Ep. 09 - The Teams You Need, Part 2 Of 3

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Three core teams help businesses flourish:

  1. Your Executive Team
  2. Your Trusted Advisors Team
  3. Your Life After Ownership Team.

In this three-part series, we are devoting an episode to each of these teams. In this second episode of the series, we explore the big challenges that effective "Trusted Advisors" teams face and how to turn these challenges to your advantage. These are the very people who help facilitate the success of your business, but too often, they are the ones given the least amount of attention. It’s time to change that and propel your business forward. Join this conversation to learn how you can take advantage of this core team!


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In this episode, we are in part 2 of a 3-part series on the teams you need. We're going to be talking about your Trusted Advisory Team, which is team 2 of 3. You’ve got your executive team, which is operating the business. You’ve got the trusted advisory team, which is facilitating the success of the business through third-party expert resources.

You’ve got your life after ownership team, which is helping you prepare and execute your plan for life after ownership. We're excited to be talking about your trusted advisory team. This is core to success for any business. You'll find that even though this is one of the teams that most business owners are at least aware of, you will have some new tips and exciting information to help you get the most out of that team.


David, it's great to see you again. How are you doing?

I'm happy to be back with you. It's great to see you, too. 

Let's get into this.

We're going to start off by uncovering the four big challenges that we see that trusted advisor teams need to face. The first of those is recognizing that skillsets shift among or throughout the business cycle. In other words, what trusted advisors need is supposed to shift throughout the business life cycle. Here are a couple of quick examples. One is that a great startup CPA isn't necessarily the CPA who is best suited to merger and acquisition or preparation and execution. It may be yes and maybe no. That has to be determined on a team-by-team basis. Another example is that different lawyers have different specialty areas. Rarely will you find a lawyer who's got deep-dive expertise in all of the legal areas that a business is going to need legal advice on throughout the business life cycle. 

Those are some good points. We're going to dive into that further later in the episode. Keep in the back of your mind that these skillsets shift, so your team will be dynamic as your business grows. The other thing that we see as a challenge is the way that the business world works is that advisors love to be one-on-one with the owner and execute within their silo of expertise.

This is a big detriment to the business and the business owner. It puts business owners and their leadership teams into positions where you'll get great financial guidance from your CPA on an initiative that you'd like to execute. You then go and talk to your lawyer and get great legal counsel on how to execute that. You get back to your team, share that information with your team, and realize they're pulling you in two opposite directions.

What we want to enforce and impress upon you is that all of these advisory experts love to be experts within their silos. They're comfortable bringing you to their office and giving you the support they paid an expert to provide. It's incumbent on the business owner and their leadership team, and as we'll talk about later, an expert facilitator to bring all of those third-party experts and specialists together to become a team that can share their own expertise to strengthen the guidance and direction of the overall business.

All of these advisory experts love to be experts within their silo. They're comfortable bringing you to their office and giving you the support they're paid an expert to provide.

When you've got these siloed individuals, everyone covets their most trusted advisor relationship with the business owner. You can start to get into turf wars, especially when you're at that inflection point where the team needs to shift. The skills and expertise requirements of the business are changing. Who should be sitting in those leadership roles? That's the place where you can start to see the different trusted advisors taking turf wars and clinging to their relationship for their benefit and not necessarily for the benefit of the business owner and the business.

Bringing the teams together provides a bright and shiny room where there are no shadows and corners for core performance to hide in. It is also where we can all talk as adults and make sure that the team is growing, morphing, and providing guidance to the best outcomes for the business owner and their client. This leads to how the resource needs balancing. We're going to be talking about this harmony between what resources a business has and what the requirements of the business are throughout the life cycle in this team's discussion a lot. That's what you want the third-party teams to be guiding you with.

One of the things that you find as a business matures is frequently, the business will require expertise before it necessarily has the fiscal feasibility to hire that expertise. It’s figuring out, as a team, how you overcome those gaps and bring in some fractional support to ease you into the skills and knowledge recovery that your business is growing to while you're getting the financial wherewithal to budget for a full-time position if that full-time position is even warranted.

