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Inspiring Women, Episode 21: Finding and Owning Your Voice

May 12, 2020 by John Ray

finding and owning your voice
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 21: Finding and Owning Your Voice
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finding and owning your voice

Inspiring Women, Episode 21: Finding and Owning Your Voice

Finding and owning your voice is a necessary skill for women to learn, so that they can express their unique identity, add value in any situation, and contribute to the greater good. Host Betty Collins explains in this edition of “Inspiring Women,” presented by Brady Ware & Company.

Betty’s Show Notes

Finding and owning your voice.

Strengthening your inner confidence.

It’s your identity expressing itself. It’s your personality, and it’s your individual message to the world.

I believe that there is power in that feminine voice, and it’s missing in too many conversations. From the business environment – your office, the marketplace, the boardroom, to politics, and in our homes. If we are there, it’s so crucial that the voice is heard.

In this episode, I hope to help you to move forward in owning your voice, and claiming that power.

Of course, if it’s only for the greater good.

You first have to recognize you probably have something valuable to say. You have to be strategic, though, about what you say and when you say it. Don’t speak for the sake of speaking. Be sure that you speak thoughtfully, in an engaging manner, when you want to be heard.

Words really matter.

People’s perception and how they’ve heard you is your of choice of words. Speaking isn’t just saying what you want. Speaking isn’t just having your voice. Words matter to make things happen.

You must be willing to speak up when something goes against what has a deep value for you. Silence in those moments really talks about your character. And be prepared for possible backlash when you do. Criticism comes with being a leader, regardless of your gender. The labels, and the name-calling have very little to do with you, personally. It’s really about how uncomfortable you’re making some people. Don’t take it personally, and just move on.

When you’re finding your voice, it’s one step at a time. Slow and steady.

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Other episodes of “Inspiring Women” can be found here.

Show Transcript

Today, we’re going to talk about finding and owning your voice; strengthening your inner confidence. It’s really not about how your voice sounds, or it’s not really about finding the perfect way to say something. Really, do you have something to say, but you maybe choose to be silent? Maybe you’re at the table. You finally got there, and you want to have some kind of impact, and you want to speak up, but you don’t. Maybe you’re confident, but you’re just not courageous with what you’re wanting to say, when the time comes. Maybe you’re using your voice, and you’re talking, but you’re not being heard. I hate to say it like this, but could it be that you’re not saying anything? That’s kind of an ouch, but …

So, your voice – it’s your authentic self speaking. It’s your identity expressing itself. It’s your personality, and it’s your individual message to the world. That world is what for you, professionally and personally? Your voice is what you have to say, and it takes confidence, and you have to be courageous. It takes really some strategy. It takes you stepping back, looking into the mirror, and being honest; strengthening that inner confidence, and shutting down the voices in your head. Then, it’s just action time.

Your voice is your power. It’s yours. It’s not anyone else’s. You should not give it up for any reason. There are people all around you who have used their voice for good and for bad. Think about it – if they had not used their voice, if they had not stood, if they had not said what needed to be said, what differences would be going on, right now, around you, in your company, in your career, in your family, et cetera? Who are you thinking of right now that spoke up? They spoke up and they communicated a very needed message. You have to think of those who did it negatively, though, and not for the greater good; always speaking, always saying something … Today is a tough environment. We have this P.C. world, and the tones, and the agendas, and all these opinions. At time, it’s shutting down our voices due to differences, and that’s not good either.

As this is a podcast for inspiring women, I believe that there is power in that feminine voice, and it’s missing in too many conversations, from the business environment – your office, the marketplace, maybe the boardroom; in politics; our homes. In a lot of those arenas, we’re not even there, so how could our voice be heard? So, if we are there, it’s so crucial that the voice is heard. Today, I hope to help you to move forward in owning your voice, and claiming that power; of course, if it’s only for the greater good. So, let’s get started.

You first have to recognize you probably have something valuable to say. Do you believe that you have something to say? Is there something on that tip of your tongue or maybe at the very core of who you are, something you have had … There’s a tremendous passion and yet, no one knows it. You have to start first with knowing that you are capable of adding value to a conversation.

I struggle with this, at times, because I think who would really care about this, or I think, even in my podcast, who’s really going to listen to what I have to say? But a lot of times, these are the things that I think matter. So, you matter, and your words matter. You have to avoid measuring the worth of your words against other people at the table, sometimes, or in the room. If you’re playing the comparison game, you’re just devaluing yourself. Don’t let the original of who you are conform to just being another copy. Believe in yourself and what you have to say. That’s your starting point. You’ve got to recognize that you have something valuable to say.

You have to be strategic also, though, about what you say and when you say it. I hate to break it to you … Here’s the bad news – shooting from the hip and spouting off is probably not overly strategic. Sometimes, it’s very effective. Do not get me wrong. Sometimes, you’re just in that moment, and it’s the choice that needs to be made. You certainly found your voice, and you used it, but was it effective, or did it just set you back because shooting from the hip can also do that? Your credibility is gone, and you can’t go back, because that’s what people are going to remember.

Do not speak for the sake of speaking. Be sure that you speak thoughtfully, in an engaging manner, if you want to be heard. Speak as you would like to be spoken to. That’s really huge. Sometimes we tend to be very brash people, or we tend to be very strong personalities, so we think everyone gets that. Sometimes, we want to be spoken to with respect, so if you don’t do that to the other person, how are you going to be heard? Your voice is just noise. Think on that because that can be pretty hard.

Think of it this way – when you have listened to somebody, it’s probably because they spoke; they were prepared; they were … The influence of what they were trying to get across was probably ignited within you. Again, it took strategy, and they thought it through.

We really need to figure out how to be inclusive and not decisive in our message. What does that mean? It means, really, sometimes, words really matter. As much as I don’t like the P.C. world in which we live right now, words matter, and how they are said matters. People’s perception and how they’ve heard you is probably because of choice of words. Speaking isn’t just saying what you want. Speaking isn’t just having your voice. Words matter in the things that have to happen. Then, just getting angry is counterproductive, so try to keep out of that kind of conversation, when it becomes heated, and you disagree.

If we use the right inclusiveness and decisiveness in our message, we can say the tough things; we can say the things that we want to say and, in some environments, it would be heard. The hardest thing in today’s environment is we can’t even have the discussion, no matter how we even choose our words. It’s not the greatest place to be, but that matters.

I think we have to be confident and not defensive. There is a time to be defensive. That is pretty much defending your abilities and your potentials, and sometimes, that happens. It’s more reactive. Then, there’s a time to be offensive. “Hey, these are my abilities, values. I’m going to score. I’m going to show you that potential!” That’s being proactive.

No matter which side you’ve chosen because of the circumstance, you got to do it with confidence. Then, you have nothing to prove. If somebody comes to you, and they’re very defensive, and they’re very timid, or meek, or apologizing, you’re not going to listen. So, when you do that, why would somebody? A defensive posture instinctively says you have something to prove, and maybe you do; but the offensive posture says, “This is my ability.” Either way, when you’re confident when you execute, you will have nothing to prove. You only have to show everyone else what already is known to be true. Being confident, and being on the offense, and not being defensive is usually the better strategy.

Stay in integrity with yourself. You must be willing to speak up, when something goes against something that is a very deep value for you. Silence in those moments really talks about your character. You have to stay in integrity. You have to stay in that mode. Silence or backing down in those moments probably is not an option. It’s far more important for you to look at yourself in the mirror and sleep well at night. Your voice can change that environment, maybe; standing up for what is right, or staying with a value, a core value. But don’t waste your energy where you won’t find yourself doing that. Find another place. You’re too valuable for that.

I think of two men who had two different beliefs. One was a very, very progressive, left side – those are what he valued, and those are what he believed – and he did not compromise those. He did it with … He led with those beliefs and those values. You never saw him compromise. Then, I will speak of a very, very conservative man who, these were his beliefs, and he met with anyone who didn’t believe that, and tried to convince them, and tried to help them understand. Neither gentleman ever compromised, or said, “I’m going to just go ahead and go what’s against everything I believe.” Those two people are President Ronald Reagan, and President Barack Obama. Two very different belief systems, two very different ways, but they both had the same way, in my opinion, of execution. They stayed with what they believed, and their integrity relied upon it. Doesn’t mean you had to believe either side, but they were both very effective in communicating their messages, and their voices were heard to two different audiences, but they were heard.

Speaking of those two individuals, be prepared for possible backlash when you do these things. While I want to believe that things are improving for women, and they are, there are still some environments where women leaders are penalized for speaking up. We’re labeled … When we’re aggressive, there are certain names that are said. I’m not going to say them … Or you’re told, “You’re too much.” Kind of like my kids do. “Mom, you’re great, but you’re a lot.”.

But remember these two things. Criticism comes with being a leader, regardless of your gender, by the way. The words are just nastier, sometimes, when they’re attached to a woman who is leading. So, you have to be prepared for that backlash. When you want your voice heard, and you’re trying to find that in today’s environment, it’s not easy. Two, the labels, and the name-calling have very little to do with you, personally. It’s really about how much you’re probably making some people feel uncomfortable. Don’t take it personally, and just move on. Again, I always go back to – if I want my voice heard, how am I going to use it?

You’ve got to have some safe places. I have my sounding boards, where I just let down. It’s a place. It’s a person. It’s an environment. I have to trust that those people, in those places, at the very core. At times, your voice is going to be criticized beyond, and you’re going to need to do that. It may be harsh, and it may take a toll on you emotionally, but no woman should be an island. We shouldn’t feel like we’re all in this alone because we’ve chosen to maybe take a stand somewhere.

When you’re finding your voice, it’s one step at a time. Slow and steady. It can be scary, and it can be risky, and you’ve got to put yourself out there. You’ve got to allow your voice to be heard and see what happens. You may not be able to do it all at once, or in a really big way, but that’s okay. Find a small way that you can begin today. Maybe start by saying no more, or intentionally apologizing less.

I would challenge you … My son is a minister in a church, and there’s just certain things that he believes in that he’s really into. Then, there are things that he just really isn’t about. He said, “Why are these things happening?” I’m not going to go into all that … I told him very clearly, pretty quickly, and he kind of just … We talked about it for a while, and I said it’s because people have believed what they needed to say, and they kept saying it. And after a while, people either got on board; they believed it. They got engaged, and there was conversation.

At Brady Ware, I’m fortunate enough to be a shareholder, lead a women’s initiative, and be on the board of directors. The greatest thing about that is – in all three of those arenas, as an owner of a business and in the leadership of the business – I get to have a voice, and I get to speak for many around me. So, you got to take your voice, and your message, and finding it very seriously, in no matter what it is you do. So, I hope this was challenging for you today and that you’ll think about it.

Tagged With: Betty Collins, Brady Ware, Brady Ware & Company, Finding your voice, inner confidence, Inspiring Women, Inspiring Women podcast, Inspiring Women with Betty Collins, voice

Decision Vision Episode 64: Should I Fire My Accountant? – An Interview with Brian Woodman, Woodman & Associates, LLC

May 7, 2020 by John Ray

should I fire my accountant
Decision Vision
Decision Vision Episode 64: Should I Fire My Accountant? - An Interview with Brian Woodman, Woodman & Associates, LLC
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“Decision Vision” Host Mike Blake and Brian Woodman, Woodman & Associates

Decision Vision Episode 64:  Should I Fire My Accountant? – An Interview with Brian Woodman, Woodman & Associates, LLC

What are the circumstances under which I should change accountants? How can I tell whether my accountant is doing a good job for me and my business? Brian Woodman joins “Decision Vision” to discuss these questions and much more with Host Mike Blake. “Decision Vision” is presented by Brady Ware & Company.

Brian Woodman, Woodman & Associates, LLC

should I fire my accountant
Brian Woodman, Woodman & Associates

Woodman & Associates is a professional accounting services firm specializing in CFO services, financial reporting, audit support services and internal accounting assistance, all typically on a project basis for small to mid-size businesses.

Brian Woodman is a senior financial leader with 18 years of proven technical and financial management expertise with a focus on middle market technology, services and manufacturing + distribution businesses from start-up to $1 billion in revenue. He has proven expertise in leading internal and external finance and accounting based projects and teams, business and accounting process development and review, and financial reporting research and implementation expertise under U.S. GAAP. He is a CPA licensed in Georgia.

For more information, go to the Woodman & Associates website or contact Brian directly by email.

Michael Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service service accounting and advisory that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owner’s or executive’s perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:39] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we’re recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe to your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:02] So, today we’re going to talk about whether you should fire your accountant. And we are recording this podcast on lucky Friday the 13th of March in 2020, which means that in the accounting world, we are in the heart of what is known as busy season, which may or may not be extended depending what the IRS decides to do in response to coronavirus. But this is the time when the relationship between the accountant and the client is at its most intense, at least, for most clients. And for good or ill, in many cases, clients talk to their accountants pretty much only this time of year. And we can have a discussion at some point later as to whether or not that’s a good thing or the prudent thing.

Mike Blake: [00:01:50] But this is the time of year when things get tense. Things pop up on the tax return that the client wasn’t necessarily expecting, when phone calls and emails are not returned as quickly as they are through the rest of the year because there’s a traffic jam. And so, the most strain is put on that accountant-client relationship. And at some point, as a client, you may start thinking about, “Well, is this relationship really working for me? Should I be looking elsewhere?” Or “Is this just kind of the nature of the business? And is what I’m experiencing something that I would likely get from somebody else if I switched, and I should just sort of leave well enough alone.” So, I hope that you’ll find it is a timely topic. And if you listen to a podcast from a few weeks ago, we did one on Should We Fire a Lawyer? So, this is an equal opportunity podcast. We’ll haves, should we fire your financial advisor? Should we fire your gardener? Should we fire your Uber driver? Should you fire the person that mows your lawn? So, we’ll go through all kinds of firing kinds of podcasts.

Mike Blake: [00:03:02] But today we’re talking about accounting. And even though I work for an accounting firm, I am not an accountant. If I talk anything about accounting, it’s instantly malpractice. So, joining us today to help us talk about accountants and relationships with our accountants is my longtime friend, Brian Woodman of Woodman & Associates. We go back a long way, at least 10 years. Woodman & Associates is a professional accounting services firm specializing in CFO services, financial reporting, audit support services, and internal accounting assistance all typically on a project basis for small and mid-sized businesses.

Mike Blake: [00:03:37] Brian is a senior financial leader with 18 years of proven technical and financial management expertise, the focus on middle market technology services, and manufacturing, and distribution businesses from startup to a billion dollars in revenue. He has proven expertise in leading internal and external finance and accounting-based projects and teams, business and accounting process development and review, and financial reporting, research and implementation expertise under US GAP. He is a CPA license in Georgia. All around good and sporting his brand-new glasses that I just can’t take my eyes off of. Brian Woodman, welcome to the program.

Brian Woodman: [00:04:13] Thank you, Mike. You reading that makes me sound like I’m bragging. So, I’ve never had that read back to me, my bios. I’m a little embarrassed, but-

Mike Blake: [00:04:23] Well, but some of this-

Brian Woodman: [00:04:24] Thanks for the interest.

Mike Blake: [00:04:24] Some of it’s true, right?

Brian Woodman: [00:04:26] Yes..

Mike Blake: [00:04:29] It’s interesting that you mentioned that. I hate having my bio read as well when I do speaking gigs and so forth. I do want to sort of put my hands over my ears like this. It’s like, yeah.

Brian Woodman: [00:04:29] I’m sorry.

Mike Blake: [00:04:44] My marketing people made me write that. I’m really a bad guy. So-

Brian Woodman: [00:04:51] No worries.

Mike Blake: [00:04:51] … let’s jump into this. And I’m having you on the program for a lot of reasons, but your expertise is that you’ve been in the CPA role. You grew up as an auditor.

Brian Woodman: [00:05:03] Yes.

Mike Blake: [00:05:04] Right?

Brian Woodman: [00:05:04] Yeah.

Mike Blake: [00:05:04] And in public accounting. And now, you’re in a position where you’re doing some accounting work, but I think you’re also coordinating who your clients hire and work with to get-

Brian Woodman: [00:05:17] Correct.

Mike Blake: [00:05:17] … sort of the kind of the bulk work done, right?

Brian Woodman: [00:05:20] Yes, yeah.

Mike Blake: [00:05:20] So, you are sort of a kingmaker. And if you decide that somebody needs to be voted off the island, you’re going to tell the client. And more often than not, they’re going to do what you tell them because why pay for your advice if they’re not going to follow it?

Brian Woodman: [00:05:34] Right, yeah. I’ve been in both sides at this point. On the service provider side, I was an auditor for many years. So, I know what makes clients happy and what makes them upset. So, it’s good for me to have that on the other side to help my client make the right decision about which service provider to pick.

Mike Blake: [00:05:54] Yes. So, I mean, how often do clients make a change? Are clients kind of always looking for a reason to fire their CPA? Or do they tend to come to that decision after a lot of thought?

Brian Woodman: [00:06:11] Well, I think entering a relationship with an accountant is a very thoughtful process. So, especially with small business, your business is tied to your personal life in many cases. So, business is personal. So, you’re sharing your intimate financial details with someone. So, in most cases, at least for small businesses, it’s a somewhat personal decision, and you want to find someone that you trusts. So, you put a lot of thought into that. So, the intent is to go into that relationship to last. So, I would say, how often do the clients look to change their accountants? I would say they’re not looking to necessarily change their accountants unless they have to. So, I’d say not often.

Mike Blake: [00:07:02] Yeah, okay. So, when you come to that decision, and you’re advising, what are the most frequent reasons that clients do decide they’re going to change accountants?

Brian Woodman: [00:07:17] Well, let’s see. There’s a few. Price, unmet expectations. Some of the reasons where it’s not really a choice is if there’s a change in control of the company or with larger companies, a change in the C-suite. So, they may kind of bring their own accountants along or advisors. I mean, so when we define accountant, that could mean several different things. There’s compliance-related work, which is tax returns and audits. And then, there’s more advisory work. So, it kind of depends on who you’re talking about.

Brian Woodman: [00:07:52] But I would say, so, I was in audit, so I know that best. So, if it’s an auditor, and you’ve got a new CFO in place, it’s possible that the CFO kind of brings in the firm that they’ve known, depending on where the company is at at any time. So, change of in control. If an acquisition takes place, so a foreign parent buys a US sub, there could be a reason to change the accounting relationship there. I think I mentioned price, although it’s not always the best reason to change. Oftentimes, clients or companies or required to go out and bid the work out just to make sure they’re still in range. And oftentimes, the change occurs just through that process. Other reasons, a company can grow and kind of outgrow the depth of their current single shingle shop, you could say, and it may require more depth and expertise in a specific area. So, they may have to go and find a firm that can meet their needs there.

Mike Blake: [00:09:02] Yeah, I just had a conversation. I do office hours in Alpharetta, Georgia, an organization called Tech Alpharetta twice a month. And last Wednesday, somebody came in and started talking about research and development, tax credits.

Brian Woodman: [00:09:19] Sure.

Mike Blake: [00:09:20] And I said, “Well, look out. I have a passing familiarity with them, but I’m not an actual CPA. I don’t even do my own tax returns. So, who’s your accountant?” He says, “Well, our accountant is just sort of a guy that we decided to go with because he was the chief business.” I said, “Well, maybe for research and development tax credits, you need more than just some guy.” And that is a case where the complexity of what the client needs outgrows kind of the single shingle that for certain there is maybe a fine accountant, but reaches a technical depth that just you cannot reasonably expect unless that person just happened to be an R&D tax expert at a bigger firm that did that.

Brian Woodman: [00:10:02] And that that is the case. So, hope it doesn’t sound like I’m knocking single shingle.

Mike Blake: [00:10:07] You’re notOr.

Brian Woodman: [00:10:08] It’s just that the single shingle can’t do everything to the depth that, say, a large national firm could probably do. But you may have a boutique shop or a single shingle that may fit your specific need and that might be the right person.

Mike Blake: [00:10:24] Yeah. And, an interesting thing I just thought of because you you mentioned your audit background, when you have an auditor, I mean, firing an order is a little bit trickier because there’s observers who are going to kind of wonder, “Well, why did you fire the auditor?”

Brian Woodman: [00:10:45] Yes.

Mike Blake: [00:10:46] Did you fire the auditor because they legitimately did something from a business perspective that was not cool? Or was the auditor telling you to do something on your financial statements that was the right thing to do, and you didn’t want him to? And you found the equivalent of the break inspector that says, “Ah, for 20 bucks, we’ll let those then brake pads slide and I’ll give you the sticker.” That’s a real concern.

Brian Woodman: [00:11:13] You could call that opinion shopping. So, I think that I go back to my audit days, that was a specific question. We fill out all sorts of checklists as accountants as we go through and QC our work. And in the planning stage in an audit, there was a specific question about how many times has your client fired their accountants in the past, and what are the reasons, and take those into consideration, [1], in accepting this client; and then, [2], if you’re comfortable accepting the client, you need to potentially build that into the audit risk, which determines how deep you really need to go in an audit.

Mike Blake: [00:11:53] You know what? That’s interesting. So, as I mentioned at our intro, we did have a podcast talking about should I fire my attorney with Jeff Berman from Berman Fink Van Horn. And one of the things he talked about as is attorneys are kind of reluctant to take on a client that rolls through other attorneys. It sends up some red flags. I had not thought about that from the accounting perspective, but I mean, that’s right. Accountants, for those of you who don’t know, accountants have this process called client acceptance. At least, most accounting firms do. And I think that’s the checklist you’re talking about is should we accept this client or retain and continue the client? And it hadn’t occurred to me, but I guess on that checklist is, does this person make a habit of having a rotating accountant merry go round, basically? And so, if you can develop that reputation of being somebody that does that, you may find it, at some point, hard to find somebody good that wants to represent you.

Brian Woodman: [00:12:56] That’s right. That’s right. The question’s going to get asked eventually.

Mike Blake: [00:12:59] Yeah, sure.

Mike Blake: [00:13:01] And I guess another reason why firms change accountants too is because they receive an investment or even just financing, in general, right?

Brian Woodman: [00:13:09] Right.

Mike Blake: [00:13:10] I know that VCs will often say, “Congratulations! Here’s the check. Here’s also the accountant you’re gonna be working with,” right?

Brian Woodman: [00:13:20] Right. I have actually seen the name of a firm written into a loan agreement.

Mike Blake: [00:13:26] I was gonna ask you about that. Does that work for banks as well?

Brian Woodman: [00:13:29] I’ve seen it.

Mike Blake: [00:13:29] Okay.

Brian Woodman: [00:13:29] I’ve seen it where in order to get the funding, now, I’m trying to think if it was … I mean, it was a debt agreement. I don’t know if it was with a bank, but it did specifically name the firm that was to do the audit of the financial statements.

Mike Blake: [00:13:48] So, it’s conditional.

Brian Woodman: [00:13:49] Yeah, yes. So, in order to get the debt, you may have to change your accounting firm.

Mike Blake: [00:13:53] Man, I gotta find that lender and make sure they’re my best friend. That sounds great.

Brian Woodman: [00:13:59] So, I’ve seen some that will say it must be a national firm or big four firm. But I’ve only once seen where it was the specific firm was named. And I thought that was interesting.

Mike Blake: [00:14:11] Yeah. I haven’t seen that either, but I’ve certainly seen it where at a minimum, sort of as part of the term sheet, they say you’re going to adopt whatever accounting firm we say you’re going to adopt to be named later. So, in your mind, as as an advisor to clients that kind of coordinates the work of other accountants, what starts you down the road thinking, “I’m not sure this is the right match. And maybe I’m going to tell the client to start looking at other alternatives”?

Brian Woodman: [00:14:47] I would say, broadly, unmet expectations.

Mike Blake: [00:14:52] Like what?

Brian Woodman: [00:14:52] On price. So, I’ve often seen situations where the bidding process, you’ve got the low bidder coming in. And then, all it is, is coming in with a low price subject to conditions that the client must meet. And if that fine print isn’t read in detail and held to, you’re going to see change orders. So, for every little thing, so that it allows the firm to come in and get the work, but then on the back end, I don’t know. Firms that kind of take that approach, I don’t think that’s a really good long-term approach to going out and generating business because it kind of leaves a bad taste in the clients.

Mike Blake: [00:15:38] You might generate business but you won’t keep it.

Brian Woodman: [00:15:38] Yeah, yeah. That’s right. Yeah. So, I think you’ll have high turnover in those situations, but as far as expectations go, last minute surprises. And I can talk about this from an audit perspective and from a tax perspective. You discuss the communication throughout the year. Why are we having the conversation just before the deadline? Why haven’t we discussed these things?  And I’ve been able, fortunately for me. So, I’m sitting on the other side of the table now where the client had asked me before, “Okay, why are we talking about this now at the end of the audit? We’re just about to issue.” So, I go, “Yeah, I get it.”

Brian Woodman: [00:16:21] So, I’m able to have these conversations now where, okay, we’ve had all year, which is not your busy season. So, there should have been time. I mean, I realize everything’s cramming in here at the last minute for everybody, but we’ve had all year to talk about some of these issues. So, let’s try to plan a little bit to be a little more proactive. So, I’d say the more that that happens and the more heartburn accumulates over a couple of years, if that happens a couple of times, you’re going to want to move on or think about moving on.

Mike Blake: [00:16:59] Yeah, it makes sense. I mean, you think about the desired outcome of an accounting relationship, you want them to manage risk and bring stability. If it seems to be at risk and having instability, that seems to run counter to the purpose of what you’re trying to do, right?

Brian Woodman: [00:17:18] Right.

Mike Blake: [00:17:18] And you can appreciate if someone is going to be hit on their personal taxes an additional $10,000 tax bill. And by the way, you’re finding about that on April 13th, that’s a little bit frustrating.

Brian Woodman: [00:17:31] Yes, yeah.

Mike Blake: [00:17:32] And can be financially challenging, right? Or if you find that you’ve been telling everybody, all your stakeholders, you’re expecting a massive profit this year, and then five days before the audit issues, you’ve got a massive write-off you got to take, that’s an issue too.

Brian Woodman: [00:17:52] To be fair, accounting is historical. So, the end result is based on what happened. So, I can’t tell you what the answer is going to be in June for where we’re going to be in December. But I can tell you, okay, here is where we’re at in June. What are your plans for the rest of the year, so we’re not going to have any surprises? Remember, we talked about this. If you were going to buy that building, if you were going to do that acquisition, if you were going to launch a product or not, to make a decision at launching a product or not, or changing out the C-suite, those are things that could affect and change the end results. So, let me know what those are now. Let’s discuss and let’s head those up at the pass versus on April 15th or March 15th or 16th, I think is the deadline, is, “Oh, that’s what happened. Okay. Well, that changes everything now. Your answer is completely different. And it’s the first I’ve heard of it.” So, again, I think being proactive with communication. In my career, keeping the number of surprises down with your client is the best. That’s preventative action to an upset client or client wanting to move on.

Mike Blake: [00:19:18] Yeah, yeah. So, let me ask this, accountants aren’t cheap. I mean, I guess some are, but most aren’t. You’re not cheap. I’m not. My firm is not cheap. The firm we used to work for really isn’t cheap. Is it unreasonable for a client to demand perfection or near perfection?

Brian Woodman: [00:19:39] Yeah, I was going to say perfection. Perfection can be subjective, especially, and you know this very well that this business can be somewhat of an art. The answer on a tax return that’s acceptable to the IRS could be different from … the same exact return prepared two or three different ways could be acceptable to the IRS. So, which one is perfect? Probably the one that as long as is acceptable has the highest refund, but I think that, and especially in your business, and I know you say you’re not an accountant, but your business involves … it certainly involves numbers.

Mike Blake: [00:20:17] I certainly am in the accounting industry. I work for accounting firms, so.

Brian Woodman: [00:20:21] Right. So, I would say that relatively perfect. We’re certainly not perfect, but I would say that generally and materially perfect is a reasonable expectation. But you also have to understand kind of where you’re at. So, if you have the wrong person in place. So, if you got highly complex transactions, and you’re asking a bookkeeper to book those transactions perfectly, and they involve estimates, and they involve a lot of inputs, I would say you shouldn’t, in the first place, expect perfection from that level of service provider. But if you have a bookkeeper at the lowest level, the transactional level, I would say where there’s not a lot of judgment, there’s not a lot of art-

Mike Blake: [00:21:18] Right, it’s just a mechanical process.

Brian Woodman: [00:21:20] Yeah, it’s mechanical, I would say that, yeah, should you could expect something close to perfection there.

Mike Blake: [00:21:26] So, is changing an accountant easy? And let me put some parameters around that because I know this is very much a big it depends answer, but let’s say there’s already been a five-year relationship. The accounting firm is helping both in the tax and maybe the financial reporting side. How hard is it to change accountants? And what is your existing accountant’s obligation to facilitate that transition?

Brian Woodman: [00:21:56] It’s becoming easier. With your accountant having the documents, having the documents that are yours, sourced documents, things that you own that they’re using to perform the work, I think technology has enabled the facilitation of transmission of documents from one place to another. I know that in the past, it was difficult, especially like if you hadn’t paid your bill to your prior accountant, or it was an adverse relationship, it was a little more difficult to get all your stuff, but you really should have any way. And that would be my suggestion is just as a best practice is anything that your service provider, your accountant prepares for you, or documents that you provide them to prepare tax return, or audit, or whatnot, keep files of those yourself. Don’t just let them keep all that stuff.

Brian Woodman: [00:22:56] They stay as organized as they can, but it may not be exactly what you need in order to transition. So, I see a lot of heartburn, heartache in gathering documents that you just don’t have on file. Your old accountant or my old accountant has that, or all the journal entries that were ever booked on my books, I don’t have them in my QuickBooks. My accountant has all of my journal entries that fix all my books for the last five years. And they just rebook those every year. Well, we’ve got to go get that from them. Well, just get those every year from your accountant.

Mike Blake: [00:23:29] So, make that part of the deliverable.

Brian Woodman: [00:23:30] Yes, yeah, yeah. So, yes. I would say that technology is enabling better transmission because those documents would be available there for you to log into your portal. And a lot of firms are doing that now.

Mike Blake: [00:23:44] So, what are some instances where a client might be thinking that they want to change their accountant, but, really,  at the end of the day, it’s really the client’s issue, not the accountant’s issue that the client is just being unreasonable and the client needs to kind of weigh the beat and take it down a notch?

Brian Woodman: [00:24:05] Yeah. There’s certain circumstances where it’s always a fee issue. So, it’s never going to be cheap enough for what you’re getting. And then, second is the information and effort that is often required on the client’s side, you’re just never gonna get it. So, it’s like garbage in, garbage out. Well, you’re not getting my tax return done. We’re not getting through the audit. Well, we’re not getting what we need as service providers in order to complete the task. So, if you give us garbage, we’re not going to give you garbage back. You just gonna get nothing. So, I would say clients get hung up on price, and then don’t deliver on their end of the bargain.

Mike Blake: [00:24:59] Okay. And then, I think you’re kind of touching upon this. Are there sources of client unhappiness that they don’t realize is just there’s certain things a client has to do to make the relationship work. And even though they may not love doing it that they just have to understand it’s part of the process. For example, in one of my assignments, I asked for a lot of data. And I don’t apologize for that. I asked for a lot of data because earlier in my career, I’ve given the surprise to the client, and it’s because I didn’t ask for the right data upfront because I was, “They’re not going to have. That doesn’t matter.” And then, it turns out that had I asked for that 45 days ago, my answer would have been radically different and right as opposed to wrong, basically. So, I don’t apologize for that. But I know and I sympathize the fact that sometimes a client is overwhelmed by the data, what looks like a very burdensome data request initially because they start to think, “Well, who’s working for who?” Does that phenomenon occur in your side of the house too on the conventional accounting world?

Brian Woodman: [00:26:12] Well, that keeps me in business.

Mike Blake: [00:26:14] Okay.

Brian Woodman: [00:26:15] So, I do audit support. And basically, that’s a function where I sit between my client and the auditor. So, I facilitate all of the requests that the auditor needs from the client. So, I’m kind of the buffer in between that takes the burden. My client and their personnel still have to pull documents, but I kind of backed down things. I make sure that the documents are really needed and kind of temper the list. So, yeah, it’s definitely an issue, and it can definitely be overwhelming. And  I mean, it’s certainly generated business for me. It’s a need out there.

Mike Blake: [00:27:03] How do you figure out if … as you said, nobody’s perfect. I’m not perfect. I know there are deliverables I would like to have back in my career and have had to take back and fix them. At what point do you decide this advisor just made a mistake that I just sort of can’t live with? How do you kind of come to that conclusion that a mistake or maybe a series of mistakes – I’m not sure if there’s a difference there – but rises to the level that you just gotta make a change? Is there any kind of rule of thumb that you have, or a trigger point, or a threshold that you cross and you say, “You know what? This goes beyond the normal bumps and turbulence of an advisory relationship”?

Brian Woodman: [00:27:57] I would say on the audit side, the ultimate would be a misstatement. So, a financial misstatement. So, something that the auditor didn’t catch that they may have known about. And then, we may talk about accountant liability. But I would say that if the financial statements are materially misstated and your auditor signs off on it, that would be large enough to really, really consider making the decision at that point to go with another auditor. I can’t speak so much on the tax side, but I would say that frequency has something to do with it. Some of some of my clients, I don’t do the taxes, but they have tax providers, and if they’re seeing IRS notices often, that means that someone is not being proactive. So, I think the frequency of IRS notices and issues there can certainly weigh on needing to make a change and needing to choose another firm.

Mike Blake: [00:29:01] So, one thing I’ve noticed that you have not talked about specifically is firing your CPA because the tax bill is too high.We talked about surprises, we talked about mistakes, but I think and I’ve seen that there can be a client tendency to blame the accountant because they’ve discovered that they’re going to have to write a bigger check to Uncle Sam than they wanted to. They don’t have the IRS to strangle in front of them. So, their tax preparer is kind of seen as an extension. So, what I’m curious about is, have you seen that? And is there a point where maybe the accountant isn’t doing enough or hasn’t made enough of an effort to “optimize” tax liability? And how does that in your world kind of play in terms of how you consider that dynamic? We only ask hard questions here on this podcast.

Brian Woodman: [00:29:01] I have seen it, and I’ve seen plenty of tax accountants fired because the tax bill at the end of the day was hefty. And that occurs for various reasons. And I think maybe we come back to communication and the expectations of the client. And also, how you communicate with your client. So, if your client is big picture, if they don’t read paragraphs and paragraphs of an email where you lay everything out for them, understand your client. Understand how they consume information, so you can get the point across. So, I may say, “Hey, if you do this or you don’t do this all year long, we’re gonna have an issue on April 15th.” But they may not read that. And maybe that’s not their fault. Maybe that’s just not the best way to communicate with your client. So, I would say just expectations, no surprises, and find out how to communicate with your client about those things will avoid the real surprises. And have your client … I know I’m speaking from the service provider side. I’m trying to go from looking at our service for providers.

Mike Blake: [00:31:22] Yeah. Well, I mean, you’ve been on both sides of the fence. So, that’s why I have you here because you can speak to that.

Brian Woodman: [00:31:28] Yeah. So, from the client side, demand a proactive approach and tell them how you want to be communicated with, especially when it comes to surprises. And from the service provider side, do the same.

Mike Blake: [00:31:43] That house is really interesting. I want to kind of pause on that because I don’t think I’ve explicitly reflected on that enough or even pushed on that. We’ve had a lot of advisors come on the program, and the theme of communication in terms of a successful relationship comes up a lot. But what hasn’t come up is how you communicate. And that leads me to think in my own personal experience, my wife is terrible with physical mail. If you send her something in the mail, she just will not read it. And so, I have to bring in the mail to make sure that our mail kits are read. And if we have jury duty, or a subpoena, or some bill or something that it actually gets taken care of because my wife just flat out won’t read it.

