Armando (0:00 – 1:39)
Well, hello, founder. You built your business over decades and now it’s time to think about that once in a lifetime exit from your business. You’ve come to the right place.
Here, you will hear business exit professionals involved in the buying and selling of companies talk about what you should know before you exit your business. If you’ve never sold a business before, this podcast can be super helpful to you. You will come away with an understanding of a successful business exit done right.
I’m Armando, host of the Founder’s Guidepost. Enjoy, but first, a quick disclosure. Opinions expressed are those of individual professionals.
The Founder’s Guidepost is a service of Axiom Founder’s Family Office, Inc., a registered investment advisor, licensed or exempt from state registration in all states in which it operates. The Scottsdale Founder’s Forum is a biannual live event for you, the founder, considering exiting your business in the next 36 months. More information available at ScottsdaleFoundersForum.com.
Hi, Armando here with Axiom Founder’s Family Office in Scottsdale this morning with Katina Koller, a professional EOS implementer and a Vistage Best Practice Chair. And we’re gonna have a conversation this morning really about that company that maybe has been around for 20 or 30 years. Now they’re realizing that it’s gonna be time to exit at some point.
And they wanna make sure they put their best foot forward and bring in the people they need to help them get there, maybe help build that team. And Katina, I’ll ask you to introduce yourself and just talk a bit about what you do and then we’ll just have a conversation.
Katina (1:40 – 2:04)
Thank you, Armando. It’s a pleasure to be here today. I appreciate the opportunity to share.
So essentially my purpose or why is to meet entrepreneurs where they are on their journey and help them define and execute on the best version of their life both personally and professionally. And I do that through EOS and Vistage and private coaching as you had mentioned.
Armando (2:04 – 2:27)
Yeah, and Katina, you’ve had your own business experience of course, along the way, which I’m sure gives you just invaluable experience when you’re talking with business owners and helping those teams come together. Maybe you can just touch on that background just a bit and then that can lead into really why you’re so effective when you’re working with a team and a culture in a company.
Katina (2:28 – 3:23)
Thank you. One of the main drivers in my Encore was to serve other entrepreneurs as they went through the highs and lows of being a business owner. And I wanted to ensure that others didn’t have to, as I described, kind of fail forward through their journey and help them navigate the complexities of building teams, growing businesses, positioning for exit.
And so I’ve had the pleasure of doing that. I sold my company in 2014 and spent almost three years doing integration work with my new buyer. And then on the other side of things, I thought I really wanna give back in this most meaningful way and serve those who are on the same path that I was on.
Armando (3:23 – 3:42)
Fantastic. What a great experience that you bring to the table when you’re talking with companies. And Katina, what are some of the things that as you’re talking with somebody who is considering bringing you on board, what are some of the common things you hear from them that to you are clues that they really could use your help?
Katina (3:44 – 4:37)
It’s a really insightful question. So oftentimes I hear things like we’re stuck, we’ve hit a ceiling. That may be from an organizational level, it may be at a departmental level, it may be at an individual level, it may be from a market position.
Regardless, the story is we’re stuck and we need to get over the next hump. So that’s frequent. The other one is my business is controlling me and I’m in the passenger seat.
So we really chart a course to get them into control of their business, defining what that future state looks like and then aligning the team around that vision and building out a plan to execute on it. So now they’re in the driver’s seat, they have their work-life harmony back and their business is no longer controlling them.
Armando (4:37 – 4:53)
So a company that you’re working with, can you just describe that as a typically 20, 50, 100 employees, what kind of revenues, how long has it been around, management structure? What’s that typical company look like that you work with?
Katina (4:53 – 5:30)
Yeah, it’s a good question. So one thing that keeps me really sharp is that I get to work and serve a variety of leaders in a wide range of industries. So it’s pretty industry agnostic and they range from kind of that newer, earlier stage company that’s at about two to 4 million.
Sometimes they’re multi-preneurs up to over 100 million. So I’ve worked with third and fourth generation companies. I also was a third generation business owner.
So I understand the challenges in that very intimately. As you smile, you know exactly what I’m talking about.
[Speaker 3] (5:30 – 5:30)
Thank you.
Katina (5:31 – 5:54)
Yeah, and oftentimes I’m working directly with the founder or the second generation, sometimes professional talent that have been positioned in that CEO spot to help grow the company. It just really depends, but you’re right, exactly. Anywhere from 20 employees to 350.
Armando (5:55 – 6:28)
Okay, and so a company, let’s say that a company isn’t quite sure, but maybe they’re right that we’re used to that. They’re saying we’re stuck, we’ve hit a ceiling, but they haven’t had someone come in and really help them understand that, go through that. Maybe they’re not big on bringing in outside consultants for that kind of thing.
And this might be their first experience working with someone like you. How would that look when you first come on board? How does that kind of roll out so that they get a sense for what they should expect?
Katina (6:29 – 9:28)
Yeah, it’s a great question. So I think let’s first talk about the benefits of bringing somebody from the outside in. Somebody from the outside brings a perspective of objectivity.
And it’s hard when you’ve been into an organization for many, many years. You see the world oftentimes from the inside out. Someone from the outside also brings a wide perspective.
I have the privilege of serving about 40 to 50 CEOs. So I can create innovation by taking disparate parts and bringing them together in a very unique way. And that asset lends to value creation.
Someone from the outside can often be seen as the expert because they’ve spent their life or their recent life doing that type of work where a CEO who’s trying to implement something new is potentially dismissed by her or his own staff because they see this as potentially a flavor of the month, another gimmick, something that if they just resist it long enough, it’ll go away. And so those are just a couple of the reasons that I’m brought in or others are brought in to do some facilitation. And so from an EOS perspective, what we do is really start to learn more about the organization.
What are their strengths? What are their desires? What are their constraints?