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A couple of examples of these different types of resource and needs balancing can come up. In a startup, there's not any wealth to manage. A business owner doesn't necessarily require a wealth manager or advisor in the beginning. They need a good financial controller. As the business grows, that financial controller will evolve into the need for a tax planner.

As the business gets closer to exit, that's when you need to bring in a wealth advisor, probably a trust attorney, and some of those other specialists that can say once you are in possession of a significant lump sum of money, how you protect it from the tax man and how you make it last for the rest of your life after ownership. You'll see that the expertise and knowledge needs have shifted dynamically throughout the course of that.

When you're starting, you need a good financial controller if you're going to raise capital to start your business. Investors are going to want to see a CFO, but CFOs are expensive. If you're trying to raise capital because you don't have enough money to bootstrap the launch of your business, and then you have to figure in $150,000 a year for a CFO to make the investors comfortable, that means you're selling more equity to get off the ground.

Maybe you could get a fractional CFO and they work 10 to 20 hours a week. They still have the pedigree or the credentials that make investors comfortable, but they're only serving for the timeframe that is required to be a good fiduciary for that investment money. That makes the business comfortable. You can see on both sides of this resource balancing that there are gives and takes. There are different opportunities for the business as they're looking at their advisory team. 

That is well said. Before we get into the fourth of the big challenges that trusted advisors teams must face, I want to underscore something that you touched on because of how important I have found it to be. That is sequencing the onboarding of your trusted advisors. When you do onboard an appropriate trusted advisor, it is making sure that your initial onboarding is at the right scale, like fractional rather than full-time, for example.

The onboarding sequencing and the scope of their responsibilities and engagement at each stage need to be very consciously designed. That is, you aren't frittering away the funding you have or the revenue you're generating on good people that you've brought in too soon to be worth the money you're going be paying them.

That is well said. Thank you for putting an exclamation point on that.

I can't emphasize sequencing enough because, unfortunately, a lot of businesses don't have sequencing mastery. It’s not nailed down or locked and loaded. The fourth of the four big challenges we want to cover in this episode about trusted advisor teams is related to this. Most trusted advisors are most comfortable when they're working in their siloed area of expertise rather than as team members.

At the same time, most CEOs, business owners, and executive teams don't have the skillset or the objectivity to manage the facilitation and the collaboration among trusted advisors. What that leads to is this final challenge that has to do with who will be the trusted advisor team’s cat herder. If you've never heard the term herding cats, think about what it's like to herd a bunch of sheep. Sheep are designed to be herded. There are lots of animals that are herd animals. Cats are not herding animals. They think independently and they're all in their own little siloed world.

If you have ever had a cat or if you have a cat, you know that the cat is going to come to you when they want to come to you. They're not like your dog that will be delighted to come and get loved on whenever you want to love on them. Cats will be loved on when they're in the mood to be loved on. That's what we mean by cat herders.

Trusted advisors, by and large, are cats, not dogs. They require experienced cat herders to ensure optimal collaboration and facilitation and to prevent the siloing of trusted advisors that they're used to doing from backfiring on behalf of your company's best interests. That's the fourth big challenge for trusted advisor teams. It’s who is going to be your trusted advisor team’s cat herder.

I love that analogy. This is so important. It's at the heart of everything. We're talking about a trusted advisory team. How many of you out there as business owners have seen your trusted advisors engage with you as a team? They don't. It's not natural for them. It's not their comfortable place, but it's what you and your business need.

Having somebody with the attention, focus, and wherewithal to bring everybody together to a productive end is important. Having somebody that can structure it, deliver value, and make sure that their executable is at the end of the meeting that nobody's time is wasted and there's value in that time together is going to benefit everybody. The more business owners we can have doing this, the stronger the entire ecosystem of closely held businesses will become.

We've discussed the challenges. We spent a lot of time opining on what it's going to take. Let's start looking at creating a plan for success. I'm going to kick it right off where you left off. It’s the selection of your facilitator of your cat herder. It’s finding that one advisor who is going to be the coach within this team and working through them to create your needs analysis and start preparing for that sequencing that Dr. Gruder was talking about earlier.

