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Suggest questionOn this episode Shawn Busse (CEO) of Kinesis out of Portland, OR get the opportunity to talk about the valuation from the perspective of ways to improve. We tap into Kinesis’ visionary and unique approach to “branding” that incorporates the proper alignment of customers and employees. It is a powerful concept that takes guts for a company to embrace that kind of change but in the end - a business will improve in ways that ultimately provide a stronger valuation for the ESOP!
Transcript provided by the publisher.
<p><!--block-->[0:11] Hey everyone welcome this is the ESOP guy and we are on a journey to an ESOP so glad you could join us today and, today I was we're going to go into a topic I think is going to be very helpful for those that are thinking they might want to convert their company to an ESOP or are thinking at some point they want to transaction to happen with their company so we're going to deal with, the valuation and so you might know this already but one of the. <br> Very first steps that we go through is to try to help somebody develop a valuation model to understand what their business is worth. <br> It's a critical step and it may be taken even way before may be years before you even do any type of transaction, so at least you know and in some cases when we do that the company's valuation maybe a little bit lower or lower maybe much lower than they thought it should be. <br> And so what we're going to talk about today are ways to enhance the valuation over a period of time and I've invited Shawn Busse. <br> <br> [1:09] God John see I'm like I did that like right yeah you got it right I gotta try, with Kinesis he is a CEO of this consulting company now Sean and I met, in Portland Oregon at an NCO conference and we've gotten to know each other over the last couple months and really love I love the way his company goes about, this topic and I thought he would be a great person to put on the podcast as a resource so we're going to talk about some of the things that Kinesis focuses on that are very helpful and this might be just a good reminder of things that you may already be thinking about, to help your company and build its valuation so we're going to explain exactly what they do what they focus on but before we do that. <br> I wanted to ask John is he's invited into the podcast and part of our initiation is to say what is your favorite movie Sean and why. <br> <br> [2:03] Yeah I'm going to date myself here I'm a kid of the 70s. <br> You know and there's so many great films but you know of course I'm a Star Wars kid grew up with Star Wars wallpaper thinking that I was going to be Luke Skywalker as an adult you know the whole thing and you know those movies. <br> They're pretty silly when you watch them now but you know still it's a great thing to grow up on and I think I think for me what's meaningful about them is that. <br> You've got this like archetype you know these stories that are Timeless and that really Taps into you and that also kind of TAPS into. <br> How we approach some of our work too and in terms of helping companies figure out who they are that's pretty cool yeah I don't know if I didn't say this to you earlier but. <br> I grew up the same way and I don't know if you did this for not this is embarrassing but I had Star Wars pajamas. <br> <br> [2:52] Oh man yeah we had pajamas and we collected those Star Wars cards and if you ever saw those but we had like all the cards and you could build like a big map of the characters and, so but so yeah I'm in the same boat you know and you know, my kids watch the old Star Wars movies and they're just like I don't get it why yeah but that was pretty when I was I was pretty cool I would that was revolutionary like what they did was was revolutionary, yeah so tell your jeddaks he get it yeah here you just get here told ya told I was actually real quick I was reading an article about Han Solo, Harrison Ford and how he got into that movie it was on LinkedIn and it basically he was a carpenter he goes to Hollywood, to become an actor and he decides to get a like a skill so he becomes a Carpenter and he's doing work for George Lucas. <br> In George Lucas invites him to read you know the script with 300 people and and then they like hey you're Han Solo. <br> <br> [3:53] That's it isn't that crazy yeah so like are you joking but he was like Francis Ford Coppola has Carpenter so he became a carpenter of all the you know the stars of the people of the product the producers and stuff so anyway yeah totally side note that grass, cool so Kinesis tell us kind of quickly like what do you guys focus on how to you if we start with the big picture how do you create valuation or an increased value or enhance value for companies that work for you guys or work as your clients. <br> I mean the first piece is understanding really who's a right fit customer for us so we're really specific and who we work with. <br> And that is an owner operated company you know where the folks who have skin in the game are running organization and so that takes out a lot of businesses like we don't work with. <br> The Fortune 500 we don't work with publicly traded companies. <br> <br> [4:46] We generally don't work with businesses where there's like a professional CEO and then a board of directors it's really the owner operator and. <br> The reason we do that is that you know fundamentally. <br> <br> [4:59] We want to help these businesses to be the best they can be and I believe in this I'm a child of an entrepreneur you know my dad has just had his own business after business after business many of them terrible and, watching him kind of struggle you know through throughout his life. <br> And I think that's been a big driver for me it's like okay how do you help people. <br> You know achieve something great and I think a lot of folks they're just doing on their own and so we've just found a way to do that yeah and that's our that's our folk I love I love the personal mission like knowing you grew up with this, and you can see that like the struggle and people that are owner-operators. <br> <br> [5:40] You know in when what resonates with me is like you really just