At our breakfast Tuesday, January 26, 2021 we hosted our third panel discussion with a few selected leaders of our 2020-21 Texas Consilium Business Excellence Award nominees.
Building off our initial award nominee interviews, we explored further what these leaders have in common — inspiration, lessons learned and challenges. Every business leader is sure to feel a connection with the issues we all encounter, while gaining insights from this sharing of journeys of excellence.
Enjoy our January 26th breakfast with Moderator Robert Gardner, and Award-Nominee Leaders and Panelists:
Comm-Fit – Seth Gordon, Chief Executive Officer
Give Me The Vin, LLC – John Wolfe, President & CEO
Iconic IT – Jeff Howard, Founder
Jim Ratchford: Good morning to all and welcome to our Texas Consilium Breakfast for January 2021. Appreciate all of you being here. As we get started, I’ll go through just a few orientation and housekeeping items. I believe we have a few on this morning that are new to Texas Consilium. Not going to take a lot of time on orientation, but we’ll just step you through a few of the basics so you can explore more if you’d like.Big call out to our naming sponsor, Ryan. They supported us in 2019 when we started our Business Excellence award, and they are our top sponsor again for this year. I would like to recognize our other partners. We have done a little transition here over the holidays. We have shifted the terminology from sponsors to partners to better reflect the fact that we’re not just about an event; we really are about working relationships with all of those who are supportive of us and our mission. We’ll have a little bit more on that later on here.
Housekeeping items. This is a Zoom meeting, not a webinar. The last couple months, we were using a webinar where only our panelists were on the screen and could be heard. There was a lack of interactivity, which we kind of missed being able to talk to each other. So we’re returning here to a Zoom meeting, all of you will be able to be on screen and be heard. We’ve got a small enough group I think we can keep that organized. Add your name to your Zoom just so we know who you are. I think most of you have already done that. Use the chat to ask questions any time, and please keep yourself muted except when speaking. Enjoy your breakfast and our time together, and this meeting will be recorded.
Here’s our agenda for today. We’re going to have some welcome and introductions. We’re going to take time to go around and let each of you very briefly introduce yourselves. I’ve got a poll; we’d like your opinion on a few issues. I’ll provide you with some updates on Texas Consilium and our Business Excellence Awards, and then we’ll move into the key part of our program today, which is our Award Nominee Boardroom Discussion with our panelists, and there’ll be time for Q&A with them. So be thinking of questions that you might want to ask our panelists. As we wrap up, we’ll have a chance for any other business or questions you might have. And make a note that our next breakfast will be Tuesday, February 23rd. We meet on the fourth Tuesday of each month.
Let me let in just a couple more folks here, including one of our panelists. John, good morning, it’s good to see you.
John Wolfe: Good morning.
Jim Ratchford: One of our panelists is in Colorado. You’ll get to hear him. He’ll be with us in his own way.
What I’d like to do is just let each of you briefly tell us your name and organization and what brings you to Texas Consilium or what your goal is or your interest. Let’s do that. Let’s try to do it this way. I’ll just call on you as I see you on my screen, and unmute yourself and give your brief introduction.
Brad, I see you top left on my screen, so tell us who you are.
Brad Kaufman: Good morning. I’m Brad Kaufman and I’m a partner and co-founder of Valhalla Business Brokers. My partner and I are retired military law enforcement with nearly 70 years in service, and as a business brokerage firm, we’re looking to interact with business owners and businessmen and women like yourselves.
Jim Ratchford: Very good. I’m going to skip the people who are at the country club. We’re going to come back to you in just a bit. David Larimore?
David Larimore: Yes, good morning. This is my first event here with the Texas Consilium. I spent 36 years with a company called Halliburton and recently left them, and I led global business units for that Fortune 500 company. Had operations in over 40 countries. Just the same, looking to take my experience running those business units to try to help other businesses locally in the DFW area.
Jim Ratchford: Very good. Yoram?
Yoram Solomon: Oh, I thought we already did me. I’m Yoram Solomon. I’m the founder of the Innovation Culture Institute and the author of The Book of Trust. What I do is help countries, organizations, and individuals deal with trust issues because I just recently found that even on project management, you have a 66% impact on project success if the level of trust is high.
Jim Ratchford: Very good. Yoram is one of our workshop leaders for our Executive Summit when we get to that.
Yoram Solomon: And by the way, if you go to KERA-TV, on their website, last Sunday, two days ago, there was a program on trust and I was their guest.
Jim Ratchford: Excellent. Doug?
Doug Taeckens: Good morning. Doug Taeckens, Pace Solutions Internatioanl. I help companies take their products to interantinoal markets, and I’m always interested in helping Texas businesses grow.
Jim Ratchford: We’ll have a little more from Doug later on. Theresa?
Theresa Boyce: Good morning. I’m Theresa Boyce. I’m CEO and chair of The CEO Trust. Trust is a popular topic this morning. We’re a national association of CEOs that get together to help each other. As we all on this call know, it’s a really tough job. We’ve identified seven stages that CEOs go through, and we focus on each of those CEOs in each of those stages to help each other get to that next stage. As I said, we’re national. The area of the company that’s growing most rapidly right now, interestingly, is the West Coast. But we do have a chapter here in Dallas, Texas, and we started in New York City. As the word “trust” implies, it’s a really warm organization to connect with. Certainly a cultural fit with Jim and this organization. Thank you.
Jim Ratchford: Very good, Theresa. Glad to have you with us.
Theresa Boyce: Thanks.
Jim Ratchford: John Wolfe, I know we’re going to come back to you a little bit later, but real briefly do you want to just say hi?
John Wolfe: Is he talking to me? Can you hear me?
Jim Ratchford: Yes, John.
John Wolfe: My name is John Clay Wolfe. I own a company called Give Me the Vin. I’ve been in the space for 25 years, but recently saw a surge in growth with a product change of, as I said, a quarter century of doing the transaction. We tweaked it about six years ago. It was about 10 years in the making, but it made quite a difference and took us from $100 million a year to I think we’ll do a billion this year in vol in 2021.
Jim Ratchford: We’re going to hear more about your story in a little while. John is one of our panelists. Jason?
John Wolfe: Jim, are you muted?
Jim Ratchford: Am I muted? No, I’m not muted. Jason, you want to introduce yourself?
Jason Kleiman: Thanks, Jim. Hi, everybody. I’m new here. Jason Kleiman. I run global sales for a high tech company out in San Francisco. We recently joined Texas Consilium. Seventh generation Texan, so anything Texas is always good. And that’s rare here in Dallas anymore. But glad to be part of this organization. Our core market focus right now is really helping the small and medium size business go through the digital transformation process. Love the opportunity to get to know everyone and see how we might bring value to your business.
Jim Ratchford: Very good, Jason. Thank you. Michael Yorba?
Michael Yorba: I’m Michael Yorba, chairman and CEO of Advance Community Fund. We’re a 501(c)(3) and emerging CDFI, community development financial institution. We work to alleviate poverty by investing in real estate ventures, single family to commercial throughout southern Dallas, everywhere from Fair Park to Oak Cliff. We’re really kicking off to a good 2021 by expanding our network. We do business with mainly B2B, commercial developers, banks, and insurance companies.
Jim Ratchford: Thank you, Michael. Michael is also an outstanding interviewer, and most of our Award Nominees were interviewed by him. Appreciate his work with us. John?
John Page: Hey, Jim. John Page here. I’m VP of Sales with a company called Quick Search. We do background screening, drug testing, electronic I-9 services. Our company was recently purchased by the private equity firm the Carlyle Group, so if anybody needs any PI, background screening, recruiting assistance, we’re here to help you. Just one note for Michael: my customer is City of Dallas Housing, and they are anxious to find places for a lot of people in Dallas that need help. So I’d like to connect with you.
Michael Yorba: Absolutely.
John Page: I’m going to go back on mute, Jim, and I’m going to get back on the treadmill if you don’t mind.
Jim Ratchford: All right. Shirley?
Shirley Staten: Good morning. My name is Shirley Staten and I’m a life and business coach. I am part of Texas Consilium or joined Texas Consilium to focus on the customer service and inside sales functions with small organizations since they are the frontline of most companies and can have a big impact on the service experience or the customer’s experience when they connect with these small companies. If you know of an organization that’s struggling with their frontline organization, let me know and I’ll be happy to have a conversation with them.
Jim Ratchford: Thank you, Shirley. Dan?
Dan Cahalen: Good morning. I’m Dan Cahalen, and I am the Chief Development Officer for the Texans Can Academies. Frankly, we’ve gotten involved because we serve a really unique population of the community in Texas, in five different communities or cities, the five biggest. We have 14 campuses that serve the underserved population of high school dropouts or would-be dropouts. We’re working hard to get them through and get their diploma, and we’ve recently got engaged in a lot of career development and trying to provide them opportunities and a vision for a positive future in their lives.
