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Cash Flow Is King for Any Startup or Scaleup | with Ken & Mark Heymann · GAIN Momentum

• ​GAIN Momentum episode #49- Cash Flow Is King for Any Startup or Scaleup | with Ken & Mark Heymann === Adam Mogelonsky: Welcome to the Game Momentum podcast, focusing on timeless lessons from senior leaders in hospitality, technology, food service, and travel. I'm your host, Adam Mogulonsky, and today we have two guests, two brothers, Ken and Mark Heyman, who are the founders of Unifocus and their current venture, Heyman Squared and Associates. Ken and Mark, how are you doing? Ken Heymann: Good. Thank you. Mark Heymann: Well, thank you. Very nice to be with you this afternoon. Adam Mogelonsky: Well, great to have you here. And, um, you know, it's, it's such a rarity that I get to interview two people at the same time and two brothers, uh, as well. So what I'm hoping to do is before we dive into our first key question that we ask all guests, I'm hoping that each one of you could take a turn to describe what you're currently working on. And perhaps Ken, I'll put it over to [00:01:00] you first to describe that, but also give us a little background on Unifocus and your, uh, your tenure there founding it with your brother. Awesome. So Ken Heymann: well, as, as you just pointed out, uh, we founded Unifocus in 1998, and the origin of that company was a consulting practice that we had started about 15 years earlier. Mark had been, uh, working with, staff planning, workforce management consulting firm, had an opportunity to focus on the hotel market, did so. He started a company which I joined a few years after. That company was founded, we then started our own consulting practice, but our goal, from the inception, of that business was to build technology to do what we had been doing, back in the time with paper, pencil, and pocket calculators, and that's what led to Unifocus's creation in 1998. And of course, over the years, we've gone from some very, very early versions of workforce [00:02:00] technology and labor management. To where Unifocus is today, and certainly still one of the premier providers of workforce management technology across the hotel industry. So, I was sort of the latecomer to the process, Mark had been in the business and had founded a company, and then he and I, together, started what ultimately became Unifocus. As of today, we sold a majority stake in Unifocus to private equity. In turn, we stayed on for different lengths of time depending upon the agreement. once I had left because I stayed longer, um, Mark and I again sort of got together as we have for the better part of our lives, you know, we've worked together for, I guess, 40 years now, um, and started Hayman Squared Associates. And I'll, uh, let Mark talk about, you know, his background a little bit and his focus. We sort of have two areas of focus. my focus is what I call the consulting practice. Which basically involves working with hotels and owners to look [00:03:00] for and define improvement opportunities throughout an operational assessment and frequently working with the hotel management company to find opportunities for improvement. I have a staff of several people. We currently work at a few hotels, predominantly the auspices of an owner in this particular case. We work with both owners and managers. Um, recently did some work for a hotel. One of the companies that uses Unifocus technology to help them understand opportunities to use it more effectively, which is still a fundamental part of my practice to help organizations use whatever labor management technology they have more effectively. And as I think anybody who's on this call or on this podcast would know, there's a number of applications out on the market today. And so we are somewhat software agnostic in terms of looking at ways to utilize the technology more effectively. And then also doing some consulting, in some instances with private equity, looking to acquire workforce management technologies, things of that [00:04:00] nature. So that's where the consulting practice focus has been, um, since the inception of Hayman Squared or H2A as we like to call it earlier this year. And I'll let Mark talk to the area where his focus is. Um, in terms of, you know, his activities. Mark Heymann: Well, as Ken said, sold the business to private equity, um, I left it in the milk and gave it to my foster dad, um, we remain members of the board of directors. But, um, since leaving Unifocus on a full time basis, I've gotten myself involved in working with a charity, um, the treasurer of the charity in Dallas that helps place veterans and disabled people back in the marketplace, which has been quite rewarding and happily quite successful. At the same time, I, um crunched the numbers with Ken in the H2A business, so I get to keep some of the books, et cetera. And then I've also started a new software company. We're [00:05:00] in the middle of developing some new technology, pretty much around the area of enhancing employee engagement and finding more tools, more ability, more capabilities. To help the hourly and the managerial team of any service business become more engaged in