want to help them you know and you get down to it it's your business but the bottom line is you you're focused on what you have a passion for so I think that's really. <br> That comes across pretty strong I think I'm sure it does when you're dealing with the clients that you kind of aligned with so clients that you wouldn't aligned with are basically larger corporations that have. <br> The typical. <br> CEO position the CFO position all that kind of infrastructure you know that our right yeah very very there I call them political organizations because it's really, navigating within that structure is how you succeed whether you're an employee or consultant. <br> And I just don't have patience for politics yeah I love it yeah you know when you work with the owner operator like they're writing the check they're making the decision, they can get stuff done yeah and so that's you know if I eliminate the top end the big companies and then I also kind of eliminate the solopreneurs and the onesie twosie businesses yeah so it's yeah. <br> <br> [6:40] It's those you know 2200 person sized companies you know be a little bit bigger than that but generally in that range and then their owner operated gonna have to really really make them remarkable, yeah well I like about to just these are observations like you know your target market and it's probably something you already tell people when you get engaged like. <br> How many times you see a company that is just all over the place like anything that moves they think is a good customer like yeah you know for you to articulate exactly what you who you go after and what you and what you're going to do to help them. <br> It just makes it so much more straightforward and you're more successful to do that I'm sure you tell your clients that. <br> <br> [7:19] Yeah I mean it's in many ways how we connected you know I'm at this conference. <br> I'm seeing all these folks who kind of a lot of them they want to be everything to everybody you know like well, we can sell your business to private Equity or we can help you become an ESOP and I'm like right I don't believe you exactly I really believe that's what I met you and you're like I'm the ESOP guy like all right tell me more about that yeah exactly yeah and that was really exciting because it's like I want to know somebody who knows Esau mmm because I have a lot of clients that I think that's in their future I think it's in our future as a company um so cool yeah it's like let's talk and I think that's why we connected really well. <br> <br> [8:00] So just kind of the takeaway is like know yourself know what you're wanting to do and in some cases like start to strip away things that don't really. <br> That are distractions like just as a business. <br> So your focal point though is brand and culture and Business Development would you add anything that to that categorically or is that primarily your focus, I mean that's like that's a lot as it has yeah is right and you'd have for folks to know you know like we can't do everything right we're not doing it we're not doing Finance but. <br> You know we got our start and Brandon design you know helping companies Express themselves you know show who they are. <br> Most companies have the this wicked problem that we call the best kept secret meaning that they're really quite great, but you wouldn't know it looking at them and so we help solve that problem with brand positioning and messaging so that's a big container right there. <br> <br> [8:57] You know as we worked on that you know we've been in business for 23 years, you know so we did about a decade of that and then we started working on the culture piece we started taking brand and saying hey what a company stands for to its customers also matters to its employees. <br> <br> [9:13] And so he started aligning those two things so that the employee value proposition in the customer value proposition were much more similar as opposed to how a lot of companies do it which is like hey customers. <br> This is who we are and then the employees would know them is very very different you know so. <br> Aligning those things is super powerful and I think you see some really great organizations out there where that is true and they tend to outperform those where there's where they're discordant. <br> That's a really good point yeah I don't think many times people. <br> <br> [9:46] You know especially like you said the political companies that they're so segmented in the in the marketing department and the sales department and the you know and then the people that do customer service. <br> You know and even then the production people they're all different departments and there's not like this this overall like alignment strategy of Who We Are, who our customer is and like so I think that's a great point. <br> So big picture like who would you say just in you know as an example or these more smaller companies that really demonstrate that. <br> Alignment that you've seen yeah. <br> <br> [10:21] I mean there are a few exceptions in the large corporate space because I could rattle off 10 clients of ours and the listeners here probably won't know them yeah that's true yeah, here's a here's a custom tile manufacturer in Portland Oregon that 75 employees Pratt & Larson tile. <br> Probably aren't going to know them they're really amazing. <br> <br> [10:42] But in the bigger space you know there have been a few companies that have pulled this off I would say apple is one we're kind of the force of will Steve Jobs force of will, made it so that there were not going to be the kind of silos and Bs you see in these large corporations yeah. <br> Advocate and he he did a really good job of saying this is our mission that you know this is what we stand for these are values and you know. <br> <br> [11:08] It wasn't difficult human being let's not be you know yeah it's not all it yeah it's not having politics does it mean he's just you know run around kissing everybody it's yeah I mean he's Adam and he was a demanding individual I know very demand yeah yeah and you know the way he treated his family I mean yeah like a lot of things I don't really admire but at least from a like here's a company that clearly I was able