Today I had the pleasure of sitting down with one of Trellis’ 4 owners and partners, Ross Beyeler. Ross is a tenured eCommerce veteran who started his own agency, Growth Spark, over a decade ago. Ross transformed Growth Spark into Boston’s premier Shopify Plus agency and was eventually acquired through a merger with Trellis. Ross joined Isaiah Bollinger, Jared Shaner, and John Cymerman as part of Trellis’ ownership group and the team has continued to grow ever since. Today, we get an inside look into Ross’ current involvement here at Trellis and we will learn how he tackles problem solving, critical thinking, and decision making through the lens of operational efficiency within an agency model. This interview encapsulates everything you need to know to successfully understand your business, its utilization, output, and finances.
1) Please describe your role in the company.
My role as COO is on the tactical side managing the project management team alongside Jeff, our director of project management and all the other miscellaneous sort of operational roles that we have. So, for us, that includes people management, resource management, financial management, data management, and even process management. Each department is really run by one or two people and then I work in collaboration with them to help build out that aspect of the business.
From a tactical perspective, I see my role as managing the people, processes and performance of each of those divisions in collaboration with the people that are either directing those divisions.
From a strategic perspective, I see my role in the company really being centered around thinking about how we scale as an organization – How do we build models that allow for us to profitably scale? How do we build systems that allow us to automate reporting that allows us to create better data driven insights in the company?
I really feel like fundamentally everything I do is really centered around this idea of how do we scale as an organization and the other major component is change management.
Change management is a discipline in and of itself. I see Nick is very much the steward of a lot of our change management efforts but I focus on how we change from the perspective of the goals that we’re setting, the OKRs.
I ensure that people are being held accountable for their OKRs and provide them the support they need in achieving those OKRs which includes collaborating with the other directors, understanding where they’re spending their time, helping them unblock them on things, giving them additional resources from the operations team or making suggestions and getting feedback.
So, I think generally for me, it’s very much scaling the organization and managing the change that comes along with that scale are definitely the backbone of my role.
2) And could you elaborate on OKRs? Are those like KPIs for operations?
Yes, OKR stands for Objectives and Key Results – it’s a framework for goal setting. The best way to think about it is if you’re driving a car across the country, your Objective is to drive from Boston to California. How do you know if you are on track? Well, you’re going to look at what are called Key Results which are the specific indicators that show you’re on track – your speed, your general direction, duration spent on the road, your MPG, and all of the other things that indicate you are on trajectory.
So, we deploy a similar system for different goals – for example, improving employee retention. How do we know that has happened? You may see a reduction in turnover, an increase in duration, higher levels of engagement or improved employee satisfaction surveys. So, it’s using a model to think about goal setting that allows you to state these loftier objectives with supportive, clear, tangible measurable, key results that are achieved along the way.
3) And when you’re creating these models are they unique to Trellis operations? OR can they be more broadly defined and re-used within other agencies?
That’s a great question. I intentionally try to do everything agnostic to Trellis as much as possible, I treat it like Trellis is my only client and I am trying to consult Trellis on how to scale their agency. The reason I do this is because I think it allows you to work on the system that’s powering the systems right. So, if you have that level of disconnect or objectivity, it’s easier to know whether or not the way you’re going about implementing change is the right kind of move. Having that objectivity allows me to build something I think that’s a bit more resilient and doesn’t get wrapped into the like nuances of Trellis.
4) What specific processes or changes have you seen deliver the most impact to the firm?
I think there’s been a few things that have really helped us as an organization over the last couple of years. First, we’ve found that having true documentation for our onboarding process for new employees is vastly important. We’ve hired a ton of new people since I joined the company, 35 to 95 people and counting. And obviously there’s been some turnover along the way so we’ve actually hired closer to 80 people in that time period.
We continually get a lot of positive feedback on the level of documentation we have, and how that aids people’s ability to get up and running quickly with the onboarding process. The second thing is building a discipline of data. It’s really hard to get everyone to track and update data. No one really loves doing CRM updates or project reports updates. It is administrative overhead and nobody loves logging their time, but the only way we can really scale as an organization is by being able to rely on data as an informant.
