WEBVTT
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Hey, what is up?
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Welcome to this episode of the Entrepreneur to Entrepreneur podcast.
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As always, I'm your host, brian LoFermento, and I am joined by someone here today that I think this guy loves business just as much as I do, because this is someone who really loves process improvement, automations and really looking at ways to fit in in all different types of industries, including some very difficult channels to navigate, including governmental work.
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So let me tell you all about today's guest.
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His name is Marty Herbert.
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Marty has been helping government contractors since his days fresh out of college with the DCAA.
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He can't help but want to make things better, which is why he set out on the entrepreneurial journey with his wife in 2024, after getting the push he needed from a former employer who didn't share his vision.
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So, yes, all of you entrepreneurs out there, you're also going to deeply resonate with Marty's journey and his story as well, and really, what I'm so excited to hear from him personally is what gave him that push, what gave him the confidence and the support and all of those things to say you know what?
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I have the expertise, I have the skills, I have the experience and I'm going to go out and start my own business Outside of the office.
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He's an Eagle Scout, he's a dad, which I love the fact that he says that it also guides the way he runs the business side of his life.
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And what I think is really cool about Marty is that when I talk about his love for business, I also am gonna lump in his love for business.
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I also am going to lump in his love for entrepreneurship, because this is someone who embraces freedom in all the ways.
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He believes in a four-day work week, he believes in bonuses for all.
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He's trying to build a company where the employees are the life force of it and he's guiding those changes.
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So we're all going to learn a lot, not only from his expertise, but the way that he thinks, the way that he grows his own business.
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So I'm excited about this one.
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Let's dive straight into my interview with Marty Herbert.
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All right, marty, I'm so excited that you're here with us today.
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First things first, welcome to the show.
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Thank you so much.
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Glad to be here.
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Heck, yes, marty, you know that I'm excited for our conversation today.
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But first things first.
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You've got to take us beyond the bio.
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Who's Marty?
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How'd you start doing all these cool things?
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First things first.
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You've got to take us beyond the bio.
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Who's Marty?
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How'd you start doing all these cool things?
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Yeah, you know, brian, I used to be really what I thought was a more boring version of myself.
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A lot of my clients, peers, you know you mentioned in my intro the DCAA.
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They don't really believe it when I tell them that I started my career out, as you know, government compliance auditor in the trenches, contract audit for Department of Defense, and that's perhaps one of the driest and really monotonous things you can do right out of college, right.
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But somehow I found ways to kind of make that a little bit more interesting.
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I did some computer audit techniques and things like that and kind of made the most of it.
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And then I even spent some time as a stuffy director of finance if you can believe it, and an introverted internal auditor, you know, kind of hiding away in my office.
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And it really wasn't until I started thinking about myself differently that I realized I wasn't as much of an introvert as I thought.
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At one point I turned my you know point I turned my perspective of government contracts compliance even into a blog that was getting around 1,500 reads a month.
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So I mean, think about taking a dry topic like contracts compliance and turning that into something that somebody actually wants to read about.
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So as I look back now, even early in my career, you know I wanted to train people.
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I wanted to speak in front of big groups.
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I wanted to share what I knew and really help to not just, you know, not just convince people around me, but really help them to understand what it is that I understood about things like compliance and auditing and accounting and kind of all that back office stuff.
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And I didn't do it necessarily for the fame and fortune, but really just from a place of wanting to help people.
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And I do.
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I really enjoy helping people and businesses.
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Of course it's part of the reason I earned my Eagle Scout whenever I was a teenager, why I've taught introductory accounting classes at the local community college and really why I do what I do now.
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Of course, you know we never really escape our past.
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So you know whether it's government contracting, auditing, compliance, you know all those boring things accounting it all kind of runs underneath of really the key business processes that we address at HINI.
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And at this point I've been around long enough that I kind of know what a lot of the problems are that you know that I've heard stories about and I've heard so many stories about those problems that I've also gotten a lot of the best ways to kind of help my clients fix whatever flavor of problem that they're experiencing.