What are the obstacles? Because from time to time, obstacles are the path if you quote Shunru Suzuki. And so then I tell them a little bit about me, my background, my experiential level.
And then we walk through the EOS model and the EOS tools. And we do that all in this encapsulated 90 minute meeting. And they leave there with the sense of, oh, this is an experienced guide who can help us do the heavy lifting because the talent is at the table.
The knowledge and the expertise is within that ownership and leadership group. It’s just about a facilitator helping to draw that out and construct it in a way that’s very meaningful because the team built it. And when they build things, they buy into it.
So that’s the first premise. And then they help to realize the goals and objectives that they set. And so I’m all the time in the background, giving them the tools and the resources that they need, but really they’re doing the work.
And so I’d like to think of it as that guide who helps them do what they already know how to do because they have the talent. They just haven’t had the right structure, the right people in the right seats, doing the right work at the right time, those types of Jim Collins comments. So bringing all of that together for them in a really meaningful way.
Armando (9:28 – 9:52)
And do you find then that just what you said, that the talent typically, it is already there, maybe just not being utilized to its fullest extent. Maybe it’s that the people not in the right seats doing the right jobs and functions. And so with your help, you’re able to shift things around a bit and help bring out that value and those true gifts and let them shine in the organization.
Katina (9:52 – 11:30)
You said it so well. And we all have blind spots, right? And so helping to reveal some of those blind spots, getting the strengths into the right seats and reallocating people who have a different strength and they’ve just been in a position that has outgrown them or maybe they’ve outgrown the position.
And so it’s time to retool and repurpose. And I think the other part of it comes from a gentleman named Craig Weber and I love his work. And he talks about this conversational capacity.
So if you think about the sweet spot in a conversation where we stay really candid and really curious, that’s part of my work is to have all voices in the conversation. And oftentimes Armando, that’s not the case. The loudest person tends to dominate a meeting.
The biggest personality can dictate a direction and it may not be the right direction. And so it really levels this playing field to say, hey, all voices have inputs and matter and add value. And that diversity of thought and experience and perspective lends to a much richer and robust plan going forward.
And like I said, when they build it, they buy into it. In the absence of them building it, they’re just handed a three ring binder and it’s like, okay, carry this forward. People don’t believe in things that they’re told to do.
They want to have a voice in where they can add value. And so it’s really about structuring meetings that help encourage people to contribute the value that they already have.
Armando (11:31 – 11:55)
And do you find that the owner of the business is often, are they just shocked or surprised? Or when you begin your process with them, begin the dialogue with them and they start to see some of the things, start to see things coming together and start to see the numbers actually improving and going in the right direction, what are some of the things that they tell you as they’re seeing that happen?
Katina (11:56 – 12:58)
They actually are quite relieved because they have felt this burden or this weight of shouldering the gravity of this responsibility of this company. And so they find a significant amount of release and saying, oh, this means that I’m delegating and elevating and everybody in the team is playing an escalated role and they’re taking more responsibility. So they enjoy things like time back, control back that we talked about, leveraging other people’s gifts and talents, having more velocity in the accomplishments because now a team of people are working on it and you get this force multiplier effect.
And so more frequently, they find a lot of joy, they love hearing their team contribute and they also feel incredibly relieved that they’re no longer having to bear the burden of the go forward plan.
Armando (12:59 – 13:13)
Can you talk about maybe a success story where you came in and you went through that process and it just had a great outcome for the company? Can you just maybe bring up a story that you have?
Katina (13:14 – 16:25)
Sure, I’d be happy to. And I like to think of that whole phenomena as the CEO now gives himself this permission to replace her or himself. So if you think about how entrepreneurial organizations grow, we tend to take on more and more responsibilities until we can no longer support them.
And so the CEO, that owner, that leader houses a significant amount of value, knowledge, sales capability, leadership, and so on. And this is really about them activating their team to take that on. So I’ve got a number of them that I could talk about.
So trying to think of one that would serve this conversation best. So let me talk about one that’s particularly heartfelt because I think in business, we are, as much as we’re cerebral, it’s driven by our heart and our spirit and our energy. In this particular scenario, there were two founding partners in this business and it’s over 20 years old now.
And over time, the relationship between the two partners soured. And one of the partners became dysfunctional, dysfunctional, if you will. It’s a hard word to use, but I think everybody can identify with that type of scenario.
So here he had his golden goose, right? That was going to help lay this nest egg for his family and the interference of this partner hindering their ability to achieve that life’s goal. And it was really hard to watch that suffering and just the amount of pain associated with it.
And so through work together, and we actually did this work through Vistage, our private peer advisory board for CEOs, we helped him to envision what a potential buyout could look like. And alternative channels to getting this partner segregated from the business. And the team brought everything they had in terms of connections to banks and network to other types of investors and really helped him build this plan to say, here’s what life looks like post-partner and single owner.
And so through that course, he was able to secure the financing he needed, buy out his partner, and now is leading and steering this company. And the most beautiful thing is it’s all within his control now. And so now he’s got the right people in the right seats, doing the right work, building those revenues, and really maximizing his financial potential because he’s looking at a three-year exit.
And none of that was possible because of the interference that was being created.
Armando (16:26 – 16:43)
Yeah, it sounds like he really felt stuck and didn’t know what to do. And he had maybe more of a legal thing to figure out as well because it could have become an ugly legal battle had it not been handled in a way that avoided that.
Katina (16:44 – 18:59)
Yeah, absolutely. And I have another example. So this is a professional.
He is one of those types of CEOs that’s both the practitioner service provider and the CEO. Well, which hat do you wear? It’s hard because both demand a full-time job.
