Turning Your Employees Into Owners
Phone: 314.283.1589

Case Studies

Ardent will feature post regarding the firm.

Ardent Group recently surveyed 134 small to medium sized companies throughout North America to determine the use of well-established business tools in operating a company.  63% reported having completed a strategic plan in the last 2 years.  42% have completed a customer survey and 48% have surveyed their employees in the last two years.  55% have a key metric dashboard.  Of those firms with a dashboard, 89% share budgets, 88% share quoting volume, 92% share sales, 93% share revenue and 88% share margin.  71% of firms responding report having a bonus program.  Of those with a bonus program 43% have a portion that is discretionary, 62% tie bonuses to individual performance and 67% tie bonuses to company performance.  63% of businesses report having a succession plan with 23% intending to sell to a third party and 41% intending to sell to an insider.  35% indicate a process is in place for business leaders to become owners.

If you have not participated in the survey, we encourage you to do so by clicking on the below link.

SURVEY

Get by With a Little Help from Your Friends

They say it’s lonely at the top and they are all too often right. You come up through the ranks, you have the support of your friends and colleagues, the guidance of your professional mentors, but then you make it to the top and suddenly everyone vanishes. You’re not one of the guys anymore. You can’t go to your supervisor for advice because you don’t have one.

But even CEOs need mentors and friends in the field. How else can you keep growing as a leader and as a person? How else can you stay relevant in today’s ever-changing business world? You might not be able to find as much support inside your company anymore, but you do have a couple of other options.

Get to Know Someone

To find a good mentor, you, as a CEO, could approach current or former CEOs of other companies. Some people develop excellent working relationships that way. Most folks are happy to offer their expertise and flattered to be asked. But finding the right person can be difficult if you don’t have an established friendship already—not everyone has the time or energy to spare, and you won’t “click” with everyone.

Work with a Consultant

You can also hire an outside firm (like Ardent) to help you improve your leadership skills. While it might seem odd to hire someone for support and feedback, it isn’t so different from the kind of mentorship you might have found back in school—you were paying tuition, after all. This way, instead of you going to school, you hire the school to come to you. The big advantage of working with a consultant is that there is no question that the person will have the time and energy and interest to mentor you. For a consultant, working with you doesn’t require time off from work. The consultant’s whole job is to help you.

Join a Group of Your Peers

You can also join an organization for CEOs, like Vistage. At monthly chapter meetings, Vistage members learn new information and skills from outside speakers and also discuss with each other issues that arise within their own companies. It is almost like being like members of each other’s boards.

I’ve actually been a member of Vistage for over ten years. You get that constant flow of information. You never know when you’re going to use that information, when you’re going to need it. You build your repertoire of skills over time so you’re equipped for whatever comes up.

To Sum Up

An individual coach or mentor in your specific area, whether that’s marketing, construction, transition, or whatever else, is a great option. And either an individual or a consultant can adapt to your specific situation and help you with what’s going on in your company today. Peer group organizations, on the other hand, give you a wide range of more generalized information and provide a context with which you can both give and receive support.

However you do it, the point is to find someone who really has no agenda apart from being there for you. You need someone who will be in the trenches with you, no matter what.

Communication is a pillar for Ardent.  As business leaders, communication nurtures and develops our team to think and act like owners.  When we are owners we put ourselves out there for all to see.  We may be imperfect but we are worthy of sharing connections that are authentic.  In Dr. Brown’s TEDX presentation, she suggests these connections are not based on a hierarchical business expectation but on being vulnerable.

Dr. Brown states that in order to connect we need to have the courage to be imperfect, to be kind to ourselves and others and the ability to be our self.  We have to learn to be comfortable with being uncomfortable.  This could be entering into a business, relationship, or conversation where there are no guarantees.  As owners we need to embrace space where failure is an option.

Vulnerability is not a weakness but a measure of courage.  Vulnerability unlocks the door to innovation, creativity and change.  If we are not willing to be vulnerable we avoid.  Avoidance may manifest itself by ignoring the obvious, being dictatorial or micromanaging.  By being vulnerable it gives owners the ability to work through the tough decisions (hire/fire, new markets, turnaround, new products, define culture, succession planning, financial performance).  By having the tough conversations we foster growth and maximize success for the organization, team and ourselves.

