Latest / Exit Algorithms / Leadership, Culture & Selling Your Business Without Losing Your Team | Rene De Coning (#50)
Transcript
- speaker-0: Welcome to exit algorithms, the podcast where we decode what it really takes to unlock growth, streamline operations, and prepare your business for a high value exit. I'm your host Pete Vera. And today I'm excited to bring on Renee DeConing, president and owner of Mustard Seed Consulting. Gaza has a wealth of experience working with execs and you know, have, I have a little, a lot of, a lot prepared for her. But I'll let her speak for herself. Renee, really excited to have you on the show today. speaker-1: Thank you so much, Pete. It's my pleasure to be here and I look forward to our conversation. speaker-0: Yeah, absolutely. Yeah, can you share with listeners a bit about your background? to hear ⁓ level, your journey and ⁓ you got into consulting and founding Mustard Seed. speaker-1: Thank you. ⁓ Yes, of course. So my background comes way back from insight gathering, strategy development ⁓ based the insights. So ⁓ it has basis in the old fashioned market research, which is sort of like a, almost like a dying breed because data is everywhere now. but the principles still remain the same, right? The data that you gather needs to be solid you have to have confidence in it in order to be able to make solid decisions. And the translation of that data into insights is really important. Once you that, then you can start building strategy. decades of that and... in several countries. You can hear from my accent. I'm not from here originally. I am now in Chicago, but originally from South Africa, live distant in the UK, traveled significantly ⁓ ⁓ been here in the Chicagoland area for 19 years now. After my insight strategy journey, I started to look around for what it is that I wanted to do next. And leadership development came across my path and took to it like a duck to waters because it's really so fundamental to how an organization functions ⁓ whether an organization functions well or not, right? And ⁓ so I started to do that. And my development ⁓ journey developing leaders discovered that some people read needed a little bit more help and other people were like, okay, just leave me alone. And I want to get on with this. So I started to ⁓ go into a coaching direction, got certified as a professional coach. And the rest is really history because ⁓ ⁓ my insight ⁓ my strategy development, ⁓ leadership training development, as well as my ⁓ executive And that's how I my business. ⁓ And really strong foundational. how I got to where I am right now. speaker-0: ⁓ yeah, I love that. the data driven approach ⁓ be able to look at a business kind of from also leadership lens. ⁓ think important to have ⁓ both those insights, right? Yeah. speaker-1: Otherwise you're making a decision in a vacuum, right? Or what you assume be true, which is not necessarily ⁓ the right? speaker-0: Yeah, yeah, for sure. Yeah. What do you typically look for when you, when you work, work with someone? ⁓ I know that's a broad question, but maybe are there some things like some metrics you look in the business first to see how to get a ⁓ owner, a business owner unstuck? speaker-1: ⁓ to get a business owner unstuck, I will tell you that it's often not metrics. are as humans can become paralyzed by data because can dig so deep ⁓ that like, ⁓ I can keep going here. And then I call it kick the can management because he we can keep going, kicking the can down the road, digging deeper, getting more information, analyzing more data. There's a point at which you have to change the way in which you think. put a stake in the ground and said, I now have enough information to start making a decision. And that is really what leadership is about, right, is to make the right decisions or the best decisions, let's not call it right, but the best decisions with the information available to move the organization forward towards the goals that were set for the organization. what I often see is that, and so have some catchphrases that I use that I don't know, maybe other people use them, but it's ⁓ email tennis or text message tennis or slack tennis where somebody poses a question, has an opinion, and then 20 other people come into the conversation and has their opinion. And then some, the, the, and then it becomes a whole long conversation. No decisions are made. If you don't make those decisions, nothing changes and nothing improves. So use your data wisely use it in a way that moves the organization forward. So there's not one single piece of data that I look for. I look for mindset. When somebody works with me, do they have the mindset to maybe think differently? Bring team along with them. as opposed to being the low wolf, which works, but ⁓ often does not. And they open to change? Do they want to shift the way in which they behave, the way in which they act, the way in which they lead, so that the organization becomes more effective, efficient, and it continues grow. Nobody wants to stay stuck right. speaker-0: Yeah, yeah, got it. yeah, that makes a lot of sense. The mindset, of course, you have