what they're doing and create a more effective reward process for those individuals. That's kind of, I think, where we sit today. I also, since leaving Interfocus, I've also acquired some real estate assets in some different parts of the country with a partner. Adam Mogelonsky: When it comes to scaling a business, what is the single piece of advice you would give entrepreneurs from your perspective as [00:06:00] professionals in the hotel technology industry? I guess, uh, Ken, if you wanted to go first and we can go back to Mark or if Mark, you wanted to go first, your call. Ken Heymann: Well, couple of thoughts. you know, one of the things I always talk about when I talk to people who are starting businesses, and I've had an opportunity to have conversations of this nature with various people, is to explain that when you're in a startup environment, your profit and loss statement is not as important as your cash flow. You know, that you may be making a lot of money, but if people aren't paying the bills. So, that's point one. And that sounds incredibly mundane. And yet, a lot of companies I've seen fail because they're not looking at that. And the other thing I would say, which is something Mark talks about, and I'll sort of segway this to him, is don't bite off more than you can chew. You know, when we started our company, we had grand plans. we had a good mix between, Mark and I talk about this all the time. I think Mark, Mark's, one of Mark's great virtues in our organization over the years has [00:07:00] been his ability to drive forward with a vision of where the technology should go. and always pushing that envelope as much as possible. Whereas, I often was, wanted to make sure that we didn't bite off more than we could chew. That we had the resources, the skills, the ability to get where we wanted to go. And, oddly enough, that kind of push pull of like, yeah, we have to go there, but how fast can we go there? So, some of it almost sounds a bit clichéd. You need a coherent plan that you can test yourself against frequently so that when it comes to scaling and you're talking about growth, to use again a cliche, you know, you want to prepare, you want to hope for the best, but prepare for the worst. So I would turn that over to Mark, but those are the things that always stuck, stick out to me, like understanding the essence. of managing the financial aspect of the business, and then also, um, making sure that what you aspire to achieve is really viable based on the resources and the [00:08:00] skills within your organization. And understanding that as you grow, the skills you need vary. When you're a little company, there's real value in having someone who might be a jack of all trades. know, can do a little of this, a little of that, but as you grow, you get a little more specialized. And I think Mark would agree that when we look back over the years of Unifocus in our early days, we ultimately had to move on from some people who were great jacks of all trades, but didn't experience or present the level of expertise we needed in areas as we grew the business. Mark Heymann: I think coupled with that, you know, Ken's comment, you know, um, don't count your chickens before they're hatched. I think you've got to be very careful of how you scale, the speed at which you scale, and it's a delicate balancing act because, you You want to be prepared to handle more business, at the same time, as Ken said, you can't hire an abnormal number of people in the hopes that you're [00:09:00] going to close five more contracts, so it's a delicate balancing act between people. Um, hiring more people, getting more capabilities. And the other thing I think that's critical in looking at from a scaling standpoint is one of the challenges that companies frequently run into is if they scale too quickly, they can see a deterioration in their product quality. And especially when you're a small business, if you're a big maker company and you kick the budget once or twice, you can probably survive that. You're a small company in a startup world, and you're trying to grow the business, and you've got ten clients, if you will, and two or three of them have a poor experience. You've now pretty much put yourself in a situation where you may be endangering the entire business. So you've got to balance your growth, your scaling, with ensuring that you're still delivering. On your value proposition, and that [00:10:00] every customer of yours, every relationship you establish as you grow the business, needs to be at the exact same quality level. earlier on in our business, we had a few very large partners. Clients. And as we would talk to even a smaller client about our capabilities, one of the key questions they asked was, you've got this client and this client. Are you going to pay as much attention to me? Because I'm much smaller than some of your other clients or people you've been working with for years. And you have to have the internal capabilities, but also The commitment that, regardless of size, every one of your clients gets treated with the utmost of care, and that the value proposition you're committed to is actually delivered, In the vein that Ken was talking