And so we created goals for him, objectives, and then he set forth his exit timeframe. And now he’s working towards solidifying the role that he prefers, and then replacing himself in the role that he no longer wants to serve in that practitioner role. And so that’s like another great example is even for the leader and the owner is like defining what that role is.
And I think of it this way. It’s a huge Venn diagram. I’m an advisor, I’m an owner, I’m a board member, I’m a family member, I’m a stakeholder, I’m an employee, I’m the CEO.
And which hat am I wearing when I go to sit down in this meeting? Which hat am I wearing when I facilitate this? What hat am I wearing when I’m doing X, Y, and Z?
But really defining that so that there’s clear lines so that others can participate and bring their talent and gifts. And he also can get his highest and best purpose out of his work and the most joy. And this is why I love those two stories tying them together is because they’re both about harmonization and joy.
And to me, that’s why we start our entrepreneurial journeys because we wanna have control of our future. We wanna control our destinies and we’re really seeking joy and other values and attributes. But if we’ve lost that along the way, those are just a couple of examples of how we get you back to loving your business.
And sometimes the clients decide, now I have a business I love again, I don’t know that I wanna leave it. And that’s great too. It’s just that you know that it’s going to be sale ready should you wanna exercise that.
Armando (18:59 – 19:30)
So what are the common, you know, when people get, you mentioned, I’m making some notes here on my yellow pad. You mentioned, you know, people saying we’re stuck, we’ve hit a ceiling. What are some of those common reasons why?
You mentioned the partner that had become dysfunctional had to get beyond that, then life was good again for the one who was there running the business. But what are some of those common reasons why they get stuck and they just hit that ceiling?
Katina (19:31 – 20:37)
I like this question because there’s a wide range of them, right? And especially in EOS, they would tell us that everybody in the organization has a vision, but it’s not necessarily crystallized and it’s not necessarily written down and it’s not necessarily bought into by everyone. So in the absence of having that vision or that North star, as I like to say, people feel like, I don’t know what the purpose is behind the work that I’m doing.
And I don’t know why I should have a passion for this work because I really don’t quite understand where we’re headed. And so that’s one of the reasons that people feel stuck. I mean, Armando, everybody wants to go to work to do a good job.
They want to serve their highest purpose. They wanna have a return on their invested time. They wanna be aligned with the values of the organization and the culture of it.
And they wanna make a bigger impact in life. And when we don’t have clarity around our vision and our North star and our purpose and our passion and our niche and our focus, then we are stuck.
Armando (20:39 – 21:13)
That makes sense. So it sounds like part of your work might really begin with helping them clarify that vision or talk about it so that they can be more clear, maybe more articulate in awarding the vision and then maybe even helping them share that vision if it’s the owner or leadership share the vision with the entire team, so everyone can understand and get behind. As you said, get alignment with the vision of the company versus individual visions that might not be in alignments.
Katina (21:14 – 22:52)
Exactly. That’s one of the exercises. So there’s a two-day vision traction, yeah, vision traction organizer.
It’s called day one and day two. In day one, we really tackle what is the vision of the organization? If you will, what is that big, hairy, audacious goal?
What’s our niche or our purpose or our passion? What’s our core focus, right? What are our organization’s values?
And imagine your leadership team in this room and everybody’s having that conversation and they’re challenging each other and they’re questioning it and they’re disagreeing and they’re pushing back and they’re pointing out when they don’t show up that way. And so they’re really crystallizing what that looks like going forward. And then from there, you start to build out this marketing plan of like, okay, so now that’s where we’re going.
How are we gonna get there? And what are we gonna look like at 10 years? And what do we need to look like at three years and then one year?
And then ultimately in that day two, we’re answering those questions. And what do we need to do in the next 90 days that gets us closer to that 10-year vision? And so everybody is aligned and that’s part of the how we get unstuck because this is everyone’s opportunity to contribute and everybody can get on board.
And if you’re not on board for it, that’s okay, but then you’re no longer in alignment and we don’t need to move forward with you in the organization. And that’s also about getting the right people in the right seat.
Armando (22:53 – 23:09)
So it sounds like that’s an opportunity for people who maybe don’t see themselves as part of the organization, how they might see themselves stepping out or help them be more clear that they really belong someplace else.
Katina (23:09 – 23:59)
Yeah, I like to think of it as an exit ramp in two ways. One exit ramp is this idea that everything we ever wanted, and I think this comes from Karen Salmason, is that the exit ramp of our comfort zone, right? And so this pushes people who are like, okay, I’m committed, I didn’t know how we were gonna get there, but now I see my role and that’s exciting.
The other exit ramp that I’m talking about are the people who are just dispassionate or misaligned as we talked about. And they get to just go off and say, I no longer have a role that I wanna participate in this organization, which is great because it creates space for that person who’s ready to enter that discomfort zone and get on board for that next generation of growth.
Armando (24:01 – 25:02)
Yeah, I can see how that all rolls out. So then when you’re looking at that vision, I guess I’m curious when there’s an owner who is often a CEO, founder, manager, but somewhere of course leading the company, his or her vision may be a bit different than what management may think and maybe what the employees, if they have any idea or sense of vision at all. So when you’re working with the organization then to help clarify the vision of that, is it starting with the owner or is it getting permission to work with the owner in management or work with the whole team altogether?
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Katina (25:03 – 27:26)
It depends on the culture of the organization. So some of the cultures that I walk into, there’s open book accounting. People know what the gross profit is.
They know what the net income is and everybody’s really clear on it. They know that the owner is on a five-year trajectory and she wants to exit at this timeframe. And so everybody’s on the same page.
Either way, there’s intimate conversations that I’m having with ownership and with the leadership team. And in that scenario, we’re harmonizing both of those. In another scenario, I may be working with an owner who says, I don’t want to destabilize this leadership team that I have but I want to exit in three years.