to be open to change and improving and going through the discomfort to ⁓ those changes, right? speaker-1: ⁓ of course. And I had a conversation with a group of people just on Tuesday, ⁓ used the word change in part of the conversation. And I could see people's eyes just going like, you mean I have to ⁓ change order to achieve what I want to achieve? And it's, yeah, that's how we learn is by changing, you know, ⁓ speaker-0: Yep, exactly. Yeah, I read a thing recently. It was a Harvard study. It was like, all change is uncomfortable. Like there's no there's like the review was like a data sample of 1000s and 1000s of people. It was like, no matter what type of change it is, it is uncomfortable. Right? speaker-1: But then, you know, if we tap into how we learned about where we are to be where we are right now, sometimes it wasn't uncomfortable to think of a kid, right? When we were kids, you didn't crawl for the whole of your life. You crawl for a certain period. And then you wanted to stand up. And maybe you fell down a couple of times and then you started to take a few steps and maybe fell down and you were determined to eventually walk upright like the rest of your species. but it's because of a desire. They to want kids desire to want to grow and walk and become little adults until they are adults. If you have Boys, maybe they never adult, sorry, Pete, I apologize. ⁓ it's about what's your attitude to growing. And if we believe growing and changing is hard, it's gonna be hard. But we curious and like, want to learn something different. I want to get better. There's a desire there. It changes the whole perspective. speaker-0: yeah, definitely makes sense. And you mentioned, you know, email, tennis, ⁓ like that analogy a lot. seems like communication is a big piece ⁓ What's ideal, what does good communication look like? speaker-1: ⁓ How long do we have, Pete? So good communication is, and I know sometimes the obvious answer is listening. And I 100 % agree with that. But it's also about, again, curiosity. So if I'm the owner of an organization and I walk the plant, let's say it's a manufacturing organization. And I say, hi Pete, hi John, hi Andrew, hi Mary, how are you guys today? And keep walking. That's not communication. It's showing my face. It's PR, right? I stop and to Joe at the machine and I say him, hey Joe, show me you're doing today. And Joe, and you're curious, Joe is going to feel like he's being listened to. And he stops at Mary's desk and she's busy with maybe something else, she's the programming. And he's like, what ⁓ are you challenged by So asking those open-ended questions as opposed to ⁓ just showing your face, that's curiosity. And it all comes from the top. So the CEO, the owner, the leader does not practice that, nobody is going to practice it. speaker-0: Hmm. speaker-1: So lead by example, the curious questions and listen, speaker-0: Mm. speaker-1: and not email them. speaker-0: Yeah, no email tennis. that makes perfect Do you find that it can be challenging ⁓ sometimes, especially the organization grows and gets bigger and there's different departments for ⁓ good to ⁓ throughout the whole and not just maybe in a silo? How do you diagnose that problem? speaker-1: So, siloed can be in a small organization as well as in a large organization. And I will go right back to communication. And it all starts at the top. There's always one at the top, right? There's not 10 people at the top. There's always an owner, a president, a CEO, a general manager, somebody right at the top that is driving bus. And then that person has several people reporting into him or her. how that leader lead impacts how the rest of his leadership, her leadership leads. And then how they lead is how the rest of the organization leads. So it really is almost like the champagne towers that you get at weddings, where you start with it, pouring it in at the top, and then it bubbles down to the bottom layer. But it starts with leadership. If leadership is not brought into clear engaged communication, every single ⁓ action or action that people lower down in the organization are taking has a lower of succeeding. I'm not saying no chance, because when you're in enterprise organizations, There are definitely business units that almost function as separate little businesses on their own and not necessarily attached all that strongly to the highest level. But when you're in smaller organizations, what the leader does has a huge impact on how, and the leadership team, the C-suite, the way they lead is going to impact how the rest of the organization leads. And it's about how you, it's how you recruit, right? you recruit people for in the right, the right skills in the right seats with the right attitudes? We look at right people, right seats, and we don't necessarily look at the attitude side. the how people communicate. And I know people call them soft skills, but boy, they're not soft. They are hard. Those are the hardest skills to firstly learn and to recruit for and to encourage and grow, nurture in the organization. speaker-0: Sure. Yeah, and hardest to develop, I would imagine too. speaker-1: