This is the leading Podcast for Leadership globally. You’ll listen to top authors, C-suite executives and leadership coaches and unlock tips, ideas, insights along with top leadership hacks. It’s your way to tap into some of the best and most experienced leaders and business coaches in the world.
Monday Aug 10, 2020
Monday Aug 10, 2020
Monday Aug 10, 2020
Patrick Ungashick is the CEO of NAVIX Consultants. He is a business exit strategist, speaker, and author, you don’t have to be selling a business to apply these leadership hacks! You will learn:
- The different emotional connections of CEO of Corporate vs Owner Managed CEO’s
- Why people become less strategic in their thinking as they start to plan exit?
- How questions reveal the direction and decisions
- Why having a stop doing list is a leadership enabler
Follow us and explore our social media tribe from our Website: https://leadership-hacker.com
Music: " Upbeat Party " by Scott Holmes courtesy of the Free Music Archive FMA
Transcript: Thanks to Jermaine Pinto at JRP Transcribing for being our Partner. Contact Jermaine via LinkedIn or via his site JRP Transcribing Services
Find out more from Patrick:
Patrick on LinkedIn
FULL TRANSCRIPT BELOW
Steve Rush: Some call me Steve, dad, husband or friend. Others might call me boss, coach or mentor. Today you can call me The Leadership Hacker.
Thanks for listening in. I really appreciate it. My job as the leadership hacker is to hack into the minds, experiences, habits and learning of great leaders, C-Suite executives, authors and development experts so that I can assist you developing your understanding and awareness of leadership. I am Steve Rush and I am your host today. I am the author of Leadership Cake. I am a transformation consultant and leadership coach. I cannot wait to start sharing all things leadership with you.
Patrick Ungashick is a guest on today's show. He is an Entrepreneur, CEO, renowned exit strategist and author of Dance In The End Zone. Before we get a chance to speak with Patrick, it is The Leadership Hacker News.
The Leadership Hacker News
Steve Rush: In the news today, we explore with the positive thinking in leadership is overrated. Overestimating success is detrimental to the wellbeing compared to making decisions based on sound unbiased data according to new research. In a study of 1600 participants in the British Household Panel Survey, which is a national wellbeing gauge, launched almost three decades ago by scientists at the University of BATH have tracked people's life expectations, actual outcomes over the last 18 years. And according to their findings, overestimating success is detrimental to wellbeing compared of course, to setting realistic goals. In a team assessment, what positive thinking frames optimism, and is a self-fulfilling prophecy. Decisions based on accurate unbiased data will always lead to greatest satisfaction. The team pointed out that pessimist also fare badly compared to realists. However, numbers at the end of the spectrum are relatively sparse because around 80% of the UK population can be classes, unrealistic optimists. University of BATH, School of Management Associate Professor Dr. Chris Dawson said plans based on inaccurate beliefs, make for poor decisions and are bound to deliver worst outcomes than would rational, realistic beliefs leading to lower wellbeing for both optimists and pessimists, particularly prone to this, our decisions on employment, savings and any choice involved in risks and uncertainty. The study’s co-author David De Mesa of the London School of Economics said findings of a particular resident for personal behaviours is a mix of current crisis too. Optimist will see themselves as less susceptible of the risk of COVID-19 than others and he said, therefore are less likely to take appropriate precautionary measures. Whereas pessimists on the other hand may be tempted to never leave the house or send their children to school again. And of course, neither strategy seems like a suitable recipe for wellbeing. Whereas realists take measures based on risk based assessments and scientific understanding of the disease.
The Institute of Leadership Management, head of research, policy and standards, Kate Cooper said. This is all about the pros and cons of a growth mind-set. Our guest on episode 12, Marc Effron of The Total Strategy Group. A couple of years ago, argued that advocating for a growth mind-set was only appropriate when speaking to children and even Carol Dweck who originated the term now recognizes that no one has ever got a hundred percent a growth mind-set the entire time. Surely, however, whatever you are thinking now, it is likely to be either a positive thought or somewhat of a negative thought. All of which is derived from our mindset. Guest on episode 23, Ryan Gottfredson said. It is about being more aware of one's mindset and that we are all on a continuum from negative to positive. His extensive research and studies show. Having more of a positive mind-set is more likely than not to unlock greater success in your life, your work and your leadership, and of course, that is also including your positive thinking. That has been The Leadership Hacker New. Please get in touch if you have any news, insights or stories.