Outside of that, I find myself doing a lot of financial modeling – what if type scenarios. What if we increase utilization by 10%? What if we hire 15 new people? What if we added five new non billable roles? Being able to incorporate modeling and scenario playing is really helpful to vet out an idea. Modeling gives us that opportunity to try something on paper, before we roll it out, which would ultimately have a huge cost if we’re talking about hiring people and moving people’s roles around.
So, I would say onboarding documentation, discipline of data, and modeling have had the three biggest impacts on the company.
5) It sounds like risk management is also part of your role, evaluating future problems ahead of time, and making sure that the firm is positioned well enough to succeed in any scenario. Do you agree?
Yes, absolutely. Risk management is key. I think it’s particularly hard, where there’s so many different departments in the business and so many conflicting priorities, but there’s only so many resources, whether it’s time or money to go around.
So, trying to figure out how you prioritize the various issues and initiatives that exist in the company, it can be a lot at times!
6) Definitely, that’s a great transition into my next question. What would you say is the most difficult part of your job? Where do you add the most value at Trellis?
I think the most difficult part is building consensus on things, because there are so many stakeholders and so many brilliant people in the company. Everyone’s looking at something from their particular perspective and when we are talking about a problem or potential solution, everyone is trying to look at it through their lense. How does that affect me? How does that affect my direct reports? How does it affect the performance of my department?
So, everyone has a very specific lens on things, including myself, and it’s really easy to get caught up in that. Remaining objective and trying to think through things holistically is essential.
There’s a fine line right when you try to get everyone’s input, where it gets too democratic or bureaucratic and then you’re not making any decisions.
Or it becomes Sorry Guys and then you’re not getting the buy-in that you need from everyone else, so managing that can be a bit difficult.
7) Where do you feel like you add the most value? What are the bottlenecks or major pain points that you absolve?
Because I tend to look at things from a systems, process and automation perspective, I think a lot of times I can think through problems and help people come up with solutions that scale fairly well. But, sometimes you over-engineer things, over-automate things, over-design things. So there’s a fine balance where I might be getting a little too eager beaver on trying to automate things.
8) So when you are building out these models and building out these systems, what are the core metrics that you think a healthy eCommerce agency needs to have to succeed? Is it efficiency? High utilization rate? Is it quantifying leads per month? What are the core metrics that you truly value effort for an eCommerce agency?
For any business, you have to have healthy profit. Generally, if you’re under 10% it’s really not healthy and not sustainable. You can’t keep up with inflation and the growth that you’re going to need.
If it’s 10 to 15% you’re you’re healthy business, you are where you want to be, but aren’t necessarily banking super hard.
Anything in the 15 to 20% range, now you’re starting to put a little money aside and being able to do some more generous bonuses.
Anything above 20% and up to 30%, then you’re talking about real profit. I don’t see that many agencies that are truly operating at scale that have profit margins above 25-30%.
As a very small agency, of course, but as soon as you’re talking about being above 60 people, operations of scale come into play. When you have management overhead and all that type of stuff, it’s really hard to maintain net profits and you know pay people livable wages and continue to scale.
For us it’s really important to recognize when you’re in periods of growth versus when you’re in periods of optimization. Last year and this year as well are big growth years with a lot of hiring, a lot of investment in new roles, in overhead and it’s a very conscious decision because we see the light at the end of the next level.
Once we get to a 120-150 headcount, we’re going to be able to do a whole lot more as an agency, really diversify our services and help serve our clients. So we’re willing to make that investment right now, willing to sacrifice on the short term profitability, to see that sort of longer term profitability.
Aside from profit, which is a big guide poll for anybody, I think utilization is one of the most useful, but sometimes distracting, metrics.
If you look at utilization as the absolute truth, you’re probably going to end up optimizing the wrong things. I like to look at utilization as a sort of narrative on a couple different points.
