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Conscient Leaders: Interview with Jim “Big Red” Wetrich

Conscient Leaders: Interview with Jim “Big Red” Wetrich

For our leadership segment, we interviewed Jim Wetrich, author of Stifled: Where Good Leaders Go Wrong and CEO of The Wetrich Group, a healthcare management consulting firm providing advisory support and guidance—substantive, thorough, strategic, and tactical—to partner clients.

Tell us a little about your current role and how you got to where you are today as a leader and author.

I founded Wetrich Group in 2001. For the last 8 years, I have been coaching, consulting, and mentoring innovative leaders. I am a certified coach and recently joined the Professional Coach’s board of directors for the International Coaching Federation (ICF). Though my career had been mostly focused in healthcare, I am very much a student of business and love working with leaders with businesses from across various industries.

You recently published your first book. What led you to put pen to paper at this stage?

This book has been in the works for many years and something I have been wanting to do since I left my last full-time job at Mölnlycke Health. Stifled: Where Good Leaders Go Wrong is very much a reflection of my own career and experience with leadership. I have always had very strong feelings about certain things involving leadership. Following a 40-year career in the health care space, 10 of which were spent working in hospitals, including hospital administration, and hospital consulting, I also ran two large supply chain organizations. I also spent 22 years in the medical device and pharmaceutical business and worked with three companies – Abbott Laboratories, Reapplix, and Mölnlycke Health Care -part of the Wallenberg family Investor AB portfolio companies. More often than not, leaders don’t completely understand their impact on an organization and how their messages can be deemed inconsistent. Most of the leaders I have met and worked around have generally been well-meaning and well-intended people, but sometimes their actions have consequences, causing firestorms and controversies.

There are many books on different types of leadership like ‘authentic leadership’ and the rest. Still, I thought it would be interesting to point out some of the failures and troubles people get into when leading. I also think, imagine my first years in business in 1981, your boss told you what, how, why, and when to do your tasks; you worked for that boss, and they owned you, and this was the environment. Fast-forward 40yrs that doesn’t work anymore; it probably hasn’t worked for a long time, but a lot of people get away with the ‘command and control’ type leadership style. It is an entirely different world now, and with covid, everything has changed.

As you think of the qualities of a great leader or manager, what are some of those essential qualities?

It is a series of questions, who are you and what do you stand for; what is important to you, and what people need to know about what is important to you. Self-awareness is so critical, and that includes knowing what you do not know. I have been shocked by some of the messages from former GE leaders talking about ‘I wish I said I don’t know’ more often. Today with so much specialization and information, you can’t possibly get close to begin knowing everything about anything; it is not possible. So being cognizant of your limitations is very important.

Also important are humility, authenticity, transparency. There is a considerable gap with leaders not being open and honest with their employees either about the status of the business or their personal situation. I can’t tell you how many people I coach now who have been identified as high potential within their organization but can’t get any clarity on what that means–what is or if there is a success plan and how to continue to develop; this is a transparency issue. Integrity is also important; it surprises me there are still significant lapses with that. The last things on my list are putting other people first and yourself second, audaciousness, and grit.

How do you balance bringing the leadership strengths from the past and incorporate what works now?

Leadership involves a process of continuous development, growth, and improvement. I think some of the problems leaders get into is that they lean on what worked for them in the past and haven’t necessarily adjusted to what is working now or what will be working in the future. This was partly why I went back to grad school to get my MBA. I got my MBA when I was 52 because I felt, in the late 2000s, lots of things had changed. So, I wanted to refresh, retool, and reorient, and I am glad I did. It was a critical time in my life where I could sit and think of where I had been and think about what I would want to look like going forward.

How would you describe your leadership style and approach?

I generally like the servant leadership model and most of its tenets. I try to put people first, and the most important thing for me is that people grow and develop and to provide opportunities to make this happen. It may be that the growth may have to come from outside the organization. A downside for us being a small business is you can’t offer a lot of opportunities for many people. But it is about what is important to the individual. How can I help you grow to do the position you are doing now if you want to stay here or close gaps in your background to help you find opportunities externally if that is the direction you want to take.  Though I understand it, we focus too much on the hard stuff like hitting numbers and targets—profit, sales, market share—and not enough on the softer skills, which is critical.

What would you include if you were to build a leadership starter pack for people leading this ever-changing, multicultural business environment?

It will be having as many case studies as possible on good practices of model organizations, psychological safety, integrity, and diversity. I will also add helping people speak their minds and speak up as leaders often assume that if people don’t speak up, they don’t have anything important to say and tend to minimize those people. It may be very much so that, referenced from an appraisal of my book, “sometimes the biggest or loudest voice in the room isn’t the best voice in the room.” So how are we making sure that we get people to participate; I love the term ‘Lean-in’ as all people need to lean in, need a seat at the table, and voices need to be heard as much as possible.

As you think about your book, the future of your work as a coach and leader, what are you looking forward to?

For me, one of the most exciting things is being able to branch out of healthcare and working with people across industries, differing businesses, and the globe. This is super exciting because I can get a sense of what is happening in diverse companies; surprisingly, is how much they are still operating under ‘command and control.’ When I was in grad school, someone worked in a huge, well-known company where the environment was you couldn’t just go mingling with and talking to people; if you wanted to talk with your bosses’ boss, you needed your boss’s approval. This just blows my mind, and it is still prevalent today; there is still this siloed bureaucracy and chain of command culture. It is so foreign for me going back to my time at Abbott, things were very open, and you could talk to anybody. So, I don’t quite understand that and believe that we must continue to evolve and democratize more employment.

 

 

About The Wetrich Group:

The Wetrich Group is a health care management consulting firm founded in 2001 by James G. Wetrich. They pride themselves on their experience, each of their associates has over 25 years of experience in a variety of senior leadership positions. They offer comprehensive advisory support and consulting resources to their partner clients. Through leveraging their experience, they provide their clients with substantive, thorough strategic and tactical guidance, rooted deep in sound execution. Their consultants focus on creating value for their business and provider clients. Learn more at wetrichgroup.com.

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Deal Makers Interview Series: Scott Taylor

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We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

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Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

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Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

In the Deal Makers Series, we interview leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space about how they get successful deals done. The series highlights perspectives of investors and buy and sell-side advisors working across industries and geographies.

For the fifth installment, we interviewed Scott W. Taylor, attorney and principal at SmolenPlevy in Tysons, Virginia. Scott received his law degree (Cum Laude) from George Mason University School of Law, and he holds a Bachelor of Science Degree in Business from Virginia Tech.

What is your current role, and can you tell us a little about how you got there?