Mike Blake: [00:32:32] And we wound up firing a service provider over that because it didn’t communicate with my wife about something that needed her attention, but they solely relied upon physical mail, which she never reads. And they did their best to communicate, they met their obligation, but they didn’t take the temperature of their customer well enough to say, “Okay,  are we communicating in a way where they have the radio turned to the right channel to receive it?” And the point you bring up there, I think that is so critical. It’s not just about communicating, but communicating the right way.

Brian Woodman: [00:33:15] Exactly, exactly. And you and I, we’ve been through some leadership courses together. So, you’ve got emotional intelligence. I’m sure you’ve heard of that disk profiles. And there’s all sorts of different versions. They kind of have four quadrants usually and kind of put you into different boxes. Sometimes, that’s social, how you deal with things socially, and then whether you’re detailed or a high level type person in your decision making. So, if you’ve got somebody that’s very high level that makes decisions quickly, usually, higher levels of leadership, they have to act fast, they’re decisive, they don’t need as much detail to make their decisions. So, you give that information to them in bullet points as opposed to a long narrative when you know all the details.

Brian Woodman: [00:34:08] Some people require high levels of detail in order to make decisions or feel comfortable. So, those are just kind of two quadrants of people, and how you deal, you should consider. Actually, I worked for a firm for a brief stint, and I know of, at least, a couple of firms that actually have their clients do the surveys that give you the results of what [indiscernible] and where your emotional intelligence is, what you require as far as communication. And every time they get on the phone with their client, they kind of look at their profile first or even send an email to make a decision about how should I communicate with my client, what I expect from them, what needs to be done. So, I think that’s interesting. I mean, I don’t employ that currently, but I think that’s a good idea. And I try to, at least, get a read on how my client consumes information and needs to get it.

Mike Blake: [00:35:12] Well, and even the communication channel itself, right? I mean=

Brian Woodman: [00:35:15] Yeah, medium. Yeah.

Mike Blake: [00:35:17] My oldest son, who’s about to turn 18, I can’t get him to read an e-mail. But he’ll respond to a text. He’ll respond to a Slack. He’ll even respond to an Instagram. And that’s kind of interesting. You want something creative, yell at your teenager with Instagram. There so many options of angry pictures that you can sort of send and things that depict being left to dead in a ditch and things of that. So, it’s actually quite liberating. It gives you a sense of being creative as a parent basically. But I have clients around me older, not that many. Most of my clients are 35 and younger. But the older ones, for anything in depth, they still want a phone call.

Brian Woodman: [00:36:03] Yes.

Mike Blake: [00:36:04] But then, the younger ones don’t, or they want to do a video conference, which I’m embarrassed to say because I pride myself on being a tech guy, I am still getting used to doing the video conference thing because I’ve got an ugly mug, and I don’t dress in a suit every day.

Brian Woodman: [00:36:22] Don’t say that.

Mike Blake: [00:36:23] And there have been times where I realized, “I’ve got a video chat in five minutes,” and I still have my Christopher Walken. I need more cowbell t-shirt on, and I’m in trouble. I don’t even have pants on, but I got to have a shirt. But that’s sort of a reality of learning how to communicate the right way with a client because if you send the message to a non-receiving medium, you really don’t get points for having sent something that the client has no realistic chance of receiving.

Brian Woodman: [00:36:55] Right. Well, so, when I manage large audit teams, working … so,  I guess I’m an X-er. I’m very close to millenial, but I think I’m still categorized as Gen X. The most effective way for me to get an answer was to pick up the phone. That’s the most effective and efficient way. But as my clients have become younger, and I guess as I’ve gotten older, I realized that I would harp on some of my staff when I was an audit manager. I would say, “Just pick up the phone, just call them. Don’t send an elaborate e-mail. Just pick up the phone and get the answer. That’s the quickest way, so we can move on. And don’t send the e-mail, then leave for the day and just be able to clear your mind out. Let’s just get to the issue.” But now, a lot of my clients would prefer to receive a text or an e-mail. So, I guess I’ve aged out of my communication method. So, I need to keep thinking about my clients’ preferred communication method.

Mike Blake: [00:38:02] A lot of younger people don’t even have their voicemails set up, right?

Brian Woodman: [00:38:02] Yeah.

Mike Blake: [00:38:07] They won’t, let alone, return one. They’ll see a voicemail, they’ll delete it because they’ll just assume if it’s that important, you’ll just call back. So, let me ask this. Accounting, like so many services, is a competitive field. Let’s say I’m not necessarily unhappy with my accountant, but I meet somebody else, and they want to kind of work their way in and see if they can knock the incumbent accountant out. That happens.

Brian Woodman: [00:38:42] It does.

Mike Blake: [00:38:42] And as a client, how open should I be to that? And even as as a client, should I see that as kind of all a little sketchy? Is there a kind of turf there or some professional courtesy that’s being violated? Or is that just sort of big boy football, and that’s the way it works, and an incumbent always has to remain competitive and assume that somebody else is trying to knock him out for their business? . How do you think about that?

Brian Woodman: [00:39:17] So, CPA firms, accounting firms are businesses. So, there is a degree of marketing that you’ll see and there’s  business development. Otherwise,an accounting firm would have no clients if you didn’t reach out, if you didn’t create a network. The direct approach is fine. I would say don’t waste too much time. I mean, listen to what they have to say. And if there’s something that they say that makes sense that piques your interest, continue the conversation. But it’s more of an unspoken. If you feel like it’s just a sleazy sales pitch, I would say don’t waste too much time with it. But I think if it’s a thoughtful approach, and if you’re in a genuine conversation, and they seem to understand your business somewhat, and you think that there might be something that they could add to it, I’d certainly have the conversation.

Mike Blake: [00:40:21] Now, let me change gears here. And this will be, I think, the most uncomfortable question I’m going to ask you all day. And that is, as we talked about, mistakes happen. In your mind, where is the line between a mistake, stuff happens, people are not perfect, and then you have to start thinking about, was their malpractice?

Brian Woodman: [00:40:50] I think that it’s a matter of severity and materiality. As accountants, there’s certain guidelines that we have to follow. When it comes to an audit, we’re auditing under GAAS, which are auditing standards, the generally accepted accounting principles. So, we have to stay within the confines of those. And if there is a big material miss there, then that’s an issue. I would say that whether you know about it, if you knowingly … so, as an accountant, whether you knowingly look over something that’s material, that to be considered a crime. So, I think that would probably fall more heavily into malpractice. If there’s a misrepresentation that’s intentional that you know you’re deceiving or skirting, maybe it’s not your client, but you’re helping them skirt the loan covenant, meet earnings, something like that, I would say that that falls along the lines of malpractice. Is that a good answer? Is that-

Mike Blake: [00:42:08] You tell me. I think so. I mean, yeah. I mean, yeah. I think what you’re talking about is understanding kind of what professional standards are, right? And is the mistake big enough that it costs the client a lot of money, basically?

Brian Woodman: [00:42:28] That’s usually-

Mike Blake: [00:42:28] And is this something that they should have caught, right, had they been doing their job correctly?

Brian Woodman: [00:42:35] Right. And then, even if they don’t know about it, were they negligent? So, were they just not following the rules and negligent in the performance of their service to not catch something material?

Mike Blake: [00:42:49] So, when your client is thinking about maybe changing accountants, do you advise a client to maybe try to do something to salvage the relationship? Maybe, is it a conversation or different kind of engagement parameters? Or maybe you talk to the accountant instead and say, “Hey, look, we got an unhappy client. You’ve got to kind of fix these things.” But other other pre-cursor thought processes that you would recommend if you’re thinking about changing accountants before you actually pull the trigger and do it?

Brian Woodman: [00:43:28] It should not be a knee-jerk decision. So, in my experience, and you know me, I often find myself as in the position of a mediator. So, I see-.

Mike Blake: [00:43:40] Which you’re good at.

Brian Woodman: [00:43:41] Yeah, and I see both sides. And people, for some reason, kind of open up to me. So, I’m able to see different perspectives. Now, in some cases, I’ll give people the benefit of the doubt to my own detriment, but I can see where someone is making a knee-jerk decision or wants to make a knee-jerk decision based on just one thing that went wrong. So, we’re coming down to the wire, getting the tax return done. It’s rush, rush. It’s high stress. People want to make a knee-jerk decision just because of the pain in that moment. Let’s step back and look at the entire relationship. Just because it’s high stress right now, and we may miss a deadline, what else is this firm doing for you? And then, at the same time, I can talk to the firm and say, “My client is really having a heartache with these last-minute decisions, and always coming down at the wire on the audit. Is there something that we can do or something that they’re not doing that can make your job easier?” So, let’s, at least, have these conversations before we make a decision to part ways. So, I think it’s worth it to just step back before you just make a decision based on one event.

Mike Blake: [00:45:02] So, we’re running out of time, and we can’t cover sort of every possible scenario. But if one of our listeners is kind of thinking about whether or not they should be changing accountants, could they reach out to you? Would you be willing to help them out?

Brian Woodman: [00:45:17] Oh, sure, sure.

Mike Blake: [00:45:18] What’s the best way from the contact you?

Brian Woodman: [00:45:20] You can either ping me directly at brian.woodman@woodmancpa.com or info@woodmancpa.com. You can reach me those ways.

Mike Blake: [00:45:33] So, somebody actually reads info at woodmanscpa.com?

Brian Woodman: [00:45:37] Yes, yeah.

Mike Blake: [00:45:38] Okay, good.

Brian Woodman: [00:45:38] I think they all go to the same inbox.

Mike Blake: [00:45:43] Well, I’d like to thank Brian “Info” Woodman so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next executive decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review of their favored podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Tagged With: accountants, accounting firm, Brady Ware, Brady Ware & Company, Brian Woodman, CPa, CPA firm, fire an accountant, Michael Blake, Mike Blake, Woodman & Associates

Decision Vision Episode 63: Should I Buy a Business? – An Interview with Ray Padron, Brightworth

April 30, 2020 by John Ray

should I buy a business
Decision Vision
Decision Vision Episode 63: Should I Buy a Business? - An Interview with Ray Padron, Brightworth
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should I buy a business
Mike Blake, Host of “Decision Vision,” and Ray Padron, Brightworth

Decision Vision Episode 63:  Should I Buy a Business? – An Interview with Ray Padron, Brightworth

Why buy a business? How do I manage the process of buying a business? How do I prevent an acquisition from destroying the culture of my existing business? Ray Padron speaks from his experience as CEO of Brightworth, an acquisitive private wealth management firm. The host of “Decision Vision” is Mike Blake and the series is presented by Brady Ware & Company.

Ray Padron, Brightworth

Brightworth is a boutique private wealth management firm that empowers its clients to focus on what matters most. They do that by helping their clients build, preserve and to make an impact with their wealth.

Their advisers have deep expertise across the financial disciplines with certifications that include the CFA,CPA, CFP and CIMA, JD and CFTA. The major client focus of Brightworth includes the dental industry nationwide, corporate professionals and executives, business exit transition services, and retiring well.

should I buy a business
Ray Padron, Brightworth

Ray is Brightworth’s Chief Executive Officer, leading strategic and management operations across the firm. In addition, as a Wealth Advisor, he provides comprehensive financial and investment advice to help clients achieve their financial goals and dreams. His experience working with senior executives and business owners and their complex transition and succession strategies helps him guide both Brightworth’s and his clients’ success.

Ray began his financial career with what is now PricewaterhouseCoopers, later working for the Marriott Corporation and then serving as Vice President of Accounting Operations and Financial Reporting for Finalco Group, Inc. In 1986, Ray became a Principal and Senior Vice President of Finance for Capital Associates, Inc., a regional venture capital firm that provided both capital and funding services for portfolio companies.

In 1988, Ray created ARC Financial Services, a financial planning firm that focused on the unique needs of business owners. He later merged that firm with Ron Blue Trust, a national wealth advisory firm, starting their Washington, D.C. and Baltimore, Md. branches and eventually becoming the Vice President of Practice Areas and Chief Financial Officer at the national headquarters in Atlanta.

Ray is a Certified Public Accountant and CERTIFIED FINANCIAL PLANNER™ practitioner. He has completed the Investment Management Consultants Association’s Investment Analyst Program at the Wharton School of Business at the University of Pennsylvania and is a Certified Investment Management AnalystSM. In addition, he is an Accredited Estate Planner®, a Chartered Life Underwriter and a Chartered Financial Consultant. Ray has been named several times in Atlanta Magazine‘s list of Five Star Wealth Managers*.

Ray is currently on the Board of Directors for the Georgia Chamber of Commerce as well as Junior Achievement of Georgia, the Executive Committee of the Buckhead Coalition, and is past President of CEO Netweavers, a community of CEOs and trusted advisors committed to helping and improving the Atlanta business community. He is also a founding board member of Matchbook Learning, a national non-profit K-12 school management organization focused on a unique blended, competency-based model of learning for struggling schools.

He is an active member of Business Executives for National Security (BENS), a non-profit organization focused on bringing the private sector together with our government partners to apply best business practice solutions to its most difficult national security challenges. In addition, Ray is a past member of the board of directors of the Financial Planning Association of Georgia, and a past chairman and board member of an international faith-based ministry.

Over the years Ray has been a frequent speaker to executives on retirement planning. He has also spoken on operational excellence within the financial planning and wealth management industry.

Ray and his wife, Sharon, have four grown children and ten grandchildren. His hobbies include international travel, golfing with friends, reading and exercise.

For more information, you can visit the Brightworth website or email Ray directly.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

should I buy a business“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owner’s or executive’s perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:39] My name is Mike Blake, and I’m your host for today’s program. I also touch my face, at least, 35 times a day. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; and Richmond, Indiana; and Alpharetta, Georgia, which is where we recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:07] So, we’re talking about a subject that I’m a big fan of. And I’m a big fan of it because I think it’s extremely important, and nobody talks about it. And that is whether you should buy a business. And I say nobody talks about it because I’m in the transactional world, and I do my fair share of M&A, thankfully. And one thing that I’ve noticed is that there are plenty of seminars around that will talk about how you should sell your business and why. And there’s some that will even talk to you about succession planning, how do you transition at your business to a succeeding generation?

Mike Blake: [00:01:54] And I think those two subjects get covered a lot, quite frankly, because I think that’s where the most money is made. There’s a lot of money to be made, certainly, anytime a business sells, or brokerage fees, or legal fees, or accounting fees are, I don’t know, after deal dinner fees. There’s a lot of money on the move that occurs and is set in motion because a business is going to be sold. And that’s usually initiated by the seller. Not always, but usually. And to a lesser extent, that is true for businesses that are in succession. There’s a whole industry now around succession planning. There are organizations that offer some form of accreditation or some source of letters after your name because you’re a really awesome succession planner.

Mike Blake: [00:02:41] But buying a business, it’s really crickets. And even to the point where it’s actually hard to find an investment bank that wants to take on what we call buy side transaction. They don’t want to work for buyers because the perception is that buyers have less of a motivation to buy a business than a seller has to sell a business. And therefore, if you’re working on contingency, it’s a less reliable source of income. But buying a business, I would argue, is just as hard, if not harder than selling a business because the burden of information is on the buyer and it’s going to be in the asset that you buy.

Mike Blake: [00:02:41] So, Warren Buffett is famous for saying that “Price is what you pay. Value is what you get.” And if you do things right, you hope that value is, at least, equal to or maybe greater than the price. But the seller walks away with money, and they know what money is worth. But the buyer, they may not understand exactly what they’ve bought for a year or two or more after they’ve bought the business. And so, this is a rich topic for discussion. This can be one of these things. I may ask our guest to come back for a second part because I can just see right now that we’re going to cover a lot of ground and leave ground uncovered.

Mike Blake: [00:04:11] So, with that having been said, I would like to introduce you to my friend Ray Padron, who is Chief Executive Officer of Brightworth, a boutique private wealth management firm headquartered in Atlanta. Founded in 1997, they empower their clients to focus on what matters most. They do that by helping their clients build, preserve and make an impact on their wealth. Today, Brightworth has over 1400 individuals and families across the US, whom they helped build, preserve and be generous with their wealth, which is currently, according to their website, about $4 billion under management, letting them spend more time on the things that truly matter to them.

Mike Blake: [00:04:48] From the beginning, Brightworth built their firm to align their interests with those their clients that they’re always on the same side of the table with those they serve. A critical way in which they accomplish this is by being fee-only, selling no proprietary products and refusing to let compensation influence the guidance Brightworth provides to its clients. That’s important. Fee-based advisors are hard to find. Fee-based advisors who are good are very hard to find. That is not a usual model. So, pay attention to that.

Mike Blake: [00:05:16] They’re a team of over 50 professionals in Atlanta and Charlotte who are dedicated to providing independent and objective advice, taking care of their clients in the same manner they would want their own parents taken care of provide. By providing outstanding depth of expertise, the uniquely personal approach, they continue to create lasting relationships with clients to help build their financial future with confidence. Ray Padron, thank you for coming on the program.

Ray Padron: [00:05:40] Mike, it is a pleasure to be here. I’m glad you and I are getting to spend time together.

Mike Blake: [00:05:45] So, you’re now CEO and grand poobah of Brightworth. I know you’re a co-founder, but have you always been the CEO?

Ray Padron: [00:05:54] No. Actually, I took over the CEO position in 2014.

Mike Blake: [00:05:59] And in that time, how many acquisitions have you led Brightworth either through or maybe better yet into?

Ray Padron: [00:06:06] Sure. We actually have done three. And it was a very fortuitous. We had a chance to do a very small transaction first, which helped us sort of learn the ropes of integrating an individual practice into our firm. Then, the next transaction, which was probably within 12-18 months of that, it was sort of a team that was rolling out of another firm, they wanted to leave, and we brought them into our firm. A little more complicated. There was a lot more client work to do, paperwork, more conversations with the exiting that was taking place, et cetera. And then, there was a very large transaction we did, which doubled the size of the firm in 2017.

Mike Blake: [00:06:49] So, I’d like to talk about that one because it was clearly so material and so important. Why did you want to make that big an acquisition? Were you nervous about making that big an acquisition?

Ray Padron: [00:07:02] Right. Two questions. Yes, we were nervous, but the big reason for doing the acquisition was we decided we needed to actually have a a non-organic growth strategy. We’re in an industry, the wealth management industry is not actually that old, particularly the fee-only practice. So, when you look at what’s happening in our industry, there is issues around succession planning. We have literally hundreds, if not thousands of firms that are struggling with their own succession plans. All the first-generation owners who’ve created this business now were in what we would call a succession trap. They can’t sell their practice or their businesses to the next generation. It’s too late. It’s worth too much. And what’s happening is there’s this huge amount of consolidation that’s actually taking place because they have to do something.

Ray Padron: [00:07:54] At the same time, we’ve got private equity firms that are in large banks like Goldman Sachs that are buying up RIAs because they’re seeing changes in their own industry. So, there’s a lot taking place because the industry’s matured to the place it is. So, our choices are stick with organic growth or to do things that put us in the better position for the future. The future of this industry, there’ll be a handful of national firms. There’ll also be maybe 5 to 10 regional firms. And our decision six years ago was we want to be a regional firm. Let’s work towards that. And then, we can go from there. So, from a strategic standpoint, we needed to to do something and we needed to learn our way there. So, that’s pretty much the motivation for why we wanted to do an organic growth.

Mike Blake: [00:08:45] So, I like that distinction. That’s important kind of vocabulary point, organic growth versus inorganic. For our listeners who may not necessarily know that, organic growth simply means growth that you drive on your own by either expanding revenue from existing clients or adding new clients to your portfolio.

Ray Padron: [00:09:02] Exactly.

Mike Blake: [00:09:03] Right? So, I infer something. I wanna clarify. I wanna make sure I’m not assuming, but I infer from what you just said that you had a concern that if you did not acquire to become larger, you are at risk of potentially being acquired and maybe not under the best circumstances that you would like.

Ray Padron: [00:09:26] Sure. That’s exactly right. We actually had made the decision to work on our own succession plan 13 years ago. I was only 50 years old at the time. I was the oldest partner. So, we started our transition and our strategy for our own internal succession plan well in advance. We’re now at a point where the next generation, and we’re almost into third generation owners, own more of the firm than the original founders do. In fact, two of the founders are already gone. And the other two, myself included, will probably be gone in the next five to seven years. So, we’ve taken care of our part. Now, the question is, what do we want to become? And with all the consolidation taking place, it really is we wanted to be the masters of our own destiny. We’ve sold all our own succession plan. We should be able to survive all the changes that are taking place in the industry.

Mike Blake: [00:10:18] So, this big acquisition that you did in 2017, it’s hard to imagine. It’s three years ago now. How long did that take?

Ray Padron: [00:10:27] Longer than I anticipated. There was a really interesting process. We actually had met several years before that. They were interested in their own succession plan, wanted to meet with us to understand how we had done ours, and approached one private equity firm, in particular, to help them do that. After, I think, working with them for 18 months realized there wasn’t enough time, and they came back to us and said, “Would you be interested? We really like you. Why not consolidate the two firms?” And that was a great opportunity for us.

Mike Blake: [00:11:04] So, you said that the acquisition took longer than than expected. What knock-on effects did that have on other aspects of your business or maybe the acquisition itself? How did that change the tenor?

Ray Padron: [00:11:19] Sure. And I didn’t really s answer the last question well in a sense of why did it take so long. But there are a couple of things that had to take place. You have this whole LOI, which is our first time we actually did something as formal as sending out an LOI. You start doing some due diligence, and you realize, “You know what? The way we structured the LOI, some of the provisions really did need to change.” And one of those was there was a follow-on transaction that we felt was really important. There were two parts to the transaction. There was the investment, the registered investment advisor. And then, there was a planning firm. And there was issues with the planning firm. We realized we needed more than just a — what would you call it? An option. We needed an actual drop-dead date where we would actually be able to do something.

Ray Padron: [00:12:09] So, anyways, that process required us to sort of renegotiate from the LOI a different transaction. And that really is the reason why it stretched out. The cascading consequences of that are both positive in a sense for us and negative. The negatives, as I’m sure everybody can imagine, the longer you take, it’s like a death march. The more time people have to think of things, they want answers that I’m trying to explain to them, we’re going to answer those things on the other side of the transaction. So, where there are blanks in in people’s minds, they filled it with usually negative things. So, it’s this constant grind of trying to solve things and ghosts, I call it, that they think exist that just aren’t there. So, those are the negative things. The positive things where the firm actually grew during all that time, the firm we were buying. So, our initial upfront cost relative to the revenue we’re buying ended up becoming much lower.

Mike Blake: [00:13:10] Now, that’s interesting. And that speaks to the fact that on the sell side, they ran their process well because the more frequent outcome you see as that the firm stagnates or even declines in the sale process because selling a firm, and as I think you discover, buying a firm becomes a full-time job in and of itself. And so, frequently, the very asset you’re targeting can be neglected. If it’s not run well, if it hasn’t scaled well, it’s not as valuable an asset at the end of the process as it was when you started, but you encountered the reverse phenomenon.

Ray Padron: [00:13:42] Yeah. Good point.

Mike Blake: [00:13:43] And that must have given you, then, a lot of confidence. You found the right partner. You are doing the right thing.

Ray Padron: [00:13:48] Yeah, they’re a very focused business. They’re focused on the dental industry. So, they were able to continue to—what’s the word? Kind of run their flywheel. And they have this great marketing engine, which is one of the things that absolutely attracted us to the acquisition. And that marketing engine just kept working.

Mike Blake: [00:14:08] So, actually, I want to I want to touch on that ’cause something you led off with and now are coming back to, I think, is a very important instructive point, which is you didn’t buy a business for the hell of it. You bought a business because you had a specific objective that you wanted to meet with buying one or more businesses, right?

Ray Padron: [00:14:30] Correct.

Mike Blake: [00:14:30] And presumably then, you are prepared and perhaps did walk away from potential targets that we’re not going to help you meet that objective.

Ray Padron: [00:14:38] Correct.

Mike Blake: [00:14:38] Right? So, a there’s a deliberate process. And I think that’s important because— actually, what I’m going to back out, I’m assuming some of that may not be true. Do you, on occasion, receive unsolicited offers? Some firms or brokers say, “Hey, this this thing’s available. Would you like to buy it?”

Ray Padron: [00:14:54] Absolutely.

Mike Blake: [00:14:55] And most the time you say?

Ray Padron: [00:14:57] No.

Mike Blake: [00:14:57] Why?

Ray Padron: [00:14:58] Well, there’s some very specific things that we’re looking for. One is we love the idea of there being a succession trap because, usually, that means we can get this at a decent price. But there has got to be a whole host of things that have to be behind that to make it work. You got to have talent. There’s got to be a set of hungry next generation people who’ve been waiting for something to happen, so they can take over this business. I can’t just ask somebody from Atlanta to move up to Charlotte to run the firm.

Ray Padron: [00:15:31] So, we were looking for several things. One is a strategic location. If I get an offer to buy a firm in some small town in Alabama, I’m not interested in that. So, Charlotte was a strategic location. You’re looking for a strategic talent –  the credible talent and group of next-generation people that were ready to take over the business. And then, I’m trying to think of what the third thing was. Oh, a strategic market. So, our Atlanta business is very focused on corporate executives and professionals, as well as with business owners. Having a business up in Charlotte that’s entirely focused on the dental industry nationwide was a really cool and very unusual. You, usually, don’t see that in our industry.

Mike Blake: [00:16:13] And we had another guest on, Rod Burkert, who talked about the need to specialize. This is not really in our script, but I sort of have to ask you, do you feel that specialization has been a benefit?

Ray Padron: [00:16:24] Absolutely. People want to work with people who know their business and the phase of life that they’re in.

Mike Blake: [00:16:32] Yeah. And I think clients appreciate not having to educate their advisors-.

Ray Padron: [00:16:39] Absolutely.

Mike Blake: [00:16:39] … about their business. And being a generalist, it’s hard to sort of defend to a client that says, “Hey, should I get somebody that’s done one of these before or not?” No, you don’t need someone who’s done one of these before. Your business is any old business.

Ray Padron: [00:16:58] Right, exactly.

Mike Blake: [00:16:58] I’ve never been able to really figure how to carry that conversation and not sound dumb doing it. If there’s a way, please send something into info@decisionvision.com, whatever the hell our email is. Help me figure out how to do that.

Ray Padron: [00:17:11] Really.

Mike Blake: [00:17:14] So, this opportunity came about because you had some kind of relationship, and there was sort of a slow-burn conversation. Let’s just sort of dip your toe in, and I think sort of gradually weighed in. Is that fair?

Ray Padron: [00:17:25] Yeah, that’s fair statement.

Mike Blake: [00:17:27] So, at some point, you then flipped the switch from conversation to real negotiation discussion. You touched on this before, but I want to really dive into this. What was your due diligence process like?

Ray Padron: [00:17:40] So, the due diligence process actually went incredibly well. There are several reasons. The individuals we were dealing with, some of them actually were attorneys. And so, they had a really good understanding of some of the things we were going to be asking for. We also had a private equity firm, our financing arm, if I may, that was helping us do the acquisition, had done literally dozens and dozens of these in this space. So, we really knew exactly sort of what to ask for, and how to build out the data room, and et cetera. So, that process actually went really well and smoothly. We have a full-time compliance officer who knows exactly, again, what we need to be doing and looking for. So, it was a pretty smooth process. It didn’t take very long.

Mike Blake: [00:18:27] How long did it take? Do you recall?

Ray Padron: [00:18:29] It’s about 30 to 45 days.

Mike Blake: [00:18:31] Okay. That’s a well-run due diligence process, which I’m sure your buyer— I’m sorry, your seller appreciated.

Ray Padron: [00:18:37] Yeah, it was.

Mike Blake: [00:18:38] Because a seller, when I advise sellers, I tell them to be prepared for a 90-day, sometimes even 120-day due diligence. And that gets them to the death march things you talk about.

Ray Padron: [00:18:48] Exactly.

Mike Blake: [00:18:48] Everybody’s happy and cheerful for the first two weeks of questions. And then, after that, it’s, “Oh, God. I got to do this again,” right?

Ray Padron: [00:18:55] Yeah, yeah.

Mike Blake: [00:18:56] I can’t imagine what it’s like by day 100. You just want to chuck everything and say, “You know what, I’m just gonna sell this to the government.”

Ray Padron: [00:19:03] It’s funny, and I mentioned it earlier, there were these two parts – the getting the RIA part in the due diligence done. Really, we had that done all in 90 days, including the purchase agreement. It was renegotiating the aspect of the LOI that required the acquisition of the other part that took us another 12 months. It was that, which where we had the death march.

Mike Blake: [00:19:26] Now, what’s interesting in the due diligence too is that in your world, you’re a highly regulated industry.

Ray Padron: [00:19:26] Very, very very.

Mike Blake: [00:19:36] And one in which potential liability and, frankly, disaster is lurking around every corner. And as you said, you have a compliance officer, all RAs either have an internal or outsource compliance officer. You pretty much have to, I think.

Ray Padron: [00:19:51] Absolutely.

Mike Blake: [00:19:55] How afraid were you, concerned were you about finding that or maybe not finding that gremlin under the rug that, all of a sudden, now, it becomes your responsibility? How big a concern is that in your industry?

Ray Padron: [00:20:13] It’s a big concern. Obviously, there’s two things that you do. Well, or maybe three things that you’re doing that kind of help mitigate a lot of that. Obviously, we did an asset purchase. We weren’t buying the stock of the company. So, there’s sort of step one.

Mike Blake: [00:20:28] So, that gives you some level of protection.

Ray Padron: [00:20:30] They actually have compliance files, which they have to have. And if they’ve been recently audited, they’re probably very up to date. So, that gives you another layer of comfort. You’re going to do an audit of their CRM. Well-run firms got every client conversation or every issue sitting in CRM. So, you’re going to do a set of tests through their CRM for, particularly, their larger clients where there might be larger financial exposure. In this case, the firm that we purchased did have one issue with a client. It was disclosed to us right upfront. It wasn’t a big deal. Clients get upset sometimes.

Ray Padron: [00:21:08] And then, the last thing is the clients are required to sign a consent on the transaction. So, we can’t just buy a firm and then the clients go, “Wait a minute” all of a sudden, “Who’s Brightworth?” So, there’s this whole communication process. And the clients actually consent to the transaction. So, there’s another set of affirmations that there’s no problems lurking out there or if they are, they’re going to make a decision not to come.

Mike Blake: [00:21:32] So, that’s interesting. I think I kind of knew that but hadn’t really internalized it. Is a client consent such that they consent to be transitioned over or could a client potentially even hold a transaction?

Ray Padron: [00:21:46] They can’t hold a transaction, but what they can do is isolate what issues are. And effectively, then, they would not sort of consent to moving over, and they can no longer be a client.

Mike Blake: [00:21:57] They can opt out basically.

Ray Padron: [00:21:58] And then, it changes the math of the transaction.

Mike Blake: [00:22:01] Now, I wonder, the way you kind of work through this due diligence process and compliance, I guess I wonder if in a way it’s easier because you can kind of look up with FINRA what kind of actions have been taken, if any sensors, anything like that, that’s gonna be a matter of public record.

Ray Padron: [00:22:18] Exactly. And that’s not just at the firm level but also at each advisor level.

Mike Blake: [00:22:23] Okay.

Ray Padron: [00:22:23] Right. If there’s an action against a specific advisor that maybe they even hired after that issue came up, it’s all gonna be out in the disclosure systems that we check.

Mike Blake: [00:22:34] So, that’s a luxury relative to a lot of other industries-

Ray Padron: [00:22:38] Absolutely.

Mike Blake: [00:22:39] … that the skeletons, they can’t be in a closet or it’s a very easy closet to open.

Ray Padron: [00:22:44] Exactly.

Mike Blake: [00:22:47] So, you’re working through a due diligence process. At what point does your conversation talk turned to pricing terms?

Ray Padron: [00:22:56] Most of the pricing terms were worked out upfront and were in the LOI. We structured it that way. We are basically saying, “We’re going to purchase your revenue at X. And we’ve built out an earn out of whatever, over a five-year period.” And so, most of the pricing was already determined.

Mike Blake: [00:23:14] And how difficult was that? Was there a lot of back and forth? Or did you and the seller find that you had kind of a similar mindset?

Ray Padron: [00:23:22] In this case, it was very similar mindset.

Mike Blake: [00:23:25] In other cases. were there not? Are there cases where you found that a show stopper?

Ray Padron: [00:23:30] No. In the other ones, it was less of an issue because there was much smaller transactions and the multiples were just one time; where this was an earn-out calculation. So, it gets a little bit more complicated. And when you have market volatility like we do today, yesterday anyways, it becomes a much more complex conversation.

Mike Blake: [00:23:51] So, did you do this transaction yourself or did you have a team of advisors helping you with us?

Ray Padron: [00:23:57] Great question. Probably one of my— I call it both a strength and a fault was this one transaction, in particular, I did most of the work from a Brightworth perspective. Now, the good news is I had a private equity firm that specializes in this. So, they were a big part of helping keep things on track, make sure our thinking was clear, and moving the transaction forward.

Mike Blake: [00:24:23] You said you had a private equity firm. In what way? What? How are they involved? Were they a client that’s just sort of helped you along the way or professional contact?

Ray Padron: [00:24:30] No. They’re actually an investor in the transaction. So, it’s a-

Mike Blake: [00:24:33] Oh, I see. Okay.

Ray Padron: [00:24:34] Yeah. They’re just partly a Brightworth private equity purchase of the business.

Mike Blake: [00:24:39] Got it. Okay. So, I didn’t know that out of the transaction. So, it sounds like, I would think initially, my first reaction would be having another seat at the table would make the transaction more complicated, but it sounds like in your case, it also made it easier.

Ray Padron: [00:25:01] Yeah, it absolutely did make it more complicated. Quick funny story. My wife and I have a place in Florida condo. One day where I was working, negotiating with and against the private equity firm on pricing, I was working on the transaction itself, negotiating compensation. I don’t think I got off the phone over a 10-hour period, and I’d walked over five miles just inside my home working through those kinds of issues. So, yeah, it can get really complicated.

Mike Blake: [00:25:36] Now, a lot of people talked about the importance of culture. I’ve known you long enough to know, you are a big culture guy.

Ray Padron: [00:25:44] I am.

Mike Blake: [00:25:44] This is not something that’s just a Harvard Business Review article that you read. This is something that is critical to you. It’s part of who you are and what’s made you successful.

Ray Padron: [00:25:54] Thank you.

Mike Blake: [00:25:54] You are acquiring a large firm. How did you explore culture and get comfortable that an acquisition of that magnitude wasn’t going to blow up what you’d spent the prior 20 years building?

Ray Padron: [00:26:09] Yeah, great question. And probably the biggest concern that you have with your own team when you’re proposing this to your own management committee and your partners, in this case, it was really kind of an interesting process. Step one, and I do this as I’m looking at firms that are out there that I would call targets, they’re what I’d call stealth targets. I’m not using their name. Nobody else in the firm knows. But I actually go to their website, and I’ll sit there and look at the bios of what I would call the next-gen leaders or the senior team that we would probably be buying out. And in this case, when I looked at their website, it was, “Wow! I could take that that bio and that person, lift it out, I could set it right in the Brightworth, and you would know the difference. They’d look and feel just like a Brightworth advisor.” That’s not culture, but it is a big step. You see the things that they’ve done. You see what their hobbies are. You see what’s important to them, their certifications, et cetera. They were definitely felt like Brightworth.

Ray Padron: [00:26:09] The next thing is you’ve got to talk about how they make decisions. How do they govern themselves? That’ll tell you a lot about the leadership. Is it a top-down kind of thing? Is it consensus building? And then, the other part is you actually go in there and you show them, “Here’s how we run our firm. Here’s what we expect from ourselves as human beings working together to get things done for our clients. We want to look as healthy on the inside as we look to our clients on the outside.” And the other thing is you spend time with them. We encourage to do assessments if we can get them to do there. Step one is I share mine, “Here’s my assessments. I want you to see what my profile looks like.” The fact I’m a take charge person and I tend to be a bit spontaneous, et cetera. Those are the things I want them to know about. So, I open the firm up to them. And at the same time, hopefully, allow them to be and feel more open to us. And we kind of learn our way there.

