Removing Yourself As A Bottleneck To Growth | Jessica Walther | Itivate | Profits on Purpose

Episode Description

In this episode of the Profits on Purpose podcast, host Nate Littlewood speaks with Jessica Walther, co-founder and CEO of Itivate. They discuss Jessica's journey from corporate supply chain to founding a company that helps small businesses scale effectively. The conversation covers identifying founder pain points, the importance of organizational structure, and the balance between scalability and fundability. Jessica shares insights on different founder archetypes, key questions for diagnosing business challenges, and the evolution of supply chains in CPG businesses. The episode emphasizes the significance of culture and metrics in driving business success.

Key Takeaways

• Jessica Walther transitioned from corporate to founding Innovate to help small businesses scale.
• Founders often face bottlenecks that can be identified through specific warning signs.
• Understanding different founder archetypes can help tailor support and strategies.
• Key questions can diagnose business challenges effectively.
• Mapping out an organizational structure is crucial for clarity and delegation.
• Founders need to let go of certain roles to avoid bottlenecks.
• Scalability is more important than fundability for sustainable growth.
• The evolution of supply chain is critical for CPG businesses as they scale.
• Early business experiments are essential for finding product-market fit.
• Balancing structure and flexibility is key for startups to thrive.

See More from Jessica and Itivate

• Itivate's Official Website
• LinkedIn
• Email

Listen to the full episode to discover how Jessica’s experiences can inspire and guide you on your entrepreneurial journey. Don't forget to subscribe for more insightful conversations!

I hope you enjoy this episode!

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– Nate and the Profits on Purpose podcast team

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Transcript

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00:00 Introduction to Purpose-Driven Entrepreneurship
02:46 From Corporate to Founding: Jessica's Journey
05:40 Identifying Founder Pain Points
08:42 Understanding Founder Archetypes
11:42 Key Questions for Business Assessment
14:37 Mapping Organizational Structure
17:29 The Challenge of Delegation
20:16 Optimizing for Scalability vs. Fundability
25:44 Profitability and Scalability in Business
26:27 The Evolution of Supply Chain in CPG
27:47 Direct to Consumer vs. Retail Strategies
30:17 Understanding Business Vision and Strategy
31:31 The Importance of Organizational Structure
33:43 Testing and Iterating in Early Business Stages
36:43 The Role of Culture in Business Success
40:45 People vs. Processes: The Core of Business Operations
43:36 Key Performance Indicators for Business Growth

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Nate (00:06)
Welcome to the Profits on Purpose podcast where we explore the journeys of purpose led founders and the financial strategies that have helped them survive and thrive. I'm your host, Nate Littlewood. Today's guest is Jessica Walther, who is the co-founder and CEO of Itivate which is the team behind Align My Company, which is basically a plug and play growth system built to help founder led businesses scale without the usual chaos. Jessica brings a really, really deep background in corporate supply chain and procurement, having spent time at brands like Kroger's and Macy's. And she now channels all that knowledge, expertise and wisdom into practical frameworks that let founders get out of the weeds, build high performing teams and scale profitably.

Jessica, I am really, really looking forward to this conversation. Welcome to the show. It's great to have you here.

Jessica Walther (01:06)
Thank you. Thank you for having me. great to be here too.

Nate (01:09)
So Jessica, I touched briefly on your background during the intro there, but could we maybe start off by just expanding a little bit on your background and explaining, you know, how this led you to be doing what you're actually doing today.

Jessica Walther (01:25)
Yeah. So spent the first, gosh, 10 plus years of my professional life working inside of large corporations. was a great learning place. gave me access to fantastic tools and systems and frameworks. And, you know, when I was in corporate, I fit well inside of them until I didn't. and that's what led me to become a founder, but

What I realized is that I had such a unique opportunity to work with small emerging brands, businesses. And there was often a lot of disconnect between the corporations that I used to work for and that these smaller businesses wanted to do business with. And it caused a lot of communication issues. It caused a lot of frustration, broken promises, broken relationships, and it caused a lot of chaos.

Being able to do some of that and heal some of that in the transactions that I was responsible for leading and solidifying with these businesses that had amazing innovations, amazing new perspectives on their industry. I'm like, how do we package all this up and make this repeatable? Because now more than ever, everyone is looking for ways to bring new innovation into bigger spaces. And there is a

a massive bottlenecking issue in getting those ideas through. I just said, how do we simplify this? And when I realized that we were, or at the time my team and I were recycling these old, these old frameworks that were truly well incorporated, we said, how can we reimagine this for small businesses in a way that is incredibly tangible and practical and gets right to the heart of the issue as to why large businesses and small businesses sometimes struggle to do business together.

