253: Rekindle Your Growth with Ryan Kauth

Ryan Kauth, Business Coach, Facilitator, and Coleman Chair in Entrepreneurship at Marquette University, is driven by his mission to rekindle growth in family enterprises and serial founder-led businesses by helping owners develop strategic leadership.

We learn about Ryan’s journey from educator to business coach, working with family business owners and serial entrepreneurs to overcome growth plateaus and succession challenges. Ryan explains his five-category framework for rekindling growth, which includes leadership development, customer creation, culture, finance, and operations. He emphasizes the importance of moving from functional roles to strategic leadership, empowering teams, and preparing the next generation to lead family businesses successfully.

Listen to the podcast here

 

Rekindle Your Growth with Ryan Kauth

Good day, dear listeners, Steve Preda here with the Management Blueprint podcast. And my guest today is Ryan Kauth, a business coach and facilitator for serial founders and family enterprise owners, as well as the Coleman Chair in Entrepreneurship at Market University. Ryan, welcome to the show.

Well, thank you, Steve. I really appreciate being here.

It’s great to have you, you’ve got some great ideas on growing companies, which we are all about. But I’d like to start with the question about your personal “Why.” So what is your personal “Why” and what are you doing in your practice to manifest it?

Yeah, so my “Why” is simply to serve business owners. That might not be the best sounding one, but what I tell my students in my classroom is, teaching students doesn’t get me out of bed in the morning. But teaching future CEOs, and current and future business owners, that gets me out of bed in the morning. So that’s my very simple “Why.” And what do I do about that? Well, I do some teaching, but then I also do some coaching to serial entrepreneurs as well as family enterprise owners. And, typically, when I’m working with a serial entrepreneur, it’s a business in a different industry and they’re trying to grow it like they did their past companies and it’s just not working. With family business owners, I work a lot with founders and their children who want to own the business someday or very near future. But I also have some interesting clients where it’s maybe Gen 4 and they’ve got Gen 5 and 6 in the business and things like that. And, typically, the challenge that starts out is if I’m the founder of the business, my children are not going to run this business like I did. And I’m not sure I like that. So we go from there.

Yeah. So what’s exciting for you about helping business owners?

Well, I mean, I think, again, kind of looking at the family enterprises, it’s certainly having that next generation of owners take control, still allow their parents to have a say in what goes on in the business, like on their board, but then keep that business going forward and moving it through how they know things are going on in the marketplace, as the marketplace changes, as their customers expect different things from them. And then if I’m looking at a serial entrepreneur, again, the typical case is they’ve built several companies, they’re in a new industry now, it’s not going the way they built it before. And most of the time, it really has nothing to do with, I’m in a new industry, that might be what they think, but really it has to do with how the markets and the customer landscape is changing and their customers are expecting different things from them.

Yeah. Well, I think this is a very tricky thing to be a successful family enterprise for various reasons. I think it’s a super hard thing to do.

It is.

Not just because your parents or one of your parents is a dominant founder or a dominant owner of that organization. They have their ideas and they feel like you should be just following in their footsteps. That’s hard enough. But then the other thing is you are coming into a mature business and don’t get the benefit of actually growing the business and making the small mistakes in order to learn how to not make the big ones. You’re falling at the deep end and now you have to avoid making big mistakes from the get-go, which is, I think, super scary.

Yeah, exactly.

So we’ll talk more about family businesses, but let’s talk about frameworks first. So you are working on a book called, we don’t know what the title is, but it’s about rekindling the growth, which is a very interesting topic. Let me ask you first this idea, why does growth need to be rekindled? Because that concept suggests that growth actually plateaus and atrophies, so it needs to be rekindled. So is this a natural thing that grows, tails off, and every now and then you have to rekindle it?

Yeah, for sure. I mean, growth doesn’t happen at a 45 degree angle like on that pretty of a graph, right? It happens, it looks more like a staircase. And so when something plateaus, whether that’s your sales or your number of customers or number of employees, there’s a number of things that you need to change before that happens to keep that growth going. And then there’s the whole part of, there’s the difference between growth and scaling, right? Growth tends to be kind of linear and scaling is exponential. Share on X So if you have things in place to anticipate scaling, that is one thing. And usually what happens is you grow with your customers. And again, that’s a good thing. But you don’t necessarily anticipate growth or anticipate scaling. And so when I’m looking at rekindling that growth, we look at these five different areas that you have to change to anticipate scaling or to rekindle that growth.