Yeah, if somebody doesn't naturally have it. Yeah, but that's where culture does play a role. If the culture in an organization is openness, trust, fast, which I believe is now a old school thinking, but it's still true. If you don't try something. and perhaps fail, but perhaps succeed, you're never going to know. You're never going to know whether it's worked. speaker-0: Yeah, very true. I think the most successful, you know, business examples are all around that. Right. Yeah. I was just listening to, I don't if you know that podcast called Founders. talks about, well, he just talks about all founders throughout history. But a recent one was on Elon Musk and ⁓ he SpaceX in particular. And the whole reason he's able to succeed is because of that culture of failing. He wants people to push it to the very limit, to the point of failure. speaker-1: Yeah, can go right back to the industrial revolution even with that. You know, or the first plumbing system ⁓ you electrification. It is as old as The development of just ⁓ age tools. Somebody figured that if I sharpen this sucker, I can actually cut meat with it and I don't have to tear it with my teeth. It's ingrained in us. sometimes now make it to fail. But there is no failure without learning. Actually, I shouldn't say that. Failure without learning, that's failure. Mistakes with learning. That is success. speaker-0: Yeah, yeah, well said. Definitely. without failure is almost impossible, you could say. Yeah. Yeah, I love that. I'd love to talk a little more about ⁓ culture as well. How do you recommend businesses kind of keep their culture? know, this podcast in particular talks a lot about business exits and selling your business. I think that's a big concern for a lot of owners when they ⁓ their businesses. How is that the new acquirer going to keep the culture? Yeah, do you have any recommendations for businesses in that situation, how to reduce that that post-close like culture risk to protect performance? speaker-1: That is a tough one because we're human, right? I don't think there's only one single answer. And I don't think there is ⁓ scenario where you protect the culture. Except you're saying, I'm investing money in you, but you're staying exactly the way you are. and we're not interfering at all. We just want to invest in you. We're silent partners. Go ahead, do your thing and grow the business. Good luck. We love you. Bye. That is the only scenario where culture change does not happen. not have to happen. But there's acquisition, you can be sure that culture shifts will have to happen. The key is not to despair about it and not to make it scary. Yeah. So it goes back to communication and often in an acquisition scenario, there are certain timelines where you cannot communicate with your people. But as soon as you can, honest, trustworthy, straightforward communication is what people appreciate. So telling people, ⁓ nothing's changing. People are not gonna believe you, But they just not. And that's when management by official ⁓ will start. because some is going to tell Mary that, know, did you think about that town hall? Did you ⁓ believe And Mary said, well, there were things that they said that I didn't really think were true. And they're off. And the ⁓ grapevine takes off from there. And if you don't get ahead of that, your organization people's motivation will suffer. It increases anxiety amongst people and will drop and people will start leaving. And you might be ⁓ losing ⁓ the most valuable in the organization because they're marketable. speaker-0: Yeah. speaker-1: And that devalues your organization even before it is sold or before it gets acquired. So again, it comes down to transparency, communication, bringing people along with you. I'm saying all of this, that it is not easy. And trust plays a huge part. So if you as a leader in that organization have not built trust over time. is going to be way harder to build trust in a transition period. speaker-0: Hmm. speaker-1: because you're already starting on the back foot. Transparency, communication, trust. Those are absolutely key when it comes to any transition period. And be honest that our culture might change, but we wanted to change for the better. with us? Can align, ⁓ get us to make this a better organization? speaker-0: Yeah, yeah, get it by and from from the team. speaker-1: Exactly. Yes. speaker-0: Yeah, I think that's a great approach. It's a very sensitive time for everybody involved, especially the owner, especially employees, ⁓ those questions of, ⁓ going to ⁓ my job? What's to be the changes? Yeah, I like recommendation. It comes down to communication and getting on the same page and making sure they understand. ⁓ You know, there are going to be changes, but want them to be positive and want, you know, as a team to work together to continue and grow the business. speaker-1: Yeah, yeah. And if people smell just a hint of insincerity, you're done for. It's harder to pull that back than when you are just straight up honest. speaker-0: Yeah Yeah, no, I love that. And that again comes down to the culture of setting that well before, well before they're gonna, the