And so we’re having the conversation around, okay, you know that in your head. We’re gonna build out this vision traction organizer together. I’m gonna pulse check with you and make sure that that direction that that is heading is still in alignment with your interests and desires.
And then we’ll bring the two of them together offline. And I think this is so important, Armando. I know when we talked earlier, there’s really two reasons that people exit a business.
And one is because they get an unsolicited offer and two, they have a major health event for sadly either themselves or their family. Well, when you have your vision traction organizer and you know what your North Star is and your end game is, you’re prepared for both of those scenarios. And I think that’s vitally important because when we think of ourselves as CEOs and owners and stewards of our business, we have a responsibility to a lot of people.
I used to think of that as thousands of people. I had 200 employees, they all had family members. I had vendors, I had suppliers, I had customers and every single one of them were relying on me to have this forward plan that this awesome team that I had the pleasure of serving built together.
And so it’s the same thing, whether it’s shared or it’s not, it’s imperative that that owner have the exit known for themself and their family so that when they receive that unsolicited offer or that health event happens, they aren’t caught off guard.
Armando (27:27 – 28:39)
Yeah, so it sounds like either way you’re aligning. If CEO has this exit plan, maybe doesn’t want the employees and that to know that, but you can still align his or her personal goals with replacing him or herself with the goals of the organization, bring those together so they’re still all going in the same direction. Exactly, yep.
Okay, okay. So then what are some of those surprises that you hear then from the owner? And you said before that it’s a relief.
They feel burdens taken off their shoulders. As you said, you had over 200 employees plus suppliers and vendors. You had a whole food chain, a whole ecosystem that depended on you doing it right and you coming through for all those families.
And that is a lot of weight to carry on your shoulders. So that CEO then who is now feeling that relief, are there some ahas that they say to you, Katina, that was so simple. Why didn’t I think of that?
Or why didn’t we do this 10 years ago? Do you hear things like that from them?
Katina (28:39 – 31:21)
Yes, and I love that. And I would say that the teacher appears when the student is ready, right? So to your point, you know this, right?
They’ve heard this time and time again, they often knew it, but then they have someone like yourself, your expertise or me in front of them and then their light bulb finally goes off because they’ve heard it enough times. So I have a wonderful story of a wonderful family that I work with and they invest in real estate and a significant amount of real estate. And when we started to look at their portfolio and some of the projects that weren’t moving as successfully as their other products, the common thread was that they were trying to be operators in those specific projects or products.
And I said, this doesn’t work for you guys because you’re visionaries and you’re financial engineers, you’re not operators. And it was like, oh my gosh. And so the four family members who are in this business, they went to market and they activated these properties and they moved on from those.
And then they went back and stayed on their core business, which was serving them significantly better. So they freed up some capital, they were able to make investments that are aligned with their core business. But did they know that probably?
Yeah, but it was just having that conversation from the outside in looking at these rocks as we call them in EOS, these are 90 day goals. Which ones are stagnating and why? And which ones do we really move through and why?
And it was so black and white from the outside, but from the inside, they were like, aha, okay, we get it. So it’s some of those things. Other things are about, I’ll give you an example.
So if you think of the CEO’s hourly rate, oftentimes people will convert the salary to weeks of the year to an hourly basis. And what I try to do is reframe that. And I got this just through my years of coaching and I’ve had amazing advisors and influencers and mentors.
And what you actually do is you take your growth rate. So say this company wants to grow by $5 million in two and a half years. You divide that by the timeframe and the hours.
And so now you’re telling this person, your growth rate is worth 5,000 an hour. Will you please stop doing X, Y, and Z?
Armando (31:22 – 31:24)
Stop taking out the trash.
Katina (31:25 – 32:01)
Right, because you’re not, unless you find joy in that and that’s meditative for you, but right. And so it’s helping them to reframe their return on invested time. Did they already know that?
Yes, but at the same time, it can take a coach, it can take a Vistage peer group, it can take an EOS exercise for them to have that breakthrough and go, oh, I get it. And you know what? That CEO stopped taking those phone calls and doing those lunches because he now understood his rate was 5,000 an hour.
Armando (32:01 – 32:04)
And that’s an expensive lunch if it’s going nowhere.
Katina (32:04 – 34:02)
Right, unless you’re creating future value or it’s a value driver for your existing business, like stop doing those activities. And so those are a couple of the examples. Another example of clarity is, I have the privilege of serving in a role and this CEO was contemplating what a majority or minority investment might look like.
And so we started with, what are your family’s goals? What are your personal objectives? And then he began interviewing different private equity companies as he was evaluating his options.
And he wanted to have a minority investment and majority control. Well, at the end of it, the three that had provided the most attractive opportunities, they were minority interest with controlling, also that taking majority control. And I went back to, here are your objectives.
You didn’t wanna do this. And he was like, oh my gosh. Yeah, what am I even doing in these scenarios?
And he made a significant pivot and found the most amazing private equity firm to work with who did take majority control, but also bought him out. And he realized his goals and objectives. And so in this scenario, all we did was to say in the higher scheme of priorities, what’s more important to you, to have control or to meet your objectives?
And it was to meet his objectives. And I think sometimes it’s that outside looking in to really, because we have more clarity around it because we’re objective and we don’t have the emotional involvement that they do.
Armando (34:03 – 34:27)
Right. So it sounds like he was walking down a path that the first step was clear what he did not want to do. And yet, as he walked down that path, ended up where he didn’t really wanna be.
So the reminder from you, hey, this isn’t what you were saying. Helping him see that picture in some way really saved him from causing harm to himself.
Katina (34:28 – 37:00)
Well, this is the scenario. And we talked about this. Buyers are professionals, especially private equity.
They do many, many deals. And as a business owner, myself included, we only typically sell one or two companies in our lifetime. They have us leveraged because of their sophistication.