So, you know, learn that experience in corporate and now bring it to the small and mid-sized business world.

Nate (03:25)
Interesting, interesting. So if I'm understanding you correctly, you're kind of taking some of the best practices and wisdom from the way bigger companies do things and distilling it down and making it accessible and practical for smaller businesses. that about right? Absolutely. Cool, cool. So I want to understand this a little bit better from the founder's perspective. You know, you and I

Jessica Walther (03:42)
Absolutely.

Nate (03:53)
these days we both work with much smaller businesses than the ones that you're used to working with. How would a founder know that they have a problem that someone like you can potentially solve? Like what are some of the warning signs or indicators that you would look out for?

Jessica Walther (04:13)
Realizing that you're at a threshold that you can't seem to break through. A lot of people talk about that in terms of revenue. That's a very clear metric where that frustration and that ceiling can be sort of felt. And just realizing that it doesn't matter how many hours you work, it doesn't matter how many people you hire, it doesn't matter how many clients you attract and do business with.

If you keep running into the same issue over and over and over again, I'm a firm believer that your business is forcing you to take a look at it. Our businesses are a mirror for us in a lot of ways. And if we keep running into the same brick wall, whether that's everything that happens after the deal is signed and the customers aren't having the best experience that the sales team may be sold upfront, what is that telling you about your business?

Look at the processes. Where does things start to slow down or feel stuck or feel like you're forcing something through a process that just doesn't work anymore? That's one. The other is the founder really starts to resent their business.

Nate (05:25)
Hmm, okay, interesting. Tell me a bit more about that.

Jessica Walther (05:28)
Yeah, so that's the moment where the frustration becomes so intense that there's a strong urgency to sell, exit, hire someone else to do all the hard work. And there's this frustration that just starts to boil up. And we've seen this in every business that we've either helped break through that ceiling or even do a turnaround. There's usually that negative feeling in the air of,

Let's just make this problem go away and we'll do whatever it takes to make it go away. And underlying all of that, there's a resentment and often, you know, it's gone too long without having any those root causes addressed when that resentment is felt across the organization. It's no longer able to be contained with the foundation.

Nate (06:18)
Okay. Okay. Good to know. Good to know. So Jessica, we spoke about this, the other day when we, when we had a chat before this podcast and I was explaining to you that in my fractional CFO business, I kind of come across three main types of founders. The first I would call the product or designer. They're often from a, you know, maybe an engineering background or maybe they're the subject matter expert and they love building.

products and they love releasing things and designing things and putting widgets out into the world. And to be honest, they're often not great for me as a fractional CFO client because it can be hard to get them to kind of focus on the numbers. The next I would call the media bias slash digital marketing guru. And these are people who understand their CACs and their LTVs. And, you know, as long as they understand the financial math behind that, the decisions that they have to make about

what they're going to do with capital and how they're going to invest. They're usually pretty simple, right? They're going to buy more ads and more inventory, and they're just going to keep going. And those people are usually happy to just have a bookkeeper, accountant, follow them around and kind of clean up their mess. Again, not awesome clients for a fractional CFO business. When I look at my client base today, I would say the majority are in a third archetype, which I would call the business owners, the operators.

Right. They've done a little bit of everything, but they're maybe not expert at any one discipline, but they tend to think, think, think through things and solve problems a little bit more like a general business owner would. Right. They think about ROI, they think about allocation of resources and so forth. I'm curious what the founder archetypes look like from your perspective and do they align with that? Are they a little bit different?

And does your approach to working with founders and the ways and the tools that you use to help them, does it differ based on the founder profile that you're dealing with?

Jessica Walther (08:24)
I love how you've segmented these. So I see three very similar categories that you do. To answer your question on whether or not it's a different toolkit, depending on the different type of founder or business owner, I would honestly say it's not so much about just the founder personality, because there are three different, and you laid them out beautifully.

three different types of personalities that decide to go into the wild world of building and growing a business. The first group that you talked about, I would describe them at least in the way that my team and I have experienced them, are the engineers or architects turned founder. So they come in. They're often an SME in their particular field or in their ability to design and create new products. But I would say that that personality

really spans the other two in that all founders are innovators in some way. They saw an opening in the market and they said, this is where I need to be and this is my role in solving that vacancy or filling that vacancy. And we have to leave across all three personas room for that innovation because your business is very

solving a similar problem that mine does just in a different way in that we offer helpful structure to what is a good decision and what is not such a great decision or a decision that needs to be delayed for a different time in the business and what it's focused on. The biggest thing that I've seen, and we saw this at times, especially with the teams that those that were supporting the founder and the business.