I encourage you to watch Dr. Brown’s Presentations

The Power of Vulnerability

Listening To Shame

“Vulnerability sounds like truth and feels like courage.  Truth and courage aren’t always comfortable, but they’re never weakness”.  Brené Brown

A close friend pointed out in my April 21st blog post My Journeythat I did not provide any detail on the way we created our ownership group at Counsilman – Hunsaker.

I knew from the beginning that to carry the firm to the next level I needed an engaged team with a shared risk / reward.  A professional marriage of sorts that had the team members committed to the long term success of the firm.  While my father was not comfortable with partners, I realized that to attract the best, they would want to participate in a meaningful way.  Looking at the legal and accounting fields, if you are not a partner, you have not arrived.  The same is true, although less prevalent, in the other professional service firms like architecture and engineering.

The agreement with my father prevented me from adding partners until his note was paid in full.  However, we started the process almost immediately of laying the ground work for what ownership would look like by discussing all of the various expectations, issues, concerns, and “what if’s”.  We created a white paper outlining the issues and collective expectations on how to deal with them.  We then retained legal counsel to memorialize our goals and objectives.

This was more difficult than one might think.  The legal team wrote the first version one sided focusing on providing every protection and benefit for me.  Our goal was to create working documents that could support multiple transactions over the life of the firm.  We used 100 years as a guide.  On the fifth draft we had a solid structure that was well documented.  The next question was how to fund it?

It is my belief that stock has real value and should be purchased at that value.  We did not favor other stock strategies like phantom stock or different classes of stock.  The stock was not to be given away or discounted.  So how to finance the purchase?  On the first purchase, I provided my personal guarantee to the bank.  Call it priming the pump.  It allowed the bank time to get comfortable with the ownership team.  This was the only time I provided this level of support.  These new owners were taking a leap of faith on me and on a good but untested ownership plan.

A good business decision requires that all parties have all of the information and understand it.  To invest in this success, we provided a budget for each perspective owner to get outside legal advice.  The goal was not to modify or negotiate but to understand the terms of the commitment.  This process served us well.  Our ownership documents and process supported multiple transactions including the purchase of my majority ownership.

The guiding principle that I used in working through all of the questions, issues and challenges was “What’s good for the goose is good for the gander”.

Posted by: In: Ardent 1 comment

mail_image_previewMy personal mission statement has been

“To develop the best possible team, give them the best possible tools and get out of the way!”

I grew up in the swimming pool business. My father started Midwest Pool Management in 1963, the year I was born. I grew up digging ditches, acid washing swimming pools, lifeguarding and managing. As the boss’ son, I had more opportunities than most, but I would also argue that the expectations were higher than most. Through this experience growing up I developed a strong respect and interest in the entrepreneur. When I went to Indiana University it was with the intent of earning a Bachelor of Science degree in Entrepreneurship (it was a major at the time that has since been discontinued). After college I worked for Adam Aronson, CEO of Mark Twain Bank, in a management training program. Mr. Aronson was a dynamic leader that invested heavily in his team. I learned a great deal from him, and many of these lessons are a part of any legacy I have left at the organizations I have led.

In 1989, my father asked me to join the family business. I was eager to help. The advantage of joining a family business is that you get a head start on your career path. I would like to think I would have been successful on any career path, however, the family business allowed me to be tested by fire faster. It has been my experience that success of the next generation is more dependent on the senior generation than the younger. How the family patriarch communicates, shares knowledge, empowers and trusts the new generation is the critical component to success. My father was a master at laying the foundation for me to be successful.

In 1997, I approached my father with another team member to discuss buying the firm. While there were a lot of reasons we were not successful, I realized my father was not comfortable with partners. He was a brilliant visionary in the aquatic world and was exceptional at pushing the boundaries of aquatic design. But, at this point, the firm was at capacity because Dad was intimately involved in every project and there were just so many hours in the day.

