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Bringing twenty years of experience with Accenture to the table, Pariveda Solutions COO, Kerry Stover defines the thin line between COO and CEO. He talks about the importance of hiring the right people not only for the task but who are aligned with your company culture as well. Kerry emphasizes the importance of handling people correctly in scaling your company. He covers the benefits of grooming people to be better than yourself, the value of delegating responsibilities and learning more by listening than by talking.
Kerry Stover has delivered solutions in the areas of IT strategy, large system implementation, process management, enterprise architecture development, project management, customer relationship management and business intelligence. His industry experience includes work with high-tech manufacturing, software products, consumer products, healthcare, retail, not-for-profit and financial services clients. He possesses a unique set of skills in the delivery and administration aspects of corporate business operations, information technology and customer support while delivering effective business process change in the companies from small startup ventures to companies in the Fortune 500.
Much of Mr. Stover’s experience comes from the variety of leadership positions he’s held in twenty years career as a partner with Accenture. These include serving as the lead partner for the Dallas Technology organization serving as Executive Director-Product Management. Prior to joining Pariveda Solutions, Mr. Stover was the Principal and Co-owner of I.Think, an online market research services firm, where he led the company to a compounded annual growth in revenues of 37% and recognition in the Inc. 5000 Fastest Growing Companies. Previously, he also served as Chief Information Officer with Efficient Networks, a Siemens Company. He’s responsible for the efforts to upgrade business processes and support technologies across the supply chain of manufacturers, distributors, customers and business partners for this $300 million manufacturer of high-speed modem and home networking products. It resulted in reducing logistics by 25% annually. Kerry graduated from Baylor University with a BS in Mathematics with Honors. He has served on the boards of Need Him National Outreach Ministry and Parkway Hills Baptist Church and has provided hundreds of hours of volunteer service to Trinity Christian Academy of Addison. Kerry, welcome to the Second in Command Podcast.
I’m glad to be here. Thank you for having me.
You’ve got a pretty broad background and also a large-scale operation you worked in. I’m looking forward to gaining insights as to some of the leadership skills and the process that you used that would scale across all different organizations. Why don’t you tell us how you got involved or how you got into the role that you’re in now?
When I left Accenture and I went to become a CIO for Siemens Company, that company wasn’t a Siemens Company when I went there. It got bought by Siemens. Siemens is a great company but it wasn’t exactly the experience that I had thought I was going to do in a smaller company after leaving Accenture. It turned out that they did not need me and I decided to go buy a company. As I was looking to buy a company with one of my ex-partners at Accenture, my good friend Bruce Ballengee came to me and asked me to help start Pariveda. I made a commitment to buy I.Think for that market research services company with a friend of mine so I could not be part of founding Pariveda. Bruce and I go way back. Bruce is our CEO and Founder. Bruce and I met in 1981 when we started Arthur Andersen’s consulting division. We worked together on and off for years when I went to Siemens. I had him and his consulting company come in and help me. It was natural that he asked me to help found Pariveda. I had to say no.
Bruce stayed after it about 1.5 years after founding Parived. He was looking for his first office space and met me for lunch one day. The space next door with my company was available. He became a neighbor of mine. Two years after that, he was looking for an outside director to join the company. We have an ESOP and he wanted not just an internal management team on the board. He wanted an outsider to look out for the employee’s interest in the ESOP. He asked me to join the board of directors. A year after that, I realized that the founder who had stayed on with the company I bought was interested more in a smaller company. I was interested in scale. I realized I needed to change and called Bruce. I’ve been dropping hints for years. It’s about time. I walked across the hall and let’s get started. When I joined Pariveda, Bruce was wanting to architect the company, a very purpose-driven company, and do it in a way that it lasts well beyond the legacy that he and I might leave. That’s an interesting part of my challenge. Bruce is interested as CEO in the architecting of the company. He’s asking me to be more the engineer and builder on the ground of the day-to-day operations of our consulting company.
That defines the role pretty nicely. I love that he was stalking you and moved his office beside you and kept dropping hints.
Bruce plays an infinite game.