to do it and you look at how they outperformed like everybody in their category you know in that alignment, internally and externally created greater products and it created a cutback to the customer question, it created a type of customer that was fanatical and believed in their product in the same way it created an employee base that was fanatical believed in their, and the harmony of that ecosystem is like, it's on stop mazed yeah it's Unstoppable and I would say Nike has done that pretty well over the years to there are our Portland you know company or, Beaverton sure now that's I mean those are good examples you can you can see and you can see when it doesn't work that way to the discordance I think is. <br> <br> [12:12] Is just as evident and it can also drive people like you and me crazy because you're like come on I mean you know how are you just wasting shareholders money by. <br> Just doing stupid things so so I like that I like the overall you know the idea of making somebody aware of that so the owner operator in this setting. <br> <br> [12:32] Is so like I can see this like visually like they're so busy they can't even stop to actually look at this issue or any of the issues that we're going to get into, and so you're like hey know what we do is slow it down have these kind of conversations in no invite. <br> A change in our transfer like a transformation so let's go back to your name for seconds of kinesis, is Latin for motion you told me that I'm not that smart, so it's so tell us like that that was the the original eyes the only Latin I know by the okay so quid pro quo whatever that means so yeah so, so you're that the you know like the name and I like what it means so tell me a little bit about. <br> That in terms of how that really affects you know what you do from beginning to end to a with a. <br> <br> [13:23] The process of doing that definitely so when. <br> We're in like a sales meeting or an Engaged potential engagement with a client one of the first slides I show them is the slide that says the word transformation on it and I say to them. <br> This is a one word mission statement this is an idea we created which is like let's make mission statement something people can remember people can remember a word right so we take clients through that process get it down to one word we've done it to ourselves, transformation it means change very much in the same way Kinesis means motion which is a form of change. <br> Our logo for many many years was a paper airplane which is like if you think about a flat sheet of paper and folding it and giving it shape and then throwing it, giving it flight and motion it's awesome these are all all interrelated ideas and then. <br> The way we write our job descriptions there's just tons of language in there that's about, comfortable with change likes to look for new things is you know ambiguity is okay you know so we're trying to hire people who align with that sword we're trying to line everything up top to bottom from our mission our highest purpose, and then all the activities that we do within the organization and by doing that you get rid of all the friction that you often see in a business you know where. <br> <br> [14:45] Let's say we hire and play we weren't really clear that we want people who are comfortable with change you might get somebody who wants to be told what to do you know they might want you know and and we've made that mistake before you know we've hired those like yeah. <br> Corporate type A lot of times we get them out of the corporate space and they come in and they're like what's my kpi what's my metric that I measure too and I'm like, kpi is to be awesome in case but yeah it's too it's too ambiguous right for somebody to be like yeah they're like I don't know so much anxiety know how to function in this in this organic environment so that's I love that idea of transformation I love the airplane I think it's very Vivid where do you like if you get a brand new company that you're talking to where do you start. <br> How does the process that you guys go through start. <br> <br> [15:33] Yeah so another term that will talk to clients about is this idea of True North which is where we headed all right what is what is our true north and so that's a four-month process we take folks through to understand, what's their you know do they have a mission that's actually true do they have a set of values that are actually not only written down but people are living them, do they have a vision for the company where are they headed, and then we do things like we interview their employees and an anonymous and confidential format so we can give feedback to leadership and say. <br> Broadly this is what your team is saying about you this is what they love about you this is what they're struggling with and then we do that with their customers so we interview their best customers not all the customers there want to go for the best ones that like we want to recreate more of hmm and we interview them and say hey what do you appreciate about this company what's great about it what could be better. <br> <br> [16:32] How did you find out about them why did you work with them and not somebody else. <br> So by being an outsider we ask those questions and the answers you get are just amazing I mean just. <br> Mind-bogglingly interesting and, well we're looking for patterns in the noise so we're looking for a customer several customers to say things that harmonize and then employees to say things that harmonize and ideally where's the overlap mmm and if you can. <br> Find that overlap that should be connected to your mission so. <br> In our example you know II talked about hiring employees that like transformation they like change. <br> <br> [17:11] Well I also should get customers that like change mmm because if you get customers that don't like change and you have employees who do like change, the customers are going to be unhappy yeah of course right yeah right yeah so, so getting to know what your best customers want from you and what your employees and your best employees value from you that gives you Direction and and the true north process helps us uncover and discover that, and then start to formalize codify and