A Conversation with: Frank McShane
The Profiles in Leaderships series features conversations with organizational leadership experts to discuss important lessons they have learned and what “Hiring for Good” means to them. This series helps us better understand the role leadership plays in positive transformations and growth for people, organizations, and the world we live in.
This episode features a conversation with Frank McShane, President, Square Peg Consulting. Frank has been in executive, consulting, and mentoring roles for over 30 years. His initiatives have resulted in cumulative benefits for his clients of well over one billion dollars. Square Peg Consulting helps organizations cash in on opportunities in Supply Chain and Operations.
Frank’s Contact Information: email: fvm@SqrPegConsulting.com/ Phone (360) 562-1077/ LinkedIn: https://www.linkedin.com/in/frank-mcshane/ / Website: www.SqrPegConsulting.comm
““..And the other thing is thinking ahead…not just hiring for the current role but hiring for the future too. It’s a 70/30 breakdown, 70% of the time you’re hiring for the current role, but about 30% of the time you want to be thinking about where this person could (help you) prepare for the future. I need people that are going to develop so they may not match the initial role, but they will match a future role well, and you can help them be successful in the current role.””
Transcript:
Suzanne Hanifin:
Well hello, this is Suzanne Hanifin with Acumen Executive Search, and today I have Frank McShane with us. Frank is the owner of Squarepeg Consulting, and Frank and Acumen have worked together on multiple clients. And I think what makes Frank such a wonderful consultant is that not only has he been the CEO and COO of very large and small organizations, he started his career in human resources. And it’s not often that you see an ops person that has such an emphasis on the people side. So, when we look at a whole organization— the people, the systems, the processes— Frank really comes in with that approach. It is the people first. So, welcome Frank. Is there anything you want to add to that introduction?
Frank McShane:
Well thank you Suzanne. It’s great to be here with you, and I appreciate the opportunity to speak today. Yeah, I think you hit it. You know, it’s kind of a well-rounded approach I try and take where I consider the people, the process, the technology— all those pieces that need to come together for a company to operate productively.
Suzanne Hanifin:
Well, and yeah, absolutely. People don’t get where they are in their career without really looking at some formative leadership experiences.
Frank McShane:
You bet.
Suzanne Hanifin:
Yeah, tell us about people or situations that really have shaped who you are.
Frank McShane:
Okay, yeah, I was giving some thought to it. Chronologically, almost, you could say my first real leadership experience was as captain of the football team in high school. That's the first time you have to sort of step up in relation to your peers and take on a little bit different role. So that was very helpful. In college, I got to be president of my fraternity, another opportunity to step up with your peers in a different role. It was a great, small, academically oriented college, so we weren't the big partiers. We were kind of a balance of academics, sports, and fun, so that was a great experience. Then, when I got into the work world, I got put into a couple of situations. You know, I think sometimes you learn to be a leader in real time, when the situation calls for it. One was really kind of a failure I learned from, which was the first time I was running a consulting project. It was a small kind of boutique consulting firm I was working for—what I call street fighting consulting, shop floor productivity improvement kind of stuff. It was my first time running the project, and I was looking at the role as getting everybody to get along, do what the client says, and be kind of kowtowing to the client, who was a big-talking, loud, high-ego individual CEO. What he was trying to get us to do and the way he was treating us was wrong. He was leading things in the wrong direction, and he was belittling me and my team in front of his people. I didn't really stand up and defend us enough and take that on because I thought my role was to be the good, polite consultant and do what I was told. I got taken off that project because it was going in the wrong direction. Fortunately, my boss was good; he believed in me and he really stepped in and said, “Here’s what happened, here’s what went wrong. We can't do this again. You have to do what you believe is right, and you have to stand up for certain principles, especially in the way of treating people, particularly our own team.” That lesson really stuck with me, and I've carried that forward into all my other experiences in leading consulting teams. It really helped get me into Ernst & Young in the supply chain practice. In that case, I was helping on a project where we were trying to take the Diablo Canyon Nuclear Plant into the open market for the first time. They had always been in a cost-plus environment. The project leaders had left; they joined a different consulting firm and left in the middle. The partner in charge of that came to me and said, “I'd like you to take this one on.” So I said, “Okay,” and not knowing if I really was up for it or not, I got kind of put into the fire. I took it on, remembering those previous lessons about doing what's right, keeping your eye on the goal we're trying to accomplish, and not being influenced by being liked or looked up to—just do the work, take things on, and speak the truth about the issues and what's necessary to get there. That was a big leap for me.
Suzanne Hanifin:
Oh, absolutely. Go on, I'm sorry, Frank.