Mike Blake: [00:28:15] I’m glad you say that one. When my firm was acquired by Brady Ware two and a half years ago, I volunteered my profiles because I wanted them to know what they are getting into, and I wanted them to self-select out. And my profile basically says that I am a raving lunatic that is always pushing the edge of stuff, that is a creative type, that doesn’t follow rules, that doesn’t pay attention to administrative detail and doesn’t acknowledge that they’re even important. And basically says that you’re retaining an anarchist.

Ray Padron: [00:28:51] Right.

Mike Blake: [00:28:52] Right? And I thought it was important that they sort of understood what they’re getting into. That when I told them that, I wasn’t just being self-deprecating. I have empirical data that demonstrates that’s the kind of person that I am, so that they understood what they kind of getting into.

Ray Padron: [00:29:10] Sure.

Mike Blake: [00:29:10] And I think that’s why our relationship has, although it’s had some bumps, I’ve only threatened to burn the building down twice, it’s had its bumps along the way, I think it survived because we also realized a culture is going to be a threat. And even as one person who was a loud mouth going into 160-person firm can be just as disruptive to culture if you don’t play it correctly-

Ray Padron: [00:29:38] Absolutely.

Mike Blake: [00:29:38] … as a large acquisition.

Ray Padron: [00:29:40] Yeah. If you think about it, you really are. The closer you can get the authenticity or in transparency is the sooner you can get to a win/win. They don’t want to buy trouble, and you don’t want to inherit trouble. And the best thing you can do is lay it out there, and just be clear on what life forward is going to be like.

Mike Blake: [00:29:59] And you don’t want to walk into trouble either.

Ray Padron: [00:30:01] Exactly. The other thing, and I did mention this, that you should look for, and that is turnover. Go back through the last five years and see how much turnover did the firm actually have.

Mike Blake: [00:30:12] And you’re an industry that has some turnover.

Ray Padron: [00:30:14] It really does. In large part because the way these businesses have been built, they tend to be very siloed. Everything’s concentrated at the top. And you have all these young advisors coming up through the ranks who are looking for opportunity. If you don’t bring that to them, which includes ownership, something we solved at Brightworth a long time ago, they get frustrated and leave. And we earn in talent race in our business.

Mike Blake: [00:30:37] Yeah. So, you’re the chief executive officer, but I don’t think you’re a dictator. You didn’t come in wearing a sash or a big hat and frilly shoulder pads or anything like that. So, how did you get your other partners on board? How involved were they? And how did you manage the— I don’t want to say politics. That’s not the right word. But how do you manage the relationship and communication, so that they would be inclined to be a constructive force in the transaction?

Ray Padron: [00:31:11] Sure. Great question. And there’s sort of several parts to this one too. There’s the management committee and the partners. And then, there’s the entire Brightworth team sitting in in Atlanta. So, one of the things we already had was what were our critical success factors in our mergers and acquisitions strategy that we were looking for? Check the boxes, strategic location, strategic talent, a focus in a niche market. Check, check, check. So, all of the basic things were covered.

Ray Padron: [00:31:43] The other part to this is that you have to realize that there’s sort of a— I call it there’s two kinds of people. At Brightworth, I saw two kinds of people. There’s always the wow group, which is, “Wow, this could be amazing and great.” They see the check next to the critical success factors. And then, there’s the other group, which is, “How in the world are we going to pull this off?” And you really have to take your time with the hows because they’re going to have a billion questions sitting in their head about, “How is that going to work from a compliance? How is that going to work from an investment standpoint? How are you going to integrate all this?” There’s all these millions of questions. And I’m an influencer. I am a very positive person. And at the same time, I have to be patient. You’ve got to bring them along. You’ve got to give them the time to process these things. And partly, you’ve also got to say, “Well, you’ve got to have a little bit of faith here.”

Ray Padron: [00:32:39] I had a great question at a staff meeting when I announced that we were pursuing this large acquisition. A gentleman in the group, he was one of our planners, said, “What makes us think we can pull this off? Like, what makes you think we can actually do this?” And the fact of the matter is I didn’t know we could do this. I can’t prove to them that we can do this. But I looked around the room, I said, “Look, we’re one of the few firms who’ve invested a lot in our next-generation leaders. They’ve done an amazing job over the last 10 years of moving from where they were to where we are now. We’re at the right place in our maturing as a company to go find out. I don’t know if we’re riding a 5-speed bike, a 10-speed bike, or an 18-speed bike. But the only way we’re gonna find out is to attack the hill, and let’s go see.” And that really won a lot of people over.

Mike Blake: [00:33:30] Interesting that you bring up, and not just bring up but that you involved your employees. I think that’s an unusual step to take. I think when most executives pursue a material transaction, buy or sell side, they try to keep that a very closed discussion with a very tight inner circle, I think, primarily, because they’re afraid of causing fear and uncertainty.

Ray Padron: [00:33:58] Sure.

Mike Blake: [00:33:58] Right? Although, I think that tends to backfire. We’re kind of seeing now with the coronavirus thing, the more that you try to cover up, all that does, it makes people’s imaginations become more active.

Ray Padron: [00:34:12] Yep.

Mike Blake: [00:34:12] Right? So, it hurts in the long run. But also, what you did is that you made yourself subject to scrutiny. You  put yourself in a position of a public forum where one of of your planners said, “Basically, what makes you so great? Who do you think you are that we can pull off this really successful thing?” and gave you the opportunity to put you in the position of being vulnerable and saying, “Well, I don’t know. But here’s what my faith is based on.”

Ray Padron: [00:34:41] Yeah, exactly.

Mike Blake: [00:34:43] But not all leaders appreciate being questioned right by the “rank and file” of the organization.

Ray Padron: [00:34:50] Sure. Just from a personal philosophical standpoint, I have found that the benefits of having the open conversation and the challenge outweigh the other way, which is don’t tell them anything. And we actually used to have that culture of telling these people very little. I want to have the questions in advance on a card. And that’s just not my style.

Mike Blake: [00:35:18] Well, I think you get buy-in. We just recorded a podcast with another individual talking about CPA firm relationships, and what he said was that the most disruptive thing to a CPA relationship is a surprise, a material surprise. Very few things are more surprising than an e-mail at 8:30 in the morning on a Monday saying, “Hey, we just acquired a firm equal our size in Charlotte. More to come.”

Ray Padron: [00:35:46] Right. Yeah, exactly.

Mike Blake: [00:35:48] Is that really helping you retain people? And B-.

Ray Padron: [00:35:52] No.

Mike Blake: [00:35:52] And [B], have people be more comfortable with the transaction than if you’ve kind of at least said some information along the line?

Ray Padron: [00:35:59] Exactly. Exactly.

Mike Blake: [00:36:02] So, you made this acquisition in ’17. You’ve had a few years to step back. How has it change your firm?

Ray Padron: [00:36:09] Okay We have not stepped back. That’s the funny part.

Mike Blake: [00:36:12] Okay.

Ray Padron: [00:36:12] All the work starts. You get that signature, you cut a check, and now you’ve got a lot of work to do. And we went from, like I said, with effectively, what were we? We were about 25 people. They were 16. We’re now 80 people. It was a big giant step for our firm. So, we had an awful lot of infrastructure we needed to build out while we were integrating. So, at the time that we did the acquisition, I was effectively CEO, CFO and COO. Well, that couldn’t last very long. So, over the last two years, we’ve spent time building out the infrastructure. We now have a chief operating officer, a chief financial officer, people officer. I’m trying to think what else, but we’ve built in the matrix management between the two offices, so that it’s really clear where all the planners actually report to. And it’s taken an awful lot of time and effort.

Ray Padron: [00:37:13] We’ve answered all the questions that I tried to push off until the other side of that the transaction, and that’s worked out really well. We follow through with our promise, which was we told them, “Look, we realized you’re the same size as us pretty much.” We had more infrastructure built out than they did, but we told them, “We will figure this out together.” I’m sure that was a Jimmy Carter ‘Please trust me” kind of a comment but we follow through. We said, “Look, okay, let’s go sit down. Let’s start talking about CRM. Let’s talk about our trading software. Let’s talk about where trading should take place.” And we’ve worked through all those things together.

Ray Padron: [00:37:51] Now, that’s going to be a lot harder on the next one because we’ve made a lot of decisions about how we’re going to organize ourselves, et cetera. So, the next one won’t be as— what’s the word? Together, if I may. It’s going to be-.

Mike Blake: [00:38:03] Quite as collaborative.

Ray Padron: [00:38:06] Thank you. We’ll be quite as collaborative. It’s got to be more our way than the highway or whatever, but we’ll still take the best. Like if we find another firm that’s of substantial size, and they’re doing something we really like, I think the pain of change now is going to be way better than just trying to force people into a system that’s not as good. So, we’ll make changes. It just won’t be as many changes as we’ve done this time.

Mike Blake: [00:38:34] So, you sound like you’re happy with the results of the acquisition.

Ray Padron: [00:38:37] Yeah. Great team. I love our partners. I can’t tell you how many times they’ve come up to me and said, “Man, we are so glad that we’re part of Brightworth now.” And from that standpoint, people’s standpoint, I could not ask for a better decision. Their firm, if I may, their part has grown by leaps and bounds. And so, everything’s working out. But it’s, again, really hard work. There are periods of time where they probably feel like, “We’re starting to feel like the stepchild,” and it means I’m not spending enough time up there or we’re not putting the right resources there. And we’re working through how to do all of that.

Ray Padron: [00:38:37] Our decision making around hiring, for example, is a little bit more driven around real calculations of what capacity is across the organization. Theirs was a little more by the— I’m not going to use the word seat of the pants, but hey, we’re feeling really busy. I think we need to hire somebody. So, now, we’re bringing structure around all that. They’re not used to that. And we’re learning a lot of things from them. So, it’s been a lot of, I would say, really a win/win from that standpoint.

Mike Blake: [00:39:43] Are you finding that your offices still have slightly different cultures? And maybe that’s a good thing.

Ray Padron: [00:39:49] Sure. And part of that is their service model is a little different. It needs to be. We’re very, obviously, Atlanta-centric. We, obviously, have clients all over the country. Those larger clients, we go fly to. And the Atlanta clients, they just kind of drive to the office. Well, their space, the dentists are all over the country. They actually have the dentists fly into Charlotte. So, the dentist will come in, come to the building. It’s almost like a Mayo Clinic structure. They’ll meet with the attorney. They meet with the transition’s person, the TPA, the CPA, and they meet with us. So, there are some cultural differences but we really are merging the cultures, and that’s working really well. We have very defined sort of terms and accountability around our culture. So, there are a lot of things and behaviors we don’t tolerate, and we’d make sure we jump on those. So, we’re seeing it really come together.

Mike Blake: [00:40:43] I don’t know if this is either here or there but I feel compelled to add in. Microphone’s turned on, so I’m just going to say it. But we were the result of the acquisition of Brady Ware and several firms, including two in the Atlanta area that became the Atlanta office. And our Atlanta office does have a different culture, I think, than the rest of the firm. And I think that’s a good thing. It’s a good thing for me because I do believe that our office is a little bit more entrepreneurial. We do feel like we’re kind of the rebels a little bit, and we’re not afraid to kind of do skunkworks kind of stuff and put things in place that we know are going to hurt the rest of the firm, but we just don’t feel like we got to wait for everybody to catch up to realize how brilliant we are and that we’re right. And we think that if we set a good enough example, the rest of firm will come along.

Ray Padron: [00:41:35] Sure.

Mike Blake: [00:41:36] Personally, our headquarters are in Dayton, Ohio. I don’t know that I would thrive in our headquarter office because it is the central office. It is the core of the firm. They are accountants. There’s nothing wrong with accountants. I worked for an accounting firm but it’s much more of a by-the-numbers kind of place.

Ray Padron: [00:42:00] Sure.

Mike Blake: [00:42:00] And so, personally speaking, having another location of the firm that is willing to be a little bit different where I can be a better fit, for me, has been a huge benefit. And I actually think it benefits our firm.

Ray Padron: [00:42:15] Sure. And I think that’s a really good thing. And I would think every organization, and this is even true around operational issues, which is what are things that have to be absolute, and what are the things where we have some flexibility around? And part of that is also culture and how people operate. But there are also some boundaries where things are just plain not acceptable. And we think those boundaries are really also important to enforce and make sure that there are no exceptions, particularly at the partner level. If we let the partners live in the exception area, the staff will never follow. So, they have to see that at the partner level. And we’ve actually had issues around that, and we’ve dealt with them. And that really speaks volumes to the team.

Mike Blake: [00:43:03] So, you’ve been through a couple of these. And thank you again so much for spending all this time with us and sharing your experience. If someone listening is thinking about buying a company, if we can distill down to a couple of pieces of advice, couple of bullet points, can you do that? Or are there a couple of pieces of advice you’d just give blanket thinking about buying a business, what do you need to think about?

Ray Padron: [00:43:26] Couple of things. One is we talked about it, it’s the death march. So, it’s almost like preparing for a marathon. You have to mentally say, “Okay. I may get this done in six months, but it also may take a really long time.” And just prepare yourself, which also means linked to neglect. So, you have to prepare. Also, know your team. Who are you going to draw into the process and when? And sort of understand how they’re built, right. Are they a wild type of a person or are they going to be a how type of a person? Knowing that it’s good to have those people were always asking how because they’re the ones you’re going to help you with the due diligence and really ask a lot of good questions. So, know your team, expect a long march.

Ray Padron: [00:44:07] One of the things that really was hard for me was realizing that everything matters to somebody. And I have to realize that, “Even though it may not matter to me, like, yeah, that’s just not an important deal point. Why are we bothering with that?” it matters to somebody in the firm. So, you have to take the time to address it and address it well. So, in a sense, details matter. Everything matters.

Ray Padron: [00:44:31] Know your boundaries. I work a couple of times where I got hooked on some policy that they had that they wanted to keep, and it was an absolute no for Brightworth. But when I really looked at it, it was just not a big deal. And I let it bother me. And I was really ready to just say the heck with it and walk away when the PE firm or our attorney would step in and go, “Ray, it’s just not that big a deal. It’s just small potatoes. We’re talking billions of dollars of assets to manage. Who cares whether you’re going to charge your parents or not for the services you’re doing,” that kind of stuff.

Mike Blake: [00:45:08] You want to charge a $5 million fine for a 50 cent crime.

Ray Padron: [00:45:10] Yeah, right. And then, the other thing is when you’re doing the LOI, again, it was my first time, there’s just an awful lot of cascading consequences of anything that’s in there and you need to think ahead. Like what are the cascading consequences of putting this specific thing in your LOI? I found myself having to cover a lot of areas that I didn’t think about because you’re sort of sold that the LOI is just this general document, you want to put too much detail in it, but sometimes you do. You really want to think ahead. Those are my suggestions.

Mike Blake: [00:45:47] I’m going to use that quote. I may even make it my quote of the day that I do on LinkedIn, “Everything matters to somebody.” That-.

Ray Padron: [00:45:53] Really do.

Mike Blake: [00:45:53] That is profound and insightful.

Ray Padron: [00:45:56] Thank you.

Mike Blake: [00:45:56] At least, to me, it is. I think, to other people, it will be as well. If somebody wants to ask a question about how to buy a business, as somebody who has been through the wars before, can they contact you?

Ray Padron: [00:46:05] Absolutely.

Mike Blake: [00:46:06] How do they do that?

Ray Padron: [00:46:07] Well, there’s always the website. My my email address is ray.padron@brightworth.com. And you can always call our phone number, which is 404-760-9000.

Mike Blake: [00:46:20] That’s going to wrap it up for today’s program. I’d like to thank Ray Padron so much for chair for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week, so please tune so that when you’re faced with your next executive decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor’s Brady Ware & company. And I’ve just touched my face three more times. And this has been the Decision Vision Podcast.

Tagged With: acquisition, Brady Ware, Brady Ware & Company, Brightworth, buy a business, buying a business, Decision Vision, Decision Vision podcast, due diligence, management succession, merger, Michael Blake, Mike Blake, private wealth management, Ray Padron, succession

Decision Vision Episode 62: Should We Sell the Family Business? – An Interview with Gaia Marchisio, Cox Family Enterprise Center at Kennesaw State University

April 23, 2020 by John Ray

sell the family business
Decision Vision
Decision Vision Episode 62: Should We Sell the Family Business? - An Interview with Gaia Marchisio, Cox Family Enterprise Center at Kennesaw State University
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sell the family business
Mike Blake and Dr. Gaia Marchisio

Decision Vision Episode 62: Should We Sell the Family Business? – An Interview with Dr. Gaia Marchisio, Cox Family Enterprise Center at Kennesaw State University

How do you recognize when it’s the best decision to sell the family business? Can a dysfunctional family operate a functional and successful business? Dr. Gaia Marchiso of the Cox Family Enterprise Center at Kennesaw State University joins the show to answer these questions and much more. The host of “Decision Vision” is Mike Blake and the series is presented by Brady Ware & Company.

Dr. Gaia Marchisio, Cox Family Enterprise Center at Kennesaw State University

The family enterprise field shares a common experience:  navigating the space where family relationships and professional demands coexist. Family members, non-family executives, external advisors and students all traverse this unique sphere, mutually working through the complexity in pursuit of success.

The mission of the Cox Family Enterprise Center (CFEC) is to act as an intellectual and practical hub for this community. With specialized programming, events and services tailored to the needs of each segment of our community, we focus on creating growth opportunities that empower individuals and organizations. We are proud to be a gathering place of learning, facilitating new skills, richer capacities, and sustainable relationships.

sell the family business
Dr. Gaia Marchisio

Dr. Gaia Marchisio is the Executive Director of the Cox Family Enterprise Center at Kennesaw State University. As a tenured Associate Professor of Management at Kennesaw State University’s Coles College of Business Gaia developed several curricula for family business classes, and teaches undergraduate and MBA courses on family business, management and behavioral sciences, and consulting services. She has been a visiting faculty under numerous Family Business Centers in Latin America, Asia, Europe, and New Zealand.

Gaia’s academic experience allows her to be rigorous and up-to-date in dealing with family business topics. She has been participating in research projects with international partners from Academic and Professional environments (including McKinsey & Company and the Italian Stock Exchange); and has strong global experience in collaborating with financial institutions and associations working with family firms, such as International Finance Corporation (IFC – World Bank Group), Inter-America Investment Corporation (IIC – Member of the IDB Group), Credit Suisse, UBS, and Australia and New Zealand (ANZ) Banking Group, to name few. In particular, Gaia has experience working with financial institutions, both consulting with them on family business related topics, and training their clients and/or associates.

In 2013/14, Gaia spent her sabbatical leave, during which she served as the Chief Learning Officer for FBN Academy, an initiative by the Family Business Network in Asia. Gaia is an active international speaker and family business advisor. She regularly presents and/or advises families on various topics in family business management around the world, including facilitating some of the owners meetings. These families are from around the world including Europe, North and Latin America, the Caribbean, Asia, Australia and New Zealand. Gaia brings a unique combination of knowledge and experience from the fields of management and entrepreneurship to her work with family businesses, combined with a growing expertise in family dynamics and communication.

Gaia was raised as a 4th generation successor in her family’s business. This experience helped her understand the emotional challenges and responsibilities of being a young member of an entrepreneurial family. After finishing her BBA, she joined the SDA Bocconi School of Management where she served as Assistant Director of the full-time MBA Program; as Coordinator of the first Chair in Strategic Management in Family Business; and as a Coordinator of Entrepreneurship Entrepreneurs’ Research Center. Gaia earned her Doctorate in Business Administration in Family Business. She moved to Atlanta, Georgia, USA in 2006.

For more information on the research and services offered by the Cox Family Enterprise Center, you can visit their website or email directly.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

sell the family business“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:20] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owner’s or executive’s perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:39] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia, which is where we are recording today. Brady Ware is sponsoring this podcast. If you like this podcast, please subscribe to your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:03] So, today we’re going to talk about whether you should sell the family business. And this is something that I’ve had a chance to get up close and personal with. As it happened the last couple of years, I’ve been asked to help some pretty high net worth families with the third comma and helped them with something that’s called a family charter, which is basically the constitution of how a family decides it’s going to govern itself, usually over multiple generations.

Mike Blake: [00:01:34] And over that time, I’ve had an opportunity to study family businesses in a way that I really had not before. Those of you who have listened to this podcast before know that I’m more of a tech guy. And tech companies, generally speaking, measure themselves in years or even months, but not generations. Family businesses, on the other hand, very much can measure themselves in generations. And there are family businesses that go back centuries. The Rothschilds investment banking empire can date itself to the early 18th century and Bavaria. The Kikkoman Soy Sauce company is actually a Japanese family business. Actually, an amalgamation of eight families in Japan that date back in to the 17th century. Many of the bit of the great a time museums, in fact, are legacies of the Milanese merchant bankers that date back to the Renaissance.

Mike Blake: [00:02:38] And so, we can see that some family imprints actually last for half a millennia or longer. And so, I’ve become very interested in family businesses because they offer a dynamic that you don’t see anywhere else. So, over the course of the last couple of years, I’ve managed to become, I’m not going to say expert but, at least, reasonably well read. And as is the habit with our podcast, when I know that I’m not an expert, I bring in somebody who is.

Mike Blake: [00:03:09] And so, joining us today is my new friend, Dr. Gaia Marchisio, CEO, who is Executive Director of the Cox Family Enterprise Center at Kennesaw State University, which is a university that’s about 25 miles north and west of downtown Atlanta, maybe 30 miles for those of you who are not from the Atlanta area, where she is also an Associate Professor of Management. She holds a doctorate from the University of di Pavia in Italy. I hope I’m pronouncing that correctly. And her research interests include family businesses, business strategy and business communication.

Mike Blake: [00:03:42] Some of her publications include Game Theory and Family Business Succession, Narcissism in Organizational Context – I’ve got to read that one – The OOIDA Loop: A New Strategic Management Approach for Family Business; From Burning Out to Being On Fire: A Conceptual Model of Burnout in the Family Business. Corporate Venturing in Family Business – it’s a topic that’s near and dear to my heart – The Effects on the Family and Its Members. And she’s also the author of several chapters in other books as as well. And on the the list of hits goes on and on and on.

Mike Blake: [00:04:16] The Cox Family Enterprise Center is the oldest of its kind in the world, founded in 1987, holistically supporting business families by creating comprehensive education tailored to their needs. And by the way, again, for those of you who are not in the Atlanta area, the Cox family themselves are a family business. They are on – Guy will correct me – but either the second or third generation. They are telecommunications and internet data magnates, media magnates here in the Atlanta area.

Mike Blake: [00:04:48] For those working within family enterprises, the Cox Family Enterprise Center offers programs designed to foster greater strength and services intended to create degenerates synergy in both family and business contexts. For those working as advisors to business families, the Cox Family Enterprise Center has designed education to deepen their perspectives and equips them with the necessary skills for working in their field. Both getting these efforts, they engage in industry-shaping research and undergraduate and graduate educations for the Coles College of Business at Kennesaw State University. At the core of these efforts perpetually remains their commitment to education as a crucial tool for enhancing the wealth and success of the entire community. Professor Marchisio, thanks for coming in today.

Dr. Gaia Marchisio: [00:05:29] Thank you for having me.

Mike Blake: [00:05:31] So, let’s start because it may not necessarily be obvious, what makes a business a family business? At what point does a business evolve from just sort of being something or somebody started up, and then we classify it as a family business?

Dr. Gaia Marchisio: [00:05:46] Sure. I can give you the traditional description. And then, I would like to add some of the more recent thoughts that I think we have to think about. So, typically, we have an entrepreneur, as you mentioned, that start the business. And at some point, he or she can have the family joining in the ownership structure. And that’s number one. Now, there is some debate around whether should the family have the majority to be classified as a family business. Typically, we say that they need to have enough control to have decision making power on strategic decisions. Then, there is another component. Do they need to have the family working in the company of not to be a family business? And that’s another layer. And do they need to have the intention to pass the company to the next generation?

Dr. Gaia Marchisio: [00:06:38] One thing I think it’s very important to really define whether family is a family business or not is that, do they have the mindset? Do they think as a we as a family or are they do everything they can with the tools they have from their ownership perspective to maintain their control in one person? Because that would still be an entrepreneurial family with just a little bit larger pool of owners, as opposed to start thinking as we, as a family, as a multitude of people that as owners have to make the key important decisions.

Mike Blake: [00:07:14] And is there a particular point that kind of prompts that conversion from being a family that happens to own a business to then being a family business? Is there a typical point at which that is restart? Does each family get there differently?

Dr. Gaia Marchisio: [00:07:30] I think a little bit of both.

Mike Blake: [00:07:30] Got it.

Dr. Gaia Marchisio: [00:07:33] So, some is the life event. They may bring them there. So, it can be a challenge and an opportunity at the same time. And other families become more intentional in doing so. So, they are mindful they want that to happen. And so, they start working to get ready to be able to make those decisions together, because that’s the biggest difference is how the whole decision making process in the ownership or in the daily operation change when it’s not more one person making the whole decision, but you have to share and create alignment around the key most important.

Mike Blake: [00:08:09] Now, what what are things that make family businesses different from, I guess, a non-family business, if you will?

Dr. Gaia Marchisio: [00:08:18] Several. The most well known probably is what you mentioned before, these orientation to longevity to think about across generations. They call it patient capital. I think for what I see through both research and practice, there are other factors that we have to take into consideration. One has to do with the goal setting of their company. Typically, there is a way to think about the business of the business is business. And so, having a heavy goal around making money, which is great, don’t get me wrong, and creating a different perspective, which is money becomes a tool instead of the end goal. And they allow for a variety of other reasons why to be in business. From just being with you … not just. From being with my family, creating more job opportunities, have any impact on the community, create some good. So, it can be really different from every family, but it has a lot of to do with, why are we in business, and what’s the purpose of what we do?

Mike Blake: [00:09:22] I think that patient capital point is extremely important. One of the things I’ve learned as I’ve had to give myself a crash course on family businesses, I think one of the things that makes them unusual, and we’ll talk about, extraordinarily successful is the fact they are patient capital.

Dr. Gaia Marchisio: [00:09:41] Yeah.

Mike Blake: [00:09:41] Right? So many businesses, even private ones, measure themselves by the monthly P&L, the quarterly P&L, even the annual P&L. And in some cases that’s appropriate. But on the other hand, it leads to a short-term thinking that leaves longer term opportunities on the table, I think. And when you are thinking in terms of multi-generational investing, where the time horizon is almost taken off the table, it kind of opens different opportunities, doesn’t it?

Dr. Gaia Marchisio: [00:10:12] Right, absolutely. And I want to stress these. We’re not saying that orientation to the short term shouldn’t be there. So, it’s a short and long term. The difference I think is that in non-family business, the short is the everything; while I think that family has a capacity to absorb some sacrifice in the short to invest and to have other consideration, like what kind of quality do … Is profit at any cost? What does it cost not only for the company, but for the shareholders, but also for the employees? How does that change the relationship with them? How does it change the quality of what we give to the clients?

Dr. Gaia Marchisio: [00:10:54] You mentioned some companies who went through generations. Some of them had to make very difficult decisions around quantity of their product that if they weren’t at the quality that they wanted to, they decide to withdraw them from the market, absorb a huge loss, but maintaining that long-term relationship and trust with the clients, which is a very important piece to be able to stay in business for so long. So, I think that shift a little bit the whole idea around corporate social responsibility, that often  is a mistakenly taken as a giving away some money to reduce stocks, and having a true deep understanding of all the different stakeholders, and how can I create long-term relationship which each of them, so that I can survive over time and thrive, not just survive.

Mike Blake: [00:11:51] So, what led to your interests in family businesses? Why have you devoted your life to researching this phenomenon?

Dr. Gaia Marchisio: [00:12:03] I was once. I was raised as a next gen. I had no idea there was a whole community of people like us. I saw … I’m dating myself. That was over 30 years ago when the whole thing kind of hit me. I was in college. I saw that there were professors who were talking about things were happening in my family without knowing my family. They were describing me and all of us in a way that nobody else we’re able to capture. And when my family came to the decision of closing the business, at that point, I realized that what if we had the help that we needed at the time? And because it didn’t work for me. I thought, well, maybe we can learn some of the pain and the mistakes that have been made. How about turning that in a great opportunity to help other families?

Dr. Gaia Marchisio: [00:12:54] And then, I was very fortunate to have a great mentor back then, my professor, who is a leading authority in the field in Europe. And from there, I started intentionally learning more and making sure that my story was important enough to inspire the motivation but not condition the way I was looking at other families. So, to not have a lens that pre-determined a way of looking at these companies.

Mike Blake: [00:13:22] So, what are you researching now that is interesting? And why do you think that research is important?

Dr. Gaia Marchisio: [00:13:30] So, all my life I devoted my research mainly to next generation with the idea of it’s important to understand before getting to the business. And then, I realized that, really, what’s the biggest challenge and the biggest opportunity is once you’re entering the company; and hence, the topic you’re mentioning about entrepreneurship and how can you be an entrepreneur in an already existing company? What’s the effect? We talk about burnout. What’s the effect on the emotional attachment?

Dr. Gaia Marchisio: [00:14:01] More recently, I realized that family enterprises exists in a bigger ecosystem. And there is a huge overlook at the advisors that serve families. I commend what you said before that you have started reading and putting yourself in a place of as a learner of family. Not just because we work with client, that makes us experts. And what I realized before in the last five years is there is a huge need and huge opportunities in that community to create more awareness around what is that you need to learn before being able to work with this client.

Dr. Gaia Marchisio: [00:14:44] And so, the research with my team at Kennesaw we are putting together, it’s a survey and it’s aimed to better understand how advisor – being attorneys, being accountants, financial planners, so everyone that lives in this space, which is very much needed, where are they? What are their way of working with families? And there is not enough understanding of what is an effective way of working with clients that is not just anecdotal. And I don’t think we can dare to try without some reasonable support from research. As always, it has to be the relevance that comes from practice, but the rigor that come from research.

Mike Blake: [00:15:31] So, we’re talking about facts and talking about research. One of the things that I’ve learned that surprised me is that data, now, seems pretty consistent and pretty clearly indicate that family-owned businesses not only generate higher returns than their non-family counterparts but, also, at lower risk. Have you seen similar data? And if so, what do you think are the reasons for that?

Dr. Gaia Marchisio: [00:15:59] Well, I’ve seen the similar data. I have to be careful, I’m pausing because I want to be mindful and not reduce what I’ve seen, what’s my experience, which is long, but it’s not the whole thing. So, I don’t want to jump on something. What could be the-

Mike Blake: [00:16:23] The problem is it’s hard, right, because it’s hard enough to observe even how family businesses perform.

Dr. Gaia Marchisio: [00:16:28] Right.

Mike Blake: [00:16:29] But then, collecting the data to really run the analytics to find out why.

Dr. Gaia Marchisio: [00:16:33] Exactly.

Mike Blake: [00:16:34] It’s difficult to do it from a fact-based perspective.

Dr. Gaia Marchisio: [00:16:37] Absolutely. So, that’s why I was pausing because before expressing an opinion on something that is so important. It was because I have kind of a skewed perspective because when they come to me is because they are in trouble. Because I’m in the line of business of helping those families to get to be the one performing better. So, I think that the biggest shift, that’s what I feel comfortable saying, the big shift is when they become intentional. So, when they they realize that there is some work that needs to be done. And the fact that their family doesn’t prevent them from … so, yes, you know each other, but it’s a profound shift in to thinking, what is that we need to do, not just in reaction to opportunities that comes, which is a great way of growing above all in the first stages of a company, but at some point, what are the things that we need to do in the family, in the ownership, and in the business setting.

Mike Blake: [00:17:36] So, I would speculate. I’m not an academic. But if I were to undertake an academic study, one hypothesis I would explore would be this long-term time horizon because there’s there’s been a lot of data. And Warren Buffett’s a big proponent of this, that long-term sort of buy and hold over time as a return maximizing strategy, especially on a risk adjusted basis, I think families are very good at that. You touched upon something that I wonder if this is the case as well, and that’ll be a hypothesis I’ll explore is family businesses have a mission beyond making money? They realize they have to make money to sustain themselves, but I’m a huge fan of Simon Sinek. Simon, if you’re listening, come on the podcast. We’s love to have you on.

Dr. Gaia Marchisio: [00:17:36] I adore him. I adore him.

Mike Blake: [00:18:29] So, I just finished his book, The Infinite Game. And there’s no better example in the real world of the infinite game than the multi-generational family business.

Dr. Gaia Marchisio: [00:18:39] Absolutely.

Mike Blake: [00:18:39] So, the hypothesis I would explore would be is the fact that family businesses play that infinite game, a driver behind their their outsized success relative to their peer group.

Dr. Gaia Marchisio: [00:18:52] Absolutely. I was looking forward to that book. I think it’s a very important kind of approach. And this is what I actually suggest families in my daily work with them. And in fact, I think, that it’s one of the key success factors. Those might create a mindset that are about continuous learning and continuous improvement. And reducing the competition and the confronting themselves with others. They’re all internally. I think that internal competition is really not ideal within families, but it’s more about how can we keep getting better with that perspective of the long-term impacting more stakeholders.

Mike Blake: [00:19:35] And an area of research or an area of study that I think overlaps, but it’s not entirely the same thing, are hundred-year business phenomena. Some businesses do last a hundred years, but they change ownership. Others, of course, may stay within the family. And I suspect there’s a lot of overlap there. And one of the things you talked about, that how does a business last a hundred years in any form? They must be in a learning mode. And they must be willing, at some point, to disrupt themselves because technology taste must change over a century period or longer, right? How does how does Ford remain relevant a hundred years later?

Dr. Gaia Marchisio: [00:20:22] And then, I think that we didn’t do a good job as as academics and advisors for a long time, because the whole field … And I get that it’s part of the evolution and it’s a learning process for the field itself, but the whole point is around successions. As if that’s the only moment in time where family needs to look at themselves and their businesses. While I always make the example, what is that you own anything from a car to a dishwasher that leaves longer than a year that you don’t put maintenance, that you don’t want intentional work?

Dr. Gaia Marchisio: [00:20:59] Even on the relationship, right? So, the only thing we know is that everything constantly change. And the huge mistake is to look at these every 20-30 years when succession happens because imagine what has even happened in these last two days in this world and how that has been completely disruptive. So, now, without thinking such an extreme example, but individuals in the family keep changing. Family has great event to minor event that keep changing perspective needs, desire. The company keeps changing.

Dr. Gaia Marchisio: [00:21:33] So, it’s crazy not to keep an eye on. And not just monitor but becoming, again, intentional around what are the things that we want to change, and keeping the communication open. Because people always ask me about communication in family business. It’s not just the quality of the communication, that’s a whole chapter in itself, but it’s also the quantity. How often do we have communication? And do we even finish our communication? Do we finish the conversation that we start?

Dr. Gaia Marchisio: [00:22:06] My colleague, Marj Blum, she’s a psychologist, and we work together with the rest of the team. she is huge on this point around making sure that we finish the communication because we start so many topics, but we never end up. And so, we have the illusion of communication. And when you have to keep changing, that’s one of the most important tool that we have.

Mike Blake: [00:22:30] So, one of the things forces that is always there that’s going to press for a family business to end is a desire for liquidity. The name of the game now – I think, really more so now than a generation ago – is every company must be built to sell. And you’re not really successful until a private equity firm buys you, your IPO, or something happens, and you have a big pile of cash that you can then distribute to your family members. And I think that does, sometimes, drive both the desire for the family business. I think it, also, is harmful to the family fortune. Liquidity is not always the best thing in the world for everybody. If a family business is feeling the pressure to become more liquid, are there alternatives they can consider other than simply selling out in order to satisfy whatever the cash needs or wants of the family are, so they can have the cash, but keep the engine that generates the cash as well?