about, is you've got to watch your cash flow, you know. The other comment I would have in a scaling, pure [00:11:00] scaling, is in the beginning stages of your organization, you don't necessarily need to do it all in house. One of the mistakes we made very early on, very early on, One of our developers was, he felt we had to develop a new GUI for our clients and spent massive amounts of time and energy and the truth of the matter was there was a product on the market that met 85 percent of our needs. So the other balancing point when you scale is only move to internalizing something that's critical to your business at a point in time. Make sure you're looking outside. So that you can flex your costs until you get to a point where you can actually take it fully in house. And I think, it's great to say that we like to do it all in house, but there's some great systems, great technologies. Unifocus at one point tried to do their own reporting [00:12:00] and finally turned to some reporting tools in the market that may not have met every aspect of what we're looking to do, but were more than sufficient to meet our clients goals. So that's another key issue of scaling is can you buy it at a house for a while until you realize that the amount you're spending on, let's say, a monthly basis exceeds what you can take it in house for. Ken Heymann: But I think it also goes, I mean, it goes back to Mark's earlier comment about it really comes down to what is your value proposition and what are people buying your technology for? So to really understand what is the absolute essence of your technology. And what you need to develop and what you need to own versus what you can buy from a third party that, as Mark said, may not be the perfect solution, but it's more than sufficient to meet your client goals and doesn't, I can't think of the word I'm looking for, but doesn't diminish your focus on your core [00:13:00] product and your core value proposition. Mark Heymann: And your core expertise. There was a hotel company years ago, that'll go unnamed, but they actually investigated outsourcing all their housekeeping operations and felt that their core capability was marketed. Well, as it turned out, they had some errors or mistakes in their assessment, but the fact was that they were looking at their core competency and were looking at making a decision. Do we need to keep this. in house? Or is this something that we can actually outsource and it'll be more profitable for us? So I think those are the decisions as you scale, you need to also take a look at internal skills and strengths and also what you can buy in the market until it makes sense to fully internalize Adam Mogelonsky: Well, both you have mentioned the term cashflow, and this. of course, uh, we're talking right now about internalizing your core strengths, which implies that your [00:14:00] externalizing some other non-strengths or non immediate. Strengths, and that may in turn save you costs to then trim down how much you, the money is flowing out of your business. My question to you is, and when it comes to cash flow and accounts receivable, what's a polite way to tell people? Hey, pay your bills net 30 instead of letting clients go net 90, net 120 and them just promising that it's coming, it's coming, it's coming, and then you're slowly hemorrhaging because you're a zero interest bank. How do you, how do you solve that? Mark Heymann: it's an interesting question. Because the simple reality is in some parts of the market you're paid on a very regular basis, you have a good relationship, they have an accounts payable group that gets your bill, gets your payments out on a regular basis, and then throughout the years we've had clients delayed, delayed, delayed, in fact, unfortunately, can lose some clients [00:15:00] over it, and the balance point is, you can't afford to let them go 120, 150 days, especially in a small organization where you're actually dependent upon care flow, I think part, part of it comes down to the organization. frequently people call the accounting department and, um, you know, think they're going to get paid through the accounting department. I think the key is when someone starts falling behind, you got to call the person that signed the contract. You have to basically get a hold of that person and at least in our minds, or surely in my mind, say, look, this just isn't fair. You agreed to do this. We're delivering on the service. we've accomplished everything. Here are the reports, and we're having a hard time understanding why you're not paying us on time. If there's a problem with the service, we're happy to address it. But I think at times, and I think one of the challenges the world has [00:16:00] today, is people think because they sent an email, they've done as much as they can to get something resolved. There is a point where you literally have to pick up the phone, talk to the person who signed the agreement, and try to get an understanding of why are we not getting paid? What is the challenge? I mean, look, they may be having some financial challenges, and then you try to work out either a payment schedule, and the last resort is, which is unfortunate, is you stop