When you see low utilization, it either means work isn’t available, like hey there’s just no deals, no clients and no sales. That’s a sales problem.
Or #2, work isn’t actionable. We’ve got work to do with our clients, but we can’t do anything about it. We haven’t done the solutioning. We haven’t done the estimating. We don’t have the deal in a place where people can get hands on keyboards.
#3, it’s not allocated – so you have a resource management issue. You don’t have the right people, people are on the wrong teams, the wrong people are doing the wrong work, or it’s not actually getting done appropriately.
When you see low utilization, you need to ask yourself what is actually going on here? What is the story behind all of this?
Right now, we have had a slow period of utilization over the last month or so, but it’s because we really choked up on sales, intentionally, at the beginning of this year, so we can catch up with our resourcing.
Then as sales start to pick up, we’re going to see that no longer being an issue for us as an organization.
I think utilization is really helpful, but you can’t just take it at face value, you have to dig into what is actually driving that lack of utilization.
9) What strategies or tools have you implemented to improve utilization?
First off, there is a very popular saying: what gets measured, gets managed. So #1 is, you have to make sure that you’re actually tracking utilization. If you’re not, if you’re not doing it accurately, you’re not going to be able to really have those insights, so I think we’ve done a good job on that. Everyone’s really good at tracking time. We’ve got a lot of different utilization reports, we can look at it by role, by team, by person, so that’s always #1.
Once that’s done, then it’s a matter of making sure that those reports are being communicated. People need to be made aware of utilization issues, so we’ve got the weekly utilization report, we have a monthly resource optimization meeting. Reports are available to directors to look at their team’s performance on a regular basis, so putting that reporting out there is really important.
After that, we focus on resource planning – who do we hire, when do we hire them, what teams they belong to, what work is coming in from the pipeline, where those projects are going to be allocated, how quickly will that work be actionable, there’s a lot that goes into resourcing.
It’s a massive game of chess that a lot of different people are playing on a regular basis, but it’s really important that we are running through all of this. This is why we have weekly pipeline review meetings, weekly resource forecasting, and a bunch of different activities that drive this game of resource chess.
And then, the next level is really getting into being as proactive as possible. What we’re starting to see is we’re uncovering a number of leading indicators that allow us to get ahead of potential utilization issues.
Hey, we have someone that has only 10 hours of assigned work remaining. We have someone that has no planned tickets. We have a team that has no projects that are coming in two weeks from now. All these kinds of things that are conducive to more forecasting, more future looking. This allows you to get ahead of it and start making decisions today that prevent those problems tomorrow.
10) Sounds like foresight is very important in your role. You touched upon other members of your team, those who directly report to you, would you mind describing more about their roles and their responsibilities?
Absolutely, Jeff as Director of Project Management is like all directors responsible for the people, process and performance of his department. Jeff does a great job with his people, he’s great with one on ones, he makes himself as available as possible, and does a lot of collaboration with the project managers, along with the program manager role that we’ve recently introduced. So he’s paramount in all of that, and also in helping to drive some of the cross departmental processes which includes things around our delivery processes and project reporting.
Next, Nick is our process excellence manager. Basically, think of Nick as the the person who’s on the ground, helping with change management, establishing process, documenting process, surveying people to get feedback on process changes, training people on that, auditing various tools and reporting to ensure that people are actually falling through with these changes. Nick is very much sort of the architect and person to hold people accountable to all that change.
Mike as resource manager, his job is really being the chess master of resourcing, listening to all the different teams, what’s going on, understanding what’s in the pipeline, where you have gaps in resourcing, trying to identify what hires we actually need to make, and then making those recommendations to the directors. Then, he works with Diana to actually make sure those roles get filled.
Mike is definitely the one who measures and tracks utilization most closely and is collaborating with all the directors to understand where the pieces are going to get moved from a resource allocation perspective.
Diana is our people operations manager. She is in charge of everything related to hiring, onboarding and career development with all of our staff.
