ARMS Reliability COO Darren Gloster
Darren Gloster was the first dedicated business hire to join the ARMS Reliability when all but two employees were located in a small office that overlooked the beach in Australia. Darren was brought up to revamp the company’s online presence but was quickly exposed to the commercial sales and operational aspects of the business. After becoming a partner in 2007, Darren moved to the United States to head up the ARMS Reliability International Division. Darren was promoted to the role of COO. He is leading and supporting the global operations for ARMS Reliability, working with their teams in the Asia Pacific, North America, EMEA and Latin America. They’re on an exciting journey to scale, grow and continue their industry success. Darren also lives in two of the coolest cities in the world in Melbourne, Australia and Austin, Texas. I’m looking forward to learning from Darren, his role and having him on the show. Darren, welcome.
Why don’t you give us a little bit of a background as to what ARMS Reliability is? I’ve toured over the website, but I know a lot of our audience haven’t yet. Tell us what you guys do, what your service is based on? I’d also love to hear a little bit about your journey in becoming the COO.
The 30,000-foot view of how we help clients is ARMS works with the largest industrial operations globally. Those large industrial operations manage significant assets, mechanical, electrical, operational type equipment that helps produce whatever it is they produce: oil and gas, mining operations, power generation, water utilities and everything in between. We help those companies optimize their maintenance strategies for that equipment. We help them understand how the equipment fails when it does fail, how long it takes them to repair, what resources they use. We put all that information into some computer simulation software and packages. The other end of that spits out an optimized maintenance strategy that helps them to produce more of what they’re currently doing, operate more safely, or reduce environmental exposures and risks.
You made that sound pretty simple. Is it that simple or is it a little more complex?
It’s a little more complex. We hire lots of smart mechanical engineers. They do lots of wonderful things, but I’ve had a bit of practice explaining it to people that you meet all over the world and trying to simplify it. There are lots of mathematical equations, algorithms and simulation tools that help us do what we do. Part of the reason we’ve been successful is also taking that pragmatic industrial approach, facilitating the information in such a way that allows people to optimize it using some smart decision-making tools.
What were the smallest clients of yours be in revenue size? $500,000 in revenue, would that be on the small end?
That would probably be the lowest point that would have a cost of failure or an impact of failure that is large enough for them to invest in something like what we do to help them optimize that. That’s probably the lowest entry point I would suggest.
Give us a scope in terms of the operation you’re running. What business areas do you oversee? How many total employees? Where are they located?
We’re a boutique solutions provider. We make some consulting and software solutions together. We’re a bit different and a bit rare in that we provide that pragmatic consulting advice. It also enables us to put our software solutions into our client organizations as well. We have a little over 100 people globally. My role encompasses the management of operations and a fairly large sales and marketing influence and exposure as well from my background and how I grew up in the business.
With your scope that you’re running, who’s the CEO? What areas of business does he run or she runs?
Our CEO is Jason Apps. Reporting to Jason is me. The marketing organization reports to him as well. Finance, administration, and HR come under our CFO and reports to him. We have our technical group as well, essentially the product. We have a CTO and a team of developers reporting to him as well.
What areas of the business would he love to offload to you?
That’s part of what we’ve done. The operations and sales component allow Jason to focus on thought leadership and the ongoing development of our intellectual property and our software. That was a shift for us probably over the last few years was to try and create more of that bandwidth to help him do that and help him drive our innovation forward in the background. It allowed me to focus on the operations. I have general managers in each region that run the delivery of their region. We have a global sales team through an individual sales lead that manages that sales team globally reporting into me as well. We shifted the marketing organization back underneath Jason because of the cost synergies to the product team and what they were doing there.
How many different regions are you operating in? How many total countries do you think you have clients?
Over the last few years, country-wise we would have operated in over 120. We have a number of offices in Australia, a few offices in North America, an office in London and a startup operation in Latin America. We have consultants that are spread across different countries. The Latin American management team works out of the same office as me in Austin.
How do your clients find you? Is it the sales and marketing team? Is it word of mouth? Is it through industry? How do you get in the doors of some of these large organizations? Are they typically looking to buy your services? Are you selling them something they’re not even aware of yet?