owner's gonna transition. speaker-1: 100%. Yes. Yes. speaker-0: Yeah. You know, a lot of businesses have a problem when they try to sell, they're so dependent, business is dependent on them. Do you work with any businesses that you try to decrease that owner dependence ⁓ and recommendations you have? speaker-1: Oh, all of the time. And again, it goes to the owner and the leadership team. But it starts with the owner. If we're talking about a, let's say, a family-owned business, right? It is necessary to understand that this business is the owner's baby. It may be a family business that's been in the family for decades or even longer, this owner created it from scratch. So not only is there a financial incentive here, but there's a strong emotional tie to this organization. That's where ⁓ the owner dependency comes from is because the owner is so protective of this business that they love so much that they have created. But age, illness, burnout, several reasons or not as a legacy anymore, in the, and no, none of their kids or family members want to take it over. they might be forced to sell. there's some strong emotional ties that the owner has and challenges that the owner faces to let go. And I don't think we recognize that often. It's a business, it's a financial ⁓ Is this business strong enough? Is it does it have, you know, do my due diligence? Are the financial strong enough growth projection strong enough? All the right tools and metrics and people in place? Okay, I want to buy you. But have you thought about what the impact is on that owner? And how can the buying organization with the owner to ⁓ that owner that whatever happens next, their baby is going to be nurtured, into fully fledged adulthood? speaker-0: Mm. speaker-1: And only then will the owner feel comfortable starting to let go. So and above the owner dependency that ⁓ often on right? If this is my baby, I'm controlling it. There's an emotional tie that needs to be recognized and reassurance given severing or like letting your kid go off to college, it's okay. We've got this. are going to love it and nurture it and grow it until it's an adult. speaker-0: Yeah, I love that analogy. it's smart. So psychology of the seller is probably the biggest thing there. Right. Is there anything like business owners can do to start to, you know, well, become less dependent, let their kid to drive its own car. speaker-1: Yes, absolutely. ⁓ delegating to the next level down C-suite, making sure in that C-suite that you have the right people in the right seats. I'm actually working with a company right now where that might be a question, right? Is that an organization that is set up to grow? Because we are looking at is in those seats. Let's make sure that we have the right people and they, even if they're not necessarily right skilled now, how do we get them there? ⁓ speaker-0: Mm. speaker-1: So the transition needs start like three to five years before the ⁓ actual takes place in order for it to be successful. So it's how do you grow your people so that they can take ⁓ over responsibilities you have now? so that it becomes less owner dependent. And when that organization is bought out, they can run that organization without the owner. speaker-0: Mm. speaker-1: That is, of course, one strategy. There are others that keep the owner on for several, for a year, 18 months, two years, three years as a transition period. And in that transition period, do the same thing. Make sure that the people that are running the organization are the right people with the right skills. And if they're not, either upskill them, offer them something different. And the hardest part is sometimes they need to access. speaker-0: Hmm. Yeah. No, yeah, that makes sense. It takes time to train up someone to be able to take over those responsibilities and make those decisions. speaker-1: Yes, in we talk about delegation a lot, but delegation isn't just throwing it over the fence. People have to be up skilled to handle coached, trained to handle the responsibility that you are trusting them with. And if they don't succeed, look at yourself. Have you trained them? Have you coached them? Have you given them the opportunity to develop those critical thinking skills to problem solve on their own? Or do they still come to you for the answers every time they get stuck? As opposed to Okay, Joe, see that you, OK, I hear you. You're stuck on this point and run this thing. What do you think you should be doing? How would you solve that problem? As opposed to, ⁓ give it to me. I'll just quickly do it. So control, back the control. I'll do it because I know I can do it properly. That's not upskilling your next level leader. speaker-0: Yeah, definitely. a disservice to your employees as well by ⁓ sharing that knowledge. Yeah. ⁓ speaker-1: but also to your organization because people never get leveled up. Stay speaker-0: It can be very difficult if you're used to doing things a certain way for years to suddenly shift to trying to have them be more independent, right? speaker-1: Yeah, yeah. So it should not be sudden, right? It should be a leadership principle straight