Years ago, there was a guy who was at Queens University in Canada. I was trying to recruit him for a company called College Pro Painters. His name is Rich Osborne. Every year for about 25 years, I kept saying, “I’m going to get you.” It’s become this ongoing joke. I’m going to be 94 years old, I’m still going to go, “I would still recruit you.” It’s awesome that you’ve done that. You touched on something that I think is core to the CEO, COO relationship. It’s that tenure and trust that you guys have built up from all of these years of being friends and having worked together and having offices beside each other. I’m sure you guys had multiple times where you went and poured drinks together. Do you think that trust is a core part of why you guys are successful now?
It’s absolutely true. When I first flipped roles, I started getting emails from people saying, “Office lease is available. Here, check out the office lease.” They see me listed as COO. They assume some things. If you go to the source of all knowledge, Wikipedia, what is a COO? Its definition is whatever the CEO doesn’t want to do. It’s the delegated accountability from a CEO. You have to, when you delegate accountabilities, you want to and should trust the individual that you do that. The higher up in the organization that you would become, that level of trust, if it’s the first-time relationship it can be hard to have. When you’ve worked with someone for 30 years, you know them and you know what they’re like. It’s fairly easy to step into the role and have that trust. We use an organizational firm called Levinson and Company to help us with some things, and the way we think about our people and development.
When the founder and CEO were involved with us, he looked at our relationship and he said, “You guys operate as two in a box. You both have to make decisions that affect the short and the long-term, but you do it together.” That’s the way it needs to be. You can’t have a COO operate independently of the CEO. You can’t have one that’s operating in place of the CEO either. You need them to be in sync with the CEO and the trust so that decisions are made both equally assume good intention and the best intentions for the firm first and not wondering why someone made a decision.
As you put it, you’ve been doing this for years and you had a lot of that early stage trust already built up. If you had to hire a second in command, if you had to bring one into your organization, what do you think you would do to try to get that trust up quickly?
The hiring process would be a big part of it. I look at the hiring process as, “Do we have a level of compatibility? Do I know this person? Do I see that person as someone who knows me? Do they want to join in that effort?” The first part is the hiring process is critical. You treat it as a relationship-building exercise, not just finding someone to fill a role. You’re sensitive to hiring someone to work that way, I’d think certainly of someone I wanted to be in a relationship, and not someone I wanted to do the job. The second thing is, I’d make certain that there was frequent communication so that we could have honest conversations about how we’re feeling about what each other is doing. Trust is a feeling. The feelings that people have can then cause them to step away and sense that there’s a diminished amount of trust or someone’s acted without a trustful intention. I would want to make certain that there was a buildup of the relationship in the early stages in particular. Not just, “What are you doing?” but, “Do you understand why I did it and how did you feel about it?” and vice versa, so that we would be sharing with each other to continue to build up trust.
I like what you said that trust is a feeling and it’s about that open communication. How do you guys communicate with each other now? Do you have set meetings in place? After many years, in a lot of ways, you’re reading each other’s minds. How do you guys communicate and stay on the same page? How did you do it in your early days, too?
There are meetings that we both ran on a weekly basis around the executive team. There are conversations that go on the sidelines about that where we can approach each other. There are conversations around the board meeting with some of the board members that we have. What we found most effective is that no less than once a month, we go to a long dinner together. Neither of us drank alcohol so our minds are fairly visceral during that creative time. We talk about anything and everything that we need to clear the air on something and to better understand what’s going on. That three hours, there’s no pressure. No one’s trying to call us, trying to reach us and going to interrupt us. We can talk about things and allows us to make certain that no less than a month, we set a solid foundation for the key thing I’m thinking.
I hear his feedback. I get his perspective. He expresses things to me. I share my perspective at what it does to the business for my end of it so that we can stay in sync. We can find little snippets of time around that, so there’s something that’s important for us to test along the way. That’s been a critical finding. It took us a couple of years to realize that trying to meet one on one every two weeks for 1.5 hours in the middle of the day, that was likely to get canceled or someone wanted that time. It wasn’t as productive as finding a free-flowing exchange in an unpressured environment.