Start of Podcast
Steve Rush: Today guest on the show is Patrick Ungashick. He is the CEO of NAVIX Consultants. He is a business exit strategist, speaker, and author of two books, Dance In The End Zone and Tale Of Two Owners, Patrick, welcome to The Leadership Hacker Podcast.
Patrick Ungashick: Thank you, Steve. It is my pleasure to be with you today.
Steve Rush: Really excited to get into the stories that you have about how people go about preparing for exiting their businesses. But before we do that and for the listeners tuning in today, perhaps you give us a little bit of your backstory as to how you ended up doing what you do?
Patrick Ungashick: Sure, it was a circuitous path. I am here in the States, of course, and I graduated with an undergraduate degree in political science, which qualified me for very few things to do and I got lucky. I joined a business at the time was led by my father but I did not work directly with him. I was apprentice to an investment banker who has since passed away. His name was Peter Collins, but he was a wonderful boss and wonderful mentor and I spent the first six or seven years of my career doing mid-market investment banking in New York City. And it was amazing experience because I was on a small team and Steve, as you know, when you're on a small team, you get to see and touch everything. And I saw an awful lot of very fine companies and an awful with owners who are typically very fine and certainly hardworking people. Struggle to ultimately exit successfully and that made a very big impression on me from the beginning of my career.
Steve Rush: It is a common problem, isn't it? With that mid-sized business where you have grown a successful business over a period of time. You have created wealth and capital in the business, but it is then what to do with it next. I guess, right?
Patrick Ungashick: That is right. For many owners of small to midsize companies, it is life's passion, it is a calling, it is something rightly, immensely proud of doing. And if they have success with that business success. Typically comes personal financial success. However, most of that financial success is tied up in the company and the emotional and psychological desire to make sure that the company survives and continues one day is incredibly important, just as important as the financial outcome. And all of that is wrapped up in how do I exit successfully one day. Yet most owners will exit only once and they only have one shot at success and it can be a very challenging, and uncertain and disorienting position to be in.
Steve Rush: And particularly if you have, been immersed in that business for many, many years, and it has been your life's work. There's lots of emotional attachments that come with that too, Isn't there?
Patrick Ungashick: Huge emotional attachments. If you have, two human children and you are a business owner. You typically thinking you have three kids and the third child, I mean, just look at the simple math. The third child gets more of your time over the course of your life than the first two do because you are working on it minimum five days a week and probably even more than that. It is a wonderful source of emotional sense of pleasure and achievement. Most business leaders define themselves and measure their accomplishments by what they achieve in their company and you have all of those emotions swirling and wrapped up. And as we get closer to exit, and as that event draws near in life, then you've got all those challenges and all that uncertainty yet all that desire to make sure that you go out the right way.
Steve Rush: And of course, if you are a CEO of a public limited company, you don't have that emotional attachment. You just have the attachment. That is the financial one, which comes with the share certificates, right?
Patrick Ungashick: That is right, A mean. Just look in the news media, you will see routinely CEOs and other C level leaders in publicly traded companies, talk about succession planning, which is an incredibly important responsibility. Succession planning I define as being the orderly transfer of leadership of an organization and that is the mandate of every business leader. Owners and leaders of privately held companies have to think about succession planning, the orderly transfer of leadership. In addition, they have to think about the orderly transfer of ownership as well, and so you've got a double responsibility there and sometimes they flow well together and sometimes they don't. So yes, absolutely. Publicly traded CEOs won't talk about exit planning. They will focus on that succession piece when the time draws near. The leaders and owners of privately held, Companies have to think about both realms.
Steve Rush: Right, now you have been helping organizations and businesses for over 20 years with their strategy to leave an exit and pass on that legacy.
Patrick Ungashick: Close to 30 at this point, yes.
Steve Rush: Oh, it is 30, Wow, okay. Excellent, as an exit strategy, when is the right time to start thinking about exit?