We recently hired a recruiting and onboarding specialist, Carlos, who’s going to be working with Diana on the front end of that. He’ll be helping with driving our recruiting process or recruiting data recruiting relationships that will allow Diana to have a little bit more bandwidth to be able to work on things in the longer term. This includes employee engagement initiatives, career development initiatives, helping us migrate to a more robust HR management tool, all the things that relate to building a healthy scalable people driven organization.
Additionally, Marty is our internal data engineer, but is really our master of all things tooling and reporting. He charges that everything that we have that powers this business from a data perspective has been built by hand by Marty.
He’s a master of everything related to Google cloud, Google data studio, Google sheets, etc. He is literally the backbone of the company and has all the tools that he’s built and maintained
Finally, Joe is the backbone of the financial aspect of the company so he’s doing all the AP, AR, and all the billing. He does all of the grunt work that comes with running an organization like this. He makes sure all of the trains are running properly and that we are getting paid by the people that we need to on a regular basis.
11) If you were a CEO of another agency that was struggling to scale, where would you recommend they start? Who is the first hire? What’s the first goal? What’s the first model that you’re building out?
Another great question, I think you have to look at where the problems exist. Do you have a demand issue or a supply issue?
A demand issue is we’re not getting enough leads or not closing enough deals, we’re not pricing projects appropriately, anything that’s related to sales and marketing. On the delivery side, issues are we don’t have enough people, we don’t have the right people, we don’t have people trained up effectively, we don’t know how to manage our projects, we don’t have processes of standardization.
The third bucket would be on the finance side. Are you getting paid? Are you paying people right?
Generally, just looking at a P&L of an organization, you can figure that out pretty quickly. What is your current staff ? What is their capacity? What are their utilization targets based on their role? That gives you a sense of how much revenue potential you have as an organization based on the size of your team.
And then, once you have that number in mind, you can look at what your actual revenue is and then ask yourself if you are getting close to that number? A rough rule of thumb is between 150-200 thousand per head.
So, let’s say 200,000 a head and you have 10 people on staff, perhaps your organization can net 2 million give or take.
So if you’re at 2 million great, maybe you don’t have a sales issue, maybe you’re not profitable because you’ve got too much overhead or you outsource too much or you’re paying people too much. Whatever the cause might be, once you understand what the team structure looks like, and you know what the revenue capacity looks like you can then determine whether it’s a sales issue or if it’s more of an operations issue.
12) Where do you see the trajectory of the firm going in the next 2-3 years? Where would you like Trellis to be?
I’ve been very excited about the growth that we’ve had, we’ve consistently nailed 30% year over year growth. Increasing the headcount is really about doubling down on what we are doing well, so being strategy driven, being full service and being experts in a very narrow set of eCommerce platforms.
On the strategy side, we made a commitment to rethinking how we’re approaching projects and to put strategy at the forefront. We went from having one person who was doing all the solution strategy to now having a team of 8 people, between BSAs and solution strategists. This is going to allow us to have far more robust, more comprehensive solutioning services for our clients. I want us to continue to scale that out so Adam, the director of client strategy, creates more robust strategic frameworks, being able to take on more complex projects, being a bit more sophisticated with accounting deliverables that we’re turning around on the strategy side.
On the full service side, continuing to build up our design and marketing teams will be critical. We’ve seen tremendous growth on the design side, we’re starting to do a lot more branding engagements and brand strategy. I’d love to see both of those teams continue to grow if not double in size in the next one or two years.
Then on the platform expertise side, it’s about deepening strategic partnerships, building internal component libraries to allow us to do more reusable code, building better technical documentation so that we can solve recurring problems quicker, and building tighter integration. It seems like our Expertek integration, where we have a differentiation, is a way to speed up some of the work that we do with our clients on Magento. Staying focused is going to be the biggest challenge for us because it’s very exciting to do new things. We’ve proven that we are good at what we do and then, if we can stay true to the course and continue to deepen those three areas in the business, I think there’s a lot of opportunity for us in the next two to three years to go from the 95 people that we are now to hopefully to 2x that.
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