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But I'm getting ahead of myself.
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So the origin story really goes back to 2021, 2022, of course, post-covid.
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I had been working in business process improvement at that point for somewhere about 10, 12 years and my wife and I both worked in government contracting for about 20 plus years at that point.
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So we started kicking around this idea of starting our own business.
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So of course we did all the fun stuff we brainstormed, we mapped, we listed, we talked about the colors and the names and the logos and all of that all the fun things about starting a business.
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But of course there's that reality.
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So, like a lot of people, we were comfortable where we were until all of a sudden we weren't.
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So at the beginning of this year my former employee had my former employer had decided it was time for us to part ways because they had kind of too much help at the top or whatever.
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And thankfully they let me go easily.
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I kind of landed softly, had a couple of clients that came along for the ride and the relationships that I had built really lasted through the transition and into the dream we had.
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And, of course, I'd be remiss if I don't mention, you know, art, the founder.
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You know Jessica she really calls the shots, but she is actually the true introvert in this, which is why I'm here with you today.
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Yes, marty, and we're so grateful that you're here with us, especially because, even in that overview and that story, what I really hear is that you love the subject matter.
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You genuinely love the nitty gritty components of business, which makes sense, that part of what your agency operates and part of what you offer is process improvement, automation.
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We talk about those nitty gritty things.
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You mentioned so many of the ingredients of business that when we start our businesses, you know if you are a social media expert, you're excited about doing social media for others.
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You're not so excited about all those other things that you talked about, but, marty, you love those things.
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So walk us through.
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Where's that love of process improvement come from?
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And I'm going to layer on a super big and broad question to you what does process improvement mean?
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It's something that we've always heard that term kind of thrown out there, but I want you to get into it, because we all have all of the things in our business.
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All of them can improve in so many different ways.
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So what is that actual process of process improvement?
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Yeah, I'm glad we start there because you know everybody starts to talk about business process improvement, and especially right now.
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You know you hear about business process, you hear about AI, you hear about machine learning and all of these other things that can be helping.
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But really what business process improvement is is truly what it says it is.
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It is improving the process of business.
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So it is the back office, it is the operation side, you name it.
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If it's something that businesses are doing, there's a way to do it better, there's a process there.
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Now, what we find a lot of the time is that our clients don't necessarily know what that process is.
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They may understand that they get up and they go out and they stamp the widget and they put the logo on something and they get things out the door, but what is that step-by-step process?
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So a lot of what we do is we help our clients to figure out what it is that they do.
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We help them document that clients to figure out what it is that they do.
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We help them document that.
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We help them figure out the better way to do what it is they're doing, because they wouldn't be coming to us if they thought that everything was perfect.
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So with that, with the business process improvement, it includes things that fall under this umbrella like business process management how do we do each step of the process?
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How do we know what step of the process we are in whenever we are putting together that thing?
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Then there's also business process automation that automated piece of things like AI, things like robotic process automation that you hear a lot of these buzzwords around, like robotic process automation that you hear a lot of these buzzwords around.
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And then, of course, for us, really where we thrive is in those human-centered processes, and that's one of the things that so often we get caught up in the technology side of things.
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And how can technology make us better?
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And it can, but we can't lose sight of the fact that there is still a human behind the keyboard.
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There's still a decision that needs to be made that a lot of times has to be driven by somebody looking at the form, looking at the spreadsheet, looking at whatever it is that they need to make, that make that decision in the best way possible.
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So for us, it's really about taking that business process improvement umbrella and making sure that our clients get the best process from what it is they have, whether it's out of the current systems that they have, whether it's layering on, talking through with them how can they do it better, because sometimes just walking down the hallway with a client can help them understand better what it is that they're doing and how they're doing it.
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We take all of that and we apply a Lean Six Sigma methodology to it, so it's really about reducing the amount of variance in what we do, so that we say what we do and we do what we say.