Patrick Ungashick: Day one but that rarely happens. Stephen Covey his well-regarded well-known book, 7 Habits Of Highly Effective People. Points out that you have to begin with the end in mind and those five, six words sum it up rather nicely. The reality is most entrepreneurs, especially if they are a founder, you are not thinking about your exit on day one. You are excited about launching. You are excited about growing, you are excited about the customer needs that you are going to innovate, and you are going to meet and you are going to dominate your market and so on. It is natural that that thought is not part of the fabric of analysis and the picture when you first launch your company. But the reality is, that the longer that this topic is delayed, the longer that the business leader waits to start to think about exit. What happens is for that business owner and leader who is rarely, or maybe never thinking about exit, you end up making all of those strategic decisions about how you are going to grow your company without the backdrop in mind, without knowing where that is going to take you. The ideal scenario is on day one at the practical realistic scenario in the real world is when you get to your final 10 years and maybe even absolutely your final 5 years, if you're not very conscious around your exit goals and what your intentions are, you run the risk of getting yourself in trouble. I mean, five years, as you know, Steve, five years flies by. Five years is sixty months and so when you are at that point, absolutely. If you're not already consciously planning and strategizing and laying out the tactics for how you're going to exit, it'll come back to limit your success.
Steve Rush: Yeah, I agree and if you bring it into real terms, you've got 60 board meetings technically, or that kind of philosophy of thinking will start to help focus the mind on the right things, the right behaviours and the right strategy, I guess.
Patrick Ungashick: Absolutely, you've got 60 board meetings. If your exit strategy is to sell, which is not the only exit strategy, but the most common one. A typical midmarket company takes about 9 to 12 months to sell and that is starting from the point where you are shaking hands with your banking team. So now, you are actually down to 48 months of prep time, and your buyers typically going to want to see 5 years of financial history, so the month of revenue and profits that you are booking right now is actually going to be viewed by your potential buyer, 5 years from now, so you are right, 5 years out. I mean, it literally is the final stretch of the race.
Steve Rush: And of course your buyers or your partners. However you decide to exit are looking for much more than 5 years of strategic thinking and planning too, because they are buying something aren't they, that they want to inherit, grow and develop, so they get a return on their investment? And I wonder, Patrick, you're having that lens. Do you often notice people in that space become less strategic in their thinking as they start to leave or exit or more?
Patrick Ungashick: No, you are under, that is a great question Steve. You are under pressure to do things that you would not normally consider doing, or you would look through a different lens if exit wasn't on the immediate horizon. I will give you for an example. The classic scenario is perhaps I've got a sales team of a half, a dozen people, but I don't have a dedicated sales leader, chief sales officer, vice president sales. Should I go hire that person? If I am in the last few years before I am planning an exit. That person might have an annual salary wages cost of a few hundred thousand dollars or more, well, how much sales do I need to grow in order to justify that expense? Because on the surface, the immediate impact of that type of investment in expanding my senior team is a reduction in our profits. Is a reduction in our earnings, which is a reduction in company value, I need time depending upon my sales cycle, and my market and what my company does. I need time for the sales to recover and grow higher in order to justify that expense. If my time horizon for owning and leading my company is 10 years, 20 years or more, I might not even think about that decision. It might be a no brainer because I am pursuing the growth of my company but if I am anticipating selling the company, maybe sometime in the next two, three years, that decision becomes that much harder. And it's much more difficult to be strategic because I have the tactical to use your very appropriate word. I have the tactical pressure on the near term on maximizing earnings, so you are right. It pulls the leadership, the owner and the company in different directions as you are getting very close to that. What I like to call that one-yard line.
Steve Rush: Yeah, is a really fascinating approach. Isn't it? Because I wonder if that deadline of exit was not there. You would make different bets. You would make different decisions because you are still in that growth phase and I suspect as an exit strategic, do you find yourself having lots of conversations with exiting executives who are going through that push and pull kind of thinking?
Patrick Ungashick: Yes, another classic example is many companies small to mid-market size companies struggle with the issue of customer concentration. I have one, or maybe just a very small number of customers, or clients or accounts that account for 20, 30, 50% or more of our revenue. I mean, that is a very common scenario where businesses get launched. They get launched on the back of one key customer relationship and in the beginning years, you are excited by those opportunities and the customer becomes such a large portion of your revenue and your profits, because you're doing great work for that customer. Delivering superior products and services and therefore that customer is throwing more and more opportunities, your way. That is exciting, that’s rewarding. Again, that is how many companies are birthed and grow to such great success. If you're in the homeward stretch, that's all danger because a buyer is going to come along and in most situations see great risk associated with such a significant amount of the revenue and or profits being tied to one, or maybe a very small number of customer relations. So just like, you said, if I am contemplating my exit and I am working to maximize the value of my company to my buyer or a successor. I now have an incentive as healthy of a manner as possible dilute the size and the impact of that one key account, that one key customer and try and grow the rest of the business even faster, which is a challenge in most situations in of itself.