out of the gate. It is part of your leadership style to share the load. I have an example where I was ⁓ coaching somebody ⁓ in a C-suite role just this past week and the had always done a specific financial function. Now this person took over part of it and started to ask questions about, this doesn't make sense. That doesn't quite work. Financially, this is not necessarily a great idea. the set of ⁓ eyes it improved on original. So as an owner, yes, you're smart. Yes, you bought this from scratch. Yes, this is your baby. But you don't have all the answers. Use your people. That's what they're there for. You're paying them. Don't let them sit back and just watch you do it. So that's not leadership, right? speaker-0: Yeah, yeah, well said. Really good insights there ⁓ owners that are thinking of eventual exit, starting these things as early as possible, creating the culture for business to support itself ⁓ takes ⁓ speaker-1: Yeah, right. And also, if you're an owner and you have a, I would recommend a strong second layer, whether they C-suite, VP, director, whatever their title is, if you're paying them, them do the work? Because why are you paying them? you're just going to take on the work yourself? Yeah. There should be an investment, not a cost. speaker-0: Hehehehe that makes sense. Yeah, know, another focus of this podcast is technology and AI. I'm curious your perspective on how that how it interplays with with leadership and, you know, and like we're talking about delegation. Does technology or especially AI does it help a business become you know, ⁓ independent, more of a functioning machine, less reliant on owner, or is not the case? What's your opinion on that? speaker-1: It goes back to mindset, right? So AI automation or ⁓ any is ⁓ as tool and not the answer, then you're moving in the right direction. often work with clients who so far behind in technology that for them it would be a leapfrog move to go from a mishmash of different systems to AI. And then there's a gap, a gap in learning, a gap in understanding, a gap in how to use it. So if you ⁓ ⁓ to investigate AI as a tool in your organization, make sure that you have the right resources in place to effectively and efficiently use the tool. The craftsman the creator, not the tool. And AI is a tool. I know some people might disagree with me, but AI is not the end result. The end result is a goal that you set in the organization. How do you use AI? ⁓ your tool, AI, and all your other tools to achieve that goal. AI is not going to achieve your goal for you. might plot a pathway. It might help you put the right processes, practices, people, structures, plans in place, but it's not going to execute it for you. speaker-0: Yeah. speaker-1: And for that you still need people. speaker-0: Yeah, yeah, absolutely. Definitely agree. That's actually that's a key point in the book ⁓ reading. The driven leader by Jeff Woods. I don't know if you've read that one. speaker-1: ⁓ I've heard of it, I've not read it yet. speaker-0: It's well written. He's really good. I think he wrote the one thing, I believe, also. Oh yeah! speaker-1: Yeah, yeah, yeah. That's book I to all the time. Because I focus on the one thing. speaker-0: Yeah. Absolutely. Yeah. similar, a lot of really good insights in this one. But one of the big things was, ⁓ that, ⁓ you know, ⁓ person is still in the driver's seat. Yes. Definitely AI to its full potential, but you're using it to help you make better decisions. You're not letting it control or do be the end all be all. Right. You're still, ⁓ you're it as a tool. Yeah. Yeah. speaker-1: 100%. speaker-0: I love it. Yeah, I know we're coming up on time here. We could probably talk all day or day. So I'll just leave. I always guess this at the end, if you could have one actionable takeaway. From your perspective, I know you have an extensive background in helping people that are really busy. So I just would love to hear if you could offer some advice, ending advice. speaker-1: If you're the owner or the CEO. Take a long hard look at how you lead. Is that how you want to be led? If not, think about how your people might want to be led. It goes right back to communication and listening and trust, transparency, all of the good things that we talked about. So be present because you're setting the example. speaker-0: Yeah. Wow. Well said. Great way to end the show. Thank you so much for all the insights today, Renee. ⁓ Where can listeners find you easiest? speaker-1: Wow, that's a hard question right now, but I would probably say on my LinkedIn and just Rene de Kroening ⁓ and you'll me on LinkedIn. I also do have a website which is soon to be ⁓ reconstructed because it's a sparse. Most of my work gets generated by referral, so my web page has been neglected a little. So that going to be my next project for this year. But LinkedIn where you'll find me. ⁓ speaker-0: Yeah, I'll leave that in the show notes. It'll be easier, easy to reach out to you. Awesome. Thank you. Thank you for coming on, Renee. Yeah, it's a pleasure having you. speaker-1: Excellent. pleasure. Yes, absolutely. You have a wonderful day. speaker-0: You too.