Jim Ratchford: Very good. Texans Can Academies is one of our Award Nominees. Great story. You’ll hear more about them, not so much today but in the months to come for sure. Roger?
Dan Cahalen: Thank you.
Roger Tremblay: I’m Roger Tremblay. I’m the founding principal of PointClear Search Communications. We’re an executive search firm that specializes in senior roles in advertising media and any organization that spends a lot of money on marketing.
Jim Ratchford: Very good. Mark?
Mark Czec: Mark Czec.
Jim Ratchford: Yes sir.
Mark Czec: I have a business called Real Business Vantage. It is a fractional CFO/COO firm. It really specializes in helping the business owner scale and grow their business, or if for some reason they’ve driven it into the ditch, help them turn it around. I’m also really known as a business integrator, so I straddle that fractional CFO/COO role. Thank you.
Jim Ratchford: Very good, thank you. Richard Pena?
Richard Pena: Good morning, everyone. I am Richard Pena. I’m the executive director of information technology for Texans Can Academies, so Dan is a coworker of mine. He pretty much spoke to Texans Can. I’ll wrap it around IT and some of the initiatives that we’ve had and some of the challenges we’ve had with COVID, certainly we’re wrapping our arms around. I think we’ve done a successful job in ensuring that all our kids have the technology they need in order to participate in remote instruction if that’s the way they choose to go. That’s my challenge, and I’m looking for partners that can help me deliver a higher level of services with the small team that we currently have. It’s certainly a pleasure to be here.
Jim Ratchford: Thank you, Richard. Glad to have you. William?
William Sampson: Good morning. William Sampson. I’m a business speaker, trainer, and coach. My tagline is I build better humans. Something we obviously need more of in today’s world. I work with leadership teams, boards of directors, individuals. I help them expand their self-awareness, emotional intelligence, and to discover their saboteurs. What’s making them tap the brakes on their worth? So discovering self-sabotage and working through that.
Jim Ratchford: Very good. Thank you, William. Jeremy, I see you’ve joined us.
Jeremy Fudge: Hi there. Jeremy Fudge. I am the head of BAL, which is a corporate immigration law firm, but that’s sort of our real identity. Our secret identity is being a tech company that’s trying to change the way the whole industry and legal practice and everything else works.
Jim Ratchford: BAL is another one of our Award Nominees, so delighted to have Jeremy involved with us, not just this morning but for everything we’re doing together. Is there anyone else who’s not at the country club that we have not given a chance – oh, Ken, thank you.
Ken Huffman: You forgot about me, Jim? Come on now.
Jim Ratchford: I was saving the best for last, Ken. Please.
Ken Huffman: Absolutely. I appreciate it. My name is Ken Huffman. I am a CPA with Captive Nation. We create private insurance companies for business owners. It’s called captive insurance. It protects the business, decreases taxes, and builds the wealth of the business owner. It’s something that Fortune 500 companies have; we bring it to the small to medium size businesses. Thanks, Jim, for not forgetting about me.
Jim Ratchford: Thank you, Ken. Anybody else not at the country club that we have overlooked? I don’t see any hands waving. Robert, let’s briefly introduce who’s at the country club with you.
Robert Gardner: Darryl Haynes, Tammi, and the panelists.
Jim Ratchford: Can we find a way to give each of them a chance to briefly introduce themselves?
Robert Gardner: Oh, you want to use mine? Here we go.
Tammi Carter: Tammi Carter.
Jim Ratchford: Good morning, Tammi. Tammi is with the E4D and is one of our Award Nominees as well. Tammi, delighted to have your participation with us.
Darryl Haynes: Good morning, everybody. This is Darryl Haynes, and I am on the board of directors for Texas Consilium. My day job is consulting with companies, helping them with risk management, primarily, in the benefits and organization area. I’m happy to be here with everyone.
Jim Ratchford: Very good. Thank you, Darryl.
Robert Gardner: I’m Robert Gardner. I’m also one of the board of directors, and my day job is helping companies protect what they have first, and that’s with succession planning and key employee retention and attraction programs and protection, making sure that things are in place in case unplanned things happen. Robert Gardner with Gardner Wallace Financial Solutions. Then I guess we can introduce the panelists, but they’re going to have plenty of time to talk about themselves, Jim.
Jim Ratchford: Okay. Anybody else there you want to introduce now, or should we move on?
Robert Gardner: I think we can move on and start with the programming.
Jim Ratchford: Very good. Let me move things away, back to our slides here. Just a quick poll of the audience. This is something that we polled back about nine months ago when we had Texas Comptroller Glenn Hegar on one of our programs. We’d like to give a little bit of an update.
COVID certainly has affected everybody. We’ve all got mindsets about what we’re going to do. Just four questions. For those of you who have access to your computer and Zoom there, you’re going to see four polls pop up on your screen. Just take a moment to quickly answer them. We’ll do them one at a time and see what the thoughts of our group are.
The first poll you’re going to have is asking, when is the earliest you would consider flying on a commercial aircraft again? These are all COVID-19 related, and the first option is basically now, the first quarter, or the second quarter or the third quarter or the fourth quarter – or out to 2022 or later. So I’m going to launch the poll. Give it a quick answer and let’s see what the results are.
Let me share the results. Most of you are fairly fearless. 60% would travel now. 15% more second quarter, 10% third quarter, 15% fourth quarter. Nobody here is waiting until 2022.
Somewhat similar question. When’s the earliest you would consider attending a large in-person event that did not involve airplane travel, such as our Executive Summit or a tradeshow, convention, networking, sporting event, concert, banquet, or similar event?
Just under 50% would do it now. Another 14% April through June, and nearly 40% would not do it until the third or fourth quarter. Interesting.
After experiencing the pandemic during 2020 and looking forward to the rest of 2021 and beyond, how do you currently believe that COVID-19 will have affected the prosperity of your business? I am now or soon will be out of business. Highly negative, but I expect to survive. Somewhat negative. No net effect. Somewhat positive. Highly positive. Or I don’t yet have a clear direction.
Nobody’s going out of business. Very good. Someone highly negative. Somewhat negative. Interestingly, most of you have found that COVID was somewhat or highly positive. Interesting.
The final question has to do with office space. Teleworking from home has replaced going to the office for many, and some are finding potential long-term benefits as well as negatives. For the same number of workers, how will teleworking impact your long-term office space needs? The options are substantially decrease office space needs because we will continue teleworking, or slightly decrease our office space needs, or no change expected as we move back towards previous normal, or increase our office space needs because we will be bringing people back with more physical distancing, or you don’t have a sense of direction for this. And keep in mind this is for the same number of employees, so don’t adjust your space needs because you’re growing or shrinking your workforce, but with the same number of employees. Here we go.
So 11%, substantially decrease. Another 21%, slightly decrease. And 68%, no change. Nobody is planning to increase their space. Probably doesn’t bode terribly well for those in the office space business. Interesting. I appreciate everybody participating in that.
I want to run through a few orientations. Won’t spend a lot of time on this, but for those of you new to us, everything that Texas Consilium does is really focused on what our homepage of our website says. “What if your business could achieve its true potential?” That drives everything we do.
On our website under About, you can see frequently asked questions. I would invite you to go there and probably find many of the answers. Type in something like “What is” and you’ll find a whole list of answers to questions like “What is Texas Consilium?”
We also have a video on our website from Governor Greg Abbott supporting what we do. We’re pretty proud of that, and I encourage you to play that. We have our upcoming Business Excellence Award, and that’s a lot of our focus. We’ve got a number of Award Nominees with us today, as we mentioned. A few pictures from our 2019 event where we inaugurated our award. We’re moving into applying that award to Texas businesses. There’s a whole story about that on the website.
I want to make clear that the award is not just about the event. It’s really about the relationships that we create and enhance because of the event that matter. The event is just something that brings us all together. It’s a focal point. We really are relationship-oriented.
On our website you’ll find information about our event, and notice that it has been rescheduled to May 3rd and 4th of 2021. I will share with you that that is a target date, and the information that we get from you and others about your appetite for attending an event will affect that. We want to give our Award Nominees the greatest audience we can. We really want to showcase them and hold them up as examples and models for the pursuit of excellence, so we want to make sure we’re going to have a good audience when we tell their stories. So mark the date, but be aware that we are very actively tracking COVID and what’s happening with that and people’s attitudes. We’ll have updates on that as we progress over the coming weeks and months.