find ways to put it into the organization now I think that's really helpful and I again if I bring it back to the people that listen and think about okay what how is this helping me. <br> It's like identifying what Shawn is talking about is identifying that there, the way to get better as a business is to consider that the alignment that you have how do you hire people, who what customers are you really going after you know you can kind of assume because you make money that everything's, hunky-dory but your you could see me so much better I mean that's part of the process of continuous Improvement so I think it's opening your eyes Opening Our Eyes to things like that like we can if we do these kind of I like the approach to because you guys are so objective. <br> <br> [18:22] I can't do these interviews nobody's going to tell me anything at my company that's true like they might but I'm not hopefully you're not listening this but I mean like they're going to tell somebody independent because they're going to like oh they're taking me serious you know they care about me, enough to ask these questions same thing with your customers to care about me enough to ask the questions and that by itself is going to add, a sense of like more more respect to people more esteem like we really do value you know your opinion and we're going to be using that, to to do something with it what you were going to get to so we're collecting data at this point, do you we talked a little bit about this before we got on so you do you do the the archetype like do you start to kind of put people in categories like with the, like we talked about the characters of Star Wars how does that work is this that part of this process or is that something else this is the early stage of that okay we're looking for the patterns and then often client will you know after truth the true north process will say hey I think we need to go through some kind of a branding process you know and that can be you know brand is one of those words that means lots of different things to different people but I like to sing about it like what is the essence the organization and. <br> That could be expressed in lots of different ways it's not a new logo I mean lots of people say well forget the yeah that's what we get a new logo oh God it drives me crazy yeah what is the essence the organization. <br> <br> [19:49] Does the name of the company Express what's remarkable about you and and if it doesn't mmm let's figure out a strategy for resolving that and it might be, you know what it doesn't line up but we have so much brand Equity people know that name changing it would be expensive and convoluted and risky and we're not going to do it okay that's fine we'll take that off the table. <br> Do the other LL what other elements can we change you know can we change how we write our job description can we change what get set on the website can we change how sales people go to market and talk about the value of organization and now those areas are ripe for opportunity yeah yeah. <br> <br> [20:31] I should add two I went through my own journey of like having a company that was worth nothing yeah we literally literally sure, Great Recession comes and I'm like looking around and I'm like wow I'm learning about what companies are worth and I'm like my company is not worth anything and cool, you know that's a come-to-jesus moment right absolutely so I just started reading all these books and studies on like how to maximize value in an organization and so a lot of the stuff we're doing even though it sounds kind of soft and fluffy is like actually the endpoint is maximizing value so. <br> Recurring Revenue through customers lower employee turnover you know maximizing profitability through reducing friction you know, increasing the speed of sales Cycles you know it's like all these things that you can put on paper and demonstrate added value. <br> The stuff we're talking about a true north and brand is like the beginning of moving towards that that's really work that's really profound, and it's great because I do think people get lost in the hey this is a warm and fuzzy soft concept. <br> But as you connect those dots it's like you know I'm you can see that you know me being me being evaluation person like I do evaluation work. <br> That those are very real. <br> <br> [21:55] Realities to evaluation so if I'm always recreating my Revenue stream right and I'm you know our if I've got ton of rework and I can see my gross margin just going. <br> You know are losing people left and right my training budgets out of it you know so everything you're talking about is a very hardcore business. <br> <br> [22:14] Principal category like you got a nail these things down and and you know some people like they want to go in at the you know at the direct front door like. <br> Let's just get our people to do more you know like let's create an incentive plan for instance like oh yeah you know let's just give them more money or and then people are not getting it, you because you're not you're not doing what you guys are doing which is going into a sustainable way of creating a compelling culture which I would, that's kind of how it articulate like that's what you're really doing which becomes more of a fun place like who doesn't want to work for a company like that. <br> <br> [22:51] Right and and if you look at the data you know if you like want to be a real cynic about all this and you just like look at the data if you don't want to believe me because I like Star Wars and I just look at the data and the data around to like the two pillars that I'm are I'm advocating here are. <br> Employee engagement right so basically meaning employees who show up to work are excited to be there and to contribute. <br> Companies with high levels of Employee Engagement massively outperformed those with low levels and I have all the data on this I can happy to share I mean it's like. <br> <br> [23:29] You know factors of 10 you know when you compare the disengage versus highly engaged yeah. <br> In the other Corner Stone is customer so when you have customers who are recurring with you. <br> <br> [23:45] Massively more profitable organizations than those who have to go