Power members Eric Weisgarber and Adam Diesselhorst have implemented succession planning at their marketing agency, inspired in part by the Collective 54 book The Founder Bottleneck. As a result, they have identified their high-potential employees and are preparing them to take over the firm upon exit. This has allowed them to scale smoothly without the employee headaches and drama found in many firms.

TRANSCRIPT

Greg Alexander [00:00:10] Welcome to the Pro Serv podcast, a podcast for leaders of thriving boutique professional services firms. If you’re not familiar with us, Collective 54 is the first mastermind community focused entirely on the unique needs of that boutique pro serve firm. My name’s Greg Alexander. I’m the Founder and I’m going to be your host today. And on this episode we’re going to have a conversation around succession. It’s a very important issue for professional services firms because we’re people-driven businesses. So as a firm scales and maybe someday exits, you know, the baton has to be handled from Gen one to Gen two or from one leader to the next. It’s really important that this gets done correctly and we’ve got a wonderful set of role models on the call today who I’ve recently got to know, and they are very deliberate and intentional about their approach and that’s why I asked them to be on the show today so that they can share with you our members what it is they’re doing. So we have with us Eric Weisgerber and Adam Diesselhorst, how’d I do with those pronunciations? 

Eric Weisgarber [00:01:21] You nailed it. Well done. 

Greg Alexander [00:01:23] All right. Very good. All right. Would you mind introducing yourselves and your firm to our audience? 

Eric Weisgarber [00:01:31] Sure. My name is Eric Weisgarber. I’m the CEO of Analytics, Marketing and Growth. Everybody calls us. That’s our DBA. Everybody calls us the AMG team. And I started the business that we had and kind of followed opportunity and to the point that we’ve had been about a 22-year-long success before we got to where we are today. And and Adam came along about seven years into my journey. And I’m Adam Diesselhorst. I’m the current president of the AMG team. 

Greg Alexander [00:02:03] Okay, very good. So guys, let’s start at a high level. So when I spoke to you, it was obvious to me that you were thinking about succession very early in your journey. So how did you have the foresight to know that that was an important thing to think about that early on? 

Eric Weisgarber [00:02:22] Oh, well, Adam and I were in a different business model. We incubate, incubated what we have today inside of an older business model and found our way to pull out what we had incubated into the agency that we have today and knew that we wanted to grow it over the next 8 to 10 years and sell it and hand it off to the next generation, as you stated. And a dear friend of mine who’s a member of Collective 54 introduced me to you and your content and and told me that I had to take a look at it and get involved and get going on it. So I did. 

Greg Alexander [00:02:56] Okay, very good. And tell the audience a little bit about how you divide up your responsibilities currently. 

Eric Weisgarber [00:03:03] Sure we use similar to in your new founder’s book. One of the chapters, I think it’s maybe nine or ten where you’re talking about the responsibilities and you need to teach people. It kind of follows the same path as Dave Ramsey’s KRAs – key results areas, and we write KRAs for every position in the company and divide them out. And so I’m the CEO. I manage the business with about 20% of my time. And Adam is in the business with about 80% of his time, and he leads the sales portion of our organization. 

Greg Alexander [00:03:47] Okay. And. That determination as to how you’re going to divide your responsibilities. Was that determined based on the skill set that each of you brought? Was it based on your prior working history in the old firm? Was it based on what the needs of the business were like? How did you, how did you land on that? And I’m asking this question because when our members are attempting succession, succession excuse me, they’re struggling with it because people aren’t staying in their lanes, so to speak. They get the concept and everybody says, okay, here’s how we’re going to do it. And they end up with a lot of conflict because everybody’s doing everybody else’s job. And I’m trying to help them stay away from that by studying how you guys are doing it. 

Eric Weisgarber [00:04:30] Yeah, I think I can answer that. It’s a combination of what you had mentioned. It’s all of it. I mean, so I think when I was younger, I used to hire really great people that I thought would fit the job, but I hadn’t really done what you teach, and that is to hire for their potential as well. And I started doing that. So I have both. Everybody is really built for the role that I have available and and where I made the mistakes when I was younger was I’d hire, you know, kind of one of the first two or three candidates I had available. And then we just keep molding the positions around them. Yeah. And developing the positions and hiring the right person, end of them. And if you have the the people on the team that don’t fit it, don’t try and keep them, you know, let them go, be successful somewhere else and hire the people that you need. And that’s what we do today. 

Greg Alexander [00:05:25] Okay. And is there an age gap between the two of you? 

Eric Weisgarber [00:05:29] Seven years. 

Greg Alexander [00:05:30] Seven years. And is there a timeline as to when you’re going to retire and Adam’s going to take over it? Have you built it out to that degree? 

