority of us were like board members at large, so to speak.

Raza: That sounds very interesting, and it is different[00:10:00] than maybe the typical nom-gov committee process for including new board members. Are these elections contentious and you have to kind of gather the votes?

Lisa: Yeah. It’s so interesting. I didn’t find it contentious, but part of that may just be me. I had a bit of a “this is who I am, this is what I believe, this is what I think is important to you.” You either think I’m right or you don’t. I did not campaign. I don’t recall anybody really doing that at the time or it being particularly contentious in any way, but there were two seats available and I believe there were nine of us on the ballot, and I do remember an interesting story from that one if you’d like me to tell this.

After I won, one of the longtime partners walked up to me and he said, “You know why you won, [00:11:00] right?” And I said, “Oh, this should be interesting.” I may not know so I said, “I don’t. Why don’t you tell me?” And he said, “Because you have the ability to take on the really contentious, tough issues, and you need a lot of courage to do that on a board. That’s why you got elected. Don’t ever forget that.”

Raza: Speaking of that, it does sound like the board had to deal with contentious, complex and intense issues when Deloitte was acquiring The Monitor Group, so talk a little bit about that and what was the board’s role in that, and what it ended up being.

Lisa: Yeah, the election was not contentious. However, shortly thereafter joining the board, it had been in the works for a while, but we basically realized that we were going to need to get acquired for a whole host of reasons. One of the most prominent reasons [00:12:00] is just it can be very hard to be a mid-sized consulting firm. You don’t have the same level of scale that some of the larger players typically have, but you’re not this sort of small boutique firm with a lower cost structure. Mid-sized firms can be somewhere stuck in the middle, so to speak.

We ultimately realized that we had to get acquired and we were fortunate enough to have a lot of people, a lot of consulting organizations that were interested in The Monitor Group, but we absolutely landed at the right place with Deloitte, but wow, it’s a complex, long process. All of the partners are also shareholders, all got to be aligned to it, so it was a process.

Joe: What did you learn as a board member during that process?

Lisa: One of the most important things I learned during that process is that we can tend to hyper focus, [00:13:00] like when we’re early in our careers or when we’re in business school, we can hyper focus on what we call the hard skills, but being on a board, particularly at a contentious period of time, the soft skills win the day, like the people who can raise the tough issues, take them on without a doubt, but do them in a way that aligns people, that was really key, critically important for us during that one.

I guess the other really important thing I learned was if you think back to the old ask why five times and so you’ll really get to the bottom of something, bringing that to bear in this environment was critically important. Somebody might say, “Well, we think the acquisition is going to do X, Y, Z for us, and that’s [00:14:00] really important to us.” “Really? Why is that?” “Well, it’s going to drive revenue for us.” “Okay. Why is revenue important?” Sometimes asking questions that might feel rather elementary to you, you realize that you get underneath what’s really going on for the other party, and this was important. It was a collaboration, but it was also a negotiation so that was key. I think I’ll stick with those two, Joe, because those were the most important there.

Joe: Yeah, those are two incredible observations, and I would say as your first board experience, two really critical things to learn moving on. Let’s talk about some of the board work you did. We’ll start with Twin Valley Companies. Tell us a little bit about it. I know it’s a family-owned business, but tell us about it, what it does.

Lisa: Yes, so family-owned, fourth-generation telecommunications products and services, managed-service provider based in Kansas [00:15:00] City and serving households and businesses throughout Kansas, especially rural Kansas. The organization and the family have just a very deep-rooted culture and community in the cities and towns that they serve.

Raza: Lisa, how did you get onto the Twin Valley board?

Lisa: I was actually recruited to the Twin Valley board through an organization I’m part of which is called the Private Directors Association, which is a collection of people who serve on boards or would like to serve on boards and who care deeply about excellence in governance for private companies.

Joe: Yeah, and as you know, I’m also a member of the PDA. I think one time Raza was a member of the PDA, but he’s a busy guy, so I’ll take that up. It’s great to hear one of the stories about finding a board [00:16:00] seat through the PDA, because I know it happens, but it’s always great to hear a real story about that so talk about the size of the board, what it does and how you feel like you’ve contributed.

Lisa: Okay. That’s great. The size of the board, let’s see, we have two independent directors, and then we have four family members who sit on the board. One of the family members is currently employed at the company and then the other one is the CEO and then the other two are former employees, but no longer employed there and just sort of representing the family and their interests and caring about what the stakeholders want, both in the short term and the long term, for the organization.

I would say in terms of my impact for the board, probably two things. The primary reason why they hired me was not because I [00:17:00] was a telecommunications expert, because I’m not. Obviously, I’ve gotten up to speed really quickly on the industry, but they hired me almost precisely, or brought me onto the board, I should say almost precisely because I didn’t know telecommunications wasn’t steeped in that industry. But as a lifelong consultant, I’ve worked in a variety of different industries and liked that I had industrial and process manufacturing experience, hardware, software, B2B services, things that weren’t telecommunications necessarily.