get new customers all the time. <br> And if you look at the most highly valued organizations in the world let's let's take apple right which is historically been a incredible performer in terms of stock value, right why is that, they have customers who buy from them over and over and over again Apple doesn't go out and get new customers they just sell more stuff to the same people like yeah that's yeah that's their Enterprise Value right there are pods and the iPhone. <br> <br> [24:21] Everything I got is Apple and unfortunately I'm not yeah yeah I mean totally TV Apple TV you name it yeah, yeah they made it easy that connected I mean I think that that whole thing of like oh no I can't be apple but you can be is so much better than you already are. <br> You know and so one point I would make is like I loved I loved the conversation because I wouldn't I want to kind of dislike. <br> Take apart some things that people think about Aesop's like I'm going to become an ESOP company. <br> <br> [24:51] So that I can have a better culture and I can engage my people it's wrong it's wrong thinking because if you don't have the culture and right now the ESOP is gonna help and ways. <br> But you're still going to be if your dysfunctional your dysfunctional you can't you can't just slap an ESOP on to a company's area now finally you're going to be, this employee-owned Company ownership thinking is going to start to crowd everybody's mind and they're going to transition to this this the work you're doing has to be done. <br> <br> [25:20] Don't you know whether you have an ESOP to work as a tool you don't it still has to be done. <br> <br> [25:26] No matter what you want to do with the company in this is my experience to you know when I realized I was worth nothing I was like, wow I need to start thinking about the company as if I would sell it so I can really create its greatest potential value. <br> And whether I choose to sell it or not right is good for me that that outcome is good for me no matter what yeah and that has been totally true for me I mean we went from having. <br> <br> [25:56] Dozens if not hundreds of clients a year who would come and go come and go come and go to like at this point we might have 20 longer have 20 clients and. <br> Seven times the size wow so I mean wow study Daniel like War yes right yeah. <br> It's crazy and we have clients who literally now have been with us for a decade. <br> And many of those clients in that roster are five two five six seven years in which for a firm that's a creative firm if you want to call us that. <br> <br> [26:29] Is totally remarkable yeah for sure so yeah it's just been so powerful for me I'm just like how can others not want to do this exactly right yeah it's yeah and not to mention it's fun. <br> <br> [26:42] Yeah I mean it's way more fun I like like trying to convince people like do the thing you love because you're gonna have more fun at it is opposed to like I want to try to do what I think can make me the most money like. <br> Took care of like it's yeah you're not having fun and it's like you're it's going to come across and you're going to be miserable at some point maybe. <br> So I love I'm guessing right you can from the CPA world right you could have stayed over there and probably made a bunch of money you know but like something called you to this ESOP work yeah similar to your your your mission and like I just felt like. <br> It had nothing to do with anything but helping people like if I had to say my it's not transformation it's just helping people. <br> Because there's so many people in this space that. <br> Are therefore I believe for the wrong reasons they're there to make money on these deals and not it's not wrong to make money in our country but. <br> <br> [27:35] It's better just to help people you know and yeah there's meat there's a need there so I yeah I love doing it and you're right I could have done different things but this is this is what I'm passionate about in, and I think that. <br> <br> [27:50] Enjoy it's a podcast itself is fun because I think it does help people and I think its resources that are its unbiased. <br> <br> [28:01] I could care less if you listen to pocket I mean if you do great. <br> It's completely unbiased I don't have sponsors nobody pays me to do this so it's just fun I'm not connected to any agenda, I do believe that the ESOP world has a need for good information that's not been cooked up for some other piece you know for some other bias you know so I think we're, common common ground that's so interesting you know I think Phil because I think you and I both have come to the soothe like two different ways where you know I used to work at an ad agency years ago are talking like 25 years ago, and what I saw was the because the Ad Agency made its money off of. <br> Fine ads for their customers me like a commission but I saw them doing all the time we're making choices for their clients that were not in the clients best interest right you know so for example I asked my boss one day I'm like you know. <br> <br> [29:00] So this is like your 1999 I'm like hey this client has this really terrible website. <br> And at the time they didn't know how to make money off of changing websites you know that's what the client really needed a website that like look decent sure like shouldn't we do this he's like no no we just need to make more ads, and at the end of the day right it's like what was in the clients best interest wasn't more ads Yes actually a better presentation of what they were yeah. <br> But the incentives were all wrong yeah exactly aligned yeah yeah and you and you obviously challenge that and you said, I'm doing something different it makes me think of Jerry Maguire honestly which you know it has the whole idea like I'm just going to keep doing this because everybody else is doing it, it's a challenging the norm is saying no you know and I think that that just comes across so I think it's really helpful. <br> When you get through so get back to the process a little bit let me ask you a question like when you said Express what is remarkable about somebody's some company how do you feel like first off how would you define that and then secondly how do you, how do