Dr. Gaia Marchisio: [00:23:34] I’m a huge fan of why people do what they do or they don’t do what they don’t do, which is another reason why I like Simon Sinek so much. And so, I think that what’s very important for each family to consider is why to sell the company, but also why to keep the company because I think they’re related but they’re different. And so many times I see struggle in the family or struggle in the business, but I want to focus on the struggle in the family, and how many times family think, “If we didn’t have the business, this wouldn’t be the case.” And they’re are strongly invited or recommended to sell the company thinking that, “If I don’t have a company anymore, I won’t have those issues.” And rest assured that they sell the company, and there are different levels of engagement in that decisions. And people can look back and be very frustrated because they probably gave away something that they loved.

Dr. Gaia Marchisio: [00:24:35] And so, thinking why things are a struggle, where do they originate, and what’s the right decision to fix the root cause of the trouble, not the symptoms? Because being unease in the relationship, it’s normal. It’s not necessarily symptoms that something is wrong, but it’s more of the fact that it’s difficult to stay in relationship, and live together, work together, making and sharing decisions. It requires work. And so, why to sell? What are the real reason? And on the other hand, give the family, and above all, the next generation a purpose to keep that company because it’s a different thing. And it has to be a higher reason because of the work that is required prior to that.

Mike Blake: [00:25:24] So, one of the challenges I think many family businesses face, if they’re going to keep the family businesses, who’s the next person who’s going to run it? And sometimes, I know the Mars family, for example, they are notorious or they’re famous for the fact that, basically, cradle to grave, they groom you to run that business. You work in there as a toddler, which is interesting for a candy business. But  in other cases, things don’t work out where there’s necessarily an obvious successor, right? You may not have children. You may have children, but they’re not business people. Can a family hang onto a business or maintain control of a business in that scenario? And if so, how do they go about it?

Dr. Gaia Marchisio: [00:26:07] So, choosing to not run the business, I think, is one of the toughest. And I remember years ago, I was in China, I was giving a lecture there, and there was a 20-year-old boy who start crying as I was picking. And I immediately thought, “Oh, my gosh. Did I say anything wrong?” So, end of the class. I went there, I talked to him, and he explained to me that those tears were of joy. And I was like, “What do you mean?” And he said, “Well, all my life, I was raised with the expectation I was supposed to be the next one. And as much as I loved my family and the business, I don’t see myself being there. And so, hearing that you don’t cease to be a family business if you don’t operate the business is a huge relief. And now, we have to talk about that.”

Dr. Gaia Marchisio: [00:26:55] So, for sure, it’s not a simple decision. It’s almost a make or buy kind of decisions. What competence can you find on the market? And it opens a conversation around, what kind of person do you want? What kind of governance mechanism between the owners and the management you want to have? How to navigate boundaries? You want to make sure that the person don’t miss the importance of the culture and the values that the family want to have. So, it requires a lot of coordination, but it will also open two great opportunities for growth.

Dr. Gaia Marchisio: [00:27:33] And here’s the other thing. We, historically, are used to think about the family business as one family, one business. And I think that some of the shift that has been happening is to think about entrepreneurs … enterprising families, sorry, where it could be that you can generate an abundance of opportunities if you use your human capital, intellectual capital as a family to start even more than a company, and then to choose to have someone who helps to run. And that creates an opportunity to scale without losing who you are.

Mike Blake: [00:28:10] And sometimes, family businesses evolve into multi-family businesses, right?

Dr. Gaia Marchisio: [00:28:13] Absolutely.

Mike Blake: [00:28:13] I think La Roche, the Swedish … I’m sorry, Swiss pharmaceutical company, I can;t remember now. There’s another family name that’s associated with it but, over time, they became intertwined with a second family that provided new blood and expertise. So, they can evolve that way. And then, there are the Mercks that have been around in Germany since the early 19th Century. And their family weaves in and out of direct management. They have a separate board. So, there are models around there. Even if you think there’s no way the family can do that, you can still hang onto it.

Dr. Gaia Marchisio: [00:28:46] Yes. And they are way more common than we think about. Now, of course, it’s really complex to have one family running one business. And so, for sure, finding the right partners. As every partnership, you need to have trust and you have to have a similar values because if you have these two conditions, some that you create, some that you need since the beginning. And again, it’s the evolution. It’s managing how they both grow. And it’s more complexity, for sure, but I do believe strongly that this can be a great opportunity for growth.

Mike Blake: [00:29:28] Now, we know, and you hinted at this, that families sometimes are highly functional and some families are not as highly functional. And in America, we have this holiday called Thanksgiving where we devote one day to making sure that families are as dysfunctional as we can possibly make them. Can a dysfunctional family have a functional family business?

Dr. Gaia Marchisio: [00:29:53] So, sometimes, I think that we use the term dysfunction easily. And I think that it’s important to have people that are experts in that field to use that appropriately. I think that what often is described as dysfunctional is more a family who has to learn how to navigate through some of the dynamics that are very normal given the age and the stage , both of the individual and the family combined. If you think about that, one thing that everyone has is a family. Nobody teaches us about that. Nobody teaches how a family function. Nobody teach us what is normal. We have classes of how to run a business. We don’t have a minute spent to learn how to run interaction. We expect that because we are family, we know each other. And probably, the last time you had a conversation with your children is before they left for college and think how much they changed. And we all grow.

Dr. Gaia Marchisio: [00:29:53] And so, first point is not everything that looks dysfunctional is actually dysfunctional. And second point is when it’s really becoming dysfunctional because, unfortunately, there are those situations that are extremely painful – and so, have a huge respect for that – again, it’s a matter of choice.  Do I want to put the work there to make that better? What can I do to protect the business? Because their system, their open system, there are spillovers when bad things happen in the family that end up being in the company as well. It depends to the extent. So, I think that it’s important to create mechanisms that can prevent and protect the company.

Dr. Gaia Marchisio: [00:31:44] Is that for sure 100% proof? Probably at the cost of some individual expenses  both emotionally and physically. So, it is possible. I have in mind a few examples. Would I strongly recommend to not take care of your family dynamics because in any case, you can have a profitable business? Again, it’s what you want for your life. And I think that the other big mistake that has been shared is that it’s okay to separate family and business because to be professional, you need to pretend the family is not there. That’s a huge lie. We can’t pretend that the family is not there. We can’t pretend that emotions are not there. We don’t have to act emotionally and reactively in the business setting, but we have to respect and work with what we have in the family.

Mike Blake: [00:32:42] So, are there particular tools and techniques that that you’ve observed that are successful in helping them manage that dynamic?

Dr. Gaia Marchisio: [00:32:51] Yes, I think that talking about that is number one, right?

Mike Blake: [00:32:56] Yeah.

Dr. Gaia Marchisio: [00:32:56] And I put that as the number one because my biggest fear around tools is that we are culture-oriented to a solution, which is great. We don’t want to drag up problems. But I don’t think that we spend enough time understanding what is it that we’re really trying to solve. And because there are a bunch of tools in the market ready to be used and promise an easy fix, I don’t believe in easy fix above all when it comes to family and when it comes to family and businesses together.

Dr. Gaia Marchisio: [00:33:27] So, yes, can you put in place governance? Governance is excellent tool. Different kind of governance, different way of implementing. But expecting that governance is the panacea for everything happening is very wrong. Trusts are great tools. But again, it’s a tool. Applying a trust to every family to protect it, it cannot be the right thing. It’s like the difference between a screwdriver and a pot. Can you cook with a screwdriver? No. Is a screwdriver a great tool? Yes. It depends on what you need. So, I urge advisors, as well as families, to be very mindful. Not one tool fits every situation, which is unfortunately way more the case that I see happening.

Mike Blake: [00:34:15] Well, that’s the reason for your family enterprise center, right, is you explore those things and each family is going to probably need a different set of tools and even at different times, I’m guessing.

Dr. Gaia Marchisio: [00:34:26] Absolutely. I think that what family needs is to be empowered to learn and understand what they need. They will always need advisors. That’s the beauty of that interdependent relationship. But I think that what’s very important is to teach these families what they need and how to problem solve together, how to identify the challenge that they have, so that they can be more intentional and proactive in choosing it. Because at the end of the day, advisors, we are they are, even the longer relationship, but at some point, we leave and they have to stay and live with the consequences of the choices that they make.

Dr. Gaia Marchisio: [00:35:03] So, the biggest favor if you are a family business owner listening is to really invest in understanding enough to be able to have a more educated conversation. It is scary to me when I have family, and I can tell you how many that they have trusts and documents in place that they signed because they blindly trust their advisor, which is great trust in someone. But I heard people say, “That the document so complicated. It must be good, so I signed it.” And it’s not just once that has happened. And it comes from people that I know that are very business savvy. So, it’s never allowing the … I mean, it’s understanding that you don’t have to give up on understanding, and growing, and improving your capacity as as a family and as owners.

Mike Blake: [00:36:00] So, I’m going to ask you right now the toughest question of the interview.

Dr. Gaia Marchisio: [00:36:04] All right.

Mike Blake: [00:36:05] And that question is, I know you’re a big fan of family businesses, as am I, but not every family business is gonna work out, right? In your case, you said – I did not know this – that you come from a family business that ultimately was sold. How do you recognize where you’ve got problems that are so deep that it really is the best thing to sell the business and kind of get a clean slate or it’s just not going to be recoverable?

Dr. Gaia Marchisio: [00:36:45] I don’t want to answer that question.

Mike Blake: [00:36:47] I didn’t think you would.

Dr. Gaia Marchisio: [00:36:47] No, no, no, no. But let me let me say why and how. So, I’m a a huge, passionate person of medical doctors in that field. And I think that we can learn so much from there. I think it’s a big issue around boundaries. What’s our job as someone who helps families there? And what I’m going with this is I do believe that it’s mainly an educated choice for the people in the situation. I’ve seen families who chose to stay in incredibly difficult situations, and they had their own reasons. So, I think that it’s about respecting that it’s our responsibility and our job to help them think about what’s recoverable and what’s not.

Dr. Gaia Marchisio: [00:37:42] What I know is that the more people wait to raise difficult conversations, which I’m not saying go home now and talk about the elephant in the room that has been there for 30 years in your family, but if things are-.

Mike Blake: [00:37:56] That’s what’s Thanksgiving’s for.

Dr. Gaia Marchisio: [00:37:57] Exactly, exactly. And even without wanting that just to happen. But my point is the fact that we don’t talk about difficult things, it doesn’t make them go away. Just make them grow even stronger. So, those families that I saw that they came to the conclusion that it’s better to go separate ways, there is a way to get there where exiting the company doesn’t mean exiting the family. There is a way to even get there, which is actually a great decision for the good of the family and the good of the business. So, I think that as much as the family can provide value to the business and the business can provide value – and I’m not just talking about financial value – it’s worth trying. Where that threshold is, it’s all about the family.

Dr. Gaia Marchisio: [00:38:44] That’s why I was talking about boundaries. I’ve seen so much biases on behalf of advisors that really push for people to leave and to go away because of their own choices or preferences. I think that our job is, really, to help families think through why it’s worth to keep it. why is that worth to give you the way and to think at the same time, which is the most difficult thing because we live in a culture where it’s either or. Is that the family or the business more important? I’m a huge believer that both has to be important for the individual, and the family, and the business. And in that tiny word ‘and,’ that lies all the complexity of how can you manage three systems to be able to coexist in the long term?

Mike Blake: [00:39:42] Aside from Cox, because I know there’s a special interest in relationship there, what is an example of a family business that is successful? Who’s really doing it well that you can talk about?

Dr. Gaia Marchisio: [00:39:56] I’m always resistant to give names. I think those families that are great at learning, and keep learning and learning from their mistakes, that they see every situation, and keep trying, and put a lot of work, and they don’t allow for a difficult moment to become their life’s work. Become a learning family. And when I talk about becoming a learning family, I’m not saying that everyone needs to go in and sign up for an educational class. That’s a piece of that. But a learning family is the infinite game we’re talking before. It’s this idea of how can I … okay, so last week, and I quote this woman, the company is CI², they were one of the honorees. We have a yearly honoration, which is as the word says, honoring and celebrating companies.

Dr. Gaia Marchisio: [00:40:52] And one of the six finalists, we had is Mrs. Andrella. And she’s the founder of CI². They manage an incredible number of controlled-towering airports in the US and the Caribbean. And her mantra is she wakes up every morning, and her pray is, “Let be today better than yesterday.”So, I commend and I love her intention as an individual, as a businesswoman, and as a business owner to wake up with intention of, how can I make today better than yesterday? I think that if a family is able to do something like that, even the mistake that we all make to have become something totally different and an opportunity for growth.

Mike Blake: [00:41:46] We are out of and and past time, but we could easily make this a three-part series or longer but unfortunately, can’t. If somebody is looking at a family business and is thinking about these issues, how can they contact you to learn more?

Dr. Gaia Marchisio: [00:42:02] So, we have our website. And otherwise, we have a relatively easy e-mail address. Am I allowed to plug it?

Mike Blake: [00:42:11] Yes, please. Yeah.

Dr. Gaia Marchisio: [00:42:12] Okay. It’s cfec@kennesaw.edu. cfec@kennesaw.edu. And we are happy to have a conversation with whomever wants to learn more. And I really want to thank you for being one of those people that really are into learning and getting better. It is refreshing to meet people like you, and it’s very meaningful. So, thank you.

Mike Blake: [00:42:37] Well, when you get to know me, you won’t think so highly of me. But that’s going to wrap it up for today’s program. I’d like to thank Dr. Gaia Marchisio so much for joining us and sharing her expertise with us today.

Mike Blake: [00:42:47] We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next executive decision, you have clearer vision when making it. If you enjoy this podcast, please consider leaving your review with your favorite podcast aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Tagged With: Brady Ware, Brady Ware & Company, Cox Family Enterprise Center, Family Business, family business owners, family business transition, Gaia Marchisio, Kennesaw State University, KSU Coles College of Business, Michael Blake, Mike Blake, patient capital, sell the family business, selling a family business

Decision Vision Episode 61, “How Do I Manage My Business Real Estate in a COVID-19 World?” – An Interview with Brooks Morris and Andy Roberts, Cresa Atlanta

April 16, 2020 by John Ray

Cresa Atlanta
Decision Vision
Decision Vision Episode 61, "How Do I Manage My Business Real Estate in a COVID-19 World?" - An Interview with Brooks Morris and Andy Roberts, Cresa Atlanta
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Cresa Atlanta
Clockwise from Upper Left: Brooks Morris, Andy Roberts, and Mike Blake

Decision Vision Episode 61, “How Do I Manage My Business Real Estate in a COVID-19 World?” – An Interview with Brooks Morris and Andy Roberts, Cresa Atlanta

The COVID-19 economic crisis has injected a new dynamic between commercial real estate landlords and their business clients, as questions around rent abatement are coming up. Brooks Morris and Andy Roberts of Cresa Atlanta join “Decision Vision” to discuss this issue and much more. “Decision Vision” is brought to you by Brady Ware & Company.

Brooks Morris, Senior Vice President, Cresa Atlanta

Cresa Atlanta
Brooks Morris, Cresa Atlanta

Brooks Morris, Senior Vice President of Cresa Atlanta, has over 16 years of executive experience. Prior to starting his real estate career, Brooks was with Enterprise Holdings, a $17 billion global transportation company. Brooks is known for recruiting, developing, leading and motivating teams to achieve targeted customer service, sales, operational growth, and profit goals. Brooks was rapidly promoted 4 times to executive positions in different markets with responsibilities overseeing multiple businesses and brands.

Joining Cresa in 2015, Brooks has a mission to deploy his years of experience through client advisement. His unique perspective from multiple angles of real estate transactions allow him to take a holistic approach while consulting on each of his clients needs. His proven results assure the focus will always be to use real estate as a platform to support employee engagement, customer satisfaction, brand recognition, growth, and profitability.

Brooks’ multiple years of experience as a Vice President and Officer at Enterprise Holdings include executing market analysis, site selection, lease negotiations, contract negotiations, P&L management, sales, budgeting, cost control, strategy, project management, and lease administration.

Andy Roberts, Senior Vice President, Cresa Atlanta

Cresa Atlanta
Andy Roberts, Cresa Atlanta

Andy Roberts began his career in commercial real estate at Wells Real Estate Funds by raising capital for various REIT portfolios that are now traded on the NYSE. During his tenure at Wells, Andy developed a passion for counseling clients on the dynamics of investing in commercial real estate.

Following his tenure with REITs, Andy joined Cresa in the summer of 2014 to help clients navigate their real estate decisions in a market where a growing percentage of properties are institutionally owned. Andy enjoys educating clients on the manner their real estate decisions impact not only their financial bottom line but their culture and labor force dynamics as well.

Cresa Atlanta

Cresa is the world’s largest tenant-only commercial real estate firm. In representing tenants exclusively—no landlords or developers—Cresa provides unbiased, conflict-free advice. Its integrated services cover every aspect of a real estate assignment, including strategic planning, employee demographics, workplace strategy, site selection, incentives negotiation, market research, transaction management, project financing, project management, portfolio management, and relocation services. Cresa offers clients customized solutions worldwide through more than 60 global offices.

To find out more on Cresa Atlanta, go to their website.

Michael Blake, Brady Ware & Company

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:06] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:26] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:44] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like this podcast, please subscribe on your favorite podcast aggregator and please consider leaving a review of the podcast.

Mike Blake: [00:01:11] This is the fourth in a subseries of topics regarding how to address the coronavirus crisis. And as everybody knows by now, we are faced with an unprecedented environment in our economy. And as one of our guests quipped before we started the show, basically, the way that he is helping save the world is by watching Netflix, but I will not out him and reveal what the nature of the show is. He can choose to out himself if he wants to, but I’m not going to do it for him.

Mike Blake: [00:01:48] But that is sort of the world that we’re living in, right? The best way we can help people is to do as little as we possibly can. And as a result of that, we are seeing an unprecedented rebalancing of the economy. We have whole industries such as restaurants that are shutting down en masse. We have other industries that are now booming and considered vital industries such as anything supply chain, grocery stores, drugstores, Amazon.com, and so forth. And we’re even now seeing companies that are stopping the businesses in which they’re normally engaged, so they can manufacture other things. Heinz is supposedly gearing up to manufacture these N95 virus protection masks. And Tesla and Ford are gearing up in partnership with General Electric to produce ventilators. We just haven’t seen anything like this before, certainly not since World War II. And even then, it’s sort of a thing tacked on.

Mike Blake: [00:03:09] So, if you’re like me and most other people who are thrashing around for some kind of guidance on how to address the issues that are now facing all of our businesses, frankly, whether we own the business, we’re an executive, or even an employee trying to help keep the lights on. And today, we’re going to talk about managing real estate assets and obligations in a shutdown world. And real estate is kind of funny. It’s one of those things that you don’t appreciate, I think, until it’s gone, in spite of the fact that we have a president who sort of made his claim to fame initially in real estate. But real estate, no pun intended, is a real issue. It’s no longer being used, and have been under some pressure anyway, particularly on the retail side, but it’s no longer being used.

Mike Blake: [00:04:11] In some cases, it’s being repurposed. We’re seeing hotels in Manhattan that are being commandeered now to serve effectively as field hospitals. That is perhaps an extreme case, but I think that’s going to come to other cities, including Atlanta. And real estate that has been—office areas that have been previously bustling with activity and have been a home away from home, frankly, for millions of employees are now shut down, locked down, basically ghost towns. And this provides a whole unique set of problems, and challenges, and maybe some opportunities too that we need to understand how to address, because just because we’re not working there, that doesn’t mean the real estate and the obligations that go with it suddenly disappear. Those have not shut them.

Mike Blake: [00:05:12] And joining us to help us understand this question are my longtime friends, Brooks Morris and Andy Roberts of Cresa. Now, you may remember, we had another person from Cresa on Jason Jones, who you used to fly navigation and ordinance and A6 intruders. It’s a fly off aircraft carriers. And he came on to help us understand the benefits of hiring veterans. But now, we’re bringing in a couple of people on from Cresa to actually talk about real estate. And Cresa is an international commercial real estate firm headquartered in Washington, DC. And they represent tenants and provide real estate services, including corporate service, strategic planning, transaction management, project management, facilities management, workforce and location planning, portfolio and lease administration, capital markets, supply chain management, sustainability, and sublease, and distribution. Formed in 1993, Cressa now has more than 60 offices and 900 employees.

Mike Blake: [00:06:14] Brooks Morris is a Senior Vice President of Cresa Atlanta with over 20 years of executive experience. Prior to starting his real estate career, Brooks is with Enterprise Holdings, a $17 billion global transportation company. Brooks is known for recruiting, developing, leading and motivating teams to achieve targeted customer service, sales, operational growth and profit goals. He was rapidly promoted four times to executive positions in different markets with responsibilities overseeing multiple businesses and brands.

Mike Blake: [00:06:45] Joining Cresa in 2015 – well, its that long already – and Brooks has a mission to deploy his years of experience to client advisement. His unique perspective from multiple angles of real estate transactions allows him to take a holistic approach while consulting on each of his clients’ needs. His proven results assure focus will always be to use real estate as a platform to support recruiting and retaining talent, brand enhancement, growth and profitability.

Mike Blake: [00:07:14] Brooks grew up in Los Angeles and played baseball for and graduated from the University of California Santa Barbara. I did not know that. He loves spending time with family, reading, golf, sports, water skiing and working in the yard. He and I have to talk about that. I hate working in the yards. Maybe we can make a trade. He and his wife and two children live in the Buckhead neighborhood of Atlanta.

Mike Blake: [00:07:37] Andy Roberts began his commercial real estate career by raising capital for various real estate investment trust portfolios that are now traded on the New York Stock Exchange. Through this experience, Andy developed a passion for consulting clients in the various dynamics of real estate. Andy joined Cresa in mid 2014 to help clients navigate their real estate decisions in a market where a growing percentage of properties are institutionally owned. Andy enjoys educating clients on the idea that their real estate decisions impact not only the financial bottom line but one’s cultural and labor dynamics as well. Andy and his wife, Jill, live in Atlanta with their four young children, where they enjoy spending time together with family and friends. And God knows, they’re getting ample opportunity to do that. Brooks and Andy, thank you so much for joining us on the program.

Brooks Morris: [00:08:25] Thank you, Mike.

Andy Roberts: [00:08:25] Thank you for having us.

Brooks Morris: [00:08:25] Good to be here.

Mike Blake: [00:08:28] So, to I want to start with something that is tangential to the topic, but I think it’s important for people to understand exactly what you do and how you do it because that will help people understand the nature of your informed perspective when we’re talking about today. And that is, what is exactly a tenant representative? It’s not a household name like a fireman, or a doctor, or a lawyer. So, maybe you can explain to our audience what a tenant representative does.

Andy Roberts: [00:09:03] Sure. So, we at Cresa and just in general, a tenant representative exclusively represents tenants. And let me back up. You have a number of commercial real estate firms. Majority of the commercial real estate firms receive a majority of the revenue from landlord representation. A tenant representative focuses on representing tenants, i.e. occupiers or companies. In general, that’s how tenant representative is defined. Now, what’s unique about Cresa, what we do is we exclusively represent tenants, i.e. occupiers. So, we are not representing any landlords, i.e. rich institutional owners. And we do that to remove all conflicts of interest, so that we are completely free to focus on the needs of our clients, the occupiers. We’re free to think beyond space and negotiate as hard as is required on behalf of our clients. So, in general, that’s what a tenant representative does. And that’s what’s unique about Cresa in that we are the largest global firm that exclusively represents tenants or as we define it, occupiers.

Brooks Morris: [00:10:20] And that’s well said. That’s well said by Andy. I’ll add one thing to that to simplify. It’s like in the residential market, you have someone selling a house, and you have a seller’s agent and a buyer’s agent. And we are the buyer’s agent in the commercial space, whether you’re buying real estate or leasing real estate.

Mike Blake: [00:10:49] And on the leasing side, I don’t know this about the buying side, so you can educate me, but at least on the leasing side, even though you’re the buyer’s agent, you make your fee from the seller or the lessor. Correct?

Brooks Morris: [00:11:03] That is correct. Just like in residential commercial real estate, it’s set up in a way that the landlords pay their broker a portion of the fee and the tenant’s broker a portion of the fee.

Mike Blake: [00:11:19] So, let’s wind the clock back to happier or more predictable times. Let’s go back to, say, February 1st. What was the commercial real estate market in Atlanta like at that point?

Brooks Morris: [00:11:36] First of all, February 1st feels like a year or two ago.

Mike Blake: [00:11:41] I know. It does.

Brooks Morris: [00:11:43] Right? It was a landlord’s market. The development around the US and very much so in Atlanta of new office space was accelerating, lots of projects, and it was a very healthy market. Tenant incentives had been reducing. Large blocks of space were competitively being pursued by multiple tenants. In some cases, for one or two large blocks of space. So, very much a landlord’s market and very much a situation where tenant had to be not just thoughtful and advance with strategy, but ready to execute when they found the right property because properties and spaces were moving quickly.

Andy Roberts: [00:12:45] And the great analysis I’d add to that was, I think, February 1st and during this pre-COVID season, we’re seeing, unlike any time before, certainly for a number of decades, labor influencing commercial real estate more than ever in the sense that the focus was on the investments need to be made to maintain a workforce and recruit a desirable workforce because we were continuing to enjoy such a long economic bull run, and if that investment was made via real estate, so be it. And you had that as well on the construction costs. Labor was so tight that the cost of construction was one of the main drivers of an increasingly more expensive market; thus, a landlord market.

Brooks Morris: [00:13:45] I’ll give one statistic. Piedmont Center in Buckhead is a group of about 15 building. And in 2016, the rental rate on those buildings was about $18 a square foot. And fast forward to February 1st of 2020, those buildings are quoting, in some cases, just over $30 dollars per square foot.

Mike Blake: [00:14:12] Wow. And I know that space too, and the space as as far as it goes. But also, I’ve never been lost in any parking lot or complex more frequently than I’ve been lost in that complex. I mean, I’ve probably inadvertently parked about three quarters of a mile away from where my meeting is supposed to be. And-.

Brooks Morris: [00:14:35] You are not alone.

Mike Blake: [00:14:37] Yeah. I’m glad to hear that because I feel like a horse’s ass, but that’s meaningful when it’s an August Atlanta day, and you’re wearing a suit and tie, and then you show to the meeting. I basically look like LeBron James at the foul line with fourth quarter of a game, just sweat pouring down my face. But even, if they’re able to raise rents that much that quickly, that shows you a pretty hot market for sure.

Mike Blake: [00:15:17] And now the commercial real estate market, I guess, sort of the question is, is there a commercial real estate market? Have you guys pretty much frozen in place now? Is there anything going on right now? What is the market or the industry look like today?

Andy Roberts: [00:15:41] To be perfectly candid, I think we’re still in the fog of war, if you will. I think there’s going to be some clarity that obviously comes with time. But just the initial impression is — I mean, just from personally, clients and deals that were already in motion that were pretty close to getting done, those have continued to move forward. New deals and most of the clients that I’m personally working with, and it seems to be the case for a number of colleagues, are saying, “Hey, let’s just put this on pause.” So, that’s one dynamic.

Andy Roberts: [00:16:21] The second dynamic is you have, obviously, across the board, companies trying to figure out, holding on to every dollar cost cutting initiatives, reaching out to their landlord, saying, “Hey, what can we do? Can we abate rent for three months? Four months?” At the same time, you have those very same landlords having the same conversation with their lenders. And it’s all across the board. I mean, candidly, very large household institutions, there’s been one that everyone would recognize that has come out and said, “Hey, three months abated. No questions asked. We want to work with you,” to another household, prominent lender that has just said, “We’re not budging. We’re not giving any grace, any mercy, period.” And so, obviously, those landlords are in a tight spot. They’ve got to turn around. They don’t want to say the same thing to their tenants, but they don’t know if they can afford not to. And so, it’s really interesting. You don’t have a consensus other than those conversations are being had, a lot of probably wait and see, but it’s really interesting because the responses are all over the map.

Brooks Morris: [00:17:40] Yeah. I say, to Andy’s point, Andy said it very well, There’s three buckets. There’s the bucket of industries. We all know retail, some transportation, hospitality, event companies that are just getting clobbered. And you’ve got the middle bucket of a lot of professional services firms and some other industries that are feeling it, but there’s a cut in revenue, but they’re doing okay. They’re just having to be diligent about making some cuts here and there within their business. And then, there’s another bucket. And a lot of this falls into the industrial space category of businesses that are actually doing as well or better.

Brooks Morris: [00:18:25] And so, depending upon who you’re working with is going to drive what you need to do in the real estate market right now for those different groups. And to Andy’s point, a lot of what I was already working on that was close to being done, if there’s any sort of certainty in their business and an expiration coming off of their lease, we are moving forward and taking action. Anything that was an expansion, because everybody has gone remote for this period of time, most of those projects have been put on pause, and it’s a wait and see. And as soon as we have more clarity, then we’ll decide on what to do moving forward.

Mike Blake: [00:19:07] It occurs to me that there’s a signaling dynamic going on here, a signaling process. When a bank or a landlord tells their borrower or their tenants respectively what they’re prepared to do in terms of flexibility, and forgiveness, and forbearance I think tells you a lot about how they think this movie ends, right? I think that if they take a soft line, they’re telling you that this movie doesn’t necessarily have a very happy ending. It may be okay, but what they’re really telling you is that we want to keep you in place. We don’t think there’s necessarily another awesome bar or another awesome tenant that’s walking around the corner. So, we’re going to go with the devil we know. We’re gonna hang on to what we have and ride it out. And if we take a haircut, we take a haircut. But we’d rather get 80 cents on the dollar than zero.

Mike Blake: [00:20:12] Whereas, I think the hard liners are basically saying, you know what, at some point, whether it’s Memorial Day, whether it’s 4th of July, Labor Day, gotta help us on that one. But there’s going to be a reboot, basically, and somebody pushes a big red button somewhere that throws a lever that’s supposed to restart the economy. And they think there’s a basically a rubber band effect, that everything’s going to go back to normal. And if you default, and if you have to default, then we’re happy to take your property because we think they’ll be a ready market, or we’re happy to declare you in default because we think that there going to be six tenants waiting around the corner. I think that’s an interesting signaling effect that economists and economics geeks like me want to maybe look at to understand what the market sentiment is going forward.

Andy Roberts: [00:21:11] That’s a great point, Bill.

Brooks Morris: [00:21:13] Yeah, it’s a great point. I think—go ahead.

Mike Blake: [00:21:16] No. You said it was a great point. I want to hear more about my great point.

Brooks Morris: [00:21:20] Well, the signal, you’re correct. It does send a signal. But, also, anytime there is change that happens or there’s challenge in a challenging environment we’re all navigating through, sometimes, it also sends the signal on with the philosophical approach of a business owner or ownership group. And sometimes, that has nothing to do with the economy moving forward and their feelings on that but just how they approach business. And are they looking at a tenant as a long-term partner and somebody that they want to share success with, or are they looking at it in a transactional way? And we’re learning right now who are the partners and who are transactional.

Mike Blake: [00:22:10] Yeah, I think that’s a great point. And you really do find out who your friends are in crisis. And maybe there’s a psychological element to it as well. I think this whole coronavirus crisis scenario in which we find ourselves has put us into a collective state of grief. And the first stage is denial. And just as I think there have been many people who’ve been in denial that I think that number is rapidly diminishing, but you can see they’re the ones going out to spring break, and they’re still getting together in large groups, and I guess coughing on each other just to see what’ll happen. But there’s probably some of that. There’s probably some of that psychology in the business market too where it’s a scenario that can go so sideways and so horrifically that I think some people and businesses psychologically just go to a place of denial because they’re just not emotionally ready to embrace the potential reality.

Brooks Morris: [00:23:24] Agreed.

Andy Roberts: [00:23:25] To your point, Michael, on an economic point, I think Brooks did it really well and made some great points. And I think what’s so unique about this scenario is it’s going to be interesting to see how the legislation plays out because historically, when it comes to real estate as a broad brush, legislation is first seen in the residential arena for. And I think probably because politicians score more points that way. For example, a number of states have already come out and said, “Hey, there can be no foreclosures on any residential homes for X number of weeks or months.”

Andy Roberts: [00:24:11] The commercial real estate arena, the legislation, if it happens, happens much further down the road. It’s going to be interesting to see if that legislation does take place in a commercial arena. So, for example,if you have tenants defaulting, to what degree can the landlords—what retribution do they have. And if they’re prevented legislatively from doing so, and I think what may drive that in this arena is, historically, defaults have been from financial reasons. So, for example, ’08-’09, there was too much debt involved and irresponsible underwriting of the debt. No one in who’s alive today has seen this type of scenario where the driver is a medical health dynamic where sadly, tragically, a thousand Americans are dying a day.

Andy Roberts: [00:25:12] And so, there’s this kind of this social element overlying this that I think is so unique where it’s not your typical debt problem. It’s just kind of a war with an invisible enemy that it’s almost like for someone to come out and foreclose, there’s kind of the level of evilness to it that I think there’s this social pervasiveness that’s unprecedented. And it’s going to be really interesting to see how it plays out. I think that could drive greater legislation in the commercial arena. For example, not allowing landlords to penalize a tenant for defaulting. Well, time will tell, but that’ll be interesting ’cause usually that legislation stops in the residential arena.

Mike Blake: [00:26:04] So, a lot of offices are empty. Ours is largely empty, although a few people are coming in, but a fraction, most of us are are working from home. If you’ve got an office that is basically empty, empty assets are scary.I remember when I was a kid, and this probably explains a lot about me, when there is an abandoned house or a house in our neighborhood that had construction that was paused for a while, we would go into that house, and we would find pieces of wood, and hack them at each other. And we’d find pieces of copper tubing and whack each other with them, basically. And it’s illustrative of what can happen if you have real estate that is not sort of being looked after. And if I’ve got an office that is now basically empty, is there something that I need to be doing as a tenant to be looking after my real estate or my space even though I don’t own it, it’s still important. It’s still an asset. Is there something I need to be doing to look after it or take care of it during this down period?

Brooks Morris: [00:27:21] It depends on the position of the real estate. So, if you’re an owner, you’re going to be looking at this differently. If you’re a tenant of a full-service office, you’re really not going to need to do anything per se because the landlord, through the full-service structure of the building or the lease contract, is gonna be responsible for everything. And I would say if there’s anything that is that you’re responsible for be within those four walls, maybe it phones, internet that you probably have already moved to remote and cloud. There may be some opportunities to make sure that your expense is being allocated appropriately.

Brooks Morris: [00:28:18] If you’re in an industrial user, and you’re on a triple net lease, and you are leasing a building that you’re the only tenant in, there lies some opportunity and operating expenses that you’re responsible for as a tenant that you can take a look at and, say, go dark in a building, basically turn certain things off so you’re not paying for them while you’re not using them. Those would be the only things that you would be really looking at doing while you’re not using their real estate, and it really pertains to industrial spaces. But those particular businesses right now, most of them are in business and, in some cases, thriving.

Mike Blake: [00:29:00] Yeah.

Andy Roberts: [00:29:00] Brooks makes a great point. I think it would be interesting or it’s worthy to note, let’s say, for example, an office building, a classy office building, there’s multiple tenants – and Brooks is right – it’s on the landlord’s onus to run that building. And so, I think every tenant in their lease is going to have typically passthrough of operating expenses and the increase in operating expenses they’re going to be responsible for paying in the next calendar year. And so I do think it’s responsible for tenants currently being communication with their landlord on what are they doing to mitigate expenses while the buildings are vacant, so the tenants can be able to enjoy those savings.