Okay, that’s a great segue. So that’s your framework about the five categories to change?

It is.

So first question is, why five categories? How did you pick five? And then what are those five, or maybe the other way around?

Yeah, it’s interesting. These five buckets, I’ve learned for the last 25 years working with my clients that they have typically four areas of expertise and then there’s a fifth one, which is them. And so, if I can talk to a serial entrepreneur or family business owner about their sales, marketing and business development, one, two, their finances, three, their operations, and four, their culture, which we typically then call becoming an employer of choice. They can usually talk about which areas are in their own strengths, right? Very common for the founder of the company to be the chief sales officer. But then there’s this fifth one, which typically goes ignored because you and I personally don’t really like to change even though we know we have to. And when you’re talking about even a serial founder or that founding family business owner or business owning couple, for example, what they typically don’t look at is how is my entrepreneurial leadership development happening. And a lot of that is because most entrepreneurs kind of live on an island and they might have some good business advisors, but they’re typically not talking to other entrepreneurs. Maybe they’re not involved in an industry association so that they’re a thought leader in their industry, but they’re also stuck in that functional role, which is the one that they like the best. So again, using chief sales officer as the example, being the chief sales officer of their company is not gonna help their company grow or scale. Them becoming the visionary strategic CEO that their company and their employees need, that’s gonna help them grow and scale.

Yeah, so obviously they are stuck in any one function. That means they are not focusing on the most important function for them, which is being the CEO and being strategic and think about how to innovate and how to build relationships and to help the people grow below them and they become well on it. So the five categories are, what the notes I made here were, leadership, customer creation, you saide an employer of choice, the culture, finance and operations. How do you approach these five categories and how do these help you help them?

Yeah, I typically start with one of two approaches. One is where their strength lies, and I start there. Or we start with where they believe the fire is, the most fires, for example. So one of those two ways. And typically what I get called into, I get called into when there are fires to put out that either they are not able to, don’t understand why these fires keep happening, et cetera. But what we then look at is how each of these areas affects all the other ones. And part of that entrepreneurial leadership development into the strategic visionary CEO is seeing all these different areas working together and how fires in one of them affects all the other three. And part of that really is based on their own personal growth into being the CEO of the company. And if they are kind of stuck in that functional role, they can’t move into that role, hire somebody to be that chief sales officer, as an example, and then continue to grow their company that way. Plus, if you really think about succession of the company, that’s the best way to provide value and have a valuable company that somebody else wants to buy. If you’re the chief sales officer of your company, and that company depends on that, your business has much less value for that next generation, or however you exit your company, whether you sell to your employees or you sell to a new owner.

So what do you do in order to help these people get out of these functional roles?

Yeah, a lot of it has to do with setting up systems in each one of these areas. So as an example, if it’s in operations, we look at how they have used operational functions, software, processes, and procedures that have not kind of kept up with the company, right? They’re still using the ones that they developed 10 years ago, and they haven’t adapted those to now their adult children in their family business. So that’s just one example of what we look at in those five areas of change.

Okay. So you basically make sure that they are using best practices or they are using best software. But what else? I mean, if that person is stuck in the sales, especially sales, is kind of the face, can be the face of the company, and it is very critical. It’s the lifeblood of the company. And the owner, if they founded the company, they probably are a pretty strong personality as well. And then they’re going to be super critical. They might be looking to clone themselves or find someone who is as cool as they are. How do you help them over the hump so that they can let go of that function?