Eric Weisgarber [00:05:40] Yeah, absolutely. So we have we have an executive team in place and and a couple of high potential people that are going to replace us. We expect that Brooke Thompson on our team has been with me for 17 years. Adam and I have worked together for 16. Then she’ll actually wind up being the CEO and we’ll put her in that spot in about 2028. Adam will become an almost an interim CEO in about two years or so. And then we have a high potential on Adam’s sales team that we believe will be the president of the company that does really the role that he does and leading that portion of the the organization. And we have a couple other players that are high potential as well that are being apprenticed right now. So we we intend to sell the company, start the process in about eight years and hope to have that done two years after that. 

Greg Alexander [00:06:38] Okay. So you have a very deliberate and intentional schedule, which is great. How did you come up with those dates? 

Eric Weisgarber [00:06:47] I’m just. What I think we can do within that time period with a little bit of conservative conservative amount of time built in there for messing up and then just desirous, I don’t think Adam and I are guys that are ever stopped working, but we’d like to get our our large one off from our core business. This when I’m about 58 years old and and Adam wants to exit when I exit. 

Greg Alexander [00:07:14] Okay. So it’s a stage of life scenario as opposed to some something happening within your industry sector. Is that fair to say? 

Eric Weisgarber [00:07:24] Yeah. I mean, we’re built the last 50 years. 

Greg Alexander [00:07:29] Yeah. And Adam, you’re in the president role and you’re very patiently going through that. Sometimes the the number two, the person in the president role gets a little impatient and the succession planning process doesn’t go smoothly because the younger gentleman wants the old fart to get out of the way. So how are you remaining patient and being so accommodating? 

Adam Diesselhorst [00:07:58] Well, I think I have you know, Eric has done a really good job in leading in myself, I believe, leading also to our our particular departments. But seeing a vision. It’s helped me a lot, you know, knowing those steps that are in place and have that clear picture painted for me. You know, I’m naturally a sales person, so I don’t have a very good patience. But I do understand the value of of the succession of me going from president to kind of the interim CEO and then that version of the founder where Eric and I can exit together. And, you know, Eric and I have come up with some clear there roles for me as we go through this process. And the other thing I think that will help me too, is Eric is ahead of me in the process. And like we always kind of like to say with each other as is, I’m about two years behind him so I can we’re going to do this and then about two years later we’re going to do it again. And so I’ve got Eric as somebody kind of as the lead for me to follow in behind. 

Greg Alexander [00:08:58] Okay. And the high potentials that you mentioned earlier that are going to come up behind the two of you, are they aware that they’ve been deemed the heir apparent and I guess the same patience questions would be applied to them? 

Eric Weisgarber [00:09:14] Yes. In fact, when I told him that we are we had joined Collective 54 on what we were doing Adam and I visit for an hour and a half on your content every Monday afternoon and go through a chapter together in our notes. And we we take the task separately and then we compare notes on the tasks and talk about what next steps do we need to take and where does this fall into our plan. And we started in December. So for us, that was maybe four and a half months ago. And they came to us, both of them, and said, you know, what does this look like for you guys? Where are you guys going? And when are you leaving? And we explained it to them and talked to them about them being high potentials for us. And it was great that they came to us because they were our high potentials and they said, Where do we fall in line with this? And so I already had an outline for them and and laid it out to them as to what they thought about it, and then moved it to a next formal step and took them out to dinner and kind of did the steaks and wine and and long term vision and what needs to happen between now and then in these segmented periods of time to evolve to that place. And they fell in love with the idea. 

Greg Alexander [00:10:26] You know, that’s the thing with high potentials, their high potentials for a reason. You know, they they’re proactive. They came to you. They can understand and buy into our vision. They can play the long game practice, prudence, you know, delay gratification for something bigger down the road. You know, top performers, very valuable for sure, but different than high potentials. It’s a little bit more of a what have you done for me lately kind of mentality? Yeah, a little bit more mercenary in nature. So you’re fortunate that you have these high potentials and congratulations on you and and treating them properly and nurturing them and showing them the vision of the future that’s that’s inspiring them. And high potentials want to be motivated. They want to see a vision. They want to know they have a future. 

Eric Weisgarber [00:11:10] Yeah. So we laid out to them even the the path of you had thought on one of the classes. Adam and I don’t really miss the classes. That’s part of a nice apprenticeship. As we take notes, we listen to it and watch in separate rooms and then we compare notes afterwards and. And stuff. So. One of them you had talked about, you know, you go from salary to and increased salaries to, you know, bonuses to, you know, be built in on the profits. And so we did that with one of the the person that’s going to wind up being CEO already. And and then we talked about the warranties that come after that. But really Adam’s the only person that whatever that I’m ever going to give equity to outside of myself. So but the warranties were a great piece of communication. Um, where, where does that fall in line if they hit their benchmarks along the way? And so they, they see the big picture and the rewards from it as well. 

