Customer/Client First — An approach that says ‘if your clients succeed, we succeed’ allows an organization to focus on what’s important to the customer. Technologies and methods can change and adjust over time if they are in support of giving the clients what they need. In our organization, our incentive systems are heavily tied to client focus and orientation more than they are to internal metrics.
As part of my series about the “How To Take Your Company From Good To Great”, I had the pleasure of interviewing Pradeep Khurana, co-founder and Managing Director of ContinuServe, LLC and Chairman of ContinuServe India Private Limited. ContinuServe provides outsourced back-office solutions to Private Equity backed portfolio companies with a focus on Carve-Outs.
Mr. Khurana was also the founder of Surebridge, Inc., a company started in 1996 and a pioneer in the Software as a Service industry. Mr. Khurana has served as Chairman, Co-President, and Co-CEO of the firm. He was also part of the founding team of i-Cube, a systems integration firm headquartered in Cambridge, Massachusetts which filed a successful IPO.
Mr. Khurana received his B.A. from Wesleyan University where he graduated Phi Beta Kappa. He received his MBA from Harvard Business School where he graduated with distinction.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’ and how you got started?
I got started in entrepreneurship back in 1996 when I started one of the first Software as a Service companies (called an Application Service Provider back then). We were offering High-End ERP systems delivered to the middle-market over the internet. We had a great run and the business was eventually sold. One thing we learned from that experience was that the middle-market needed an integrated back office service that includes BOTH financial systems and the actual tedious work of processing all the transactions. So, back in 2003 myself and my business partner started ContinuServe to offer a comprehensive back office outsourcing solution for the middle-market.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
We definitely had some challenging moments. Early on in the business, we had just signed on our first major client where we were handling running their back office financial system. There was a miscommunication between the client and one of our engineers regarding purging some data from their system to free up some storage space. That miscommunication led to critical production data being deleted. Although one could argue that it was the client who caused the problem, we did not want to focus on who was to blame. I think the main thing was that as soon as we realized what happened, he immediately communicated to the client in a transparent and constructive way. We were able to recover the data but there was a system downtime that was created. The client ultimately appreciated how we addressed the issue and they ended up becoming a significant client who we still work with 16 years later.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘takeaways’ you learned from that?
One funny story involved us traveling to India where we had set up an operational office to support our business. Whenever we traveled there, we would bring an extra laptop to leave there since the laptops available in India at the time were from an older generation. One of our employees is a very fair skinned Irish gentleman who turns red with embarrassment easily. Upon arriving in India he was stopped at the airport and asked by customs whether he was bringing anything extra in the country. Rather than just say no, he turned red with embarrassment because of the extra laptop he was carrying and the customs officer thought he was very ill and wanted to send him to the infirmary. The lesson was only assigning tasks to those that can handle them 😉
What do you think makes your company stand out? Can you share a story?
I think what makes us stand out is our commitment to client service. One situation that really stands out is when we had a client that had a major internal network problem a construction company had accidently cut a major network trunk. So, we were not able to log into the back-office system for almost 5 days which caused a massive backlog of transactions to pile up. But we were coming to their quarter close. So, our team had to work 18 hours days for almost a week with many employees sometimes sleeping in the office. Again, this was a problem that was caused by some external factor, but we knew how critical our work was to the client and went above and beyond.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I think it’s important to determine what the critical path is for the success of your business. That will allow you to focus and not waste time and energy on dead-ends.
None of us can achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
I had a mentor who was a retired executive from a very large organization. He taught me a lot (by example) of doing the right thing even if it might affect you negatively on a personal level.
Ok thank you for all that. Now let’s shift to the main focus of this interview. The title of this series is “How to take your company from good to great”. Let’s start with defining our terms. How would you define a “good” company, what does that look like? How would you define a “great” company, what does that look like?
I think a good company is one that literally has just okay, mediocre metrics (margins, growth, employee retention, etc.). This mediocrity is usually because there is nothing special or great about its culture and organization. A great company is one that delivers something exceptional to its customers and all the underpinnings of what it takes to deliver that something special are reinforced by the way its people behave.
Based on your experience and success, what are the five most important things one should know in order to lead a company from Good to Great? Please share a story or an example for each.
- Continuous Improvement — A great organization must engage in continuous improvement. That must be part of its normal daily functioning (it needs to be as essential as breathing is for a human). We engage in something called Root Cause Analysis (RCA) which occurs whenever there is a major service issue. We try to understand what causes the problem and go several levels deep so as to not just correct a technical or procedural problem, but often get to a level that may hit on the type of people we are hiring, or how we train people.