The basic plan for the event is laid out on our website. I won’t go through all that here, but I invite you to explore that at your leisure. We are launching our 360 for Texas Peer Groups. It’s a pretty exciting program. We’ve had a meeting with a number of our Award Nominees, and we really are building this as an elite peer group program populated initially with our Award Nominees. Being part of our 360 Peer Group program really I think is going to be something special. There’s a problem with every peer group in that business owners and leaders don’t know what they don’t know, so helping identify some of those unknown issues is a key focus of what we do with our 360 program. It’s what differentiates us from some of the others.
More about that on the website. Again, explore that at your convenience. We’ve got a NASCAR pit crew exercise at our Executive Summit when that comes up. We’ll have a lot of fun with that.
For our Award Nominees, including our panelists today, again, under About and as a submenu to the Business Excellence Award, we have our Award Nominees Gallery. I invite you to explore that. We’ve got 25 Award Nominees.
A little bit of an update here, just sharing some statistics we pulled together. Our 25 Award Nominees for 2021-21 have total annual revenues of $11.5 billion. The median revenue is $169 million. They range from revenues of $15 million to $3.4 billion. Our award is stratified by revenue size; we have three different company sizes, small, medium, and large. Total employees of our award finalists, just over 38,000, and the median employees per finalist, 563. So a little demographics on who make up our Award Nominees.
You’ll find 30-second videos as well as longer videos and more information on our website for each of our nominees. You’ll see descriptions on our website and links to each company’s website, and you can watch our full interview videos. Our panels today will expand a little bit on the video interviews that they did, and Robert Gardner will be leading that.
Part of what we’re doing is, since we have some time to put some things together and really enhance this whole program, we’re putting a book together. It’s called Texcellence: The Pursuit of Excellence in Texas. It’s a commemorative yearbook for our awards program this year, and the plan is this will become a book that we produce each year as we go into 2022 and beyond, highlighting that year’s Award Nominees and the pursuit of excellence. I’d say we’re about 90% done with the layout, and we hope to have a digital version ready by sometime in February. That’s coming together nicely. Appreciate our team that’s working to put that together.
Jeremy, if you’re seeing this, we have your pages laid out. We’ll be sending each of our Award Nominees their pages for a final review, probably in the next week or two.
Our Partners Program is something I’ll just touch on briefly. Again, we were referring to it as sponsors, but we really have rebranded and repositioned it as partners because it really is not just about the event. It really is about the relationships and working together for all of us to help make Texas businesses better and make Texas an even better place. On our website there’s a whole package of benefits for those who support Texas businesses and want to become partners with us.
A few updates that maybe aren’t fully on our website yet. Dallas Business Journal has become our primary media partner, and we’ll have ads running in the Dallas Business Journal. The publisher of the Dallas Business Journal, Ollie, will be our moderator for our April meeting of panelists. We’ll be recognizing our Pinnacle Club Partners in our ads in the Dallas Business Journal, and you can see a little bit about the reach that we’ll have, bringing some recognition to our top level partners.
One of our Pinnacle Club Partner prospects asked if they could present a special award, and as we explored it, we thought that was a great idea. We’ve actually built that in now as a benefit for our Pinnacle Club Partners. So we are looking for companies that might want to produce or present their own award representing business excellence. It might focus on a particular area beyond our broad Texas Consilium Business Excellence Award. It could be a cybersecurity award or it could be a marketing award or a social media award or whatever the focus of the partner is. Let’s see if we can find an award that lets you focus on your particular area of expertise, and let’s find examples that really represent excellence in your area. Just something else to discuss.
Doug Taeckens has stepped up as our Director of Partner Relations. Anyone who’s interested in exploring the benefits of partnering with us, reach out to Doug. His email address is here, and his phone number is here. Doug, is there anything you’d like to add?
Doug Taeckens: If you’re aware of any companies that might be a good partner with us, reach out and let us connect with them. I’ll be glad to show them the benefits of partnering with us. It’d be a win-win deal.
Jim Ratchford: Very good. Thank you, Doug. I think this wraps up our overview and updates for Texas Consilium. I’m going to move into our panel discussion at this point. Before I do that, are there any questions about anything we just covered? I’m hearing nothing. Robert Gardner, are you ready to go?
Robert Gardner: Ready to go.
Jim Ratchford: All right, let me briefly introduce Robert. Robert is our Texas Consilium Chairman of the Board and a Business Advocate. If you go back to the founding documents of Texas Consilium, you’ll find Robert’s name at the Secretary of State. So he’s been with us from the very beginning. He’s also founding partner of Gardner Wallace Financial Solutions, and he’s an experienced and wise advisor for Texas businesses. With that said, Robert, you are the moderator. Take it from here, please.
Robert Gardner: We’ll get started, but just one side note. If you have any questions, put them in the chat box and we’ll try to look at them periodically and get them asked when appropriate. Feel free to do that. I’m going to start out from my left to right, and I guess in another room is John.
Jeff Howard, the founder of Iconic IT, helping small and medium businesses with high responsive IT support, security, and guidance to achieve their business goals. Jim, you want to run the video?
Jeff Howard: It’s about actually getting out there and doing what’s important. I would encourage people to not talk it, but to actually get out and understand who their customers are, understand who their employees are, not just that they’re working for them, but know their background, know their family, and make sure that you put together a team that works together and gels together that can execute on your strategy.
Robert Gardner: Very good. Next in line is Seth Gordon, CEO of Comm-Fit, a leader and innovator of fitness facility solutions offering a variety of fitness equipment brands and services and a turnkey solution based approach to each fitness center client.
David Risser: Leading by example and following our guiding principles. Fun, we would like to have fun in our environment. Continuous growth, accountability are some of the ones that we try to strive for, and in each department we make sure that those folks are following those guidelines, and then in turn we’re able to produce a much better product.
Robert Gardner: And I’d like to add that that’s David Risser, the Chief Commercial Officer of Comm-Fit. He was the interviewee that day in place of Seth. Then John Wolfe, President and CEO of Give Me the Vin. You don’t have to sell your car to a dealer anymore because you can go to GiveMetheVin.com, enter your car’s VIN number online, and sell it right now for me.
John Wolfe: Don’t borrow money unless you have to, and don’t finance fun, ever. We’re at a point now where I’ve been doing this so long and I finally got it where I was. If for some reason it fell apart or broke or corona took us all out, then it was worth the ride, because I did get to see it to the top of the mountain. It’s pretty exciting.
Robert Gardner: Just to start out, I’d ask you the same general question. I’d like to ask each of you to give the audience a little bit of who you are and a description of what you do, and we’ll start with Jeff.
Jeff Howard: Well, good morning. Jeff Howard, as he said. I guess my unofficial title would be Chief People Officer. I’m the Vice President of Experience, so I’m responsible for everything from the client experience to the employee experience, and that’s just what I’m passionate about. Founded the company 18 years ago and it’s been a fantastic ride along the way. Enjoy juggling lots of tasks at one time. I guess my ADHD plays in there. I like to go fast, drive fast – on closed race tracks, not on the highways, but I do like to go fast.
Seth Gordon: I’m Seth Gordon. I’m the CEO of Comm-Fit. I acquired this business a little bit over a year and a half ago; prior to this business, I ran manufacturing and distribution companies. We look at ourselves as more than just a fitness equipment company. We are health and wellness. We focus on getting people active, from children all the way up to geriatrics, and support multiple different end verticals, including multifamily housing, corporate, park & rec and municipality, and do everything turnkey from design and layout, insulation, delivery, service, and all your disinfecting products and services as well to keep the facility up and running. And as you can tell from my video, by being very active and healthy, you start to look younger over time. [laughter]
Robert Gardner: Touché. John?
John Wolfe: Hello, my name’s John Clay Wolfe. I’m the founder and operator of GiveMetheVin.com. As I said earlier, I’ve been in the space for 25 years. I also host a national syndicated radio show on Rock Stations around the U.S. called the John Clay Wolfe Show. In Dallas, it’s on 92.5 every Saturday morning from 8:00 to 11:00 in Dallas. We’re on KLOS in LA and Big 100 in Washington, D.C., and fixing to add 100 more stations in 2021 through iHeart and Cumulus. Business has been good and been growing a lot. Managing people and working out growing pains takes most of my time.
Robert Gardner: Very good. Seth, this question is for you. David Risser, the youngster in the video, mentioned that the company was currently in the process of defining your differentiation. Would you tell us more about that and what that process is like?
Seth Gordon: Thank you. For us, it’s all about, again, creating health and wellness in our society, and it’s never been more pertinent than it is today. We have had a lot of focus on vaccines, we’ve had a lot of focus on stay away from people. The gyms became the villain in 2020. Very interesting. It’s all about shifting the narrative today, getting you back to the building blocks of what every single doctor would tell you if you were to go to them with any ailment. The first thing they would say is diet and exercise.