Frank McShane:
That's fine. So, from then on, I got into bigger and bigger projects, including the last consulting project I had, which was with Long View Fiber, Paper, and Packaging here in Long View, Washington. And that was a big transformation project. Toward the end of the project, the president recruited me to join the company. I was ready to get off the road and stop being a consultant for a while, so I did. I joined as VP of Supply Chain, and I had to put together an organization they never had before. All the supply chain pieces were all hammered out into other organizations, so we pulled people together and created something new. So, that was a really good experience. And then, he got caught up in the board action of trying to sell the business. So, he needed somebody to run the business on a day-to-day basis and put me in the COO role. Then we went through the sale, and he moved on. He was my sponsor, but the new owners identified me as the guy to lead the company after that. So, I took it on and had to really engineer a change in culture, and mostly in results. We had not been making money very successfully over the time, over a number of years, and they were looking for a definite positive return on their investment. So, that was a matter of really going through and reshaping the whole business, stem to stern. Getting out of businesses that weren't successful and customers that weren't really generating cash, finding the things that the products and the customers that really were making the money and making sure we focused on those. So, we went from about a $700 million business losing 70 million in EBA per year to a $500 million business making 70 million in EBA a year. And it took about a year and a half to get to that point, but it was a pretty quick turnaround. The investment banks had commented that it was one of the more dramatic and successful turnarounds they had ever seen. So, that was a real learning experience for me in terms of how all the things, all the levers you have to pull to transform a business. You know, which was people, like you mentioned earlier, it's people, process, technology, strategy, picking your customers, picking your products, those kind of things to be really careful about how you go about doing that so that you end up with the results you're looking for.
Suzanne Hanifin:
No, this is fascinating, Frank, because there's a couple of things that you brought up. One was lessons learned with falling down, and it's amazing to me how much we can learn from it if we are open to learning. And then that changed a core value in you as a leader. And then the other thing, a year and a half, holy cow, that is like lightning fast. That is not just a quick turnaround, that is incredibly fast. So great job. And then, you know, we talk about these values, and you mentioned again respect of your team, respect of who you are, being able to stand up. What other values do you bring that you hold dear to you to operationalize, whether it is in your current consulting business at Square Peg or when you were the CEO of Long View Fiber?
Frank McShane:
Yeah, so I think the root value for leaders is the willingness to take some risk, and that includes with your people. So, showing respect, you've got to have mutual respect with each other for a team to be successful and for the leader to be successful. You've got to understand your success is dependent on the success of the team; you don't go anywhere without them, right? But you've got to show respect first, and then hopefully, they'll earn it as well, and you will too, and there'll be mutual respect. But I think you've got to take that risk upfront. And the same thing with trust, I think you've got to show some trust in people, and hopefully, they'll move towards the trust as a way, as opposed to away from it, and take on more responsibility, you know, take on some risk of their own, and try and push the envelope in terms of how well they can perform and what's possible to do, what changes can be made, you know, those kinds of things, particularly in those types of situations where change is not an option, it's you must change, right? But how you change is open for debate, and so you need people to step forward and do that. So, I think those two things, mutual respect and mutual trust, are absolutely essential, and it takes the leader to set that tone and take the first step, you know, to show the respect, show the trust, and kind of mode what that's supposed to look like.
Suzanne Hanifin:
Absolutely. And then when you're looking at hiring a team, because again, we take what we value, our values, and also our biases when we create a team. So, what characteristics do you look for when you hire?
Frank McShane:
Yeah, well, before I even think about the characteristics, I really think about the work itself, right? What is the work of the person or the team that you're trying to get done? And is it more task and technical kind of work, or is it more influencing people and guiding people? Is it more proactive kind of work, so we've got to be moving ahead, pushing ahead, doing new things? Or is it more what I would call responsive work, where the work is already structured, we just need people to be able to execute it really well? And then, is it very structured or not? Is it pretty clear, there's lots of policies and procedures, or there's not much there, no map to follow, right? So, those are the first things I do in looking at the work, and that tells me what kind of people do need who are going to be successful at this? Because if your work is real task and technical, and you get a bunch of people-oriented types, they're going to struggle in that. Likewise, if it's really people-oriented work, leading and guiding and coaching, and they're very task and technical oriented, they're going to struggle in that even worse if it's proactive work so that you're solving problems, anticipating problems, removing roadblocks to the business. If that's really the task of the team, and you've got more responsive people who are kind of heads down, focused on their work, and they react to things really well, but they're not really aiming ahead very far, they're going to struggle. So, you need to find that, so it's really the match of those things that the work requires, I think that's the most important part of that, yeah.