My practice is primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

I’ve always been interested in business. I pursued a Corporate and Securities concentration in law school after studying business as an undergrad. I’ve spent my entire 20-year legal career here at SmolenPlevy.

Tell us about a typical client for you. What does the work with them consist of?

My clients are primarily owner-operated businesses, meaning the owners are also key executives, managing not only the strategic goals of the business, but the day-to-day operations as well. Most are service providers—consultants, software developers, government contractors, or professional firms.

My merger and acquisition work breaks down into roughly 75% seller representation and 25% buyer representation in the small to mid-market range.

You’ve worked on a variety of acquisitions and other deals. What are some factors that contribute to a successful merger or acquisition?

In general, bringing legal counsel in early contributes to successful deals. We focus on the process and the documents involved with the deal to help clients avoid unfavorable terms/the “uh-oh” moments.

Clients tend to focus heavily on the financials and—particularly for sellers—the sales price. We help them understand everything else involved in the transaction. When we’re brought in prior to signing the letter of intent or before discussions begin, we explain the terms for confidentiality agreements, binding and nonbinding clauses, tax issues, and ways for buyers to pull back money through indemnification provisions.

Purchase agreements tend to be much longer and more involved than first-time business sellers are expecting. They are not simply glorified letters of intent.

On the sell side of transactions, deals are successful when clients understand the factors involved before and after the sale. The seller needs to think about what they want for themselves. For instance, are they really prepared to work for someone else after years, decades even, of working for themselves or with a handful of partners, even if only for a short period after closing?

The company culture after closing is rarely considered. Target companies often go from operating in a smaller environment to operating in a much larger one. Employees who are used to having direct access to the previous owners on a daily or weekly basis may no longer know the new owners and may find there are two to three layers of management between themselves and the top decision makers.

Are there any common lessons or themes you’ve seen in deals that are not successful?

Less successful deals usually go bad within the first year after closing, even after all parties spent months, even years, working on the deal. Financial issues tend to cause most problems, but unpredictable events do occur—for example, the COVID-19 pandemic.

When I say deals go bad, I mean that the deal does not achieve its objectives if the target company fails to realize its potential post-closing. Buyer’s usually have a “theory of the deal,” the strategic goal the deal is meant to accomplish, but often overlook aspects of the target company that could impact achieving that goal.

How often do these problems become clear before the transaction is complete, versus once the deal is done?

Problems usually become clear after the deal is done and the real integration work begins. Often, the information was there before hand and not identified as a problem. There may have been a “pink” flag, but not something the parties really honed-in on. It’s rare to experience a brand-new problem that, looking back, wasn’t somewhere in the due diligence process or deal documents.

But as the recent COVID-19 crisis has shown, it is impossible to foresee every potential problem in advance. COVID-19 was a brand-new situation that none of us had experienced. But with a quick and successful switch to remote work for many companies, what at first seemed like a situation that could cause deals to go bad turned out not to be the case.

Good deal documents protect both the buyer and the seller, and fairly allocate the risk if an issue does arise.

To the end of avoiding problems and mitigating risk pre-deal—as you advise on a transaction—is company culture typically seen as an important part of due diligence?

Honestly, I would say that company culture is almost never on a due diligence check list.

There is usually an “HR/Employee” section that mostly consists of checking a few boxes regarding payroll systems, employment agreements, non-compete covenants, NDAs, etc. But buyers rarely do a deep dive into company culture, to their detriment because it is such a fundamental aspect of the success of a transaction.

Often, organizations start to address cultural issues only when there is a problem. In an ideal scenario, when would leadership and culture come into play for an M&A deal?

Ideally, cultural considerations would be part of the due diligence checklist to expand on the review of things such as employment contracts and nondisclosure agreements. Analysis to evaluate the workplace can include factors such as cultural norms regarding approaching senior leaders, how or whether ideas are allowed to bubble up from lower levels, the level of obedience required, and what collaboration looks like.

When looking at a deal, most buyers and sellers don’t consider their respective leadership styles.

Most owners expect key people to be successful on the other side of the transaction. But, if the acquired company’s culture is more collaborative and the buyer’s company culture is more authoritative, those key people may not be in an environment that will allow them to thrive. The buyer will not have the same workforce after closing if that situation results in significant attrition.

Have you ever seen leadership and culture drag down a deal or hinder growth? What did that look like?

Transactions often don’t work if the buyer doesn’t understand the company they acquired. There can be a tendency for buyers to move on to the next deal. That may be fine if the leadership is in place to allow the acquired company to run on its own. But if the acquired company needs attention, then ignoring it is not going to produce the intended goals.

How about on the flip side? Where have you seen strong leadership or culture drive growth?

Strong leadership is essential to the success of an owner-operated company. My clients are mostly well-established businesses with strong, focused leaders. They know their business and their people well. They understand the people behind the numbers; that their people make the business work. Culture influences how the company operates and communicates. That’s what needs to be integrated after the sale.

In the successful deals I have seen, the buyers understood what they were buying and how best to integrate the new company and its employees into their operations.

As you think about the next few years, and the evolution in your field, what are you most excited about?

I am curious to see what “normal” looks like as businesses try to bring employees back to the office. What will company culture look like?

The M&A environment has remained active and moved along well during COVID-19. There are still plenty of buyers looking for targets. Baby boomer owners still want to sell their businesses. I expect this momentum to continue. 

We’re so grateful to Scott for sharing his expertise and insights on M&A. Check back here for future installments of the Deal Makers Series!

Learn more about Leadership & Culture Due Diligence »

Conscient Strategies was founded with the idea that every organization is capable of thriving through change. With a focus on strategy development, program implementation, workplace dynamics, and leadership development, Conscient Strategies equips leaders with the tools necessary to continuously navigate the constancy of change in ways that not only benefit their team, but, equally as important, their business outcomes as well. From mergers to c-suite changes to sudden or explosive growth, organizations turn to Conscient Strategies when change is threatening their financial health and cultural wellbeing.

Based in Washington, D.C., Conscient Strategies is comprised of a talented group of consultants, executive coaches, strategists, and account executives. The team has worked with organizations of all sizes in the private, federal, and non-profit sectors across the United States and Internationally.

 

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Deal Makers Interview Series: Scott Taylor

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Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

In the Deal Makers Series, we interview leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space about how they get successful deals done. The series highlights perspectives of investors, corporate development executives, and buy and sell-side advisors working across industries and geographies.

For the fifth installment, we interviewed Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

What is your current role, and can you tell us a little bit about how you got there?