When there's too much restriction, there is a lot of frustration and it's more about how do you offer ways for the founder to communicate more easily with the team. And I've seen that be a need across all three personality types that you just described, because it's often not what is the founder dealing with all the time. It's also, does the team know what the founder knows?

Is the business operating with the intelligence that lives inside of the founder's mind? Is it being articulated in a way that the team can take action on? And that's where we've usually seen it break down across all three personality types.

Nate (10:59)
Interesting. So I'm going to put you on the spot a little bit here, Jessica. Let's assume you're going into a brand new business slash situation and you can have access to anyone in the organization you want and you could ask them any questions you wanted. let's say I only give you three questions. What are you going to ask and who are you going to ask it to?

to diagnose or assess whether we might have a problem here that you could potentially help with.

Jessica Walther (11:36)
For the founder, it's what's keeping you up at night. There's so much to unpack there. That's a very simple question that usually yields a very complex answer. But I would just ask that one question and then let them talk. And there's all kinds of parsing of what they said that give you a clue on what actually needs to be addressed. But that's step one. My next stop is whoever's in finance, whether that's

Nate (11:51)
Yeah.

Yeah.

Jessica Walther (12:04)
bookkeeper, CFO, whatever that level of role is in the organization, it's what is keeping you up at night or for them it's what is the thing you can't seem to solve for right now? A lot of times it's profitability or we're spending too much money and not focused on ROI and we're very erratic in our decision making. And then it's whoever is closest to the customer.

Nate (12:35)
Okay.

Jessica Walther (12:36)
And I like, I don't know of a department in any company that isn't in some way.

aware of what the customer needs and what they're not getting. This can live in, if it's a product business, it can live in the warehousing and distribution group. It can live in the customer service group. It can live in sales. Really every segment of the business needs to be able to answer that question. If they can't, that's even more illuminating as to where the root cause issue is. They've lost focus of the customer. Everyone has a different definition of what

Nate (12:47)
Okay.

Jessica Walther (13:13)
the customer needs and expects. R &D would say they want more products, they want more innovation. Customer service would say they just want the product that they ordered and they want it on time. How do we marry those two definitions into a well operating business?

Nate (13:32)
Yeah, that's three very well selected questions. Congratulations. I like that. Thank you.

I know. That's why I'm giving you extra kudos for it. so yeah. So keeping the founder up at night, I like that. And then in the finance, it's, you know, what's not adding up. Where is the math just not mathing? then it's where's the gap in terms of customer expectations. I mean, that kind of really touches on all the important parts of a business, right? So it's a good way to...

Jessica Walther (13:43)
I appreciate it.

Nate (14:09)
Yeah, exactly. A good way to do your diligence, guess. Okay, so let's assume that we've gotten past this point and you're working with a founder and they have come to recognize or acknowledge that they are the bottleneck here and it's a problem that needs to be solved. Talk me through what do we do next? Like, how do we think about building out an org chart and what sort of help they should actually be looking for and how do you

you stop them being a bottleneck and get them, you know, unclogged.

Jessica Walther (14:43)
Yeah. So this is a practice that is used across many different business models. And it really is getting what lives in the founder's head and onto paper because there's so much clarity that just through that exercise alone, awareness is gained. So I have them map out not the org chart that they think exists, but the org chart that actually exists. And one of the most transformative and starting points that we do with founders.

is map out all the roles that you're currently employing. How many hats are you wearing? And that's the common description that we've all heard for a long time. But there's such a grit about founders where unless they write it down, they're like, I can do it all. And they really actually believe that. in some ways, all of us founders, have a special uniqueness about us that

we can push through certain boundaries of where we think we can't find that next gear. Well, we always find it. And that's partly of what holds us and our businesses back, is not being able to delegate and hand things off to people that we trust. So we map out that org chart as it is. And we even take a very simple org chart from maybe a completely different organization. even if our company isn't that large yet,

Plot yourself in the boxes on the org chart and see how many roles you're currently holding.