Yeah, I mean, there’s one or two things going on there. One is they don’t want to let go. And let’s be honest, if you built it, you don’t want to let it go. It’s like one of your own children. If it’s a family business, it tends to be a little bit easier because there’s a succession plan at least in their mind, if not on paper. But for family businesses, to get them all on the same page, they need to stop looking at the next generation and look at two generations from now. So if you have that focus, then you’re understanding, okay, I need to stop being the chief sales officer and that means I need to stop doing all these sales functions and sales training myself and I need to figure out how to grow and scale the sales part of my business, which could be anything from empowering the best salesperson in your organization now, could be hiring out, could be bringing in a sales trainer, and anything like that has more consistency going on in the company than just you showing up at 6 a.m. and you’re at your desk or on the phone or visiting clients till 6 p.m. with nobody else or maybe the person you think might take over for you, when in reality, they’re just a glorified executive sales assistant or administrative assistant, and you’re not letting them actually sell.

Yeah. So it’s kind of a sink or swim. You have to let go and let them figure it out how they’re going to stay afloat and not try to enable them.

Yeah. I mean, there’s some of that for sure. Just like they made mistakes building their business, they’re, again, using the sales example, there’s going to be mistakes made that way. But even if they were trying to, say, sell their business, typically speaking, if you’re selling your business, you’re bringing in that new owner and you’re taking that owner around to your customers and introducing them, maybe not as the current owner, but as the next CEO, as you move into a chairman role or something like that. Or you might even just say, I’m going to be contracting with the company for a while, sticking around, but here’s my new executive. So there’s a lot of different things you can do to, I would say, if I say to somebody, it’s sink or swim, that’s going to make them pretty nervous because they’re going to focus on that sink part and so what we have to actually focus on is the swim part and talk about things like the life preservers that you have and things like that. So that they are not putting out the fires every day in the sales part of their organization, they’re empowering their sales team to put those fires out and not bring you the problems, but bring you the scenarios with the solutions that will move things forward.

Okay, so I get that, develop this longer term outlook, but again, that has to presuppose an attitude of our goal is progress, not perfection, and willing to tolerate a lesser performance than what you would be doing with your four years of experience. So, switching gears here a little bit, and look more broadly about companies. So what are some of the challenges that you feel, or that you see that family companies, specifically, are facing?

Yeah, I think the main one starts out with, I want my children to have the business, but they’re not gonna run it like I run it. And I think part of that is, again, bringing and empowering the children, and again, these are all adult children, obviously, but bringing them along in your decision-making. So that founder or founding couple is used to making the decisions by themselves. At some point, you have to involve your adult children in there. And it doesn’t matter what their title is in their company, they have to be involved. So they’re understanding not only the decisions you have made, but why you make the decisions going forward. Then here’s the other part. Their future customers are going to be the same age of their adult children. They’re going to be younger. So if they understand that, it’s not just age that makes you relatable, but it does help. And again, that would be a way to ease that delegation tour from the founder to the adult children.

Yeah. That recognition that the other children bring in the potential of new customers that maybe can no longer relate to me as a boomer or a Gen Xer, they want to do business with other millennials or Gen Z’s and they’re going to be in a better position. It’s also energy and sometimes the youthful optimism that can also be very attractive, which is harder to do when you’ve seen more things. So I like that perspective a lot. So what else is different for a family company? So I understand the succession planning is a challenge and obviously that limits some things. What else?

Right, the other part that’s different with a family enterprise is why do they even exist? I mean, they first exist for the family, right? And there’s no other type of business that really does that. But understanding what that means is really important. And again, that's a good way to get everybody together in the same room. Share on X No, we’re not going to talk about strategic planning, we’re not going to talk about the day-to-day things going on in the business. Now we’re thinking about things like, all right, again, what’s our focus? If you can focus that family, those family business owners, however many generations there are involved in the business, however many owners there are in that business, on two things. One, again, is two generations from now, and then the philanthropy that you’re going to be doing, that can help get everybody on the same page or close to being on the same page. But really, it boils down to, why do we exist as a family company? Do we want to exist as a family company anymore? And usually the answer is yes, we’re going to do our darndest to keep that going, but that’s really the difference.

Yeah. So they don’t naturally have a “Why” other than the family and they have to develop this and they have to find that together.

Yes. And it’s hard. It’s very hard. And so when you’re think you see all these statistics about second generation, third generation, fourth generation, fifth, and how the success rates drop from gen one to gen two, and then again from gen two to gen three and so forth. Again, one of those main reasons is why do we exist as a family enterprise as opposed to why do we just exist as an enterprise?

