Transitioning Leadership: A Founder’s Journey from Coach to COO with John Sherk | Episode 181

Greg Alexander:

Hey, everybody. This is Greg Alexander, founder of Collective 54. You’re listening to the ProServe podcast, a show dedicated to helping founders of boutique professional services firms grow, scale, and one day exit their firm. And with me today, I have a long-standing, well-respected, well-liked member, John Sherk. John has a very interesting story about his journey and a recent strategic change he made. I wanted to capture that because I think what he did might be applicable to everybody else. But before we jump into that, John, for those that might not know you, would you introduce yourself and your firm, please?

John Sherk:

Sure. I’m John Sherk. I am a business coach and consultant, mostly in human capital. I have my own brand as John P. Sherk, but I also have Operations Laboratory, which focuses specifically on air conditioning.

Greg Alexander:

Okay, sounds good. So we were on a session, and you chimed in and you told everybody about a change you made fairly recently. That prompted us to dedicate a whole episode to just that. So why don’t I just have you explain to the audience what that was, and then I’ve got a bunch of questions regarding it.

John Sherk:

Well, I’ll give you the 40,000-foot version first. As a guy in my mid-fifties trying to decide where I want to go in the last sprint, I thought, do I really want to go from being a solo coach with two virtual assistants to building a real firm, growing it, scaling it, selling it? Do I have the energy for it? Where do I want to go with it? Literally, I was sitting on a beach in the Caribbean, thinking about life and work, and what I really love and want to do more of. It came down to two things. One was I needed to fully fund my retirement. I’m not going to Thelma and Louise my way into it right now, but I need to do something more. The other part was, there’s this company that I just love doing business with. I’ve been working with the owner, a young guy, for 10 years. I’ve been coaching him, and I just love his team. He’s got like 35 people. He’s 33 and just about the oldest person in the company. They’re a blast to work with. For me, I’m sort of like the dad when I’m there. It just dawned on me, what if I buy a minority stake in his company? He’s just at the end of the grow phase, which aligns with me really well. What if I attach my car to his train for the next 10 years? I come in, create value toward an exit, and 10 years from now, we exit together. I probably do better than I would have on my own. He gets a lot from me that he probably wouldn’t get otherwise. It’s a win-win scenario.

Greg Alexander:

Yep. Well, I have so many questions regarding that. Thanks for that 40,000-foot summary because I think that tees it up really well. This concept of buy or build is very interesting. Previously, you were on the build journey, and you know how long that takes, how much money it costs, the hours you have to put into it, the probability of success, etc. You hit an age, 55, sitting on a beach with two virtual assistants. Retirement’s breathing down your neck. You’re like, how the heck am I going to pull this off? When comparing the two options, staying on the current path versus buying into or attaching your car to his train, that was a better path for you. We have several members in Collective 54 that are your peers, similar stage in life. They have the same exact decision to make. I don’t think they’re considering buying into another firm, and they should be. So questions regarding that. This 33-year-old guy, what does he need your minority investment for? How did you get him to agree to it?

John Sherk:

Well, first of all, we’ve known each other for years and have great chemistry together. I hope at some point you’ll get to meet this guy. I’m trying to drag him with me to the in-person event in October. He started his company at 13. He’s pure energy. His dad bought him a camera, and he started doing wedding videos in high school, then practice and scouting videos for LSU football. A moment of silence for that great institution. Then he started his company. He was just so much energy; nothing was going to stop him. He made plenty of mistakes along the way, and I was there to help him and watch him develop. There was a time when he was only a prodigy. Now he’s legit, like get out of his way. But he needed a CEO and didn’t know where to go with that. He didn’t feel like he had anybody inside the company who was ready. I’m his go-to develop people guy. We talked it through and decided it would work for me to come in as the CEO, but not the one who stays through the liquidation event ultimately. I can come in, he can be more external, do more founder stuff. We’re using the language CEO and COO as opposed to founder and CEO. I can be the day-to-day operator of the business. He can go out, be external, do what he needs to do for himself and the business. I can develop the person we have in mind, get them ready, hand it off to them. Then I become the person who takes care of all the collective stuff we talk about every session, pushes us through all the checklists, all the grids, gets everybody ready for a sale.