I co-founded Blue Highway Capital after stepping back into the professional world following a 10-year hiatus to attend to my children. I like to say that children are a form of investing, though with longer tails. Returning to investing, I was looking for a structural break in the market, a place where capital wasn’t actively being deployed. Looking back at my own track record, I realized that—overall—two-thirds of my investments went to rural regions, and those investments outperformed the remaining investment portfolio. This coincided with the time that the country was beginning to highlight underserved areas.

Statistics show about 74% of PE and venture capital is invested in California, Massachusetts, and New York—53% goes to California alone. Approximately 85% of that capital is under management in California, Massachusetts, and New York, with California once again holding the majority at about 57%. So, it becomes straightforward—money goes to where money is. Naturally, people look to community banks in rural areas for investment capital, but in 2019, the Federal Reserve noted that just 16% of those loan portfolios were dedicated to business development. Building on our thesis that we can do well and do good; this is how our strategy came to be.

So far, we haven’t ever competed with other funds for our investments, a fact that has helped us to establish trust and a strong reputation with the management teams and communities we deal with.

What makes for a successful investment?

The first answer is people, the second answer is people, and the third answer is people. Its exceptionalism around people and the ability of people to adapt. We saw this with COVID—the determination and drive to persevere yielded results beyond expectations. Pandemic-related issues around the supply chain, finding people for open roles, and so much more highlighted how essential people are in making suitable investments. You can always have a business plan and other added factors, but what every business doesn’t always have is an exceptional management team.

We also have two nonfinancial metrics that we evaluate each year. We want our companies to do well economically, but we also track job creation and ways companies have shared their prosperity with the community. For example, we have a company that hires neurodiverse candidates, and we report this as part of our metrics to our fund partners in our annual report.

How do you evaluate whether the team and people are the right folks to bring an investment/company to its next growth point?

We are not a VC fund or investing in things such as technology innovations or new engineering years down the road, or a company that will burn cash for a long time. We look at strong fundamentals from the beginning. Having done this over time, I will say incremental change is more of our type than growth by leaps and bounds, i.e., hypergrowth. There are challenges with hypergrowth; it is not a panacea. We value incremental growth, because it is born out of the experiences of the management team and the guiding principles are clear.

So, you ask, how do you know? You don’t always know, but we do our due diligence around people and their adaptability, background checks, and get recommendations. Ultimately, you don’t truly know, so you need other people in your network to be there to assist you. These networks can manifest in the form of added independent board members, other investors with specific skill sets, etc. No one investor can do it all.

What are common lessons or themes you have seen in deals that didn’t work out as planned?

I wouldn’t blame a company for failing—but I will say where I failed as an investor. It’s really around the people question. For example, I invested in a company brought to me by a person who had a stellar recommendation, and he vouched for the team, and it ended up being misplaced.

The lesson I took from that is, you can’t always take the advice of someone you know very well and think highly of. You must be careful you don’t misplace your trust. I can take on opportunities from people I know and are well intended, but I still must do my own work—pay more attention to my own instincts, trust myself and my experiences—so ultimately, trust and verify.

Are problems transparent before deals?

Not always, but they do manifest quickly. We have a saying, that lemons ripen quickly.

What are the most critical pieces of data that you obtain or activities that you perform during the due diligence phase?

We do a lot of financial due diligence. Most companies don’t initially have audited financial statements—more frequently their statements are reviewed—though at times, they have only QuickBooks and other simple ways of keeping records. So, we spend more time with the quality earnings report, and we have accounting expertise on our team who spend time verifying trends and numbers—as numbers tell your story—so there is a lot of work around that. There’s also a lot of work in structuring the investment to ensure that it’s aligned. We always do background checks and talk to references, customer vendors, accounting firms, insurance brokerage firms, and attorneys to get to know people around them.

We do a lot of work on operational components, looking for ways to add value and generate sales. Sales channels are shifting so quickly now that a lot of work is focused on customers, identifying who your tribe is, and how you can get more sales from them. There’s also thought on how you expand your tribe and measuring these customer acquisition costs. Looking at the competitive landscape, we like to find niche opportunities, especially if they can exploit regulatory or other market gaps. So, looking for unique ways they approach the market.

How important do you see culture as a growth mechanism for companies looking to grow?

From my lens, it’s important. However, I have seen companies do very well with cultures that aren’t great, though I don’t see them as healthy when compared to others. They don’t do well for a long duration, but they can be okay if you can get them to a particular place where they can eventually sell. When you look at Silicon Valley and see what gets funded, some funded companies have dysfunctional cultures. If you measure success by returns on investment, it’s possible to achieve returns in the short run. In the long run, a dysfunctional culture will not yield as much success.

Have you come across an investment that meets your criteria but wasn’t a good fit for BHC?

We back away from 99 out of 100 opportunities. The major reasons an investment might not be a good fit include: 1) people, 2) ability to scale, and 3) the lack of an addressable market.

Looking ahead to the next few years, what excites you?

I’m excited about our strategy of investing in rural America. People have started heading back home, and rural America is exploding in terms of opportunities. There isn’t currently enough capital to take advantage of those opportunities. I think more people should look at the rural areas—the more the better.

We are a women-run fund. We can grow the economy much more broadly and in a more democratized manner; that is exciting! 

We’re so grateful to Christine for sharing her expertise and insights on M&A. Check back here for more future installments of the Deal Makers Series.

Learn more about Leadership & Culture Due Diligence »

Conscient Strategies was founded with the idea that every organization is capable of thriving through change. With a focus on strategy development, program implementation, workplace dynamics, and leadership development, Conscient Strategies equips leaders with the tools necessary to continuously navigate the constancy of change in ways that not only benefit their team, but, equally as important, their business outcomes as well. From mergers to c-suite changes to sudden or explosive growth, organizations turn to Conscient Strategies when change is threatening their financial health and cultural wellbeing.

Based in Washington, D.C., Conscient Strategies is comprised of a talented group of consultants, executive coaches, strategists, and account executives. The team has worked with organizations of all sizes in the private, federal, and non-profit sectors across the United States and Internationally.

 

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Deal Makers Interview Series: Christine Jones

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Contact us to get started.

6 + 1 =

Deal Makers Interview Series: Curt Cyliax

Deal Makers Interview Series: Curt Cyliax

In the Deal Makers Series, we interview leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space about how they get successful deals done. The series highlights perspectives of investors, corporate development executives, and buy and sell-side advisors working across industries and geographies.

For the fourth installment, we interviewed Curt Cyliax, Managing Director at Strategic Exit Advisors in Pennsylvania, an Investment Bank for entrepreneurs helping owners achieve their Ultimate Exit.

