The latest episode of the Business Advisor Hot Seat, hosted by CEO of Growth-Drive George Sandmann, focuses on the concept of the "Crazy Eights," which are critical growth-driving objectives within three dimensions of business growth: predictable profits and cash flow, predictable sustainable growth, and predictable transferable business value.
Overview of the Crazy Eights
1. Predictable Profits and Cash Flow
The first dimension serves as the foundation for growth
Key objectives include:
- An effective senior leadership team.
- High employee productivity and loyalty.
- A significant percentage of recurring revenue.
- Margins at or above industry norms.
- Accurate financial and operational reporting.
- A scalable sales process.
- Strong standard operating procedures (SOPs).
- High customer satisfaction (the "crazy eighth"), which requires excellence in all other areas to achieve.
2. Predictable Sustainable Growth
Focuses on creating sustainably growing free cash flow.
Key objectives include:
- Strategic vision, planning, and execution.
- A culture that supports strategic initiatives.
- Effective hiring and training processes.
- A large market size for growth opportunities.
- Unique, non-commoditized products and services.
- A scalable marketing process.
- Budgeting and performance forecasting aligned with strategic plans.
- Innovation (the second "crazy eighth"), emphasizing the need for systematic processes to drive and capture innovation from various sources.
3. Predictable Transferable Business Value
Discusses the importance of business value that can be transferred or sold, highlighting that value is meaningless if it cannot be realized or transferred.
Key Insights
- George stresses the need for CPA firms to radically transform their practices by "burning the boats," meaning they must abandon outdated methods to thrive as business advisors rather than just tax preparers.
- He emphasizes that high customer satisfaction is not merely a goal but a competitive advantage that requires a comprehensive approach to operations, sales, and leadership.
- The episode encourages firms to innovate in various aspects, including service offerings, compensation structures, and client management strategies.