Steve Rush: I wonder how many executives even have public companies have that mindset that you have just described about how they can drive value and if I guess if there was a direct correlation between a privately owned company and a publicly owned company. They are very similar thinking in activities that go on, but the mind-set shifts somewhat, doesn’t it?
Patrick Ungashick: It does and there is that. You use the word, I believe a few minutes ago, tension and the tension applies here. I mean, growing a business and creating value often move arm and arm together, but not always. Clearly, a company that is a $500 million dollar company is in most situations without question, more valuable than a $50 million dollar company. So growth and size creates a value impact unto itself. However, growth and value are separate in a number of other characteristics. I just mentioned customer concentration. If that growth is largely achieved through a concentrated customer base, the growth might be inevitable, clearer, it is measurable, but that value increase might not be there and certainly not in proportion because of the risk that you are creating. Another challenge that is common, more common in privately held companies, but not uniquely so. Is the issue of we call owner dependency, Steve.
Steve Rush: Yep.
Patrick Ungashick: And what that is all about is. How much can this company not just survive, but actually thrive without the current owner playing a day to day role in operations, customer relations, vendor relations, and so on. A lot of small to mid-market size companies, very profitable, very successful companies will struggle if the owner or current owners are removed from the picture. So again, the growth might be there. You might be able to see the growth measured year by year, but that value is maybe not going to be there as soon as that owner who is such a key employee is removed from the picture.
Steve Rush: Right.
Patrick Ungashick: Now, that is a much more common scenario in private companies, but it is not unique to private companies. I mean, we have a wonderful business story going on right now with Tesla and Elon Musk, who is such an influential and impactful individual but at this point, where we are in the development of Tesla. Would you buy Tesla stock if Elon Musk was not in the picture tomorrow?
Steve Rush: Right.
Patrick Ungashick: A lot of investors probably would not because that publicly traded company is heavily dependent on its owner. I should say its Chief Executive at, this point in time.
Steve Rush: Can have a massive impact on the valuation of the company as well, can’t it?
Patrick Ungashick: Massive, yes. I mean, you look at any industry and when you do a little bit of research, it is common. It is the norm that you will see, there's typically a range of multiples and multiples of earnings, but sometimes a multiple revenue, but there's a range of multiples that most often apply as guideposts in that industry. It could be six to nine times earnings, or five to ten or whatever the numbers are. Well, who determines who gets the six and who gets the nine? Or who determines who gets the low end or who gets the high end of those guideposts that may apply in industry. And the answer is typically not size driven because that's already factored into the guideposts. The answers is typically these other elements that drive value. One could argue independent of growth. We have listed two or three of them already, customer concentration, owner dependency. How compelling is that brand compared to its peer group? There is a number of elements. That you could point to and say, they may not directly drive growth, but they absolutely drive value, especially in sale.
Steve Rush: Sure, given your experience, Patrick, what are the key components that make for a successful exit?
Patrick Ungashick: I think it starts with the owner or owners if it is an ownership team. Having clarity around their goals, most owners have some aspirations. They can very quickly list. I want to reach a certain amount of financial reward. I want the company to survive without me. I want the culture to be preserved and the employees to be treated fairly. Those are rather universally held aspirations, but you need to probably be more specific in your goals and your outcomes in order to be able to implement the strategies or tactics they're going to achieve your variation in your interpretation of those aspirations. That is part of it. Then the other part of it is getting the company ready. Getting a company ready for exit, especially if it is going to be sale to an outside third party buyer. Is a very different process. Than just running and leading a well-managed company.
We talked about some of the issues already that drive value sometimes independently of growth. There is getting a company ready for buyers. There is the level of financial preparation that is involved in preparing the company's books and records and financial reports for buyers. That's a level of discipline and diligence that many privately held companies don't have, especially if their buyer buyers potentially going to be a publicly traded company, which is going to have a much more rigorous approach to financial underwriting, that deal. So it goes back to, we talked about when, you know, if you're down to five years, Steve you can see that there's a lot of work to do condensed in that five years on top of just keeping the company going and keeping the company growing and growing profitably,
Steve Rush: Now we both share the backgrounds of coming from investment banking and I was always taught on day one of fund manager school, never time the market, there is never a right time to invest. If everything stacks up, go. How does that square off though? When you are exiting, is there a right time to sell or exit?