Andy Roberts: [00:29:47] And then, also, keep in touch on what are the potential increase expenses that are around the corner. So, likely there’s going to be new janitorial dynamics. There’s also, likely, when America gets back to work, if you will, you’re hearing a lot of sentiment towards kind of not everyone just goes back on Monday. It’s kind of you’re phasing in and almost to the point where you have longer hours, certain departments working in the morning, certain departments working in the evening. And you have kind of maybe an overlap of one or two just to help respect social distancing as we start phasing back in.

Andy Roberts: [00:30:30] So, then you get into an office building, the HVAC act, for example. I mean, you know, hopefully this is happening late spring and summer. Well, HVAC expenses are at their highest at that point. And typically, a building will say, “Okay, we’re going to be running back from, say, 8:00 to 6:00.” Well, now, if you’re running it from 7:00 to 8:00 or 9:00 at night, you’re going to have higher expenses. So, tenants need to be aware of how are those expenses gonna be passed on to them, and what’s going to be their cap that they have in their lease on what the expense increase will be next year. So, I do think there’s currently some planning that can take place on the tenants’ behalf that’ll serve that well.

Mike Blake: [00:31:14] Let me jump on that.

Brooks Morris: [00:31:14] Mike.

Mike Blake: [00:31:15]  Go ahead.

Brooks Morris: [00:31:16] Mike, one thing I just thought of, I should have already mentioned as it pertains to your question and what you can do while you’re not in your space right now, as it pertains to any metropolitan building that charges for parking, in most cases, right now, because you’re not using that parking, you can negotiate with your landlord to not pay for that parking potentially. We’ve done that within ours. So, that’s something, for sure, to look at.

Mike Blake: [00:31:43] Okay. Yeah, that’s good advice. That’s an actionable thing people can, if they haven’t done already, they can do right away. So, we touched upon this a little bit, but I want to make sure to address this explicitly. There’s a provision in the CARES Act, and as you mentioned, several states as well that are basically freezing home real estate obligations, but that’s not really impacting the commercial sector, right? Unless you’ve negotiated something, if you’re a business tenant, you still have to pay your rent, right?

Brooks Morris: [00:32:18] Correct.

Andy Roberts: [00:32:20] Correct. What is interesting is a number of landlords, when tenants have requested to defer rent for a number of, say, three months to please the common average, a number of landlords are saying, “Hey, noted your request. Let’s pursue these avenues with the CARES Act and let’s circle back end of April. Then, say, mid-May.” And understandably so, they’d like to see these tenants be able to receive the provisions through the CARES Act, so that, obviously, the landlords don’t have to further rent, which is understandable. But that to your point, that’s a common conversation taking place in the industry.

Mike Blake: [00:33:02] So, the unfortunate reality is that not every business is going to come back from this, but the lease obligation may still remain. So, if in fact your business is not going to survive this, but the only thing that may survive is your lease obligation, what are your options to try to get out from under or mitigate that obligation?

Brooks Morris: [00:33:34] Well, the first thing you want to do is pull out your lease, get with your commercial real estate advisor, whether that’s us or someone else, and your attorney, and make sure you understand every single component of that lease and what your options are pertaining to that contract. Usually, there’s going to be a sublease provision that allows you to sublease as an option. So, you want to understand what that looks like and what that exit might realistically look like. In some cases, some companies have negotiated termination options. So, that could be that could be an option. There could be an option to restructure your lease. Maybe there’s an option to downsize and use certain-.

Brooks Morris: [00:34:22] And communication is key here. You want to engage with your landlord after you understand what your options are. You want to know what the landlord’s position is because they may have different things happening within their building with their existing tenants. And as business comes back, depending upon how well that building’s doing, they may want that space back or need that space depending on the size. And that’s a low percentage opportunity, but it’s one that should be explored. Andy, any other thoughts that I’m missing?

Andy Roberts: [00:34:53] No, those are all great points. You’re nailing it. And, certainly, typically, a lease will spell out a termination, if you have a termination clause and/or if it’s essentially what those costs would be. I think for a tenant to be fully aware what the landlord’s costs to structure this lease, and largely the build out, what have you, to understand how the landlord is going to be viewing this financially will be advantageous for a tenant. It may be you’re having to come out of pocket for a termination agreement or clause, but just knowing eyes wide up on what that number will be, will be helpful.

Brooks Morris: [00:35:37] And my advice, the biggest thing is just to be proactive, not wait around to get with your advisors, to build a strategy quickly that you can execute quickly if that’s the direction things are going because there will be other subleases coming to the market and you want to be in front of it.

Mike Blake: [00:35:56] We’re talking with Andy Roberts and Brooks Morris of Cresa about managing your real estate obligations and assets in a pandemic world. I want to interject here. I’ve interrupted them a couple of times inadvertently, and I apologize for that. One of the challenges of doing this remotely and not in the studios, you don’t normally have the visual cues where I can tell accurately if people are done talking or not. So, I’m not on speed or anything like that. This is sort of me learning about how to conduct interviews, also, in a coronavirus world.

Mike Blake: [00:36:35] But getting back to this, I want to touch now then on something that you said because I want to drill down a little bit. And that is the reaction or the posture of the landlord does vary from landlord to landlord. And that may be driven, ultimately, by how their bank is treating this. But generally, are you finding more often than not that landlords do want to work with their tenants in some way to accommodate them? Or do you find that, still, right now, they’re more likely to take a hard line? Or is it, in fact, 50/50 as far as you’re seeing?

Andy Roberts: [00:37:15] Yeah, future-.

Brooks Morris: [00:37:16] I don’t want-.

Andy Roberts: [00:37:16] Go ahead. Go ahead, Brooks.

Brooks Morris: [00:37:18] I wouldn’t say it’s 50. It’s hard to say right now because I would say the majority are taking the approach that we want to help. There is a percentage, which is a smaller percentage, that’s basically saying yes, and taking action immediately, and saying we will help, get us this information, and we’re gonna go ahead and accommodate your requests. The larger percentage is we want to help, but we can’t. We want to make sure you really need the help. So, these are the things we need to see from you and let us process this. And I say there’s another there’s a small percentage that are taking the hard line. So, I think the lion’s share wants to help. It’s just they are taking a very thoughtful approach on what requirements need to be met in order for them to actually execute on giving that help.

Andy Roberts: [00:38:15] Yeah, I think Brooks is absolutely right. I think your question, Michael, the answer is yes, and that landlords genuinely want to help. I’m yet to encounter any landlord that’s kind of this evil villain laughing that they don’t want to help. I think, from their perspective, to be to be empathetic to their world, they’re internally discussing, okay, we have this tenant that’s been a great tenant. They’re asking for a rent deferment. We generally want to help them. And so, then, (A), what are our lenders willing to do? And (B), depending on how they’re structured financially, it’s commonly a question of, okay, well, what will the implications be to our investors?

Andy Roberts: [00:39:03] And so, a lot of times they’re kind of stuck between a rock and a hard place. You don’t want to have a very difficult conversation with either. And I think the answer in this unique health pandemic is everyone to be transparent as best you can. And I think the reality is both sides are going to have to essentially kind of receive a burden, part of the cost for us as a society to get this behind us and move on. And I think there’s a sentiment of goodwill that’ll carry that to some degree. And yet, whether it’s the investors carrying a bit of a cost, I mean, it’s not like a landlord’s quick to say no. If they do say no to a tenant because they they don’t want to say no to a new investor. For example, they don’t want to tell them that, hey, with this unprecedented economy, your dividends about to go down, and you primarily invest in our fund because of the dividend dynamic.

Andy Roberts: [00:40:06] So, they are in a tough position. And yet I think both sides, to get through this efficiently, are just gonna have to recognize and transparently have the conversation. There’s a cost to care and agree we can kind of split that amiably and move forward.

Brooks Morris: [00:40:22] And in an effort to give a tenant, who may be listening, or business owner and executive who may be listening to this, an actionable item or set expectations, to Andy’s point, these landlords either have a lender to pay themselves, and they’re not getting forgiveness for this at this point in time, or they have investors they’re paying. And so, the tenant needs to understand, they’re asking for help. And so, in order for that to work, it’s got to work for both parties. And if the landlord’s gonna help, and you really need it, there are ways in which you can structure that help where the landlord can get something maybe towards the end of the lease that’s beneficial to them, but it allows the tenant to receive relief today. So, the tenant needs to understand what they have to offer that would benefit the landlord, which makes the landlord still a lot better about giving them the relief.

Andy Roberts: [00:41:25] Yeah, Brooks makes a great point. And we’re typically seeing that take place one of two ways. One being, hey, defer three months of rent now, and you can add it on the end of the term that I’m obligated to, lease-wise, or three months of deferment now, and then that delta that you deferred amortizing that over the remaining term. Those are typically one of the two paths that we’re seeing landlords are open to having.

Mike Blake: [00:41:53] So, let’s look at another scenario, a somewhat happier scenario. Maybe when you return to work, there’s going to be a company to which to return to work, but maybe you decide that your office needs are going to be different. You decide for us, for example, in our Alpharetta office, we’ve seen a marked increase in productivity with remote working vs. being in the office. I don’t know if we’re exceptional or not, right? But other firms may decide that, for whatever reason, they kind of like this remote working kind of scenario, but they’re going to keep their office, they may have or there may be other reasons to keep it. What are other options to generate value from their leased space if they’re not necessarily going to have a full office of employees anymore, but they still want to get value out of the space that they’re already paying for it and have invested in? How much do you redeploy that space to be value added?

Brooks Morris: [00:43:06] I think it’s case by case, Mike. I mean, it really depends upon what type of business is it. Do they have clients that come into that space? Do they not have clients come into that space? Their business is gonna dictate how they can best redeploy that space. Before I get into that a little bit, I would say that it is going to be a very interesting time moving forward. I think what’s happening with this forced remote work situation is it’s really heightening the awareness of the types of jobs that are okay to do remote and the types of jobs that are not okay to do remote or shouldn’t be remote. And so, I think you’re going to see that sort of become a big topic before you understand how are you going to redeploy your space.

Brooks Morris: [00:44:13] I can also see the conversation’s accelerating around, well, if this is a job that needs to be in the office, we maybe would be okay with four days a week in the office and one day remote, and creating some more flexibility around, what does it look like? What does a work week look like for different types of positions? So, I think that’s the first thing that companies are going to need to get their hands around because you have to understand that first before you start the space program around how to use that space.

Brooks Morris: [00:44:49] But then, if you get into redeploying space and once you understand those things, you’re going to start looking at, okay, so what are the areas of our office space that could be used for hoteling and not having a desk specifically for a person or an office specifically for a person? But it starts to be shared, which is something that’s been happening. I could see that accelerating a bit, but I could also see where we’re realizing how much we like to be around people. We love connectivity. Energy is created from when you’re around people. Ideas come from serendipity that happens in water cooler discussions.

Brooks Morris: [00:45:32] And Starbucks wouldn’t have been doing so well with people that worked remote if they just stayed at home or worked by themselves. Starbucks is full of people that are remote workers because they like to be around other people. So, I think you can see office space being redeployed that replicates, to a degree, restaurant in coffee shop environments that draw their people in to that environment to work and have the energy of being around people.

Mike Blake: [00:46:02] That’s really-

Andy Roberts: [00:46:06] Yeah, I completely agree.

Mike Blake: [00:46:06] Sorry, go ahead.

Andy Roberts: [00:46:07] Well, I think Brooks makes a lot of great points. And this will continue to affirm and accelerate a trend we’ve already been witnessing in the sense that office setting and a work setting transitioning from an industrial economy to an idea-driven economy. I mean, even 10 years ago, even 5 years ago, teh degree is still pre-COVID, the degree to which the number of businesses still kind of operated with this mentality of, “Well, this is my desk. It’s just where I go stress it.” I mean, that that really kind of originated out of an industrial revolution mindset, which was you had to be there for the specific function. And yet, as we’ve obviously moved to an idea-driven economy, that no longer makes sense.

Andy Roberts: [00:47:03] And so, it doesn’t mean, obviously, it would go away with office space, what have you. It just looks dramatically different. The same sense, an idea-driven economy looks different from an industrial-driven economy. The office space will reflect it. And I think some of the things we do certainly know is, one, flexibility will continue to rise. And two, I do think you’ve had some of this degree in some place, but think about, for example, the health care industry and the financial services industry, if you’re in either of those, a main theme is going to be working with your attorney to really get buttoned up on remote security in the sense of FCC regulations and HIPAA regulations. And you’ve had a lot of that discussion from within your office, and to some degree some laptop protocol, what have you. But knowing that a flexible, remote workforce that’s not going away, some of this is going to be certainly higher post-COVID than was pre, that’s just going to continue to put more focus on what does that look like on those specific industries that are highly regulated.

Mike Blake: [00:48:13] You touched upon something I want to jump on just a little bit; although we’re running out of time, unfortunately, but it bears discussion. And that is that the bulk of what I see being written right now is that we’re never going back to the old way of doing things. People are going to work remotely a lot more. And I’m not entirely sure that’s true. I mean, I’ve been working from home for the bulk of the last 10 years or so. But I think I’m a little bit of an outlier. I’ve joked before, my wife’s biggest fear about me is not that I’m going to cheat on her but that I’m going to try to get accepted into the Mars mission as long as they start accepting overweight, middle-aged man because I’m going to jump at the opportunity isolated for 24 months. But for somebody like she who is an extrovert, it’s really tough.

Mike Blake: [00:49:12] And I think there is going to be a a demand, a pent-up demand for that socialization. And Brooks, that idea of sort of having a virtual coffee shop within the office, I actually took a note. Maybe that,  in some way, will actually redeploy our space. Can we replicate the Starbucks kind of environment if people just sort of need to change the environment to feel more productive, more creative, more free? I think it’s going to unleash some creativity in terms of how better to use space to promote that socialization.

Brooks Morris: [00:49:51] Yeah, Mike. And it was already happening. So, in the technology industry, anybody that’s been competing for developers, these companies have had to find creative ways already to attract not only through pay but just through culture and what is the office space? Is it a fun office space to come to? And I’m not talking about ping pong tables but this coffee shop/restaurant idea and having diner booth in the break room, great views with bars looking out over the city where you can sit and work, this has been happening. And I see this accelerating for that reason. And it’s really what employees have shown that they want.

Brooks Morris: [00:49:51] I’ll say I know we’re running out of time here, but I was talking to John Ray a little bit about this before the call, but I’ve got a quote from Steve Jobs because I was reading Walter Isaacson. I’m in the middle of his book on the biography of Steve Jobs. And we all know he’s not only a founder of the respected brand Apple but also Pixar. And he was avid about their office space and including at Pixar. And he is not only a denizen of the digital world, but he knew all too well the isolated potential of technology and he was a big believer of face-to-face meetings. And he said there’s a temptation in our networked age to think that an idea can be developed by email or iChat. He says that’s crazy. Creativity comes from spontaneous meetings and from random discussions. And I think there’s a lot of truth in that. I just think there’s a balance that has to be found between flexibility and how technology can allow us to be remote and flexible. But, also, when and how often should we be face-to-face and  what do those environments look like now moving forward?

Andy Roberts: [00:52:10] That’s a great point.

Mike Blake: [00:52:12] So, one last question I want to touch upon is the return-to-work scenario. I believe, and you can tell me if I’m wrong, of course, but I believe that how we—and you touched upon it actually, but how we work is going to change, and I think there’s going to be some negotiations between tenants and landlords, and how to accommodate that. For example, even professional services moved to shift work, basically, right? And is the climate control now going to be kept on and who pays for that? I think that one janitorial visit per day is not going to cut it, right? You’re going to need to sterilize the office, I think, multiple times a day. I’m certainly advocating that for our firm. And other kind of logistical issues. Employee access, do you have to put toilet paper in safe, which sounds absurd, but it’s not, right? Is  it worth thinking now about what the return-to-work scenario looks like? And are these things that you ought to be talking to your landlord about now about what that looks like, so you can agree in terms of, basically, who’s responsible for what and how?

Brooks Morris: [00:53:42] Yeah, I think before-

Andy Roberts: [00:53:42] Absolutely.

Brooks Morris: [00:53:42] Yeah. Before you have that conversation with your landlord, with your advisors and your executive team, and asking questions among all your employees, you want to understand what is your need at the company first. What your plan to address this? Because you don’t want to go get out in front of this with the landlord before you know what you’re really asking for and why because you wanted to support your long-term business needs and short-term with addressing and making sure that you’re getting the janitorial services that you need.

Brooks Morris: [00:54:18] Once you establish what the need is, then you go engage in a proactive conversation with your landlord to address those things. But I think, depending upon how long this lasts, there is an opportunity to be in a better position as a tenant with more leverage in the cycle that we may be entering into. So, this could be an opportunity for tenants to, eventually, not right away, certainly if you have a lease expiration coming up, to restructure leases. Well, there’s gonna be a lot more subleases on the market, which is going to be competitive with the direct lease options for landlords. So, I think that there’s going to be an opportunity to push some of the responsibility for additional expenses onto the landlord and have more incentives that the landlords are offering.

Andy Roberts: [00:55:19] Those are great points. And I think one noteworthy point to consider for those working primarily in an office setting who are leading a company, it’s very possible that landlords, for a season of time as we start to get back, may have kind of revised density requirements that the tenants are going to want to be aware of. And again, it’s not that landlords are looking to be difficult. We just don’t know what conversations they’re having with lenders. And primarily, that’s probably their insurance brokers in the sense of to mitigate any outbreak, it’s very possible you don’t want to kind of have an internal planning session come up with a plan and then find out it’s not compatible with what the landlord will allow. I don’t think it’s gonna last forever, but I could very well see a scenario where, hey, the ban is lifted and set in for the next 30 days, or 45, or 60 days. There’s kind of a revised density issue that landlords are asking/mandating their tenants adhere to.

Brooks Morris: [00:56:24] Yeah, I think Andy brings up a great point. Historically, square footage of use per person has been 300 square feet or higher. And over the last several years, that’s gotten down sub-200. So, you could see where there’s not as many people that need to be in the office, but they still need almost as many square feet because it’s been mandated that it’s not allowed to be that dense anymore, and you have to have more square feet per person. I could see that potentially happening.

Mike Blake: [00:57:01] Yes, certainly places like California, New York, you may very well see them. I hadn’t thought of that. I think it’s a great observation. Guys, this has been great. We’re already over time, and I want to be as I try to be uber respectful of your time. If people have other questions that we weren’t able to cover today, how can people contact you?

Andy Roberts: [00:57:23] Sure. Obviously, if you go online and Google Cresa, this is Andy Roberts and Brooks Morris. We’re both in the Atlanta office. Obviously, our website is a great resource to learn about our firm. And then, you can specifically visit the Atlanta link, as well as Brooks has a personalized bio page. I, myself, have  a personalized bio page on LinkedIn. Please feel free. We’ve got a lot of great thought leadership resources on our website. That’s probably the easiest direct place to go to. Again, www.cresa.com. And happy to be a resource specifically and/or just kind of general questions. We’re always looking to receive feedback from the frontlines, if you will. So, welcome those conversations.

Mike Blake: [00:58:17] Well, that’s going to wrap it up for today’s program. I’d like to thank Brooks Morris and Andy Roberts of Cresa so much for joining us and sharing their expertise with us. We’ll be exploring a new topic each week. So, please tune in, so that when you’re facing your next executive decision, you have clear vision when making it. If you enjoy this podcast. please consider leaving a review with your favorite podcast aggregator. That helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Tagged With: Andy Roberts, Brady Ware, Brady Ware & Company, Brooks Morris, commercial real estate, corporate office tenant representation, CRESA, Cresa Atlanta, Michael Blake, Mike Blake, office space, office space rental, tenant representation

Inspiring Women, Episode 20: Becoming The Authentic Leader You Envision

April 15, 2020 by John Ray

Inspiring Women with Betty Collins album cover
Inspiring Women PodCast with Betty Collins
Inspiring Women, Episode 20: Becoming The Authentic Leader You Envision
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Inspiring Women with Betty Collins album cover

Inspiring Women, Episode 20: Becoming The Authentic Leader You Envision

There’s almost a crying desire for leadership in our society which is genuine. In this episode of “Inspiring Women,” host Betty Collins discusses the characteristics of authentic leadership. “Inspiring Women” is presented by Brady Ware & Company.

Betty’s Show Notes

It’s everywhere; books, coaches, seminars on the why, the what, the who, and the how.

It’s really, in my mind, almost overkill. But the sad truth is, with all of that help, we are desperately looking for leadership that is authentic.

In our society, in politics, to corporate America, to education systems, within our homes, within professional organizations, authentic leadership is really tough to find.

Authentic leadership works on the principle that leaders can prove their legitimacy, their credibility, by nurturing sincere relationships with whomever they’re leading. Notice I did not say “I am the leader, follow me!” It isn’t about the title. It really is nurturing sincere relationships.

How do you do that?

An authentic leader encourages their followers to be more open. They appreciate their support in the success of the organization. When you want to be an authentic leader, it’s pretty tough. It’s a pretty high standard, and it takes a while to do.

This is something you have to be pretty intentional about. If you are a true authentic leader, you’ll have certain characteristics. You probably can’t have all 10 that I’ve come up with, but you’ve got to have some of these, or you’ve got to be working on them.

  • Self-awareness
  • Integrity
  • Vision
  • Focus On Long-term Results
  • Listening Skills
  • Speaking Carefully
  • Transparency
  • Consistency
  • Drawing On Experience
  • Sharing Success With Your Team

Betty Collins, CPA, Brady Ware & Company and Host of the “Inspiring Women” Podcast

Betty Collins, Brady Ware & Company

Betty Collins is the Office Lead for Brady Ware’s Columbus office and a Shareholder in the firm. Betty joined Brady Ware & Company in 2012 through a merger with Nipps, Brown, Collins & Associates. She started her career in public accounting in 1988. Betty is co-leader of the Long Term Care service team, which helps providers of services to Individuals with Intellectual and Developmental Disabilities and nursing centers establish effective operational models that also maximize available funding. She consults with other small businesses, helping them prosper with advice on general operations management, cash flow optimization, and tax minimization strategies.

In addition, Betty serves on the Board of Directors for Brady Ware and Company. She leads Brady Ware’s Women’s Initiative, a program designed to empower female employees, allowing them to tap into unique resources and unleash their full potential.  Betty helps her colleagues create a work/life balance while inspiring them to set and reach personal and professional goals. The Women’s Initiative promotes women-to-women business relationships for clients and holds an annual conference that supports women business owners, women leaders, and other women who want to succeed. Betty actively participates in women-oriented conferences through speaking engagements and board activity.

Betty is a member of the National Association of Women Business Owners (NAWBO) and she is the President-elect for the Columbus Chapter. Brady Ware also partners with the Women’s Small Business Accelerator (WSBA), an organization designed to help female business owners develop and implement a strong business strategy through education and mentorship, and Betty participates in their mentor match program. She is passionate about WSBA because she believes in their acceleration program and matching women with the right advisors to help them achieve their business ownership goals. Betty supports the WSBA and NAWBO because these organizations deliver resources that help other women-owned and managed businesses thrive.

Betty is a graduate of Mount Vernon Nazarene College, a member of the American Institute of Certified Public Accountants, and a member of the Ohio Society of Certified Public Accountants. Betty is also the Board Chairwoman for the Gahanna Area Chamber of Commerce, and she serves on the Board of the Community Improvement Corporation of Gahanna as Treasurer.

“Inspiring Women” Podcast Series

“Inspiring Women” is THE podcast that advances women toward economic, social and political achievement. The show is hosted by Betty Collins, CPA, and presented by Brady Ware and Company. Brady Ware is committed to empowering women to go their distance in the workplace and at home. Other episodes of “Inspiring Women” can be found here.

Show Transcript

[00:00:00] Becoming the authentic leader that you envision and making sure you can build that team … Authentic leaders, being an authentic leader, the 10 steps of all of it … It’s everywhere; books, coaches, seminars on the why, the what, the who, and the how. It’s really, in my mind, almost overkill, but the sad truth is, with all of that help, and with all of those things, and with all that can be thrown at you, we are desperately looking for leadership that is authentic, in all aspects. From our society, from politics, to corporate America, to education systems, within our homes, within professional organizations, authentic leadership is really tough to find.

[00:00:46]  Part of it is because it’s hard to be an authentic leader. Authentic leadership works on the principle that leaders can prove their legitimacy, their credibility, by nurturing sincere relationships with whoever they’re leading. Notice I did not say I am the leader, follow me! It isn’t about the title you finally got. “Get over it. Do as I say.” It really is nurturing sincere relationships. How do you do that?

[00:01:19]   The word authentic also is way overused everywhere, but an authentic leader encourages their followers to be more open. They appreciate their support in the success of the organization, so they really want to hear from them. It doesn’t just promote them as the leader, or it doesn’t just promote individuals. It’s a team performance.

[00:01:41]   When you want to be an authentic leader, it’s pretty tough. It’s a pretty high standard, and it takes a while to do. You’re not going to do that because you got your MBA, or something, or you’re just getting out of college, or even if you have years of experience. This is something you have to be pretty intentional about. If you are a true authentic leader, you’ll probably have certain characteristics. You probably can’t have all 10 that I’ve come up with, but you’ve got to have some of these, or you’ve got to be working on them.

[00:02:09]   Who is the person in your life, at your company, in your career, in your past, maybe in your local government? In the professional organization, when you’re thinking authentic leader, who comes to your mind immediately? And then, I have to ask this – do you think you are an authentic leader? But, probably, the real question is do others see you as that?

[00:02:34]   I want to talk about how do we get there, and what does it mean to be an authentic leader? These are just some basic ideas that I came across, and read about, and looked … I think I narrowed it down to 10 because I don’t know how you could do all 10 of these but let me go through them.

[00:02:50]   Self-awareness. An authentic leader reflects upon their actions and some of their decisions, and they examine; all along their career, they’re examining how they’re doing those things, so they can try to not be biased, and, again, being open. You lead with your heart. You focus on the long-term results, integrity. That could be an entire podcast. You’ve got to lead with vision. You’ve got to listen, and carefully speak. Of course, transparency and consistency. Those are some things that I think have to be there for you to get the title – authentic leader.

[00:03:30]   Let’s start with the first one – self-awareness. You’re reflecting on your actions, your decisions. You’re examining your own strengths and weaknesses. Then, you put a lot of effort to overcome the fears around … The people who fear maybe those things that are not going well, and you use your strengths to maximize. Self-awareness is not obsession with every aspect of your life so it’s all perfect, and it is not constantly analyzing yourself and then asking everyone’s opinion about it. Again, it’s really reflection; examination. I don’t know that you have to do it every day, but authentic leaders don’t really hide behind their flaws. They talk about them, and they acknowledge them. A lot of times they get people around them that can maybe fill in where they are not that way.

[00:04:24]   Being an authentic leader is hard work and it takes years of experience, and you’re going to fail. But everyone behaves inauthentically – is that a word? – at times, and they say things and do things they regret. So, the key is to have self-awareness; to recognize those times where you listen, and you listen to your colleagues, and wherever you’re leading as this authentic leader, who can point them out to you, and you can go, “Okay, I get that.”

[00:04:54]   If you’re going to be an authentic leader, you’ve got to lead with your heart. Probably not afraid to dig deep. Those people that can go, “Let’s just get to the core of it.” They lead their team with courage. There’s a lot of empathy, because if you’re going to really lead from the heart and listen, it takes empathy. I’m not always an empathetic person. It’s a skill that I really have to work on. Being all heart also doesn’t mean you just lead with your emotions, or you feel good, therefore, that must be coming from the heart; or you feel bad, and that’s really coming from the core.

[00:05:31]   Two situations. One, I had someone … We always had kind of a flex time in one of the companies that I worked with. One of those things was as long as you got your eight-hour day in, you were good. This was well before everybody now has flex time or works out of your house. We had somebody who really loved flex time, because they wanted to eat breakfast with their kids every morning and take them to school. The problem with his authentic leadership, though, was when it came 5:00, and he still had two more hours, he didn’t hesitate to go into someone’s office at 3:00, 4:00, or 5:00, and sit there and talk and even follow them to their car. He really wasn’t authentic. Liked it for himself. Didn’t let others do it.

[00:06:18]   I will say, of course, I’m either very egotistical, or very insecure, but I will say this with as much humbleness as I can … The success of the women’s initiative at Brady Ware, my CEO directly said this to me from the beginning; he said, “You are a leader for this because you wear the emotions on your sleeve. Your passion is there for everybody to see, and it comes out at the very core, and that’s why the Brady Ware women’s initiative is successful.” For me to have a legacy and to pass this on to someone, I’ve got to find someone with that same thing. You lead with the heart. We’ve had some success with that. It was a very nice compliment, for sure, and I’ve tried to use that in other areas, if I have that much passion. When I don’t have that kind of, where I can lead from the heart, I kind of question should I be doing this?

[00:07:14]   You’ve got to focus on long-term results, when you are an authentic leader. You don’t waste a whole lot of time worrying about maybe temporary setbacks or things that just didn’t go well. You cannot always have a stellar month. You cannot always have a stellar year. You’ve got to look long term. You know this is the right thing. It takes patience, and it takes hard work, but you can yield some rich results in the long run. So, looking forward by learning from the past generally results in good. But, again, everything can’t be stellar and huge all the time.

[00:07:50]   I hope you get the correlation; I’m going to try to describe this … I ran in a 5K only one time. It was time to get my health in order, and the book I was reading at the time said, “Find the exercise you like, and you exercise.” I said, okay, I’m going to run. I’m going to be a runner. I prepped for the 5K, somewhat, and I loved more buying the shoes, and the matching gear, and being part of the big day more. It was a community thing. At the end of the day, the race was kind of tough, but I kept my focus because I did know – when I was tired – it’s like everyone else is doing this. We can get there. There is a finish line. I met the goal. I was part of the community. It’s all really good. I finished about mid-pack, which I didn’t think was bad because I was in my 50s. I wasn’t in first place. It wasn’t this big result, but it was all part of my health plan.

[00:08:51]   So, instead of going, “Well, that didn’t work,” I just moved on to something that maybe did work. It led me to the next part of my physical health, which was really just getting a trainer. I lost, over four, or five months’ time, about 19 pounds, 13 inches. Now, those habits are really in place. I wasn’t about what I was going to look like, when I worked out at the gym with her, or whatever it was. So, I took that and learned from my past; didn’t get buried down in that one more thing didn’t work about weight. Instead, I said I’m going to look at this long term.

[00:09:25]   I prep now; I focus; I’m more patient. If I would have just said, “No more 5ks. I’m done,” I wouldn’t have the amazing results I have right now. I didn’t waste time focusing on what I didn’t accomplish in that race. Instead, I found another way to move forward and applied that somewhat to how I lead in business. It’s okay that something didn’t work. If it doesn’t, don’t keep doing it over. I wasn’t going to keep running races that I wasn’t prepared for, but I am going to, day by day, deal with my health. So, focus on the long-term results.

[00:09:58]   Integrity … Just not there today. I had a great book back in the day about President Ronald Reagan, “When Character was King,” and it was all about integrity. I would still vote for him today. That would be who I’d write in on the ballot. He was authentic to me. He wasn’t perfect, but integrity mattered to him. Of course, I’m a pretty conservative person, so, of course, I’m going to be drawn to him, but integrity was key. He just didn’t say things to say them. Generally, hat he said he meant. I kind of look that way with Barack Obama, as well. President Obama was a progressive left; he said that. He also said, “This is what I believe, and this is what I’m going to do.” There wasn’t any- What’s the word I want? There wasn’t any delusion about it. They both had different ways about their character, and integrity, because they were doing what they believed, and what they said, they meant. They were respected, yet two very, very different men.

[00:10:59]   Chances are, two people can say the same thing. The one who’s listened to probably has integrity and probably has some credibility, especially with the world we have today. If you really step back and go, “I want to understand more about integrity. I’ve got to figure that out, and character, that matters in my character …” you will be a leader, far past a lot of people.

[00:11:26]   You have to lead with vision. Authentic leaders lead with purpose and vision. Chances are, they’re going to add value to the people that they interact with, the team, and they’re going to help people also be part of the vision. They are not just the vision. That’s why I say- that’s only five, and I’m exhausted thinking about all the things I have to do to be the leader. We’ve got five more … We’ll finish up.

[00:11:50]   Listening skills and carefully speaking. What a mess we are in today with the ability to not listen and the ability to say whatever we think, and we call that freedom. Well, I look at it as a good leader … As we are making decisions right now about a next president, a good authentic leader is a good listener. Even when they don’t like your views, or you don’t like theirs, there’s listening involved.

[00:12:22]   Authentic leaders also monitor their words. They’re very careful to how they say things to the audience. Not because of political correctness, which has gone beyond, they do it because maybe they’re sensitive to the person who’s going to hear those; the impact, the actions. They’re not just messaging the right talking points. People can read right through that. Too much of today, and not just in politics, but our culture, in general, is we don’t listen, and we speak way too quickly. You want to be a better leader? People will gravitate to you, if you have listening skills and carefully speak. It’s definitely part of being that authentic leader.

[00:13:09]   Transparency … Authentic leaders obviously believe in open communication and combine their directness with empathy. I hope you heard that. They combine their directness with empathy. Transparency doesn’t mean, “Well, I told you, and I spilled my guts, and now everyone knows everything.” That might be transparency. It also might be maybe a little stupidity. “What you see is what you get” – that can be dangerous. “Well, this is just who I am!” Those things are not transparency.

[00:13:37]   We had somebody who, years ago, they were my client and always talked about his faith; always talked about transparency, and open, and honesty. Yet everyone knew he was having an affair with the administrative assistant. Everyone knew it. He didn’t know that everyone knew it … So, his transparency, no matter what, wasn’t there. It just wasn’t there. We really need it today. Transparency is about open communication; being direct with some empathy; and not just saying what you think needs to be said. People see who you are, most of the time, or they at least have some idea.

[00:14:18]   Consistency … Consistent people in your life. I want you to be thinking, who is that, and why do you go to that person on your team? It’s because they’re consistent, and you can count on them. Well, they need the same thing from you as a leader. They’re not probably going to be allured into things and allow things that just don’t … They’re not with the plan. They’re not with the steps. They’re not with what needs to happen. Consistency is a huge important thing. Sometimes, you need to divert; sometimes, you need to take another fork in the road. I get that, but, generally, in business and when you’re leading, and you want a team to follow, you can’t live in too much ‘let’s just shoot from the hip and go over here.’ You’ve got to stay with some things, and consistency is part of that.

[00:14:57]   Probably the hardest things for leaders, especially authentic, but this is one you could really just say, “I’m going to make an effort on this,” is sharing your success with your team. Everybody wants to take the credit for it. Really, when you build the team around you, and give credit, and you do it as a team, you have so much- so much more different results.

[00:15:17]   Drawing on experience … I’m 56, and I have a lot to say, and I probably have a lot of good stories to tell you. It doesn’t mean, because I tell them, and I learned the hard way, it makes me authentic. But stellar leadership will absolutely share their experiences and really have compassion that you don’t experience that. Or they might have compassion for you to experience it because you need to.

[00:15:39]   Rhett Ricart is a common name in Columbus. Of course, they have Ricart Ford, which is a- many years, it’s been number one in the country. It’s a huge, huge organization. He’s a great speaker, and he does a great presentation on his 13 mistakes. He takes that experience, and he throws it out there and says, “This is what I did.”

[00:16:02]   One of the ones I loved, he talked about ‘Don’t teach your employees to steal.’ I’m like, wow … He said, because, you know, if you were a Ricart, you could fill up your gas tank and get your tires changed, and no one ever paid for any of that. You just ate lunch on the … All the different things you do as an owner. Then, when your employees start doing that, you’re kind of mad, because you’re like, “What are you doing?” “Well, you guys do it. You’re employees here. Okay, you’re owners, but …” He just talked very, very openly about, “These are the things I didn’t do well, and I don’t want you to do that.” He’s very authentic about it. He doesn’t talk about he was perfect the whole way and that’s why they’re number one.