What is your current role, and can you tell us a little about how you got there?
I am a Managing Director of a niche investment bank located outside of Philadelphia. We got into the business by bringing several solo practitioners together 15 years ago. After that, we all wanted to move upstream and work with bigger companies—so we did—and over the years, we have grown. We work for entrepreneurial owners who want to exit, and typically have a unique characteristic about their business or themselves that they want to preserve, and we help them achieve that. From a size standpoint, we work with companies (revenue-wise) from about $5 – $50 million, which is an enterprise value of about $10 to more than $50 million. I have spent 20 years in the industry and ten years doing this on my own, and just love making deals and helping people achieve what they want to achieve. We also tie in the emotional piece because when you sell a business, it is a draining process, and can also be an emotional one. This is evident especially when dealing with an owner/founder who starts a business and gets it to a successful level, or a later generation owner of a family business who must wait until the family member who owned it previously leaves this Earth before they can sell. So, when a child or management team doesn’t want it, and they want to sell it in a third market, that is where we come in.
When working with a typical client, what are the primary services you provide for them?

Our services consist of leveraging our experiences to help sell clients understand:

  • What the value of their business is, and
  • That the culture and people—the most critical assets—are taken care of.

We provide examples from situations where we have accomplished these goals. We are not dealing with a market segment where two companies are merging, and they are getting rid of many people due to duplication. We are typically dealing with a company that is an add-on to an existing company or platform, where a financial or strategic buyer puts more money into a business—regarding people, resources, and so on. We educate sellers on valuation, what a buyer looks like, and how a buyer will treat operations.

What makes for a successful acquisition?

The most successful acquisitions involve vetting what is important to the owner and conveying that to the prospective buyer group. Our process makes it more apparent which buyers will meet many or all the owner’s needs. For example, there are many fragmented industries around the world, and the typical financial buyer comes in and buys one of our companies as an add-on, holds it for three to five years, and flips it after that. For our business owners, that’s not an attractive buyer; they are concerned about what happens with their employees three to five years down the road. By understanding what our clients need and holding their hand through the process, dealing with the emotional issues that must be addressed throughout, and trying to tackle them upfront as quickly as you can, it isn’t a “say it once, and everyone understands it,” approach. We try to find business buyers who have a more permanent type of equity, where they will take a company that we sell, and their goal is to keep it—maybe not forever, but to not flip it in three to five years and instead want to keep it and help it grow.

How do you assess culture and people fit between a buyer and seller?

We emphasize what is important to the owner, but don’t lead with that. Our approach allows the prospective buyer and seller the chance to get to know each other on a short call before they start doing a deep dive into the business. Now, in the world of Zoom, you can read facial expressions, reactions, and some body language, which helps with vetting from the get-go. The buyer’s intent comes out very quickly in the conversation—this is the foundation we set for both sides to understand “what is this company really,” and, “what are the buyer and seller about?”

We insert the human. Before they get the entire book, they get a piece or a summary of it, and then they get to talk to the owner. Then—in real-time—the buyer must sell themselves, and the seller communicates precisely what they want, and the buyer can go, “this sounds good.” They have the option to listen to each other’s needs and intentions. It sets the tone for discussion just as much as the culture and the people. When employees work for someone for 40 years, they are like family—the people component is a big piece of these relatively smaller businesses—and even a $20M – 40M business.

What are common lessons and themes you have seen in deals that didn’t work out as planned?

Normally, we try to vet our prospects well before they turn into our clients, but we occasionally miss the mark. We see something attractive in a business, and we do our research and sometimes find out it’s not what we thought. The common reason companies do not transact many times is that they are too small to do so. Often, in certain situations, we have owners talk to psychologists before they move forward, so we get their familial tension out of the way. But sometimes when we get into it, the business isn’t as valuable as we thought—this is our mistake. Another possibility is the owners don’t decide as a unit, or an unexpected event, like COVID, happens.

For example, last year, we worked on two transactions at the same time; one was a business selling directly to consumers over the internet, and it hiccupped for about four weeks. The company made cuts, and within eight weeks, there was a turnaround, so those people came back, and then they were looking for more people. In this scenario, the culprit was resistance due to an unforeseen event—we were in the management (final) stages, so we took a break, and when we picked it back up, it was back on the beat. We worked with another company that was into internal communications for pharmaceutical companies—which was a luxury, nice-to-have thing before the pandemic. When the pandemic hit, the need for this technology instead became a must-have, causing them to become so busy that both the seller and prospective buyers needed to be put on hold. We picked them back up in the last quarter, and the buyer’s interests and price had grown exponentially.

Do you see scenarios where deals are anticipated to be good before close, but afterwards turn out otherwise down the line?

We do stay in touch more with the sellers as we are on the sell-side. We get the seller’s perception of what is really happening. We find out from them regularly how it’s going, about once a year or so. We see growth potential for these companies—you won’t replace the owner as there is minimal upward mobility. It’s a win/win when we talk to the owners. These owners tend to stay in touch with their people to ensure they are being taken care of. Another point of interest for them is that they want us to make sure the business they developed is successful for the new owner. They want to see them happy and making money, but also for the company to grow—they often maintain the original name under new owners. There is no need to fix it if it isn’t broken.

When looking at the due diligence phase, what are the most important pieces of data or activities that you perform?

I wouldn’t say that data is the most important—but, I will say the process is an emotional rollercoaster, it’s going to be a ride—keep your eye on the end target. From basic factual information, what’s most important—and we stress this from the beginning—is that you are honest. This is the most important thing about due diligence; being honest from the get-go. Credibility matters hugely in these smaller businesses.

Honesty is number one. If you have a “what,” get it out there initially, because a prospective buyer will read this as, “is that is a ‘what’ I can deal with?” For us, due diligence starts on day one. If there is any bad to tell, tell it now so that it doesn’t become an “aha” moment later. Establishing trust, keeping it, and staying honest are the most important pillars of due diligence. The numbers aren’t more important than the processes, people, or vendor-customer relationships. They are all equally important. I will say being honest and having a vision for growth are two key features that must be tackled at the start.

Have you ever seen leadership and culture considerations drag down a deal? What did that look like?

Yes, I have. I will say that leadership is more often the culprit. One of the things we like to do is visit the company. If they tell us one thing, and then when we visit the culture is not as stated, that’s something we back away from. From a leadership standpoint, we have seen leaders that don’t really lead by example and are destructive. We have run into problems where these destructive leaders are also the owners. They are more negative than positive—they’ve grown a nice business but are not enthusiastic about it. Owners must be enthused about their business for prospective buyers to follow suit. We’ve had situations that once you get into it, the owners aren’t as enthusiastic, or their enthusiasm doesn’t come across; you can coach them, but if they don’t listen, you can’t make them listen. This has been our biggest hurdle with leadership.