In 1999, I was successful in purchasing 100% of Counsilman-Hunsaker. At that time we were licensed in 10 states and had 10 employees. I realized that for me to grow the firm, it would take a team that had the passion and discipline to build on the values my father established. Within the first six months we held our first strategic planning session, developed an open book corporate dashboard, began a formalized quality control process and created a shared fate culture where the entire team shared in the success and shortfalls of the organization. Over time this culture attracted some of the best talent in the industry. Counsilman-Hunsaker stood out as a home for talent where team members could make a tremendous impact.

By 2009, the firm had grown to 37 team members with three offices and licensed in all 50 states. Twenty percent of our revenue was from international projects. In 2003, I began offering stock to team members and by 2009 there were 12 partners. We had built a management team that could do just about anything and were poised for continued rapid growth. While hoping for the best, but preparing for the worst, the recession hit the aquatic industry in 2009. Industry publications indicate the swimming pool market declined 70% between 2008 and 2011. While Counsilman-Hunsaker did not experience this decline, we did have to manage challenges during this period. As we exited the recession in 2012, we had no debt, our market share had doubled and we were poised to enter new markets. Since 2010 the management team handled most of the day-to-day function of marketing, production and planning. My role as CEO was focused on strategic initiatives.

In our 2012 strategic planning meeting, we came to a standard agenda item of corporate stock sales. It was my philosophy to offer shares of stock each year to provide an opportunity to buy in the good times and bad. This seemed the most fair to me. In 2012, I owned 56% of the firm. I had always said I was willing to be a 51% owner, a 20% owner, a 0%owner but not a 49% owner. The plan was for me to go to 51%. I had also shared with my team it was my desire to do another start up and to build another team. This would bring my focus back to my passion for entrepreneurship.

Well, be careful what you ask for … a number of our junior partners expressed interest in becoming major shareholders. This would take me to the 20% ownership range. The fact of the matter was this team had the talent, skills and capability of taking Counsilman-Hunsaker into the future and make it their own. I believed in them and the bank did as well. The bank agreed to finance buying 100% of my outstanding shares. We executed the deal in less than 60 days. This could not have been accomplished without the years of communication, empowerment and trusting with confidence. These team members had already been owners in Counsilman-Hunsaker, both figuratively and functionally for a long time.

So why did I do it? Could I have made more money staying in my role? Absolutely. Do I miss having a highly skilled team of professionals around me? You bet. But it was time to walk the walk and talk the talk. The Counsilman – Hunsaker team was the best possible team, we had the best possible tools and they were making themselves better every day.  It was time for me to get out of the way.

Ardent means enthusiastic or passionate. That is how I feel about entrepreneurship and business leadership. During my business career I have lead eight companies and been involved in 16 mergers and/or acquisitions. My personal mission is to develop the best possible team, give them the best possible tools and get the hell out of the way.  Ardent’s purpose is to provide the information necessary to business leaders to turn their employees into owners.

A recent survey indicated that 80% of business owners plan to sell their business to family members or employees and 20% plan to sell their business to a competitor or outsider. What actually happens is the 20% that plan to sell to an outsider do, and the 80% that plan to sell to a family member or employee only complete the transaction about 20% of the time. Why?

It appears we have very good tools to transfer the goodwill and intellectual property from one firm to another. This is often a straight forward financial analysis and transaction. However, the ability to transfer the institutional knowledge, business management skills and trust to the next generation takes time and effort. To develop the best possible team and give them the best possible tools to carry forward takes communication, empowerment and trusting with confidence. The reality is that much of this planning occurs in a vacuum. Too often we confuse the urgent with the important and fail to make our own firm’s needs a priority.

By turning your employees into owners you have more options. A highly effective management team that is empowered and tested provides the business leader more options when planning for the future. It allows you to fill a wise counsel role and distance yourself from the day-to-day activities with confidence, make your firm more valuable to others, and it provides the foundation to transfer the organization to your employees.

When I ask business owners what their definition of success is, or when they will transition their organization to the next team, the knee jerk response is cashing out when I can get the best possible price. After thinking about it awhile, many reflect on leaving the organization in the best possible hands to carry on and build on the legacy they had built. There is often a desire to make sure the employees and customers are well taken care of. Ardent looks beyond just the dollar to meet your definition of success.

Not making a decision is a decision.