you actually get to that level like people sometimes people don't really know what that is I guess you're getting it from the employees and the customers. <br> <br> [30:16] Yeah it's and it's one of those things and it's hard it is often hard. <br> So I use an example from The Real World you know we had a client who, was a steel fabrication company so we're talking welding grinding metal cool historically kind of like hard dirty work, that you know isn't necessarily held up as like oh yeah my kid didn't go to college instead he's you know slinging a welder and a grinder hmm. <br> <br> [30:45] And you know through this process what we started to see it it's like you start to have a hunch and then you see affirmations of those hunches and then you start to run a little test what we saw with the owner was like wow you. <br> You actually don't care a ton about like is that the perfect weld or something structurally you actually care way more about your employees and their well-being and their Career Development like you care about their career development. <br> <br> [31:12] When the industry as a whole doesn't see welders as worthy of having a career development like just go well the thing that's the attitude of the industry sure and so we're like that's really different that you actually care about your well that's cool, yeah you know so much so that like you're going to schools and giving talks about a career in welding and the financial opportunities and. <br> So we ended up making his brand kind of about that wasn't about welding it was actually about the. <br> Career Development and what's possible as an employee there that he was really remarkable about that and what's really cool is that remark ability that connection to Workforce. <br> <br> [31:57] Actually ended up resonating with his customers who were large general contractors, they're also trying to figure out how to solve the workforce problem they don't know what so they look at Devin and his firm and go wow that's really interesting so now his customers are talking to him about something they both have a shared affinity for, even though he's not selling them on welding right wow yeah yeah Gene remarkable about people and culture, it allows them to have conversations with people who you know would not otherwise want to talk to him, and then let's talk about yeah yeah like yeah you just share something here about and then then they hire him because they're like you care about the same things I care about yeah no kidding yeah what's cool about that story is like it's not obvious. <br> <br> [32:42] No not to the owner operator that's not going to be obvious it's just kind of hard somebody has to come along like you guys to say hey. <br> Let's take the time and talk through these things and right so that is its in its I mean people have this. <br> Maybe it's a paradigm I don't know they start thinking if they're in business they're like this is what they need to do. <br> <br> [33:02] And then just keep doing the same thing over and over and over and over again until somebody comes along and says you know why do you why are you doing that that way so I think that's really cool. <br> Discovering what is remarkable I think that's a really cool idea and then how that gold goes about so you guys were able to use that in The Branding like we talked about it's not the same as just a logo. <br> How did you guys change so if you take that case study what sort of things did you do with that then did you change their marketing did you change the okay totally everything about their go-to-market strategy so, instead of their website being about look at this beautiful stair railing we made or this you know catwalk that was welded together because everybody else has those same things yeah there's nothing remarkable about it's white noise yeah, it's totally noise you know in fact it's like table Stakes like yeah they you know clients assume you can do that stuff, so that really the website became more about the story of the people who he was helping to elevate and like the real the humans right so there's no stock photography you know kind of nonsense people shaking hands photos that lot are on all the websites you know these are like real people, so that's that's in terms of like positioning and what you talk about but then in terms of the go-to-market strategy we actually help. <br> Create things like hey Devin how would you feel about giving a TED Talk. <br> <br> [34:25] So how yeah he shapes up a TED Talk gets on the Ted stage talks about the trades career advancement and development, and in the audience are Winery owners who hire people to do welding of catwalks no way attract icicle higher well do you know welding subcontractors that's Claire's yeah Civic leaders who like want to you know so now like he's seen as like a leader of an idea as opposed to an owner of a welding shop man that's cool. <br> He was so I mean yeah he would have never gotten I mean I'm just like I don't want to just say how great you guys are but he would never gotten there. <br> <br> [35:07] Because that idea top yeah that idea would never have occurred to him I mean not I mean but then the connecting points of like the whole strategy it's not just do a TED Talk and you'll have more money or more business right it's you totally trans like you said you transformed, something that was this into something like that. <br> The fact that he gave you an like open rain on that right how did that work I mean he can't he had to have some anxiety he did he feel like crap on Sean's coming yeah. <br> <br> [35:37] Yeah hold on one second sure you got it. <br> <br> [35:49] Sorry I had a dog in the other room oh yeah dreamy and Pine in the dream so that's hilarious talk to you draw so, the que no like so what you're talking about really is trust you know how high a high level of trust. <br> And I look for that in the in the sales process with clients I look for signs of trust and and if I see a lot of cynicism and skepticism. <br> I bet it really hard you know and I actually told no to a client a month ago you know have a lot of money, got referred to us by someone you trusted yeah you know I totally could have signed him up but you know at the end of the day