I love that you’ve built that in as a bit of a meeting as well but it’s also off-site. When I was this second in command at 1-800-GOT-JUNK, Brian and I would go for runs in the morning. Twice a week, Tuesday and Thursday. One morning on Tuesdays I would pick him up at his house, and on Thursdays he would pick me up at my house. We drive down at the beach and go for our early morning runs together. That was fun to be able to go for a run. Sometimes we talked about nothing and sometimes we talked about everything. He was the best man at my wedding before I joined him. It was very similar to you and Bruce. You knew each other. That trust was already implicit. When someone’s your best man, you would give them the keys to your house and bank account right away. Tell us what Pariveda is so we have some clarity on that.
We are a management consulting technology strategy company that does work for a range of companies from startup to the Fortune 10. We are what we call fuzzy problem solvers. We are not scaled. If you want to do something around technology at scale, it’s probably an Accenture you might think to call. If you want to do something that’s more commodity, you might think of an outsourcing option. There are known problems that people are going after. What we tend to do is operate on a space where people sense they have a problem but they’re not quite sure what it is and they certainly don’t see a solution. We do that through lifelong relationships with our clients. Our space is to solve interesting problems through strategic thinking and leading-edge technology to give people some advantage in the marketplace to create value. We do that across eleven offices now between ten in the US. We opened up in Toronto with mostly our work is technology development with a strategy around it.
Give us an example of one project that you took on and how it unfolded.
We have business alliances with Microsoft, AWS. One time, we were called by our AWS representative. He says, “I’ve got this agribusiness company that wants to work with somebody. They have a problem where they got 25 power windows. It takes them to load all of the prior day’s data for all of the information coming in from their products operating in the farmlands across the US. That real-time data, they like to have that real-time loaded, but it takes 25 hours to load a day and they can’t make it work. They’re looking for somebody. They want to put it in the cloud and said, “We’ve worked with you enough to know you are unique enough to go and help them solve this problem.” We went in and worked through and got them down to millisecond response time to getting combine data flowing in through the cloud and being able to be seen by the other combines in the field. That allowed us to earn some trust and we’ve been with that company for the following few years helping them solve things where they’re trying to move into a new space around data and information flow as a product for their current customers.
Is it because you can see the forest or the trees, that you can see some solutions that maybe they can’t because they’re so close to it? Do you have a depth of talent and maybe they can’t afford to have all this expertise full-time or a bit of both?
It’s a bit of both. What we have is that we’ve focused on how do you learn new technology quickly with some of our leaders? How do you determine how to make effective use of that quickly? If you’re a company that’s innovating in technology, you’re probably gauged internally. You’ve got some R&D doing it. If you’re in the early adopter, early majority, you might sense there’s something and you want to do it but you don’t have that history of innovating around technology. You may not even have a history of adopting early technology. You don’t know how to solve your problem and you’re looking for someone else. When you’re an early adopter, you don’t care that they have the industry skills.
We didn’t know anything about their business quite frankly when we went into the situation. They have all that knowledge. They had industry knowledge, the function of technology, technical knowledge. We know how to use the technology, how to apply the technology, and we could bring that to bear and understand how it interacted with your business is the other part. We’re not just technology for technology’s sake. If it doesn’t add business value, we don’t see there’s going to be a value. We’re making a mistake to implement it. We could see where the business value would be and how to get them to that as part of what we do.
I love it that you’ve been understating your niche in terms of the cross and the cash. You’re not going after the innovator in that early 0.4%. You’re going after the next 4% and you got that real sliver of people that want to adopt the technology. What’s interesting around technology right now is we think we’re a technology society, but it’s still so new in leveraging a lot of these solutions that are out there. We’ve only had iPhones for a couple of years. You guys have to stay ahead of the curve, but on a sailboat that’s curving at the same time. How do you price it? Is it by the hour pricing? Is it project pricing? Do you price based on savings? Is it all of the above?
All of the above. Probably savings are less frequent. Many of our buyers have been handed problems to solve budgets to go with them. Oftentimes, that budget is independent of the savings. In other words, the CIO, who is a good portion of our buyers, they’ve already determined how much money they’re going to get if someone else owns the business case for that, usually a business unit, not the leader. When we’re in those situations, we’re not quite in the position of being able to measure the value or take a stake in seeing if the value has been created. We’ll do an hourly basis for those or project-based with some cap in fees to make certain there’s skin in the game on both sides. We want our clients to see us as being invested with them. On a few occasions, we’ve had C-level sponsors who are willing to give us the authority inside an organization to help them act. We’ve been able to move into value-based arrangements where we put our share of our margin at risk in order to make certain that they’re getting back a many-fold investment than what they’re getting from us. Thankfully, that has worked out fairly well in the essence as we’ve been able to do it.