I think I am able to bring a viewpoint of things that work and don’t work in other. Industries that help the CEO refine his thinking as it relates to various strategic issues or certain challenges that he’s considering. I think the other thing perhaps that I’m most excited [00:18:00] about is being part of this team that is transforming Twin Valley into what we call a high-impact board.

The entire board is really committing to looking at and determining for ourselves what is the highest level of governance excellence look like and how do we transition to that and become that because, of course, that provides nothing but growth opportunities. It’s better for the organization, better for our customers, and better for the family who are the shareholders.

Joe: Terrific to be in an environment where the board and management collectively really understand the importance of a board and want to make it as high-performing a board as it possibly can. That doesn’t always happen. I think it’d be not only a good fit for the organization, but great for the members of the board who are participating.

Lisa: Absolutely. It surprises me, Joe, [00:19:00] that it doesn’t happen in more private companies, because, let’s face it, we know the risk level of serving on a private company board is absolutely different than it is for a public company board. There isn’t the same risk profile, I’ll say, but board members always want in particular to be growing and becoming better and better at governance because there are serious risks to the organization that can ultimately come back on us as board members if we’re not governing as well as we can.

Joe: Yeah, amen

Raza: lisa, you have also served on the inaugural board for Consigli. Tell us about what Consigli does and how that board came about.

Lisa: Yeah. That was an interesting one, very different. Consigli is a multi-billion dollar construction management firm that’s based in the Boston area, but works up and down the east coast on major construction and [00:20:00] renovation projects, and that is also a fourth-generation family. business, but it’s an ESOF, the employees actually own the company in addition to the family members.

I got on that board because I sat on a nonprofit board at Babson College, their college advisory board, with Matthew Consigli who’s the president, and so he had seen me in these board meetings at Babson and then one day he asked me to go out to lunch and asked if I would consider joining his board after giving a pitch for what an amazing organization they were and he proved to be 100% right about how amazing they were. I think we’re very lucky to have a firm like Consigli in our local area.

Raza: Well, that is terrific. Did it start as a large board, or how big was the board, and kind of what were the term [00:21:00] limits or rotations on that board?

Lisa: Yeah. Consigli had nine people on the board, including the CEO and president and then their direct reports, so they were six of the people were key leaders within Consigli, and then there were three of us who were independent board members, so I’m pretty sure it was nine to start.

This was an inaugural board for them, because as we discussed, they had recently become an ESOF and so they were required to form the board as part of their bylaws as an ESOF, and this was their first ever board. As I’m sure you can imagine, I know this is true for so many private companies, particularly if you feel like you’re really well run and you’ve done a great job of growing, you kind of think, do I want outsiders all up in my business here?

So, [00:22:00] they did something that some people may disagree with it, some people would think it was really smart, but what they basically said was, we’re going to start with one-year board terms, and those were renewable twice for up to a maximum of three years. I think what it did is it gave them the flexibility to make sure that nobody was on the board too long if they weren’t adding serious value and didn’t deserve that seat on the board.

Raza: Yeah, that sounds about right in a good way, although that is indeed a little shortest term limit that we often hear. Probably they have evolved their governance practices, but it does make sense for an inaugural board to have a rapid pace of succession.

Joe: I would say this, it is really unusual to have a term overall limit of three years, but anything that allows an organization, especially a family company to [00:23:00] go down the road of having a true independent board, I think it’s great. If you have to be particularly careful at the beginning, I get it.

The thing you might lose is that they find a board member like you, for example, who is forced off after three years and probably would add a ton of value as time goes on, because really good board members learn the company, learn the management, understand what the issues are, and often become more valuable as time goes on, so you missed that, but at least they did it.

Lisa: Yeah, exactly, and I’m sure like any other policy, that they’re evolving their thinking in that regard. But I did, I thought it was quite an interesting way to get started and dip their toes in the water of having an outside board.

Raza: Lisa, you’ve been involved in the entrepreneurial ecosystem in Africa. Tell us what your involvement has been and with what organizations.[00:24:00]

Lisa: Yeah. Fantastic. A friend of mine with whom I served on a nonprofit board asked me to join an annual meeting of a group called the Harambeans, and they are a group of some of the most prominent, amazing entrepreneurs I have ever met from countries all over Africa, and they’ve started businesses that are geared towards solving some of the biggest problems that the continent faces, like super high youth unemployment rates, farming, like 80% of the arable land in the world is in Africa, and we haven’t figured out how to extract the kind of yields that we need from that land, access to credit, just so that you can buy things you need in your [00:25:00] household.

These businesses are all designed to support the needs of the African people, and it’s a really incredible organization that supports all these entrepreneurs.

Raza: Through the Harambean organization, are you connecting with entrepreneurs and helping them on the advisory boards, serving on their boards? How are you helping these entrepreneurs?

Lisa: Yes, in a few different ways. For some of them, I’m just doing pro bono consulting because they’re startups and many of them are not well funded yet. One of them, I have actually joined their advisory board. That is Semicolon, which is based in Nigeria, but ultimately planning to serve all the countries in Africa and they’re basically teaching young people primarily how to write code in software, and they’re getting jobs in the [00:26:00] US and the UK and other parts of Europe, and they continue to live and work in their villages in Nigeria, and they make like US salaries, so it’s absolutely incredible.