We were fortunate growing up as a small business in Australia. A typical small business setup was one of the biggest changes for me when I moved to the US. The Australian economy up until even the last few years, most small business owners were all bootstrapped by their own profitability. Someone had a good idea, started it, ran a profitable business and continued to reinvest in their business. That’s what our founders did over a period of time. The Australian industrial market by comparison to the US is quite small. Many of the world’s leading businesses and particularly in resource-intensive businesses like BHP and Rio and the like have significant operations down here. We were fortunate enough because the market was small that if you deliver a great product and great service, that word of mouth primarily was the largest component. Referrals were the largest component to the way we grew the business.
We had an online presence. We’d go to trade shows and conferences and did think leadership type things. We worked across the gamut of all of the available clientele we would have in Australia over a period of time. When we moved to the US, it was about trying to replicate that business model. Some of the US businesses we worked with who are multinational businesses that had operations in Australia asked first to come over and support what they were doing in the US. One particular company made a global decision about the technology they wanted to use and we were supporting them in Western Australia. They said, “That’s great but we’ve got seventeen locations in the US. If we’re going to make this decision, you guys need to come over, support us and start an operation over there.” We did that and used that to replicate what we were doing and go, “If we can make it with this one company, let’s go leverage off the other relationships we have.”
From that, it then spawned into the thought leadership online presence and it’s amazing some of the places where leads or inquiries will come from. Our largest source of the pipeline is conferences and industry trade shows where we’ll go run workshops, we’ll deliver papers, have the typical exhibition booths and the like. People with problems will come up and talk to us about those problems. We’ll educate them on how we would solve them. The explosion of the internet, not so much social for us yet but people searching for solutions online. As simple as keyword searches looking for, “I need to do something to this particular piece of equipment,” and stumbling across our website and then going from there.
It’s astounding the scope of the operation, operating or having clients in 120 countries. I’ve done paid speaking events in 28 countries and that was hard enough. Do you have to deal with much of the localization of your service or is it because it’s more of a financial engineering service that you don’t have to?
Most of the time we don’t have to. Language barriers are becoming greater for us as we continue to expand. Most of the work we’ve done across those countries has been on the back of other relationships we’ve had with sister organizations for those particular businesses. One of their corporate entities in North America, Australia or Europe will make a decision and it happens that one of their plants or facilities is in that particular location. We’ll go work with them on that basis. There’s a corporate endorsement. The management levels within the organizations that we work within a lot of cases have multiple languages that they speak, but English is the professional business language. It allows us to work through that.
It’s certainly been challenging. The other challenges we’ve come across are things like taxation and other financial considerations that you weren’t aware of until after you’ve closed the deal and then had to go through that. That’s probably been the thing that I see have always helped us with or helped us to slow that down a little bit. It will come up in some operational meeting. I hear we’re talking to somebody in some part of Africa where we considered about what the financial implications of that might be. For the most part, we’re small enough and our operating entities are in other locations that we’ve managed to not run into too many considerations in that space.
In some of our research around you, it said that one of your strengths is in onboarding your customers and providing amazing customer support. Can you walk us through any of the systems you do to onboard and related to your customer engagement?
It’s one of the things when a business is growing the way we’ve grown over a period of time and on the back of its own self-funding. The importance of not losing a customer is critical to that continued growth. We always prided ourselves on our ability to deliver results and project results that far exceeded the client’s expectations. We’d always prided ourselves on the quality of work we did. Being quite boutique in an engineering field and engineering world, we’ve carved out quite a small niche of that. I’ve found I made no apologies about what it was we did and what it was we were good at. We went through a process of the way we taught our people. When we were much smaller, they would generally work under the founder or the current CEO who were both technical guys and learn from the best. As we continued to grow, that puts challenges on how you do that on a global basis.
We had to think more about systems, playbooks and frameworks that our people need to work within. We’ve also gone under a restructure for our technical team to put layers of quality assurance in place. We’re doing a professional service and someone might be working with a talented consultant. We still need to have those interventions in a place where somebody in the back office that has been working with us for a number of years can review the quality of that work. We’ve done some smart things around the software to look at typical models. We build decision-making models and reliability models for our customers. We run the software over the top of that to ensure all the appropriate fields have been populated the way we would expect.