It is identifying who you need to fill those advisory roles based on skills and expertise that are required by the business first and then starting to create an avatar for what type of person and professional. Not just expertise and skills-wise, but also personality and values-wise is going to fit with your business. It will help you drive forward to the next level.

Look one step ahead of that. You’re like, “Where is the next inflection point? What team members are we going to need sitting at this table at the next inflection point?” If you can always stay one inflection point ahead, you've got the sequencing that David is talking about. You've got the opportunity to go out, find the right advisors, fill those seats, and drive this process forward in a completely new and very powerful way.

If you don't know ahead of time what's next in the development process in your business life cycle, what will happen is you will end up managing by crisis rather than being proactive. You all know how ineffective and energy-draining management by crisis is.


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There's only one building in a town that you want firemen to be at, and it's not your office.

That's right. That’s a good point. We want to give you a couple of tips for what to look for in that cat herder role. There are two key qualities in a cat herder in addition to them having good chemistry with you and things along those lines. In terms of traits to look for in a cat herder, the first is that you want to be looking for something that is called uncommonly and, unfortunately, a T expert. I'm not talking about the tea that you drink. I'm talking about the letter T.

This is something I didn't even know about. I had never heard of the term T expert until a CEO who was a serial entrepreneur that I was advising turned to me at the end of a consult with him. He said, “Do you know what you are?” I said, “What?” He says, “You’re a T expert.” I said, “I don't even like tea. My wife is a tea aficionado.” He said, “Not that tea. The letter T.” He unpacked for me what he meant by that, which I'm about to unpack for you.

The letter T has a crossbar and a stem. The stem is deep-dive expertise. That's what that represents in a T expert. The crossbar in a T expert is that this expert understands what needs to be done when throughout the entire business life cycle from the napkin concept, meaning, “We have a cool idea. I wonder if we should turn it into a business,” all the way through and after exit. A T expert understands the business life cycle process, sequencing, what is necessary to focus on, and what kinds of expertise are necessary to have at each stage along the way.

The T expert isn't the expert in all of those areas. They know what's needed at each stage. Unfortunately, most experts are I experts. They're the stem without the crossbar. They've got deep-dive expertise in whatever they have deep-dive expertise in, but they think they're for everybody all the time. That's problematic. Their expertise isn't problematic, but their estimation of where they fit is problematic because most of these siloed experts don't have the crossbar that I was describing in the T.

Your cat herder needs to be a T expert. Their deep-dive expertise or stem as a cat herder is that they are a masterful collaboration facilitator. That's the deep-dive expertise they need to have, but they need to be able to bring that to bear across the entire range of the crossbar in the T. Those are the two qualities of a cat herder profile. They're a T expert and their deep-dive expertise, even if they have other areas of expertise, is that they're masterful as a collaboration facilitator.

I like that visual idea of somebody who has the ability to control from above with their expertise being in facilitating. That's exactly what it is when you think of somebody who's going to facilitate and master a team of people who maybe don't necessarily want to engage as a team. I appreciate that description.

Once you've got this T expert or facilitator and you've sat down, analyzed the business, and determined what the needs are, what the next step needs are, and what milestones to find, it's time to start filling those seats. There are four things that you need to think about, but I'm going to say it is maybe 3.2. The fourth one needs to be secondary. It's important. We always talk about it. It needs to be subordinate to the first three.

The first three things that you need to look at are, first and foremost, finding an advisor that fits within your organizational values. The best way that I can describe this is there are a lot of ways that you can create your general ledger that will have varying degrees of impact on the tax implications of the business. If integrity is at the forefront of the brand you're trying to create and it's important to you, you're not going to want a CPA/tax advisor that's going to teach you how to be sneaky to avoid your tax burden or put you squarely in that gray space of, “This isn't necessarily illegal to the letter of the law, but it's not following the spirit of the law.”

Find an advisor that fits within your organizational values.

That’s a pretty extreme example. I don't know that too many business owners are going to be like, “Get me the shadiest CPA that you can find because I don't want to pay taxes.” Nobody wants to pay taxes, but there are ways to go about that that are okay and there are ways that aren't. I don't think that any of our readers are going to be like, “I want the shady guy.” I'm giving you a gross exaggeration or a caricatured example so that you can see that values become important as you're thinking about who you want on your team.