Shifting to the subject of keeping a company’s original name, banner, and brand post-acquisition—how often is this the case? If otherwise, how does this impact integration?

I think that is the bulk of our work. But I will say that for 95% of opportunities we work on, everything is left alone—the buyers want to learn about the company first and then tweak it later down the road. Thinking back, we’ve only had one case that was an exception in the past; a publicly held company bought and renamed a group of brands before replacing their leadership in a short period.

Do you work with your sell-side clients to define and talk about their culture, so that it’s presented in a way the buyer understands?

In many of our cases, the sellers explain their culture to us because they genuinely believe in it. For them, it is more than a mission statement; it’s an active task they work on throughout the year. They explain it to us, and we take copious notes to facilitate us explaining it to prospective buyers. We try to articulate as best as we can, but the owners can do it better than us.

When they tell it, and we witness it, this is very apparent. We let the owners expand on their “how,” “why,” and “what.” We focus on the highlights—such as incentives and rewards—and then the owner talks about how and why they do it, and what it means to people. When an owner explains it, they explain it from a better vantage point, in part due to their knowledge of their people and their importance. We try to stay out of the detailed explanations, as the owners are the experts in what they do. We are just experts in the process of how to do it.

As you look forward to the next few years and the current evolution in your field, what excites you?

What excites me is getting to continue doing what we do. We can’t control the world—with so many things going on, there are so many things we can’t control. All we can control is focusing on what we do well and making owners happy beyond their wildest dreams. That’s just fun.

The other aspect we use to differentiate ourselves is that we have this “pay it forward” initiative, where with every engagement fee we charge from a successful sale, we take this fee and donate it to charity. For our philanthropic clients, it makes us happy that we can make their sales dreams come true and donate $30,000 – $40,000 to the charity of their choice.

What haven’t we talked about that you think is important for a deal to be successful?

There must be an emphasis—especially for the lower and middle market—on the emotional process an owner goes through when selling their business as we court them. We haven’t yet figured it out entirely, but we have tools and resources to help our business owners get through it. When an owner has been dedicated to a business for 30 to 40 years, and suddenly, they are out of a job and feel a lack of relevance—that emotional process is one we continue to learn about. In our world, money is important, but understanding the emotions an owner goes through as they make decisions, journey through the process, and ultimately turn over the keys to their business can be a real roller coaster. Having these feelings as an add-on when doing due diligence can become a consuming process. We try to hold our owners’ hands a little more through that because we know it is a ride, while keeping the endgame in mind. We must do a lot of listening as the emotional process is a very real thing.

If you weren’t doing this, what would you be doing?

Something easy. I am an accountant by trade; I got into it, loved it, and outgrew it. Now—with what I’m currently doing—it hasn’t been easy, but still a fun ride. 

We’re so grateful to Curt for sharing his expertise and insights on M&A. Check back here for more future installments of the Deal Makers Series.

Learn more about Leadership & Culture Due Diligence »

Conscient Strategies was founded with the idea that every organization is capable of thriving through change. With a focus on strategy development, program implementation, workplace dynamics, and leadership development, Conscient Strategies equips leaders with the tools necessary to continuously navigate the constancy of change in ways that not only benefit their team, but, equally as important, their business outcomes as well. From mergers to c-suite changes to sudden or explosive growth, organizations turn to Conscient Strategies when change is threatening their financial health and cultural wellbeing.

Based in Washington, D.C., Conscient Strategies is comprised of a talented group of consultants, executive coaches, strategists, and account executives. The team has worked with organizations of all sizes in the private, federal, and non-profit sectors across the United States and Internationally.

 

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Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

read more
Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

We interview Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

read more

Ready to grow a stronger organization? 

Contact us to get started.

15 + 15 =

Deal Makers Interview Series: Judd Appel

Deal Makers Interview Series: Judd Appel

In the Deal Makers Series, we interview leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space about how they get successful deals done. The series highlights perspectives of investors, corporate development executives, and buy and sell-side advisors working across industries and geographies.

We interviewed Judd Appel, Director of the M&A and Capital Raising practice at BayBridge Capital Advisors, an affiliate of Berkowitz Pollack Brant (BPB) Advisors + CPAs.

What is your current role, and can you tell us a little of how you got there?

I’m the Director of BayBridge Capital Advisors, advising clients on buy-side and sell-side mergers & acquisitions (M&A) transactions. I also raise debt and equity capital for clients, and try to find the unique solutions that our clients need.

I began my career as a CPA with Berkowitz Pollack Brant, left for 20 years to work for KPMG (Transaction Advisory Services), General Electric Company, Honeywell International, ITT Corporation, and Global Infrastructure Partners, and then returned to run the BayBridge Capital Advisors arm of BPB. I truly believe we have a great growth platform here.

Tell us about a typical client for BayBridge? What does working with them consist of?

We work with a broad array of industries covering most everything except probably oil and gas.

Our typical client and professional sweet spot are small cap clients with EBITDA of $3-25M. While our average deals are in this range, we sold a $1.2B auto dealership business last year. We work on a success fee structure so clients pay us when we succeed. We are very selective about the clients we choose to work with and conscious about what we bring to market.

Given that the majority of our clients are first time sellers, we invest a lot of time supporting the client throughout the selling process. Often, these are family-owned businesses. Recent examples include a $10M company owned by three members of a family, and a husband and wife that were running the $1.2B auto dealership group.

This work is very different than the work I did at General Electric and Honeywell where we were experienced buyers and largely dealing with experienced sellers. Since we work with smaller companies at BPB, our deals tend to have a more personal impact on the seller and require much more “hand-holding”.

You’ve worked on a variety of deals and acquisitions. What are some of the factors that you think contribute to a successful merger or acquisition?

The most important factor is to find the right buyer who is aligned with the goals of the seller, be it a strategic or financial driven transaction. Most of our clients want to find a good home for their companies, meaning they want the buyer to invest in and grow their businesses. No one desires to sell to a buyer who will cut costs and resell the business within a year and half to three years later. We spend the time and effort to find buyers who will continue to nurture the business and make the investment for growth.

Another important factor affecting the valuation and success of a deal is continuity of leadership. Buyers tend to want the former owners to stay on for a period to preserve relationships and provide interim stability for specialized businesses. This is a major point of negotiation since some sellers are tired and want to just walk away. That usually doesn’t work well in terms of valuation and success.

Are there any common lessons or themes you’ve seen in deals that are not successful?

It’s imperative to focus on people as they are the most important aspect of every business. If the workforce doesn’t like the new owners, value disintegrates quickly.