Is your team all full-time or do you leverage freelance experts and bring them in as need be?
It is 99% full-time. The full-time is because it goes to the purpose of our business, which is to develop people to their fullest potential. What we’re looking to do is to leverage technology change as a way to have curious people learn how to affect business change. Technology change is going to be with us forever now. It’s been with us forever quite frankly and still will be. Companies want to use that to get a competitive advantage. We have a constant supply of businesses needing help. If we can hire the right people and develop them, not just for their technical skills but for their ability to understand the value that comes from applying technology, they can be C-level advisers one day as vice presidents and senior vice presidents in our firm. We have some experts that we can bring in, but CEOs don’t want to talk to experts.
I don’t want to talk to experts because typically they’re very narrow in what they know. They don’t understand the implications outside of it. I want to talk to a generalist who can talk about not just the technology, but the way in which you implement change in the organization. How you need to take into account to think about the processes that are involved and making certain that the technology works. We can find technology experts everywhere, but can you find people who advise a CEO about how we create value and see that value is created and is willing to talk about that? That’s what the CEO wants to hear. That’s what I want to hear as the COO.
Do you have eleven offices?
How many employees do you have?
Seven hundred employees, eleven offices, and you mentioned the hiring and development of people so they can have those C-level conversations. Teach us how to do the hiring. Hiring is almost the holy grail when you get it right. When you hire for cultural fit and skillset, what do you look for? What are some of the behavioral traits you look for?
I’d advise any company to do this, you need to know who you are so that you hire within the proximity of who you are. You don’t want to hire clones obviously. You want to hire people that are aligned with the culture. When we dipped our toes into the water of marketing, our leader of marketing wanted to do a brand identity and understand who we are. We sat it a room and said, “Who you are is what your client says you are. Why don’t we let our clients tell us that? What do they say about our people?” We’ve put all these phrases up and filled about seven or eight whiteboards. We looked around and said, “That’s good. What is the most important thing if we were going to hire somebody? What is it that we would look for?”
The first thing that we saw on the board was a curious learner, someone who wanted to learn and understand. The second thing is that they wanted a coach. It wasn’t just that they wanted to learn. They wanted to share with others and see other people learn. The third thing was to say we’re a giver, that they would give it their time to help people, that they would be collaborative. They would give to the community, which is important in building lifelong relationships. Between learn, coach and give, that’s the threshold. If you don’t want to do that, that’s not going to fit in our culture.
You’re the first person who said the whole curious learner and that self-driven learning. We have a group called the COO Alliance which is the only network of its kind in the world for second in commands. At one of our COO Alliance events, we were talking about my belief is that to grow a company, you have to grow people. The more you grow people, the more they’ll scale your company. We were talking about how to grow them. One of the COO’s put up their hands and said, “The best way to grow people is to hire people who want to grow. Hire people that are already learning and trying to grow on their own.” I was like, “That’s smart.” I never thought of it that way that otherwise you’re trying to push a rope. You can’t learn to control the environment. It’s interesting that you guys have seen that, that you want to hire people that are curious learners and that they want to coach others. Wrapping it all together in that giver component, those are huge insights. Do you train your team on interviewing? What do you train in? What do you focus internally on growing your people on? Do you have a set of core skills at all or beliefs around people and leadership?
First is our belief in people that everybody has potential. What we’re trying to do is move people towards their fullest potential. We do try to hire people who have a level of complex problem-solving capability. We’ll use cases to ferret out a way in which they think and see that’s good proximity for seeing them at work. We have behavioral interviews that are looking for the practices that they go through to see that they have examples of how they behaved in that learning, coaching and giving mentality around how do they stand up for their integrity. Are they a match to our core values? Do they have that in the bag? We use the same behavioral firm, an intern to a vice president at some level. An intern should have had a chance to stand up at some point in their life and stand up for what’s right and say that in front of the group. If they haven’t, the vice president definitely has to have had time to do that for sure. They have to have a pretty complex time they had to deal with from our perspective. Behavioral interviewing is critical.