You got to look at the skills that are required. There is a CPA that's going to be great at helping you establish and construct your general ledger, help you understand your lean operational cash flow, and help you take in some money and survive the early pre-rapid growth phases. There's a different kind of CPA that will help you manage a multimillion-dollar business that has, let's say, an annual CapEx of $5 million.

They're turning over fixed capitalized assets quickly or extensively. They also are cashflowing a lot, and they need to deal with how they are going to appropriately develop tax strategies. Those are different skillsets, all under the umbrella of CPA. We could go through these same types of examples with lawyers, financial advisors, and everybody, but understanding what skills are appropriate for your business and looking to that next milestone and what skills are going to be appropriate.

Most of the time, these team members are going to be part of a firm. When you're interviewing firms, you can say, “Here's what I need now. Do you also have advisors within your firm that provide these skills?” You can then build for success, growth, and, hopefully, a long-term relationship with an advisory team.

There is also the team fit. As you're filling those seats, you're going to have to be looking at personality and operational and performance styles to make sure that when you bring the team together, there's not a lot of turf war and bickering. It's all about being focused on you, your business needs, and your success. Those are the three that have to be addressed.

The 2.1 that I don't like talking about, but I have to, is figuring out the financial ability to build this team. We talked about whether it is fractional support. In the early stages, when you're cash-strapped, is it getting an associate under an expert-level advisor so that you're paying the associate fee instead of the expert fee for a little while? You know that they're going to go back, be able to learn from, and ask questions from that expert, but you're not bringing the expert to the table. It is things of that nature. It’s making sure that you're getting the quality and the caliber that you need but also being sensitive to the financial implications of building this team.

I'm glad you added that piece about financial ability because it's foundational. That leads to step three. Step one was cat herder, selection, and needs analysis. Step two was identifying, selecting, and building your trusted advisors team and to continue modifying them throughout your business lifecycle journey. Step three is, with the help of your cat herder, monitor and intervene with inadvertent sabotage. If you've got deliberate saboteurs in your organization, I don't know how to be blunter than to say they need to be eliminated if they can't be helped to stop sabotaging.

If we assume that you are doing that, then the only sabotage that's going to be going on from there is inadvertent, unintentional sabotage. Inadvertent or unintentional sabotage needs to not be given a pass card, nor does it needs to be a source of shaming. It needs to be recognized and intervened within a good way.

There are four areas of inadvertent sabotage that you and your cat herder are going to want to be on the lookout for and going to want to intervene with. The first is inadvertent sabotage by the owner. A classic example where inadvertent owner sabotage will come into play is as you're getting ready for the business to be acquired or implementing whatever the owner's exit plan is, the owner starts getting cold feet about what their life is going to be after they exit the role that they've been in the business. Who will they be? What will they do? That fear level, if it's high enough and it's not addressed, will classically cause owners to inadvertently undermine the M&A process or the exit or succession planning implementation process. That's an example of inadvertent sabotage by the owner.

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The second is inadvertent sabotage by dueling trusted advisors. You touched on that earlier where you've got trusted advisors who are used to operating in silos. If they're brought together, they'll inadvertently get into power struggles over, “I'm right. You are wrong. I know the facts and you don't,” and things along those lines. Recognizing when you've got dueling trusted advisors and getting them back into collaboration is a crucial inadvertent sabotage piece to be aware of.

The third is inadvertent sabotage by family members if we go to the exit process. For example, you've got a spouse who's terrified that their spouse, after exit, is going to be at home full-time. They don't want them at home full-time sucking off of them for life, energy, meaning, and things like that. Inadvertent sabotage by family members also might be concerned about finance, whether their lifestyle is going to be fundable, and things like that.

The fourth area of inadvertent sabotage to be monitored and intervened with if it comes up is executive team members. It is where you've got executive team members that are doing something similar to dueling trusted advisors or executive team members are dueling with each other over whose perspective is more important perspective when the executive team is doing decision-making. Those are the four key areas to monitor inadvertent sabotage with the owner, dueling trusted advisors, family members, and dueling executive team members. My last thought on this is that we will cover the executive team in part three of this series.