Our ability to go beyond the numbers for organizational compatibility and provide a high level of confidential support to our sellers differentiates us from the big investment banks. 

How often do these problems become clear before the transaction is complete versus once the deal is done?

The people problems usually become clear after the transaction is complete. We try to be proactive regarding this issue since interpersonal relationships of all sorts are often key to financial success. 

Often, organizations start to address cultural issues only when there is a problem. In an ideal scenario, when would leadership and culture come into play for an M&A deal?

Cultural issues must be dealt with on day one of the process. I am not saying it’s impossible for a multi-billion company to be successful with the acquisition of a $15M business, but you will obviously see and feel many cultural differences between large corporations and small entrepreneurial companies. In nearly all cases, the right transition period and predecessor management involvement is required over the first year. 

What is the value of integrating leadership and culture into due diligence? How does this look in practice?

Most of our clients employ a local workforce. The seller wants to know what will happen to their employees. They are not looking for a buyer who will cut a large percentage of the workforce. If buyers are looking for a firm that will integrate, they try to be open and minimize unexpected issues.

It’s my role to give guidance to the seller as their banker. I’ve been in this arena for 25 years. I’ve learned a lot from seeing many successful transactions and of course those unsuccessful ones. As one would always say “the best way to learn is to make a mistake” and learn from it.

Have you ever seen leadership and culture drag down a deal or hinder growth? What did that look like?

The human element, in addition to segment/industry alignment, is so important. From my perspective, people are the most important element in any deal.

From my previous Honeywell buy side experience, I saw plenty of examples of significant consequences when culture was not considered enough. Culture is a big consideration.

One experience was a company run by 6 partners out of a mid-west firm that operated very differently than our $40Bn organization. When clashes develop between the acquiror and acquiree that can quickly diminish the value proposition. In this instance there was a significant impact on client relationships and sales continuity.

Similarly, employees at a British company doing work in the United States felt very empowered to run their business prior to the acquisition by a German company. After the merger, that empowerment was taken away. Voices could not be heard. It was harder to hold people accountable. In this case, sales quickly slowed, and profitability fell, leading to dilution in value of the target company.

I try to educate sellers about these issues and what the situation will be like after the transaction.

There is a lot of concern with my current deals regarding what the company will look like in the future.

As you think about the next few years, and the projected evolution in your field, what are you most excited about?

Completed transactions are at an all-time high. The economy remains robust and many public valuations are up more than 100% year-over-year. We all hope this strong deal market will continue.

I want to create wins and build on my proven track record. I enjoy doing a lot of networking these days.

On the sell side, defining the culture of the company being sold differentiates our service to the seller. It’s important to set expectations to the buyers and work with both sides. 

We’re so grateful to Judd for sharing his expertise and insights on M&A. Check back here for more future installments of the Deal Makers Series.

Learn more about Leadership & Culture Due Diligence »

Conscient Strategies was founded with the idea that every organization is capable of thriving through change. With a focus on strategy development, program implementation, workplace dynamics, and leadership development, Conscient Strategies equips leaders with the tools necessary to continuously navigate the constancy of change in ways that not only benefit their team, but, equally as important, their business outcomes as well. From mergers to c-suite changes to sudden or explosive growth, organizations turn to Conscient Strategies when change is threatening their financial health and cultural wellbeing.

Based in Washington, D.C., Conscient Strategies is comprised of a talented group of consultants, executive coaches, strategists, and account executives. The team has worked with organizations of all sizes in the private, federal, and non-profit sectors across the United States and Internationally.

 

You may also be interested in:

Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

read more
Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

We interview Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

read more

Ready to grow a stronger organization? 

Contact us to get started.

11 + 8 =

How to Develop Leadership & Culture to Optimize Value

How to Develop Leadership & Culture to Optimize Value

In acquisitions, both sellers and buyers spend great effort in financial and operational due diligence, yet far too many transactions fail. Why?

Leadership and culture are critical to a successful acquisition, but frequently they’re ignored. For sellers, recognizing that leadership and culture are linked to enterprise value helps them mitigate risk and drive value in preparation for sale. For buyers, leadership and culture play a critical role in ensuring a smooth post-transaction integration.

Key Learnings:

Leverage real-life examples to learn why the evaluation of leadership and culture matter leading up to a transaction.

Understand what a pre-transaction leadership and cultural assessment looks like.

Learn how addressing these types of risks can drive value for sellers and buyers.

About Value Scout:

Value Scout is the first value creation platform. It enables entrepreneurs to pinpoint their business value today, create and drive a plan to create the value they’ll need tomorrow, and exit on their terms. Value Scout enables entrepreneurs to take a deliberate, proactive approach to value creation. Business leaders and their advisors use it to identify, plan for, and drive all their value creation activities – from growing revenue and increasing efficiencies to improving cash flows and strengthening leadership teams. Learn more at getvaluescout.com.

You may also be interested in:

Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

read more
Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

We interview Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

read more

Ready to grow a stronger organization? 

Contact us to get started.

10 + 15 =

DEIB Employee Experience Survey

DEIB Employee Experience Survey

DEIB is a journey. Where is your organization?

This survey contains sample diversity, equity, inclusion, and belonging questions that may be used to gather feedback from your team. We recommend distributing confidentially so employees feel comfortable being candid and honest.

Enter your email address below to download the 24-question survey.

You may also be interested in:

Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

read more
Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

We interview Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

read more

Ready to grow a stronger organization? 

Contact us to get started.

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Survey Download: DEIB Survey

Thank you!
Download the survey below.

Thank you! Download the survey below.

Other Resources by Conscient Strategies 

DEIB Employee Experience Survey

DEIB Employee Experience Survey

DEIB is a journey. Where is your organization? This survey contains sample diversity, equity, inclusion, and belonging questions that may be used to...

read more
The Future of Your Work Part 2: From Survival to Strategy

The Future of Your Work Part 2: From Survival to Strategy

After a year of unprecedented workforce disruption, many leaders are finding that their standard approach to team management, communication, and decision making is no longer adequate. To manage disruption and move beyond survival, we recommend that leaders focus on culture as the core of their future of work (FOW) strategy.

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The Future of Your Work: Part 1

The Future of Your Work: Part 1

COVID-19 sent lasting shockwaves around the world, disrupting everyday life, pushing businesses to pivot for survival, and transforming the way we...

read more

Ready to grow a stronger organization? 

Contact us to get started.

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Deal Makers Interview Series: Jack Tillman

Deal Makers Interview Series: Jack Tillman

In the Deal Makers Series, we interview leaders, experts, and innovators in the Merger & Acquisition and the Private Equity space about how they get successful deals done. The series highlights perspectives of investors, corporate development executives, and buy and sell-side advisors working across industries and geographies.