So for us, it’s about adapting our business, adapting the focus in society back towards things that can build up immunity, that can allow us to prevent ourselves from having significant negative effects from viruses. I know this might be shocking, but this is a little news alert for everybody: this is not the first virus ever. In the past, we have always utilized health and wellness to defend against viruses, and we must do so going forward. So for us, it’s about being nimble. It’s about finding solutions to help ensure that the facilities are open so people can go exercise, and also just getting those endorphins up and building up our immunity. We’re always diversifying, adding new products and new services to support our end customers that oftentimes we’re putting amenities in front of, whether it’s tenants or it’s end users or customers, that allow them to continue to be active.
Robert Gardner: Great answer. David also mentioned in the video that you want to deliver an entire package, Seth. Can you expand on that?
Seth Gordon: Sure. Our entire package starts with the design and layout phase. From there it goes into the delivery of the product. We do everything from flooring to the equipment. We do disinfecting products and services whereby we supply all the sanitizer and dispensers and wipes. We also do a service whereby we apply an EPA approved hospital-grade disinfectant to essentially bring any facility down to a neutral state whereby you can kill off any contaminants that may be in that facility. And thereafter, we’re constantly servicing the equipment, ensuring that it’s operating in the longest period possible and you’re getting the most that you can out of those warranties you have.
Robert Gardner: Sounds great. John, you were adamant when you said “Do what you say you’re going to do when you say you’re going to do it.” How do you instill that motto throughout your company?
John Wolfe: Hourly beatings. [laughs] No, but pretty serious about it. We just don’t lie to people. Especially in the auto space, everybody has a bad vibe towards dealers – for good reasons, because dealers created that stereotype. Just bait and switch and lie, lie, lie. Everybody has a story where they went to the dealership and they said they’d give them $20,000 on a trade-in and after they inspect it, they back them up to $18,000 to bump them for gross.
How we instill it is, just like I’m telling you right now, I just explain to the staff that your reputation is key. We’re in a space where our reputation is already soiled from the industry. So if we can supersede that and our reviews show it, then we can be a true national alternative. I just pound on it all the time, because it’s so easy to play that backup game and renegotiate game. It drives me crazy, in all aspects of business.
Robert Gardner: You also mentioned that you don’t finance fun, ever. Is there a funny story to that?
John Wolfe: Maybe a bad – not funny story, no. My grandfather started a construction company in the ’50s. It was delivering mail on a bicycle for Western Union wires. Then he got the Southwestern Bell Telephone account delivering mail, and then phonebooks. Long story short, just a bootstrap story. Came from nothing and wound up with a couple hundred employees. Everything was cash. He was a big believer in cash. He died a wealthy guy, and my dad took the company over and six years later, after he levered up all the assets and made the company much larger, when the recession in ’87 hit, wound up filing bankruptcy in 1990.
That was a comment my uncle made. My uncle split off from the company and employed my grandfather’s tactics of cash, cash, cash, and my uncle stayed financially wealthy most of his life, and my dad died a broke man at 72. Hell, he’d been broke since he was 50. That’s not a very funny story, but that’s where it came from.
Robert Gardner: No, not funny. John, how could your business model be applied to other industries? Is that something you can talk about?
John Wolfe: You see it all over the place. My motto is we’re CarMax in the cloud with a Domino’s Pizza delivery. Everybody has their dot-com service. Where we took a risk was actually bidding the job. If you’re a contractor, you bid jobs. We’ll meet you at the house, we’ll go through the house. Everybody wants to meet to get a quote. I decided to take the risk of making the quote without the meeting and standing by it, and creating a process where our quote was solid. And when we were wrong, we would stick with it and not back up.
Then I created a computer system with the help of another man that automatically bid these cars based on market condition so you could go to our website and get that quote instantaneously without having to be hassled by a sales guy.
Robert Gardner: I imagine you’ve taken a lot of the stress out of car selling.
John Wolfe: Oh yeah, absolutely. The reviews are key, and we’ve got about 3,000 of them online. People still think it’s too good to be true. But Carvana didn’t think it was too good to be true because they hired one of my key men and stole our product and completely copy-pasted it. I have a non-compete and confidentiality agreement signed. Thought about suing him about it, but I immediately stopped. They’re worth so much, Carvana is, with their IPO, that we’d get into some $5 million lawsuit. The truth is, they’re a really good customer of ours. Between DriveTime and Carvana, they buy a ton of cars from us. So I guess imitation is the best form of flattery.
But I can tell you one other thing. We were having trouble convincing our customers that our product was real because there’s so much scam and distrust in the car dealer space. So what Carvana did – I noticed all of our buyers – we’ve got about 60 buyers in a room talking to customers all day, but they were spending so much time validating that what we’re proposing is real. Yes, we will show up. Yes, it is a good check. No, we’re not lying. This is real. Carvana hundreds of millions of dollars in advertising the product I created broke the eggshell, if you will, on public perception of our product. So as I hated to see them come into our space with their VC and IPO money and blow it up, they also helped me in regards that they made us more legitimate in a sense.
Robert Gardner: Interesting. Jeff, you’re growing in different markets. You said Dallas, Denver, Rochester. How do you select your geographical areas for your business?
Jeff Howard: We have been a part of a peer group for a number of years – about 15 years – that met every quarter, and we helped each other build all the kinds of things that peer groups so. Sharing our business plans, sharing our marketing plans, all the things to help each other grow our businesses. Through that, I developed a relationship with a lot of different companies that are in my space. There were about 300 in the group, and then there were 12 in my small breakout group. In that group, four of us decided to merge our companies together. We created Iconic IT about a year and a half ago and merged those four companies in each of those regions together.
The power of peer groups – I encourage anyone who’s not in one to seek one out, and obviously the one here sounds like a fantastic opportunity. Looking forward to that getting started and being a part of that because I think there’s such power in connecting with people and understanding what others are going through. Not only can we use our own experiences to help others, which is great, but also we can learn from those in the group the things that they’ve achieved and accomplished and the things that they failed on, learn from their mistakes hopefully, and not have to go through them ourselves.
That was a fantastic opportunity for us to expand and go national and have a reach and a large body of technical resources to draw from around the country for any customer’s concerns or needs. So it’s been fantastic. Also, we’ve had an acquisition that we did in Tyler, Texas just outside of Dallas, and one in Florida as well. So I guess we’re now in five states and six cities around the country.
Robert Gardner: Very good.
Jim Ratchford: Robert, you’re muted. We couldn’t hear you.
Jeff Howard: I can repeat the question.
Robert Gardner: You mentioned you have great customer retention and you hold everyone accountable. Can you expand on why your retention is so high, and how do you track accountability?
Jeff Howard: Certainly. Retention is high because we put a significant focus on taking care of the customer to the point that we have an entire department dedicated to experience and making sure that the customer’s experience is ideal. We do everything from serving customers on every closed ticket to doing regular NPS score surveys to following up on tickets that go wrong. We’re certainly not perfect, but we want to make sure that the experience even when things aren’t 100% perfect is a solid one.
The retention has come through that, but we also make sure that the accountability is there with our team. I think that the word “accountability” gets a bad name and oftentimes is seen as a negative, as if it’s punishment or something that your employees are going to see as something that they’re not going to like you anymore if you hold them accountable. But I think that’s the wrong way of looking at accountability. Amongst our team and our leadership, we’ve made sure that we direct people to a positive sense of what accountability means.
I often use the example with my folks of two fathers who have sons that went to Sunday School on Sunday morning. Each of them were given the same Bible verse to memorize – and I’m stealing this story from someone. I’m not sure who I stole the story from, but not original. On Sunday, they come home and they tell their sons, “I know you can do this. I’m proud of you. Here’s what you’ve got to do. You’ve got to study this verse and repeat it back to your Sunday School teacher next Sunday.” One father then sits down on Monday night, Tuesday night, Wednesday night, all week long with his son and asks him how he did working on his verse that day. As it gets closer and closer to the end of the week, he works with him on wrapping it up and reciting it back to him. The other father had encouraged his son on Sunday that “This is what your job is. I know you can do it. I believe in you,” and then on Sunday morning as they’re driving to church says, “Hey, you got that verse done?”
Both employees, as this relates to, had the same opportunity to be successful, but one had a manager that worked with them on a daily basis and asked them questions. You can see that as micromanagement and pull away from that as a manager and say “I don’t want to be seen as a micromanager,” or you can see it as a fatherly figure who’s walking alongside your employees and helping them with the accountability. That’s how we work with our employees and build that relationship. We believe that if you have happy employees, you’re going to have happy customers, and if you have happy customers, you’re going to have happy employees. We think that that cycle is very, very important. We hopefully accomplish that based on holding people accountable in a positive way.
