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EPISODE 9 Transcript: Consulting Business Twists and Turns—with Greg Gast Podcast

Deb Zahn: Welcome to Episode 9 of the Craft of Consulting podcast. I have a great guest today. His name is Greg Gast, and he is a leadership advisor and an organizational and human resources expert. He was an entrepreneur who founded and was the president of several multimillion-dollar professional services firms. On today's show he's going to talk about his journey as a consultant—from starting as an independent consultant to building a more robust firm to negotiating joint ventures to selling his firm, to being an advisor and then getting hired by a client. He's been on quite a journey. He's going to talk to us about why and how he approached and made those choices, as well as dig into some of the ways to evolve, scale, and systematize a consulting practice. Let's get started.

I want to welcome my guest, Greg Gast, who is joining me on the show today. Greg, thank you so much for joining me.

Greg Gast: Thanks for inviting me, Deb. I appreciate being part of this venture of yours.

Deb Zahn: Thank you. Let's start off. Tell my listeners a little bit about what type of consulting you've done.

Greg Gast: I've done mostly human resources consulting. I'll say the whole range of...and it's a really broad category when people talk about human resources, but primarily around the core pieces of policies, procedures, performance management, organizational development, and some of the technical aspects of how to run an HR department, and how it services the organization from recruitment and onboarding all through the life cycle of employees. Pretty much the whole range of the HR area. So mostly a generalist as opposed to a particular specialist.

Deb Zahn: That's great. You make sure all the people stuff goes well.

Greg Gast: Exactly, Yep. All the pieces fit together and coordinate with the organization and make sure that those outcomes are as successful as possible.

Deb Zahn: That's great. Now I know that you are more than a consultant. A lot of people who go into consulting, they sort of put their shingle up and they jump into that world, but you actually built and owned multimillion dollar professional services firms so far in your career. What actually drew you to building a consulting firm rather than just going the independent route?

Greg Gast: It's a good question. I think two things. One, I think what prompted me to go into consulting in the first place was that I had worked in multiple organizations. My background is primarily in healthcare. The ones I started consulting, it was outside that, but I went from one organization to the next organization, progressive responsibility, and opportunities, but I kept finding common themes. Like they all needed their handbook done. They all needed their policies updated. They needed a new performance management system. They need to streamline their HR operations. And I'm thinking, yeah, after three or four times I'm getting pretty good at this. So that's what prompted me to start a consulting firm.

And I think from the beginning I knew it was a bigger task than just something that I could do myself. I just didn't want to necessarily be stuck.

And I don't mean that in a bad way, but kind of a position to have to write, spend a couple of months writing an employee handbook. And I felt that there was more knowledge, insight, wisdom, et cetera, that I could add to organizations that needed support for that. I need people who were experts in some of those areas and or specialized in some of those areas. Really, from the beginning, had the concept of having it as a business, and basically my first contract, I actually ended up bringing the employees of that client organization onto my payroll. Literally day one, I had employees.

Deb Zahn: Oh wow. Did it also allow you then, because you said you saw sort of common themes come up again and again about things they needed in addition to bringing on other experts, did it allow you to systematize something? So that every time you approach a client, it's not cookie cutter but it's not fresh as if you have to create everything over and over again.

Greg Gast: Great point. And that's exactly right. Employee handbooks, everybody thinks they have a unique one or they want unique things, but it's really hard to develop a handbook because you don't remember what you didn't include. And eventually, we ended up with a master template with I believe nearly 400 different topics within that employee handbook.

And so what we were able to do is when we went to an organization, depending on the size of the organization or the industry, that kind of set up the parameters. But we could use that as a template. And so we didn't have to develop all those items and try to think of all the pieces to include from the beginning. Same thing with HR audits. When they did audits. Here's the material that we request ahead of time. Here are the things that we go through and look at while we're on-site. And then here's how we structure the report in the final presentation at the end. And of course this is all evolutionary. What we did at five years or 10 years into the business was a lot better and a lot more systematized than what we had at day one.