delivering services. but, the reality is, as soon as you, I'm sorry, Karen, as soon as you do that, you may well have lost a client. Ken Heymann: but we we did have a structured escalation protocol. just to elaborate a little bit further. So our protocol was, you know, in the first 30 days, 45 days and, and all candid, all candor, Adam, to your point, we never hocked somebody to collect if they was, if it was within 30 days, everybody ages you. So, so you have to build, You know, a model that accommodates the fact that if you send a bill Tuesday, [00:17:00] you ain't getting paid Friday. And if you're not doing that, if you're not acknowledging that a bill that goes out Tuesday isn't going to be paid until the next month, then you're fooling yourself. So, there's that financial planning piece of the process. But from the escalation protocol, A, within the first, call it 31 to 60 days, AR pursued it. The next step up was the client success manager or the customer success manager, whatever term the individual responsible for that, and that reach was typically, at least to the senior person in finance in the other company, we no longer wanted to talk to AR. And then to Mark's point, the third escalation point, and, uh, Mark, Mark makes an incredibly, two incredibly value points, okay? At a certain point, stop sending emails. They don't work. People can ignore emails. People are more inclined to take phone calls and then secondarily, and this was something that we would discuss. I would say to people, look, at a certain point in time, the call has [00:18:00] to come from me because I'm the COO. So I'm going to call my counterpart or whomever is a contract signer and say, why aren't you paying us? And that's a different conversation from a client success manager or an AR manager. So the second point is you need a coherent escalation process that everybody abides by. Because to the point when we were selling software as a license, it was much harder to click. Mark's right. At some point with software, with SaaS models, which is where everybody used to, you can always turn it off, but then you're going to lose them. But you got to have a coherent escalation process in place that allows you, because I would sometimes say to people within my organization, I'd look and sometimes I was behind, I'd say, wait a minute, this is 120 days past due, what's going on here? And they would say, they haven't responded, my response would be, why the heck didn't you come to me? Because I'll make that phone call. And if you're an executive at any level in an organization, you have to be willing to make that phone call and have that conversation Mark was talking about. Mark Heymann: I [00:19:00] think also, as Ken talks about easy escalation. Now, there's a problem. If you look at the average accounting or financial person, one of the metrics they have is, So you also have to make sure that in your organization, it's not punitive if those days begin to extend. Because some people will just hide the information from you. You know, you have to have a financial person. And as a company grows, you go from a bookkeeper to a consultant to a CFO. But you have to have regular reviews as executives of the company, of your financial. As Ken commented earlier, what's not just your cash position, but what's your next 90 days of cash flow. So we have to manage the process as much as you have aspirations to talk to the client on why you're not getting paid, you have to have a process in place that ensures that people understand. This is one of the key lifebloods [00:20:00] of the company. And, as a team, we're all here to help make sure that we get paid on time, that it's not only falling on your shoulders, and therefore, you don't want to be as candid as you want to be. so it's also, I think, part of it is, how do you manage the process with an open and fair culture, so everyone recognizes, as Ken said, You know, the aspiration at some point, you may bring a salesperson into the conversation and say look, Sam or Sarah, um, so and so, they're way behind you, as they've been turned over, they don't know anything about the client, that's causing this, or maybe you all need to get involved in making the phone call. Because as Ken commented in the very early part of our discussion today, cash flow is Cash flow is the lifeblood of any company. And it is surely critical from the start in the startup world. So you have to be prepared to, as I said, pick [00:21:00] up the phone, but make sure your whole organization knows that everyone's responsible. Even the person that's taking service calls. If there's a problem, if that service call isn't going well, and that potentially becomes a reason why the client may say, well we haven't paid you because we're having a couple of service issues. So I would also suggest that before you pick up the phone to talk to the top client, you make sure you talk to the service team in your organization to make sure internally you're not missing anything that would give the client the rationale for not paying you. Ken Heymann: Yeah, that's a great point. you. should. You know, and we all know this at the 30, 000 foot level, as a senior executive, you should never