Robert Gardner: Great answer. Seth, can you expand on that for yourself, your company?
Seth Gordon: Accountability is one of our core guiding principles in our organization. I think that was a great example that you just gave, Jeff, because for us it is all about trying to catch people doing things right as opposed to catching them doing things wrong. So often is the case with even members of my team where they get more excited about finding things that are not going well versus looking for those things that are, and that really can drown out the success of an organization. It can push people down, and it does end up leading to micromanagement versus accountability, whereas accountability can also be there to pick people up and support them and make them feel good about their efforts.
That’s really where I focus my leadership. We all have playbooks, we all have plans. We use something called a weekly alignment note where every week each member of the team puts together a couple things that they worked on this past week, things that they have to look forward to the coming week, any achievements or obstacles or challenges that they’re dealing with, and we utilize that as a cross-functional accountability plan so that we can pass information from one member of the team to the others and make sure that we’re fully connected. Accountability is critical to the success of any business I’ve been part of, and it’s something that we’re always focused.
Robert Gardner: Great. I’m going to go back to Jeff for a second because you said in your video, and you talked about it briefly, coaching people in customer experience and monitoring customer experience and teaching others about customer experience in your industry. I’m just curious about that. What does that mean that you go out and teach other people in your industry? I thought that was interesting.
Jeff Howard: Yeah, we don’t see others in our industry as competitors or the enemy or anything like that. We are strong believers that we’re all just peers doing the same thing. I have the expression “there’s plenty of PCs to go around, so let’s just be friends.” Sometimes people are a little offish when you reach out to a competitor and say, “Hey, I’d like to have lunch” or “Let’s do coffee,” but a lot of those coffees and lunches have turned into acquisitions, and many, many more have just turned into long-term relationships and friendships that I still have today from 10-15 years ago that we are helping and sharing with one another.
Through that – part of that’s the peer group, part of it’s just people I can act with here in the DFW area – I’ve been able to take my passion for customer experience and the things that I’ve learned along the way – we’re a part of a group called the DiJulius Group that does customer experience training for Starbucks and Chick-fil-A and those kinds of folks, and we’ve sent a number of our employees through their program. That material that we’ve learned and those experiences that we’ve had, we’re always looking for the opportunity to share those with our peers and help them develop their employees to be better at customer experience.
Robert Gardner: I think that’s great. I’m so glad to hear that, because it’s actually my motto when I’m talking to a business owner, whether it’s me or someone like me. Protect what you’re doing. It doesn’t matter who it’s with; there’s a lot of good people out there that can do it.
Going back to John, you’ve been doing this for 25 years. Why is it the last five years, things have gone like turbocharger crazy?
John Wolfe: Just years and years of planning. I sourced my inventory in the wholesale car business for decades from dealerships and auctions, which we still do. I would buy your trade-in at the Cadillac store, and as you were trading it in, they would call me or my guys. “Hey, I’ve got an 80,000 mile Escalade,” and I’d say, “I’ll give 20 grand.” What sped it up is I went consumer direct. So many dealers were keeping those used cars because the new car margins got tighter, so my source evaporated somewhat considerably. I would buy these cars to recondition and re-wholesale to other dealers.
Going consumer direct and coming up with a marketing plan, and the radio show that started 15 years ago – that was all in the back of the mind all along of how to reach the masses. We have nearly a million listeners every Saturday morning now. It was a combination between the radio and the automated computer bidding and the new process to jump in front of the dealerships and get consumer direct. One of our largest obstacles is marketing the brand profitably, because when you’re up against – like I mentioned Carvana earlier. $250 million a year advertising budget versus right now what’s a $5 million a year advertising budget. But that’s what changed it. The dealers cut us off and started keeping the cars, so I cut them off and jumped in front of them and got their customers.
Robert Gardner: The other thing that you mentioned, John, was you’re coming as accounting excellence, and it’s not surprising that this is a common weak part of most businesses, and small businesses for sure. Please expand on what makes your business accounting excellent. I’m sure it’s very important, as many cars as you move in a day.
John Wolfe: Yeah, we’re 700 million last year in volume. Average ticket is 22 grand, so there’s a lot of unwinds – like we sell a car to a dealer that doesn’t like it, we have to stock it back. We spend about $700 per unit in reconditioning and hail and transport and all these things. Point being, lots of accounting is going on.
I hired an auditor for Manheim Corporate Auctions to be my auditor. I’ve got three layers of accounting, so they’re combing through the books three times before it gets to the final auditor with a fine-tooth comb. I’m 48 now; when I was 32, I suffered an embezzlement. I had a company called Vernon Auto Group, and $3.2 million embezzlement because I wasn’t keeping up with the accounting side of things. I had too much trust in a lady that was stealing from me, and it broke me. So I had to start all over.
When I say accounting excellence, I overload the accounting department because I don’t want to go through that meltdown again.
Robert Gardner: That’s great. Am I still having some feedback that’s coming through, or is it clear?
John Wolfe: You’re clear to me.
Robert Gardner: Going back to Jeff, tell us about the impact of COVID on your business – positive, negative, neutral.
Jeff Howard: COVID started off as a firestorm. We had all these customers calling us – I think something like 20,000 endpoints. We were having to move people from their offices to home, and we did that. I think we did more tickets in two weeks than we typically do in an entire quarter, just helping customers get back home and out of the office.
With our model, we have agreements with customers. We had some dentists that were immediately shut down and had no more revenue, so we worked out deals with some of those to help them mitigate costs during the pandemic. We didn’t really see the significant drop until people started getting nervous about COVID and they started dialing back their spend on projects and buying hardware.
But as of last month, we had our best month since pre-COVID, or even before COVID, in that area. So I think we’re back. I think the hold on people being nervous about what was going to happen in the world with COVID, they’ve loosened up their pocketbooks again. They’re starting to keep their infrastructures updated and getting back. So if you’re looking for upgrades or procurement or purchasing of hardware or whatever, you probably want to do it now before backorders start and everybody starts getting back out there and spending money in 2021.
Robert Gardner: That’s very true. Same question. The impact of COVID on your business – positive, negative, or neutral.
Jim Ratchford: Hey Robert?
Robert Gardner: Yes?
Jim Ratchford: Real quick, we are getting some reverb. Those of you at the country club, whoever is not speaking, if you would please mute.
Seth Gordon: All right, everybody can hear me now. 2020 was quite a year for us, from the initial shutdown that took place in the first quarter. We considered pivoting to a retail environment. We did that for one day and then realized that we weren’t really equipped for that environment, so we shut that down pretty quickly. We are a B2B company; we want to stay B2B. We service at the top of the market with premium products and premium service.
Fortunately, most of our customers are and were going through new construction projects and they were fully funded. Our work therefore became somewhat essential. I guess that was a blurry line that we walked. But we did service our customers throughout the year, and we had an exceptional year.
Like I said earlier, health and wellness is more important now than ever. Whether it’s from a physical standpoint or a mental standpoint, the long-term effects of COVID are going to far outlast the illness itself, the deaths that came from it – all very sad and wish that we could have reduced or eliminated it. With that being said, there is a trickledown effect that has hit our society that we’re going to find is going to stick around for decades. You’re going to see an increase in other comorbidities that are going to come from people being inactive. The mental health issue in our country is definitely on a downward spiral, and we’re seeing more suicides, we’re seeing more dependency on drugs and alcohol, more domestic violence – and all of this can be attributed to essentially sitting at home, being inactive, not taking care of ourselves both mentally and physically.
So our business has been more fueled by supporting people. We have a bigger cause. Know your why. Our why is to support the people in our country and worldwide in living longer, healthier, and happier lives. It just so happens that we do so with equipment and with disinfecting products to keep people out there and being active, and we’ll continue to diversify into new markets. But our growth trajectory is well set, and the period ahead should be even more so, whether you’re working out at home, whether you’re walking around the block, or you’re going to a fitness facility or to your corporate building or your multifamily housing establishment. That is our focus: get people up, get them moving, and make sure that we get past COVID very quickly.
Robert Gardner: I agree. The effect is years away from the reality of what we’re going through. John, same question. Neutral, positive, negative?
John Wolfe: I was listening to him talk; what’s the question again? It’s about COVID?
Robert Gardner: Tell us the impact of COVID on your business – positive, neutral, or negative.