We use technology to do a bit of that quality assurance as well. We’re starting to get into a space of customer success. We’re engineers ourselves and we’re recognizing the value, our continued stickiness within our client organizations. Nothing had changed from what it was when we were two engineers to over 70 engineers. It’s about getting the customer those results and investing in that continued high-quality deliverables that we’ll continue to have them come back. It has reduced the continued entry into the growth of our client organizations. They start single sole sourcing work to us and the like.
Do you stay with the clients in the long-term? Are you with them for longer term engagements or multiple-year engagements or is it a one-off?
It is a typical multiple-year engagement. We do find that the lifecycle of a customer is particularly around service engagement. It’s typically a five-year engagement in that year one. There will be some proof of concept, pilot studies and business case building for a broader initiative and get great results. We start to ramp up in years two to four and then they become self-sufficient, or there is a new improvement activity perhaps they’re looking to embark on or undertake. That was a large reason for the starting of the development of our intellectual property as well. The enabling tools that we utilize to help get our customers results, we feel they can play a big role in the ongoing management of our customers’ businesses as well. Hence, the startup of the software development team to ensure we can remain with customers on that journey and become part of their business processes on an ongoing basis.
That’s the typical life cycle. Originally, the founder had built the business on the back of some technology, smart people and training our customers. The original model was people would get exposed to what we did through some public training seminar or the like that purchased the software applications. We train them in the software applications and then we would want them to be self-sufficient. In about 2011, 2012 as organizations started to become much leaner, they started to remove our typical roles within organizations and basically start to outsource their function.
Our service business grew considerably. As a result, people started to look outside the expertise rather than developing that expertise internally. Let’s outsource this stuff to somebody that does it much better than we do. It’s become something of a unique value proposition for us, for our client organizations as well is that our consultants are doing this day in, day out for 225 working days a year. It is something that’s difficult for somebody to pick up and then get involved in operations and get thrown to 101 other things they have to do on their particular facility on a day-to-day basis.
Your employees are reasonably remote as well because they are on-site often with the clients.
50% of the time our guys are away from whatever their home office might be. We also have a number of engagements where people are permanently based in client facilities.
Talk to us about how you identify the right people to hire. How do you interview and recruit them? How do you onboard them? How do you get people to be able to be a part of your culture when they are remote? What systems and tools do you use?
We spent a lot of time in that space. I’ve been with the organization for many years. There are lots of trials and error. It’s something we’re quite happy with. We’ve basically added probably 40% of our workforce, 40% of our team. The organization has grown considerably. It did get us to sit back and think about how we were going to continue to grow. We partnered or worked with a recruiter to help us with the sourcing of the particular individuals that we were looking for in the marketplace, which has worked fantastically well. They work on her on a retainer agreement with us. Over a period of time, they’ve gotten used to the types of people that are naturally great fits for us in the organization. We’d spend a lot of time recruiting for not only skills and certain attributes in a typical engineering space. They’ll be interviewed by other engineers. They’ll be interviewed by engineering managers all the way to the point that at the very last stage that myself and the CEO interview them either in person or by some web platform for cultural fit.
I often have conversations with them that, “I want you to forget everything you’ve spoken about technically.” You’ve already jumped over those hurdles and everybody is happy with where that is. This is about what’s in your heart and what’s in your head. We have honest conversations at that point. We do a fair bit of psychometric testing as well. We use a tool called Business DNA that’s resonated. Like all psychometric testing, it’s very similar. It was the approach that resonated with the management team when we put ourselves through it a few years ago. The beauty of that is it’s less about who the individual is and how they like to work. It’s more about how they marry up who their potential future manager is going to be.
As those guys start getting used to one another and building a relationship over a few months, someone’s naturally behaving the way their personality or how their DNA likes them to behave. The manager or their peer can understand that, “This guy’s not a jerk. It’s how he likes to operate naturally. This is how I can operate as their manager or leader to get the best results together or work collaboratively as a team.” Similarly, for the new employees, they can get a detailed and deep understanding of who their manager is and how they’re likely to work together or how they can get the best results. That’s become an extensive process that people will go through something like eight to ten steps in our recruitment process. When you’re hiring as many people as we’re hiring and as quickly as we’ve been hiring them, we’ve come to realize whilst that is by no means foolproof, it is getting us better results and better outcomes.