For the second installment, we interview Jack Tillman the Head of Corporate Development for a leading network of community hospitals in Georgia.

What is your current role and tell us a little of how you got there?

I’m the Chief Real Estate and Corporate Development Officer for the largest health system in Georgia.

I consider myself a generalist. Over the years I’ve had many different roles from consultant and executive to foundation and a university administrator. But, what has been the running theme of my career is an interest in humanity that’s lead me to work within large non-profits across the education, healthcare, and research sectors.

What were some of the biggest building blocks to helping you achieve your leadership position and personal perception of what is good leadership?

I’ve had a commitment to the truth and being a direct and honest communicator since I was very young. Those were values taught in the Catholic school where I was educated and also by my stepfather who was CFO of a major private corporation. He really educated me on the ways the world, especially the business world, actually works, with a focus on common sense and hard work.

Over the years, I’ve built relationships and mentorships with people who also deeply value truthfulness. My current boss who is a mentor of mine, and a former partner, also a former boss, is a great example. We have a high level of candor with each other and that makes both of us better at our jobs. If you are diligent, thoughtful, honest, and back up opinions with data, you may not know the answer right away, but these values will help you get to the best business outcomes in the long run. Those values, and being a person of consistently high character, enable you to have a straightforward reputation that others will gravitate towards.

You’ve worked on a variety of deals and acquisitions. What are some of the factors that you think contribute to a successful acquisition?

Diligence is super important. It’s important to be thoughtful and honest about what you’re really looking for and develop an opinion early on about what will make a good deal. Then you lay out the spectrum of all the different ways a deal might go, a series of options, from the situation where we don’t act on a deal to the one where we overpay for the acquisition. You then carefully consider all these options and scenarios and make plans from there. There are a million different ways a transaction can go, but the key is to be specific about your assumptions and then try to predict how you expect the people to act. You then do the math and base your decisions on your understanding of all the possible outcomes. I’ve learned a lot of these skills from bankers and lawyers involved in transactions, but I think they are also just a good way to approach business in general.

Having a solid deal team in place is also essential. You can’t see everything and we all have blind spots, so having a partner to point out what you’ve missed and who can help observe all the small details and dynamics going on is important.

Beyond the bankers, lawyers, accountants, experts, you need trusted partners who have your back as you make a deal. Deal teams that take this approach, they get consistently good outcomes.

You’ve always worked for mission-driven organizations where culture plays an important role. How important do you think leadership and culture are in creating value?

They are sort of everything to me personally. I won’t work for people or cultures that I don’t align and harmonize with.

Certainly you can make a lot of money and there are plenty of successful businesses out there that don’t care about those things, but success is fleeting if you don’t have the right leadership and culture in place.

In my work, I regularly meet with the many CEOs of hospitals in our network. It’s a great opportunity to see how different leaders and culture do the same work but in different ways. All our hospitals are focused on quality, safety and service. I’ve found that the highest quality leaders who develop high performing cultures are also the stewards of best financial results, at least in our system. Our best performing assets are those with solid leaders with good business acumen who get the very best performance from their team. 

What are those leadership traits that get the best performance? Where exactly do you see the effects of leadership on business outcomes?

Better leadership results in consistent and predicable strong financial returns. These leaders and their organizations still of course have ups and downs, but over time, they provide us predictable and reliable returns. These are the leaders who have a clear understanding of their performance and why it is the way it is. They can explain here is what’s happening, here are the steps I’ll take to address the current situation, and here is the expected result.

These really good leaders are also the ones surrounded by really great people, they are magnetic. Good leadership attracts high performing employees. Good people come in clumps in my experience, they are clumpy. The best leaders unlock the capacity of their teams to perform their best. It feeds on itself.

I also often say that you know who a really good owner is because they can hire bad consultants and experts but still get good outcomes. Weak owners on the other hand may be surrounded by the best consultants and experts, yet their outcomes will continue to suffer. If a leader doesn’t know what they’re doing and does not have good reasons for doing something, then they won’t get the outcomes. Good owners and good leaders drive strong cultures and raise the performance of their teams, internally and externally. 

Do you have a way of evaluating the leadership and culture fit of a potential acquisition?

I’m not in the day-to-day of those decisions and evaluations, but for instance we are in the middle of two ten-figure acquisitions and our CEO and EVP are out there interviewing hospital executives. They’re focused on figuring out how real are these people? Will these people follow through what they say they are going to do? Are they going to execute consistently?

I think a great measure of if someone is “real” is if they are willing to admit they don’t know something. They should absolutely have predictions and opinions and they should be clear about their assumptions, but the best admit the limits to their knowledge. Anyone who says they know everything isn’t very honest, and the people around them respond to that. 

When we evaluate leaders, we are also looking a lots of body language and observing how people treat others around them. What are the team dynamics? How engaged and present are they? Do they know the names and stories of their colleagues? By observing people and their behavior, what they are doing and what they are not doing, it becomes pretty obvious who the real people are. 

As you think about the next few years, what are you most excited about?

Our company’s plate is full. We have multiple acquisitions being finalized, so I’ll be laser focused on integration work for the next year and half or so. I oversee that work and am highly involved at the executive level. We have enough economic risk that we engage heavily in overseeing the details of an integration. Of course, I love deal making, so while it won’t be my focus, there may be some restructuring or small acquisitions we make. We also have a JV urgent care business that has been knocking it out of the park, so continuing to grow that will be fun.

Our focus for the near future is to execute well. We are going from 11 to 18 hospitals and we are dedicated to ensuring that every one of the community hospitals in our system is performing at the highest levels of quality, safety, and service. We aim to provide high quality outcomes with a cost-efficient platform. 

We’re so grateful to Jack for sharing his expertise and insights on M&A. Check back here for more future installments of the Deal Makers Series.

Learn more about Leadership & Culture Due Diligence »

Conscient Strategies was founded with the idea that every organization is capable of thriving through change. With a focus on strategy development, program implementation, workplace dynamics, and leadership development, Conscient Strategies equips leaders with the tools necessary to continuously navigate the constancy of change in ways that not only benefit their team, but, equally as important, their business outcomes as well. From mergers to c-suite changes to sudden or explosive growth, organizations turn to Conscient Strategies when change is threatening their financial health and cultural wellbeing.

Based in Washington, D.C., Conscient Strategies is comprised of a talented group of consultants, executive coaches, strategists, and account executives. The team has worked with organizations of all sizes in the private, federal, and non-profit sectors across the United States and Internationally.