John Wolfe: Crazy positive, unfortunately. I’ve told guys that work with me, it felt like being a war profiteer this year. When the factories shut down in March and April, it created a surge on used car desirability. There were no new cars. The dealers ran out of new cars. So the used cars went up 10-20% in value. It basically gave us a net income double year. It was like winning the lottery and getting a whole free year of business from a net income perspective out of it. It settled back down into normalcy about October, but from May through September it was the damnedest used car market I’ve ever seen in my 25 years. It’s the best quarters of cars in the history of the car business across every platform. You can see it in the publicly traded companies. Even companies that lose money actually almost made some money, like Carvana. I keep bringing that up. Maybe I have a little problem with Carvana. But yeah, it was good. [laughs]
Robert Gardner: Kind of put two questions to one. What changes or pivoting did you do to address, and what permanent changes do you see as a result of COVID? I’ll start with Seth.
Seth Gordon: One of the first changes or pivots that we took was we wanted to make sure that we could get the facilities open. We immediately built a new business called Flow Wellness, which is focused on disinfecting products and services. That put our service techs that were out in the field taking care of equipment back to work, whereby they had been sitting home relatively inactive. We trained them on how to disinfect facilities.
We private label sourced our own wipes and disinfecting products as well as our hand sanitizer and dispensers, and we went and canvassed the market. We put it out there. At a time when nobody else could get their hands on wipes or sanitizer, we were fully stocked and we locked in our customer base. We put our service teams out on the streets to help those facilities get their facilities open so that the tenants of these apartment complexes would stop yelling at the management companies who had these facilities closed. Those people wanted to work out. They wanted to exercise. They were stuck in their very small apartments for long periods of time. So it was our goal to help them get open, and we did so really quickly. That was our first pivot.
Then our secondary pivot was looking at what is next. What other things can we do to support the environments that we’re in, any health and wellness facility, and started targeting some of the different wellness facilities as well to support them with their disinfecting needs.
Robert Gardner: Sounds like you went from protecting what you had to figuring out how you can grow what you have.
Seth Gordon: The innovation always comes from challenging times. When you’re a business owner and you have a lot of people sitting around with nothing to do, it’s thinking about what you can do to get them active and get them back out and being productive for the organization. But at the same time it’s always growth-focused in our organization. I spoke on one guiding principle earlier on accountability; another guiding principle of ours is growth. So we’re always focused on new markets, new products, and new customers.
Robert Gardner: What permanent changes do you see as a result of this?
Seth Gordon: Permanent-wise, there’s more to wellness than just avoiding viruses and illness. We consume quite a bit of toxins in our day through air, through water. So we’re continuing to focus on where else we can help with the overall health and wellness of each individual, whether it’s in a facility, it’s at your home, or it’s in the general community that you go into.
Robert Gardner: That’s great. Jeff, same question. What changes or pivoting did you do to adjust? I’m sure that was something you had to be very limber with.
Jeff Howard: Yeah, and fortunately what we do is we become a company’s outsourced IT. We become their IT department. We had long-term relationships with these small businesses all throughout each of our markets, so we were able to quickly identify what gaps they may have had from having all their staff at the office to being at home, and to be able to replace or configure their environment so they could basically completely flip what the paradigm had been before of everybody being in the office. I don’t know that that’s going to change.
Excuse me, I apologize. This is like the worst possible time in history to be coughing in a room full of people. [laughter] There’s going to be a hook that’s going to come around my neck in a minute and pull me out of the room. Sorry, Seth. I’m sitting right next to Seth. If you come down sick next week, it was not me, I assure you.
But the modern workplace is going to be all about hybrid. During this time, it was a little easier because everyone went home and everyone was patient and everyone was understanding. But as things begin to shift, there’s going to be some folks that work at home and some that work remote, and companies are really having a challenge right now figuring out what that’s going to look like from a culture perspective, from a systems and communication perspective. There’s tools out there that do those things, but they’re not necessarily tools that were used in small companies. The large enterprise has always been spread across the country and across the world, but one of the benefits and advantages of being a small business is that everybody was right there listening over the cubicle wall to each other. When you break that, now you’re dependent on the Zooms and the Teams and the instant messaging and regular meetings and those kind of things to maintain that level of communication.
So not only are we a technology company that is helping companies with the physical infrastructure of servers and desktops and those kinds of things, but we are the CIO, the Chief Information Officer or the IT manager for our customers as well. We have to be there and help them strategize about what that new world looks like and how technology can play a role in keeping their employees engaged. We had a virtual Christmas party this year – I’m sure lots of you did – where we played games and we had breakout rooms. At first we thought there was going to be no Christmas party this year; we were just going to be a bunch of Scrooges that didn’t have a Christmas party. But we figured out a way to do that virtually and we had a lot of people that had a really, really fantastic time. That’s what we have to do for business: help them, in the coming year and years, figure out how to adapt and how technology plays a role in that.
Robert Gardner: I was on a committee with Dick Buck; I see his hand’s raised up. He always has something intriguing to ask or an observation to add. Dick?
Dick Buck: I wanted to ask John what he sees in his crystal ball for the future of electric cars given Biden’s focus on climate change.
John Wolfe: I think the market drives the manufacturing, and I think that politicians come and go. I’m not buying into it all the way. I think the credibility and safety to be able to hop in your car and drive from Houston to Dallas or Dallas to Colorado – you can do it in a Tesla or EV, but it’s not feasible. I’m all systems go the way we are right now. I still think it is a novelty, and I’m not buying into the hype. I think Tesla’s overvalued. I think electric cars are nice go-karts. I have an E-Z-GO in my garage. I see so many people buy these electric Porsches, electric BMWs, electric Teslas, and they trade out of them 3,000 miles and go back to gas because that’s what people want. I hope that helps.
Dick Buck: Thank you.
Robert Gardner: That’s interesting. Jeff, what permanent changes do you see as a result of COVID?
Jeff Howard: Just a little bit of what I mentioned a minute ago, the fact that we’re going to be in this hybrid model for the foreseeable future. It’s going to be very confusing and challenging for companies that are people-centric. Especially for those that manufacture and those kinds of people that are 100% back or never left, having to deal with vendors and other people who are in these hybrid models with some of their people in. Some of the tendencies I’ve seen companies go to is different days of the week in the office. To me, that seems very challenging. Sally’s in the office Monday/Tuesday, Bob’s in the office Wednesday/Thursday; they never see each other. You never know which day Sally’s in. Is she a Monday person or a Friday person? I don’t know. But it’s going to be very interesting to see how companies adapt. It’s going to be an interesting sociological study on how it impacts people.
What Seth said a minute ago about mental health is exactly right. I heard about a school district yesterday that’s having everybody come back because the suicide rate was just completely out of control. No mental health professionals that are talking about that on a regular basis, about the suicide rate. So it’s going to be an interesting study on how employers are able to figure out a way to keep a dynamic that is healthy for their people. I think that’s going to be one of the biggest challenges long term and one of the biggest changes long term.
Robert Gardner: That’s so true. My mother and her friends are out of their routine and we’re doing everything we can as a family to keep them active because their whole life has been shut down, so to speak. Especially when a lot of them don’t drive anymore.
John, do you have anything to add to the pivoting that you adjusted to or permanent changes you see?
John Wolfe: I’m just looking forward to normalcy, as we all are. My industry has changed forever because when they shut the auctions down and they forced what we’re doing right now, they forced digital auctions simulcast – now that the auctions are opened back up, 5% of the dealer body came back to physical auctions. The scalability of what we do has increased because of the digital connectivity around the country and the fact that these dealers were forced to buy cars without touching them and seeing them, which they weren’t in the past, and they realized it’s a pretty good thing and it works. So I don’t see that coming back.
Obviously, the same thing goes with the consumers buying these cars. I’m using cars as an example. Any product. Whatever we’re selling. The Amazon effect ramped it up, sped it up quite a bit, and I don’t see it regressing back to the old state in any category for the most part.
Robert Gardner: This is a flip of a question. I’ll start with Seth again. What is the one question you’re most tired of hearing, and what would you like to say about it so you never have to answer it again?
Seth Gordon: Wow, there’s been a lot of questions this year that I’m tired of hearing, and they all start with “COVID.” I’m just going to give you a very broad answer here. I am tired of hearing about “What should I do? I was near someone, I was exposed to someone, I know somebody, I know somebody who knows somebody. What should I do? Do I come to work, do I not come to work?” The decision-making process and the amount of energy that has gone into protecting our liability against COVID is what I look forward to getting away from, getting back to the blocking and tackling of running a great business and building great teams and not having to have all these external factors that keep sneaking up on you. I had one pop up on me today. A sales manager whose daughter is in a class that somebody tested positive, so now she’s quarantined, so should he quarantine? I’m doing with all of that.
