Every company experiences it at some point—the changing of the guard. And with the current generational shift from boomers in leadership to Gen-Xers and millennials, there’s never been a better time to talk about succession. Leo MacLeod, executive trainer and coach, joins us to share his thoughts on succession planning—who should do it, when you should start and how to find the right successor.
Brandon Laws: Leo, I think there’s a shift happening because of just the demographics and the generational. So boomers are leaving the workforce or leaving – as far as they’re selling their businesses. They maybe want to retire. Millennials are stepping in the leadership roles. Xers are taking over. What’s this whole succession planning thing all about?
Leo MacLeod: Yeah. Well, here’s the scary fact. Ten thousand boomers are retiring every day. Every day!
Brandon Laws: Every day?
Leo MacLeod: Every day.
Brandon Laws: Wow.
Leo MacLeod: As we talk, people are leaving.
Brandon Laws: But it’s hard to wrap my head around that –
Leo MacLeod: Right now, right now. There goes another one.
Brandon Laws: Are they owners of the business?
Leo MacLeod: Well, that’s 10,000 boomers who are retiring from the workforce. So how many of those people own businesses? Enough, right? Enough for it to be a concern. So I got into this business because I just heard of a lot of people, a lot of firms that were saying, “Yeah, I got to leave my business someday here and I haven’t really created a plan.” There’s a whole bunch of people who are in that boat, who haven’t done the planning, who haven’t thought about it and are now in a position of trying to figure out what to do.
So I thought, well, maybe I can give them some help. As I started to get into it, I realized it’s really complicated because there are different parts to it. There’s the emotional part, the people part. There’s the logistics part, right? There’s the financial part. So you actually need a team. You need an attorney. You need a financial planner and then you need what I would call succession coaches, which is what I am. So I’m the guy who helps you kind of navigate the overall plan because a lot of it frankly is just trying to figure out, “How do I want to leave this firm? What does it mean to me? What am I going to do afterwards? Can I trust the people who are taking over? How do I develop them?” There’s a lot of questions.
Brandon Laws: Well, I would have thought about the people side for sure and it’s interesting that you take on that role. I wouldn’t have thought about the attorney and the financial planner side of the equation. But that makes a lot of sense. You have somebody that potentially could be selling their business or relinquishing options in the organization, whatever it may be financially.
Leo MacLeod: Yeah.
Brandon Laws: All that needs to be sorted out. I wouldn’t have thought about that. But you have to think about it, right?
Leo MacLeod: It’s a big part of it. The money part is the big part of it because, well, let me say this. It depends on what you want to get out of the business. It depends on how important it is to you. So when I sit down with companies that are thinking about doing – leaving their business at some point, I have two questions.
One is, when do you want to retire? When do you want to exit the business?
Brandon Laws: What if they said six months from now? That will be a little concerning, right?
Leo MacLeod: No, I had that. I have that story. I do. I do. So one question is, “When do you want to leave?” and the other one is, “What do you want it to look like afterwards?” How is this going to end?
So I will go into the story where someone actually called me up, because I write a column for the Daily Journal of Commerce on succession planning. This guy calls me up. He owns an engineering firm. It’s not very big. It’s maybe 20 people and he says, “Yeah, I was reading your article and your column.” He said, “It sounds really interesting. Here’s my case. My wife is really getting on my case because she wants me to retire. I’m about 65 years old. I’ve had this business for 30 years and I really need to get out. Can you help me?”
I thought, you know, I –
Brandon Laws: Yeah, you have five years.
Leo MacLeod: There’s all kinds of flags coming up. I’m saying, well – I ask him, “Look, do you have an owner in mind? Do you have somebody who you think could step into this position?” Well, I’m not really sure.
Brandon Laws: That’s a no.
Leo MacLeod: That’s all right, kind of. It’s a question mark. It’s a big question mark and then I said, “Well, how strong is your business? Do you have recurring revenue?” I mean what are we buying here? Are you just in the business of going out and getting work? How reliant is it on you? In other words, if you leave the business, is it going to collapse?
So yeah, it’s pretty reliant on me. I mean I’m hearing all these different flags. But then I said, “Well, what’s your objective? How do you want this to end?” He says, “I’m not really that concerned about getting that much money out of the business for myself. I’m more interested in trying to keep it together for the people who are here.”
