Talent & Leadership

Why B Corp certification may just be the edge to differentiate your firm

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When I started my internship with Tercera earlier this summer, I knew there would be a lot to learn. As a junior at the University of Illinois’ Gies College of Business studying for a BS in Information Systems & Management (and the daughter of a small business owner), I felt I had a pretty good foundation for how businesses work. But I also knew there is no substitute for real-world experience.

During my internship, as I was researching all things cloud, tech and consulting, I noticed that quite a few firms in this space were B Corps Certified. I was familiar with the term. Patagonia had introduced the term to me a few years ago, but I didn’t even think about why a services firm would want to become certified. A certification aimed at verifying social and environmental performance seemed far more suited for product and consumer goods companies like Ben & Jerry’s than people-based firms (many of which have remote workforces). Yet there they were, services firms highlighting their B Corps certification on websites, social media sites and careers pages, and I was intrigued.

Over the last few weeks, I was fortunate enough to interview a few representatives from B-corp certified services firms who explained the process, benefits, and why they were attracted enough to go through the lengthy endeavor. An endeavor that one of these individuals described as their “North Star” for building a purpose-driven organization and a big differentiator when it comes to recruiting.

#Bethechange

If you’re unfamiliar with the term B Corps, here’s what you’ll find on its website: “Certified B Corporations are businesses that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose. B Corps are accelerating a global culture shift to redefine success in business and build a more inclusive and sustainable economy”.

Started by three ex-private equity professionals, B Corps was founded on the idea that today’s issues cannot be solved by government and nonprofits alone. The Wall Street alumni reflected on the work they were doing in respect to the conditions of the world around them and decided they wanted to use business as a way to enact positive change.

The certification

The process begins with a tool, the B Impact Assessment, which companies use to measure their existing impact on workers, their community, environment and customers. The questions are extensive and require time and effort to sort through — the whole process can take up to a year and a half, if completed as a background gig. Questions are given point values and topics range from ‘how much PTO do you allow employees’ to ‘how is your company cutting down on energy usage’ to ‘how diverse is your leadership team’.

You need to reach an 80 point minimum threshold to pass, and the process then continues with a B Corps representative checking records and documentation that prove you answered the questions accurately and honestly. I will note that there are some questions regarding supply chain and sourcing that services companies will automatically miss out on, but there are plenty of other areas in which your company can make up for lost points. Lastly, the certification does require yearly dues and upkeep to maintain, which is why it’s nice to have a designated person or team to manage the project.

Is it beneficial?

So, why have 3,500 companies worldwide already taken the pledge to abide by these rigorous, higher ethical standards of business? Well, let’s look at the stats:

  • A 2021 Gallup poll found that 81% of American respondents say a business’ impact on its local community matters, while another poll indicated 69% of American workers say a company’s environmental record is a factor when taking a job.
  • A 2018 Accenture study found that 62% of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices.
  • A 2017 American Express study found that 68% of Millennials want to make a positive difference in the world through their careers, and 81% said a successful business needs to have a genuine purpose.

If the stats above are any indication for how workforce expectations and customer demands are trending, the success of any company – product or service – will depend not just on financial performance but also how they act on environmental, social and governance (ESG) initiatives. As growing trends of conscious consumerism boom and employees demand that the companies they choose to work with take action, my hope and hypothesis is that this new standard will become the norm in years to come.

But does it apply to services?

My preconception that B Corps was reserved strictly for product companies like Patagonia that need to appeal to eco-conscious consumers was eradicated when I came to understand that professional services are seeing it as a way to differentiate, attract talent, and become more purpose-driven.

Jolene Chan from Traction on Demand, a Salesforce consultancy with more than 1000 employees across the globe, explained how the certification process and the metrics put in place by B Corps have been a “North Star” in guiding decision making. Jolene is Traction’s new Chief Impact Officer — a role you’ll likely see pop up more and more now that companies are bringing these issues up to the executive and board level.

Choosing to become B certified, or implementing other consciously-based business processes, seems especially important for people-driven companies where recruiting and team engagement are so important. Simone Marin from Trineo, another cloud services firm specializing in the Salesforce ecosystem said the B-corp process has helped shape the way in which the company makes decisions. Beyond the initial certification process, it has also been able to translate the questions into a way to monitor progress and continuously improve business processes.