Jeff Howard: Now you have to quarantine though, because I coughed. [laughter]
Robert Gardner: Terrific answer. That’s terrific. Jeff, anything to add to that?
Jeff Howard: No, I’m sick and tired of all the same exact questions. There’s nothing from a technology perspective we hear at all, but just what to do and how to adjust. I’m right there with Seth.
Robert Gardner: John?
John Wolfe: Same thing. I’m tired of hearing about the guys that say they had it last December before it came out. [laughs] No, same sentiments. Let’s get back to normalcy as quick as possible, get the vaccine going, whatever. Hearing these stories about the suicide rates – I wasn’t aware of that. I mean, I heard it, but I’ve been hearing specific comments this morning. Hurts your heart with these kiddos and cutting their school experience out of their life. Hopefully it’s just one year and not more.
Robert Gardner: I agree. You hear it, you know about it, but when someone like Seth visualized it so well, it really comes front and center and you do feel bad for what they’re going through.
I’ll start with Jeff on this one. What’s the biggest challenge in your industry at this moment?
Jeff Howard: If I can get myself unmuted. I guess that would be security. I don’t think you have to think very long and hard about that one. Malware and the bad guys that are making life difficult. I remember when I first got into IT, we didn’t have passwords, or at least you didn’t change them. They were always “password99.” That was your password forever. I heard a comedian last week talk about “My password used to be ‘password.’ Then they made me put a number after it, it was ‘password1.’ Then they made me put a symbol, so I put an exclamation point.” He goes, “Now all of you are thinking, ‘I need to go change my password because that’s my password too.’” Those were the good old days, right? Then people started being mean and ornery and doing things that created disruption.
But now it’s an industry where they’re making billions of dollars and they’re using cryptocurrencies to hold people’s data hostage and they’re demanding million dollar payments. We see it on a regular basis where customers are having their networks infiltrated, and they’re watching for financial transactions to take place and then using that data against people. It’s a very serious problem and it continues to get worse, unfortunately. Between the FBI and other folks, it’s gotten too big, too fast.
Robert Gardner: No doubt. I see Dick’s hand raised again. Dick?
Dick Buck: I was wondering for all three of you how effective you have found Zoom type meetings to be versus face to face.
Robert Gardner: I’m sorry –
Jeff Howard: He asked about virtual meetings versus in-person meetings. As a people person, I just don’t like it. I don’t know, do I look over here and have face contact with these people, or do I keep staring at the Zoom camera? It doesn’t even feel like they’re here and it feels so impersonal to not look at Robert when he’s asking me questions. It’s not how I was raised. At 50 years of age, my mom would be very upset with me if I wasn’t looking the person who was asking me a question in the eye.
So yeah, I don’t enjoy it. But the technology has come a long way and is certainly – thank God the technology was there through this period of time, or we’d be in a way worse situation. We’ve gone to meetings all over the country through Zoom, and it’s working out well. The technology’s working well. The human side, not so much.
Seth Gordon: It’s kind of interesting. When this all first started and we started doing these virtual tradeshows and virtual networking situations, I think they were really novel. It was interesting and it was unique. I didn’t have to drive somewhere, I didn’t have to put on a pair of pants or whatever to try to differentiate.
But now what’s happened is fatigue has set in. Sitting here and staring at a computer screen, hunched over, the flatness, the lack of sound – I don’t hear anybody laughing at the jokes – it all really starts to wear down to the point where I try to avoid them as much as possible now. When Jim and the rest of us got together last week, the question was posed, “Are you going to be there in person?” I’m like, please, I have to get out and be in person. Really tired of being at home or being at my desk doing these things. Really fortunate that we had an event like this today. Even though there’s few of us here, it still feels good to be out and about and networking again.
Robert Gardner: It really does. John, you want to add to that?
John Wolfe: Absolutely. I’ve been traveling a lot lately. There’s nothing better than being there. With what we do, word bond, it’s a big deal. Large transactions. I just don’t feel good about – what I’ve learned about meeting people on Zoom, we get all this stuff stirred up and we’re going to do all this great shit, and nothing ever happens. You go there in person – last week I went to Nashville, went to Florida. My wife’s like, “Why are you going to Florida?” I’m like, “To see people.” She’s like, “Who?” I said, “I don’t know, but I’m going to Florida.” Every time I walk out and spend three days on the road and go hit some vendors and accounts and this and that, I come home very, very, very happy I did. I can talk to them on Zoom until I’m blue in the face and we can play board games on Zoom, but nothing comes of it.
Robert Gardner: While you’re there, what’s the biggest challenge in your industry at this moment?
John Wolfe: In my industry, the largest challenge for me is – I’m sorry, it took me a minute to formulate the answer – getting through all this Zoom bullshit and getting deals put together. Truthfully. And hiring new people. On my way out of Florida the other day I was in Orlando and talking to this fella in Tampa, and “Why don’t we make a call tomorrow?” I said, “Why don’t I come there in a minute?” “That’s a long drive.” I’m like, “It’s two hours. I’ll be there in two hours.” We spent two hours at a restaurant and made a big deal. We would’ve messed around on the phone and Zoom for a long time and it never would’ve happened.
You just get a sense of people when you meet them in person, spend some real time, figure out if you trust them or not, think they’re an addition to your outfit or not. I can’t do it on Zoom.
Robert Gardner: Seth, what is your biggest challenge? Is scalability difficult at this point, or something else?
Seth Gordon: The biggest challenge we’re dealing with is shifting the narrative away from the gym being the scary place and that it’s dangerous to go to a gym. That to me is an odd and peculiar way that our leadership decided to focus. Shifting that narrative back to exercise is important, being healthy – you don’t have to go to a gym. Go walk outside. Don’t order takeout, don’t do drive-through. Notice none of those places closed, by the way, but yet all the gyms did. So really shifting that narrative. That’s the biggest focus for us.
We are fortunate that multifamily housing is continuing to grow and is going to grow even further because of this, because people are looking for community now. They’ve been sitting in homes by themselves for a very long period of time. The active aging community is going to be more cognizant of the need to take care of themselves in a healthy way. While that trend had already been well underway, now it’s even more significant and there’s communities set up to support them. It’s really just getting people comfortable and, again, remembering that the best way to build immunity is actually to be exposed to things and to be active.
Robert Gardner: Our office building actually has a very nice fitness facility. It doesn’t look like the ones I saw in the video. [laughs] But it’s nice. But I will say I feel very safe there, and I do think the connotation that goes along with fitness has really been negative, and it shouldn’t be.
Seth Gordon: Yeah, that and stay away from people. That’s a pretty bad message for the wellbeing of our next generation. For our kids to believe that it’s dangerous to go near other kids or to be near other people is really scary. This is a frightening situation that we have to reverse. We have to get people comfortable again being around other people.
Robert Gardner: This is a question I’d like to ask to any of y’all. Jeff, you can take it first if you want. Do you remember a specific experience where you wished that you or your organization had done something differently, or even your industry had done something differently? And if you were to do it over, what would you change?
Jeff Howard: I was talking to someone recently who said that when they’re on interviews with radio, they’re often given the questions in advance, and then they change the questions when they actually get on the interview and ask them a completely different set of questions that they weren’t ready for. I have to say, Robert, this is one of those questions.
Robert Gardner: [laughs] I thought we went over this.
Jeff Howard: Yeah, that’s okay. We can be flexible. Seth or John might have an immediate answer for you.
Robert Gardner: John or Seth, do you have any experiences with this?
John Wolfe: Ask the question again?
Robert Gardner: Do you remember a specific experience where you wished that you or your organization or industry had done something differently? And if you can, what would you change?
Seth Gordon: That’s a great question. Everybody thinks of health and wellness as being this big enormous industry, and specifically the fitness space. But it actually is relatively small, and the primary association that governs fitness is a group called the International Health and Racquet Sports Association. That organization had been poorly run, had been poorly funded, and had done nothing to put lobbyists in place to drive home the need for health and wellness and fitness in particular.
That’s why fitness was shut down, whereas on the flipside, you look at the companies that really thrived through this – heavy lobbyists. The pharmaceutical companies, all the medical wellness facilities that really earned quite a bit off of COVID. If you think back to when Trump was up there in March talking about this coalition he built, it was your Walmart and Sam’s – I guess that’s the same group – Costco and Walgreens and CVS. All the organizations that were going to benefit from all the messaging that was being pushed about staying home.
So if there’s one thing that I wish were different, it’s that our organization had been stronger, had been more focused, had had a unifying message to the marketplace. What we are doing is I have built that coalition with most of the manufacturers of equipment here, both domestically and overseas, and most of the leaders of some of those large chains, and now we are going to go fight that message and get people back focused on a more positive message as opposed to what I believe is more of a negative message.