Nate (16:16)
Okay wait, so does it need to be a similar type of business? So I assume if we're getting an AWK chart from a bigger company it should be and we're an e-commerce business. It should be a larger e-commerce business, is that right?

Jessica Walther (16:26)
I

wouldn't be too worried about the vertical. mean, there's very basic things, sales, marketing, product, customer, finance, HR, those quite common sort of segments that you would see in a business. filling out those boxes on the org chart and making a very easy decision. And it's not always so easy, but trying to make it easy as possible.

Circling that one role that you know you need to exit the most because you simply can't do it all as one person. A lot of times that is a sales role that founders are seeing their own capacity be met and they're needing to add more people that can represent the brand with the same essence that the founder does. How do you close deals as that person that represents the company?

Nate (17:25)
Okay.

Jessica Walther (17:26)
So it's really looking through that org chart and saying, am I forcing competency or forcing my time into a role that doesn't fit me anymore? Sales is one. Accounting is another popular one. Customer service or wherever project work lives, that's another one. Those are really the three main ones that I typically see.

Nate (17:52)
Okay. Interesting. Let me dive into that a little bit further. one of the things that I think is true of a lot of founders and entrepreneurs is that we love learning and we love, you know, acquiring new skills, whether it's, you know, new marketing widgets, new tools, new product, AI, like this, that, whatever. I found from my own personal experience as a founder that there was

often not a great correlation between how much I enjoyed a certain discipline and how good at it I actually was and the results that I actually delivered. So there were some areas where, you know, I just found them interesting and I kind of enjoyed learning it about it. And so I like to spend time on it. I've actually got a kind of zone of genius framework. take some of my clients through sometimes, which would call this a hobby zone.

Right? You enjoy doing it, but you're not really making much traction. But then you have another kind of quadrant of this framework, which is tasks that you're actually really, really good at. Like you enjoy doing them and you can get results. So how do you solve for that when you're kind of looking at this org chart and asking people to think, OK, where should you exit? How do you force people to, you know,

to avoid the temptation of staying in a role just because they enjoy it and it's fun versus a really frank and honest assessment of like, you're just not put on earth to be a marketer or a salesperson. I you might enjoy it, but like you do not belong in that seat. How do you solve for that?

Jessica Walther (19:37)
So we've used many different tools to help with that clarity. And what I found to be least helpful is for someone like you or me to tell the founder that they're not right for that role, because we believe we can do everything, right? And in some cases, we're right. We are big fans of Predictive Index. And that is a tool that we've used to help it

It really helped the founder remember where their gifts are. It shows in plot points who you think you are and who you actually are. And it puts that also in a framework of what do you think your job is at work? And you get to see this relationship between who you think you are and who you've always been. And then how you're behaving at work.

How in alignment are those two things? Or how dissimilar are those two things? And our brains never turn off on the tasks that need to be done as founders in our businesses, right? So this is a really nice pause point of saying, here's where my genius lives, and here's where it doesn't. And this is a totally agnostic tool that lets me remember that and get out of the day to day and the hamster on the wheel that

lives in my brain of all the things I have to get done. And it's like, okay, this is where, this is where I can safely let go because this tool hasn't told me that I can't do this job, but it's telling me that I'm probably not utilizing my best gifts or doing my best work in this type of world.

Nate (21:25)
Okay, interesting. Would you say that this is the biggest mistake founders make in terms of misjudging their fit for certain roles or are there other mistakes you see founders commonly making when they go through this process?

Jessica Walther (21:39)
this part of the process is always very enlightening for them. biggest part is what the biggest challenge is what comes next. And that's letting go of how do I replicate what I know to be high quality work. Partially biased because usually the founder is the one who's done it. So they believe that what they're doing is the right way a lot of times. and it's really helping them decode.

All right, how do I get over that in a way that makes me feel safe? Because a lot of times founders hold onto stuff because we're afraid that if we hand it off, the quality is going to plummet. Customers are going to stop having a great experience. We're going to lose customers. We're going to lose revenue and our business is going to go under, right? We go through this trauma scenario. So that's where we really help the founder package up. Okay, what's really important for you?

in how this process or how this role is carried out. We got to put that in a playbook, in a hiring guide, in something that captures the essence of how the founder was doing it. And it almost feels like their IP is baked into how the next person will do it. So that essence is protected. And then through a training of founder to the person that they're eventually going to hire to take over that role, that transition is a lot smoother.