Patrick Ungashick: Yes, I think there is. What they taught us in school is correct, but we have to talk about what market are we timing. If I am thinking about the publicly traded markets and opportunities as an investor, I would tend to agree with that statement. You don't time the market. You just go, when you are talking about a privately held company and anticipating when is the right time to exit, it is a Venn diagram, we've got three circles and we want to ideally target what happens in the middle of the overlap. On one of those circles, am I ready individually? Personally? The second of those circles is, is my company ready? Which we have talked about some of the issues there, and then the third circle is, is the market ready? And timing the market when you're anticipating exiting from a privately held company is hugely important.
I mean, Steve, as we all know, here we are, and we are dealing with a worldwide global pandemic that has unevenly impacted different countries and different communities in different ways.
Steve Rush: Definitely.
Patrick Ungashick: Here in the States, economically for most companies, most mid-market companies, this would be a disastrous time to try and exit at this point in time because of the noise, the distraction, the very difficult economic environment that's here in the States right now. Then you can't make that blanket statement across all industries and all situations, but I certainly can generalize and say for most companies, that would be true.
Steve Rush: Sure.
Patrick Ungashick: And you look at, you look at the global pattern of recessions and the periods of economic growth. They tend to fall in 6 to 10 year cycles. And when you look at valuations and this is true for North America, this is true for Europe. This is true for Australia.
I know when you tend to look at market cycles, what we typically see is multiples will rise and fall by anywhere from 25 to 40% Steve. Depending upon whose data you're looking at, based upon the economic cycle, meaning when I'm in a recessionary environment, most industries, most of the time see multiples that are 25 to 40% lower than what they are likely to be four or five years later when we've moved past that recessionary cycle and we're moving into a sustained growth situation. Now, if you try and time it down to the day, down to the quarter, you're going to drive yourself crazy and it will be self-defeating, but broad macro-economic trends, a good banker can be paying attention into those trends and can see that multiples are strong and buyers are frothy to use the term we all learned. And in normal times in healthy economic times say, okay, this is a better time to sell.
Very quickly, here is the problem though Steve, is that in those higher growth, good economic times, what is the company doing? It is probably making money. It's got a great pipeline. The team has got high morale. We are hiring people. Customers are happy. You are making a lot of money. It is profitable. That is fun. That is exciting. That is why business owners signed up to be a business owner.
Steve Rush: Right.
Patrick Ungashick: That is the time that most owners don't want out, that's the time when they're having too much fun. It is when you know, I have a lot of phone calls on a typical month where I would hear, especially pre COVID-19, I'll hear business owners go, you know, making a lot of money. I am having a lot of fun. Like I said, the pipeline looks great. Why would I want to exit now? And my response often is, well, do you want to wait until the pipeline is thin? And the margins are down and you're breaking even, and morale is tight, and you know, the team is really tense, is that when you're going to want to exit? And you can hear the light bulb go off and go, yeah, that's probably not the right way to time the market, is it? No, it is not.
Steve Rush: It feels counterintuitive to leave something that is successful, and fun and energetic, but absolutely from a valuation perspective, it is probably the right time
Patrick Ungashick: So much, yeah. The emotionally the time that you will least want to exit is probably the time that you should. And the time that you probably are most emotionally interested in exiting is probably the time you should not.
Steve Rush: Do you often experience Patrick in the work that you do now, those leaders of these organizations that have built their life's work or most over a period of time, do you ever find that they also don't sell because there is this fear of what happens next? What happens after the life and the work that they have created for themselves?
Patrick Ungashick: Yeah, it's an issue that does not get the level of attention that it should. We call that issue life after exit. What am I going to do with my time and my talent and my skills and my capacities after I exit from my company? And in my experience, Steve, very few entrepreneurs seek to do nothing after they exit from their primary company. There is nothing wrong with a life of pure recreation. I am certainly not opposed to that in any way, but that is just not, what a lot of people wish to do. A lot of people see themselves doing something else and when you exit from your company and you don't have something else to occupy your time and your talent in a way that's engaging and rewarding. All kinds of negative things happen, and I have seen it. You begin to doubt. Why did I exit the first place? Did I make a huge mistake? And it's a mistake you can't undo. The risk there is either not having something else meaningful and engaging to do, or having something that you think is going to be meaningful and engaging to do, but you start doing it for a little while and you realize as a client once told me years ago, what was fun as a hobby stinks as a job.
Steve Rush: Oh, I like that.