I thought, “Well, that’s kind of interesting.” As I started to get into it, working with them, I realized that they had a really great like family kind of culture and he was sort of the patriarch. Right, which is kind of common.
While it was challenging to find owners among the people who were there, we did find them. We found two people within the organization.
Brandon Laws: That’s great.
Leo MacLeod: But the key was – and this is what made it work is – the owner, the person who was leaving the firm, was not asking for a lot of money out of the deal. Frankly, that made it easier. It made it easier for the deal to go through because at the end of the deal, if I said, “Hey, Brandon. You know, you work for me. How would you like to take over my business?” so what does that require? Does it mean just doing what you’re doing or am I taking on some kind of financial risk?
Do I need to buy you out? How much do you want out of the business? How much do you want me to be paying you over time? How is this going to work? That part, a lot of people avoid.
Brandon Laws: Yeah.
Leo MacLeod: And they wait too long because frankly, it’s like any kind of loan. You need time, right? In order to pay off anything like that, just like your home, right? You buy a home. You’re not like – someone says, “OK. Can you write a check for $500,000?”
Brandon Laws: Most people don’t have that sitting around.
Leo MacLeod: Exactly. So –
Brandon Laws: And that’s probably where the attorney and the financial planner come into play with that side of the equation.
Leo MacLeod: Yeah, there’s – it’s complicated and it’s not my area. But there are a lot of tax implications as well.
Brandon Laws: Yeah, it makes sense.
Leo MacLeod: So there’s a lot of tax implications, of receiving a lot of money for your business all at once.
Brandon Laws: Yeah, right. That’s why people probably take it over time.
Leo MacLeod: You take it over time. There are ways of structuring the deal. But the key is, too, if you’re giving the business to someone else, if someone in your firm is going to be picking it up and owning it, how can they afford to do that? Because that’s expensive.
Brandon Laws: Yeah.
Leo MacLeod: So that’s the challenge. The challenge is that you as an owner have a certain price. You want to get the most out of it. Most people do and the people who are at the firm, they’re not high rollers. That’s why a lot of times –
Brandon Laws: They’re employees.
Leo MacLeod: Yeah, they’re employees. That’s why a lot of times, owners look for third parties, look for people who have got deeper pockets, who just want to buy the whole firm.
Brandon Laws: That’s – but then they might bring in their whole crew, culture, changes.
Leo MacLeod: What they generally try to do is it runs on kind of the business. So if you’re producing a product and you have a process and you have a technology, you have a plan and that’s what you’re buying, then yes, you’re essentially just buying – you’re buying the customer base. You’re buying the intellectual property.
Brandon Laws: Equipment.
Leo MacLeod: Equipment, all that stuff. The people are important, but they’re secondary. If you’re buying a professional services firm, like for instance like Xenium, I mean what are you buying? Maybe they’ve got some assets for an office building. But essentially it’s people.
Brandon Laws: Yeah.
Leo MacLeod: So in that situation, you need to figure out how are you going to hold on to the people? Or more specifically, how are you going to replicate the business when you’re not around, which is the tricky part because when you start looking at leaving a business, you have to look at replacing yourself.
Brandon Laws: Yeah. That story that you were just describing, did it have a happy ending? You said you were able to identify a couple of people within the organization. What was the result of all that?
Leo MacLeod: He’s riding through the Rockies on a motorcycle and spending more time with his –
Brandon Laws: He’s got a happy ending then.
Leo MacLeod: He’s spending more time with his grown children.
Brandon Laws: Yeah.
Leo MacLeod: And loving life and he’s still involved. He’s still involved –
Brandon Laws: OK. So he’s still an owner of the –
Leo MacLeod: So he’s an engineer and he comes into the office maybe once a week for a little bit. But the other thing too is this guy is very – he’s a hands-off kind of guy. So he’s not going to come in and say, “What are you doing?” and you should be doing it that way.
Brandon Laws: So it sounds like he – so he’s riding around the Rockies on a motorcycle, he’s still involved in business. He’s still an owner then.
Leo MacLeod: He’s not an owner. He’s just an employee now.
Brandon Laws: OK.
Leo MacLeod: Or maybe just a contractor.
Brandon Laws: But some people want that and maybe early on in the succession planning process to identify what involvement you want to have, if any.