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Yeah, marty, I love that overview.
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I really appreciate the fact that you call out the human element of it, because one of the things that I've long pushed back against is that phrase of B2B.
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We talk about B2C businesses and B2B businesses and we make it seem like business to business, that we do business with other businesses, but ultimately it's still people, it's still humans that are deciding to do business with each other.
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And I would say it's even worse in your industry, where we talk about the world of government, contracting and the government, almost people view it as an entity that operates in and of itself and they forget that the government again is just a group of people, some elected, some not elected but ultimately it's just people making those decisions.
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And so I want to go a little bit deeper there, because when you talk about you know, people decide to reach out to you and people decide to work with you.
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That means that there's a pain point.
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I often find that most pain points, the most actionable pain points, I'll say, are ones that are costing us money.
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When companies say, you know what?
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We're losing revenue or we're up against a wall where we've got capacity issues.
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That's one example of reasons why people address issues.
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What are some of those pain points that you see in your vantage point that cause people to say, okay, it's time to take this stuff seriously and get some help?
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Yeah it, it's funny.
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We have the top three.
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Um, you know, for us the top three really comes back to again back office accounting and the top three ends up being accounts payable, purchasing and billing.
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I mean, those are the things that are the lifeblood of really what businesses do.
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So you know, accounts payable, nobody wants to pay their bills right.
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If we didn't have to pay their bills, right, if we didn't have to pay the bills, great.
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But we know that they have to be paid, or else we're going to get that bad reputation about, hey, we pay late or we don't know where our payments are and we don't know how these things work and this company isn't paying their bills on time is a really bad thing to happen.
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So accounts payable is really the one that a lot of our clients come to us.
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First they're like we're doing it, we're getting things paid, but sometimes we're late.
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We know we can do it better.
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We have a high volume.
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Whatever the reasons are that they're coming.
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But I've had clients where the invoices come in from vendors to anyone in the company, clients where the invoices come in from vendors to anyone in the company.
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And when you're talking about a 500, 600,000 person company, if you've got these invoices coming from different vendors anywhere, that can be a problem.
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I've also had clients with a centralized mailbox where one person is monitoring and routing the invoices for approvals and payments and things, and that's fine until you start talking about volume.
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I've also had clients that rely on really a sophisticated assignment by you know this vendor goes to this person and they've got a whole team of their accounts payable clerks.
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But in each case, really what me and my team have done is we've been able to standardize the process.
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First of all, right, make sure that things are going to the right place at the right time with all of the right background information so that the decision makers can make the right decisions easier.
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And then, once we know what to expect from that standardized process, then we end up using whether it's an automation tool or just documentation.
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We run into so often that the process is written down one way in a procedure manual.
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Then you talk to the person who's doing it and you realize that they're going to explain it in a different way and then you sit with them and when you sit with them you realize that they're actually doing it In yet another way.
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So that standardization helps.
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Getting it documented helps, and then putting it into a, putting it into a system, into a way that is repeatable, then becomes the key to making sure that that is what we say is what we do.
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Pare it all down, you know, to say that some of our clients are just a little bit fed up with how you know, with the way that it's always been done, is really an understatement.
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And from there you talk about procurement.
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So purchasing, you know, hey, I need a laptop.
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That's the example that I use all the time.
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You're in a company of a thousand people and you are using your computer daily and all of a sudden you realize, well, the keyboard's dead, the monitor glitches every now and then, but you know you need a laptop.
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So so many, so many of our clients that come to us with our, with their purchasing system problems, are coming to us saying I'm not getting a good request.
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And that's where all of these things kind of come into play, of the types of process improvement.
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It really all starts with making sure you have a valid and a real request.
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I need a laptop is great, but the first thing that the IT team or whoever it is it's purchasing that laptop is going to ask you is does it need a?
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Does it need a 10 keypad?
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What size monitor do you want?
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Is there a certain weight?
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Do you travel all the time?
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Do you need a backpack with it?