It seems to be a good mix for us. How we onboard them when they’re remote and keep the fabric of the culture and the team. Our CEO has been in his position for a few years that the founder and former CEO stepped down from operations and remained the chairman of the company. One of the first things our CEO did and got a considerable amount of respect for was promoted the values that we want to run the organization by. Back in the early days, you were either employed by the founder or you worked for the founder in some capacity. The way we want it to behave or what he wanted the company to become was unwritten and it didn’t need to be written anywhere. You’ve got to live it and breathe it every single day. You knew how you were expected to operate.
As we started to grow and utilize and management came into the organization, that was one of the things that became more and more difficult. You had people that were coming from out of the organization that no longer got to spend many months working alongside the founder. That was one of the good steps that we took was creating a set of values. It wasn’t even the creation of the values. We created the values previously, but then they’d been put in a cupboard somewhere and never saw the light of day again. Bringing those out, dusting those off and then making them central to everything we do is central to the recruitment and interviewing discussions that we have.
It’s central to the onboarding discussions and to every operations meeting that we have in the industry. It’s good common for our industrial clients to do things called safety shares. They talk about safety events or near misses and the like and try and promote that safety culture within their industrial environments. We do things called value shares and it’s about reinforcing the values that the organization has. Other team members right around the world are exhibiting the behaviors we value and calling those out across the management team, across the group, across all hands meetings. It’s been a powerful thing and it’s also a powerful thing in terms of being able to have discussions about poor performance as well because you bring it back to the values and how we expect to operate.
You’re operating in all these multiple countries like this, having the dispersed team that you’ve got and also being engineers, engineers are good at putting systems and processes or playbooks in place. How do you keep them simple so that they work across all of these countries, all these regions, all these clients? How do you make sure that your SOPs or playbooks are getting used?
It’s certainly something we’ve struggled with as well. The three partners in the business: the founder, CEO and I were all similar in terms of the way we naturally like to operate. We’ve been quite entrepreneurial in our focused systems and processes. They’re not our strong suits and we’ve been happy to freewheel and liked the flexibility of that. It’s one of the things that as we’ve grown, it’s something you can see that the rest of the team is gravitating towards and yearning for and wanting. We did do some early work around quality assurance and the framework of our delivery. We’ve invested in roles to ensure that’s being executed. There’s no silver bullet solution we’re finding that you can use technology or as much as we would like it to make it that easy. It’s about the behaviors, what you value and what you continue to reinforce for the team.
We’ve invested in roles to ensure that those things are being executed. Similarly, we’ve gone through a big hiring process for the sales team. The global sales lead for us has been an extensive amount of time developing the playbook, working through the playbook and continuing to reference that. From the sales side of the business, we believe a lot in the sales process that we think works best. When you walk into pipeline meetings or we walk into forecast meetings, it’s about the behaviors of reinforcing those things. Pulling out that framework, asking those same questions over and over again until it becomes natural for people.
Talk to us about how you sell into these big companies. You’re hiring a team of salespeople. I’m curious about what lessons you could give our audience in terms of how to sell to these big organizations.
Nobody wants to be the first. It’s been our expression that we see in the industry. As long as somebody has done it in the past in their particular vertical or one of their related verticals, it’s like, “That’s okay.” You rubber stamp to get to the next stage. The biggest thing or the most successful thing for us has been pilot studies, essentially paid proof of concepts where we help the clients solve a problem that exists within the business that they are able to scale across their business. Use that as the business case for a broader investment theater abroad or continuous improvement initiative, broader investment in the technology to run the initiative, whatever the case might be. It’s been as simple as leading with our expertise to deliver results through a pilot study.
That then finds its way as the mechanism to talk to that through the rest of the organization. We picked something that we know is going to have an immediate impact in the particular department or area that we’re working in the business. If you’re talking about a global initiative or a global rollout, where can I then multiply that improvement? I have that same piece of equipment or I have that same particular process elsewhere in my business. Use that as a mechanism to multiply those results. We lead with our expertise is probably the thing that has been most successful for us. We always do it and it’s something that I’ve lived by from the founder that’s always in a paid environment. We don’t do anything because his fundamental belief was always that people don’t value what they don’t pay for. One of the things we do see with some others that people start offering complimentary services and it doesn’t lead to the right results.