Patrick Ungashick: And so sometimes, the mistake that gets made is I think I know what I want to do in life after exit. I do it for a little while and I realize it is not my next life calling and I end up still being stuck again. And it really doesn't matter how much money you have in the bank. If you wake up every day without something rewarding, and interesting and engaging to do. That is probably not going to be chopped up as a happy exit.
Steve Rush: Sure, purpose does not really cost a thing, does it? Having a real sense of purpose is void of money and void of other things.
Patrick Ungashick: Yes, absolutely.
Steve Rush: You created a couple of books. The first was Dance In The End Zone and it's real a playbook to help business owners with their active. What was the inspiration for you putting pen to paper?
Patrick Ungashick: True story is the inspiration was my coach and mentor at the time being frustrated with me. I remember very distinctly in our having a bite to eat. I thought I was talking with my coach to get coaching advice and I turns out, I think with a little bit of hindsight, I was probably whining in that moment, but I was telling him that, you know, at the time there's, and this is probably still true today. There is thousands of books out there on how to lead or grow a business. But at that time, there was only maybe a couple dozen about how to exit from a company and I wouldn't want to admit this in a social setting, but I had bought all of those books, courtesy of Amazon and read most of them, and I walked away disappointed.
My mentor looked at me over lunch and he said, well, why don't you go write your own damn books? And I walked away chagrined and I walked away not like being challenged. And I didn't tell anybody the rest of it, the true story Steve is I didn't tell anybody what I was going to do. I started to poll together. I had written a few articles for some publications, and I started to splice together and I got to about 30,000 words or so, and realize that I had to finish. It changed the direction of my company. It changed the direction of me as a speaker, because when you write a book and I encourage anybody who has not done it to think about the project, whether you are a writer or not. Simply because what it forces you to do is, it forces you to organize and synthesize and arrange your thoughts in a way that I think is much more clear, much more directive.
The book became an in many ways, a resource for my team to grow. It became the book we all work from, the playbook; if you will that, we all work from, so writing that first book, Dance In The End Zone. It is still very important to us from our marketing standpoint and I am pleased whenever I meet a business owner, who has read it and says it has been helpful. But I would do it all over. I would write a first book all over again, just from the internal benefits, if you will.
Steve Rush: And those thoughts that you write down can then turn into tools that you use every day, right?
Patrick Ungashick: Absolutely, yeah. Our marketing team still extracts articles through the book and white papers and slices and dices it, and we are actually working on an updated edition that will come out later this year, right now, as we speak. So it's an invaluable exercise for anyone who has even, you know, part of your job description is thinking and thought leadership, even if it never gets published. I think it is an incredible exercise.
Steve Rush: Of course yours did and so too did The Tale Of Two Owners, and I suspect is that to help people that cone an organization or cone a business, worked through some of their conflicts, goals and outcomes?
Patrick Ungashick: It is. We did some market research as part of my first book, A Dance In The End Zone and the market research had a few nuggets in there. Were incredibly surprising to us and this is a survey of North American privately held companies. The biggest learnings that came out of that research was, about 70% of privately held companies in North are owned by more than one individual. I have never seen any data for Europe, but I suspect it is probably similar.
Steve Rush: Right.
Patrick Ungashick: We went back, and looked at our client base hundreds of businesses over the years and found that it matched up perfectly. And I still wouldn't have a chance to survey if I'm speaking to a room of 300 business owners, pre COVID-19, I'll say, raise your hand if you have a business partner and typically about 7 out of 10 hands go up in the air.
And that's incredibly important because when you share ownership in a company with one or more other individuals, or maybe an organization like an investment company. Now all these things that you have to think about and address and plan for, and act on to be ready to exit. Now you are sharing that journey with somebody else and they may or may not have the same goals. Very often they don't, just because two different people, two or more different people. And so, yes, I ended up writing A Tale Of Two Owners. Exactly, as you said. As far as I know Steve. It is the only book in existence. That is specifically a resource for how business partners, should approach these issues as a team. As a partnership and how do they explore these issues together and how do they answer them in a way that is collaborative and maintains that alignment, which is probably so fundamental to their business success in the first place.
Steve Rush: Definitely so, in my experience, prior to do what I am doing now. Helping business owners that have different perspectives, different families, different outcomes, whilst they share the same goals and ambitions for the organization, they come from a different place, a different reason, and therefore the same reasons that they grow the business and want to achieve things, will definitely then play out when they come into exit, wont it?
