Rebecca Dzynski (2:42)

What's been the biggest driver of growth for your business? What brought you to the Inc. 5000?

Dr. Sandy Fiaschetti (2:48)

I think it's a great network of referrals. We were lucky early with a great client that we have kept in our four years since we founded and they have been generous in introducing us to other people in the space. And also I speak at events, conferences. And so we've just, we haven't done any true marketing. We've just been out at events and getting clients that way.

Rebecca Dzynski (3:17)

Yeah, Client work is always such a specific thing. You know, we one, making those connections, two, securing the deal and then also maintaining those relationships. How have you navigated those? I would think maybe in a way the psychology background helps with that. So. Yeah. What's your process for that?

Dr. Sandy Fiaschetti (3:35)

I think part of what helps us obtain deals and keep them is our own ethos as a company. What's the saying? We eat our own dog food. Right. Or we, you know, we, we make what we cook or whatever. So even in the beginning when we were three in a conference room, we took the time to establish what our values were. And not just in a way that you laminate them and stick them on the wall, but behavioralizing. If we say we're a no BS company, what does that mean? And if we say we value aha moments, what does that mean? And so the way that we approach our engagements with clients honors that no bs, which sometimes means we're telling them hard things. Because a lot of the work that we're doing is saying about this management team that you in love with this deal. Here are some watch outs on them. And so we have to live by that and just another part of who we are. And maybe it's owing to my background in the Midwest and automotive and all of that and first time PhD in the family. But we love it when people say, oh my gosh, I didn't realize you were a PhD. Like we take that as a compliment that the way that we present our results to our clients is just very business focused and doesn't feel like you're in an ivory tower getting an analysis. So.

Rebecca Dzynski (4:57)

Yeah. How big is your team now?

Dr. Sandy Fiaschetti (4:59)

We are seven full time people and our model is we have a cadre of associated contractors who love working with us. And so we scale up and scale down using them, but we're just seven little mighty team right now.

Rebecca Dzynski (5:14)

Yeah. Yeah. What was it like hiring?

Dr. Sandy Fiaschetti (5:17)

Well, easy in that one, that's our business. But two, I mean, when I was starting Lodestone, first I had to decide do I want to make this journey again? But then once I realized, yeah, I'm actually not that good at having a boss I should actually start a company again. I just called people in my network, like I kind of Pied Piper, the great talent. And so it was easy to say, martin, I don't have any work yet, but would you be the person to join me when we get work? And Becca and just sort of putting people together in that way. We've just hired a new salesperson that's a stranger to us. So that is a first for us. Yeah. Cool. He hasn't even started yet.

Rebecca Dzynski (5:59)

Yeah. What's it like, you know, navigating this kind of growth? Are there any challenges with it? I know we always hear, you know, it can be a bit of a double edged sword. You know, you're so excited that your business is growing, but then all these other things pop up that you have to deal with.

Dr. Sandy Fiaschetti (6:14)

Yeah, I would say there are speed bumps and challenges. I think the good news, though is literally the business we're in is in helping other growing and scaling companies navigate it. And so just this morning before I came down to talk to you, I was talking with a company going through that and I can say, oh, we're facing this too. Right now I'm just hiring my first stranger. And here's how that's different than hiring the people, you know, or we've just gotten out of the referral network and now we've gotten a stranger to us client or whatever. So that has been helpful. I mean, the biggest thing that I remember learning early in this is make sure that you're not constantly working in the business. You're working on the business. So I've been intentional about that. Even though we're just finishing our fourth year as early and often as I can, I tell my team, I'm like, I'm just superfluous around here. Right. Like, I don't want to be in the delivery. I don't want clients to feel a dependency. I don't want that, like, founder issue that happens a lot where we need the founder or that I get so caught up in my own ego that I think I need to be there as the founder. I do not.

Rebecca Dzynski (7:24)

Yeah. It seems like deliberation is probably a huge part of that. Yeah, yeah, yeah. And having the people that you trust.

Dr. Sandy Fiaschetti (7:31)

Yes. And, you know, using good process to select them, because that's again, the business we do. So all that's helpful. And even though we're seven people, we're doing the things about how do we think about career progression and what's the competency roadmap for everybody. Again, the stuff that we do for other companies. But we're doing it now, trying to get ahead of it, because we know that's what scaling requires.