I thought that the issue was that the different generations find it really hard to align around a “Why,” a mission for the organization. But it sounds like it’s not just that, but it’s also why to stay a family company. What is the reason for us staying as a family company? And what do you see is the reason beyond the founder wanting to create an empire? Are there other reasons?

Yeah, I mean, I think those, again, those family business reasons are there to be there for the family. This business exists to support our family. And at some point, and maybe Gen 1, the founders get there, is they really value their employees and the community that they’re in. And they are fanatical about staying in that community and supporting that community. Sometimes that has to do with it’s their name on the company, right, their family name. But sometimes it’s also just about what the community has given them, how the community has supported them, and how they’re essentially giving back. So it goes beyond family enterprise now to a family enterprise in our community. And what does our community mean? It could be geographical, it could be philanthropic. I typically see both. There’s something in the community that they’re supporting, but there’s also some cause they’re supporting. And typically, when you’re looking at their philanthropy, the philanthropy might be something like a health issue that one of the family members suffers from, going on from there. Or it could be that, again, using the university, right? It could be that we have multiple Marquette University grads and alums, and we want to give back to the university in some way. And so, that’s something that we do. So again, focusing on the family business and the business operations is one thing, but focusing on two generations from now and our philanthropy, and why this business is a family enterprise and not just an enterprise is important. And I think it’s the hardest part about the family enterprise itself.

Yeah, it can be very hard. Now, what about if someone is an outsider? How should an outsider work with a family business? And what’s the best kind of models that you saw outsiders who managed to make it?

Yeah, there’s lots of models. You could hire a non-family member CEO. The thing that you want to be cognizant of is basically this one tenant, which is, do we want to have non-family business members own any part of the company? And I typically find the answer to that is no. And if that’s the case and you don’t have a current executive family member who is ready to be the CEO of the company, you can certainly hire non-family business CEOs to come in and work with those family members to get them to that point of say, being the CEO or an executive in the company. I see that all the time. There’s non-family member CFOs and things like that. You just have to understand what then the going compensation rate is for that executive and match them to be culturally aligned, one, with your company, and then two, with the idea that this is a family enterprise and we exist first for the family. So that can be a challenge for say, a non-family member CFO to understand that.

Yeah, it’s gonna be tough, especially the CFO position where there could be pressures to mix the family finances with company finances. But I even knew a CEO who was a non-family member, came in the family company, it was a medium size, it was a couple hundred million dollar company. And I was the coach of the CEO. He really struggled sometimes. The board, which was made up of family members and they had different agendas and there was a lot of drama. And he worked in between a rock and a hard place and he had to make the right decision. And the pressure from all directions wasn’t an easy task.

Yeah. I mean, there’s coaches and facilitators like you and I that sometimes will work with the board who might be all family members and might not have as much executive or business background. I mean, essentially presenting to them, maybe even teaching them about specific things in that business or in that industry that might be part of the coaching or that communication with that non-family member CEO with the board who are all family members.

Yeah. All right. Well, we’re coming to the end of our show. So if people who listen to this, executives, CEOs, C-levels, if they want to learn more about what you can do and connect with you, where can they go? Where can they find you?

Yeah, I mean, I have a couple of websites, ryankauth.com, ryankauth.coach, but really the best way to get a hold of me is just message me on LinkedIn.

Okay, so Ryan Kauth, who is a business coach and a facilitator for serial founders and family enterprise owners. So if you run a family business, then Ryan is your man. And he’s also a professor, so he thinks a lot about the dynamics of this sector. So reach out to him, Ryan Kauth on LinkedIn and pick his brains, you’ll be in good hands. So Ryan, thank you for coming to our show and sharing your wisdom, especially on family businesses. And I’m very excited about your new book coming out. So hopefully you’ll have a title soon. And for those of you that like the show, don’t forget to hit like and subscribe on YouTube and give us a review on Apple podcast. And I’ll see you in a couple of days with a new episode. And I’ll see you in a couple of days with a new episode. Thank you for coming, Ryan.

Thank you, Steve.

 

Important Links:

This entry was posted in . Bookmark the permalink.