Trineo isn’t alone. A number of services companies have highlighted talent acquisition and retention as a benefit. As stated on the B Corps site, Tiffany Jana of TMI Consulting, said her biggest surprise after becoming certified was “the social capital B Corp community membership gave me with millenials… I no longer search for high-potential staff; they now come to me”.

Simone emphasized this point as well, describing how the majority of Trineo’s potential new employees expressed that their initial draw to the company was the certification, which they’re also hoping to use in the future to attract clients who share similar values.

With the labor shortage happening now (and expected to continue) in professional services, companies will need a competitive edge in order to attract millennials and future generation workforces.

My humble opinion

Coming from someone who’s about to join the workforce and has spoken with many peers on the issue, I believe the majority of us will be looking to join companies that share values like those highlighted in the B Corps process. We understand how pivotal it is for our shared future to address environmental, social and community issues, and we want to work with businesses and business leaders who also want to ‘be the change’.

The very first class that business students are required to take at my school is BUS 101: Professional Responsibility and Business. It’s here that we were introduced to the framework developed by Michael Porter and Mark Kramer in 2011 known as shared value, or value that accounts for employees, supply chains, society, AND the environment; not just stakeholders.

The fact of the matter is that companies now have an opportunity to hold themselves accountable, to take responsibility, and to become a force for positive change in a world that so desperately needs it. My generation will demand these practices be a part of the business model, and in some cases, will even become the “Why” for going into business in the first place. That was my reason!

If you want to attract the best and brightest of the next gen workforce, and keep up with today’s ever-demanding expectations, I would consider checking out the B Corps certification to see if it’s an attainable goal for your company. If not, there are still plenty of ways to make positive change; B Corp just gives you the verified do-good stamp of approval.

If you do decide to go down this path, my last piece of advice would be to act fast! B Corps is currently experiencing an overwhelming surge of interest, which, from my perspective, is extremely hopeful and encouraging, and from a business standpoint may just be the catalyst needed to get going on this grand, do-good venture.

27 questions to create your country playbook when expanding internationally

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For first-time CEOs and founders, the decision to expand internationally can be both exciting and daunting — as it should be. Expanding into new regions can spur growth and open up a world of possibilities, but it also adds a level of complexity that not every leadership team is ready for, especially without first-hand experience operating in that region.

In part 1 of my blog series on international expansion, I shared a strategic approach for how services firms can tackle international expansion, based on my own personal experience. It covered topics like when to expand, where to go first, how to work with partners, and ways to mitigate risks like culture dilution and financial readiness.

In part 2, I’ll dive deeper into what happens once you decide to make the move. Specifically, how to create a global operating framework that can support your expansion into each new country — what I call your country playbook.

What is a country playbook?

A country playbook is in essence an operating framework for international expansion, providing structure and information needed to expand into a new country or region in a disciplined, repeatable way. It’s the operating manual that brings your strategy to life.

A country playbook can align the leadership team with the new leaders on the ground in a new region. It can reduce risk, speed decision making and guide the new team to operate with the same vision for customer experience, culture and employee experience while still allowing for local flexibility.

While a country playbook should provide enough detail to answer the most common questions about expansion, it doesn’t need to be long or formal. It just needs to provide your leaders with the direction they need to understand and execute on your strategy—and feel empowered to make decisions that will benefit everyone involved.

What are the components of a country playbook?

There are two parts to a successful country playbook: a global overview and country specifics.

The global overview provides a high-level structure that can be used across countries, covering items like company positioning, sales differentiators, the scope of services to be provided, the customer value proposition, financial modeling and governance frameworks. This part of the playbook also includes information to help country leaders with hiring, providing clear expectations about alignment with your culture.

The playbook must also address country-level nuances linked to your overall strategy. For example, the specific roles you might need in-country for delivery versus what you can centralize through a center of excellence model. It might also include specific services or capabilities that best fit the customers and partner maturity in that market.
Since each country and situation is unique, this article will focus on the 5 areas that should be part of the global overview: 1) culture; 2) team; 3) services & go-to-market; 4) governance; and 5) financial model.

When thinking about each of these areas, look to expand through fractal growth. By this I mean branching off from an existing offering or point of strength, which helps to create consistency and alignment between regions. Below is an illustration for how this might look as you expand your market interactions, people processes and customer experience into a new country.