And we almost have a greater challenge because of our emotional commitment, our connectivity to our teams, et cetera. And so they already have a significant advantage. And so it’s about leveling that playing field by giving that one-time or two-time seller more assets, more experts, more professionals, more resources so that they can actually negotiate better for themselves.
Because we know two things. These are statistics that come from exits. 80% of business owners regret it a year later.
And the reason being is they didn’t feel like they negotiated strong enough and they didn’t get as much as they wanted. So the third leg of that stool is we overestimate the value of our business and we underestimate what we need for our runway. And so imagine that you’ve built your whole life to take this golden goose and those four factors are injurious to you essentially.
And that’s why this team of people who can, like I say, shine the flashlight on the path to just illuminate it for you just a little bit more can be helpful. But those factors are undeniable. And I feel like as a servant leader and someone who has the privilege to serve other CEOs and business owners, that’s my responsibility to help shine a light on all of these factors and variables because they get caught up in the business.
They have the family involved from time to time. They have other investors. Sometimes they’re publicly held.
And sometimes they’re just looking a quarter out or the performance of the next year or the three years. And I’m there to say, let’s step back and look at your multi-generational plan and what you wanted to do and what you wanted to accomplish. Is this getting you closer to that or is it getting you farther away?
Armando (37:00 – 37:37)
Yeah. I like the observation you made that if you spend 20, 30 years building a company and you haven’t ever sold one before and now you’re selling to professional buyers, this is what they do day in, day out. They buy companies.
So you’re at an extreme disadvantage if you’ve never sold a company before, or maybe as you said, maybe you’ve sold one and this is gonna be your second sale, but you’ve gotta have those experts around to help you just to help level the playing field somewhat so that you don’t get taken advantage of against those professional buyers.
Katina (37:38 – 38:08)
Yes. And you achieve exactly what you wanted to so that you get to be that 20% or maybe that 10% a year later that says, you know what? I did that deal my way.
I got exactly what I wanted. I took care of all of my stakeholders. I’ve taken care of future generations.
Maybe I also have an ability to invest in other companies. Now I get to advocate for others. I get to support and sponsor and mentor and I get to go and do all of these things that I wanna do.
Like no regrets.
Armando (38:10 – 38:41)
Right. And it is a once. I had one of our clients years ago as they were going through an exit.
He says, I have one chance to get this right. He was right. He was right.
He has one chance to get this sale right. So you can’t afford to not take the appropriate steps to help ensure that you’re going to be as close as making that exit as beneficial for you and your family as possible.
Katina (38:42 – 40:08)
Yeah. And the fact that the gravity of, I have one chance to get this right, lends to that deal fatigue where people just start to submit. And then they lose sight of what they wanted to accomplish in this transaction because they’re just going through the motions and they wanna get it done.
And that’s how they get to the other side of it and go, oh, shoot. I didn’t, you know, I could have negotiated here. I gave this up and I shouldn’t have all of those things that we talked about, or I underestimated what my actual walkaway would be because these experts that we talk about, I love them.
I’ve worked with many amazing ones, but there’s the estate planning attorney. There’s the tax attorney. There’s the business contract law attorney.
There’s the human resource attorney, right? There’s the CPAs. If it’s an international deal, there’s all of those factors.
And that can cost a significant amount of money. And people often forget to include that as part of the deal reconciliation. And it’s just an imperative to have those professionals.
So bring them along, just make sure you’re doing all of the math and have your full field of view in terms of what you’re going to need going forward to serve the life that you want to live.
Armando (40:09 – 40:47)
Right, and we have that conversation often with people about, you know, you have this business today, it produces, you know, X dollars of income a year for your family, plus you run some of your vehicle expenses through there. Maybe you run some of your vacations through it or whatever you do, but somehow that company is providing a lifestyle for you and your family today. Once that sale is done and that business no longer is yours, you no longer get those profits, then we’ve got to make sure that after taxes, after that sale, that the nest egg that is left will produce an income that will produce the lifestyle that you’re happy with.
Katina (40:48 – 41:32)
Absolutely, so the question is, how intertwined is your personal life with your business? And for some it’s higher and for others it’s lower. In one example that I have, an individual, very generous, worked with a lot of nonprofits, but his business was his philanthropic engine.
That’s pretty hard to leave when you’re so emotionally connected to your purpose and serving the community. That’s a hard asset to let go of. Harder than that somebody who says, nope, we’ve always done our giving personally.
And so to your point about segregating those things out and really knowing the true numbers of what that future looks like.
Armando (41:33 – 42:45)
Right, and philanthropy, we often have conversations about this with business owners about being philanthropic. And there are tax ways that could be very beneficial on how you can give through the company and have that impact you wanna have and get a bigger tax benefit from it as well. And you’re right, once that company is gone, then that part of it can go away.
But with planning ahead of time, you can still maybe not have the same impact you were having, but you can still have an impact. And maybe that impact is gonna be different. Maybe now rather than running that big fat check to the different events, maybe it’s a smaller check and maybe it’s more hands-on participation or maybe rounding up friends and family to go to events or to support events.
So it’s all about just understanding what that landscape looks like and making decisions, knowing what it looks like so that you can do the best to feel like you’re coming out on the other side of it, still feeling good and serving purpose and having met those life goals that you want to meet.
Katina (42:46 – 43:27)
To your exact point, that business can be a vehicle for the next generation. And so if you groom that generation and they share that same values and vision and mission alignment, they can carry that forward, right? But that takes a ton of intentionality on front-end planning to, again, ensure you have the right people in the right seat.
I’ve had this privilege of studying family businesses having been in one, and there’s a number of pitfalls, which is why only 3% of family businesses transition from generation to generation, generation three to four. 3% are successful in that transition.