make a call that puts you at risk of being blindsided, you know, and Mark's right, you have to do your homework and make sure that they don't have a reason to say, well, we haven't paid you because of something or other, which may be minor in the grand scheme of the [00:22:00] things, but certainly I've had experience, and again, we've lost Mark, hopefully momentarily, where people have said, well, we haven't paid the bill yet. Because we had this one problem with this one manager and it's not been resolved yet. Adam Mogelonsky: so we're diving into our second question here. Ken and Mark, what are some of the common pitfalls or failures you have witnessed that business owners should look to avoid when scaling their business? Ken Heymann: so, so just to, to finish off, you know, the point Mark was making, because it's happened to me a few times, went through the escalation process, call somebody, and they have some rationale as to why they haven't paid us that they feel is justified, and because I didn't do my homework and find out where exactly we were with that client, I was caught off guard. certainly happened to me a couple of times, so my advice is before you call someone, you know, in a collection mode, make sure you are fully attuned to what's going on with that client and the issues they have in their resolution. and then, um, you know, to, to, to segue into, into [00:23:00] pitfalls, I guess, because in, in growing a business, you, I could recount as Mark could, you know, several strategic decisions we made that were, essential, you know, the company is old enough so that it was back in the late 90s, early aughts. That people were still, you know, sending computer disks for people to use software programs. And so one of the big conversations at the time was, should we stop? Should we rewrite the application and move it to the web? Well, obviously we made that decision or we wouldn't be on this call today because we'd have gone out of business. then there were other decisions we made, um, that didn't pan out so well. So what I would say at a broad level is, is two things. One, really understanding the decision making process within your organization, because in my experience, people frequently don't understand the decision making process, which is to say that there are people from whom you gather information who think that because they are information providers, they should be [00:24:00] part of the decision. They're not. You need to know who's going to be the essential decision makers. And two, um, and I think this was one of our strengths as an organization, we were flat out open to conflict and disagreement. I think what, what drove us, and Mark has heard this from me for many years, you know, we had a third senior partner who was our CIO, and whenever there was a dispute, and there were many, you know, at the strategic level, And We believed that if there was an argument for A and B, to use a hypothetical, And Mark's position was A, and my position was B, and I'm just going to exclude our third partner for the moment. If we went with B, because I had sort of, you know, had a good argument and it failed, then it means that Mark hadn't figured out a way to counter the argument. The reverse was also true. If, I [00:25:00] argued for B, and we went with A, And that failed because Mark, as CEO, got to make that final decision and that's part of the understanding that someone has to be able to rule, if you can't reach consensus, someone has to be willing to make a final decision. And we've both seen companies get paralyzed because they don't come to a decision. And sometimes, in technology especially, you have to move forward. But if A was the wrong decision, we always, always owned it. Whatever decision we made, good or bad, we all owned it. And so, one of the pitfalls that companies make is they, they fall victim to groupthink, right? Which is, well, it sounds like a good idea, so we should do that. When someone in the room is saying, no, this is not a good idea, and that person is hesitant to stand up and assert her perspective, then it's not a good idea. So to me, it's all about having a good, solid decision making process. Where you're open, candid, willing to engage in [00:26:00] some conflict and disagreement, but also respect who the final decision maker is and how you get to a final decision. mark and I could recount a half a dozen major errors that we felt we made, but we survive it, you know? So that's really how I think about pitfalls in growing a business because you make important strategic decisions and you better make good ones more than you make bad ones. Mark Heymann: but in reality they were just rehashing of our operations meetings. look for is when do you bring in outside advisors to help you think differently about your business. It is, very easy to become so enmeshed. In your day to day business, that while you think you're having a just talking about the day to day business, and it makes it at times more to think strategically. When you bring in some outside directors, which we did early on, especially with Unifocus, but we had some even with the company before Unifocus, [00:27:00] one of the key things that those