And it feels like support rather than letting go of control or losing control. Cause that's what often founders, you know, there's a hesitancy to hold on so tightly to things that shouldn't be ours. So that's a really helpful transition to show that the quality of work can still be there even if someone else is doing it.

Nate (23:25)
Interesting. Okay, cool. So you said the other day that a lot of founders over-optimized for looking fundable when they really need to be more focused on being scalable. Can you tell me what is the difference between those two and from where you sit engaging with founders and looking at these businesses, how do you kind of know if a business slash founder is one versus the other?

Jessica Walther (23:53)
Yeah. So the founder being too much in every aspect of the business, and that's often signal number one. It's the signal that investors are going to identify very early on. If the founder is in the middle of everything, the business is not scalable and it's often compromising the value or the valuation of that business. So the days, especially for, for

diverse founders of any kind. We already know the story of how capital is not so willingly given. And there's a challenge there that really is being presented to all founders. And that is, it's no longer just about market opportunity and being awarded funding as a result of how big the opportunity is. It's not just funding ideas anymore.

It's showing the scalability of that idea and in the market and how can it be repeated and how can it be profitable and all these new kinds of questions that are being asked of any founder before capital is awarded. And that's a very different world than what we've seen in the last couple of decades. It's now very urgent that founders are able to articulate and show and demonstrate

how the product or the service is repeatable and is high quality. Because a lot of investors are now saying, you don't need our capital. You just need to go figure out how to make it scalable. And then it's the chicken or the egg. The founder is like, well, I can't make it scalable until you give me funds to do it. So these are the types of questions that are being asked now. And that's why we've decided to make operations and organizational scaling.

A much easier thing to address because the market is demanding it. Funders are demanding it. Now there's a lot of pressure to show and demonstrate profitability and scalability. I mean, you know, this looking at financial statements and advising founders on this operations is not a line item. It's a lot of different line items that need to be evaluated to make sure the invest the money is being well invested.

And that's where we see so much dilution in the valuation of a business is because those individual line items aren't evaluated as intently often as they should. And it's really what's eating away at the profitability and the scalability of the business.

Nate (26:33)
Got it. Got it. Okay. Interesting. So we've talked a lot so far about like people and systems and, you know, org charts and the processes around people, but I don't want to mislead the audience into thinking that's all you do because you've actually got a really, you know, deep background in, you know, supply chain and operations from, what I understand. could you talk a little bit about.

what the typical evolution of a CPG or an e-commerce business, like what does the evolution of their supply chain and operations footprint kind of look like over time? And what are the triggers or catalysts that we could be looking out for to know that it's time to step up to the next level, right? Maybe we're starting out in a kitchen or a test kitchen somewhere, like how do we?

How do we scale up? How do we go from there to Kopec, to 3PL, this, that, know, whatever else we need. through that journey.

Jessica Walther (27:33)
Yeah. Well, you've laid it out. You've just kind of laid it out a big portion of it. A lot of businesses in the CPG space start out as passion businesses. And sometimes they do start out in the home kitchen or in the test kitchen or, you know, lots of different ways a product can be started. And the D2C, direct to consumer market is so much larger than it has ever been. And there are a lot of things that

I've seen CPG brands go in and out of retail for very strategic and well thought out reasons. Cause there is a complex way to scale a business and there's a pretty simple way to scale the business. And a lot of times what founders I don't see asking soon enough is what's my vision? Is it to always be D to C? Is it always to be B to B? What is that strategy and why? Cause

Nate (28:33)
Well, hang on a second. Let me ask you about that one. Do you really think founders have a vision over the channel that they choose or is the vision more about the problem that they're solving and the customers that they're solving it for? And then you kind of have to pick a channel along the way that like fits with the customer and the product.

Jessica Walther (28:56)
Mm So I mean, it can be both. It depends on. So there's revenue in both in both ways. D to C going the retail channel route, not even really having direct relationships with retailers and having really strong distributor relationships that have the relationships with the retailers that you want to, you know, be present in. You're right that they're solving a problem. But there there is

It's very easy to get distracted and think that, you know, the business hasn't made it until we're on the retail shelf or the business hasn't made it until we have, you know, such a strong following on Instagram that, you know, we don't even need shelf space. just go right to the customer. Right. So it's sometimes those boxes that I see, especially CPG founders putting themselves in. I've seen. CPG companies.

that didn't start out as CPG companies, but they felt like they needed to in order to be successful. Maybe they were starting out in a brick and mortar bakery and then they added on the CPG element. So it's just, it's always such an important aspect because they're very different capital requirements, right? One versus the other. It's not always, it's not always just easy to open up or expand, but into a new vertical.

