A Special Feature

Interview with Michael Carroll, Independent Business Consultant, Part 2

By Marc Carson · Thursday February 13, 2014

At the end of Part 1, Mike discussed the death of his wife, followed by that of his father, both early deaths from cancer. Now Mike continues, tracing his path to becoming a business consultant who focuses on more than just making money, and sharing things he’s learned along the way.

Mike: Along the way, as a hobby, I had been doing woodworking. It was just a hobby, but I had heard this guy speak in probably 1977—his name was James Krenov.

He was a very inspirational speaker, and at the time he was a woodworker in Sweden, and his stuff was in national museums all around Europe. He had also been teaching at the college level in the summers—at Rhode Island School of Design, the Rochester Institute of Technology—and he had written several books. He came and talked in our local community, because there was a local woodworking tool store that sponsored him. I was completely blown away.

I thought, “wow, it would be interesting to study with him at some point,” and sure enough he started a school in Fort Bragg, and at one point I just said, “I wonder what it would take to get into that school,” and so I went to a summer program, then did the same thing another year, and then applied and got into the full-time program.

So you did that full-time, for two years—at what point in your life was this?

I think I was 43 when I started.

So you just paid your way through…

Yeah, I had sold a house and sold a car, and lived in a really cheap place, and I hadn’t really gotten wealthy, but I had enough savings that I could make it through.

So when I got done, I really liked living in the country. I thought, “maybe I can do the business coaching thing,”—because I have lots of interesting knowledge about how to build companies—“and do the woodworking too,” and it turned out I liked the business coaching more than the woodworking.

Really?

Yeah. And I still do woodworking—it’s a nice artistic outlet—but again, it’s a lot of detail work and a lot of solitary work. And that’s fine—a couple pieces a year is what I’ve been doing for almost 20 years now. I’ve done some nice stuff; I’ve got some pieces in coffee table books.

That’s really cool. How did you land your first gigs with business consulting?

I started consulting in the bay area with people that I knew already. It paid really well. In 1995 I was getting $1500 a day, and had all the business I wanted.

Wow. So they’d just bring you in as a consultant and you’d go over all their numbers? How did it work?

It depended on what they needed. One of them was one of the original companies doing software development in China. They were trying to work out some of the business details.

So they were hiring people in China to develop software but they were based in the U.S.—that kind of thing?

Yeah. One of the engineers at Analog Design Tools had some connections over there. He told some stories. Things have obviously changed a lot over there, but in those days you could hire Ph.D.-level mathematicians to do modeling of analog components for way cheaper than you could pay anybody in the U.S. to do it.

Ah, right.

And the only trick was, you had to give them the computers, because there were no computer facilities. So we were sending Sun Microsystems workstations over to this university—and these are very smart people; the theoretical math that they had was just fine—but they didn’t have computer facilities. And the guy that I was working with said that the Sun workstations would be delivered by donkey cart, pulled by oxen, and were installed in a room where the only light in the room was the light of the screen. And yet they were doing world-class work. So it was this time of transition in technology.

I also did a lot of work for a company that did contract engineering services. With them they needed help with marketing, business stuff, and a lot of cash-flow stuff. It was kind of the same thing you’re doing except on a larger scale. When they started they were doing maybe $800,000 a year and when we finished five or six years later they were doing $5 or $6 million a year and they sold it to another company.

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I had for a long time really thought that it would be much more fun to work with small organizations where the people really love what they’re doing.

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And you had moved up to this area…to Fort Bragg, from the bay area?

Yeah, I would go down for a couple days and just stay in a motel. I could go down two or three days a week for two weeks a month. So the commute was minimal [note: this would have been a 3-4 hour drive]. I was actually commuting less than when I worked and lived down there.

Then the dot-com meltdown happened.

Oh yeah. Right.

And all of a sudden nobody is using consultants, and there are lots of out-of-work marketing people calling themselves consultants. [Laughter]

I could either spend a lot more time down there cultivating business or change my business model. I had for a long time really thought that it would be much more fun to work with small organizations where the people really love what they’re doing, rather than bay-area companies where all they’re trying to do is get something that will make them rich so they can quit.