Armando (43:28 – 43:30)
Well, you were gen three, you said, right?
Katina (43:30 – 44:22)
Yes, and then I sold to a fourth generation business, which actually made me feel really great about it. But one of the reasons that the success doesn’t transfer is because the next generation has the same skill of the generation before. And they’re not bringing diversity of experience to the table.
And it’s the diversity of experience at that ownership and leadership table that lends to that diversified growth and or continued growth if the business model is really sound. And I could go on about family business, but it’s really interesting because we often say, oh, that next generation of talent, they’re a CFO just like me. And it’s like, but is that the best for what this organization needs into the next generation?
Armando (44:23 – 44:26)
Right, yeah, what does the company need versus what do you have in your family?
Katina (44:26 – 44:27)
Yes.
Armando (44:27 – 44:28)
Might be very, very different.
Katina (44:29 – 44:55)
Yes, absolutely. Early stage companies, we actually hire family members and we shape the business around them. And as that business matures, we eventually have to do this trade out, right?
People write seed exercise to say, what does the company actually need? And does this person meet their capabilities, meet the demands of what we need to do in the next six, 12 months, one year, three years, and so on.
Armando (44:56 – 45:37)
So Katina, what about a timeframe when someone brings you on board, you’re going through your process, what does that timeline look like? You’ve got a point where you go through, as you mentioned, the whole vision process and getting people in alignment. From the point where you’re, now the goals are clear, maybe the vision is clear and now the goals are more clear and now it’s executing on those to reach those goals with that vision in mind.
What kind of a timeframe does it typically take that company to get there or get far along in the process to get there?
Katina (45:38 – 47:07)
Great question. I’ll answer it three ways. So with EOS, it’s a two-year journey.
So we talked about some of the tools that we build up that are pretty intensive in the first 30, 60, 90 days. And then we go into more of a quarterly pulsing cycle with two-day annual meetings. And that whole timeframe is about two years.
Although I have really high performing clients, I still have this privilege of facilitating their two-day annuals every year. And we’re outside that two-year timeframe. With Vistage, the average Vistage member stays for seven years and they’re getting the value from it and they’re growing their company and they’re getting the accountability from the group and they’re doing the work.
And so as long as that flywheel for the value creation is happening for them, they’re saying most frequently a Vistage member is leaving because they’ve had an exit event or they’re working with next generation who then replaces them in that meeting or they’re working with a key executive who is then going to replace them as they pattern their exit. So that’s on average seven years. And then on my private coaching, my mantra is we need to start with at least a six-month engagement and do some of the assessments upfront depending on what their preference working on personal, professional, I maintain they’re both intertwined, but at least a six-month engagement so that they can see the results.
Armando (47:09 – 47:56)
Okay, okay. And you mentioned a moment ago, four family members and a company, and what did you say? There were four family members and they had to come into agreement.
Oh, they weren’t operators. Right. They were not operators.
And you helped them see that and clearly identify that that wasn’t their skillset, not their strong point. I imagine you often have to bring four people, four family members into agreement because even though they might all see the same thing, you might agree on it because of relationships in the family, they might not be able to just bring it up and talk about it because the family gets in the way of that. So you navigate some of that type thing, I’m sure as well.
Katina (47:56 – 49:12)
Absolutely. So I often say my role is to make the gray, black and white. In EOS, we call it entering the danger.
I call it getting comfortable with being uncomfortable. And so I’m often a catalyst of those conversations because it’s not necessarily what’s being said, it’s what’s not being said that I’m like the investigative journalist that’s trying to understand what’s happening in this dynamic from an emotional intelligence standpoint, what’s going on here and what aren’t we talking about? And they are often incredibly gracious because everybody knew it, but nobody was talking about it, right?
And so once it’s on the table and we’ve created this healthy and safe space to have this disagreement, this robust conversation around candor and curiosity, it builds health in the team and that health begets more health. And then you can conquer bigger challenges and bigger obstacles, right? It’s the scenario where we agree that we’re not talking about it, that’s the one that doesn’t work because that’s another example of what gets you stuck.
Armando (49:15 – 49:29)
Yeah, that makes sense. I can see you might have to sometimes delicately approach things. Sometimes you might choose to not be delicate at all because that’s what the situation calls for, I would think.
Katina (49:30 – 50:32)
Well, it’s the work that you do, right? So people have this vision for where they want their life to go and then you’re also saying, and this is the reality of what you can do with this nest egg. I have been called a dream crusher because of the vision that they have for it, but the reality is they’re not operators and they jokingly say that, right?
But yeah, I have to step into that conversation and I feel a great deal of responsibility that they’ve engaged me with this really intimate side of their lives. Business is hard. It’s a manifestation of us.
We’re a manifestation of our businesses and to have people come in and navigate that space with you requires an incredible amount of trust and connectivity. And so I like to think that I build those rapports and do it incredibly respectfully and challenge them and they challenge me and at the end of the day, the result is I think the best outcome we can get.
Armando (50:32 – 50:38)
Well, I hope that when you’re done with your work, they’re calling you a dream builder.
Katina (50:38 – 50:38)
Yeah.
Armando (50:38 – 50:39)
More than anything else.
Katina (50:40 – 51:06)
Well, the results actually show that and that’s to me is ultimately the outcomes that they’re achieving and when they’re positioning it for the next generation or they’re positioning it for their exit or they’re really finding joy in their work, that’s where I get my validation is that they’re getting the results that they are most desirous of and everything else is just part of the journey.
Armando (51:07 – 51:24)
Okay. And are there things, Katina, that we haven’t touched on in this conversation that when you’re having that first conversation with a business owner and they’re telling you, we’re stuck, we’ve hit a ceiling, are there things that we haven’t talked about that maybe we should touch on?