Rebecca Dzynski (7:53)

Yeah. Are there any external factors that have driven the growth of your business?

Dr. Sandy Fiaschetti (7:58)

I think who we serve, like, we're niche to private equity firms and portfolio companies, you know, they're deal people. They're always doing deals. They're wanting to grow companies, and so they don't tend to be price sensitive in the scheme of what they spend money on.

Rebecca Dzynski (8:12)

Right.

Dr. Sandy Fiaschetti (8:13)

We are not a big ticket item. And so I think that has helped our growth tremendously. Like, we have this one great client who early on I just remember saying, what does it cost to do an assessment of two CEO candidates? And I told him, and he was like, oh, well, why don't we just try a couple? That's nothing. And I was like, oh, okay. And so I think that lack of cost sensitivity has actually helped us.

Rebecca Dzynski (8:36)

Yeah. Yeah. Do you find that there's a lot of competition for firms like yours in this space, or are you offering something that maybe they don't know that they can really benefit from and you're selling them on, hey, you should actually be doing this?

Dr. Sandy Fiaschetti (8:49)

I think it's a little bit of a mix of both. There are definitely other players in the space. There's one that for private equity in particular, they got in sooner. They were known in private equity. But they also have a different background than us. They don't have that organizational psychology background. So I feel like we differentiate on that. But in most cases, I mean, this is true for life and for our business. I think an abundance mentality over a competitive scarcity mentality is really at play here because you've worked, Rebecca, there's no shortage of people issues in workplace places. And so it doesn't really matter if other people are doing anything similar. There's plenty of work to be done.

Rebecca Dzynski (9:33)

Yeah. What are some of the early challenges that you dealt with the business and how has that shaped how the business has. Has evolved and grown over time?

Dr. Sandy Fiaschetti (9:44)

I remember one early one where I fell in the trap of, hey, we want to pay some bills. This project is in front of us. It doesn't feel like it's going to make a meaningful difference to this organization. It feels like they're trying to check the box. They want to just do job descriptions and they don't understand how it ties to their broader culture and, you know, blah, blah, blah, and didn't have a great feel for that. They really were wanting to do the thing for the right reasons. But we did it anyway.

Rebecca Dzynski (10:17)

Yeah.

Dr. Sandy Fiaschetti (10:17)

And it felt very transactional. And I'm not sure we moved the needle in their organization. And I don't think it was the best reflection of our work because it's hard to work with an organization that is kind of stiff arming you at the same time that they're calling you in. And so that was one of those, like, you have to say no to some things and, you know, I won't do it again.

Rebecca Dzynski (10:39)

So you're, you're four years into this business. What has changed, if anything has changed from your initial vision of what it could be?

Dr. Sandy Fiaschetti (10:48)

At the beginning, honestly, I thought we're doing consulting for the short term. You know, we're all gonna make money every year and pay our bills and do good work. And about a year in, I was like, oh no, I want to do what we help other companies do. I wanna grow this, I wanna scale it and I wanna sell this thing. And so that was the biggest shift. I like to think it didn't change how we approach what we do, but of course it does change some things because never when I was training in IO psychology did I think I'd be studying EBITDA and operating margins. But it's become very important in what I do, and that's more the working on the business versus in the business.

Mike Hoffman (11:34)

When we come back, Rebecca asks Dr. Sandy what strategies Lodestone has in place to drive continued growth. But first, a quick break.

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Rebecca Dzynski (12:46)

What inspired you to go from academia to entrepreneurship? Those are two very different environments.

Dr. Sandy Fiaschetti (12:51)