Deb Zahn: Right. And it sounds like you are also able to offer clients more value faster if they could let go of “no, no, no, we want to be unique from the moment we start.” But you're actually able to add more value if you're able to systematize things that just should be.

Greg Gast: Exactly. Yep. And trying to move it from here's our preference, kind of like comparing it to people picking out the colors for an office.

Deb Zahn: Yeah.

Greg Gast: It's like I really prefer this. OK, that's wonderful. But what's more conducive for the environment and same thing for HR products. You know there's certain things that you want to have in place for legal regulatory purposes and then depending on the type of organization you have, you're going to want to include additional pieces to drive performance, manage behavior. An organization with a lot of call center operators is going to be very different in terms of the tools and resources it needs than somebody who has lots of, let's say, research scientists or PhDs that are working in a lab.

Deb Zahn: Yeah, and I know that for you, switching from being an independent consultant to now. When you were building the firm, what kind of different skills or mindset did you have to then apply to, well now it's not just me. Now I'm building something.

Greg Gast: You had to build in a lot of sleep inducers. So that you could sleep at night and not be overwhelmed by the fact that you're now responsible for employees. It's actually really...I think for consultants it might be the most important decision that they make when they're setting up a business. Am I going to set this up as an independent practitioner? And I know lots of people who've been very successful for many, many years with that model. Or am I going to build a business where I actually have people on payroll that I'm now responsible for their mortgage payments and their car payments and things like that? It just raises the level of responsibility but also raises the level of, I believe, the things that your organization's able to do. Really a big critical decision that consultants have to make. And there's certainly in-between solutions. Partnering with other consultants. 1099ing independent contractors as you need it. So there is some in-between, but it's a really important decision to make.

Deb Zahn: Right. And even with some of those in-between things, there's always trade-offs.

Greg Gast: Yep.

Deb Zahn: And so any consultant has to, I think, lay out the clarity of what all the options are and then pick their trade-off. There's no option with no trade-offs. If you stay independent, you can buy more flexibility and buy more freedom and relieve some stress of having to worry about someone else's mortgage payment, but you're likely going to be able to do less.

Greg Gast: Right. And you don't have quite the control over the end product as well. When you're using others, both the timing and what you end up delivering. My perspective, not a good or bad, it's just more of a personal choice and personality and what's your risk tolerance for those types of things and then what do you want to do with it? Do you want to have something that you can sell at the end of the day, whenever that is, five years, 10 years, 20 years from when you start the business? Those are some other considerations.

Deb Zahn: Well, which is also interesting because a lot of independent consultants or even consultants and firms that I know didn't know that that was an option. In fact, I didn't know it was an option until a friend of mine who built a business for exactly the reason of selling it, sold it to Facebook and he really likes his new Tesla. Let's just say, he done good. And his suggestion to me had been, well why at some point wouldn't you just build up a firm for the purpose of selling it?

And I didn't know that that was even a possibility or an option because I had sort of a narrow view of what the options were in my head. One other thing that I know that you also did at a certain point, and this was another big decision, is that you came together with a few other like-minded entrepreneurial folks and you actually combined your separate businesses to create a single business. You made the decision to build a business. Now you're making a decision to combine it with others. Why did you decide to do that and what did you and your clients get out of that?

Greg Gast: Yeah, it was an interesting situation where sometimes you're just in positions and in situations, like oh wow, how did this happen? And this was one of those. We had...and I’ll try to keep the story relatively short, but we had purchased new office space or rented new office space and we were expanding. And then 2008 happened. All of a sudden we had a little more space than we had people. And so we were looking for other folks that might share the space and we came across a payroll company that we'd been working with. And I said, "Hey, are you interested in moving into our space?" We called that dating before we got married. So they did move into this space, and we started to use the term loosely, cross-selling.