Suzanne Hanifin:
Absolutely. And with your current consulting at Squarepeg, you work with many different size organizations, many different industries. If there is some advice that you would give a CEO, what advice would you offer?
Frank McShane:
Sure. Well, I think first is to think about, you know, what's the real purpose of the business, right? And why are we here? They need to really be able to encapsulate that and articulate that very clearly to everybody so that gets everybody focused in the same direction. And then toreally understand what are the parts of the business that generate cash and what are the parts of the business that don't generate cash. And you've got to help people dig into that so you can figure it out. As we learned at Long View, serving all customers all the same, a lot of products that weren't generating any return. And it was a different philosophy before the sale to the, it just was different. So now the rules of the game changed, and in most businesses, that's the case. You've got to generate cash to be a sustainable business. So really understanding what the moving parts are of the business that caused that to happen or take away cash from your end result. And then next is, you know, really make sure you clearly articulate your expectations to each of your leaders and their scope, who are they supposed to work together with. You know, if the CEO or the leader in the group does that upfront, it really saves a lot of time and effort in the long run and gets everybody aligned more quickly. And then if people don't follow that or don't respond, you've got to address that quickly. You can't let, you know, problem performance fester because it never gets better, it just will get worse, and everybody else has to work harder. And now you're working around somebody. And whenever I see that we're all trying to adjust around somebody because they're not doing their job right, that's a problem, and it's got to be addressed right away. And so, that proactivity in the CEO is critical to identify issues, get them addressed quickly. It also sets the tone for the whole organization about how we deal with problems, how we identify problems, and how we deal with them quickly and effectively and move on and keep going after our goal.
Suzanne Hanifin:
No, that makes total sense. And again, moving throughout the organization as you have and seeing many different facets of it, looking back in your career, what advice would you give your 20-year-old self?
Frank McShane:
Yeah, well, that's a great question. So, I think it would be, you know, first of all, figure out how to get data as quickly as possible in any situation, right? So, don't go with your gut all the time. I mean, sometimes that's necessary and it's important, and you've got to trust your gut sometimes. But I prefer a well-informed gut decision as opposed to just a wild guess. And so, that would, I learned early on about stand up for your principles, stand up for your people. You know, I would have advised that early on and don't just accept the input from the client because you're there to help them, but sometimes helping them is telling them what they're doing wrong, and you've got to get them to change, right? And sometimes they will, sometimes they don't. But you've got to take a stand and stand up for what you think is the right thing to do. So, those are a couple of things I would advise myself early on, yeah. Now, what great advice both to the CEO and to yourself because again, we do bring with us every day these values and how we show up, and I think that is critical, yeah.
Suzanne Hanifin:
So, this podcast is called "Hiring for Good." So, what does hiring for good mean to you?
Frank McShane:
Yeah, well, you know, when I hire people or I advise clients on hiring people, as you know, I use a tool called the Predictive Index, and so that's a piece that, there's other tools out there that are also good ones that give you insight into the person in terms of what to expect from them down the road, right? Because the interview process is kind of an artificial environment, and people make judgments there that don't really match what's going to happen in their, and so does the behavior traits match the requirements of the job, that's the head part. Do their personal values and chemistry and cultural fit make sense in relation to the client? And I know that's something you guys do a great job of, of really understanding the culture and the client and then making sure the candidates are going to match and fit into that culture, and I've seen that work out really well. And then the briefcase, you know, is a relative value depending on the role that you'regoing to p ut somebody in, right? Because in sales, for example, it's almost all head and heart, and you can teach anybody the products or the services, you know, those kinds of things. But if they don't have the head and the heart match for sales, you're not going to, the briefcase doesn't really matter. But the briefcase is their experience, training, their skill sets that they bring with them, those are all important, but it's of relative importance. And the other thing is thinking ahead, looking ahead about not just hiring for the current role but hiring for the future too, right? And probably, you know, 70/30 is kind of the breakdown that 70% of the time you're hiring for the current role, but about 30% of the time you want to be thinking about where this person could get a succession system in place and get prepared for the future. And I need people that are going to develop so they may not match the initial role, but they will match a future role really well, and if you can help them be successful in the current role, then you get them ready for that.
Suzanne Hanifin:
No, that makes total sense. Go ahead, Frank.