Nate (30:22)
Yeah.

Jessica Walther (30:23)
It's really important to inquire on why you want to go to that place. Let's take, you know, getting into retail stores as an example. Why do you want to go there? Is that where your customer is hanging out? Is there a real valid reason why you want to go there? Or are you trying to prove something that has nothing to do with your business? And maybe there's something underneath that you believe that that's such a milestone that you must.

achieve in order to be a real business. It's very easy to get distracted in how much opportunity there is. And this can happen with the group that you mentioned, the first founder group, a lot of, there's a lot of interest in creating new products. You can kind of see that distraction take shape in verticals as well. Where are you selling and why? So it's always, what's your core? is it?

direct to consumer or is it retail? Can they play together? Maybe. I've seen a lot of businesses pivot one way or the other. And it's not just the money that dictates that. It's what is your real reason for wanting to head in that particular direction?

Nate (31:37)
Okay, okay. I want to have a go at pulling some of these ideas we've been talking about together into a single question or issue here. Yeah. So we were chatting earlier about org charts and kind of building out a team. Now org charts and team building takes time, right? You can't be going changing org charts and, your job descriptions month to month or quarter to quarter.

And, maybe, maybe you shouldn't. But, but you know, we were just talking about, you know, product market fit and also product channel fit, which is a thing as well. And, know, early on, and I would argue often for at least the first two or three years, a startup is really just a, hopefully intelligent and planned series of experiments, right?

We're trying to throw a whole lot of things at the wall and figure out what sticks. And we're looking for this mystical thing called product market fit. Hopefully some point after or just before that we've, we've figured out product channel fit as well. And so there's often a number of different chapters in a young businesses life as they go through and learn these things. Like they might think at one point, this is a retail product and we need to be on shelves. Therefore we need a sales team.

But then the other perspective could be that, well, no, your costs are too high. The unit economics don't make sense with this product and people, you know, for whatever reason you don't fit into retail. So it turns out we don't need a sales team after all. Right. So I guess where I'm going with this is that decisions around hiring an org chart and building out a team are usually longer term decisions. Right. You're generally making a decision like that for at least a year.

probably multi-years, but early on, it's very difficult to commit to a certain strategy for multi-years at a time because you're still throwing stuff against the wall and trying to figure out what sticks. So what I'd love to hear your thoughts on is how do you know that a business is actually ready for some of these systems and frameworks that you're talking about versus

How do you know that, okay, no, they're not ready for me and they just need a bit more time to run these experiments and figure their you know what out.

Jessica Walther (34:05)
Yeah. Yeah. So the best way to test, because you're, I agree with you wholeheartedly, the first few years is assessing what are you selling? Who are you selling it to and how well is it working?

best type of testing and iterating happens when the founder isn't the one taking the idea from start to finish. There's a lot of value in having other people, whether they are employees or contractors or collaborators of any kind, that could be a supplier or masterminds, things like that that allow for other thoughts to take shape.

A lot of founders let ideas live in their head and then they're frustrated when they don't happen exactly as they envisioned them happening. Right. you know, Itivate 1.0 looks very different than Itivate 2.0 Itivate 2.0 launched last summer. hmm. It'll be 1.0 was staff up with really amazing, a really amazing consulting bench and team to go in and fix these problems for businesses.

I equate that to a more capital intensive business that was 100 % worth it. It gave us a lot of great case studies. It gave us a lot of data to understand what we do best and what is repeatable. So I would say those early tests and learns are incredibly important.

also notice when it's not working anymore or notice when the market is shifting. Part of it a bit was noticing that there was a shift happening and there was a massive disconnect in how other kinds of businesses often smaller in size or incubator stage needed to be served and they weren't getting it. They weren't receiving that information. So how could we solve for that? So I never liked to think of

Those first couple years of being a waste and just a bunch of expensive experiments. It's easy to fall into that trap, but it really isn't. It's a very common thread that if you're always evolving, which every business will do. It's nice to see and find the common thread. We wouldn't be able to talk about what we do and the problems we solve. As clearly as we do now and package it up so cleanly. If we didn't have those 5 years of going in and.

helping businesses scale and turn businesses around. you know, it, that decision to make a pivot is very intuitive. I looked at the org chart myself in that moment. I said, this is not how we need to be meeting our, our market. We need to do it differently. And that's a very personal choice. If you brought a team along with you, whether that's a, whether that's one other person or a team of 10, like we had.