Yeah, well, I knew when I was getting my PhD that I did not want to go academic and the field itself is applied. Right. We're talking about behavior at work. But I knew I was never Going to be a professor. But my career journey was in companies in other consulting firms. I'm from Detroit, so it was like automotive, then consulting, automotive, then consulting. And automotive is a very practical kind of thing. But one of those was someone, a dear person that I had coached in my early days in automotive, who called and said, you know how you said you'd never go back inside an automotive company again unless you could do HR people stuff the way you wanted to do it? I'm going to a startup automotive. Would you come? And that gave me the taste of an entrepreneurial environment. It was venture capital backed and so that really opened my eyes to that world. Now I think we were 10 or 15 years ahead of our time with our hybrid electric vehicle. So that company ended up closing, but it started the seed and it started those connections. So I started another consulting firm with a partner and they were one of our first clients at venture capital firm. Then I went, got a call that I thought was business development. It turns out it was a private equity firm saying, hey, why don't you come inside for a couple of years? And so those couple of years of, like I said, watching people grow and scale businesses and then having had that start back at that startup automotive. Plus, I'm a psychologist. I know the way I'm wired. I'm wired for change. I'm wired for exploring big ideas, not for operational repeatability. So all of that kind of came together to say, why wouldn't I go chase this tam, this addressable market? And there's so much help that is needed in these companies. So all of that sort of came together in a confluence of it's time to start Lodestone.

Rebecca Dzynski (14:46)

What are some of the most strategic things you're doing right now to continue the growth of the business? You know, it's one thing to have like a really remarkable run, but to maintain and grow even further from that is a wholly different thing. So what does that look like for you and how are you kind of planning that out?

Dr. Sandy Fiaschetti (15:04)

Yeah, so I think part of it is what I already talked about, which is me stepping out of a lot of the delivery. One of our small but mighty team is a chief of staff who's working on an operating system. We're documenting how we do things so that we can scale and add people easier go to market, is shifting a little bit, investing in this new salesperson that I mentioned, but also being intentional about going to more and more of these events where our clients are. All of that is part of it. Another part of the strategy Is thinking about really two things. Bundling together some of our services where at the beginning people had come to us episodically for can you assess these CEO candidates or can you coach this leader? And if you put assessing, advising, and aligning an executive team all together, they get faster lift, they get faster value creation. And it's better for us and it's stickier, as we say. Right. Like we're in the story longer. And so all of that is really part of our growth strategy right now.

Rebecca Dzynski (16:09)

You mentioned before, you know, this idea of knowing when to say no and, you know, especially doing client driven work, I can understand that could be difficult to pass on something. I'm curious how you approach onboarding new clients and if there's ever reasons that a client might not be a fit for your business.

Dr. Sandy Fiaschetti (16:27)

Yes, reasons like they want to check a box instead of thinking systemically and doing the right thing by their people. But the onboarding is really, we're vetting them as much as they're vetting us, which is nice. And we're small enough that I'm in when I say I'm out of the business. I'm still involved in all of those meetings. And we're up front with not just our capabilities, but our values. Those are in our capabilities, Deck. Because it matters to us that, hey, if you want someone who's going to tell you about someone's child and give you a clinical analysis, you should not work with us. If you want someone who's going to show up at all of your events in a navy suit and a red tie, you probably should not work with us. And so we do all of that up front and that helps to onboard them and it helps to keep them around.

Rebecca Dzynski (17:17)

How do you measure success with the client work that you do? You know, like, what kinds of metrics or insights do you look for?

Dr. Sandy Fiaschetti (17:23)

Many times we can look straight at the EBITDA or the revenue of the company. Right. And see, of course, you know, I'm a scientist, so correlation is not causation. However, we can say, oh, we assessed and we put this CEO in place for you and look at the growth in ebitda. Is that the only reason? No. And that's one of those where the purist in me as a scientist doesn't want to take claim to some of those results. But everyone around me in the business world is like, you need to stop because there is a correlation there. And that's the important thing. Sometimes it's even easier. Like we have a program where we do a Year long development program like in middle market leaders in an organization. And part of that program is we give them an action learning project. So they're working on something tangible that the company needs, not just butts and seats, training and coaching and that kind of thing. I'm thinking of one example where the project that they had was they created an operating system for their company and the company. It was like we would have paid a consultant even more money than we paid for this program to have this done. So not only did it pay for itself, but it paid for the outcome that we got. So, you know, sometimes it's very easy to see those kinds of connections and then some of them, you know, there's still an emotional level to people issues. Right. So we kind of joke, but nothing is 100% joke that the CFO who used to make everyone cry in meetings. Like if we measure, do tears go down, do outbursts go down, do the number of calls to the board to say what is going on with this executive go down? We count those as measurement.

Rebecca Dzynski (19:08)

Yeah, yeah. It must be really interesting working on something where you're focused on human employees at this time when everyone is really thinking about AI and more technological solutions for driving efficiency. I'm curious just how you're thinking about this changing environment and if that has an impact on the way you approach your work.