outside directors Forced us to do was to think differently about the business. One of the key questions I would frequently ask our team throughout the year, not every week, but, you know, a few times a year was, what would, if we bought this business yesterday, what would we be doing tomorrow? And you have to force yourself to think, I hate to use this cliche, but I'm going to. Well, just to think differently about your business. You are so meshed every day in the day to day commentary or the day to day feedback that you have to step outside the box. And I think that's critical for scaling, for truly growing a business. And the other thing I think that is critical, and we've had some challenges with it, is, you know, Are you really prepared to measure your customer satisfaction, or are [00:28:00] you afraid of the measurement? We implemented a long time ago regular customer feedback formalized surveys. And without it, And I have companies I consult with today, without that feedback, you can, you can be living in a delusion. You're not really aware. So if you're to excellent service. To really grow your business from a positive standpoint, there was a, there was a large hotel company years ago, years ago We talked about doing an employee attitude survey And their answer was, no, we're not going to do it, To which we said, why? And the answer is, well, because we don't know that can do anything with the survey results, to which our response was, So you're basically prepared To sit in the dark, not knowing what your employees think at all. Even though a lot of the feedback you can react to and I think part of, um, part of scaling, part of growing [00:29:00] a business, is making sure that the client relationship you have, you're monitoring on a very close basis, and that you're getting outside input into how to, grow the business, and how to strategically think We brought an accounting person on our board about years ago. But the gentleman, to think differently about our business, and I think those are some aspects that small companies either are unwilling to do or they're afraid to do it because they don't want to see the result. Ken Heymann: Well, the other thing that Mark's comment reminds me of is, we also always did an annual employee opinion survey, and I'd love to say everybody loved us, they thought we were the best bosses in the world, and we were wonderful human beings, and this, you know, they couldn't find a better place to work, but the truth is that's never entirely the case. Some of it's personality, some of it's style. Every organization has a culture. Some people really fit in that culture, some people don't [00:30:00] I used to say that clearly ours was a culture where you were better off asking forgiveness than permission. And that sounds like a cliche, which I will grant you, yet at the same time, there are people you would hire who really didn't want to take that risk. They wanted to ask permission. Other people, you know, they felt the work was too difficult. There are lots of reasons why people aren't happy in their job. And you have to listen to that feedback thoughtfully. You have to be willing to prepare, you have to be willing to respond to the valid feedback. Some of the feedback you get is frustration, you know, you can toss that aside. But you know, if several employees all tell you that you need to work on the same floor, you have an obligation to the business, not just to the employees, to address those flaws and improve upon them. And so, as much as outside feedback is important, and customer feedback is important, employee feedback is just as important, too, because I [00:31:00] used to jokingly say, and this is going to sound terrible, you know, we, get our, our feedback from employees, and sometimes people would say, you know, kind of mean things. I only had one question. I don't care who wrote it. It doesn't matter. Okay? What matters is, do you think it's legitimate? If it's legitimate, do something about it. Adam Mogelonsky: building on your previous point, going back to the whole idea of the escalation process for cash flow. And now I want to touch on developing a process for quality feedback. Because I love the idea of getting thoughtful feedback and really paying, being thoughtful about it. And a lot of times the best way to do that is one on one interviews, but that isn't necessarily scalable, to do across all stakeholders. So what was the process that you both developed at Unifocus to get quality feedback that you, you as executives could use thoughtfully while at the same time streamlining that around something that is scalable, [00:32:00] like a survey? Or some other mechanism where the quality might be sacrificed because it's putting everything into A, B, C, D, and E, so to speak. Ken Heymann: I think there are really three pieces of the, of the process. for us, one, as we've already said, we did an annual customer survey, and that was sent to everybody who used the software. You know, whether it was a head of department, um, or GM, you know, and we promoted feedback from all of our clients. That was one part of the process. Another part was a set of quarterly meetings, you know, that we invited with a