Patrick Ungashick: Absolutely, we are working with a client right now. That's a large company based here in the United States, three owners. I will keep the example very quick and simple. Let's just say they all own a third, a third, a third and they're in the advanced stages of the investment banking process. They are likely to sell for a very successful number. They all have aspirations. They all have multiple things they want to see happen to this company that they have successfully created together. One of the owners, however, the primary drive is. What is going to be the price? How much are we going to sell for? What is the value we are going to walk away? Not that he does not care about other things, but that is the top of his mind.
Another the second, so let's just say the second or the third owners is about how are my people going to be treated? I mean, we've got hundreds of employees here. We want to make sure that they are treated fairly. It is not that he does not care about price, but the top of his mind and his priorities is what is going to be the impact of the team, and then the third owner just happens to be the youngest of the three and that individual wants to stay involved with the organization going forward. And he cares about money and he cares about the team, but he probably top of his mind is, what's this going to be an impact in him personally in his life, because he's probably got another 20, 30 working in front of him? So here, you've got three partners who share an immense bond with one another. They are very strongly rooted in their financials. They have a wonderful relationship. They built a very successful company, yet every turn and every development in the sale process, we are looking at each issue through three different lenses and they already know that it is beginning to tug and pull on them and go in different directions. And that's not a loss of personal respect, or it's not an erosion of their relationship with one another. Its three different shareholders, three different owners who are trying to row the boat in slightly different direction.
Steve Rush: Yeah, It is fascinating stuff, Isn't? Really fascinating stuff and thank you for sharing some of your insights as to what you do. This part of the show Patrick is where I turn the leadership lens on you, so you are a successful entrepreneur and CEO of your own businesses too. I want to hack into your leadership mind now and find out. What your top three leadership hacks would be?
Patrick Ungashick: I had fun with this. This is a great exercise, and I have enjoyed listening to others that you have worked with, share their leadership hacks. Mine came to me surprisingly quickly. Maybe that is a sign of a simple approach on my part, so my first one is. If you don't know what to do or say, ask a question. There has been great minds out there who have written entire books and Ted talks about the power of asking questions. My specific hack is if you are stuck, if you literally just don't know what to do in a particular moment, just keep asking questions. Usually that helps reveal the direction to go or the decision that needs to be made, so it is a trigger response. It is a default position I like to take.
My second is I didn't invent this question by any means but it's one that I find myself using often at both from my companies and also with the clients we work with. Is if I had no fear, what would I do? Or I'd like to substitute we in there. If we had no fear as a team, as an organization, what would we do? I think too many individuals and too many teams don't stop and let that question settle and really wrestle with it and explore. It changes thinking and expands thinking. It changes paradigms, so that is my second one.
And then my third, I know the source of the third. It comes from Jim Collins book, Good To Great, and my third leadership hack is a stop doing list. Most companies, leaders, leadership teams get pretty heavily bogged down with identifying those things that they need to do more of or add onto their plate or expand. And I think very few organizations or teams spend any time specifically and intentionally discussing what they need to stop doing, which is hugely important because if you can stop doing things, you create bed with, you create capacity, you increase focus with all the wonderful insights that Jim Collins shares in his book. It is one that I find myself utilizing on a pretty regular basis is just to stop and ask myself or ask my team or ask the client, Hey, what's on the stop doing list at this point in time.
Steve Rush: That is great hack Patrick, and actually, I think the reasons why people don't have much of a stop list. Is that fear of what will people think? What will people feel? It means I have invested all this time and energy doing something that might not be giving me the value, so they are super hacks. Thank you for sharing.
Patrick Ungashick: Sure.
Steve Rush: So the next part we are going to tap into is what we affectionately call Hack to Attack, so this is where something in your world in the past has not worked out in the way that you intended it to. And as a result of that, though, you've used that experience as something that's now positive in your life. So what would be your hand to attack?
Patrick Ungashick: Well, I mean, I've got a long list. If this is a list of leadership mistakes. I mean, how long has your podcast Steve? It was a variation on the first of the three hacks that you asked me to share, which is, if you don't know what to do, ask a question. When I first took over, I've got several companies and when I first took over as CEO of my first company I had a lot to learn on the job, and I was relying heavily on ask good question. And there was a moment where we were going through this, there was a recession going on. We were going through a difficult economic time and my controller came in to see me about a very difficult financial question. And as we were wrestling with it, she was getting more and more frustrated and exasperated and she turned to me in the middle of this meeting and she said, and she said something like Patrick, don't ask me another question for Pete's sake, I just need to know the answer. Tell me what to do and I think that the Hack to Attack is. There are moments to be listening, absolutely and there are moments to be asking questions of yourself and of your team.