Greg Alexander [00:12:09] Yep. And for those that are listening that might not be familiar with that concept is, is if you don’t want to dilute yourself by distributing equity, there’s a financial mechanism called the warrants or sometimes referred to as warranty and it is what it sounds like. You tell an employee, Hey, someday if we sell the firm, you’ll get X percentage of the sales price or here’s how you’re going to contribute. And it’s the same exact vehicle. You know, it performs the same way, I should say, and that they’re they’re being rewarded for helping getting the firm to the exit stage and for helping the exit happen at a big dollar amount, etc. That’s a very effective way to retain and motivate high potential employees. I’m really happy to hear that you all have embraced that. Something that’s interesting about your story is that it sounds like the two of you are going to exit at the same time. And that’s unusual. That’s very unusual. Not under normal conditions. And I’m not saying it’s right or wrong, just acknowledging that that’s a little different. Under normal conditions, what would happen is one of you would go first and then the baton would be handed to the person who’s staying, you know, with the full understanding in the acquirer’s eyes that a year or two later than the next person would go, and so on and so on. Like when I sold my firm, it was kind of a first in, first out type mentality. Have you thought about that and was there a decision to exit together for a particular reason? 

Eric Weisgarber [00:13:39] I think it was really just we pulled this out of the old business model the way we wanted to. We had the same dream of getting out the same time. I think we’re fortunate that we have Brooke and Layne and others on our team that are already leaders and a couple of people that fit this. Being able to lead the business and already be able to be seasoned enough and in that spot for 2 to 3 years before we get to the beginning of selling. And and so it’s really like I think it’s better for us. I mean I get to practice really, having done this to Adam and how well did that happen and lay down the grass that way and then and then watch him and support him and doing that again with Brooke when she becomes the CEO. So and we’ll be able to demonstrate that to somebody who would buy us that, that, you know, we’ve done this twice already. Yeah. 

Greg Alexander [00:14:36] And over an extended time period. Right. Which will make the buyer feel really comfortable that you were that you really took your time to do as well. Okay. My last question before we run out of our time here, is any any kind of gotchas or landmines you want to mention to help our members avoid paying any unnecessary dumb taxes? 

Eric Weisgarber [00:14:57] Great question. I would just say that you you do say it in these meetings that we have on Tuesdays and Fridays, and you say it in the book quite a bit from time to time on both books, really, that you cannot do it all at once. I do think you need to read the you know, I think it’s chapters seven, eight, nine and ten of The Founders Bottleneck and you got to read that book like you’re studying for an MBA. If you’re in my role and that you have to get an A-plus on this test and take notes in the margins, I mean, I treat this thing like it’s a Bible and I have my notes and then I go back and work on my plan and Adam does the same thing. And so we work on it together and we take it one step at a time, although we do move and it’s a there’s a phrase that a mentor, Greg Taylor, taught me that you need to move slower to grow faster, and that’s the methodology to doing that. And, and it works. So just don’t do it all at once. Yeah.

Adam Diesselhorst [00:16:03] And I think for me, Greg, it’s really the being somebody in a position of always been in sales and business development, business development, you know, really getting to a place where I value my time and I itemize that percentage of time of value that I’m doing to where I’m making this transition and figuring that part out of it. So I don’t know if that’s a gotcha moment, but it’s definitely something for me that has been a big step. But, you know, one thing that I learned. Eric mentioned the old model we ran. I used to always tell Eric all the time that I didn’t think we could ever charge people certain amounts for things. And I’m seeing that differently in a professional services business, not in a transactional marketing place I never thought was a reality. So to me I have the proof and this book’s been a fantastic guide for both of us to make sure we kind of see the vision.

Eric Weisgarber [00:16:57] Yeah, 100%. 

Greg Alexander [00:16:59] Yeah. Well, guys, we’re out of time here. It was a great conversation. I’m so looking forward to a private member Q&A with you. When we schedule that, I know our members are going to have a ton of questions. This is a very hot topic right now, and there’s so, so much to it. So you’re a shining example of how to do it correctly. And I appreciate the enthusiasm upon which you consume our material and and your willingness to give back to the community as well. So on behalf of all the members, thanks for being here today. 

Eric Weisgarber [00:17:29] Thank you, Greg. We both agree remarkable and appreciate and are grateful for everything you’re doing.

Adam Diesselhorst [00:17:32] Thanks, Greg. 

Greg Alexander [00:17:34] All right. Okay. A couple of calls to action for listeners. So if you are a member, be sure to attend a Q&A with these guys and get your questions ready to ask them about succession. If you’re not a member, I encourage you to consider joining. You can go to Collective 54.com, fill out a form, and somebody will get in contact with you. If you want some additional content. A couple of resources for you. So the first would be Collective 54 Insights. That’s a weekly newsletter, and we published blogs, videos, podcasts, charts of the week, etc. I think you’ll find helpful. And then of course, we have our books, which is The Boutique: How to Start, Scale, and Sell a professional services firm. And then when you join, there’s a member-only book called The Founder Bottleneck: How to Scale Yourself, which lays out the case for succession planning, which is what we talked about today. Okay, that’s it for this episode. Thanks for listening. And until next time, I wish you the best of luck as you try to grow, scale and sell your firm.