Shorten the story by about three years we ended up creating a joint venture so that technically we still had each independent businesses, but we came together and marketed under a single name. So it became our shared joint venture. It worked out well because they are typically ideas and concepts and issues that you know, payroll and you're in talking about payroll and say, "Hey, can somebody help me with my handbook? Can somebody help me with my merit pay program?” Or vice versa. You're in there doing some HR related work and they need a payroll vendor or they need time and attendance. They complemented each other. They still do.

Deb Zahn: Yeah. I think dating is critical. You also got the experience of what it's like to work with them. In dating, you want to know: Do they live in their mom's basement? Are they nice to waiters? So while you are dating, you’re obviously looking for things that would tell you whether or not this was going to be a good joint venture. What type of things were you looking for?

Greg Gast: I know it's a little bit of a cliché, but it is kind of the interpersonal and cultural fit. What type of people are these? And in particular the three partners on the payroll side and then myself and my partner on the HR side, how compatible where we personally? And then did we have similar values? I don't mean like political values, but more do we have the same values in terms of delivering services and products to employees? What's primary when you're working for. Is it just trying to maximize the money? Or is it providing the service level and what quality of service? It was really testing out those...not just what people say but what they actually deliver.

Deb Zahn: Right. And then testing it out a few times by doing some of the cross-selling or joint work together. How did your clients feel? What did they get out of it?

Greg Gast: What they got out of it was an expanded resource. When you say, "OK, we're going to switch over. We're going to use the payroll system." That's great. And then, “Hey, we've got an issue or a question about overtime. Yeah, do we need to pay overtime in this situation or how do we pay overtime in their situation?” And typically, payroll folks are not...that's not their expertise. They're not on the legal side. They'll program it however you want them to program it, but they need to say, “OK, yes, we've got folks who can help you with that.” And they got an expanded resource and eventually, we developed some products that integrated the HR and payroll products for our clients so that they could purchase literally a package. But at the least, they always knew it was there.

Deb Zahn: That's right. And that could end up being their sleep at night package because they don't have to work with three different vendors. They can work with one. And even though you're separate, it sounds like your experience on the client's side, was it they were working with one organization or did it still feel like three?

Greg Gast: It took us a little while to make that more seamless. It was an evolutionary process on our marketing. Are you two organizations or are you one organization? And over time we just got a lot better at meeting the primary need, if it's payroll or it's HR services, but offering a fuller suite of services over time. It took a little while too, I'll say, really sync that up.

Deb Zahn: Yeah. If you look back and you could take a time machine to when you either decided to build your business or when you decided to do the joint venture, with the hindsight you have now, what would you do differently?

Greg Gast: I wouldn't have told my wife that it was only going to be really busy for the first couple of years. Because I'm still busy...this is 20 some years later and she still reminds me of “well you said it was only going to be busy.” “OK. Yeah, you're right dear.”

Deb Zahn: Yeah. You're going to hear about that forever.

Greg Gast: Yes. It will forever haunt me because it doesn't get any less busy. It just gets different busy is my experience. I think that is actually, in a serious way, something to be aware of. My general advice is trying to start with something. It's really hard to start off with nothing. If you can start with your first client or first project, that's really an ideal way to kind of get started with a little bit of a momentum going from there. What's your vision?

Deb Zahn: Right? Yeah. I imagine you have to do that. And I know that most consultants have to continue to do that and also freshen up what they do by either offering more value or partnering with others or something that brings a little something new.

Greg Gast: And the proverbial challenge is I'm really busy working, I don't have time to network or vice versa. You know, I'm so busy networking, I don't have time to actually get my projects or stay in touch...and it's a real, I'll say partly art, partly skill that you develop over time in terms of how to manage those. And I would say that every consultant deals with that, and how do I balance those two things?

Deb Zahn: Any tricks you learned that helped you get the right balance of that?

Greg Gast: Nah, I probably just did more of everything. I just added more hours to the day.

Deb Zahn: You made your wife's eyes roll just a little bit more.

Greg Gast: Yeah. Yep, Yep. That was not a helpful thing on the home front.