lot of our major accounts, you had either some sort of team at corporate or senior person in the organization was responsible as the liaison to Unifocus. And we'd invite all those people to a quarterly meeting. And that meeting was multi purpose. Some of it was just show and tell. Here's what we're working on. Here's what, you know, we think the next generation should look like. What do [00:33:00] you guys think? What kind of feedback can we get? Those were quarterly. And then we had an annual, this is interesting. We had what we called an annual client meeting, not a user conference. But again, once a year we would ask, to just use one example, one of Unifocus's clients is Lowe's Hotels. And so their senior labor manager, and typically one or two other folks in his group, would come down to this meeting. We'd hold it in Dallas. It would be two days. we would go through all of our development plans. We would go through, all of our sort of brainstorming with them, like, what are you guys looking for? What can we do? and then we would also have sessions with them on, you know, how they use the software, how people could use it more effectively. And that was great because not only did it let us talk to our clients, but over the years, you'd have the senior labor executive from company A and the senior labor executive from company B, and they got to know each other and [00:34:00] they, they had a dialogue about how their companies use, you know, the technology. so all three of those. And the fourth thing, which is at least one of my responsibilities as COO, focusing more on external relationships, was to go visit our clients, like get out there and talk to them, like not do a phone call. COVID made that pretty difficult, but you know, if the client's headquarters were in Chicago, I would try to go to Chicago at least once a year and meet with them face to face. So really, as I think about it, there were four pieces. The survey, the quarterly meetings, the annual conference, And I can't say I visited every client, you know, thankfully the business grew to a point where that was problematic, but I visited all the major clients, you know, fairly regularly, and stayed in touch with them. And Mark even, you know, again, certain major key clients, Mark made a point of engaging with them several times a year. Mark Heymann: Yeah, I think the last aspect on it is don't write your own survey. Have a professional write the survey. I've seen organizations put surveys together [00:35:00] and they get the answers they're looking for. Um, I think the key thing, if you're really going to do a survey, it's got to be objectively put together. You know, we've had, um, people from University, from Penn State University. We've had people with PhDs. People in psychometrics all help us making sure the surveys that we produce and then delivered were well thought through, well thought out. And actually gave candid, actionable feedback. Um, I had a company I'm invested in about a year ago, told me to do an employee survey, um, had their marketing person put it together, and they got, the exact results the CEO wanted to get. Not that they were, you know, Candid, but they were the exact results of CO1 and therefore everything was fine and hunky dory in reality. If you are doing a survey, that it's, put together so that you're getting a solid [00:36:00] candid response, not just what you want to hear, because it's too easy to, um, hear what you want to hear and then do nothing. Adam Mogelonsky: there's a lot of expressions around that and, uh, I just finished reading another book talking about, how businesses worked in Soviet Russia. And it was pretty much everyone was so afraid of their bosses that when the boss said to do something, they would do it. And when the boss asked for the feedback It was, you know, give 'em the feedback they want to hear or else you know, there's gonna be consequences, right? So it's if people are not, if people aren't given a proper mechanism, medium, or are too afraid to voice their opinion, you're, you're gonna get exactly what you're asking. And that isn't gonna allow you to grow organically to really know what the, what the issue is or, or how to grow. Ken Heymann: It's a bit of a cliche, but to your point, you know, if part of personal growth is looking at [00:37:00] yourself candidly, same is true for business growth. I mean, none of us are good at everything, regardless of what we may think. So you better be candid about what you need to get better at, and you better be candid about what your weaknesses are, because Mark and I, and I won't go down this particular conversation, we happen to share certain characteristics across a set of psychological profiles that we've historically used, you know, to help develop and grow people. well, I can look at those and say, well, we share these characteristics, which is why we've been able to work very successfully together all these years. But it also says that we need people with these other characteristics to help the business too, because those are characteristics that we lack. Adam Mogelonsky: Ken and Mark, final question. What advice would you give for founding a company with an immediate family