[00:16:40]   Authentic leadership – I’ll end with this. Your team deserves it. It’s next to impossible to do all 10 of these, but I would certainly look at the ones where you’re struggling in and make an effort to put some change there; to get your mindset differently and to really get some open, honest communication about it because your team deserves it. They need you to strive towards becoming the authentic leader. Then, one day, you’ll probably create authentic leaders around you. I’m Betty Collins. Thank you for listening today.

 

Tagged With: authentic leadership, Betty Collins, Brady Ware, Brady Ware & Company, compassion, Inspiring Women, Inspiring Women podcast, Inspiring Women with Betty Collins, integrity, lack of transparency, Leadership, listening, self-awareness, Transparency, vision

Decision Vision Episode 60, “How Can My Business Survive the Covid-19 Crisis?” – An Interview with Tommy Marsh, Brady Ware

April 14, 2020 by John Ray

Survive the Covid-19 Crisis
Decision Vision
Decision Vision Episode 60, "How Can My Business Survive the Covid-19 Crisis?" – An Interview with Tommy Marsh, Brady Ware
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Survive the Covid-19 Crisis
Tommy Marsh, Brady Ware & Company

Decision Vision Episode 60, “How Can My Business Survive the Covid-19 Crisis?” – An Interview with Tommy Marsh, Brady Ware & Company

Many business owners right now are asking “how can my business survive the Covid-19 crisis?” In this episode of “Decision Vision,” veteran CPA Tommy Marsh addresses the various SBA relief programs of the CARES Act, how they help business, and much more. The host of “Decision Vision” is Mike Blake, and this series is presented by Brady Ware & Company.

Tommy Marsh, Brady Ware & Company

Tommy Marsh has more than 25 years’ experience in public accounting. Prior to joining the Brady Ware family, he was a tax partner with Marsh & McConnell for 21 years.

Tommy’s responsibilities include general business consulting, strategic planning and tax and audit services. He also specializes in Federal and State income tax laws and regulations as they relate to closely held corporations and partnerships, as well as personal and financial, income and estate planning. He has significant experience in obtaining IRS ruling requests, approval for changes in tax accounting methods, and tax issues relating to problems that arise in connection with complex business transactions.

Tommy is a member of the Greater North Fulton Chamber of Commerce, the American Institute of Certified Public Accountants, as well as the Georgia Society of CPAs.

To get in touch with Tommy, you can email him or call him directly at 678-350-9503.

Michael Blake, Brady Ware & Company

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:05] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting advisory firm that helps businesses and entrepreneurs make vision a reality.

Mike Blake: [00:00:25] And welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ prospective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:45] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware $ Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like this podcast, please subscribe and your favorite podcast aggregator and please consider leaving our view of the podcast as well.

Mike Blake: [00:01:12] This is the fifth of a subseries of topics regarding how to address the coronavirus crisis. And specifically, we’re discussing managing and leading companies in a shutdown shelter-in-place world. And we’ve gone pretty granular for the first four topics, ranging from data security, to managing remote teams, to being an effective remote worker. And by the time this is published, we may or may not have also published addressing your real estate obligations in a shutdown world.

Mike Blake: [00:01:51] But I want to sort of draw back a little bit and look at this from a 30,000-foot perspective because in addition to managing the very granular aspects of managing a company through a crisis, there is also the broad discussion of just how do you run a company in this environment and how do you lead. And let’s kind of put our cards on the table right now. We are collectively living inside of a horror movie, with the exception of we don’t have the don’t-open-that-door kind of thing. But we’re living in an unprecedented environment. And unless you’ve had – I don’t know – bomb diffusing training or something like that, none of us have specific training in how to handle a scenario like this.

Mike Blake: [00:02:53] And I think the best teacher for this kind of thing, quite candidly, is experience because, again, I don’t think there’s a course that Harvard is offering that is the Coronavirus and You: How to Manage your Company in a World That’s Being Afflicted with a Pandemic. And I think there are just sort of broad questions and conversations that as leaders, as decision makers, we would like to have, we’re trying to have, and maybe we have something in our region, in our network, or our ecosystem that can have that with us; maybe we don’t.

Mike Blake: [00:03:33] And what I want to do with the show is I want to make available too, quite candidly, one of the wisest business people I know and one of the guys you want to be in a foxhole with. And full disclosure, he is technically my boss. So, as a listener, you can decide if I’m sucking up to him or not, but if you’ve known me for more than five minutes, you know I’m not a suck-up guy. But I’ve taken an instant liking to Tommy Marsh ever since I joined the firm almost two and a half years ago. And in the short period of time, he’s become something of a mentor that I wish I’d had much earlier in my career and rarely did have. He just got a common sense to him and a way of cutting through the bullshit, but a way of addressing it with a level of humanity and compassion that you don’t see all that often, including in the accounting industry. And I think you’ll enjoy the next 45 minutes we’re going to spend with him as much as I’ve enjoyed being able to learn from him over the last two years.

Mike Blake: [00:04:45] Tommy has more than 25 years of experience in public accounting and is the managing director of our Alpharetta, Georgia office. Prior to joining the Brady Ware family, he was a tax partner with a firm called Marsh McConnell for 21 years, which, of course, that’s his name. He was co-owner and he was running that, running and owning that firm. Tommy is an involved in general business consulting, strategic planning and tax audit services. He specializes in federal and state income tax laws and regulations. They relate to closely held corporations and partnerships, as well as personal financial income and estate planning, does all this accounting stuff, yada, yada, yada. He’s a member of the Greater North Fulton Chamber of Commerce, AICPA, and the Georgia Society of CPAs.

Mike Blake: [00:05:32] But most importantly, what he does on a daily basis, I think he would tell you himself, he doesn’t do all that much raw accounting stuff anymore. He’s the guy that clients come to when they just got problems, and they’ve got major issues with their company that are potentially company or career-threatening, and they come to him for advice. And that’s the kind of guy that you want involved, that you want to ask these kinds of questions because every business, I don’t care even if you’re making N95 masks and you’re making ventilators, this environment, if you don’t navigate correctly, is an existential threat to us all. And so, great advice is it’s never been more important. And I’m so delighted I could convince Tommy to take some time off the tennis court and join us today. Tommy, welcome to the program.

Tommy Marsh: [00:06:33] Mike, thank you so much. I learned a couple of things about myself in that introduction, and it’s much appreciated. I will leave my ring on your desk because we got to have six feet apart, but I will leave it on your desk in order for you to pay the proper homage. But in all seriousness, Mike, thank you for the introduction, and I’m proud to be your partner. So, job well done.

Mike Blake: [00:07:01] So, Tom, let’s get into some background. When we say that you’re with Marsh & McConnell for 21 years. Were you the owner or and owner of that firm for all 21 years?

Tommy Marsh: [00:07:13] Yes, I’ve been in public accounting for about 38 years. And you sort of sharpen your teeth on the early years, I was with a regional farm. And then, once, I was traveling a lot. And when I started having children, I wanted to be in Atlanta versus being on a plane traveling and consulting. But I hooked up with a guy named Bob Humberstone, and myself, and Margaret McConnell, bought him out eventually. And therefore, I became an owner at about, probably, I don’t know, 20 some odd year, maybe 25 some odd years ago. So, I wasn’t a partner/of Marsh & McConnell for the 20 plus years you’ve indicated.

Mike Blake: [00:08:02] And in your career, how many financial crises have you had to weather, either as a business owner or as an executive that has to make these tough decisions?

Tommy Marsh: [00:08:14] Well, obviously, the two that come to mind, and I’m going to throw you a third one, but basically in 2008, that was the “Great Recession days” that that we all experienced. It was pretty much in the real estate world, but it also impacted banking, and financing, and a lot of industries across the board. That was a tough, tough time for a lot of people, a lot of businesses. So, that was probably the major one. The second one is what we’re experiencing today. I have never seen something like this before. So, this has got to be one of the major financial issues that are facing us today.

Tommy Marsh: [00:09:05] Now, being a CPA for a small practice and in the Marsh & McConnell years, I believe the other financial crisis that we had is with clients. When a client of yours loses a key employee, or they lose a bank funding, or they lose a line on a distributorship, I believe that I’ve had crises along the way. Nothing of magnitude as the 2008 or 2020 crisis that we’re going through today, but I can’t even tell you how many I’ve experienced of that on the front lines with clients.

Mike Blake: [00:09:48] Is this the worst crisis you think you’ve experienced in your career?

Tommy Marsh: [00:09:56] Absolutely. And I think when you talk about the 2008 Great Recession, it’s now behind us. It’s in the rearview mirror. When you talk about the 2020 coronavirus pandemic, we’re still living it. As you said, when we first started talking this morning is that we’re living it, we’re in the middle of it. And my experience has been that I believe that the unknown, most of the time, is worse than the known. And so, we’re still in the unknown part of this, whether it’s a health issue that you’re worried about, a loved one, or your children, or your spouse, or what have you from a health issue, but you’re also in a situation to where from a business owner, what’s going to happen? And so, that’s why I think for right now, it is absolutely terrifying on some stages.

Tommy Marsh: [00:10:55] However, we all know that the unknown is worse than the known. So, hopefully, in the next — and I’m not trying to put a deadline on this, but at the same token, we need to get back to work. Is that 30 days? Is that forty five? Is that 60 or 90? Only time will tell. So, yes, this is absolutely the worst situation I’ve seen in my career.

Mike Blake: [00:11:24] In the past, let’s go back to the ’08-’09 Great Recession, you and I were both advising clients back then. What advice have you given to clients in the past from financial stocks that came to you and said, “Tommy, what’s going to happen? The economy is obviously going to take a massive turn for the worse.” And they’re saying, “What do I do? What do I have to be doing?” What piece of advice that you find yourself most commonly giving out?

Tommy Marsh: [00:11:56] Well, obviously, advice is pretty much client-specific. You may have one client that really has not been impacted. So, our advice to them is, hey, it’s the general discussion and the general consulting that we do on a daily basis. Other clients typically have specific advice, but the over ending advice that I give clients is it is going to be okay. I may not know 100% what it looks like, but I believe with my experience and as much as I’ve been through the last 38 years in my industry, it’s all going to be okay. It may not look like it was prior to this, but at the end of the day, it’s all going to be okay. If we can hang in there long enough, and be healthy, and survive all of this, which I believe we will, we’ll come out the other side, and it’s all going to be okay.

Tommy Marsh: [00:12:59] Way back in my career. I would get nervous, I guess is the word, that if a client got in trouble or one of my largest clients declared bankruptcy, as a business owner, you become nervous, and what’s going to happen next, and am I going to survive and feed my family, and what have you? The reality is at the end of the day, it’s the human spirit that’s going to overcome, and we’re going to come out the other side better. Maybe a little bit different, but we’re going to come out the other side. I’m always betting on me, and you, and the clients, and the human spirit to get through this. And I believe it’s all going to be okay. So, that’s probably the 30,000-foot specific advice is it’s all going to be okay.

Mike Blake: [00:13:54] So, I know you, as I have, have fielded calls and have taken meetings with with clients about this. What are the most common worries that they’re expressing to you right now?

Mike Blake: [00:14:10] Well, it depends on the industry. So, one of the first, about the middle of March when this really was starting to shape up to where the economy was going to get shut down for whatever reason, it really depends upon what industry that you’re at. One of my trade show vendors called up and said, “When will this be over?” And I said, “Well, I’m not sure.” But if you know anything about the trade show industry, they didn’t postpone their trade shows, they canceled them. So, his worry was, “When will it get back to normalcy?” And he thinks it’s going to be in the fall. So, all the planning that we have done is for the fall.

Tommy Marsh: [00:15:01] A charity event client of mine suffered the same type of situation to where, overnight, all of his charity events that he supports were canceled. And right now, they’re pushing to have them in the fall again. So, his biggest concern and his biggest worry was, “I have assembled the best team that I’ve ever put together. How can I keep them all together? How can I keep my my great team together?”

Tommy Marsh: [00:15:33] A project company called me up, and he manufactures large displays for whether it’s a large construction client here in town or what have you. His revenue went from $7 million down to zero. “How am I gonna pay for the rent? How can I keep my my team together? How am I going to survive this and pay for my bills?” So, at the end of the day, even the hair salon that we represent, she called me up and said, “Hey, I closed the shop, sent everybody home. Will unemployment benefits be enough to take care of my team that I’ve had for the last 10 or 15 years?”

Tommy Marsh: [00:16:23] All four of those examples happened within about two and a half days of each other in the middle of March because they saw what was coming, and they were looking at what was gonna happen economically. So, at that point, most of them were just really, really, really worried, not only about their business but really about the people that work with the small business owner that they care about. So, really, it’s specific of what industry that you’re in, but you can give a sampling and a taste of what people are worried about going forward. So, those are some true-to-life examples. Obviously, I could give you probably 10 more. But then we went from 45 minutes to about an hour and fifteen, and I’m not sure we want to do that.

Mike Blake: [00:17:13] So, we, along with the rest of our industry, is scrambling to understand how the recently passed CARES/Payroll Protection Program Act is going to operate. And I think we’re starting to get a handle on it. But the interpretations are still a work in progress. But at the end of the day, I know a lot of, in particular, small businesses are looking at that as a potential savior. In your mind, how helpful do you think that is going to be for small businesses? And are you telling people to, “Yeah, this is going to be great, and it is a true lifeline,” or are you telling them that, “Maybe you should manage your expectations? This is great, but it’s not going to solve the whole thing”? Where do you kind of come down on that?

Tommy Marsh: [00:18:13] Well, that is a great question. So, a couple of comments on the frontend are, is that from about the middle of March and even to the end of March, we kept hearing about the SBA programs, and the CARES Act, and the TPP loans, and what have you. The way I see the world is that there’s really two groups of the CARES Act that is available or you could use it to your benefit.

Tommy Marsh: [00:18:45] The first part of it is your typical, what they call as the EIDL loan. It stands for economic injury disaster loan. And that is an SBA program that you go online and you apply for, which is truly a disaster loan to be able to borrow money from the federal government in order to keep your business open. You have to use the money for overhead, but that’s okay, right? In other words, if we have a good business, and we’re going to come out the other side, this is a great, great means for businesses to borrow money. And this disaster loan is no different than when a tornado hits a small town, they need relief, or a flood, they need relief, or a drought. You’re trying to loan moneys to businesses in order to survive. So, from that first part of this CARES Act, I think that’s very, very, very powerful and very, very good for the government to provide that. So, I highly recommend that. We have a lot of our clients applying for it. And hopefully, we’ll hear success stories of them funding it, and we’re starting to get that right now, is that we’re hearing clients are getting to receive the money.

Mike Blake: [00:20:13] Yeah. Go ahead.

Tommy Marsh: [00:20:16] Go ahead, Mike.

Mike Blake: [00:20:16] I was just going to say I’ve also started to see things trickling through our own internal communications and elsewhere that the money is actually starting to flow. So, in spite of the fact that I think the banks are taken a little bit by surprise that they’re going to be the frontend of processing this, and they’re scrambling to develop intake procedures and capacity. It looks like they’re actually starting to rise to the occasion fairly quickly.

Tommy Marsh: [00:20:43] And they have. And what’s interesting is up until about, again, three days to a week ago, the CPAs, not only myself but other CPAs around the country, are on the frontlines of answering questions that they really don’t know the answers to yet. So, I know it’s frustrating to some clients, but we can only do the best we can with the information that we have.

Tommy Marsh: [00:21:08] However, the other side of it is, of the CARES Act, is really it’s a separate, for lack of a better word, a bucket. And the other bucket, there’s really three things going on in this proverbial bucket that I’ve described. And basically the CARES Act, I believe, and this is my personal opinion, is trying to provide relief to people to survive two and a half months. And the reason I say that is if you break it down further, then the two and a half months, you’ll hear about the stimulus checks that individuals are getting 1200 bucks if your income is under $75,000. If you’re married jointly, you’re getting 2400 bucks. I’m not saying that everybody’s going to survive two and a half months on that kind of money, but from the stimulus side of the government, they are providing these stimulus checks, I believe, to individuals to try to weather the storm for a period of time.

Tommy Marsh: [00:22:15] The second thing that they’re doing is, is that they are maintaining in the CARES ACT, is that an employer that keeps their payroll in place, there are great credits available to them against future payroll taxes, which benefits people to keep their payroll and their team in place. So, that is a great opportunity. See your accountant to help you calculate those credits.

Tommy Marsh: [00:22:45] And then, the last would be the infamous PPP loan, which is the Paycheck Protection Program Loan. And that’s the one that’s getting the most press because if you maintain your payroll for two and a half or two months, you can borrow up to two and a half times your average monthly payroll. But if you can survive the two months of paying your regular payroll, I believe it’s in hopes that the economy gets started again and things get back to normal. So, when you look at the CARES Act, a lot of it is, “Hey, let’s see if we can survive the next two and a half months,” which we will, which we will, but that’s a that’s a high-level summary of the CARES Act in order for businesses to consider to keep going for two and a half months.

Mike Blake: [00:23:42] I agree with that. The math I did was that this is a $2.5 trillion rescue package, and the non-government piece of our national GDP is about $16 trillion of GDP, right? And so, when you work through the math, that does turn out to be 10 weeks or so of GDP in effect that the government is now replacing, right? Give or take what’s being produced by elsewhere in the economy. So, I think you’re right.

Tommy Marsh: [00:24:16] That’s very well put and that’s a great point, I believe, that whatever they’re trying to do and, again, what we’re hearing success stories that clients are now beginning to get some money, but if you think about it, there’s two things going on. What can the government do to help the citizens and small business out to get to the next event to where we’re back outside and we’re not on shelter-in-place type of things, which is under Georgia and what have you? So, that’s the first part of it. The second part of it is that, all of a sudden, we’re going to have this trillion dollar debt, but in my opinion, today, we’re just trying to make it two and a half months, right? I mean-

Mike Blake: [00:25:05] We are.

Tommy Marsh: [00:25:05] Yeah, exactly. So, I believe that the stimulus package and the CARES is really just trying to get businesses and people to, “Let’s figure this out. Let’s give us two and a half months of survival.”

Mike Blake: [00:25:20] So, tax return deadlines have been pushed back. I think it’s to July, I should know this more, but I’m not an accountant. How many full do you think that is for most business owners? Do you think that that’s appreciated – just to take one thing off their plates, they can focus on what’s right in front of them?

Tommy Marsh: [00:25:37] Well, Mike, to be very blunt with you. I think it’s the greatest law ever invented because I’m a public accountant CPA. So, I think it’s very meaningful if you want to know the truth of the matter. Now, on a serious note, it did give us a break because what was interesting was as we all know historically how important the April 15th deadline is, you have all the cartoon characters of the accountant in the white shirt with the 10 key, and the green hat on, and the visor on, and cranking out the numbers, and all that’s true.

Tommy Marsh: [00:26:14] So, what was little disturbing on the front end was we kept hearing about these SBA loans and big breaks given to other businesses, but they really didn’t take their foot off the gas pedal until later on to where they passed it to where CPA firms could defer the filing or actually taxpayers with CPAs are part of helping them prepare their taxes until July 15th. So, you and I know, Mike, because we sent our staff home, right?

Mike Blake: [00:26:47] Yeah

Tommy Marsh: [00:26:47] On a Monday, we sent everybody home to work from home because we didn’t want anybody getting sick or trying not to get them sick. But it was a great, great relief to get the filing deadline. And they’ve just recently come out with more rules to state that a lot of the filings that are normally done between now and July 15th have pretty much all been extended. So, from that aspect from a CPA firm, it was huge.

Tommy Marsh: [00:27:17] Now, from a general business type of client, really, it helps them if they owe tax, right? So, in other words, if you owe tax and you’re trying to survive the next two and a half months, they’re probably not going to make their tax payments anyway because they’re trying to keep the doors open and keep their employees in place. At that moment, it is a huge benefit for the government not to charge the typical 1% interest rate from April 15th until July 15th. They have waived that. So, from that aspect, if you are owing money, that is a great, great benefit and very meaningful to those people who just picked up the interest carry on that.

Tommy Marsh: [00:28:08] If you have a refund, obviously, the group that have refunds are still pressuring the CPAs to get the returns done. And Brady Ware is continuing to do that. We’re still in full production in order to continuously serve the clients that we have. It’s just being done a little bit differently since everybody’s at home. But yeah, in order to get refunds, you should have to file. And we are in the process of doing that. So, from a huge meaning, I think the SBA loans and the CARES package was probably more meaningful than just the “July 15th” filing date. If you want to know the truth of the matter, well, that’s my opinion. That’s totally my opinion.

Mike Blake: [00:28:58] And I’ll say for an aside here, as a shameless plug, but as a semi-outsider because I’m not in the accounting side, my busy season is fourth quarter, not second quarter or first quarter. We’ve done a fantastic job, in spite of this disruption, getting through the workflow that we’ve had to get through. And my impression is that not only has our productivity not dropped, I think it’s actually improved. I don’t know if that sort of industry wide, but that’s my perception.

Tommy Marsh: [00:29:38] Well, and that’s great of you to say because your taxes in his fourth quarter of what you do. But at the same token, I’ve got to give it to our team here. Our leadership here, the managers and the offices, the the staff, the professionalism exhibited by our team has been second to none. And I’m sure CPA firms around the country feel the same way. But right now, our team is still taking phone calls, and e-mails, and production, and reviewing, and I’ll probably at least a handful of tax returns this afternoon and keep the ship going in the right direction. But I got to give it to our team, Mike. We have a great group of of team members here that carry the buckets of water uphill. So, I don’t get credit for that. The managers that put it in place get credit for it.

Mike Blake: [00:30:38] They’ve responded very well. And again, as a clause outside because I’m not doing that stuff, it’s been impressive. So, let’s touch upon this. What have you had to change? I mean, you’re still responsible for our office of 36 people. I know you want us to be safe. I know you want us to be engaged. We also still have a job to do. We still have the public trust to serve. We still have clients that got to get stuff done, especially ones that that have refunds, because they really need those refunds. How are you adapting to changing to this new this new reality?

Tommy Marsh: [00:31:27] Well, you know me pretty well, Mike. And you can tell I’m smiling when I say this, but when we sent our team—let me back up further than that. Even prior to sending our team to work from home, you were on the front lines of this, we were in the process of saying, “Hey, team members, with the Atlanta traffic, why don’t you work one day from home, and just stay in touch, and we’ll see how it works,” right? I mean, for an accounting firm or for me, that was a big change, right, because I’m old school, and let’s get in here, and let’s get your hours done, and the chargability, and all the things that go with that.

Tommy Marsh: [00:32:09] So, for me, personally, I believe sending everybody home has changed, I’m not going to say a lot. Maybe it changes the way I look at it because our team, given the chance to be professionals without being in the office professionally, they have risen to the occasion. So, from that aspect, when we sent everybody home that Monday, I got up on Tuesday, Mike, and the sky hadn’t fallen. I went to my car, the sky was still up in the sky. I couldn’t believe it. I figured we’d be all over the parking lot. But no, the sky did not fall with us sending everybody home.

Tommy Marsh: [00:32:51] Now, that’s a little tongue in cheek because as you know, Brady Ware takes great pride with our IT, and you can log in anywhere, and the things that we do. We were already ahead of the curve of that, in my opinion. But just from a from a leadership viewpoint, obviously, it’s been harder. As you know, if you’re here on a Friday, sometimes – and again, this is rumor – you may have a fireball Friday walking around. So, what’s happened? Rumor has it there may be some virtual happy hours. So, from a leadership viewpoint, what’s happening is, I believe, everyone is incredibly professional. I also believe from a leadership viewpoint that people, our team misses the social interaction of our office. And people are coming in. I’m actually at the office today. Don’t tell Governor Kemp. But I guess I’m essential, though. So, I guess I’m good there.

Mike Blake: [00:33:54] You are essential, Tommy.

Tommy Marsh: [00:33:56] Thank you, Mike. I appreciate that. And so, what’s happening is, I think, people are coming, and they’re missing the social aspect of it, but you still got to run a business, you still got to look at the timesheets, you still got to look at production, you still got to return emails. And we’re still doing the 101 stuff, and the blocking, and tackling that we we need to do in order to take care of our clients.

Mike Blake: [00:34:21] And you’re right about that social interaction. Out of the Atlanta office, at least, we’re doing a virtual happy hour on Friday. And last Friday, half the office participated, which was remarkable. All we were doing was staring at people on the screen. Even one guy who is on vacation dialed in. I mean, I I think we need to get him counseling, but the gesture was nice. You’re right. I mean, it does show that the team has some resilience because they do miss each other. And you do have people like me on one end of the spectrum that will wander into the office once every two weeks or so just to remind people that I need a paycheck. But then, you have other people that really like to be in the office and get a good vibe from there.

Mike Blake: [00:35:11] And this segue nicely to my next question. Maybe one of the lessons, one of the good things that’s going to come out of this is we realize the sky doesn’t fall. We realize that we have hired well. We’ve always thought we hired well. We always thought we hired people that we could trust to be adults. But now, it’s been combat tested and it’s been proven victorious. And one of the things we’ve learned is that we can do this and we don’t need to focus on butts and seats anymore so much as productivity, which can maybe unleash some other good downstream effects down the road.

Tommy Marsh: [00:35:50] I totally agree. I think Brady where can look in the mirror a little bit because as I advise my clients, “Hey, why don’t you use this time to look at your business and to look at what changes you need to make, so when you come out the other side, what did we learn from it? What decisions needed to be taking place to get us to the other side? As well as once we get to the other side, then  what kind of culture and firm can you improve upon in order to be a better firm?” And that’s what I’ve been telling most clients or all clients, “Hey, look in the mirror and look at your business to see what needs to happen.”

Mike Blake: [00:36:36] And that segues, I think, into maybe the most important question I have in this interview. One of my previous interviews with a gentleman out in Silicon Valley named Shane Metcalf, and he runs basically an employee engagement software firm out there in Silicon Valley. And the thing that struck me from that interview – we just published that by the way – was he immediately looked at or turned the conversation to, how are we going to be better after all of this? And true Silicon Valley perspective, it was, “Yeah, yeah, yeah, okay. We got the virus thing going on. It’s going to do its thing. It’s going to visit tragedy among people and families. And we’re doing the best we can. But from a business perspective, it’s also creating disruption, which also means that it creates opportunity.” Very Silicon Valley way of thinking, which I have now blatantly stolen from him because I think it’s the right way to think about it.

Mike Blake: [00:37:47] And I think you think about these things the same way too, right? You’re saying we’re going to come out of this. We don’t know when. We don’t know exactly how. Although I think companies should be planning now for what that looks like, what the restart process is. How do you think companies are going to — you can make this Brady Ware specific if you would like or make it more general. How do you think companies are going to be better? Or maybe how do you think you’re going to be better professionally from all this?

Tommy Marsh: [00:38:19] Well, great question. I’m one of the best tax guys in the city because every answer, it depends, right? So, you can always answer it that way.

Mike Blake: [00:38:29] You’ll make a great economist.

Tommy Marsh: [00:38:30] Yes, exactly. So, to me, it’s a two-step process. And the first step is that like what clients are asking me today, “Hey, what about this?” and “Hey, what can I change?” and “Hey, Tommy, I need your help.” Well, the reality is I took a real estate course at college and it taught me three things, right? Location, location, location, right? We all know that old real estate joke.

Mike Blake: [00:38:59] Yeah.

Tommy Marsh: [00:38:59] Well, what’s happening today is in the coronavirus environment is really it’s cash flow, cash flow, cash flow because we need to figure out the cash flow to get us to the other side. And part of that cash flow analysis is, what moneys do I have coming in. Whether it’s from sales, or SBA loans, or fat claim, or whatever you’re going to do, that’s the first aspect of it is to say, “Hey, what money do I have coming in?

Tommy Marsh: [00:38:59] The second tier is  typically—and again, every business is a little bit different, but a lot of our clients, one of their largest expenses is, obviously, salaries. So, do you rank your owner as number one and everyone else down to number 20 or whatever? And the theory behind it is, hey, if my sales have gone down 30%, do I need to look at 30% of my salaries? That is a question mark, by the way. It’s not a rule out there.

Mike Blake: [00:40:09] Yeah.

Tommy Marsh: [00:40:09] But once you look at it in good times. Mike, what happens? You don’t really address the problem employee. You don’t really hold them accountable like you should hold them accountable because things are good, and why do I have to rock the boat to a degree? Well, when things aren’t good, it is forcing people, companies to look at their business and make those tough decisions. So, once you do that, and you have to say, “You know what, my business is down 30%, I’ve got to get rid of 30% of my workforce in order to survive,” right? We’re trying to get the cash flow to get the other side. Then, at that moment, it’s really easy to let the problem employee go or the team member who really isn’t carrying the water uphill because it’s survival.

Tommy Marsh: [00:41:02] And then, the last thing is that once you do that, you analyze your overhead. And that’s a little bit easier approach because it’s easier to to tell the specialty water person that we can no longer use their services in the break room because it’s not essential. But once you do all of this, and you get to the other side, I believe all businesses are going to be stronger, including Brady Ware. Maybe we have work anywhere policies, maybe we only meet on Mondays, or Tuesdays, or something because it’s been proven if Brady Ware so far that we have a great professional staff without having to repeat all of. that.

Tommy Marsh: [00:41:46] So, to answer your question, what it’s going to look like? I don’t know, Mike, but what it’s going to look like they’re still writing the book while we’re reading it. But I think we’re going to come out the other end a lot stronger in leadership and more trustworthy. Not that we weren’t before, but we’re going to be more professional and let our team grow and blossom where they can grow and blossom.

Mike Blake: [00:42:11] Tommy, this has been a great conversation. We could easily have it go another hour. But I know you got a lot to do, and you got ants in your pants anyway. But if we haven’t covered something that somebody else had a question about or maybe they’d want to follow up on something that we have covered, is it okay if they contact you? And if so, how best can they do that?

Tommy Marsh: [00:42:35] Two ways. The first is  my e-mail address, which is tmarsh@bradyware.com. So, tmarsha@bradyware.com or my direct line is 678-350-9503. Please call.

Mike Blake: [00:43:03] That’s going to wrap it up for today’s program. I would like to thank Tommy Marsh of Brady Ware so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week or maybe even more frequently as we do these special episodes, but please to announce that when you’re faced with your next executive decision, you have clear vision when making it.

Mike Blake: [00:43:23] If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. That helps you will find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brandy Ware & Company. And this has been the Decision Vision Podcast.

Tagged With: Brady Ware, Brady Ware & Company, CARES Act, COVID-19, covid-19 crisis management, Michael Blake, Mike Blake, SBA, survive the Covid-19 crisis, Tommy Marsh

Decision Vision Episode 59, “How Do I Work at Home Effectively?” – An Interview with Shane Metcalf, 15Five

April 9, 2020 by John Ray

Decision Vision
Decision Vision
Decision Vision Episode 59, "How Do I Work at Home Effectively?" – An Interview with Shane Metcalf, 15Five
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how do I work at home effectively
Shane Metcalf, 15Five, and Mike Blake, Host of “Decision Vision”

Decision Vision Episode 59, “How Do I Work at Home Effectively?” – An Interview with Shane Metcalf, 15Five

Because of “shelter in place” directives, millions of employees are now working at home for the first time and asking themselves, “how do I work at home effectively?” In this edition of “Decision Vision,” host Mike Blake explores various aspects of this question with Shane Metcalf, 15Five. “Decision Vision” is presented by Brady Ware & Company.

Shane Metcalf, Co-Founder and Chief Culture Officer of 15Five

how do I work at home effectively?
Shane Metcalf, 15Five

Shane Metcalf is the Co-Founder and Chief Culture Officer of 15Five. 15Five is a leading provider of people management software that not only guides employee growth and development but empowers people to become their best selves. Through strategic weekly check-ins, 15Five delivers everything a manager needs to maintain visibility and impact employee performance, including continuous feedback, objectives (OKR) tracking, recognition, 1-on-1s, and 360° reviews. 15Five is a top-rated performance management software on G2 and has won top culture and workplace awards, including ranking #3 Best Workplace in the nation on Glassdoor. Over 2,200 forward-thinking companies use the solution to bring out the best in their people. To learn more, please visit: https://www.15five.com/.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions, brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Michael Blake: [00:00:22] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Michael Blake: [00:00:40] My name is Mike Blake, and I’m your host for today’s program. I’m a Director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like this podcast, please subscribe to your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Michael Blake: [00:01:05] This is the third of a sub series of topics regarding how to address the coronavirus process. And specifically, today, we’re going to talk about, really, sort of the front line end user, if you will, of remote work. And that is the employee themselves. We’ve had a show on managing cybersecurity risk by moving outside of the enterprise firewalls and into the home. And we’ve had a discussion on how to lead and manage teams remotely, but I think it’s important that we don’t forget about the fact that the vast majority of people who are impacted by working from home are the people who are actually doing the work themselves.

Michael Blake: [00:01:48] And as it happens, I happen to be somebody that’s been working from home more or less the last 10 years. So, from my perspective, I’m not necessarily noticing that much of a difference, but I know that from talking to other people and reading other people’s experiences, it’s actually been quite jarring. And I hope that this podcast will help serve as a field guide to help people make that transition more easily.

Michael Blake: [00:02:15] So, in spite of the fact that I’ve been working at home for a good amount of time, I certainly do not consider myself an expert on the topic. And as we always do in this podcast, we bring in an expert of our own. And joining us today is Shane Metcalf, who is the CEO and Co-founder of 15Five, which is a leading provider of people management software that not only guides employee growth and development, but empowers people to become their best selves. Through strategic weekly check-ins 15Five delivers everything a manager needs to maintain visibility and impact employee performance, including continuous feedback, objectives tracking recognition, one-on-ones, and 360 degree reviews. 15Five is a top-rated performance management software on G2, and has won top culture and workplace awards, including ranking number three Best Workplace in the Nation on Glassdoor. Over 2200 forward thinking companies use the solution to bring out the best in their people. To learn more, please visit www.15five.com. Shane, thanks so much for coming on the program.

Shane Metcalf: [00:03:19] Michael, thanks for having me. What an unprecedented moment we’re in. And I think that it presents a lot of real challenges. And I think it also presents real opportunities. And, fundamentally, I think that we, as a business community, we kind of need to take a note at Darwin’s book. We need to adapt. I think this is really happening. We don’t know how long this is going to be the case, but I do know that the world won’t be the same. Even if some of the social distancing protocols get lifted, and we’re able to return to offices. I really don’t think that we’re going to be seeing the world that we saw before.

Michael Blake: [00:04:00] So, before we get started, if you can comment because you’re in San Francisco, at least, the San Francisco area, and we’re in Atlanta. California is effectively on what we would consider a lockdown, is that correct?

Shane Metcalf: [00:04:13] Yeah, that is correct. Yeah, only essential businesses are open, and everyone is highly discouraged from leaving the house. So, yeah. I think we were in the first state in the nation to go towards this. And hopefully, it’s working. It does seem to be flattening of the curve.

Michael Blake: [00:04:28] So, from a personal perspective, what’s that like for you, sort of, day-to-day? Most of our listeners I don’t think are in California or, thank God, not in a lockdown state; although, we do have quite a few in Ohio because of our offices there. On a personal level, before we get into the interview, how are you dealing with that?

Shane Metcalf: [00:04:45] Yeah. Well, I have a somewhat unique circumstance. I, typically, would work in the office four to five days a week. And little contacts. So, 15Five, we’re a couple hundred people. And we’ve actually been a semi-distributed team from the beginning. We have about 50% of our people working out of offices in North Carolina, and New York City, and the Bay Area. And the other half are throughout different states and different countries in Europe. And so, in some ways, this has actually been a somewhat seamless transition for us because we already had the infrastructure and the mindset for working remotely. And I think that’s something that I’m going to get into because so much of working remotely, and being effective, and being a successful experience comes down to mindset shifts from both the employer and the employees. And for me, I was actually already at home for the last couple of months because I just had my first kid, and I’ve been on this blissful paternity leave. And I lead the company, and everything’s great, and I disappear, and the whole world falls apart. I’m like, “Man, I really should have stayed, I guess.”