Frank McShane:
I just say then in promotion is to me is just like hiring, it's really like you're hiring somebody again for a new role. And when you're promoting somebody, you've got to really understand that new role and don't promote them just based on what they've done in the past. And at Long View Fiber, that's what I did. I inherited this whole organization that mostly had been promoted into leadership positions based on what they had done before. So, you had the best operator becoming the supervisor or the best salesperson becoming the sales manager. And in my mind, that's three mistakes in one move, right? Where you lose your best operator or your best salesperson, you may create a kind of a mediocre or lousy foreman or sales manager, and you make everybody else mad that has to work for this person because what they do, their style of managing is going around and telling everybody how they used to do it, and that nobody really wants to hear that, they want help in how they're going to do it, right? And so, don't look backwards when you're promoting somebody, it's got to be looking forward to see how are they going to fit that new role. And they may not be the best at what they've been doing, that's okay. And you've got to be clear with everybody that we're not going to promote just the best operator to the supervisor, that's not how this works, right? We're going to promote the best potential supervisor who may be an okay operator. And so, just be ready for that. And now companies have had to deal with how do they, if we do that now, how do we recognize the best operators, right? So, they had to create a system for recognizing and rewarding performance on the technical aspect of business as opposed to just promotion into a leadership role. It used to be that was the only path there was, and so you had to promote people that shouldn't be there, that was the only way to recognize them. Now, they've created some senior operators, two, three, four, more pay, bigger equipment responsibilities, you know, kinds of things that you can reward people with without actually putting them in a position that doesn't take advantage of their strengths. So.
Suzanne Hanifin:
No, that makes total sense, and again, every situation is different, and I think you bring, like we said at the very beginning, this holistic approach into your consulting and helping to guide. When you're looking for an ideal client, who is that?
Frank McShane:
Yeah, so it's not size so much. I mean, I have a client that's about an $8 million a year client. I have one that's a $700 million a year client, so size is not really it. It's more complexity is what I look for, either complexity of products or services or customer-based markets that they're in. Those kind of things, because that's where the cash generation mechanisms of the business are harder to see in those complex situations, and you've got to get in there and figure out which ones are positive, which ones are negative. And that's what I'm good at, is getting in there and figuring that out. And it's not just grow profit or margin, that's not the answer. It's really the cash generation from each product and service over, say, a year, and the same with the customers. You've got to really look at that. So, people get caught up in, "That's a high-margin customer, high-margin product," yeah, but we don't sell many of them, so over the period of a year, it doesn't really do much for us, right? So, and so that, I think, that's the main thing is to help customers or clients structure their business that's going to be the most highest generated cash business and then make sure the right people are in the right places to sustain that because it doesn't do me any good to do a good project and then leave and things go back to the way they were. That doesn't help my reputation at all, and it doesn't help the client at all, and they get disappointed. So, that's where that fit that you guys do so well with, um, that's where that really comes into play is to sustain the improvements and build on that. You know, my expectation when I'm done working with a client is they keep moving and progressing and improving. They don't just stop where we were when I left, you know? That doesn't help us.
Suzanne Hanifin:
Absolutely. No, Frank, I think this is really good information, and I wanted to ask about your clients because, again, as people are listening, all of your contact information will be listed, and I've seen it firsthand, and I think the other amazing thing is your toolbox. It's not, "Here's what I do in this set thing," it's so customized to that client and able to bring out this hammer is needed here versus a screwdriver. You're not going to, you know, screw in a nail with a hammer, you know, or I kind of said that wrong, but you got what I meant.
Frank McShane:
Yeah, sure did. Yeah, I try and come in neutral, you know, always, and leave my toolbox sort of at the side and wait until I really think I understand the situation better. And as you said earlier, every situation is different, every culture is unique, you know, their ability to absorb change is different, the approach you've got to use with them. Sometimes it's straight on hit, you hit them over the head, sometimes it's a lot more subtle, so you have to figure all that out upfront in order to be effective and then bring out the tools that really match the situation. And, yeah, so that's the approach I try and take is to stay neutral until I really think I understand, and then I take that understanding to the client and say, "Here's what I got so far, you know, how am I doing?" And then they can help confirm or adjust your perception a little bit for that because sometimes you see things, you think you understand them, and you don't, and that's okay, you've got to say, "Hey, I got that one wrong," you know, it's fess up right away and then adjust your approach accordingly.
Suzanne Hanifin:
Absolutely. No, Frank, this has been fantastic, and I really do appreciate you and your time and your approach. And I highly do recommend you and others to reach out to you because, again, it's that people, processes, and technology all in one and looking at things strategically, what makes sense, what makes you money, and how do we move forward. So, I just wanted to say thank you very much for your time and your insights.
Frank McShane:
You bet, it was my pleasure. Thank you, and I look forward to keep working with you on various occasions going forward.
Suzanne Hanifin:
Perfect. Awesome, Frank McShane, Square Peg Consulting. Thank you.