Deb Zahn: Yeah, we're going to talk about that at the end. So hold on to that thought. You also see a lot of other new consultants, whether it's independent consultants or firms. What have you seen they tend to struggle with in their first couple years? And if you were in front of them, giving them advice on how they could figure things out just to succeed a little bit better, a little bit faster, what would you tell them?

Greg Gast: Kind of let go of the fact that you think you're right. The biggest challenge for us as consultants is that we generally think that we're right. We know the answer for the client and if they would just listen to us, their organization will be a wonderful success, and you might be right. You might be right about that. But the challenge is really you have to kind of set your own goals and your own, to some extent, ego aside a little bit.

Deb Zahn: Yeah.

Greg Gast: And really focus on what the client needs and what are they able to absorb right now in this time and place? And I think it's a lot of attitude and approach. We go in with a hard sell instead of a soft listen.

Deb Zahn: Yeah.

Greg Gast: And I think that's the biggest thing I had to learn early on. Tone down. Dial back on the sale. Even after I had landed the engagement, kind of keep listening, keep trying to understand where the client is, what they're able to absorb. I’ll give you an example of a situation, and we've done this a couple of times. We followed some of the big names a couple of times into organizations, and we find these beautiful, elaborate performance management systems and forms and things that nobody used or nobody understood. It was an elegant solution, but the client was not capable at that point of utilizing those tools. So we had to really dial it down and reformat it to something that was, oh, OK, I understand this now. OK, I know how to deliver this tool. Whatever it might be.

Deb Zahn: I love that one because there's no such thing as the right solution. There's the right solution in the right situation. And that sort of contextual understanding, which you know involves a lot of the soft skills. What I always tell consultants is hurry up and pay attention to those, because those are going to make it or break it, and you're being brought in and you're bringing something, either more bench depth or you're bringing in expertise that they don't have access to but they're experts too. And I use the term...actually I think my husband says he coined this, the mutual expert model, which is you might be an expert in you know how to do X, Y, and Z related to whatever it is that you do.

But they're an expert in what it's like there every single day. They're an expert in what's been tried and didn't work. They're an expert in the things that they have developed over time that actually worked for them. And a better consultant takes the time to actually figure those things out and understand how solutions can be sort of puzzled together in such a way that it actually ends up working and sticking and making their lives better.

Greg Gast: Yeah, I think that's a really, really good point and it's more about “we.” How do we come up with solutions, as opposed to I come up with a solution.

Deb Zahn: Now you obviously I would imagine had a lot of repeat business. A lot of clients coming back to you again and again or just making sort of a fixture in their organization. What do you think it was about you and your firms that made you not just the go to but the come back to firms that they were working with?

Greg Gast: Yeah, I think providing that consistency, doing what you say you're going to do, and I think being respectful ties back into what you just talked about. Being respectful of them. You just talked about their expertise. They are experts in their organization. They're experts in what they've tried. So being respectful of them, their environment, and then I would say this may sound a little incidental, but that you're able to get along with the various, I'll say, personalities in the organization. Because you can get sideways with somebody and you know...may not even be the primary contact, but one of the other department managers or VPs.

You get sideways with that person and all of a sudden, unbeknownst to you, your internal reputation plummets and you don't get asked back. It really is whether it's the primary person that you're working with or others. Again, trying to include them, be inclusive, trying to be respectful, and also bringing them some new ideas. Something they hadn't thought about or thinking in a different way. I want to pay you because you bring me something I don't have.

Deb Zahn: That's right. And chances are you're not the first person that they've paid to bring something to them. And so there's a reason they're looking again and it's not because they want the same old, same old. I know you had another big decision. I feel like we're going through your work life here. Sort of big decision by big decision.

Greg Gast: Right.

Deb Zahn: At one point I'm sure it wasn't the first time it happened to you that a client of yours said you're fabulous, we want to employ you, we want to bring you in and work with us and you finally said yes. And I'm sure that wasn't the first time it's happened. I know it's happened to me more times than I can count where the clients try and lure you into employment, particularly good consultants. Why did you make that decision?