I’m glad that you brought up this whole concept of inadvertent sabotage entirely because this is one of those things where it's not an if. It's a win. Every single one of us is guilty of inadvertently sabotaging ourselves from time to time. Why would it be different in a team setting? That's where building the right team and having the values, team personality, and performance fits come in so handy. This team has to have enough trust and respect that we're all holding one another accountable for checking us when we slip.

This is inadvertent and subconscious behavior. We need a third party that is removed from our own emotions and thinking to call us back to check and say, “That’s going against what this team is all about. Let's get back into alignment.” I'm glad that you brought that up. This is a lot of information. We always seem to pack. It’s like a fruitcake. There's so much in it that it's hard to eat. We like to frost it with some key takeaways.

I’ll be starting the takeaways. Even though you will hire many of the advisors that make up your team, it takes a conscious effort to turn them into a true team. If you're running a successful business, you probably already have a CPA lawyer, wealth advisor, or banker that you always work with. Do you have a facilitator that brings you and this team together on a quarterly basis to assess where the business is at and where they're going? It takes a conscious effort to turn this group of advisors that you are already familiar with into a team of advisors. The value is there to make this a one-plus-one-becomes-three type of situation.

I'm going to offer an analogy to capture that. That is a small group musical ensemble. A musical ensemble has a bunch of virtuoso soloists who have come together to create music together. You might have a violin, cello, bass, and things like that. In jazz, you might have a trumpet player, a trombone player, a piano player, and a percussionist. You've got these virtuoso players, and they need to somehow make great harmony together.

When you've got the equivalent of a musical ensemble, there needs to be a conductor who ensures that all of these virtuoso instrumentalists make great harmony together with each other, that they blend well and synergize together. This gorgeous piece of music they're performing is one seamless, integrated whole that's a delicious thing to listen to. That is the cat herder's responsibility. It is also the CEO's responsibility to learn how to be a superb conductor of their orchestra or their company. 


It is also the CEO's responsibility to learn how to be a superb conductor of their orchestra, their company.


That's great that you bring that up. I love the analogy and sticking with that analogy. When we talk about advisory teams and the fact that many of the advisors that you need, you may already have as a business owner, there is a lot that is familiar. This master facilitator, cat herder, or conductor of the ensemble is an advisor that is frequently neglected and not thought about because your advisory group is not thought about as a team.

The first and most important step in making this transition or paradigm shift in your operation is finding somebody that can facilitate and deliver their own intrinsic value to the advisory team. They also call that team together for a purpose on at least a quarterly basis and get them to get into unison and into good harmony together to drive the business forward with you, the owner, and your operating team, that we'll talk about next time. 

The first and most important step in making this paradigm shift in your operation is finding somebody who can deliver their intrinsic value to the advisory team and get them into unison and harmony to drive the business forward.

That leads to the 3rd out of 4 takeaways that we want to remind you about. That is what we've talked about extensively in this episode. Remember that your teams are dynamic. They do change and evolve. Their composition alters. The extent to which they've involved changes throughout your business lifecycle. 

It’s so important and critical to keep that in mind. As you develop a relationship with these advisors, you don't want to see them go, but sometimes, they have to transition out. Planning ahead for that will make that easier as well as make the transition from one advisor to the next easier. This is part 2 in a 3-part series and we've been purposely going through this in a specific order. We went from a team that most business owners don't even think about at all to a group of professionals that business owners are familiar with but don't think about as a team.

For our grand finale, we're going to talk about a team that every business owner has and thinks about as a team and is comfortable in their own minds and hearts with how this team goes together and operates. We’re going to dig into that very comfortable place and, hopefully, provide some new thoughts and new ways of looking at and utilizing that team. That will be part three in this series. We're excited to have you join us for that one as well.

On behalf of Jason Tuzinkwich and myself, we thank you once again for tuning in to this episode. We look forward, as we always do, to reading your thoughts, questions, topics, suggestions, and other requests in the comments section. We additionally invite you to click the subscribe button so that you are notified immediately every time we release a future episode.


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