Robert Gardner: That’s a great answer. Jeff, by the way, I’m on quite a few panels during the year, and I will use that answer. [laughter] John, you have anything to add to that?
John Wolfe: Mine is more of a personal individual comment of how I wish that I would’ve struck faster, I’d have made faster decisions. Like I said, I’ve been in this space for a long time, and what we’re doing now I knew was doable. But fear will hold you back when you know you know your space and you know you’re right. I’ve waited too long for more validation at times. I knew I was right, but I still had the fear of doing it.
Earlier, what changed my business on turbocharger – there was one aspect I didn’t bring up. I ran into a mentor. He’s 70 years old; he’s up in Philadelphia. Every other word is an f-bomb. Their business meetings sound like the Sopranos at the pork place. But this guy was operating on a level in my space that I couldn’t fathom, to the point that I thought it was unreal, like something crooked was going on – and it wasn’t. But until I saw him do it, all these things that I had in my mind and these preconceived notions of what was holding me back, that’s really opened me up.
And in radio it was the same thing. I finally got a show coach – his name’s David Hall, and he converted Glenn Beck from Rock Radio to Talk Radio. He was Rush Limbaugh’s show coach for about 15 years. So many things he’s teaching me, I knew all along; I just didn’t have the guts to act on it. That’s my – when you really think you’re right, act on it a little faster.
Robert Gardner: Very good. I’m looking at the chat box. Does anybody out there have any questions or would like to add something? Jim, do you have anything to add?
Jim Ratchford: I really appreciate John’s last comment. In many respects that’s what our awards nomination process is all about. It’s helping hold up some of you as examples to show what’s possible. I think many times when you see somebody doing something that represents excellence, it’s something that gives you perhaps the courage to take those steps and overcome the fears and the uncertainties that you have. The fact that you’ve been through that, you’ve had those thoughts, you being able to share that with others I think is highly valuable.
One other item. This is for Seth. In addition to leading Comm-Fit, Seth is also an author. Broken Handoff. Seth, you want to give us a one-minute overview of what’s in this book? And since you’ve just done an acquisition, perhaps you can tell us how you’ve applied your own words of wisdom for saving your “ass-ets.”
Seth Gordon: Thank you. I know we have a business broker on here and we have a coach on here, so we have a good audience for the book. This was a work of labor that came from two other co-authors of mine. We sat down and said, there is a functional issue with the way transactions occur. In my prior CEO role, I had been through acquisitions and divestitures of businesses, and I got a lot of experience at a very early age. One common thread that I had found was that it all came down to culture, and ultimately it was: What are the goals of the organization? What is the organization you’re acquiring? Do those cultures match up? And what is your long-term goal?
In scenarios that I had experienced prior, there was success and then there was also what I would consider failure. They all had very similar feels to them. So I got together with two co-authors. One has been part of this group in the past, I believe – he was at a meeting earlier in the year – Michael Gorton, who started Teladoc and had gone through his own transactional issues there, and another person who was a human capital person. We shared stories, we wrote them all from first person about examples of situations, and then created a blueprint for success in an acquisition.
I went through about a two and a half year process after leaving my last CEO role to find a company to acquire, and it took two and a half years because I didn’t want to make the mistakes that I’d already been through before, which was aligning with an organization that didn’t fit me culturally, didn’t have the products and services that made sense for me or the experience that aligned with my experience. During that time is when we wrote the book and we launched it. It’s a great blueprint to help you stay on task; if you’re looking to sell your business, if you’re looking to acquire another business, I highly recommend you take a read through it. Happy to share any notes with you on that.
My acquisition at Comm-Fit took place about 17 months ago and it’s gone swimmingly well. Revenues are up over 30%. Bottom line is up almost 100%. The entire team is intact. We have not lost anybody, including the seller of the business. Interesting fact here: seller of the business, 61-year-old man, started this business 35 years ago, was looking to take some chips off the table, wanted to still sell but didn’t want to do anything else. Wants to play golf all day. Fine for me. He had carried in a book of about $1.5 million of revenue in a year. I said, “Just do that again.” First full year under my ownership he turned in a $2.5 million year. So his sales went up even though he wasn’t part of the upside of it.
To me, that’s one of the bigger signs of success, when you can actually grow somebody who’s already been in the role into a bigger role, and for having no self-serving purpose like he had before, that was a pretty big sign of success. Our business continues to grow. We’re looking for acquisitions, so for those of you on here that are in the M&A space, feel free to pass along contact information. I’d love to share any more with any of you in particular and help you think through your sale process or an acquisition process.
Robert Gardner: That’s very good. Personally, I’m out of questions y’all. Is there anything that you’d like to add, Jeff, Seth, or John, that we haven’t asked, or you’d like to share?
Seth Gordon: I’ll share one last thing. I thank you for the opportunity here, Jim and the rest of the Texas Consilium group. This has been a great group. I’ve been part of this over the last few years and I’m very fortunate to be honored here with an opportunity to share with you as well as at the event that hopefully is going to take place here in May. Look forward to meeting everybody in person then.
Robert Gardner: Well said.
Jim Ratchford: Very good. Let me see if I can wrap this up. Don’t have a lot more to cover. I do appreciate all of our panelists for joining us today and sharing your wisdom and your insights. Really enjoyed it. Look forward to working further with you. Let me skip through here. Appreciate all of you in the audience joining us today.
We do ask that you reach out to us, find your role with us. I know some of you are already highly plugged in with us. We appreciate that. But we have a lot of teams working on different things. We’ve got the event coming up, we’ve got the Texcellence book, we’ve got our 360 Program. If you see a role where you’d like to be more involved, please reach out to me. If you represent a company that would be a good partner with us or you know someone who might be, reach out to myself or Doug Taeckens. Let’s have a conversation and explore how perhaps getting you more involved would be a great way to promote the pursuit of excellence in Texas with whatever it is that you do.
If there are no further questions or suggestions or other business – let me take a quick moment and ask that question. Anyone, feel free to unmute and speak up if you have something.
John Wolfe: I have something. This is John Wolfe. If anyone has experience in growing a brand nationally, I’d love to learn from someone that’s done it. We’re very good at Texas regional, and our results outside of our regional space are lackluster. That’s a huge challenge that I’m trying to figure out, is how to scale this thing across the country. So anybody that’s been there and done that that can maybe give me some good advice, I sure will take it. My email address – I’ll put my phone number in the chat box also. I’ll put my phone number in there right now. That’s all.
Jim Ratchford: John, that’s great. We’ll be happy to have a conversation with you about that as well. I will say that in our last couple of panel discussion breakfasts, we have asked the audience, “What’s the biggest business issue you’re dealing with?” In both cases, the biggest issue has been just that. It’s marketing and telling your story, how do you expand the story and the business? So I think you’re right in line there with a business issue that a lot of other business leaders deal with.
Brad Kaufman: Jim, if I can offer something in regards to John’s question or statement about scaling his business nationwide, I think much for us as business brokers, John, it’s succession planning, and not just with the family office. I often tell CEOs that if they had good sons like they are fathers and leaders, then that ability to scale their business and to send your son to the great Northwest or Mid-Atlantic or elsewhere. But I think you and Jeff and Seth embody CEOs who are forward-thinking, certainly have your 5 Ps or 6 Ps covered prior to COVID – in other words, prior planning prevents poor performance, and you’ve all done that well from my perspective. As much as Seth will tell you, hey, let’s get back to 3D touch my face, not do it here, but let’s do it in person, I certainly look forward to getting together with you, John, and maybe expand upon some of our past experiences for you to grow your business nationwide for our involvement. I think what you guys are doing now is phenomenal. Just wish you continued success.
John Wolfe: Thanks.
Jim Ratchford: Very good. Anyone else? All right, gosh, we’re within five minutes of 10:00. We do want to end on time, be respectful of everyone’s time. Certainly as we wrap this up, if you do have further questions, have any personal needs or anything, feel free to reach out any time. Again, mark your calendar for the fourth Tuesday of each month. We hope to see all of you again in February, but even more importantly, hope to see and hear from you in the meantime. It’s not just about these meetings. It’s about working together and making a difference, making things happen.
Thanks to Robert for being our moderator. Thanks to all of our panelists for your great wisdom that you’ve shared today, for helping tell your stories, and thanks to all of our participants.
Robert Gardner: I’d like to add, I’d like to thank our panelists because they were very candid and very open with their answers today, and I thought they all did a terrific job, honestly. I can’t be happier with the way this came out with y’all. Y’all were fantastic.
Jim Ratchford: They did. Big applause for everybody. Take care, all. We are adjourned.
This content was originally posted by Texas Consilium.