Michael Blake: [00:05:51] Right. I leave for two months, and what happens.

Shane Metcalf: [00:05:54] Yeah, come on. But so, it’s an interesting one for me because there’s, of course, challenges and opportunities inherent to it for me because on the one hand, it’s really great because as I’m getting back to work, I get to stay home and spend more time with my daughter. I don’t have to waste the time of commute. I get to be there and help in between meetings. And on the other hand, that’s okay, not only am I not working from home, I’m also working from home with a kid and a screaming baby and all of the challenges that that presents. And so, it is a really fascinating balancing act. And I think that fundamentally, we need to have compassion and flexibility for all of each other right now.

Shane Metcalf: [00:06:39] And I’m speaking. A lot of my perspective is coming out as a founder, as an executive at a company that is leading and managing the team, but I’m also the employee. And really, I am more certain than ever that this is the opportunity we’ve been waiting for to bring those empathy muscles, those compassion muscles, that humanity that we have been talking about as an essential component to building great companies and to building great culture, this is the moment where the rubber meets the road because you look at Maslow’s hierarchy, everyone isn’t just focused on work right now. As much as we’d like to think that, “Okay, , great. Well, all my employees are now at home working,” and they just flipped off the humans switch and flipped on the employee switch. Now, people are are very concerned. They don’t know if they’re going to get laid off. They don’t know if the economy is going to recover. They don’t know if they have enough food. They are inundated with a lot of uncertainty right now. And so, we, as employers, can actually say, “Hey, we get it. We’re human too. And we recognize your humanity. And we’re in this together. And there’s space for all of it. And we can still be a high-performing team.”

Michael Blake: [00:08:00] Because there’s nothing quite like having to try to be productive when you’re literally in the middle of what might be a horror movie.

Shane Metcalf: [00:08:05] Yeah, you’re right. That doesn’t work. We need to actually — and that’s where I think companies can actually play a role is if you look at the triune brain, this idea that we have kind of three different brains. We have our reptilian brain, our mammalian brain, and our cortex, our human brain. And survival is happening in the amygdala, in the reptilian brain. And we need to recognize that, create a little space for people to have their feelings and to be seen in the process of this because when that happens, okay, cool. I don’t have to cover my ass and pretend that I’m not freaked out right now or pretend that I’m not like trying to jump, ditch out between meetings to run to Costco because I don’t have any toilet paper, And shit, there’s no more toilet paper at Costco. And oh, my God, what are we going to do? We need to have allowance for the entire human experience.

Shane Metcalf: [00:09:10] And there’s certain ways that I think we can actually structure that. But fundamentally, I believe that it starts with a shift in mindset where instead of making people earn trust, we grant people trust. We say, “We know what we need to accomplish as a company. I’m going to grant you the trust that you’re going to accomplish that. And I’m not going to be there looking over your shoulder. I’m not going to be checking your logs to see what you’re searching for on your computer, because that’s a big problem with people of the fear of allowing people to work remotely is, what if they don’t work? What if they just slack off? And that can be a corrosive to a remote culture.

Michael Blake: [00:09:58] Well, true; although, I would argue. I would argue that that attitude is corrosive, whether you have a remote working paradigm or architecture or not.

Shane Metcalf: [00:10:09] Absolutely, absolutely.

Michael Blake: [00:10:09] So, it’s just to amplified.

Shane Metcalf: [00:10:12] And that’s a cool thing is that, actually, this entire coronavirus thing is, it’s an opportunity for every single company in the world to upgrade their culture, to upgrade their value system, to upgrade the operating system with how they think about the people in their company, because you know what, this whole paradigm of human resources, just the words, my humans are our resources, they’re lumps of coal I’m going to throw in the furnace and get a little steam at it. And actually, we’re human beings. We’re fully fledged human beings with thoughts, feelings, emotions, fears, dreams, hopes, desires. And if we can start to actually recognize the humanity of our people in the workplace, pretty incredible things start to happen.

Michael Blake: [00:11:03] So, at the start of this conversation, you talked about the mindset. So, I’d like to start with that in terms of the formal kind of content here. And although it’s hard, I think it’s instructive. Put coronavirus aside for a second, because coronavirus or not, regardless of the circumstances, one day, you’re in the office; the next day, you can’t go in even if you want to. And you can’t go to Starbucks, you’re at home.

Shane Metcalf: [00:11:35] Well, lucky you if you can-

Michael Blake: [00:11:35] What mindset-

Shane Metcalf: [00:11:36] … go to Starbucks. Although, you can’t work at Starbucks.

Michael Blake: [00:11:39] Right. There, you can’t work there. Yes, you can get a coffee, right? But you can’t open up your laptop. I guess she could sit outside, but that would be weird. But talk about the mindset. As an employee, what is the mindset shift that you have to be prepared to embrace and pursue as you move from cubicle to home desk, or kitchen table, or couch, or wherever it is that you’re going to be working from?

Shane Metcalf: [00:12:05] Well, start by making a list of all the pros of working from home. Just get present to the reality of what the opportunity actually is. I don’t have to commute. I don’t have to deal with the crowded train. I don’t have to, you know, waste all that time. I get to not be less distracted. I have a higher chance of being able to enter deep, deep work flow states. I mean, open offices, it’s proven. It’s like they’re very economical, and they’re great for the social connections, but they are disastrous for deep work.

Michael Blake: [00:12:40] Right, they’re brutal.

Shane Metcalf: [00:12:41] Constant people flooding your space. And so, all of a sudden, “Ha! No one’s around. I can actually get some real work done.” And so, you have to make that list yourself. You have to personalize it. You have to look at, okay, look, this is a crazy situation, but what is good about this, and focus on the good. And then, the second thing is optimize your environment. Now, this is challenging. I mean, we have employees who — I have a — one of my guys is in New York City and in an apartment with three kids. A one-bedroom apartment with three kids or something. And there’s not really space for him to work at home. And so, those are challenging situations. And I have a lot of compassion and empathy for the people who don’t have home environments that are easily pivoted to being dedicated workspaces.

Shane Metcalf: [00:13:38] In those situations, I think that’s when you really want to start off utilizing technology – noise-canceling headphones. There’s a cool app that I’ve been playing around with, Krisp.AI. And it’s a noise canceling software. It’s not hardware, it’s a software that cancels all the noise coming from your background. Things like that are where you want to start optimizing the tools you’re using and the environment. For people who can create more of a home office space, optimize that. Create it. Put a little attention on it, clean it up, make it feel good. Our environment, that’s why we spend billions of dollars on designing cool office spaces is because our built environment affects our psychology. And so, don’t just neglect your home office.

Michael Blake: [00:14:35] There’s a variance in kind of cultural point, cultural in terms of American culture point that comes to mind just through this conversation. When I think Silicon Valley and I think California, I think of a mindset generally that looks at all disruption as an opportunity, right? And I don’t think everybody is necessarily hardwired for that. But I think it’s really interesting, the first words out of your mouth are not that this is going to be lousy but, rather, what is the opportunity this disruption provides? I think that’s really interesting.

Shane Metcalf: [00:15:11] Well, yeah. And I think that that’s part of what helps call the amygdala because we were in a fight or flight or freeze state, what we can start to do to shift, that is actually start focusing on what we’re grateful for. What is the positive element of that? And then, actually, start to change our brain chemistry. Now, know this from neuroscience, like, if you’re in a heightened state of survival, just saying, “I’m afraid, but I’m also grateful that I’m still alive,” or “I’m afraid that I might lose my job, but I also don’t know if that’s going to happen, and I’m grateful that I have a job right now,” it actually starts to change our neurology and opens up more creative thinking opportunities. And so, yeah. Look, this is an opportunity. I mean, there is an enormous hardship that we’re gonna be going through.

Shane Metcalf: [00:16:10] And what’s remarkable, it’s not just an American crisis. It’s not just an Italian crisis. It’s not just a Chinese crisis. It is a human crisis. I’ve never been alive in a time where all of humanity was experiencing the same collective crisis and that we actually took it seriously.

Michael Blake: [00:16:31] Yeah, nor have I. And I think you’d have to go back to the Cuban Missile Crisis. And that’s before, even a little before my time. But, yeah, I think you’re right about that.

Shane Metcalf: [00:16:39] And not just the potential of a crisis.

Michael Blake: [00:16:39] What-

Shane Metcalf: [00:16:44] And I mean, I do believe there is going to be enormous surge of companies that get created to fulfill the demands of this moment. And I mean, people are having to pivot their business models. And wait, this is more, I guess, from the entrepreneurial perspective, but there are enormous problems. And anytime there’s a problem, there are opportunities to build companies and products that service that problem.

Michael Blake: [00:17:13] What do you think is the most common misperception about working from home for somebody that hasn’t done it, really hasn’t experienced it? What do people perceive about working from home versus the reality?

Shane Metcalf: [00:17:27] Well, I think that people, when you’re confronted with that prospect of working from home that there’s gonna be no emotional connection to the other people in the company, that there’s not going to be any kind of the watercooler talk, just the random social interactions that really contribute to a sense of well-being at work. And now, that’s not necessarily the default, but what you can do is it’s not rocket science to start doing some social engineering to create opportunities for that kind of social interaction. Every Friday at our company, we do this thing called Question Friday. It’s never been more valuable. And what we do is we take a half an hour, everybody gets on a Zoom call, there’s a question master for the month, and they ask a kind of a random non-business related question, an ice breaker question. And then, we break out into Zoom rooms of 10 to 20 people each, and everybody goes around and answers.

Shane Metcalf: [00:18:28] And what’s so cool as you get this deep perspective. You learn about your colleagues at pretty deep levels. And all of a sudden, you’re actually having this human connection. And I would say that practice alone is one of the reasons why we’ve been ranked number three best place to work in the country by Glassdoor, that we do things to encourage the non-business-related human connection. And that’s more important than ever. We began all of our all-hands meetings with five minutes of every Monday, we do a five-minute gratitude meditation. Now, it’s not just immediately, “Okay, here’s the business numbers, people. Here’s how we’re tracking on our objectives.” That’s important too but, also, just a little little micro doses of connection that remind us that we’re actually all just human beings doing the best that we can.

Michael Blake: [00:19:28] So, you’re put in this position now as a remote worker. What of the most important habits that you need to focus on developing right away in order to make this a success?

Shane Metcalf: [00:19:40] Yeah. Well, look, don’t just throw your whole routine out the window now that you’re not coming into the office. Create a sense of, “Okay, great. Well, what’s my mornings look like? What does my morning practice look like? How do I get prepared for the day?” Don’t necessarily just wear sweat shirt, sweat pants, and t-shirts. Our clothing actually affects our psychology. So, put on a button up shirt, get dressed up, see how that actually changes your psychology around this. You want to ensure that there is an abundance of communication.

Shane Metcalf: [00:20:18] In the absence of information, people often go negative. When we aren’t hearing from each other, when we don’t know what we’re working on, without systems of accountability built in, it’s easy to just be like, “Oh, I don’t know if anyone is actually working.” And so, you want to create systems and processes that encourage an abundance of of good communication. And so, that’s where asynchronous check-ins come in, asking the questions like, “How are you feeling? What’s going well? Where are you stuck? What do you need help with?” is insanely valuable because it allows people to share their real experience and the truth of what’s actually happening for them – the wins and the challenges. And then, that allows for you to have really productive one-on-ones.

Shane Metcalf: [00:21:12] And I mean, also, I mean, there’s a lot of fundamentals. And what I would actually encourage our readers to do,w e just released an article that is everything we know about remote working, everything that we’ve learned in eight years of doing this and building an award-winning culture, and we’ve put that all into a pretty meaty medium article, and we can link to it in the show notes, but it has all of our best advice.

Michael Blake: [00:21:40] So-

Shane Metcalf: [00:21:42] Yeah. And other habits, I think that you want to engage in an appropriate amount of kind of — we use Slack and Zoom for everything. Like our three essentials are Zoom, Slack, and 15Five because that allows for video connection, which is really important, video over everything. Don’t minimize the phone calls. Turn on video for your calls. It’s really important to still see each other, to see that, yeah, I’m not just a disembodied voice. I’m actually the human. And the micro expressions that happen with the whole body. I mean, we know that something like 70% of communication actually happens nonverbally. And so, when we go virtual, we miss a lot of that. And video is the closest we can get to it until we have holograms or something.

Michael Blake: [00:22:37] Yeah, that’s a good point. Now, of course, one subtle but important difference in our current environment is that many remote workers didn’t necessarily work from home, right? And working from home is a subset of working remotely, but that presents its own kind of unique challenges, doesn’t it?

Shane Metcalf: [00:23:00] Yeah. Look, the home can be an non-predictable, and chaotic, and demanding place. I used to prefer not to work from home because when I work from home, it’d be like, “Oh, you know what, I got to take the trash out.” And my wife would be like, “Yeah, you’ve got to take the trash out, buddy.” I go, “I got to go do a little maintenance on that thing.” And there are a lot. There can be more distractions at home. And so, it, fundamentally, becomes also a process and a practice of self-discipline.

Shane Metcalf: [00:23:32] And so, if you can start to get clear, “Well, what does my ideal day of working from home look like?” and maybe that is that involves creating some — I don’t know if you can hear it, but my baby’s crying right now. And my kids are with my wife, and I can hear it, and I’m like, “Oh, man. Okay. I’m doing this podcast. And maybe the crying baby’s gonna get picked up by mic. And now, that’s on the recording of the podcast.” And you know what? I just have to be okay with that. Like we have to have a little more allowance for some of the unpredictable elements that get introduced to our business meetings. And being okay with a little bit more integration between the personal and the professional.

Shane Metcalf: [00:24:22] So, get clear on what you actually need to be productive at home. And part of this comes down to setting boundaries of saying, “Look, honey, I know that I’m home, but I’m not going to be able to help with the kids between these hours. Like, I need to go lock myself in the room and get into deep focus.” And so, personal discipline and boundary setting is more important than ever if we’re gonna be successful at working from home.

Michael Blake: [00:24:52] I think that boundary setting, I think that’s a really good point, that it’s worth pausing and spending some time on because it likely is also not going to be something that simply happens organically. If you just assume, “I’m gonna be okay, and the other person’s gonna be okay picking up whatever it is I’m not picking up. There’s no communication. That’s a recipe for disaster.

Shane Metcalf: [00:25:12] That’s expectations, which guarantee will lead to disappointment?

Michael Blake: [00:25:17] And I’m not putting myself in the position of a marriage counselor. I don’t want to put you in that position unless you want to. But it does sound to me like that needs to be a very intentional discussion in order for an arrangement to be tenable.

Shane Metcalf: [00:25:32] Yeah. Well, look, like at the office, we have, hopefully, a series of explicit agreements around how we’re gonna behave. If you’re going to go take a conference room, there’s usually a social agreement that you need to sign up for that conference room. Otherwise, there’s no guarantee you’re gonna get actually get it. There’s a social contract that you’ll clean your dishes after you use them in the office, things like that. There’s a multitude of agreements that we have in our working environments.

Shane Metcalf: [00:26:02] It’s no different at home. We need to take things out of implicit expectations and into explicit agreements with the other people that we live with or even with ourselves. Like I’m going to make an agreement that I’m not going to sleep in, and I’m actually going to get up, and I’m going to shave, and I’m going to get dressed, and I’m going to make my coffee, and I’m going to be sitting down at whatever hour, and start my day on a positive note.

Michael Blake: [00:26:35] So, one challenge, you sort of touched on this, but I want to hit it explicitly is, unless you happen to be like you or me, where we’ve had kind of this lifestyle for a while, your home isn’t set up to be an office, right? Like you said, homes are chaotic. And I think to my mind, my own personal experience, I never realized how chaotic home is until I actually worked here.

Shane Metcalf: [00:26:59] Yes.

Michael Blake: [00:27:01] You get a different perspective than if you’re just sort of home kind of part time, you sort of see how the sauces, and see all the answer [indiscernible], whatever analogy you want to have. So, I think many people then walk back into a chaotic environment. Are there any other tips you can think of that can help an employee kind of gain control over that chaos? You’ll never stamp all of it out but, at least, manage the chaos, so that you can get things done, meet your obligations professionally, and not lose your sanity.

Shane Metcalf: [00:27:38] Yeah. Well, look, I think that it starts with, well, what’s your vision for your home? I mean, this is a great opportunity for people to upgrade their home environments. If there’s a lot of chaos, well, what is controllable? Is it that you need to repurpose a room that’s, right now, used for something else and you say, “You know what, this is now my home office, and I’m going to paint the walls, and I’m going to go ask my employer if I can go steal a desk from the office and bring it home.”

Shane Metcalf: [00:28:09] And so, what you really want. Like, actually, open up in Word Doc, and write out a vision for what you want your home to look like, and what your experience of working at home can be. And then, come up with some strategies. Like vision and strategy. It’s no different than writing the business plan. Like, what’s the vision? What do we really want to create here? I want to have uninterrupted flow states at home. I want to feel good about the space that I’m in. I want a beautiful environment. I want to get the right technology. And then, my strategy is, “Okay, great. I’m going to go, I’m going to procure a desk. I’m going to borrow one from the office, or go get one myself, or order one. I’m going to set it up.” I mean, this this room I’m in, this is the first time I’ve set up. This is my home office. And I’m actually pretty stoked. I’m like, “Oh, wow, I’m digging this.”

Shane Metcalf: [00:29:08] And so, come up with this strategy. But again, work. Human beings are so incredibly resourceful and creative. And so, apply that, get to liberate because one of my big messages around culture is the culture happens regardless of whether you’re deliberate about it or not. And if you’re not deliberate about it, then it’s going to it’s going to reflect some of your worst unconscious habits and conditioning. If you’re deliberate about your culture, you have an opportunity to create something to reflect your highest values, your best self. And so, it’s the same thing with creating your home culture.

Michael Blake: [00:29:48] A great resource that if you need kind of ideas, and I have to confess, over time, I’ve become sort of addicted to this is, is there are desk setup tours you can see on YouTube where influencers talk about their workspaces, and they have envious — somehow you can’t see a cable, and I don’t know how they do that. They must spend weeks hiding cables, right? But they have beautiful spaces that are a joy to behold. And if you can kind of replicate that, it does become an island of serenity. You can get ideas through Pinterest as well, where people kind of put up their desks setups. And you don’t have to spend $25,000 to do that, but I’ve found that it does kind of give me some ideas in terms of placement and energy and-

Shane Metcalf: [00:30:32] All of that.

Michael Blake: [00:30:32] And even colors and lighting.

Shane Metcalf: [00:30:34] We don’t need to just be like, “Well, I’m working from home, so I’m going to just plop on the couch all day.” Actually, let this be inspirational. Get some inspiration. I love that. I’m probably going to, right after this, go look up to desk stories on YouTube. And yeah, like make this fun. I know that it’s hard to even think about fun right now, but if you can insert little bits of creativity, little bit of proactive creation, it goes a long way to feeling confident, and seeing the possibility in this crisis.

Michael Blake: [00:31:16] And it’s a sense of control, right? I mean, why are people buying toilet paper? They’re grasping for control. It’s not because we go to the bathroom more often, right? It’s a desperate attempt to grab control. And I found that if you can take this opportunity, as you’ve put it, to make a workspace kind of a home with a work home within the home, I found that helpful for myself as well, even though I’ve been doing this for a while, but as an opportunity to revisit this and kind of make it my own kind of mission control, it does give me some sense that I’ve turned this into an opportunity. So, I’ve taken command, at least, a little piece of the environment that I can control.

Shane Metcalf: [00:31:59] Absolutely, absolutely.

Michael Blake: [00:32:02] So-

Shane Metcalf: [00:32:02] The other thing I think that I want to mention, as an remote worker, I think that, often, the fear is will they know that I’m actually working? Do they trust that I’m being productive? And again, I’ll just reiterate that the communication, having some systems of structure and accountability that can create some transparency around what you’re working on really goes a long way for knowing that that you’re seen for the work that you are doing, and that’s where goal tracking, and check-ins, and things like that are super valuable in this process because you don’t just leave it up to chance whether your boss thinks you’re productive. You can actually communicate and demonstrate on a regular cadence.

Michael Blake: [00:32:57] I think one of the things that we touched upon is a little bit, but I think it’s important, one of the things that I think a lot of remote workers are now adjusting to, and myself included, because this has not been that big a part of the tech world, at least, where I am is webcams and video calls. And video calls have been the thing of the future since the 1962 World’s Fair with AT&T, and we’ve resisted, we’ve resisted. And now, everybody is now having to do it to some extent, right? It’s just unavoidable. And I think people feel a little bit uncomfortable. I don’t love it ’cause I consider myself very photogenic. So, I have to I have to kind of work on that emotionally. But as important now as those video cues are, we talked about dressing the part. You don’t just kind of walk around without pants, even if you’re just going to have a neck up view because you never know if you have to get up. And that could be uncomfortable for everybody involved.

Shane Metcalf: [00:34:06] Right.

Michael Blake: [00:34:06] What are the things you have to do to adapt to a video cam culture?

Shane Metcalf: [00:34:10] Yeah. Well, listen. Look, again, opportunity. This is a good chance to get better on video. This is a chance for all to work on whatever issues, whatever thoughts and things come up when we’re like, “Oh, I don’t really want people to see my house.” You know what? Clean your house up then. It’s like-

Michael Blake: [00:34:29] Yeah, you’re right.

Shane Metcalf: [00:34:31] It’s like uplevel your home experience. Comb your hair. And another really good trick is don’t just look at the face of the person on the video. Look at the camera.

Michael Blake: [00:34:43] Yeah, that’s hard. I’m struggling to do that right now because I have an over-sized monitor. But you’re right, it’s hard to do.

Shane Metcalf: [00:34:49] Yeah, it’s really tempting to think that I’m looking at you because it feels like I’m looking at you and I’m looking in your eyes. You’re not actually. Just practice looking at the camera when you’re speaking. And that can go a long way. And so, it’s these tricks of like, how do I actually turn this into a practice where I can get better at video? For personal use, I love the app, Marco Polo for mobile, and it’s just asynchronous video messages. And I love it because it’s great to stay connected with friends, but, also, it’s really good practice for how do you get better showing up on video?

Michael Blake: [00:35:30] Huh.

Shane Metcalf: [00:35:31] We all need to get really good if work — look, we know that communication, and presentation skills, and storytelling is one of the most valuable skills in business. We’re now entering a domain where all those things are still true, but we need to do it with the added complexity and added weight of transmitting that energy through video and audio. And so, it’s all just practice. Like we’re going to come out of the other side of this all way better at talking on video.

Michael Blake: [00:36:07] Yeah. And there’s good reasons to do that too. And it’s not just because more direct communication is going to happen on that but, also, video is becoming so important on social media now. And what some people do, I know that they’ve walked into this as rank amateurs but, now, they look like multi-million dollar productions out of the home studio.

Shane Metcalf: [00:36:28] Yeah.

Michael Blake: [00:36:28] And a lot of that, I think, is because, simply, they’ve practiced. How do you become a great chef? Make a lot of lousy food.

Shane Metcalf: [00:36:34] Yeah, right. Like, one time, a coach, and I was working with her on video, they’re like, “Look, the first hundred videos you make are going to suck. No way around it. But you got to do it. You’ve just got to put in the time, and put into practice, and look at yourself, cultivate a growth mindset around it, and just go forward. We can only go forward as a community. There’s no reverse. We need to just go forward. The past was what it was. And maybe we need to grieve the world pre-coronavirus. But then, we need to move forward. We need to pull up our big boy, big girl pants, and just accept that this is the new normal for now. And we don’t know. We don’t know how long. It could be summer. It could be next year.

Michael Blake: [00:37:25] So, what do you consider as kind of the most important tech that you can have in your house to give yourself or in your home to give yourself the best work-from-work experience and opportunity?

Shane Metcalf: [00:37:41] Well, I think that a good pair of noise canceling headphones is essential. Because of the chaos of home and same with an office, being able to block the world out and move into a more focused state whether with music or not, with music, with noise canceling headphones is really good. Zoom is awesome. Zoom, Eric Yu from Zoom is probably doing pretty well. And I’m sure Zoom is doing some pretty good business right now. And I know there’s some other video chat apps out there. We love Zoom. We use it. We’ve been using it for everything for a long time. And we’re continuing to use it for everything.

Shane Metcalf: [00:38:25] Slack or some other kind of chat app is really useful. And make it fun. Just stick to the facts. And that’s one of the big dangers of remote work, is that, “Okay. Well, I’m working remotely, so I just need to only focus on work.” No, bring in some of your personality. Throw in gifs, thrown appreciations, throw in just some of your own thoughts and reflections into channels like the Watercooler. We have a lot variety of channels in Slack. We have a gratitude channel where people just go in and post what they’re grateful for that’s connected to the Monday gratitude meditations that we do. The pets of 15Five, we have. And nothing is better than going and looking at your colleagues’ dogs and cats and goats. We have some goats in the family, which is pretty cool.

Shane Metcalf: [00:39:17] Okay, Zoom, Slack. And then, it’s not just a pitch of our product, but we really do rely on our own’s platform for the more structured asynchronous communication. Getting an insight into what’s really going on with people and being able to ask questions. Like I can go in, and I can ask a question for all 200 people in my company of, what are your biggest concerns around coronavirus. In a week or in a couple of days, I get all of the answers. And as the Chief Culture Officer of the company, I get to go through, and I get to read those, and I get to respond to them, and I get to have unparalleled access to the heart parts of my people, and what’s really going on, and figuring out how to problem solve, and how to be of service, and how to contribute to people that are struggling right now.

Shane Metcalf: [00:40:11] And then, another really important piece in in this moment right now is let people know they’re appreciated. We have a tool called High Fives in our app where every week, you’re prompted to give people high fives for contributions they made to you and for things that they did. And building that culture of gratitude and appreciation is the antidote to a culture of fear and stress.

Michael Blake: [00:40:44] The other benefit to headphones too is psychological. When you wear them, people are less inclined to bother you.

Shane Metcalf: [00:40:53] Yes, absolutely. It works.

Michael Blake: [00:40:55] Even if you don’t even have them turned on, people, there’s a barrier. Some people are happy to cross a barrier, but it does sort of preclude a lot of would-be interruptions.

Shane Metcalf: [00:41:06] I wonder if that holds true for spouses. If the spouse just doesn’t see that barrier.

Michael Blake: [00:41:12] Well, not not as much. And that’s the one issue I have with noise canceling headphones at home because if she is trying to get a hold of me, and I’m not hearing her, and she has to come down two floors to come find me, the cure may be worse than the disease in that particular case.

Shane Metcalf: [00:41:28] Yeah. I’ve been having that same thought of like I’d love to put on my headphones right now. But then, I’m not going to be able to hear the baby cry while mom is trying to get some R&R. Then, I’m going to be in trouble. So, I’m going to just go with low volume air pods today.

Michael Blake: [00:41:42] Yeah, I think you have to live with that. That’s good. I know you’re a rookie father, but you’re obviously catching up quickly. So, good for you. Any other advice you could offer that we haven’t covered yet? I want to be respectful of your time. So, we only have another couple of questions ago.

Shane Metcalf: [00:41:58] Well, listen, I think that we do need to be looking at the opportunities here that, yes, this is a very serious crisis that humanity is facing, and there is opportunity to upgrade the operating system. We can build healthier cultures where we’re valued and respected as human beings, not just as resources. We can build cultures where we grant trust and freedom; where instead of saying you need to be in the office all the time, we’re saying, “Hey, actually, as long as you’re getting your work done, we’re going to loosen some of the chains around how and when you need to work. We’re going to start granting more autonomy.”

Shane Metcalf: [00:42:44] And if you look at the research on the difference between intrinsic and extrinsic motivation, one of the highest intrinsic motivators is autonomy. It’s feeling like I’m being given the autonomy to get the job done in the best way that I see fit. That doesn’t mean that we can’t get coaching, and support, and that accountability, but if we were never given autonomy, were leaving money on the table. And look, like, it’s not like there isn’t room for improvement in the global workforce. 70% disengagement. What if this is one of the things that we discover is, actually, we can start to flip that. So, it’s 70% engagement. That’s our vision of the world is that companies start to seek out building high performance by helping people become their best selves, by tapping into intrinsic motivation, by tapping into psychological safety. Yeah, I mean, that’s a whole other conversation that we need to be having right now is, how do we create high psychological safety amidst times of great uncertainty?

Michael Blake: [00:43:56] Shane, this has been great. It’s terrific to have an opportunity to have an expert of your profile here on this program. I’m sure people have a lot of questions we have not been able to cover. How can they contact you if they want some more advice? Maybe they just want to learn more about your 15Five platform.

Shane Metcalf: [00:44:16] Yeah. Well, listen, you can go to 15Five.com. That’s 15Five.com. You can also check out the resource, the medium article, where we lay out everything we know about remote working. It’s a 37-minute read. It’s not a snack, it is definitely a meal, but it really gives you a ton of our best practices for building high-performing remote teams. Follow me on LinkedIn too. I’m pretty active on LinkedIn. I’m posting videos and content there pretty regularly. That’s the best place to find me.

Michael Blake: [00:44:52] Well, that’s going to wrap it up for today’s-

Shane Metcalf: [00:44:54] One other thing. We are giving away 15Five to two teams of under 50 people until, I think, some time something like mid-June or something. We want to support people in this transition. And so, we are giving the product away for free for now.

Michael Blake: [00:45:12] Okay. Well, I might check that out. Our Atlanta office has exactly 39 people. So, we’ll qualify for that.

Shane Metcalf: [00:45:18] Excellent. Excellent. Yeah. Well, and I’d love to hear what you think because part of how we’re also thinking about this is, “Okay, cool. We know that our platform supports virtual teams really well. But how can we innovate? How can we listen to what is needed? And then, build products and services.” And that’s what I think everyone should really be thinking about. Don’t just operate on the same mindset that you were two months ago. Think about what has changed. How can I actually create value for this new world that we’re in?

Michael Blake: [00:45:56] So, that’s going to wrap it up for today’s program, I’d like to thank Shane Metcalf, who’s Chief Culture Officer – I said Chief Operating Officer before. That was a mistake – Chief Culture Officer and Co-founder of 15Five so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week. So, please tune in, so that when you’re faced with your next executive decision, you have clear vision when making it. If you enjoy this podcast, please consider leaving a review at your favorite podcasts aggregator. It helps people find us, so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision Podcast.

Tagged With: Brady Ware, Brady Ware & Company, Michael Blake, Mike Blake, Shane Metcalf, work at home, work at home effectively, workplace culture

Decision Vision Episode 58, How Do I Manage My Work at Home Employees? – An Interview with Bruce Tulgan, RainmakerThinking

April 2, 2020 by John Ray

manage work at home employees
Decision Vision
Decision Vision Episode 58, How Do I Manage My Work at Home Employees? - An Interview with Bruce Tulgan, RainmakerThinking
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manage work at home employees
Bruce Tulgan, RainmakerThinking, Inc.,

Decision Vision Episode 58, How Do I Manage My Work at Home Employees? – An Interview with Bruce Tulgan, RainmakerThinking

The question of “how do I manage work at home employees?” has suddenly been thrust upon them of the workplace disruption caused by the coronavirus pandemic. In this edition of “Decision Vision,” host Mike Blake explores various aspects of this issue with Bruce Tulgan, RainmakerThinking. “Decision Vision” is presented by Brady Ware & Company.

Bruce Tulgan, RainmakerThinking, Inc.

manage work at home employees
Bruce Tulgan, RainmakerThinking

Bruce Tulgan is an adviser to business leaders all over the world and a sought-after keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerLearning, an online training resource. Since 1995, Bruce has worked with tens of thousands of leaders and managers in hundreds of organizations ranging from Aetna to Wal-Mart; from the Army to the YMCA. Bruce is the best-selling author of numerous books including Not Everyone Gets a Trophy (Revised & Updated, 2016), Bridging the Soft Skills Gap (2015), The 27 Challenges Managers Face (2014), and It’s Okay to be the Boss (Revised & Updated, 2014). Bruce lectures at the Yale Graduate School of Management, as well as other academic institutions. He has written for the New York Times, the Harvard Business Review, HR Magazine, Training Magazine, and the Huffington Post.

Since 1995, Bruce has worked with tens of thousands of leaders and managers in hundreds of organizations. In recent years, Bruce was named by Management Today as one of the few contemporary gurus to stand out as a “management guru” and he was named to the 2009 Thinkers 50 Rising Star list. On August 13, 2009, Bruce was honored to accept Toastmasters International’s most prestigious honor, the Golden Gavel. He lives in New Haven, CT with his wife Debby Applegate, Ph.D., who won the 2007 Pulitzer Prize for Biography for her book The Most Famous Man in America: The Biography of Henry Ward Beecher (Doubleday, 2006).

For more information, you can follow Bruce on Twitter or go to the RainmakerThinking website.

Michael Blake, Brady Ware & Company

Mike Blake, Host of “Decision Vision”

Michael Blake is Host of the “Decision Vision” podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

“Decision Vision” is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the “Decision Vision” podcast. Past episodes of “Decision Vision” can be found here. “Decision Vision” is produced and broadcast by the North Fulton studio of Business RadioX®.

Visit Brady Ware & Company on social media:

LinkedIn:  https://www.linkedin.com/company/brady-ware/

Facebook: https://www.facebook.com/bradywareCPAs/

Twitter: https://twitter.com/BradyWare

Instagram: https://www.instagram.com/bradywarecompany/

Show Transcript

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions brought to you by Brady Ware & Company. Brady Ware is a regional full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:25] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ respective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:43] My name is Mike Blake and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols. If you like this podcast, please subscribe on your favorite podcast aggregator, and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:10] So, this is the second of a sub-series of topics regarding how to address the coronavirus crisis from the executive decision makers’ perspective. And in our last discussion, we heard from Justin and Jody Daniels, who talked about the unique challenges that we confront in terms of data security and privacy when we move en masse to a remote working environment. And today, we’re going to move to the issue of management and leadership itself from a remote management environment.

Mike Blake: [00:01:46] So, full disclosure, I’ve been working largely from my home for the last 10 years or so. So, as it turns out, I’m kind of used to this thing. This whole virus has forced me into something that I would prefer to do anyway. The one thing that I had to learn as I did this is I learned that I had—not just to work differently, but you also have to manage differently and lead differently because that physical space means something.

Mike Blake: [00:02:17] The technology that has evolved over the last 25 years that enables us to work well remotely is of a blink of an eye in comparison to the evolution of humanity that makes us want to be together in the same cave, in the same herd, in the same hunting group, in the same tribe that makes us work together, build together and grow together. And if you are somebody who is suddenly thrust into the necessity to manage teams remotely, maybe you’ve even been opposed to them, maybe you’ve been a person that really has believed in face time, and you’re a person that really thrives on that needs, that craves, that personal connection.

Mike Blake: [00:03:04] With all that’s been written to tell employees how they can transport their jobs home, I don’t think enough attention is given to the managers and leaders that suddenly have to figure out how to lead when they can’t even, in many cases, see the faces of the people that they’re leading and don’t have the same nature of contact. So, I think this is a very interesting topic. We’re going to get into the weeds here. And I hope that if you’re in the position of being a manager or leader that is thrust into this unprecedented scenario, that this topic is going to be helpful.