- Long Term Thinking — This is about making decisions and thinking about their consequences at least a couple of years out. One manifestation of this is how we engage with new clients. Often a new client might want to start out with something large but that might be too risky. Although, in the short run, doing something big from the get-go might be great for short term revenue, it might not be what’s best for the client’s risk tolerance. So, we sometimes actually tell our clients to reduce the size of the initial commitment so we can put the proper prerequisites in place.
- One Firm — This is a philosophy that no matter what office you work at and no matter what geography, that we act as one firm, with consistency. This is exemplified by utilizing project teams with people from multiple locations but doing so in such an integrated fashion that everyone delivers a consistent work product.
- Transcendent Strategy — A strategy that focuses just on dominating a specific, narrow market or technology does not have the same legs as something that is universal and stands the test of time. I think to be a great company you must create a strategy that will allow you to be successful independent of changes in products, markets, etc.
- Customer/Client First — An approach that says ‘if your clients succeed, we succeed’ allows an organization to focus on what’s important to the customer. Technologies and methods can change and adjust over time if they are in support of giving the clients what they need. In our organization, our incentive systems are heavily tied to client focus and orientation more than they are to internal metrics.
Extensive research suggests that “purpose driven businesses” are more successful in many areas. Can you help articulate for our readers a few reasons why a business should consider becoming a purpose driven business, or consider having a social impact angle?
I think in America (and this may be a trend in other capitalist countries) people have limited outlets to express themselves in non-monetary ways. There is less church-attendance, fewer people know their neighbors, less community engagement. I think that desire to connect and contribute can be addressed through work to some extent especially if that is part of a company’s mission.
What would you advise to a business leader who initially went through years of successive growth, but has now reached a standstill. From your experience do you have any general advice about how to boost growth and “restart their engines”?
I don’t know if that’s always a bad thing to take a break and reassess the situation as long as you continue to focus on what can make you great. In fact, sometimes you need to take a step back to take a jump forward. Instead of focusing on ‘growth’ I would ask the question, how can we serve our customers better. Follow that advice, and all other good things will follow.
Generating new business, increasing your profits, or at least maintaining your financial stability can be challenging during good times, even more so during turbulent times. Can you share some of the strategies you use to keep forging ahead and not lose growth traction during a difficult economy?
In order to keep things stable, make sure you are in constant communication with your clients so you understand what their situation might be. Often, you need to be nimble to adjust in a way where you can support them during a tough situation. Tough situations can also create opportunities. Clients may need a new approach or may reevaluate their vendor situations, so there is a chance to grow the business.
In your experience, which aspect of running a company tends to be most underestimated? Can you explain or give an example?
I think keeping a pulse on your current clients/customers is tough. It’s often easier to focus on the next new customer as opposed to your existing customer base. Keeping engaged is critical, not just to let them know you care but also to let them guide you with their feedback.
As you know, “conversion” means to convert a visit into a sale. In your experience what are the best strategies a business should use to increase conversion rates?
I think reducing the ‘friction’ for the initial sale is critical. And often that means instead of having the client sign up for a large number of services or a large number of products out of the gate, it might be better from a competitive position to get them to sign up for something small, deliver a great service, and upsell them later.
Of course, the main way to increase conversion rates is to create a trusted and beloved brand. Can you share a few ways that a business can earn a reputation as a trusted and beloved brand?
Great customer service and great customer experience are essential to build a beloved brand and essential to be successful in general. In your experience what are a few of the most important things a business leader should know in order to create a Wow! Customer Experience?
You can’t create a sustainable brand just off of marketing. A sustainable brand needs to be supported by all facets of the organization — how you attract employees, who you attract/hire/retain, the processes and technology you use (both internal and external facing), the values you espouse and sustain through example. So, my advice is, don’t create a fake, temporary ‘brand’ image. Focus on the nuts and bolts of your organization and the brand will follow.
What are your thoughts about how a company should be engaged on Social Media? For example, the advisory firm EisnerAmper conducted 6 yearly surveys of United States corporate boards, and directors reported that one of their most pressing concerns was reputational risk as a result of social media. Do you share this concern? We’d love to hear your thoughts about this.
What are the most common mistakes you have seen CEOs & founders make when they start a business? What can be done to avoid those errors?
The most common mistake I have seen business leaders make is getting distracted and not knowing where to focus. When you feel this way, focus on your clients/customers and how to serve them best. Let that be your guide.
Thank you for all of that. We are nearly done. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
What a great question. It’s going to sound cliché, but I think it would be a movement to get people to recognize how much each of us has in common with one another in terms of experiencing the joys and sorrows of the human condition. The thought of that helps me to think of all humans as my brothers and sisters. I would like to think that such recognition would help us form a better, more peaceful world.
This was very inspiring. Thank you so much for the time you spent with this!