If you bring that team along with you in that decision making process, there's so much wisdom there. You learn so much as the founder and there really is no failure that you're talking about. When you decide to pivot your business, there is no failure. It's just version 2.0 and on and on and on. We will continue making pivots.

Nate (37:33)
Yeah.

Jessica Walther (37:38)
The same way I'm sure you will every business should it's when we're seeing businesses so locked in on what they think is real or what or how things must be done. You miss that opportunity to let the business take on its next version of itself. Look at the org chart, say, is this working or where can things be shifted or simplified?

Nate (37:58)
Right.

Jessica Walther (38:07)
Where can they be automated? mean, AI is definitely part of our world now. So it's really just saying, I receiving the value or is the business receiving the value, are our clients receiving the value of this investment? And are we meeting the industry where it is or is it time to think about this differently? And with the right team, can that conversation in a really intentional, productive way.

Nate (38:32)
Interesting. So I guess my concern implicit in the question was that we might, there might be a risk that you establish all these systems and org chart and people kind of too early at a point where you're still needing to be nimble and iterate. But it sounds like your perspective on that would be, well, no, these team of people can actually help you run the experiments faster and better than you would be able to do it on your own. So.

I guess what's important then when you're thinking about this early org chart is to make sure you're hiring people who recognize that, you know, there's not just one way of doing things and I'm not hiring you for, you know, a static job description. You're going to be an explorer with me and we're going to be testing out ideas and what you end up doing a year from now could be quite different to what I'm hiring you for today.

Jessica Walther (39:24)
Absolutely.

And you can have this very open conversation with the team that you've hired. Again, if you've helped them understand what their gifts are and you've been very upfront as you outlined, here's what the startup experience looks like. It's very different than corporate. It's very different than working in a traditional office setting. And we use tools to help

verify that that person knows what they're signing up for. Because I do feel like that's not only good for the business, but it's good for the culture if you help people understand the differences of entering in a work environment like that. But it's a lot more fun. And if you keep those systems in place, it offers structure for the creativity and the evolution to happen. When those structures aren't in place, it looks like chaos and it looks like frustration. And it looks like a lot of that work.

Nate (40:05)
Yeah.

Jessica Walther (40:18)
falling back on the founder's shoulders. And that's where we talked about the resentment. That's how the resentment can set in. Is that they felt like they were never able to fully hand something off. So I think you explained it really well in being upfront about what the experience is like and then building to that kind of opportunity.

Nate (40:37)
Yeah, yeah, okay, makes sense. Which would you say is the more common bottleneck? Is it people or supply chain and physical things? Or is one really just a reflection of the other?

Jessica Walther (40:51)
I was hoping you would make that correlation because I was kind of in my head saying, what's the difference?

Processes aren't living, breathing things until you put the people in the mix or the product in the mix. There is no process without people. At some point, there is a supplier and there is a customer. And we don't have, I don't think, bot-based customers yet. Maybe someone could challenge me on that. But I think we're still in the world where humans do business together. And I really like that world with the supplement of technology, of course.

The process is what connects the people. That's how I see it. There's a lot of wisdom on how processes can be optimized by the people who run them every day. Of course, there's data. Of course, there's so much information in the form of numbers and other things that clue us in on things. But the interpretation of that data is going to come down to who runs this process every day, who's talking to the customers.

And how closely does that experience reflect the value proposition of the business and the founder's vision? And if those things are not being connected, you know, you have a problem, but it's all the, it's all the wisdom in between the different steps of any process that really bring light to where the business needs to evolve. And everyone at every level knows where those opportunities live.

The biggest thing that we found is that there aren't enough opportunities for non-leadership roles to have a voice in articulating what those opportunities are. There's so many approval processes that prevent that amazing idea that could totally change the trajectory of the business, making it to the leadership team's desk, because we still live in a hierarchical sort of approval type world in a lot of ways.

gap in how these other ideas can flow to the top and be experimented and iterated on and tested. So I stand by my decision of what's the difference between process and people because it's by the two combined that they work together. I don't see a business run well where both aren't in place. And I've seen the magic of what happens when the two are in place. I think they're very symbiotic if done well.