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What other accessories do you need?
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Does it need a keyboard?
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All of these different things?
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So you've asked for something and then you start waiting and you're like why am I not getting my laptop?
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Why am I not getting what I need to do my job?
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But then, when you look into it deeper, what you realize is it's because they don't know.
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They're about to send you an email, likely about three days from now, that says hey, what are all of these specifications that you have?
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Instead, what we do a lot of the time is we help to standardize just the front end of it.
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If you need a laptop, tell me what screen, tell me what weight, tell me if there's a back to pack and accessories and things like that.
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Give us the details of that request so that there's not right from the beginning, there's not that loop, that constant loop of what about this, what about that?
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Get all of those questions answered right up front, because in a lot of times, in a lot of cases, the person receiving that message again that human-centered design.
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The person receiving that message already knows what they need to know to make the decision and to make the purchase, to get the accounts payable routed the right way, to get the billing out the door to the right customer, those kind of things.
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So, whatever process it is, the person who is looking to bring in, whatever it is that you're requesting, knows what they need from you.
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They just need you to offer it to them in a better way.
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And that's a lot of the time, the problem that we're solving right up front.
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Yeah, marty, hearing you talk about this, you're making my job very easy here today because I want to talk to you about Six Sigma and hearing you talk about the words, like processes, and of course, you're talking about standardization.
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Typically, we hear Six Sigma talked about traditionally in the manufacturing sense, but it's very clear to me here today that you've taken the principles, the strategies, the fundamentals and the way of thinking and applied it to really it sounds like most business problems.
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You can boil it down to find those effective solutions.
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So I'd love to hear some of those principles and the way that you've taken that Six Sigma approach to find those solutions for all different types of business problems.
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Yeah, and it's funny because you're absolutely right, you know, whether it's Lean or Six Sigma, on both sides of the Lean, six Sigma moniker, it really does apply a lot of time to manufacturing.
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And it's funny because we've taken that what they call rapid prototyping in manufacturing and this idea of you know, we give you a minimum viable product and then we continue to build that up, build that up until you're super happy and we can go to release.
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Well, the same is true in business process, on the back office side, in your operations, in those things that don't necessarily involve a thing, but they involve the people and they involve the process and they involve the throughput.
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So, thinking about Six Sigma, so it's about variation, right?
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So every time I do something, I want to make sure that I'm doing the same thing in the same way.
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So again, going back to you know, going back to our purchasing example, when I go to purchase a laptop, I want, you know, I want to make sure it's a Dell and it's a 17 inch and it's a this and it's a that.
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You know, I want to make sure that there's some standardization in what we buy, but I also need to make sure that there is standardization in the process to get there.
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So I'm going to provide a, I'm going to provide a common front end.
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I'm going to make sure that everybody who wants to buy something comes into a place where they can order something from our purchasing department.
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Because when we start talking about corporations, it's not just I'm going to go out to Amazon, right, and then hope that somebody reimburses me.
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What it is is, I go through that purchasing process.
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I take someone's request and I make sure it gets to the purchasing department, but it's that front end.
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Every time they come in, it does exactly the same thing, the same way, right?
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So I'm going to ask for the same pieces of information.
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I'm going to ask who you are, what department you're in, you know, where does this thing need to get sent, when all is said and done, and what are the details of the thing that you need.
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The same thing is true of any process.
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So, thinking just kind of shifting our mindset a little bit into billing, we want to make sure because that's the third one I haven't talked about yet but with billing, we want to make sure that we're putting the same product out there, right?
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We talk about products all the time like it's the bicycle, it's the gears, it's the you know, it's whatever it is that we are using on a daily basis.
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That is a thing that we can hold.
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But when we talk about a product as the output of the things that we are doing in the back office, it becomes a little bit different.
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It becomes the payment, it becomes the laptop going to somebody, but it also becomes the invoice that we're sending to our clients the invoice that we're sending to our clients.