There also are moments where got to step up and make the decision and even be directive. Teams need confident leadership. Even if you are not as confident as you would like to be, they still need a direction. They still need the decision then sometime, so there is a balance act there. Sure, we need to ask questions on a regular basis as a matter of habit and a response to situations, but there is also moments where I learned in that moment that there are times to just make a decision. Tell your team what you are going to do and get everyone alignment around it going forward and it is an art, right? It is not a science. But that's, my hack attack is sometimes I may be default too much to asking questions when there are moments where you've got to say, this is what the answer is, let's go forward.
Steve Rush: Yes, so right. Even this week, I was having a coaching conversation with one of my clients who was a very senior executive director of a fortune 500 company and yet the situation still came down to, I need to be collaborative. I need to be engaging. Yes, you do but sometimes you also just need to say, I think we should do these things.
Patrick Ungashick: Yes, yeah, and how do you read the situation? How do you read the moment? How do you the faces of the team? In order to know when you are at one of those situations, and it is a balancing act. I have made a mistake at that moment and we were all going to continue to make mistakes, but you have got to be intentional about feeling your way through it.
Steve Rush: Definitely so, and then the last thing we would like to do with you, Patrick, is do a bit of time travel. And this part of the show, we're going to ask you to jump into time machine, go back and bump into Patrick at 21 and you have a chance to give him some advice. What would it be?
Patrick Ungashick: Obey your instincts. The phrase that I think most of us fall back on is trust your instincts. Obey is a certain amount of.
Steve Rush: It is like that.
Patrick Ungashick: A certain amount more rigid disciplined response and this also an actionable. You are supposed to take action and as I mentioned, you asked me at the beginning, how I got started and I have got lucky. I must freely admit in the beginning of my career. I had aspirations around doing different things, but I did not act on those instincts. I did not obey my instincts and it is not just about, it would be fun to go back and have that conversation with ourselves to 21, wouldn’t it? But I think it also applies. I know it applies for me too today. If I find myself struggling with a decision and struggling with a course of action as a business leader, very often, if I remember in the moment to stop and ask, am I obeying my instincts? If I am struggling, I probably am not. I am probably guilty of forgetting that one, so especially in the beginning of a career, back at age 21. When there is so much flexibility and so much good uncertainty, about where you can go with your time and your talents and your career, just obey your instincts and go chase whatever you want to chase at that point in time, the rest of life will figure itself out.
Steve Rush: Love that, super stuff. Thanks Patrick.
Patrick Ungashick: Thank you Steve.
Steve Rush: As folk have been listening to this, I suspect they will be wanting to know how they can get hold of a bit more information and insight about you, your firms, and what is you're doing at the moment. Where's the best place we can direct our listeners to, to find out a bit more about you.
Patrick Ungashick: Thank you so much, so our company that does the exit planning work is called NAVIX, N-A-V-I-X, as in navigate towards your exit and our website is navixconsultants with an S on the end. navixconsultants.com, you can find information about my two books there. We have dozens, hundreds, actually of videos and articles and a couple of dozen white papers and eBooks, all of which to help business owners and leaders understand these issues and get educated on the importance and how to prepare for exit. I think Steve, probably the best place to start; because there is just a lot of content on the website is an eBook that we created a couple of years ago. That is probably our most popular you book. It is called Your Last Five Years, and it lays out what do business owners need to be thinking about and doing and tackling during that final 60 months, it's free. People just need to log into the site and download the eBook, Your Last Five Year.
Steve Rush: And our listeners will also find links to all of those sits and all of the resources that we've just spoken about in our show notes as well.
Patrick Ungashick: Wonderful.
Steve Rush: So Patrick, whether I think our listeners are either in the space of growing, developing, or considering exit for their business, they will get loads out of listening to the show. So from my perspective, I just wanted to say, thanks ever so much for sharing your insights, your knowledge and your leadership hacks with us on The Leadership Hacker Podcast.
Patrick Ungashick: Thank you, Steve a delight to be with you across the pond today. And I've, enjoyed becoming a subscriber to your podcast as well. Some wonderful material you are putting out. It is my honour and pleasure to be with you today.
Steve Rush: Thank you, Patrick, really appreciate that.
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