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To me, the classic idea of retiring is a little bit sad.

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Make their exit.

Yeah. I mean, you can understand why it’s that way, and it’s been an economic engine for the whole world, but at the same time, when the motivation is primarily money, it’s not the same thing as when somebody really loves what they’re doing.

Do you feel like your wife passing away earlier influenced your view of these things? Before she passed away, you were very successful—you could have made your exit like those other guys.

Yeah, I think that made a difference. But I also really enjoy what I’m doing, so I don’t see any reason to quit and retire.

To me, the classic idea of retiring is a little bit sad. If someone’s idea of retiring is “stopping what you’ve been doing to do something you like doing,” then isn’t your life kind of a failure?

I mean, look at supreme court justices or businesspeople or congressmen who are really into what they do. They don’t retire when they’re 65! They have something they really love doing, that has meaning for them, that they really want to do, and they do it until they can’t do it anymore.

To me, the idea of retiring is: Find something you love to do, as young as you possibly can, and do it until you die.

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…for most business consultants, there are only two dimensions of measuring success.

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Now, for most business consultants, there are only two dimensions of measuring success—how fast are you growing and how much money are you making. And to me, those are important. But the most important thing is that somebody’s doing something they love doing, that when they get to the end of their life they’re not going to regret spending all that time doing something they didn’t want to do. So I put a lot of emphasis on the personal goals people have, and how they’re going to achieve them.

I work for a bookstore owner—her whole dream in life is to own a bookstore and run it successfully. And, you know, everybody would like to have more money, but her whole thing is being successful at running a bookstore. So I’ve been the business knowledge behind her relatively good success at running a bookstore.

There are also some restaurants around—one of them just opened their third site. I’ve worked with five or six restaurants and all of them have been successful.

Now, I had one guy come to me and he had some kind of vinyl coating business—and he didn’t give a sh** about it! It was just like, “what can I sell and make a lot of money at?” He just wanted something he could sell. I could work with him, but…why? It’s not interesting to me. All he wants to do is make money. If it’s the only thing you’re interested in, it’s not interesting to me.

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There is this myth that, well, somebody had an idea for a search engine, so now they’re Google millionaires or billionaires.

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When you get somebody who has got a dream and is really passionate about it, what are some mistakes they’re already making by the time you begin consulting with them?

One of the cool things about what I do is that absolutely every situation is different. But one of the biggest mistakes people make is something I call, “I have an idea. Where’s my million dollars?”

There is this myth that, well, somebody had an idea for a search engine, so now they’re Google millionaires or billionaires. But what they forget is all of the 24-hour days and long, slogging difficult work to establish a market and make a product work and get the product established and have all the competition—where most of the people who only have an idea never get anywhere. So the naive assumption that I have an idea so I’m gonna be rich is the most common thing I see out there.

What I look for is somebody who doesn’t just rely on the idea—they are willing to put in the work to make that happen.

The metaphor I like is the redwood tree—if you’ve ever seen a redwood tree, they get to be giant, magnificent trees that live for thousands of years, but have you ever seen a redwood seed? They’re very small. They look like a grain of pepper. One redwood tree can put out billions of those seeds. And yet very, very few, wind up taking root, and of those that take root, most of those get overshadowed or die. Very few turn into big redwood trees. This is very much like a startup—those seeds are like ideas. How do you get from the billions of ideas to the one single giant magnificent old-growth redwood?

You have tools that you use—we’ve talked about the DISC model, Meyers-Briggs—how did those come to be helpful for you?

Well, kind of the theme through all of this is “how things work.” As a kid I had a book that showed how things work—a car engine, a bicycle, and so on. So to me, the mechanism for how things work has always been interesting.

In 1982 I got to go to the Stanford Executive Institute. It’s a residential two- or three-week thing at Stanford. It’s for people who could use a good cross-section of all the business skills you can get, in a very short period of time. There was a section on creativity, one on marketing, one on finance and accounting—a really intensive two or three weeks of day and night classes.