member? Mark Heymann: I think you got to come to the conclusion, why are you doing it? Are you doing it because the other family member doesn't have a job and therefore you're giving the person a job, right? Or you feel [00:38:00] responsible to take care of the other family member, not a good reason. Ken and I got into business and we've been in business together for 42 years or so, and we've been able to, in modesty say, succeed in that process because Ken has a skill set that I don't have. I have some skills. I hope that he doesn't have that complementary. But we're not here while we do take care of each other. We didn't start the business because we're looking to take care of each other. When Kent first joined the organization, I hired him in another company that I was an owner of because I felt there was a shortcoming in the industry that Kent could fulfill. And then the business evolved from there. But I do know a lot of people who get in the business with a family member, they don't compliment each other. Um, it's maybe [00:39:00] for the wrong reason. So I would just caution that when you make a decision, the position that Ken got originally hired for this company that I was in honor of, was because he had a skill set that I was absolutely convinced the company could use to magnify its growth. Not because he needed a job, because I knew Ken could get a job in a multitude of other places, and then The, business evolved from there. So, If you do it because, you're a caveat, you think you're a caveating the other person or whatever term you want to use, I, don't believe you'll be successful in the long term. Ken Heymann: I think the other thing that, that I always said, and I've said this to people before, is as much as we're brothers, and to Mark's point, I think we had some different skill sets. We also respected the business relationship. Mark was the CEOI was the COO. Fair to say, I was typically the last person to argue for a point if, if there was a conversation. But I also [00:40:00] respected that the ultimate decision was Marx. 'cause he was the CEO and because I was his brother. Didn't mean that he had to do what I wanted to do out of any brotherly relationship. So in terms of how we operated, well, certainly, you know, people were, everybody knew we were brothers, you know, um, you know, when I left Univocus, 200 employees, so it wasn't that huge a company, but I always respected the fact that once we made a decision, and once Mark made a decision, that I was going to support that, and I was not going to undercut him, nor, and then the other thing is, and this is what I said before, we never spent a lot of time looking back at the mistakes we made. You can spend a lot of time blaming. each other, but we always had the, the joint ability to look forward. If, if anything, we would joke about things we screwed up. And we screwed things up. Everybody does. You know, but I, I think the key is to respect that it's also a business relationship. It's not just a family relationship. And you have to keep that in mind if you're going to be in business with a Mark Heymann: think we're, we've been [00:41:00] able to sustain this 40 plus years is, we have very aligned vision of not just where the company could go, but the value structure we wanted the company to represent, and the culture we wanted to drive the company with. everyone talks about open door culture, you know, or whatever, and I'm probably of the two of us far more volatile at times over issues. More passionate or show more passion at times. But at the end of the day, when you're in business with, and this goes for whether it's a relative or anybody, if you don't share values, if you don't view the world through roughly like perspectives, the conflicts that will be created will make the business, not as successful as it could be. And can lead to certain exchanges. That actually diminish the capabilities of the business. And I think as Ken said, [00:42:00] yeah, we'd fight, fight about it. If that's the right word, argue about stuff, make some good, make some bad decisions. but the one thing we did was we left it all on the table and then when a decision got made, the decision got made and we were all abiding by our best efforts to be successful. Ken Heymann: The reason I'm chuckling is because I would say to people, look, you need to understand Mark and I will argue at 10 a. m. in executive committee. And like be really annoyed at each other and then at noon we're figuring out where we want to go to lunch. Adam Mogelonsky: Yeah. But that's, that's the best way. And, and I, I come from a family business as well. I do work with my father and, you know, behind the scenes, it's, you know, F this, F you, F that, and I'm just being honest here, uh, deciding where to go and then at the end, it's like, okay, so when are you coming over for Shabbos, right? So, but that's That's families, right? Ken Heymann: exactly true. Adam Mogelonsky: Yeah. [00:43:00] So on that note, Ken and Mark. Thank you so much for coming on. I know you went out of your way to make time today. Thank you both and it's been a delightful conversation. These are foundational lessons for any business. Thank you both.