Even the small engagements that are getting you in the door, you’re being paid for those as well. Once you have those, with the work that you’re delivering, a lot of the work is up to the company to then put that stuff in place. Any of the findings you’re having, do the hard work not start afterward?
It does and it’s also part of the reason for continued technology development. How do we make it easier for our clients to integrate with their big systems seamlessly? As you would imagine, some of our largest customers have a significant investment in their financial systems. They’re linked to their purchasing systems, which are linked to the maintenance systems, which are linked to where they record all of their equipment ownership and all that wonderful stuff. The improvement initiatives we make, we spend a lot of time ensuring that we can integrate with those systems and make it seamless for their IT departments to take revised results and upload those into their management systems. That’s one step of the process, but there’s a fair bit of significant amount of management of change associated with. I’ve always done it this way for the last several years. You’re telling me that I need to do it differently.
It’s about educating them on the process we’ve used to get the results and also to involve them in that process, so the shop floor guys have ownership over the new outcomes. It’s also been a big chunk of the growth of our service business as well. Previously, we would get optimized results. We do the improvement activity and go look at how wonderful this is. There’s a significant amount of research that’s going on in our industry that had suggested 80% of all improvement projects never make their way into a client’s management system. Hence, the rise in technology in terms of trying to integrate that and make that more seamless for customers but ensuring that we also then are supporting that. Customer success engineers is a big next frontier for us because we recognize that not only have we produced these optimized results and this new potential for our client organization. We want to ensure that we get it into the system and they’re executing against that. We want to sustain that and that’s important. Customer success roles are going to have a big part in that space for us.
Talk about your personal growth over the years. You’ve been with the company for several years. How have you grown in the last few as a leader? Ray Kroc who built up McDonald’s said, “When you’re green, you’re growing. When you’re ripe, you’re dead.” I’m curious as to the growth that you’ve had over the years.
I started in the business engaged in helping revamp the online presence within about a few months. I remember having a discussion with the founder going, “You didn’t want anybody involved. You did want somebody to help you with some of the marketing aspects, but what you were interested in was a salesperson.” I fought that for a little while, but then I got the sales bug and had been in business development sales and led growth within my career. Even when coming across the operations, we’re a small company continuing to grow. Everything was always growth-led and sales-led from my perspective and expansion. The growth as a leader, the biggest thing that I can probably pinpoint certainly in the last couple of years has been touching, mentoring and advising from outside externally for me.
It hasn’t been about ongoing education or the like. It’s been about finding appropriate mentors to help guard in areas of deficiency. Even working with third-party consultants, we’ve engaged on coaching retainer basis to help us with particular areas of expertise and continue to refine those. There are a lot of bars around coaching but certainly the executive team, we’ve engaged with that over the last couple of years and found that super valuable. At times, it can be as simple as you’re going to some advisory meeting or our CEO attends a COO Alliance group. You get a simple idea you can take away and bring back into your operations or similarly you can go talk about something you’re doing and recognize the problem you’ve got is exactly the same as everybody else. Nobody else has the silver bullet and what you’re doing is on the right track. It’s the right way to approach it.
I’ve done a fair bit of work with a particular consultant that’s acted as a coach and then worked within our business and with other team members within our business as well and broader involvements with other advisories and the likes. I joined the Techstars Mentor Program in Austin and that was a great introduction into not only a wonderful group of young entrepreneurs and startups but to see and hear from other people that had run startups and scaled businesses. I get to listen to how they think and what makes them tick. How do they approach it? How do they get the most value for their shareholders or their investors?
I truly never understood why people are averse to mentoring or coaching or attending mastermind groups. The reality is if you’d rather learn from your own mistakes, that’s going to be a painful journey. If you could learn from the people that have gone before you, it seems like it’s a more enjoyable path than having all of that.
I object a couple of times with the consultant that I work with that it’s almost like a psychology session at times or a therapy session. I’ll come in and I talk to him about the whole range of stuff. I give him what my solutions are and then it will be like, “That’s great. Good idea.” I’m like, “You didn’t help me with anything on that.” At times, it’s that conversation and that point of reckoning. That’s what the best coaches do so well. They allow you to talk through the problem. They guide you on the solution, even settle in and you end up thinking that it was all your idea to begin with.