With the vice presidents, we added an emotional intelligence interview. We lifted the behavioral to another level, to find out how do they care about people and deal with people issues in what they do. At some level of the company, people ask me what I do all day. It’s people. People make a company. If you have a company and don’t have people, it’s hard to have any successful company. Somebody has to be there to make things happen with clients. From the perspective of interviewing them, what we’re looking for is those people that are going to be not just the learners but the givers. It’s the people that can communicate and speak to the solutions that they are developing or thinking. It’s the complex problem solving and communication skills. We develop people by what we call an expectations framework. Every level of the company across about 50 dimensions of performance that are divided in the 5%, we have the intersection of a college hire to their professional skill of communication.
I’ll say in meetings, we have a short sentence of two written in that intersection of level and capability and expected behavior. Every review is written not against numbers, not against how much code per hour they produced, but across how they’ve handled themselves as a professional or as a player, a coach, or an architect and problem solver. Those dimensions lead to a progression that if they are able to meet those expectations. They can do those behaviors from college hire to young associate to a young manager, to a senior manager, to a principal. They are developing towards that ability to be a C-level advisor someday. We give them feedback every month on their progress towards it and then wrap it up with some interviews.
It sounds like by focusing on those behaviors and focusing on those traits or skills, that’s where the results come from. Instead of focusing on results, you’re focusing on growing people knowing the results will follow.
Outcomes are only the results of behavior. If you have the right behavior, the outcomes will come. I was looking at a podcast. Someone said, “You run your practices and you do certain things. What are you focused on with your team? How do you get them to focus?” He says, “Every day it’s about the behaviors. If you do the right things in practice, you’ll do the right things in game, you’ll do the right things that will get the outcomes.” The outcomes will come. If you want to throw from 400 yards in a game and you go out there thinking you’re going to throw from 400 yards in the game, you may not get there because you don’t behave in the right way. Your focus is the outcome. If you go out there and take what is given and you see that you can throw short passes versus line passes and do the right behaviors, you may get to 400 yards. You’ll do it in a way that helps the team the most. Let’s focus on behaviors. The outcomes will come.
What are the best things about big businesses? You worked around a lot of them and you worked in a lot of them. What are the best things that come out of the big businesses, the big corporate environments? What are the giant hairballs to avoid?
The good and the bad is the big businesses have a level of complexity. An awesome way to develop these curious learners is to work in places where they can deal with not just complicated problems and certainly not simple problems, but some things that are complex. You can’t determine the best answer just from a subset. You have to go and understand the full context of everything acting and the systems around it. That’s also the bad problem. A lot of companies have not just complexity but they have created a level of chaos. They don’t understand the implications of all of their different systems, and therefore they work against each other. It becomes more of a political play as to who wins or loses or gets what they want rather than the system performing exceedingly well. That’s the beauty of it and that’s also the challenge in certain companies.
How about your skillset? What would be the things that you’re still working on now in your skills? What are you working on growing and getting better at?
It’s interesting, Bruce founded Pariveda to develop people. He said that was the only reason that he would start it when he was asked by some friends to do it. I didn’t understand that at first. Bruce is even looking to develop me as a friend in a polite way. He’s leaning on me to develop him. One of the things that I didn’t understand was I looked at intelligence from my perspective. If you’re familiar with the HBDI, the whole-brain theory of blue, green, yellow, red, this is an analysis of separating the brain into quadrants. Blue-green is more of a logical thinker. Yellow-red is more of the why and the emotions behind it. I always wondered, “Why do all these people who are very logical and smart do dumb things?” He introduced me to a concept around adult maturity around their emotional side who bought into the company. It was at a point where I was struggling because we had a desire to have a common culture. We went very wide geographically early in our nature to take and not have just a centralized focus around the founding office. We had a lot of small offices. I was falling all over the place trying to infuse culture and to infuse knowledge and practices.
I hired senior leaders to move into regional roles. The offices were starting to take on a flavor of the regions. Regional is a good concept but it wasn’t what we needed at the time. It was very helpful having some senior leaders do stuff. There was a behavior change we needed to enact. It wasn’t a bad thing for what they were doing. It wasn’t what we wanted. Bruce and I agreed that the best thing for me to do was to try and give up my job and to delegate more. Instead of having four people who three of them had regions, to take and give four people one-fourth of my job and ask them to do it across all offices so that they could see all of the offices. They can communicate about how to affect them. As we worked through that, what I learned myself was I was taking a lot of my own self-satisfaction and my own self-sense of being in the role of CEO. In other words, I was fixed with the best thing to do with the firm was to delegate more.