it was just doubt skepticism fear uncertainty. <br> And I'm like, a lot of this work requires a high level of risk it's risk it's like yeah you could give a TED Talk and nobody cares or you could fail at that Ted talk you know and it's true. <br> <br> [36:52] And so trust is number one and then number two is to know that, we're not prescribing we're not telling people what to do we're looking for the greater truths and with Devin the, the owner of the company was like he cared about those things like passionately you know but he was not talking about them at all as part of his companies purpose and Mission sure and so it's a really good example of like aligning the mission of the organization we care about employees in their Career Development with the external audience hey external contractors you probably care about Career Development we can teach you some things that you can benefit in your own Workforce Development and now we're a peer helping you out. <br> As opposed to a vendor of which there are many vendors and you buy on price mmm so now they're buying on relationship instead of price yep and that's a big part of, wedding at the brand and marketing game is getting the best customers to buy you not because you're the cheapest but to buy you because you have the most value and the strongest relationship that's. <br> <br> [38:05] That. <br> Discovery and Trust cycle it requires the client to be willing to do that absolutely yeah yeah and and really both of us no I mean not everybody's going to be there, immediately or else or maybe even ever which is is just absolutely fine but you're you know I love that you have the discipline to say no. <br> When you don't see the early signs because. <br> Even if you can get paid for it it's still going to if it ends up like you're walking into a wall every day with these people it's really you know you're better off just kind of saying you know what you're not you're not a good fit for what we're trying to accomplish yeah. <br> <br> [38:43] What's interesting you know comparing the company I said no to and Devon the company we said yes to and what's a great client. <br> <br> [38:50] They're both very similar in that owner operated businesses you know they sell B2B. <br> You know same time there are in Portland metro region both were came via referral like everything is lining up right like y1y was one great and the other said no and. <br> And you know at the end of the day I was just really the difference in personality in fact when I said no to had way more money yeah then Kevin yeah but you know. <br> <br> [39:19] The guy said no to at vast would have gone through to North and probably evaporated, maybe said stay with us a year whereas like a client like Devin he'll stay you know say with us three four five years you know yet, and so back to that recurring Revenue recurring customer relationship maximizing your valuation hmm you know that's business fundamentals right there yeah you know yeah lower customer churn, client acceptance process really knowing your target market but your knowing it at a different level to it's not. <br> <br> [39:53] They look the same but you know it based on the other evaluating factors for you guys which I think is interesting to for some people they're just, they want to have every opportunity sales opportunity and and I think the big picture here is not every sales opportunity is going to be healthy. <br> And yeah hopefully people people get that you know as you become more and more you know discipline in the approach, so all those are really really cool things so let me as we kind of get get ready to kind of close down. <br> You know for people that are thinking about you know again our podcast is dedicated to people are thinking about an ESOP, when you think about all of these things you know they're kind of like, we didn't get through like the all of the completions of things as you guys you guys move through the beginning steps in then you're eventually kind of working on all kinds of things is there anything that you want to kind of mention that is really a significant part of the process or you know from a closing standpoint things that you think people really need to be aware of when it comes down to, adding building more value in their businesses. <br> <br> [40:59] Um I think that the folks were I can actually help them and the advice I would give is relevant. <br> I think that's first piece and they're probably listening to this podcast right like yeah generally I found that people who want to improve themselves and improve their businesses make really good customers and thus the advice I give tends to be very relevant to them so I want to add that first to say like what I'm about to say in terms of like thinking. <br> It is really tailored for what I call the like maximum potential companies meaning. <br> We're not going to go in and turn them around like I in fact I, I admire people who are turnaround experts I am not one of them sure yeah you know so. <br> What we discussed why we why we created True North well the reason we created True North was so there's a stopping point and we can like say hey, that was a nice date do you want to get married you know like like and so one of the things you discover when you interview employees you like learn what's really going on yeah right all right and like every once in a while you'd be like whoa the. <br> The owner told us this that's right is not true and you maybe you see that I see that too, yeah we do I think we all kind of you know yeah but you guys probably see it more because you are dealing with more of the employees I'm dealing with more of the decision-makers to sell their company but yeah. <br> But that's an eye-opener. <br> <br> [42:27] Yeah so so I like to say like we're really good at the good to Great process you know like and and so with that maximizing value for good to Great companies. <br> Tends to be about things like. <br> Really honing in on the on the hiring process I would put so much energy into that if I were to start a new company like that cuz, if you can maximize what we call the candidates Journey from the point they read a opening to the point they're signing and engagement agreement and even Beyond when