At the end of the day, as long as you get done what needs to get done and you’re being nudged in the right direction, sometimes the coach is there to hold you accountable. Sometimes they’re there to kick you in the rear. It sounds like you’ve had some good ones along the way, which is huge. Talk about the relationship with you and the CEO. How do you stay on the same page as him?
Through lots of talking. We’ve got the interesting dynamic. He’s located in Australia and I’m located in the US for the most part. We probably spend about a few weeks, perhaps a year of FaceTime together whether it be he’s traveling or I’m traveling. We do invest considerably in that and we get so much value in the ability to lock yourself away together for a week at a time. It’s where we both feel it gets great results. We talk regularly, sometimes more than others. We have a standing meeting every week that are predominantly meant to be strategically focused. We regularly talk about operational matters. We’re probably a few times a week talking verbally and then use other systems in terms of managing actions, tasks and the like to provide updates to one another in an electronic environment. We’re both okay with one another sitting to us for each other. We’re using that as a mechanism to hold one another accountable for ensuring the stuff gets done that we need to get done.
What are some of the tools that you use for that?
We’ve leveraged off our IT and development team. We’re using Jira. We’ve tried a number of different action tracking tools previously. Despite the fact that the user interface was IT and development-centric, the tool itself was super powerful in terms of the ability to use it. We’ve rolled that out across. I and the CEO have our own individual project that we use. I’ve got individual projects with each of my general managers that we use to communicate with one another, an individual project with my sales leader. Our marketing team uses it extensively. It’s one of the mechanisms that help you operate in remote locations well because you can real-time update about how stuff’s going, which is the important piece. When you’re thinking about a million things at once, often that single comment is great. I can take that off my list and we’ll talk about it when we next engage.
There’s no secret to why you are successful. The amount of information you’ve relayed, the clarity of your thoughts, processes and systemization of everything has been huge. Thank you for sharing all this. Are there any parting tips that you’d like to give an emerging leader or a strong leader out there? Anything you’ve learned over the years that you think has helped you that would help them as well?
It’s typical. Everybody perhaps does this. We go back to find the mentors or people within networks. I used to always think about networking was about knowing as many people as you could. The typical walk into a bar and have function and pass out business cards and the like. The thing I’ve learned the most is it’s about finding the right people who then have their own networks to help support you. As a simple example, when I first moved to Austin, I happened to be introduced to a particular guy that helps us with legal issues. He’s a lawyer but well-connected and I’ve been able to leverage off his network. It wasn’t about me finding the 25 people that I needed to know. It was finding that one person and then that one person then had 25 people in his network that was great. Similarly for other mentors, wherever you’re deficient or wherever you think you can improve yourself the most, go find somebody that resonates with you both from a professional perspective. It’s a big thing for me as well to get on to have a good relationship from a personal perspective. If those two things combine, it’s a powerful approach and from there see where it takes you.
That is powerful when you have the cultural fit and the business skills you’re looking for. The reality is virtually everyone out there who’s strong has been helped at some point in their career when they’re likely willing to give back at this point as well. Darren, thanks so much for sharing everything with us. I appreciate all your help and all your insights. Good luck with your expansion.
Thank you, Cameron.
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About Darren Gloster
Prior to joining ARMS Reliability, I was at an interesting career juncture. I’d been working in operations management – I took up a managerial role while still completing my undergraduate business degree – and, together with a dedicated team, had built up a business from scratch. I was ready for a new challenge. Joining a small business that works with the world’s leading companies sounded intriguing, so I joined ARMS Reliability under the leadership of a very passionate, creative and highly entrepreneurial founder who had started the business for all the right reasons.
After nearly two years of learning the technical aspects of how we help customers, I was given the opportunity to manage the sales, marketing and administration functions of the business. We experienced terrific growth within Australia, and our next frontier was to expand our footprint in North America. To achieve this, I moved to Austin, Texas in 2009 with a two-year timeframe in mind. Almost 10 years later, I am firmly (and very happily) entrenched in Austin – and have successfully expanded our global operations across the U.S., Canada, Latin America, Europe and South Africa.
From expanding our global footprint to helping the world’s leading business improve their performance, working with the ARMS Reliability team has presented many wonderful opportunities. I continue to be impressed by and extremely proud of the value we deliver to clients across so many industry verticals. The entire team is passionate about reliability and helping our clients realize success, making it a very satisfying place to work.