 

You may also be interested in:

Deal Makers Interview Series: Scott Taylor

Deal Makers Interview Series: Scott Taylor

We interviewed Scott Taylor, attorney and principal at SmolenPlevy—a practice primarily focused on general corporate and business law, mergers and acquisitions, transactional planning and structuring, and business succession and exit planning.

read more
Deal Makers Interview Series: Christine Jones

Deal Makers Interview Series: Christine Jones

We interview Christine Jones, Co-Founder and Managing Partner of Blue Highway Capital, a US-based investment firm growing small middle-market companies nationally, focusing on the Northeast and Mid-Atlantic regions.

read more

Ready to grow a stronger organization? 

Contact us to get started.

9 + 5 =

Conscient Leaders: Interview with Roya Vasseghi

Conscient Leaders: Interview with Roya Vasseghi

In our latest Conscient Leaders interview, we talk with Roya Vasseghi, Owner of Vasseghi Law PLLC, about employment legalities in a post-pandemic workforce.

Read the full transcipt below.

Hannah:
Hello, everyone. Welcome to our next installment of Conscient Leaders. I’m so excited to be joined today by Roya Vasseghi of Vasseghi Law. Roya, do you want to tell our friends and listeners a little bit about you and about your law firm?

Roya:
My name is Roy Vasseghi. I have my own law firm, Vasseghi Law PLLC in Fairfax. One of the major areas of my practice is employment law. Um, so I work with employers mostly on their compliance with the changing employment laws, training, investigations, if they need it.

Hannah:
We have so many clients who are really struggling with some of the return to work and, um, and just managing the ebb and flow of the pandemic that I thought it would be great to talk to you a little bit about some of the things you’re seeing in your practice and some of the legal perspective on how corporations take themselves forward in this fairly murky environment. When you’re in an office setting, people have the ability for the informal mentorship in informal discussions with superiors and the people who are on video and who have chosen to stay home for safety reasons don’t have that informal or more like on the go get to know people, um, that luxury, I guess you could call it. Um, and so then when it comes to promotions and salary increases, how do you compare the two people who presumably are both up for the same promotion, but one hasn’t been necessarily been afforded the same opportunities just by nature of being in the office or not being in the office?

Roya:
From the company standpoint, they’re going to have to try to keep, you know, they can’t just say out of sight, out of mind and then wait for the performance evaluation to say, well, I haven’t seen insert name, you know, so-and-so, um, Jane we’ll say Jane, I haven’t seen Jane for the past six months. I don’t know if she’s doing her job. Uh, we’re going to give the promotion to her next door neighbor who comes into the office everyday. Like I think that would be, um, pretty clear discrimination and preferential treatment, assuming, everything, assuming all else is equal or, you know, just as you’ve said that they’re getting the opportunity, the other ones, their coworkers getting the opportunity because they’re in the office. Um, in an ideal world, you have managers that are, that are good managers and they’re giving just as much attention to their in-person colleagues as they are to the people that are on zoom.

They’ve got regular check-ins, they’ve got ways of communicating with their remote employees. I mean, like by phone, good old fashioned phones so that they’re making sure to keep those, um, those employees that are working at home in the loop and making sure that they’re still getting projects, assignments and things like that that are preferable. I mean, the, a lot of it is also gonna, you know, that’s from the employer standpoint. Unfortunately, you’re going to have really great people that can work from home and are really good at saying engaged, and you’re going to have the people that just kind of put their head down and do their work, and they don’t know how to be engaged, and it’s really on the company and the managers to make sure that they’re keeping those people engaged and not indirectly or inadvertently discriminating against them or treating them differently because of whatever conditions kept them at home.

Hannah:
I’m curious, um, it’s not illegal to require vaccinations of your employees. However, it is not necessarily recommended as it could be seen as discriminatory?

Roya:
It can, it can be illegal. You can, you can have a mandatory vaccine policy, but you have to do it recognizing that there will be, um, exemptions, medical exemptions to that mandatory vaccine policy, and you’ve got to make sure to get that information, um, you know, make, put that information out with your policy so that your employees understand that they are not obligated if, if there are certain conditions that prevent them from getting a vaccine that they’re not going to lose their job, that they don’t have to get the vaccine. There is an exemption, and then there are religious exemptions as well. Um, that also has to be clearly communicated with the policy I have been recommending. Um, and some people, some companies have been doing mandatory vaccines. I have just been recommending to strongly encourage the employees to get it and not make it mandatory, to avoid kind of having to solicit, you know, accidentally solicit medical information that you shouldn’t have as an employer that you shouldn’t have had access to and then now you’re, you know. People are very casual about the vaccine thing, right. Um, have you been vaccinated? Like I ask that question all the time in my circles, but as an employer, I would think twice before I just, you know, jump into that conversation or divide my employees based on who’s been vaccinated and who’s not been vaccinated. There are ways to do the mandatory policy, but employers just have to be really careful, um, about how they administer it and the information that they’re getting back.

Hannah:
What else might business leaders want to take into account as they’re thinking through considerations for a hybrid work environment or a total virtual work environment.

Roya:
If the employers are requiring everybody to come back into the office and people want to stay behind and have remote work as an accommodation because they’ve been able to do it for the past 12, 14 months, um, there is guidance that says just because there’s been remote work in a pandemic, it doesn’t mean that that needs to be a permanent accommodation. I think a lot of those questions are going to be coming up. So why, why do you need the accommodation? Um, I think it’s going to be really hard for employers to say if the accommodation is actually necessary. I think it’s going to be hard for employers who have been remote working and providing remote work opportunity to go back and say, we can’t do that because we’re not equipped because it happened, and we were all just fine. Uh, but I think there’s going to be a lot of requests like that, a lot of issues that employers are working through, as far as the, you know, when they want to bring people back in the office, having the request to stay permanently working from home.

Hannah:
Roya, thank you so much for taking the time to talk with us today. Um, this was fascinating to hear some of the things that you’re running into in your practice and I do love how the things you work on and the things we work on overlap, so, so nicely. Um, thank you everybody for tuning in, and we look forward to talking with other Conscient Leaders in the next few months.

 

About Vasseghi Law:

Vasseghi Law PLLC is a business and employment law firm located in Fairfax, Virginia. Roya Vasseghi founded Vasseghi Law after honing her advocacy skills working for several prominent Northern Virginia and national firms. Vasseghi Law’s services range from civil litigation to employment counseling. Roya represents individuals and companies in a wide range of civil disputes including employment-related claims, contract disputes, and partnership disputes. Roya also works with her clients to stay on top of changing employment laws and regulations with an eye toward avoiding costly litigation. Learn more at vasseghilaw.com.

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