Culture

Solidifying and scaling your existing company culture should be top of the list when it comes to global expansion. You have to get it right, and so do the country leaders hiring your new team. Your country playbook gives you an opportunity to embed your existing culture into each new market from the start, weaving your mission and customer experience into the fabric of each country’s operating framework.

To help you get started, your playbook should address questions such as:

  • What is your stated vision, values and brand promise as a company?
  • When your company hires a new leader, how can the team make sure they’re aligned with your values and cultural DNA?
  • What are your norms and rituals as a company, and what can you/should you bring to the new region?
  • What kind of differentiated experience do you expect to provide to customers and employees in this new market based on existing brand expectations in other markets?
  • How can you translate your corporate culture into how you manage processes, performance and compensation while leaving room for local nuances?

 

Team

Thinking through how teams will be structured within and across regions in advance will not only create efficiencies of scale and limit conflicts down the road, it will also speed up recruiting and productivity. Your country playbook should provide guidance on how you will manage customer relationships inside and between regions, what kind of support will be provided from headquarters versus what talent is needed locally, and what you can serve out of nearby regions. This is especially important for customer-facing and leadership roles.

Certain economies of scale can come from centralization and filling some roles from nearby regions, however, these decisions must take into consideration regulatory, cultural and language differences between regions. You will likely want to fill in-country customer-facing roles (e.g. country management, sales, project managers, solution architects) by hiring local/native people, while leveraging global support functions for scale. Some companies will fly-in top experts or tap into global virtual delivery teams, or, when you have a first team in place and some traction, use nearshore and/or offshore facilities.

Your playbook should address questions such as:

  • What leadership roles are needed, and will those be hired locally or through existing leadership?
  • What is your delivery model? What are the services you need/intend to deliver locally or globally?
  • What is your partnership strategy for a given market?
  • How are you going to train your employees and manage their competencies?
  • How are you going to staff projects?
  • How are you going to structure work arrangements with subcontractors?
  • When it comes to forecasting how can you anticipate and prepare for demand?
  • How are you going to manage customer satisfaction?

 

Services and GTM

When it comes to the services, you’ll want to build a country-tailored portfolio mix and go-to-market strategy. This strategy should be based on the size and potential of the targeted market, the offerings most needed by your partner ISVs in that region, and the competition analysis you conducted prior to making the decision to expand. That portfolio shouldn’t reinvent the wheel, but instead be grounded in the services that already set you apart in your home market. For example, if 80% of your customer references are in the financial sector or are of a certain size, it makes sense to focus there in the new country.

Your playbook should address questions such as:

  • What specific services should we offer in each country?
  • What is the value proposition of those services?
  • To what extent will our offering differ from what we sell elsewhere in the world?
  • How does our pricing in this country compare to the rest of the world?
  • What markets or services do we want to say no to (e.g. public sectors, staff aug, etc.)?
  • What is your local plan to build/develop your customer-facing brand?

 

Governance

Governance frameworks and approvals should also be built into the playbook, breaking responsibilities down locally, globally and regionally. This part of the playbook should address who makes the decisions, and how that relates to your strategy and services.

Your playbook should address questions such as:

  • What level of decision making or approvals are needed when it comes to customer contracts?
  • How do we handle fixed-price proposals?
  • What are the thresholds on approvals and who needs to be involved?
  • Who makes the final decisions on hiring? Does that vary by role?

 

Financial model
Last but not least you will want to define your financial model and the budget implications of decisions being made. Your playbook should address structural models like how you’ll manage the P&L, and think through those decisions.

Your playbook should address questions such as:

  • Will we manage P&L by country, region or globally?
  • How do we align and create consistency between our P&L philosophy, incentives, compensation policies and governance?
  • How do we cope with intercompany subcontracting to ensure that countries/markets who host our expert resources are incentivized to support the start of new markets?
  • Who is financially responsible for budget overruns?

 

Once you have your global framework in place, you can dive deeper into the specific country-level detail. This should also be an evolving document. It will only continue providing value if it remains up to date and considers lessons you learn as you expand into more countries. So leave room for growth while ensuring your current playbook alleviates misunderstanding and miscommunication. Revisit the questions in here and add to those based on the situations that occurred in earlier rollouts and talk to your regional leaders to see what else would’ve helped them as they took their first steps.