Katina (51:25 – 52:01)
So I think of business as like, we just open the page of a book and there’s an entire chapter and many, many chapters and then trilogies and sagas and everything that goes with it and so there’s significantly more to it but again, my purpose is to start with meeting that entrepreneur where they are and they help to determine where they wanna go and then I help them see there are different options to get where they want to be. And so it’s all really guided by what’s most impactful for them and when do they wanna do it by.
Armando (52:03 – 52:34)
Okay. And you’ve said a couple of things here that I think are really, really key for a company that maybe has not engaged someone like you to help them. You’ve used the word facilitator and you’ve used the word guide quite a bit in our conversation here.
So you’re not necessarily coming and telling them what to do, helping them articulate and see you get to a common vision, maybe help them build goals so that what they want they can have that they can build it in their company.
Katina (52:34 – 54:19)
Exactly. We say in Vistage, which is we will run out of answers but we’ll never run out of questions and they’re the experts and so I feel like my role is like you said, it’s that facilitator, it’s the guide. I will call myself an implementer.
I call myself a moderator sometimes when I’m trying to bring parties together. I see myself from time to time as an educator whose responsibility is to say, hey, here’s a tool that’s being successfully used in this industry, would you contemplate that here? And I think one of my final roles is really a coach and I get incredibly passionate about this role because the team I believe can perform at higher levels than it’s actually performing and I help them to see what’s possible based on what they’ve accomplished maybe previously or what others are doing and really coach them to their highest purpose and achieving their best outcome.
So I am switching hats all the time and I also have from time to time been consultative. So to be clear, like I try to stay out of the consultative role but I’ll have clients who will say, just give us the answer. We know you know what the answer is, just stop asking us the questions and I’m like, okay, I respect that.
Okay, so here’s a scenario one, scenario two, scenario three and so then they choose from it. But yeah, it’s 95% all of the other roles maybe 5% consultative because they build the mental muscle to do the work themselves because the goal in all of this is to make them independent of me and to function autonomously.
Armando (54:20 – 54:23)
You’re helping them get past a rough patch, helping them grow.
Katina (54:24 – 54:30)
Yeah, or to get to the next level of growth or whatever it is that they want to achieve.
Armando (54:32 – 55:00)
Wow, well, I’m sure that must be very gratifying for you to come into a new client like that. You said you’ve got about 40 to 50 CEOs that you work with. I can see the synergies of talking with various CEOs, hearing different things, how different people used something to solve a problem that you can then take to another company you’re working with as maybe a suggestion or a thought that they could consider as well.
Katina (55:00 – 55:58)
Exactly, I feel like it’s my life’s work. I catalyze connections, I catalyze information and through Vistage, we have eight speakers a year that are domain experts in gender intelligence, emotional health, physical health, M&A. You name the topic, you can bring in an expert speaker who will spend four hours with your Vistage team doing a deep dive on something that really matters to them.
And yes, then I get to bring that knowledge and those facts and data and those tools and models to all of my clients. And so if you think about my work, I’m living this flywheel where I’m getting this constant injection of learning it through that medium, but also learning that I do independently. And then I get this privilege of just sharing it with as many people who care to grow and are willing to do the work.
Armando (55:59 – 56:38)
Right, and I imagine as you do your work and companies have different challenges within their industry, since you work in various industries, you can borrow and drag things across the table to somebody else in a different industry. And maybe someone has a new tech issue or some kind of a regulatory issue, things that you would see that a CEO say in Phoenix maybe wouldn’t see, but you have seen it and you can help someone understand and maybe navigate and come up with some thoughts, ideas and solutions to toss around within their own management team.
Katina (56:39 – 57:20)
Absolutely, because when you’re a servant leader, there’s no boundary on it, right? And so you’re always synthesizing what you’re learning and providing it to others. I can share with you a Vistage chair yesterday reached out to me and her member was in a really desperate medical situation with a young child.
And she said, he needs a trauma therapist. And I said, here you go. Best trauma therapist I know in Arizona.
And I provided it to her and she was like, and he had been a Vistage speaker and he’s working with a family member and some of my members and clients. And I mean, where in the world do you get to have that type of impact and pure joy from just helping others through life’s journeys?
Armando (57:21 – 58:01)
Yeah, that sounds amazing. I’m glad that we’re able to have this conversation, Katina. And I wonder, we haven’t, we’ve touched on a little bit about family businesses and the dynamics there, maybe with maybe a husband and wife, maybe a father and son, you were gen three in your business.
And so navigating that whole family dynamic is different than not having that inside the business. Maybe you can just touch on a little bit of how that dynamic, how you help them navigate that dynamic just a bit more so people can see that.
Katina (58:02 – 58:56)
Yeah, it’s such an important question. And I think it’s about knowing the common pitfalls and the challenges, one of which we talked about, which is grooming that next generation. But I think it’s most importantly, it goes back to having this commonly held vision and having this family aligned on this team.
And then everybody having clearly defined roles and responsibilities and knowing when they’re changing hats from future owner to employee versus advisory board member versus VP of operations, and when to wear what hat in what role and scenario, and then have a clear definition of what those respective handoffs need to look like so that everyone can achieve that vision with as little disruption and as much strength as the organization can gain from that person.
Armando (58:57 – 1:00:23)
So I heard a business owner, I was talking to a business owner, actually two business owners, and one recommended the other as the one was having an issue in his business. And there was a daughter who was, who there was, daughter wasn’t quite, wasn’t really doing the, there was a job to get done and that job was not getting done. And so then dad was trying to figure out what’s the problem.
And he was struggling with, she’s my daughter and I need my daughter. And I’ve got this employee who’s not carrying their part in the business. How do I handle it?