One of the teachers was Tom Peters, the author of In Search of Excellence —before his book came out. Then there was the guy who, during the Reagan era, proposed the flax tax changes that turned into the Tax Simplification Act. So not only did we have professors during the day, but at night we had these luminaries teaching us.

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It (Meyers-Briggs) has been completely invaluable in helping me understand other people and their motivations.

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There was this guy teaching the section on creativity—and Silicon Valley really runs on creativity, fostering new ideas, things like that—James Adams. And he came in one day and said, OK, take this test. Nobody had ever heard of it, and it was basically Meyers-Briggs. And all of a sudden this light came on about all the things I was better at than other people, or things I was drawn to, and other things that I didn’t do very well.

From then on I used it [Meyers-Briggs testing] whenever I could, and eventually I was using it with clients and had to send them off to have [the testing] done with somebody else, and I decided I would just get certified myself. So I did all the coursework to be able to administer and interpret it. It has been completely invaluable in helping me understand other people and their motivations, and helping clients understand why one will be drawn to doing the books but, you know, hates the marketing part. It influences how they do their business and how I coach them.

And you encourage them to bring people on to help them, round out their skills?

Yeah. And the most natural thing for people to do when hiring people is to hire somebody like them. And yet the strong organizations are the ones that have a mix of different personalities.

Sometimes organizations work that out themselves. We’ll do it as a team-building exercise. They [the employees] get a sense that others are doing what they do because they are just different. It helps them understand why different people have different ways.

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Instead she changed jobs inside the printing company to get a sales and marketing job, so under the umbrella of this company, they taught her how to sell, and she spent a year doing it.

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Let’s say you have someone who’s an introvert, bad at sales and marketing. You have mentioned Marcia Yudkin in the past—talk to me about that general direction.

There’s a really good book called The Charisma Myth, by Olivia Fox Cabane —she’s an introvert who decided, people come by this “charisma” stuff naturally—they are outgoing—and I’m an introvert. Now I can accept the fact that I’m an introvert or I can just do it [learn how to be more charismatic]. I think that’s a really good resource. And you have two choices—you can learn to do it yourself, or you can hire somebody to do it.

The first client I had for this kind of coaching was a photographer—she had a job at a printing company. She hated doing sales and marketing, and wanted to be a photographer. So one of the things we talked about was not quitting her day job. Instead she changed jobs inside the printing company to get a sales and marketing job, so under the umbrella of this company, they taught her how to sell, and she spent a year doing it. There’s a whole process to selling, and you can learn it. She ended up getting good enough at photography [that when she started her own business] she didn’t even have to do that much.

What should people look for in a business consultant?

For a while I worked with the SBDC. They paid me and the clients got my services for free. But the reason I quit doing that was that the clients who got it for free didn’t really appreciate it. We agreed on what they were going to do, and by when—and then they wouldn’t do it.

What I prefer is someone who is getting enough economic benefit that what I charge is valuable to them and they don’t put things off. And many of the clients who were getting my services for free became my private paid clients after I left.

I think the most important thing is the initial interview [with a business consultant]. I know there are lots of smart people who I couldn’t stand being in the same room with, even though I respect their intelligence and experience. So assuming that the person is competent and has references —that’s kind of the baseline—there has to be rapport.

“Coaching” is completely unregulated. As a result there are a lot of really slick sales people who have come up with “certification programs.” There are a whole bunch of buzz words for the various programs, and people will buy a franchise. They don’t necessarily have any experience, they just have a franchise and they get a cookbook for—OK, do this, and fill out this form—and those things are valuable, but I’m not quite sure you’re getting as much as you’d get from someone who has a lot of business experience.

The thing that is unique about me is that—mostly—business coaches want to be on the more lucrative end of things.

And you’ve kind of reversed that.

Right. And to me, the whole thing is about doing work you love doing rather than just getting bigger and making more.

Thanks for your time, Mike.