I’ve been here for years. I knew everything. I knew everybody. I knew every statistic. If you needed something, I could give you the answer. That itself was hurting the company. I had to realize the best thing I could do is to step back and allow others to grow. More people would be closer to the problem and empowered to make decisions rather than having it flow through them and flow through me. That growth was something that Bruce inspired, and it continues now. I’m challenged and continue to challenge myself with, “Am I developing leaders who will do better than me?” That’s a hard thing to judge when you’re thinking about the coaching that we do. Bruce and I talked, our success is we’re trying to build a company through the ESOP that is not acquired but continues to focus on developing people who are decades beyond our departure.
Our success will be if we developed the second generation of leaders, to develop the third generation of leaders who run the company better than any generation before them. That’s what I’m trying to do, is to focus on the development of our senior leader level and to be that model for them. That caused me to question, “Am I doing the right things that they will then turn that from instructing to teaching constantly. They’re always seeing things as a teaching moment for their future versus an instructive moment about how we get through this year.”
That’s such a massive leader dilemma as well as trying to get everything off their plate. What am I going to do next? It’s almost like we’re constantly struggling with, “If I do that well, am I going to be out of a job?”
We were talking to the CEO of a client and we introduced this to a client of what was going to happen, what I was doing. As they were talking about going to regions, we were talking about we were going away from regions. I explained it to them. He looks at me and says, “What are you going to do?” Bruce and I go, “Probably things he’s not doing now but don’t know he’s not doing now.”
We’ll figure that out when we get there. Give us the one parting tip, if you were to think back to your 21-year-old self when you were getting started in your career. What leadership advice would you give yourself back then that you now know to be true?
Listen more and ask questions. I have two wonderful sons. My younger one sometimes wonders, “Why do I want to meet this person or how do I talk to this person?” I don’t know that. You can learn from anybody. You can listen and understand. People want to talk about what they do and who they are. All you have to do is ask them a question. I probably spend too many early years of my career trying to make a name for myself rather than trying to listen to others and understand them. I learned that somewhere along the way but it was the key thing for me when that light switched from. You’re going to learn more by listening than you are by talking.
Kerry Stover, the COO from Pariveda, thanks very much for sharing with us on the Second in Command Podcast. I appreciate this.
Thank you for having me. It’s been a pleasure to be here.
About Kerry Stover
Kerry has delivered solutions in the areas of IT strategy, large system implementation, process management, enterprise architecture development, project management, customer relationship management, and business intelligence. His industry experience includes work with high-tech manufacturing, software products, consumer products, health care, retail, not for profit and financial services clients. He possesses a unique set of skills in the delivery and administration aspects of corporate, business operations, information technology and customer support while delivering effective business process change in companies from small start-up ventures to companies in the Fortune 500.
Much of Mr. Stover’s experience comes from the variety of leadership positions he held in his 20-year career as a partner with Accenture. These included serving as the lead partner for the Dallas Technology organization, serving as Executive Director – Product Management – Software Products, serving as the lead partner for IT Operations and Technical Support in the Business Process Outsourcing organization, as well as his roles serving key clients on large business process change and systems development efforts.
Prior to joining Pariveda Solutions, Mr. Stover was the Principal and Co-owner of i.think Inc., an online market research services firm, where he led the company to a compounded annual growth in revenues of 37% and recognition in the Inc. 5000 Fastest Growing Companies. Previously he also served as Chief Information Officer with Efficient Networks, a Siemens Company, where he was responsible for the efforts to upgrade business processes and support technologies across the supply chain of manufacturers, distributors, customers, and business partners for this $300 million manufacturer of high-speed modem and home networking products that resulted in reducing logistics costs by 25% annually.
Kerry graduated from Baylor University in 1979 with a BS in Mathematics with Honors. He has served on the boards of NeedHim National Outreach Ministry and Parkway Hills Baptist Church and has provided hundreds of hours of volunteer service to Trinity Christian Academy of Addison.