their onboarding. <br> <br> [43:03] You've created an entire series of clarity and yeses like I understand what I'm getting I know this organization from the inside out I feel it and then when I get there it is what they said it would be. <br> Lining all that stuff up means you got to have Clarity on your mission your vision and your values and they have to be true not just nice words that you put on a break room wall so. <br> Does it like the two biggest pieces of advice I would give is have Clarity on your mission your vision and your values. <br> Um focus on recruiting and that's your best chance to change the culture I've seen over and over again it's grading people to behave differently is really hard it is actually hiring. <br> Hiring for the right culture is totally possible yeah I think I agree with everything said I would add to it and maybe this is something that you've thought through are done with just because I'm so involved in this part of the things, so you as you go through what you guys are doing your transforming a company from what it was. <br> <br> [44:05] The leadership is obviously open-minded enough to do that what I'm what I would say in addition to what you just said was what the opportunity when it comes to an ESOP. <br> Is that we have the opportunity for transition and succession, and so what you're building is now how am I passing the Baton to so first off who am I if I'm the open-minded leader I'm going to incorporate the things that you guys are kind of coming up with, tube pass the Baton and transition and success you know have my successor May and I'd say Eve maybe even way better than me right just to say like this is who the company's going to become. <br> <br> [44:41] And or recruiting that person like that's part of the succession planning process so I think that does is it connects everything you're doing with, ultimately the people that were helping they're going to eventually get out of those seats they're exiting at some point and so that part I think is really helpful because you've created this value. <br> That more valuable Enterprise and then built a culture around that and then your leadership is only thing that sustains the culture and when you get down to it. <br> The reflection of your culture is the personality of the leader so yeah that's a really that's a really good point I mean you know I'm. <br> <br> [45:19] I'm usually interfacing with companies I like to say we work with companies that moments of transition, and so sometimes it's they've bought the company from a Founder like a lot of our it's interesting a lot of our clients have been internal buyouts snack a management team is spotted from a founder. <br> <br> [45:38] And what's really interesting in these moments of transition is that the new owners see a different path forward from the prior owners. <br> And it's usually a much better path to be honest I bet yeah and and so they're probably a lot of our clients are probably 10 years from an ESOP moment. <br> You know or selling the business or whatever maybe more yeah, and so we're sort of thinking about like how do we get the right people in the door today that in 10 years you know like you're going to have this really strong organization I think if somebody were three years from a from from a moment of transformation or a you know a change like becoming an ESOP. <br> Certainly the hiring process would be really important but I would say the What I Call operationalizing of the vision and values and meeting of the leadership team so that, as they start to move on the others come in our holding true to that and his yeah really critical I think that's great that's a great Point yeah, yeah so I think this keeping keeping that like as part of the awareness in. <br> Knowing that what so what you kind of as we ground down to what you guys do knowing what you do is really helpful and part of our mission is to. <br> <br> [46:52] Connect people with resources so if somebody wanted to talk to Sean how would they get ahold of you what would be the best way for them to say. <br> I am chronically on LinkedIn so you're always you are chronically on LinkedIn I love that you're really dumb I found it's interesting it's been a wonderful space for both. <br> Network connections and like recruiting I've gotten some great employees through it but also new business, quotes pretty strong business valve in place for me so you can find me on there Shawn Busse is is my profile or you can email me it's Shawn it Kinesis dot team coulomb and it's. <br> <br> [47:30] That's a that's good I didn't yeah and it's spelled differently so that's great. <br> Well great Sean thank you so much for your time and it was really honestly very very helpful for me to listen to what you guys do. <br> I think it's helpful for everybody honestly in whether your, going to do an ESOP or not I think it's just good to know that you there's these ways to really enhance value so thank you again for being on the podcast. <br> <br> [47:55] I appreciate the opportunity and I love the work you're doing I think I've. <br> <br> [48:00] I work with a lot of other operating businesses and I've seen some of them go down really wonderful virtuous paths as the owner exits. <br> And I've seen many of them not yeah and yeah and I'm really excited about the greater and greater awareness of Aesop's and and the I think the good work you're doing is just so in line with what we're trying to do so awesome thank you. <br> <br> [48:21] Alright well thank you and then for everybody listening thanks for joining us today joining us today check us out a journey to an ESOP.com if you want to listen to this or other podcasts in or send us a question if you have one, so with that enjoy your the rest of your day and we'll see you on our next step on this journey to an ESOP. </p>
About Journey to an ESOP & Beyond
ESOPs are gaining traction. In the "Journey to an ESOP & Beyond” podcast, Phillip Hayes explains the process of the ESOP transaction and addresses ESOPs from a business owner’s perspective. The "ESOP Guy" illuminates the simplicity of ESOPs as he debunks common misconceptions that ESOPs are immensely costly and complicated.
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