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So one of the examples that I bring up all the time I worked with a large government contractor, probably about 10 years ago, and they were looking at their billing process and number one high volume, because they're a large government contractor.
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They got a high volume, but they had a lot of standardization in the types of work that they were doing.
00:20:30.984 --> 00:20:41.885
What they lacked was, again within that Six Sigma realm they lacked the standardization of how they were getting the bill to the government client.
00:20:41.885 --> 00:20:50.340
Ultimately, they had a billing manager who was running around for two weeks every month just to send out a fixed price bill.
00:20:50.340 --> 00:20:55.714
Now I don't want to get too much into the details about what that fixed price bill looks like or how it works or anything like that.
00:20:55.714 --> 00:21:00.567
But, needless to say, it is basically the same exact bill that you're sending every month.
00:21:00.567 --> 00:21:06.528
So you're sending the exact same thing every month, but yet it's still taking you two weeks.
00:21:06.976 --> 00:21:17.457
Because there wasn't a standardized process, there wasn't a way for the billing manager to make sure that the billers were getting the information out the door in a timely fashion.
00:21:17.457 --> 00:21:18.719
So what we did is we went in.
00:21:18.719 --> 00:21:24.382
We designed a system that involved her pulling a report that she was looking at anyway.
00:21:24.382 --> 00:21:33.048
Usually she's looking at that report and she's taking her pen and she's printing it out and she's checking the boxes as she goes through and sends out the emails to her billers.
00:21:34.256 --> 00:21:36.865
Now what we did is we said you know what, you're getting this electronically.
00:21:36.865 --> 00:21:38.378
Let's not print it.
00:21:38.378 --> 00:21:40.579
First of all, let's save some trees.
00:21:40.579 --> 00:21:47.409
Then let's take this process and make it so that all you have to do is take that electronic version and load it into this system.
00:21:47.409 --> 00:21:50.115
Take that electronic version and load it into this system.
00:21:50.115 --> 00:22:00.186
Use the workflow automation tool to then route the different bills to the different people so that they can then get this information about their bills to the right client quicker.
00:22:01.136 --> 00:22:07.365
We ended up saving just the billing manager alone at least 10 hours on the front end of every month.
00:22:08.595 --> 00:22:10.362
So that's 10 hours that she can.
00:22:10.362 --> 00:22:18.878
You know, when she's loading that report, she can take the time and actually get her coffee, sit down, relax and do some more value add, right?
00:22:18.878 --> 00:22:29.587
So when we talk about reducing variation, we're doing it so that on the other side of the Lean Six Sigma lean, we can do it quicker, faster, more efficiently.
00:22:29.587 --> 00:22:35.066
Side of the Lean Six Sigma lean, we can do it quicker, faster, more efficiently so that you have more time to do the things that matter.
00:22:35.066 --> 00:22:40.961
A billing manager should not be wrapped up in emails every day following up and checking on.
00:22:40.961 --> 00:22:42.042
Do we have this?
00:22:42.042 --> 00:22:43.425
Has this bill gone out?
00:22:43.425 --> 00:23:19.167
It should be something that is relatively automated so that she knows, by coming into a dashboard, by coming into a report, that her billers are working on things, things are getting out the door, and she can then get terms are right when the contracts come in and doing that upfront legwork to make sure that her and her team are even more successful following that continuous improvement side of the Lean Six Sigma methodology.
00:23:19.849 --> 00:23:28.798
Yeah, marty, I love that real life example that you gave us, because I think what it also puts right there in front of all of us as business owners is it shows the opportunity cost.
00:23:28.798 --> 00:23:44.423
Every single thing that we're investing our time, our resources, our human capital into is costing us not only the actual money and resources of that investment, but also the opportunity cost of what else could we be doing, and I love how much of your work really focuses in on that.
00:23:44.423 --> 00:23:46.017
I want to ask you this next question.