If you’re a founder or CEO looking to expand internationally, and need capital or counsel to support your move, get in touch with Tercera. Or connect with me on LinkedIn with specific questions. We might be able to help!

Strategies to survive the talent war in the cloud’s third wave

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After working 15 years in talent strategy, recruiting and people operations for tech and IT consulting companies, I thought I had seen pretty much all there was to see when it came to trends in hiring. Then the universe laughed. Cue 2020, the year that changed the world, trapped us in our homes, and created unemployment levels we hadn’t seen since the Great Depression.

Now in 2021, we’re seeing demand for nearly everything come rushing back – especially demand for tech talent. Nearly everyone is short-staffed, but the problem is particularly significant for professional services companies, whose revenue correlates directly to having the right people to do the work. Cleveland Research estimates that many technology service partners are already 20-25% short on the people needed to deliver on their existing book of business.

With customer demand coming back faster than expected in some regions, and COVID still causing devastation in regions with a high concentration of tech talent like India, service providers are fighting a war to attract and keep top talent. Many companies are throwing money at the problem by raising salaries, instituting referral and signing bonuses, etc. This may be a necessary tactic given the current state of things, but there are other things companies can do to attract top talent that may have a more lasting effect on their employer brand. Before I go there though, let’s talk about how we got here.

What is driving the war for talent?

Even the companies who emerged from 2020 successful were cautious about hiring throughout last year, unsure of how the pandemic would impact their businesses and what a recovery would look like. On the flip side, employees were equally uncertain. Even those employees who had survived rounds of layoffs chose not to make job moves last year, sticking with the job they had so they could focus on juggling the unique nuances of the pandemic, like home schooling.

All that pent up demand is now being released as the economy recovers. Tech companies are resuming growth, with many seeing a huge spike in demand from customers that put off projects during the pandemic. The hiring required to keep up with demand, combined with the layoffs, furloughs and lack of hiring from the last year, means we’re now seeing 18 months worth of hiring squeezed into a few quarters – often from the same pool of candidates.

This is happening at the same time employees are feeling more optimistic and are starting to make the career moves they’ve been putting off for the past 12-18 months. Prudential’s Pulse on the American Worker Survey estimates that 1 in 4 workers is planning to look for new opportunities once the pandemic is over. While this data isn’t tech-specific or services-specific, it does point to a growing trend that seems to already be taking place when I see the growing attrition rates happening in firms.

While this supply and demand imbalance might feel incredibly acute right now, the challenges associated with hiring experienced and motivated tech talent will remain for years to come. Tercera’s recent ebook on the Third Wave of cloud computing points to a growing digital skills gap that cloud consultancies will need to address in the coming years.

This is why it’s time to rethink the way you recruit for talent, not only to get through our current talent situation but to prepare for the future. This new generation of talent has been shaped forever by a global pandemic, and convincing them to join a company now requires far more thought and finesse than simply throwing money at them and offering free food for offices they may not even visit.

Three trends changing recruiting in a post-COVID era

The interview process has accelerated.

In the past, even candidates for remote positions would typically come into the office for in-person interviews at the final stages of the process. Today, most companies have gone to all-virtual interviewing. This opens things up to move a lot faster, even if a candidate is interviewing with the same number of people as they would have before. It also means people can interview with many more companies at once from the convenience of their computer screen, allowing them to assess their options and the market more thoroughly. While these virtual-only interviews may get balanced out with in-person conversations post COVID, it’s unlikely we’ll ever see a full return to the old way of interviewing. Nor should we.

Candidates are all in on loving what they do.

For many, 2020 caused a perspective shift because it showed us just how short life is. People are rethinking their priorities; in response, employers need to meet candidates where they are, learning about what that individual is looking for. It’s more important than ever that recruiters can connect job tasks with a greater purpose – both for the company and for the candidate.

Companies may need to rethink offers.

Salaries for some of the most skilled or niche employees are already high, but the gap between supply and demand is boosting them further. While many companies default to boosting salary offers when fighting for top talent, they must balance this with offering other attractive benefits to lure people in. Otherwise, they risk having new hires stall out on pay once they arrive, because they came in at the top of the salary range. Companies are realizing they need to hire and develop instead of simply looking to find that unicorn candidate with the perfect set of skills and hoping they’ll stick around.