Mike Blake: [00:03:42] So, joining us today is a great expert on this topic. Bruce Tulgan is CEO of Rainmaker Thinking, a research, training and consulting firm in New Haven, Connecticut and Rainmaker Learning, an online training resource. He is internationally recognized as one of the foremost experts on leadership and performance management in the workplace. Bruce is the author or co-author of 20 books, including his best-selling It’s Okay to Be the Boss, The Classic Managing Generation X, that’s me; his popular, Not Everyone Gets a Trophy, How to Manage the Millennials, and The 27 Challenges Managers Face: Step-by-Step Solutions to Nearly All of Your Management Problems.

Mike Blake: [00:04:23] His newest book, The Art of Being Indispensable at Work is due for release in the summer of 2020 from Harvard Business Review Press. Bruce’s work has been the subject of thousands of news stories around the world, and he has written for The New York Times, USA Today, Training Magazine, HR magazine and the Harvard Business Review. Bruce also lectures regularly at the Yale School of Management and other business schools. Bruce holds a six-degree black belt, and I hope I’m pronouncing this correctly, in Uhuru Karate.

Bruce Tulgan: [00:04:52] Yeah, you can just say karate.

Mike Blake: [00:04:53] Okay. Making him a master in that style. Interestingly enough, his wife, Debby Applegate, won the 2007 Pulitzer Prize for her book, The Most Famous Man in America about the 19th Century Mr. Henry Ward Beecher. Bruce, thanks so much for coming on the program.

Bruce Tulgan: [00:05:11] Well, thanks so much for having me. That’s quite an introduction. Thanks for mentioning my latest book.

Mike Blake: [00:05:18] Well, you know, I have some books in me that I need to get out. And I’m so admiring of people who have managed to do that. And I think a lot of that is ruthless time management. And we’ve actually had somebody come on the podcast, be ready, talks about should I write a book, how to do it, et cetera. So, I won’t pepper you with questions that are off-topic about that. But I must express that the fact you’ve been able to create so much thoughtful content, well done to you, sir.

Bruce Tulgan: [00:05:47] Well, I’m doing my best. If anyone who wants to write a book, I always recommend, our agent has a great book called Thinking Like Your Editor. Her name is Susan Rabiner. That’s a book worth reading.

Mike Blake: [00:05:59] And I’m going to make a quick note of that, so everybody on the podcast world can just wait for a second. I’m going to write that quickly. There you go. So, before we get started, I’m curious, you’ve created so much content, you have a book that, is it coming out later this year? Yeah.

Bruce Tulgan: [00:06:21] Yeah. It’s coming out-

Mike Blake: [00:06:21] Due later this summer.

Bruce Tulgan: [00:06:22] It’s coming out in July if there’s still a world.

Mike Blake: [00:06:26] Oh, there will still be a world, whether anybody reason it or not, we’ll see, but there’ll be a world for sure. But my question is, what do you think the next book after that will be?

Bruce Tulgan: [00:06:37] Well, I’m not sure. You know, the book that’s coming out in July, it’s called The Art of Being Indispensable at Work, and it’s about how to handle the incredible pressure that everybody has been under. Everyone’s been so overcommitted, scrambling and trying to manage relationships up, down, sideways and diagonal. That’s what the book is about. And we’re always doing research on the front lines in the workplace, and we’re always trying to figure out, you know, what can we glean from the research that could be a value add for folks. So, I’m not sure what will come next.

Mike Blake: [00:07:17] Okay.

Bruce Tulgan: [00:07:17] Maybe How to Manage Remotely.

Mike Blake: [00:07:21] Maybe. I have a feeling that book would do very well.

Bruce Tulgan: [00:07:24] Yeah.

Mike Blake: [00:07:24] So, we’re all sort of sailing along and all of a sudden, we have run into a hurricane that nobody really—I guess some people saw it coming, but most of us sort of person on the street really didn’t see it coming. I don’t think we saw it getting to this point. How do managers themselves ground, right? Because if if you’re freaking out, if you’re losing it, it’s really hard to lead others and be a source of stability and safety unless you, yourself, ground, right? So, how do you do that when you feel yourself like you just want to throw your hands up and run in a circle screaming?

Bruce Tulgan: [00:08:02] Yeah, I think you’re—that’s very true what you’re saying. You know, I always say to people the first person you have to manage every day is yourself. And sometimes, when we’re doing leadership seminars, you know, it takes a little while for somebody in the room to have the guts to say what you just said. Because that’s the sort of acknowledgement of the human element. You know, people are feeling so out of control right now. When you’re operating in an environment of uncertainty, it’s really a feeling of a lack of control.

Bruce Tulgan: [00:08:40] And so, what I always say to folks is, remember, if you focus on what you can’t control, then you render yourself powerless by definition. So, the first thing you have to do is focus on what you can control, and that’s you, and try to help your people stay focused on what they can control, and that’s them. But I think the most important thing is to be authentic, and don’t pretend. It’s natural to be worried right now. It’s natural to be uncertain. It’s natural that people are feeling out of control. But it’s also the case that somebody has got to be in charge. In this case, that’s you, and people need you now more than ever.

Mike Blake: [00:09:27] Yeah. And there’s no playbook for this, right? There’s practically nobody alive who remembers the influenza outbreak of 1918, right? And certainly, nobody in a decision-making capacity. And, you know, I want to ask you about 2008, and even back to 2000 with the first dot-com crash. What are the parallels with then and now? And then, what’s also a difference?

Bruce Tulgan: [00:09:56] Yeah, I mean, the parallels, of course, are that people are genuinely worried about their livelihoods. If you remember the ’90s, as you and I do, maybe not everyone listening, some people are in the third grade or whatever.

Mike Blake: [00:10:09] They’ve read about it.

Bruce Tulgan: [00:10:10] Right. But back in the ’90s, you know, it was peace and prosperity, magical business models, a foosball table in every teeming space, remember? And then, all of the sudden-

Mike Blake: [00:10:22] The classy office space in Manhattan, that’s what I remember.

Bruce Tulgan: [00:10:25] Right. And then, you know, everything’s going to be great. And then, no. Boom. All over. Never mind. Crash. Everything’s terrible. And then, quite literally, crash because, you know, 9/11 followed right on that. And so, for a long time, I mean, I think 9/11 is a better parallel just in the economic crash because people were so scared. You know, an economic crash is frightening. It has a huge effect on people. You know, some people, they live paycheck-to-paycheck. Many people do. They’re worried about feeding their families. What am I going to do? And so, not to minimize the concerns about economic frailty, but I think, you know, after 9/11, people thought, “Well, gee, are terrorist attacks going to happen all over the place now?”

Mike Blake: [00:11:22] Yeah.

Bruce Tulgan: [00:11:22] Well, I can remember the anthrax scare happened shortly after that.

Mike Blake: [00:11:27] Yeah.

Bruce Tulgan: [00:11:27] And so, when people are genuinely afraid for their safety and the safety of their loved ones, I think, you know, it’s more like a war, but it’s like a neutron bomb, right? Because it’s just poison. And so, 2008, ’09, ’10, I mean, it seemed like, gee, maybe we’re heading for another depression. But of course, it turned out that the economic system was more resilient with the help of a government bailout. And of course, now, the government has all of a sudden found a couple of trillion dollars that didn’t—you know, there it is, yeah, here we go. No problem. Here’s a couple of trillion dollars.

Bruce Tulgan: [00:12:18] But the problem now is that it’s not just financial. I don’t think anyone’s ever seen anything like this. I mean, I don’t know what to do. And so, what I’m doing is every single day, I’m thinking, okay, how can I make myself stronger? How can I make my mind stronger? How can I make my body stronger? How can I make my spirit stronger? And then, what can I do to add value for someone else? And first and foremost, what can I do to add value for my family?

Bruce Tulgan: [00:12:54] Second, what can I do to add value for my team, the people who are part of my business who rely on me? And then, what can I do to add value for my clients who rely on me for advice? And, you know, every day, that’s what I’m trying to do. I’m just trying to focus on what I can control and what I’m trying to help my team focus on what they can control. And that’s the advice I’m giving to my clients is, what is not going to change your mission and your values? And what can you control today? You set yourself up for success and set your people up for success. And I don’t know what else we can do.

Mike Blake: [00:13:49] I think you’re right. I think that the ’01, September 11th is actually a more apt analogy because there’s an ambient fear. There’s an environment around that is not just economic, and at least there for a week, everybody, everything sort of shut down, right?

Bruce Tulgan: [00:14:10] Right.

Mike Blake: [00:14:10] And we had to—everything was outside of our comfort zone. It wasn’t just being unemployed. It was everything, how to keep yourself safe, right? And now, we’re outside of our comfort zone because we’re probably having to take care of ourselves medically in a way that we might not necessarily do. In my case, I have a nine-year old, so I have to learn how to home-school on the fly, and his teachers need to learn how to home-teach on the fly. And I have team members that have home-schooling obligations now, and I’m trying to balance that.

Mike Blake: [00:14:48] And you’re right. I think there is that difference, and at least one way I respond to it is I try to keep a wave of empathy up as much as I can. I don’t know if that’s the right thing. I’m curious if you agree with that, but everybody right now is frazzled, and we’re only one week into this in most states. If this continues through Easter or later, I’m not sure that I agree this is going to be over by Easter. People are going to get frazzled and frayed and really stretched to their limits and they’re going to rely on us more than ever to be that rock of stability.

Bruce Tulgan: [00:15:26] Yeah. I mean, I’m glad you used the term empathy. I think sympathy and empathy are both—you know, I’m somebody who often tells business leaders, look, it’s not your job to be somebody’s pastor, their best friend, their therapist, and you’re not qualified to do that. But wow, this is really bringing the human element to the fore in a way that is different. When I’m out, I was out yesterday running in the neighborhood. And, you know, it’s so odd.

Bruce Tulgan: [00:16:05] You see people out there, they cross the street, you know, and if they don’t, then you cross the street or I cross the street like you don’t—you know, when you look at them and you sort of nod and smile, and then nobody takes offense, it’s just sort of, yeah, wow, you’re out here being a human being and we better steer clear of each other, and it’s just so peculiar. So, I think, you know, I say that because I was trying to think of my own moments of empathy in the last 24 hours, and I had that gut feeling of yeah, of course, you’re crossing the street because you don’t want to be infected by it.

Mike Blake: [00:16:49] Or they don’t want to infect you.

Bruce Tulgan: [00:16:51] Right. Right. Right. Exactly. Exactly. Exactly.

Mike Blake: [00:16:54] So, now, this environment as a manager and as a leader particularly remotely, does that force us to kind of change our priorities, right? I think you’re an advocate of something called a stop, start and continue list, which I think is a priority set.

Bruce Tulgan: [00:17:12] Right.

Mike Blake: [00:17:12] How do you reformulate that, you know, now that the martini’s been totally shaken?

Bruce Tulgan: [00:17:18] Yeah. I mean, well, one of the things that I’ve been doing is looking at our research on organizations where uncertainty is a regular part of their day-to-day routine. So, we may be facing uncertainty today in a way on a wholesale level that none of us are accustomed to. But there are a lot of people who, what they do for a living is they manage uncertainty. And so, the sort of pillars are every day, you say, all right, what are our anchors? What’s never going to change as far as we can tell?

Bruce Tulgan: [00:17:52] And then, what’s changing right now? And how do we adapt? And the way we adapt in the moment is, what are we going to stop doing? What are we going to start doing? What are we going to continue? And it’s just a very quick reset in terms of your daily execution priorities. And, you know, in downtime, what organizations do and what people do who have to be accustomed to uncertainty, in downtime, what they do is they try to anticipate contingencies and prepare for them and prepare their people for them and even scrimmage or drill on those contingencies.

Bruce Tulgan: [00:18:37] But what most uncertainty masters know is that they’re going to run into things they didn’t anticipate. So then, they extrapolate from that stuff. But, you know, it’s one part anticipate and prepare. And it’s one part adjust in the moment. And adjust in the moment, it’s like today, what are we going to stop doing today? What are we going to start doing? What do we need to continue? And how do we proceed on that?

Mike Blake: [00:19:13] And part of that adjustment, too, is it also kind of understanding part of that empathy, I guess, but also understanding that the employees are undergoing massive adjustments, too? Learning how to work—you know not everyone wants to work from home. Not everybody is in a great environment to do that. You may have an employee that is great at work, but then they go home and they’re a young married couple with a kid in a one-bedroom apartment, and then trying to work in that environment, right? I mean, you can imagine how emotionally and intellectually challenging that is. I think we kind of have to make leeway and allowances for that, too, right?

Bruce Tulgan: [00:19:54] My advice there is a blanket fort.

Mike Blake: [00:19:58] For you or the kid?

Bruce Tulgan: [00:19:59] Well, yes. But, you know, I often joke that, you know, people until recently, they want to work from home because the dog gets lonely at home and they want to be there with the dog or, you know, the kid or whatever it is, they want to be able to do their laundry. You know, some people, they’re accustomed to having a routine for working at home. But what I always tell managers is yeah, you need to manage yourself. You need to figure out what your routine is going to be, and then try to talk through with your people, “Hey, what’s your routine going to be?” And you have to be a little bit careful because, you know, some people will be—they think it’s a snow day.

Mike Blake: [00:20:51] Yeah.

Bruce Tulgan: [00:20:52] So, we’re just on hold. And so, you have to talk him through that. No, we’ve got to stay focused. We’ve got to get stuff done every day. And it may be very different stuff than what we’ve been getting done in the past. Some of it’s going to continue. There may be new stuff we have to do. I mean, I’m in the business of going around to auditoriums packed full of people and speaking from a stage. I saw hot air to rooms full of people. You know, how’d you like to be in that business, right?

Bruce Tulgan: [00:21:28] So, you know, okay, we need to get really good at doing webinars, I guess. And so, that’s something we’re going to start doing. What am I going to stop doing? Going to the airport, at least for a while. What am I going to continue doing? Interviewing people, studying the data, trying to glean insights and trying to find good ways to share those insights with our clients. So, everybody, that formula is going to be different for everybody.

Bruce Tulgan: [00:21:58] But I think one of the common denominators that we’re all grappling with is doing this in our shelter in place. And as you say, some people, their shelter in place is more amenable or less amenable to work. You know, look, even—the reality is a lot of people in the workplace, they get interrupted all day long. A lot of people in the workplace, they don’t have a moment for focused execution. I mean, some people come in at 5:00 a.m. or they stay into the night or they say, “When I go home, it’s the only time I get stuff done.”

Mike Blake: [00:22:32] Right.

Bruce Tulgan: [00:22:35] So, whether you’re in the workplace or at home, you need to set yourself up for success. That means every day, you need to choose your execution priorities. It means you need to make time for structured communication. Who do I need to talk with today? It means you need to have good conversations and document those conversations. And you need to make time for focused execution, for getting stuff done. And that’s true whether you’re a leader, manager, supervisor or whether you’re an individual contributor.

Bruce Tulgan: [00:23:11] But if you’re a leader, manager, supervisor, then other people are looking to you to make decisions. Other people are looking to you to help set priorities. Other people are looking to you to solve the resource needs. Other people are looking to you to problem-solve. Other people are looking to you for guidance and direction and support. So, you know, I think leadership matters. And I think it’s a contact sport. And boy, it just got a lot harder because the only points of contact now we’re going to be through Facetime or email or telephone.

Bruce Tulgan: [00:23:56] But, you know, as you say, empathy, you’ve got to put yourself in the position of the people who are counting on you and try to ask them, “Hey, you know, do you have the space where you can work? Do you have a routine? How are you going to set your hours?” You’ve got to give people some real flexibility. “When are you going to do your job? How are you going to do your job? You know, what challenges are you facing? What do you need from me?

Mike Blake: [00:24:27] Yeah. And I think that last point, you know, I think, resonates because that puts you in a position of being a resource, which in my view, philosophically, is the role of a leader is to be a resource. And in that vein being a resource, you touched upon this a little bit, but I do want to hit this, some people are going to handle this environment better than others. Some people are going to have a really hard time simply being cooped up. Some people are going to have a hard time being cooped up with their family. Some people are going to have a hard time just simply having the background noise and a running tally saying, “Five more people got infected, one more person died”, right? And so-

Bruce Tulgan: [00:25:13] You know, that’s so true.

Mike Blake: [00:25:16] It’s like-

Bruce Tulgan: [00:25:16] That last part-

Mike Blake: [00:25:17] … living in a horror movie, isn’t it?

Bruce Tulgan: [00:25:19] Right. It’s like a movie.

Mike Blake: [00:25:22] Except there isn’t some closet that you know that you shouldn’t open. That’s the problem, right?

Bruce Tulgan: [00:25:29] Yes.

Mike Blake: [00:25:29] So, some people are going to handle that better than others. And when people are going to handle it as well, it doesn’t make them bad, that just makes them human beings. Not everybody was born to serve in a nuclear submarine and be in a two-year mission under the Arctic Circle for a while, right?

Bruce Tulgan: [00:25:43] That’s for sure.

Mike Blake: [00:25:44] But in spite of the fact that, you know, we’re not meant to be their advisers, their best friends, their pastors or counselors, we are going to have more contact probably with our teammates and most of the outside world well. And so, does that give us as leaders and as managers a special responsibility to kind of be on the lookout for signs that somebody may be weathering the storm not as well as others? And if so, is there something that we can do to inquire and offer a hand without being intrusive? Does that question make any sense at all?

Bruce Tulgan: [00:26:21] It does. I mean, look, this is true. If the person’s in the cubicle next to you, you look at somebody and they look tired or they look bad or they look scared or they look, you know—and you have to want this fine line of being human and being prepared to make accommodations for people if they need them, but also recognizing that, you know, some stuff is none of your business, and you’re not qualified to deal with that. I mean, look, one of the things I say to business leaders is, sure, if you can see that somebody is struggling personally, the question you have to ask yourself is, do you have resources to make available to that person? Now, sometimes, you are that person’s friend. My view is if you’re somebody’s boss, and you’re also that person’s friend, that’s a complication that you have to navigate.

Mike Blake: [00:27:18] Yeah.

Bruce Tulgan: [00:27:18] And so, maybe what you say is, “Hey, after work, let’s go out for a soda.” Right now, it’s after work, “Let me call you and we’ll have sodas in our remote locations and talk about it”, or something. But somehow, to try to recognize that it’s a different role. Being your friend is a different role than being your boss, being your leader, your manager, your supervisor. And I agree with you. Being a resource is a big part of it.

Bruce Tulgan: [00:27:49] Look, I mean, what a lot of managers are worried about right now is not necessarily the emotional well-being of their people. It’s gee, they’re at home, well, how do I know they’re working? And that’s the other side of the equation. It’s like the policing part. And I always say to leaders, look, you know, if somebody’s sitting in a desk during certain hours where you can see them, that’s place and time.

Bruce Tulgan: [00:28:18] That’s actually a lazy measure of performance, that if you’re a good leader, manager, supervisor, you shouldn’t drill them down anyway, and, you know, figuring out if they know what to do, if they know how to do it, if they’re producing, if they’re getting stuff done at a good rate of productivity, if they have good quality, you know. And so, if you’re in a remote location, you can’t see the body in a chair during certain hours.

Bruce Tulgan: [00:28:56] You know, maybe that’s going to help you get to be a better manager. And what you need to do is try to help people use their work time to succeed. So, yes, some people are going to be going stir crazy. Some people are going to be feeling scared. Some people are going to be distracted. Help them stay focused on doing one concrete thing at a time. And the good news is, you know, you don’t need to be a police, you don’t need to be policing people.

Bruce Tulgan: [00:29:28] Helping them be effective and get stuff done and stay productive and keep adding value is healthy. And it is a much more appropriate role for a manager. Sometimes, the best thing you can do if somebody is going stir crazy at home or if they’re having a hard time being effective at home is help them be more effective at home, help them be more effective and get more done, then they’ll have something to feel good about today.

Mike Blake: [00:29:57] You bring up a couple of interesting points that I want to go back and hit on because I think they’re so important and I think they’re so insightful. One, I do think there is an opportunity here for all of us to become better managers. And you’re right, this seeing a butt in the cubicle is not a measure of value unless the value that you have is to be able to survey your empire, right? If that’s your source of value, then I guess yeah, I see that, right? But if you haven’t been able to measure productivity already, then this is a great opportunity to force you. Like just in the old days, you and I are—I won’t say you. I’m old enough, and I remember taking typing classes in high school.

Bruce Tulgan: [00:30:44] I did. I did. I did.

Mike Blake: [00:30:46] And they would give you a little piece of cardboard over the keyboard so you couldn’t actually see your fingers, right?

Bruce Tulgan: [00:30:51] Yeah.

Mike Blake: [00:30:51] And I knew if I was type on the right thing because I saw it on the piece of paper.

Bruce Tulgan: [00:30:55] Yeah.

Mike Blake: [00:30:55] It’s on a real typewriter, right?

Bruce Tulgan: [00:30:57] Exactly.

Mike Blake: [00:30:58] That’s the way that we have to manage now. And I think that’s actually a good thing. That’s going to force us to develop that muscle.

Bruce Tulgan: [00:31:10] Yeah, that’s huge. I mean, look, I say to managers all the time when they said, “Oh, well, you know, people want to work from home” or, you know, they’re worried about people who want flexibility, right?

Mike Blake: [00:31:22] Right.

Bruce Tulgan: [00:31:22] Until a few weeks ago, this was, people want flexibility and managers were worried that if they’re not in a certain chair during certain hours, that they couldn’t manage them. And one of things I like to do with a group of managers is say, “Okay, show a hand. What’s more valuable to you? Somebody who gets a whole bunch of work done very well, very fast with good quality and a good attitude or somebody who’s in a certain chair during certain hours?”, right?

Bruce Tulgan: [00:31:54] And nobody votes for a body in a chair during certain hours, right? Everybody votes for somebody who gets a lot of work done and good quality. But then, if you actually followed them around, they see the empty chair and they say, “Oh, where’s that person? Where’s that person?” So, this is a chance to start managing results, to start managing concrete actions, to start zeroing in on what people are doing and how they’re doing it, more than where and when.

Mike Blake: [00:32:31] So, you know, one of the keys that we’ve kind of touched upon here is the importance now of being intentional about your communication because communication is no longer going to happen organically. You’re not going to bump into somebody on video chat most likely.

Bruce Tulgan: [00:32:47] Right.

Mike Blake: [00:32:47] So, you’ve written about it and talked about another venue, as I know, about over-communicating and over-communicating with prepositions up, down, sideways and diagonal. What does that mean?

Bruce Tulgan: [00:33:00] Well, look, the way most people communicate in the workplace is they touch base, has everything going, everything on track, any problems I should know about? They interrupt each other all day long. They see each other on email. They’re in meetings every once in a while. And then, what happens is problems hide below the radar, and then eventually, you know, sometimes, they blow up, and then it’s all hands on deck, firefighting.

Bruce Tulgan: [00:33:23] And then, we go back to touching base, interrupting, and then seeing each other in meetings or on e-mail. And, you know, it’s unstructured, unsubstantiated communication is the rule for most people. And what we have found is that when you communicate with much greater structure and substance, things go better. So, when I say up, I mean, the first person you got to talk to is your boss. You got to get aligned. You’ve got to make sure that you know what’s changing today, what’s staying the same.

Bruce Tulgan: [00:34:02] I’ve got too much to do, not enough time. What should I back-burner? I need decisions made. I need priorities clarified. I want to show you what I’m going to do and how I’m going to do it. So, you know, align up. Then, second is down. Anybody who reports to you for any period of time, you owe it to them to give them some time to help them get aligned, to help them make sure they know what priorities should come first, second and third today, and what should go on the back burner if they need decisions made, if they need resource planning, if they need problem solving. And then, sideways and diagonal.

Bruce Tulgan: [00:34:46] So many relationships now are outside that chain of command. It’s not just your boss. It’s not just the people who report to you, but it’s your sideways colleagues. It’s somebody you need something from, but they don’t report to you, you don’t report to them. You need something from them, but they don’t report to you. So, what I tell people is every single day, you need to think about not just your schedule, not just your to-do list, but also see your people list. Who do you need to talk to today? And plan the conversation. What do you need to cover in that conversation? And then, give them a heads up. Nobody’s at their best when they’re being interrupted anyway, right?

Mike Blake: [00:35:38] Yeah.

Bruce Tulgan: [00:35:38] So, there’s so much communication that happens in the ordinary workplace, that’s what I call, you know, management by interruption. We interrupt each other all day long. So, you have to pull yourself out of what you’re doing, try to tune into the interrupter. What you really want to do is get back to what you were doing in the first place. So, a much better way is to plan and prepare your communication. So, every single day, you know, start with, okay, what’s my schedule today? What do I need to get done today? And who do I need to talk with? And by the way, nine out of 10 times, if you talk to those people, you’re going to make adjustments in your schedule and your to-do list.

Mike Blake: [00:36:23] So, another disruption that I think doesn’t get talked about enough is the fact that, you know, we try to create offices that people want to be in, at least many companies do. Certainly, we do at ours at Brady Ware, and that’s something I personally pay a lot of attention to. And they could be things as rudimentary as free Coke Zeros and snacks, that could be, you know, high quality office shares, ergonomic supplies, whatever it happens to be. And now, those things are gone, right? And employees and team members are used to having those kind of creature comforts. You know, is there anything realistic that we, as leaders, can do or think about doing, if not to replicate those things, maybe to replace them with something else?

Bruce Tulgan: [00:37:26] You know, I’m not somebody who focuses as much on the ping pong table, the pool table, I do think what you want to do is create an environment where people have what they need, where people are comfortable, where people want to be at work, where people can make it their own space. And people really do care about work space. I mean, when people are at home, I mean, look, maybe we should be sending people rolls of toilet paper, you know.

Mike Blake: [00:38:06] That’s a new bonus program.

Bruce Tulgan: [00:38:07] Yeah. Right, the new bonus program. And I think that what people are going to be struggling with is staying focused and effective and knowing what to get done today and what to back-burner and how to get their hands on the information they need, how to get their hands on the resources they need to get their work done. And as a leader, manager, supervisor, I think that’s got to come first. I think if you have the resources to provide, create your comforts, I think, okay, that’s good. What most people care about the most is being able to get their work done and avoid unnecessary problems, have the resources they need to get their work done, so they can earn what they need to take care of their family. I think the second thing that people really care about is having more control over their own schedule.

Mike Blake: [00:39:18] Yeah.

Bruce Tulgan: [00:39:18] And now, I think, you know, it’s the great irony. People are going to have so much control over their own schedule that they’re going to need help staying focused and productive.

Mike Blake: [00:39:33] This reminds me of a Simpson cartoon, and I haven’t watched that show in forever. But I remember one where Homer Simpson somehow is sent into space. Don’t ask me-

Bruce Tulgan: [00:39:44] Sure, of course. Of course.

Mike Blake: [00:39:46] Perfectly plausible, right? And as would be expected, he messed up the space shuttle and he broke some sort of ant farm experiment and the ant start going crazy and they start doing their whatever language it is that ants speak. And, you know, as they’re floating in space, the subtitle says, “Freedom, horrible, horrible freedom”, right? It kind of reminds me of that, right? When you’re all of a sudden confronted with this, you don’t realize that it is a burden to cope with that and kind of wrestle the fire hose to the ground, isn’t it?

Bruce Tulgan: [00:40:20] Yeah. And, you know, one of the things that I’ve learned over the years, and it’s something that when people are having a hard time managing their time, a tool that we recommend using is a simple time log, which is just keeping track of your time, your activity and your time, you know, and you can do it as thoroughly or as—you can do it very thoroughly. So, every activity you start and stop, time start activity, time stop.

Bruce Tulgan: [00:40:51] And, you know, it’s probably a good time to start keeping a time log so that you have a reality check. And after a couple of days, take a look and see how you’re spending your time. It’s a way to start to see where are you wasting time? When are you getting stuff done? What’s wasting your time? What’s distracting you? So, if you’re having a hard time with all the freedom, it’s a very simple tool. Just a piece of paper and a pencil is all you need.

Bruce Tulgan: [00:41:34] When you wake up, write what time you wake up and just start writing down what you do. It’s an incredible reality check for most people. And that’s true in the best of times. And maybe during these times, it’s a good way to optimize this freedom and learn a little bit about yourself and see where your strengths and weaknesses are when it comes to time management.

Mike Blake: [00:42:02] So, I want to turn the conversation around a little bit. And we’re recording a podcast on Friday that’s going to talk about best practices from the employee’s perspective. But I think one thing that gets overlooked is that leaders need care and feeding as well, right? As leaders, and you don’t have to be a narcissist to think this way, but the feedback, the benefit that you receive from the people that you lead is what we take our cues from that motivates us to take on the responsibility of leadership.

Mike Blake: [00:42:38] And it’s not easy. And so, I guess my question is this, you know, to those of us, maybe some of us are at the top of the food chain, so it doesn’t apply, but others of us, myself included, I do have other people to whom I report, even if they are very senior people, what do leaders need in terms of care and feeding as well to make them? And how can employees kind of support leaders to make them feel empowered and effective?

Bruce Tulgan: [00:43:12] Well, I mean, I guess it depends on the leader. If you happen to report to a narcissistic demagogue and you should tell them how great they are all the time, I guess. But assuming that’s not your particular burden, then what my advice to people is help your boss manage you. You know, do what you can to create structured dialogues so that it’s not all on manager, the leader, to create that structured dialogue.

Bruce Tulgan: [00:43:46] Maybe suggest a time, maybe prepare an advance, send a note to your leader, manager, supervisor 24 or 12 or six hours before the conversation and say, “Here’s some decisions I need made. Here’s some problems I need help solving. Here are some resources. I need some advice about how to get my hands on. Here are competing priorities and my available time. I need help setting these priorities. Here’s my project that I’m working on.

Bruce Tulgan: [00:44:20] And here’s my preliminary plan. Could you take a look? Here is a recurring task or responsibility. And here’s my standard operating procedure usually, but here’s a change I think I’m going to make.” I think that’s one way. I think if you are the leader, manager, supervisor who has a hard time getting feedback, then you can make it clear you want that feedback. If you have a leader, manager, supervisor who wants your feedback, then be candid. And I guess, you know, once in a while, you can inquire about their well-being and tell them how great they are.

Mike Blake: [00:45:06] Or not. That’s fine. Yeah, but, you know-.

Bruce Tulgan: [00:45:08] Or not.

Mike Blake: [00:45:08] Yeah. And you’re right. You’re right. Everyone is different. But, you know, I do think that at least for some people, you’re in a leadership position because you want to lead people. And the benefit of leading people when you have this barrier, you know, that connection is stressed. And I think your suggestions are good ones. You know, the employee doesn’t have an obligation to do that really necessarily, but I do think that, you know, if the employee has a desire to make that relationship work, I think that’s good advice to facilitate that.

Mike Blake: [00:45:53] We’re running out of time, but we have time for a couple more questions. And one we touched upon a little bit, but I want to circle back and hit explicitly is there are some good things that can come out of this whole thing, right? I mean, number one, you know, we talked about as developing different management skills and talents is a good thing that I think can and will come out of this. Can you think of any other positives from a leadership development perspective that may come out of this whole thing?

Bruce Tulgan: [00:46:28] Yeah, I mean, look, so what should happen in management relationship is you should be engaged in regular structured dialogue with your people, whether they’re sitting next to you or whether they are working from a remote location. So, putting more structure and substance into your ongoing conversation, that’s step one. Step two, make sure that everybody who works for you understands the broad performance standards for their basic tasks and responsibilities.

Bruce Tulgan: [00:47:03] This is a good time to check in on broad performance standards. And even though they may be changing, check in, make sure people understand what they’re supposed to be doing, how they’re supposed to be doing it. Zero in on priorities. Make sure that people understand expectations. Expectations are different from broad performance standards because broad performance standards are from now on, right?

Mike Blake: [00:47:29] Right.

Bruce Tulgan: [00:47:29] Expectations are today, tomorrow, this week. Get better at helping people make plans. Get better at helping people set goals and spell out guidelines and parameters for their goals. Get better at helping people schedule their concrete actions and time chunks. You know, a time motion study goes way back to Frederick Taylor, but, you know, help people understand exactly how do you do that and how long does it take you to do that?

Bruce Tulgan: [00:48:04] Well, gee, if it takes you six minutes to do that, shouldn’t you be able to do that 10 times in an hour or, well, nine times with a six-minute break? And okay. Well, would you be able to do that 72 times in a day? Oh, well, okay, maybe 60, giving yourself a few deep breaths. And, you know, this is a time when you can get better at checking working progress. It’s a time when you can get better at looking at tangible results and evaluating quality.

Bruce Tulgan: [00:48:44] This is a time when you and your direct reports can get better at helping them monitor their own work. You know, one of the things that I’ve learned over the years is that, you know, in the workplace, most managers only start keeping score for people. They only start really documenting performance once things start going wrong. Well, maybe we should get better at keeping score for people when things are going average and when things are going well.

Bruce Tulgan: [00:49:17] And not only that, but let’s start helping people keep score for themselves, keep better track of what you’re doing and how you’re doing it. Time log is one way. A checklist is another way. A plan is another way. Take note of the tangible results you’re creating and get better at managing yourself and your time. I think it’s also a time when—you know, you started earlier on in the conversation talking about empathy.

Bruce Tulgan: [00:49:51] And so, maybe this is a time where we can—maybe we need to bookmark this and remember that we’re all human and that the human element is central. And maybe it’s a time where we’re all going to get more tuned in to the need to serve and to add value and to care of ourselves and take care of each other. Maybe some people are going to come out stronger. Let’s hope.

Mike Blake: [00:50:29] So, I’m going to ask you a patently unfair question, but I think that you can handle it. That patently unfair question is at some point, this is going to end, and we’re going to return back to something. Maybe it’s normal, maybe it’s not. Do you think when we go back to what we looked like in terms of the workplace and organizational operation, say, as of January 1st, are they going to look like the same thing or do you think there are going to be some things that are a little different going forward?

Bruce Tulgan: [00:51:07] You know, I’m not a futurist and I’m very tied to data, so what’s the data we’re seeing?

Mike Blake: [00:51:19] Right.

Bruce Tulgan: [00:51:19] And I don’t project out much from the data we’re seeing. I can tell you, one of my best friends is an anthropologist. And actually, did you say you’re in Atlanta?

Mike Blake: [00:51:30] Yes.

Bruce Tulgan: [00:51:32] He teaches at Agnes Scott.

Mike Blake: [00:51:35] Okay, few miles from where I live, three miles from where I live.

Bruce Tulgan: [00:51:38] And he’s one of my best friends for many, many years. And he was saying, you know, just as an anthropologist, what’s the likelihood that after all this, people are going to want to go back to all of the norms? It may be that this has lasting change on people’s willingness to congregate. What I don’t think is that we can predict how this is going to change us. I do think we can predict we’re not going to go back to the way things were. I think there are going to be big changes.

Mike Blake: [00:52:21] I think that’s a fair answer. So, Bruce, this is a bigger topic than we can probably fairly address in an hour, but I need to be respectful, of course, of your time. How can people contact you for more information?

Bruce Tulgan: [00:52:37] Rainmakerthinking.com is the best way to contact us. I’m on Twitter @brucetulgan. My email address is brucet@rainmakerthinking.com. I answer a lot of emails every day. And one thing I can tell you in terms of my values and my mission, my mission is to help leaders, managers and supervisors provide guidance, direction, support and coaching for their people. And that’s not going to change. And I want to help leaders stay in dialogue and provide that support that people need. And my two monitors are structure and substance, create structured dialogue with your people. And if I can help in any way, you send me an email, I promise I’ll respond, and I type faster than I talk.

Mike Blake: [00:53:27] All right. So, that’s going to wrap it up for today’s program. I’d like to thank Bruce Tulgan of Rainmaker Institute so much for joining us and sharing his expertise with us today. We’ll be exploring a new topic each week, so please tune in so that when you’re faced with your next executive decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.

Tagged With: Brady Ware, Brady Ware & Company, Bruce Tulgan, managing work at home employees, Michael Blake, Mike Blake

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