Greg Gast: Well really my situation changed because after founding and running the business for about 12, 13 years, I was at a point where I wanted to do something different with the business. My partner and I had a lot of conversations about the direction we wanted to go with the business. Just to be very specific, he wanted to move more in the outsourcing direction. HR outsourcing. Where you have regular ongoing, and I wanted to be more of a boutique high-end, very strategic consulting type business.

And at the end of the day, we just decided, that I'd sell him basically my share and I would go off and do some other types of consulting. So it was great. Very amicable. Just a professional point in life, point in time decision that worked for both of us and continues to work for both of us. But then I came back on as a consultant. He assigned me to a client that I had actually never really worked with. It was a ways away, so I had always sent him. I came back in to reorganize the department and through the reorganization process, we kind of mutually, both the leaders of the organization and myself, said this is a pretty good fit between us and what the organizational needs are. As the consultants would say it, I went back on the dark side.

Deb Zahn: That's great. And if you were talking to another consultant who was thinking about it, because at some point if you're a good consultant, somebody's going to try and hire you. That just happens. If you were giving advice to a consultant in that situation, what would you tell them that would help them make that decision?

Greg Gast: Go back to your vision. What's your vision of yourself in your business? Some people kind of test the consulting and it's, as you probably know, it's a little bit of a joke, employment reading, like OK, I put consultant on my business card until somebody actually hires me.

Deb Zahn: Yeah.

Greg Gast: Sometimes people do that. I'll say fairly purposely and maybe sometimes incidentally. Well, they weren't maybe 100% committed to being an independent consultant. Tested it out. Little tougher, little more challenging than I thought it was going to be. Always looks easier from the outside. Then you may want to take the employment opportunity, but if you really want to be independent and either build your own practice or business, then the decision becomes a lot easier.

Deb Zahn: That's great. Yeah. I like the idea of going back to values and not any sort of immediate concern or panic or anything like that. Because if your values align with being a consultant, then you can figure that stuff out. If they don't, and this was plan B and plan B never really felt like a nice fitting suit, then you might do consulting for a while because that's an opportunity to date organizations and sort of getting on the inside and see what they're like before you broach the idea or they broach the idea of bringing you in. You still have to add as high value as you would if you had your heart and soul in consulting. But that's a way to find out about them.

Greg Gast: Right. And it also relates to your risk tolerance. People think, oh yeah, I'm OK with...I don't need...you can't see my air quotes. I don't need that much money. Well, you find out when you go two or three or four months where you actually haven't gotten paid for a project, sometimes your perspective of that changes. Ideally, you will have had that experience so you can test yourself out.

Deb Zahn: That's right.

Greg Gast: And it's not that you don't lose sleep over it because you do, but it's, am I OK with that? Is the risk worth it? Or your family situations change, is that part of the equation as well?

Deb Zahn: Yeah. I always think of the example when I first took a kayaking class. They taught us what to do when you flip over and it was theoretical. It sounded like, OK, yeah, and I undo this and I, you know...without panic it sounded perfectly reasonable and quick and it would be fine. But what they did was really smart, and I think it applies to this, is they took us out on the water and they flipped us over, and then we had to suddenly apply everything we just heard. And it was a whole different experience.

Again, when you're starting off as a consultant, it's important to think through these things. But then it's important to also stay attentive to it as you actually start to experience it to see, is this still a fit? Is this still a fit? Or if I still want to do this, do I need to switch something up? Because my risk tolerance isn't as high as I thought, so maybe I should go work for a firm instead of being independent. Like there's a whole bunch of choices you can make, but staying attentive to it I think is really critical.

Greg Gast: Yeah, and I think it also drives like what type of projects you'd take on, and I'd rather be busier and I'll take a little less of a margin so that I could have more regular projects as opposed to holding out for the big really lucrative one. Again, you just talked about those kind of in-between decisions as well.