And one of the, and the other business owner said, to the one who was having the problem, he says, here’s my suggestion, tell your daughter, I don’t need you in the business, but I need you as my daughter to communicate clearly that she as the family member was of the utmost importance. And if she needed or wanted to leave the company, that was okay. But to father, to dad, the most important was maintaining that familial relationship and having a good Christmas gathering versus anything awkward or uncomfortable because of something that happened at work.
Katina (1:00:24 – 1:00:34)
What a generous act of selflessness to say the relationship is the priority over the business, right? And I think sometimes we can lose sight of that. So that’s incredible.
Armando (1:00:35 – 1:01:05)
Yep, yep. I just thought that was such insightful advice. And I thought, you know, I just love it.
That’s right, be very clear in your priorities, whether, you know, whatever they are, be clear in those priorities. And if the priority is maintaining that family and the strength in the family, then be very clear about it. The business, there are a lot of good people you can choose to put in your company, but you’ve only got so many family members and that’s just how it is.
Katina (1:01:05 – 1:01:23)
Yeah, the successful family owned and operated businesses that I serve all have the centricity around their values of each other as the priority over the business. And everything in the business can get sorted out as long as they stay value centered around each other.
Armando (1:01:24 – 1:02:13)
Well, Katina, are there any other, you know, thoughts that we didn’t touch on? You know, we’ve touched on a lot of this conversation and I like what you said about coming in as the guide, as the facilitator, maybe sometimes as a bit of a counselor and helping the owner and management be clear on what are they trying to get to? What are the goals?
What’s the vision? And then helping them to build it out and execute on it. And family, of course, can make that a bit more challenging for you as you do your work.
Other thoughts in summary, as you think about the work you do and how a business owner who is stuck or who’s hit a ceiling and wondering, should they call you? Any thoughts you’d like to share that might help them?
Katina (1:02:13 – 1:03:04)
The final thought that I would share on it comes from James Clear. He wrote Atomic Habits. And I love this quote, entrepreneurship is a personal growth engine disguised as a business pursuit.
And so the work that we would do together is about change management. And so it starts with vulnerability and coachability and value centered and growth mindedness and a willingness to flex and change and adapt. And so I think as long as people fully embrace that that’s the starting block, then I think we can accomplish anything together because businesses are complex and so are people and we can be messy human beings.
And we’ll just work with that. We’ll work with the whole situation, yeah.
Armando (1:03:05 – 1:03:35)
Right, well, I love that you bring your experience with you to your role. I mean, having run the company that you mentioned, third generation and transitioning that to fourth, you bring a lot of life experience, business experience, familial experience to the CEO and business owner that you certainly can draw on to help them navigate those challenges that they have to navigate, that everyone has to navigate in businesses along the way.
Katina (1:03:35 – 1:03:38)
Absolutely, and my goal is that they don’t have to do it the hard way.
Armando (1:03:39 – 1:03:54)
Yeah, fantastic. So Katina, if somebody wanted to get in touch with you and just enjoy the conversation that we had and sees that you are part of the solution for them or maybe they wonder if they should have a conversation with you, what is the best way for them to reach you?
Katina (1:03:55 – 1:04:09)
You know, it’s a great question. I think as my website is getting revised and go to LinkedIn and pull up Katina Koller, I’m based out of Tucson, Arizona, and just send me a quick message and what’s on your mind and I’ll get back to you as soon as I can.
Armando (1:04:10 – 1:04:55)
Okay, good, and we’ll put that underneath there as well, underneath the caption of this video and audio so that people can reach out to you, Katina. So Katina, thank you so much. I’m just gonna look quickly to see if I can summarize some of the things that we talked about.
You talked about harmonization. You talked about vision. You talked about alignment.
You talked about your process, how you do things. You talked about, I love that formula you mentioned that rather than looking at the CEO’s salary divided that by hours, you’re looking at the growth they want to attain, dividing that by the timeframe and coming out with a per hour cost and helping the CEO understand that maybe the lunch with, you know, whomever, maybe that’s not the best use of your time.
Katina (1:04:56 – 1:04:59)
Right, don’t take that PE call that you didn’t seek out.
Armando (1:05:00 – 1:05:51)
Right, and then, you know, helping them understand that in the exit process, we talked about as well that there are professional buyers out there. And if you’re gonna sell once, you better shore up your team so that your family and your company have the exit that you really want to have. You mentioned it’s about maybe a two-year journey to go through and really define, execute, and get things going with maybe an ongoing two-day annual meeting with, leadership meeting with the company as well.
And just really being, you know, and also candor and curiosity, being able to talk about things that sometimes are unsaid in meetings that really do need to be said. You just have to bring them up for the good of that company and all the stakeholders in that business.
Katina (1:05:52 – 1:06:04)
Absolutely, stay in the sweet spot, avoid minimizers and avoid people who need to win and just stay in that most effective position of candor and curiosity. Great summary, thank you.
Armando (1:06:05 – 1:06:31)
Katina, thank you so much for the conversation. Again, to reach you, LinkedIn, it’s Katina Koller, K-O-L-L-E-R and first name K-A-T-I-N-A. And so if anyone’s got a question for you, they can reach out to you there, reach out with the LinkedIn message.
And so let’s hope that the business owners who have hit that ceiling and are just in a no growth mode will reach out to you for a conversation.
Katina (1:06:32 – 1:06:48)
Or if they just wanna find more joy in their life or have themselves be replaced in their business because it’s earning a significant amount of money and it’s become that proverbial cash cow, it’s whatever they wanna do in that journey that best serves them, I’m happy to talk with them.
Armando (1:06:48 – 1:07:30)
Okay, fantastic, Katina, thank you so much. Really appreciate the conversation. Thank you, me too, this was a pleasure.
Thinking of exiting your business, you have one opportunity to get this exit right. Your family depends on it. Come hear experts who plan and negotiate successful business exits for a living.
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