It’s time to build your employer brand

Companies need to build a brand that extends beyond one that customers want to work with, to one that employees want to work for. This is especially important for people-based businesses. You won’t have too many happy customers without great people to support them. When I counsel my clients at Cultivate Talent, I recommend they bring together the following elements to create a brand, story and processes to attract top talent in a post-COVID world.

Start with your purpose

People are looking for purpose and connection – a reason to work for your company beyond compensation. Make sure your organization, and everyone in your organization, understands why you do what you do and make it a core element of your employer brand perspective. This will have an impact far beyond just recruiting. Telling this story and how this purpose looks in practice on your website, in your meetings, on your social feeds and across future content will help you build a pipeline of candidates you can tap into 3-12 months from now. In the end, it’s important to convey the greater impact you’re trying to have beyond the services you offer.

Create an army of brand ambassadors

While you may not know it, your employees are the best and most credible advocates for your brand. They can become ambassadors by expressing their passion for your company and its work through their own social media posts, which is one great way to generate energy and interest. You can help your employees do this by creating content they can share. However, be sure you leave it open for them to preserve authenticity in what they say. That will resonate better than any produced message ever could.

Focus on culture

This one should already be at the top of your recruiting strategy but it’s becoming even more important. People are craving connection—particularly if they’re working virtually. Professional services firms will have to talk more than ever about their vision and values, centering their business and their people around these ideals. More companies are ensuring their job postings link to passion and fulfillment, telling stories through their current employees’ voices, sharing what they’ve done to make an impact in the last year and focusing on how they led their people and their businesses during 2020 or what it feels like to work there .

Change your recruiting mindset

Just as people should nurture their networks and not tap into them only when they need something, companies need to do the same. Don’t only reach out to people when you have an open role. Instead, create regular opportunities for people who are interested in your company to learn about you and what you’re doing. Create the expectation within your organization that recruiting is every leader’s job – not just HR’s. People go to work with people, especially in a services business, so capitalize on that and deploy your incredible leaders to bring in more top talent.

Rethink benefits

While candidates don’t make their decisions solely based on benefits, offering competitive and unique options can make them stay once they’ve come onboard. Unique benefits like four-day work weeks, more all-company holidays where everyone has off so people can actually tune out, or giving people paid time away from work to serve in their community are attractive and hard to replace.

Benefits should also prioritize mental health, self-care and wellbeing. Historically, mental health benefits have been overlooked or buried within an overall benefits package. Today, employees expect their companies to care about their health holistically, extending past traditional medical benefits to include gym and wellness memberships, free access to various mental health apps and more.

Optimize for remote work

It’s unclear whether the shift to “work from anywhere” will remain as companies shift to hybrid models or even a return to full-time, office-based positions. However, firms that optimize their operations for a virtual workforce, and who make in-person attendance the exception rather than the rule, will be much better prepared to recruit for the future.

The coming year will be both exciting and challenging for our entire industry. I hope this advice can make your recruiting efforts even more successful, although keep in mind, recruiting is only the first half of the battle. Once you’ve got talent in the door, the real work begins to ensure they stay engaged and enthusiastic to ensure your long-term success. Stay tuned for more insights on how to keep employees happy and connected to your mission once they’re onboard.

How to be a services leader in the cloud’s third wave

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Something big is happening in the cloud computing space. Salesforce calls it Cloud 3.0. We call it the cloud’s third wave. Far too many call it simply digital transformation. Whatever you call it, there is a perfect storm happening right now, with multiple forces coming together to drive more mindshare and more money into cloud technology and the vendors that play in that space.

The first force is no surprise to anyone — the pandemic. COVID dramatically accelerated digital initiatives inside most companies. As Satya Nadalla, the CEO of Microsoft put in, “we saw two years’ worth of digital transformation in two months.” Those initiatives aren’t slowing. In fact, they’re accelerating.

The second force is the maturation of cloud computing. Businesses of every size have bought into the cloud model, and are finding new and creative ways to embed it into their business and customer-facing processes. A maturing space also brings a bigger, more diverse group of vendors, which means more choice for customers, and unfortunately, more complexity.