Deb Zahn: I also know that you have a life separate from consulting and separate from what your employment is right now. I know family is really important to you and I know CrossFit is really important. You actually listed CrossFit before family. I just want to point that out on the bio.

Greg Gast: Oh, oops. I was going to say, I'm hoping my wife listens to this and my kids, but maybe now I'm not so sure.

Deb Zahn: No, you just cut it off right before this point. You say, “The rest of it was really nothing.”

Greg Gast: Hey, it was really good. Just trust me. It was ...

Deb Zahn: How do you figure out then how to balance those multiple aspects of your life so that you get to do the work that you love, but you also get to do other things that you love?

Greg Gast: Yeah. This is one of those probably do as I say, not as I do. I'm not a great model for balance to be quite honest. And I would say if you're going to start a business...again, independent consulting might be a little different. I don't know the answer to that one. But if you're going to start a business, you're going to be over committed and you're going to have to fit the other things in as you can. And it's had some impact. It's been challenging on the marriage. I started the business when I had three kids in either middle school or high school. Getting ready to go to college. Owned a home. Actually owned a new home. Married. It challenges all those things. It's just something to be very aware of when you go into the business.

Being sure that you're on the same page, and I probably did not communicate nearly as much as I should have in the beginning and ongoing parts of the business. It just became all-consuming both time, emotion, just general commitment. This is kind of what it took. Years later I had to clean up some of those relationships that were not as good as they could have been or should have been. Some of the casualties of the early years. I'll put it that way.

Deb Zahn: And I imagine also though, over time, even though you say, this isn't your strong suit, you've probably also gotten better at saying no, judging whether or not that you should really be doing something or if you should pass on it. Things like that I would imagine. Because I've seen you do it.

Greg Gast: I was going to say, you're being very generous and I do appreciate that.

Deb Zahn: I am. I've seen the words no come out of your mouth.

Greg Gast: Yeah. All right, well that's reassuring because I was like, OK, how do I add that to everything else that I'm already doing is kind of my default mechanism.

Deb Zahn: Yeah. We all have to learn it. I mean, when I started off, I repeated the same pattern that I used to do when I was employed, which is I give my whole life to it. And I replicated that when I started consulting. And then, over time, now I've been doing this just shy of a decade, I had to figure out that every choice you make is a relative choice.

So if I say yes to something, that means I'm saying no to something else, even if I'm not conscious of it. My husband is quite good at pointing that out to me. The upside of being married to a behavior change expert.

Greg Gast: Wow.

Deb Zahn: But he does point out if you choose this then just be cognizant of the things that you're saying no to. Make a decision. Is this really an option to say no? Is it really an option to say yes? Is it going to inhibit your ability to deliver quality to other folks? To me, what made it easier over time is I got curious about what I was doing to contribute to the lack of balance I had in my life. And then, only then, was I able to actually start to make some choices and then have to practice those because I was in the habit of doing other things. And there's nothing better than setting a new habit.

Well, Greg, I want to thank you so much for being on this podcast. This has been just wonderful information again. I've noted any type of information like this is extremely important for new consultants who are starting off in their first few years where this is all a mystery. It's helpful for them to hear that there are sort of other ways to do it and other ways to think about it. Thank you very much for your time and I look forward to having you on again, perhaps later when you make another big life choice.

Greg Gast: I'm sure it will come but definitely appreciate the conversation and being able to reminisce and share a bit. So thanks very much Deb for having me.

Deb Zahn: Want to thank you for listening to Episode 9 of the Craft of Consulting podcasts. I've got a lot of great interviews that are coming out weekly, Please subscribe and check out craftofconsulting.com.

You can find a ton of great information and tools that are going to help you start your consulting business and propel it forward. Thank you again for listening and look forward to having you next week. Thanks.

Thank you for listening to this episode of the Craft of Consulting podcast. Want more? Get a wealth of insight or guidance, tips, and tools, at craftofconsulting.com.

Thank you. Bye Bye.