Dr. Sandy Fiaschetti (19:30)

Of course everyone's thinking about it, talking about it, and it has some impact. I think it will be like when the computers came out, when the Internet came out, when phones came out, everything was going to eliminate jobs. People can't see my air quotes, but I'm doing air quotes and make work more efficient. We were going to supposedly work only four or five hours a day. My question would be, how's that going for us? We are looking at how does AI make some of what we do faster? But it's never, in my opinion, going to replace us. Like, I'm not worried that human interactions will ever stop involving a human person.

Rebecca Dzynski (20:11)

Right.

Dr. Sandy Fiaschetti (20:12)

Giving advice. That's sort of how we're looking at that.

Rebecca Dzynski (20:14)

Yeah, yeah. So I know you work with private equity companies and their portfolio. Are there any industries that have been particularly fruitful for you within that?

Dr. Sandy Fiaschetti (20:25)

Honestly, no. It's pretty agnostic. We work in a lot of industrials as a sector. We also work in business services, consumer products. Because I think it goes back to that issue about people. Right, the people leadership. It doesn't matter what the technical skill set or the technical area is. Some of those people dynamics just cut across and so we've been all over

Rebecca Dzynski (20:49)

the sectors, and I'm curious what your background, what impact that has on how you lead. I know you've talked about trying to get outside of the operations of the business, working on it instead of in it, but what would you say is the biggest impact of having this psychology background and running your own business?

Dr. Sandy Fiaschetti (21:08)

I'd love to say, well, all my training on how to be a great leader always makes me a great leader. But of course, that is not true. Right. I am a human, and so I think it's more. I just learn faster as things happen. And what I mean by that is I know my own personality type. I know my derailers. Like, literally, we take this Hogan assessment, and that's what all of our clients take. So I know things like, I can have a bias toward action under stress. I can jump in too quickly. And so just knowing that and making that part of the nomenclature of our work makes it easier to recover faster. I think that's all we can ever do as humans. We're never going to avoid mistakes. Just how quickly can you recover from that? And so that, I think, has shaped my leadership, and it helps to create an environment of psychological safety and to know what that is and why that matters. This just happened the other day. Someone on my team came and said, hey, you know, you thought you communicated such and such to me, and you didn't. That's not okay. I felt left out. And I'm wondering if there was intent behind that or if that was an oversight. Those are words that I promise you that person did not know until. Cause that one isn't an Iowa psychologist. But the fact that people use words like that makes me feel good about what we're growing here.

Rebecca Dzynski (22:28)

Yeah, I mean, the fact too, that an employee can come to you and give feedback like that, that must really be a safe environment for them.

Dr. Sandy Fiaschetti (22:35)

Yeah, that felt good about it. I thought. Oh, not a shining moment in terms of completely blindsiding this person with this issue, for sure. But the fact that she came to me and that we had quick recovery, I think that's all we can ask for.

Rebecca Dzynski (22:47)

Totally. Being a scientist, I'm curious if you feel like you're more tolerant of risk or change.

Dr. Sandy Fiaschetti (22:55)

I don't know if it has to do with being a scientist, but I know from my own personality profile that I'm very tolerant of risk and change. It can be sometimes to a fault. That's that impulsive derailer I talked about. So I need to have people around me. We build a team mosaic on our team and for our clients. Right. To make sure, oh, I've got someone who's cautious and risk averse where I can say I want to run toward this risk or change. Is that me being impulsive? Somebody check my thinking on this. I think stereotypically a lot of scientists might be resistant to change. Right. There's process and procedure. That's not really the way I'm wired, but I'm definitely a change agent.

Rebecca Dzynski (23:36)

Well, Sandy, thank you so much for joining us.

Dr. Sandy Fiaschetti (23:38)

Yes, you bet.

Mike Hoffman (23:41)

That's all for this episode of youf Next Move. Our producer is Blake Odom. Editorial, editing and sound design by Nick Torres. Additional editing from Sam Gibauer and Tad Wadhams, and our executive producer is Josh Christensen. If you haven't already, subscribe to your Next Move on Apple Podcasts, Spotify or wherever you listen. And your Next move is a production of Inc And Capital One Business.