A third force is the surplus of capital in the market today. Consider just some of these stats:

  • Cloud companies now have a $2 trillion market cap (Bessemer)
  • In 2020 alone, $186 billion was invested into private cloud companies (Bessemer)
  • In Q4 2020 alone, five cloud vendors generated $37 billion in revenue (Cloud Wars)
  • 45 cloud consultancies were acquired in the first 5 months of 2021 with an aggregate value of more than $3 billion (Tercera/451 Research)

Most entrepreneurs and investors will tell you at least 50% of success is being in the right place at the right time, and for those in cloud services, you couldn’t pick a better time. But being in the right place at the right time is only half of the equation. The other half comes down to execution, and building and scaling a business (especially a services business) in the cloud’s third wave looks far different than it did 20 years ago.

As an operator in the services space for more than 25 years, a founder of one of the earliest cloud consultancies, and now an investor and advisor to the next generation of cloud consultancies, I’ve seen the evolution of cloud services first hand. So has Jeff Kaplan, the founder of THINKstrategies, a strategic consulting firm focused on the business implications of transitioning from product-centric to services-centric business models.

Jeff has been a thought leader in both services and cloud computing for three decades. He’s a respected industry analyst, and is now a strategy and go-to-market advisor for Tercera’s portfolio companies. He’s seen A LOT over the years, so when it came down to documenting what’s going on at the intersection of cloud and services right now, I couldn’t think of a better partner.

Our newest ebook, What It Takes to Be a Services Leader in the Cloud’s Third Wave, covers the evolution of cloud computing, the new players in the space, as well as the business models, labor models and skills that consultancies need if they want to succeed in the third wave.

Jeff and I will be holding a webinar and live Q&A about the third wave and some of the concepts in this ebook on Thursday, June 3 at 10am ET. To join that webinar (or access the recording), register here.

We hope you’ll join us!

Tercera adds two new partners

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Former Guggenheim Partners Investment Banker Bill Petty, and Former Appirio CX and Marketing Leader Michelle Swan Join the Tercera Team

EVERYWHERE – April 8, 2021 – Tercera, a growth-focused investment and advisory firm specializing in technology professional services, today announced that Bill Petty and Michelle Swan have joined the firm as partners. Together, they bring decades of IT services experience to help Tercera drive forward the Third Wave of cloud computing. Bill and Michelle join Tercera CEO and founder Chris Barbin, partner Dan Lascell and partner Lisa Burton to support the firm’s investments in third wave cloud consultancies.

“Our goal at Tercera is to identify and empower the integrators, consultancies, and managed service providers who will lead the next wave of innovation,” said Chris Barbin, founder and CEO of Tercera. “Bill and Michelle have built, ran, advised and supported dozens of services companies over the last 20 years, and they bring pattern recognition for the opportunities and challenges our founders will experience as they scale their own business. They embody our mission and values, and will be invaluable partners to the entrepreneurs we back.”

About Bill

Bill brings more than 15 years of M&A experience to Tercera and will focus on the sourcing, execution and monitoring of Tercera’s investments. He joins Tercera from Guggenheim Partners where he was a Managing Director in the Technology Investment Banking Group. Prior to Guggenheim, Bill held investment banking roles with William Blair and City Capital Advisors and worked in KPMG’s Transaction Services Group. He has advised dozens of technology companies across the IT Services and Software markets on topics ranging from M&A, growth equity investments and IPOs. More on Bill here.

“Tercera is creating a new kind of investment firm, focused on the people that enable the third wave of cloud computing,” said Bill. “We are excited to partner with the founders and teams driving the next-gen IT services firms, and are confident that our counsel, connections and capital can help them become category defining leaders.”

About Michelle

Michelle brings to Tercera more than 20 years of branding, marketing and customer experience expertise. She will be responsible for guiding Tercera’s marketing, content and diversity & inclusion initiatives, the Tercera advisor and portfolio community experience, and helping founders amplify their own brand presence. Prior to joining Tercera, she founded and led Swancomm, a marketing communications consultancy supporting early stage product and services companies. Michelle was one of the earliest employees at Appirio, where she led corporate marketing, customer experience and initiated the company’s Customer Advisory Board. More on Michelle here.

“People-based businesses are the heart and soul of the economy, and the secret to success for some of the most well known technology companies out there. Yet they rarely get the attention and support they deserve. We aim to change that,” said Michelle.