00:23:46.017 --> 00:24:12.949
I guess I'm really asking you this with your subject matter expertise hat on, but also as a fellow entrepreneur, because you're not just someone who loves process improvement, you are also the CEO of your company and you're growing an awesome agency and you're doing this full time, and I love the fact that you're doing it with your wife, and so, with that in mind, one thing that people say about us entrepreneurs is that we jump off the cliff and we build the parachute on the way down, and that's something that you're experiencing, that as well.
00:24:13.009 --> 00:24:19.696
And in building your own businesses, you're servicing your clients, but you also have all of these backroom responsibilities and obligations.
00:24:19.696 --> 00:24:25.457
So my question to you is how much for us as entrepreneurs and for business owners at all different levels.
00:24:25.457 --> 00:24:32.539
How much of this work is stuff that we should say, okay, let's not solve problems that don't exist, let's handle things as they arise.
00:24:32.539 --> 00:24:42.738
Versus that age old question of should we prepare, should we plan and start putting things into place that we know we're going to face down the line, and I'd love to hear some of your insights there.
00:24:44.141 --> 00:24:48.875
Yeah, I actually get both sides of the coin for this one.
00:24:48.875 --> 00:24:54.208
So you know again, we just talked about the large government contractor.
00:24:54.208 --> 00:25:02.404
They've been in business for years and years and years and they're large, they have a lot of employees and what they realize is that they forgot.
00:25:02.404 --> 00:25:19.596
They forgot to put the processes in place early on that set them up for success, or they, like most of us, assume that the process that they had in place was good enough and also good enough to sustain them for quite some time.
00:25:19.596 --> 00:25:31.576
So when we talk about when is the right time to put into place business process improvement and automation and management and those types of things, the time is always.
00:25:31.576 --> 00:25:33.380
The answer is always now.
00:25:33.380 --> 00:25:51.838
Whether we know exactly what we do now and we want to codify that so that we then can do it the same way every time, or if it's something that we don't know and we just need that advice on how do we do it better later, the answer is always now.
00:25:53.075 --> 00:25:58.066
We should at least be thinking in terms of what are the things that we have to do right?
00:25:58.066 --> 00:26:01.358
And you're right, every entrepreneur is going through a.
00:26:01.358 --> 00:26:07.883
Well, what accounting system do I use and do I need a CRM tool and what email am I using?
00:26:07.883 --> 00:26:10.036
And is my logo enough?
00:26:10.036 --> 00:26:10.895
Are my colors right?
00:26:10.895 --> 00:26:13.297
You know all of the little nuanced things.
00:26:13.297 --> 00:26:18.319
And then, of course, there's the compliance side right, and again I can't help it.
00:26:18.319 --> 00:26:49.152
So compliance always comes into play, whether it's if you're in the space where I'm spending a lot of my time in government contracts and you have a lot of these clauses and regulations that dictate the way that the contracts are put together, or've got HR, you've got your human capital, you've got your, you've got all of these back office compliance things that really come into play.
00:26:49.152 --> 00:26:57.067
So, as you start to think about all of the things that I have to do, those are the things that you want to make easy.
00:26:57.819 --> 00:27:13.729
The example I use all the time is and I and I actually sat in, I actually sat at a guy's living room as a DCAA auditor and he put together this software program, and we're talking about early 2000s.
00:27:13.729 --> 00:27:21.683
He put together a software program that could basically tell you whether an airplane, given different dimensions and things like that, could fly or not.
00:27:21.683 --> 00:27:47.480
And I'm sitting in his living room and it's him, his wife and maybe one other person, and what struck me by that was this guy is a literal rocket scientist, so he knows exactly how to make these things go up in the air and work, the air and work.
00:27:47.480 --> 00:27:48.906
He could care less about accounting, hr and all of the back end stuff.
00:27:48.906 --> 00:27:59.821
Right, he's really good at what he does and that's the key to business process improvement and management and automation is really about taking your passion.
00:28:00.284 --> 00:28:04.109
I just happen to be passionate about business process, but taking your passion and focusing just happen to be passionate about business process.