We get to have some access to some of the best talent in the world that has really been trained in a very high-quality way, so those types of salaries, Raza, can help lift, not just a person out of poverty and not just a person and his or her family, but sometimes a village with those types of salaries so it’s an incredible organization.

Raza: Lisa, I can totally attest to that. I believe Upwork.com has about 10% of their entire workforce from Pakistan, and these are all people from villages and they are sometimes able to kind of make similar or reasonable US salaries for their work so now it’s all about where the talent is and not the location.

Lisa: [00:27:00] Exactly, and the amount of talent that’s sitting in various countries in Africa, I don’t think we have even begun to scratch the surface on the potential of that continent.

Joe: I’m sure you’re right. No question. You’re also on the board of a startup called DGL. What does DGL stand for? What do they do? And tell us a little bit about the board.

Lisa: Yeah. DGL is Dogoday Leyba, and it was founded by a man from Ghana who’s now based in the United States, and it is a software SaaS business focused on providing services around enterprise risk management.

What’s really exciting about this company is that the founder realizes that there are a small percentage of risks in most organizations, [00:28:00] especially mid-sized and large ones, a very small percentage of risks that drive the vast amount of their problems and he’s figured out how to systematize that, how to turn it into a SaaS offering so that customers can basically take more control of their own enterprise risk management, and he’s trying to disintermediate the multi-bazillion dollar consulting industry that is doing really large enterprise risk management engagements.

Joe: How large is the board? Is it constructed like an investor board, four or five members or three or five members?

Lisa: Yeah. It’s pretty small. Aside from the founder, I’m on it and then two other people, so three of us, four total.

Joe: How has the experience been?

Lisa: The experience [00:29:00] is great. It’s one of my first experiences being really involved in the ground floor. But because we’re focusing on the software space, particularly SaaS and because of the nature of the software, the opportunity is just huge, so every meeting is really exciting, and it’s a mix of both excitement and big strategic thinking and also we’ve got a dot that i and cross that t on the statement of work with that vendor who’s going to develop the technology stack for us. it’s a mix of both, it’s roll up your sleeves and think strategically and then tactically in the same meeting.

Joe: Sounds like a great board experience.

Lisa: It is a great board experience. And of course, the primary thing that the company needs right now is money, so I think for people who are [00:30:00] considering preseed companies, they have to be prepared for the fact that the founders are looking for you to either invest or bring in others who are going to invest or do both because the governance function isn’t developed at that stage yet. Because in our case, we don’t have any sales yet so there’s not a lot of stuff to govern, so it’s really a very investment -/fundraising-driven time period.

Joe: All hands on deck.

Raza: Startup boards are super fun or super crazy, and we often say that startup board’s job number one is never run out of money so you’re absolutely right.

Joe: That’s right. That’s right. I wanted to end on a really high note to talk about Extraordinary Women On Boards (EWOB). Many of our listeners will remember that we had Lisa Shalett as a guest and she is one of the founders of EWOB [00:31:00] and subsequently have had a number of people who are members of that group. We think it’s probably one of the best board-related groups that we’ve ever run into. Love to hear a little bit about your story getting to them and how it’s been for you.

Lisa: Yeah, I would agree. It’s absolutely one of the best organizations with just a very high caliber group of women, as the name would suggest, who have a lot of board experience. This one was particularly valuable for me because I was looking to be with other women who had had similar or more board experience to me. I spend a lot of time trying to help anybody; men, women, people of color, et cetera, try to get on to boards, and I wanted some opportunity to be around other women who had more experience than I did.

I was introduced to it actually by a former client [00:32:00] who was a member of EWOB herself. Her name is Denise Warren, and she was an executive at the New York Times and actually did their digital program for them, and she is working independently now. She said, “Do you know EWOB? You’ve got to know this group. They’re absolutely fantastic.” So, that’s how I got connected to them.

Joe: Yeah, we’ve sent a bunch of people their way and I have to say everyone that has ever joined has reported a very similar story; great organization, great people, very productive, it’s just great all around. I met you essentially through EWOB and that’s another thing that they do, they really help their members find other board opportunities, so it’s just another way to approach it.

Lisa: Exactly.

Joe: Lisa, it has been great speaking with you today. Thank you so much for joining us.

Lisa: Thank you so much. A pleasure to be here.

Joe: And thank you all for listening to On Boards with our guest, Lisa Thompson.

Raza: [00:33:00] Please visit our website at OnBoardsPodcast.com. That’s OnBoardsPodcast.com. We’d love to hear your comments, suggestions, and feedback. And if you’re not already a subscriber, please be sure to subscribe at Apple Podcasts, Spotify, or wherever you get your podcasts and remember to leave us a five-star review.

Joe: Please stay safe and take care of yourselves, your families, and your communities as best you can. We hope you’ll tune in for the next episode of On Boards. Thanks.