Nate (43:28)
Okay. Interesting. So one in the same, really. Okay. That makes sense. Yeah. So Jessica, I have decided to introduce a new ritual on this podcast and you happen to be the first person to be subject.

Jessica Walther (43:42)
I

it. right. Play it on me.

Nate (43:45)
This,

this ladies and gentlemen, I've decided to make a standardized question in all of these podcasts, which is, and by the way, I think it would be cool if you answered this from two different perspectives. One from the perspective of your own business and the other from the perspective of a, you know, CPG slash econ founder, which, know, I understand you work with quite a bit. what is your favorite business?

KPI or Performance Metric and why.

Jessica Walther (44:22)
Okay, so I get this question a lot and everyone wants to know the favorite or the best thing to measure.

There is no one metric that is like the silver bullet, the gold star. is, there is no single metric that can be chosen to just make everything start to click and everything starts to work and take off. The way that I talk about it is revenue. You want to know what your top line is. There has to be something about how much money is actually in the business.

Nate (45:03)
I think hash is an image you do some other

Jessica Walther (45:04)
Wank.

I would

even take gross margin. would take something that says, what is the real money that is in the business in some form or fashion that is tangible? Not, we can make payroll again this month, so we must be doing well because our revenue covered up all of our operational and organizational sins. So we've got revenue. We've got some sort of profitability metrics, some sort of real money, real value in the business. And then to...

Nate (45:25)
Right.

Jessica Walther (45:37)
Answer your question. Culture. There has to be some sort of culture metric. The one that we use quite a bit and this is what put it on the map is we started measuring burnout in an organization and we didn't.

Nate (45:52)
And

you made a burnout.

Jessica Walther (45:54)
So many different ways. Talking with your people and having a way to make it clear as day that culture is just as important. And there's a strong correlation between revenue and profitability based on how well culture is doing. This could look like surveys. This could look like, and it doesn't have to be a culture survey or something super intense. It can be.

a very simple measurement of how are people coming into work every day? How can that self-evaluation process be anonymously captured and put as a marker right next to all of the other metrics that are so well known and appreciated? the re- and you know, when we first started doing this, everyone thought, well, this is an HR thing. This is not an HR.

thing. This is a long, this is a business longevity thing. This is a overall health and viability of the business. Because if you don't have that culture piece well measured and intact, your customers are going to feel it. Your investors are going to feel it. And it's this, you make the intangible feel tangible. And when you put all those metrics next to each other, you start to see what happens to revenue and profitability when culture is low.

Or when it is high. So we do a burnout score. It's zero to 10. What's your level of burnout? And zero is I'm on a cloud. have no stress. Never seen that before, by the way, when you're inching into that 10 range, you know, something is about to break, whether it's the organization itself from a people standpoint or a process standpoint, because when people are stressed, they cut corners.

they start doing their own thing and that presents risk to the business itself. So by normalizing that conversation, it lets people see, this is a very tangible thing that can be measured if we start measuring it and if we make it easy to measure. But it's really the relationship between all those metrics that really tell the full business story. It's a leading indicator. That culture is a leading indicator where

revenue and profitability are typically what's happened already.

Nate (48:20)
Yeah, yeah, I like that. I like that. mean, culture is what determines how people rock up to work and how people rock up to work determines how well they do their job and how well they do their job is going to determine how much revenue the business makes and you know how tuned in to customers and how responsive they are. it's yeah, all makes sense. I like it. like it.

Well, Jessica, unfortunately, this conversation must come to an end very soon. I have thoroughly enjoyed hanging out with you and chatting. Before we wrap things off here, where should people go if they would like to learn more about you and what you're up to, the programs you're on, all that fun stuff? Yeah.

Jessica Walther (49:04)
Find me on LinkedIn. That's my main platform where I hang out. If you message me, I will respond, and it will actually be me responding. There are a lot of good conversations that can start on LinkedIn. so that would be stop one. The other one is go to our business website, which is www.Itivate.com. Or you can email us at [email protected].

Nate (49:28)
Okay. Perfect. Well, thank you again, Jessica. Been lovely having you on the show and thank you for sharing all your wisdom and perspective on all things, supply chain and people and organizations and growth. It's been a great conversation and hope to speak with you again. Take care.

Jessica Walther (49:46)
Thank you.