About Tercera
Tercera is an investment and advisory firm founded to accelerate the growth of people-centric businesses. Specializing in the $460 billion cloud professional services market, the Tercera team is composed of invested operators who know first-hand what it takes to build and scale a successful cloud services business. Tercera (Spanish for ‘third’) is on a mission to identify the people and partners who will lead the next wave of cloud computing – the Third Wave – and provide them with the capital, counsel and connections they need to scale faster and take an outsized share of the market.

Empowering growth-focused businesses and people

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We’re on a mission to change the equation for people-based businesses.

Companies and leaders come to a certain juncture in their journey when it’s necessary to rethink the approach that gotten them to where they are. Growing to $5M in revenue is not easy, but in those early stages, a powerful vision, a few talented people and customers and sheer brute force can get you pretty far. However, what might fuel initial growth spurts cannot necessarily sustain a company in the long-term. Growing an organization north of $100M takes a different approach and a different set of skills.

Not every leader is ready to scale their company beyond that first plateau, which is why the world is packed with hundreds of thousands of small professional services firms that do amazing work, but never get beyond $5M or $10M. As experts agree, it takes a growth mindset and more process-oriented approach to build something that goes beyond that, something that endures.

Our goal at Tercera is to identify those who are ready, who do have that growth mindset. And then to empower them with the capital, counsel and connections they need to grow bigger and faster than they could without help.

We believe capital is the easy part. There are plenty of equity partners out there, but finding one that really understands your space and can provide the specific counsel and guidance you need to get beyond those first few plateaus of growth is difficult. This is where the magic of our methodology and advisor community comes into play.

 

Tercera’s 5 Elements Methodology

 

We developed Tercera’s 5 Elements for Scale based on decades of experience operating and selling professional services businesses. It is the framework we use when evaluating potential portfolio partners, the methodology we use during our first 100 days of working with a partner to prioritize where investments can make a difference, and how we look at building out our Advisor network. Over the years, we’ve found that most companies are great in one or two areas, good in a couple more, but could use help in the others.

Our 5 Elements for Scale are broken up into (this should not surprise you) 5 areas:

Leadership & Talent: The people piece of the puzzle, always integral to the success of any company, is critical in a professional services company. In this area, we look at everything from the strength of an organization’s culture and diversity, to its recruiting and onboarding capabilities, to its leadership development and overall talent management processes.

Corporate Strategy: In early stage growth mode, many leadership teams lean more towards execution than strategy. For sustainable growth, you need both. This element looks at a firm’s strategic planning process, brand and marketing capabilities, sales and account management strategy, and how M&A and international expansion come into play.

Solutions & IP: The professional services firms that will lead in the cloud’s Third Wave will offer a different set of skills and delivery models than those who led in previous waves. Expertise in cybersecurity, AI, DevOps, and hybrid cloud operations are needed more than ever, and vertical IP and productized solutions are no longer nice to have, but must haves. This element looks at a firm’s overall portfolio, reusable assets, product roadmap and more.

Channels & Partnerships: For services companies, success often depends on going to market with the right ISV as well as creating the right partnerships to grow revenue, attract customers, and expand awareness. This element looks at a firms’ overall market positioning, alliances strategy, channel marketing and adjacent partnerships.

Operations & Processes: While this element may be listed last, we find it’s the one with which most younger services firms need the most help. Startups tend to look at process as a bad thing, but when it comes to scaling, having solid processes matters a lot. Those firms that are buttoned up in how they manage their financials, delivery operations, talent, marketing and sales processes have a big leg up on the competition.

 

Growth comes from all directions

While we believe this methodology can make a huge difference in preparing leaders and their organizations for that next phase of growth, if it falls upon deaf ears, it’s of little value. This is why we look for potential portfolio partners with a growth mindset — specifically, founders who are coachable and open to change. Not because we want to change everything about a company or tell founders how to run their business, but because every great company goes through periods of change, transition, and even reinvention. And we want to work with great companies.

When we say coachability, it means people who are open to feedback, self-aware, good listeners and lifelong learners. You’d be surprised at how easy these traits are to recognize, even in first meetings. Coachability is a key trait shared among leaders with the highest potential and it’s integral to building trusting relationships. People want to work with and for leaders who know their own strengths and limitations, who can acknowledge problems when they arise, and who surround themselves with others that have that same mindset.

If that sounds like you, and you are ready to do bigger things with your business, hit us up here.

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