Leo MacLeod: Yeah, but it should be a clean break. At some point, you should stop being an owner and now you’re an employee and that’s a change for people. Some people are better at that than others and that’s part of knowing yourself. That’s why a lot of this, frankly, is more personal in nature. That’s where I coach people, to try to figure out, “What do you want out of life?” and it almost becomes kind of a life coach kind of a –
Brandon Laws: That’s kind of a – I like that. It’s a holistic view of what do you want out of this transition. And what do you want out of your life?
Leo MacLeod: Yeah, right. What’s next for you? And then the other part is who’s going to take over the business and are they ready? How do we develop them? So that’s what feeds a lot of my business is the leadership development for the succession plan.
Brandon Laws: Yeah, that makes perfect sense. So let’s back all the way up. That same story, he came to you. He wanted to retire in like six months, get out of the business within the next six months. It was more – probably more of a quick turnaround than you thought. Ideally, if somebody came to you and you’re advising on succession planning, how far in advance are people looking at really starting the planning process?
Leo MacLeod: Ok. So I will give you a contrast. A contrast is another engineering firm. It’s much bigger. But the person is being a lot more deliberate and intentional about the whole planning process. And he’s giving himself 10 years.
Brandon Laws: Wow.
Leo MacLeod: Yeah.
Brandon Laws: That’s a long time.
Leo MacLeod: Yeah.
Brandon Laws: A lot happens in 10 years.
Leo MacLeod: At least 10 years. Yeah. So in this situation, it’s called Company B. Company B, he already has a future owner. He has someone. It’s actually his nephew.
Brandon Laws: OK –
Leo MacLeod: I mean it’s just amazing. I mean he has got all the components of being a future owner, future CEO. We can talk about that later.
Brandon Laws: And the nephew wants it.
Leo MacLeod: Oh, he does want it.
Brandon Laws: Good.
Leo MacLeod: He wants it. He’s ready. It’s all teed up. So the owner of the firm is working with a financial planner, working with an attorney on the stock transfer, how this is going to work, and then he’s working with me on how he’s going to exit the business and start to relinquish control and how the new owners, because there’s a team of them led by his nephew, are going to take over.
And he’s doing it very deliberately. He’s got a plan and every month we get together and sit down. We look at, “OK, where are you and what do you need to do next?” So a lot of times, for him, his job is like going to Australia or Switzerland and leaving the business for a while and testing it and letting them run with it and seeing how they do because it’s similar to giving your keys to your car to your kid for the first time. You never know how it’s going to work until you test it out.
Brandon Laws: Yeah.
Leo MacLeod: You can’t be there. You need to let him just roll with it.
Brandon Laws: Kind of let them fail a little bit.
Leo MacLeod: Go into the ditch.
Brandon Laws: Probably mitigate some of the failures. But –
Leo MacLeod: Right, exactly.
Brandon Laws: You just got to let them do it.
Leo MacLeod: Exactly.
Brandon Laws: So let’s say you have a small organization where you maybe have an owner or multiple owners where they’re not necessarily involved in the day to day business. So they’re going to keep the organization. And you have a key executive who is basically running the business, but not an owner. They’re retiring. Is that also part of a succession planning process or is it always just based on ownership change?
Leo MacLeod: You do need to look at the team in place. I mean there are very few places unless you’re really small that you’re totally dependent upon one person. You can have an operations person. You can have a financial person. You have a human resources person. People contribute in different ways.
It’s interesting. There are some firms that look a little bit more towards how are they going to replace the team rather than the person. So what they will do is they will start developing kind of a – the bench to take over for the people on the field. Very much like basketball or football. It’s like, OK, we need to bring in our second team. So those people are warming up and they’re getting ready to enter the game and they’re slowly taking over the responsibilities. I’m just thinking about a firm I’m working with now that’s very flat. I mean it’s – oh, I don’t know. Maybe it’s three – under 400 employees.
Brandon Laws: Wow. But it’s more flat. So the team is more important than any one person.
Leo MacLeod: Right. I mean they’ve got a corporate management group of about eight people, right? So they’re a multidisciplinary firm. So they’ve got people who are representing different parts of engineering and architecture and construction for instance. So they’re making decisions as a group as opposed to just one person saying this is what we’re going to be doing, which becomes challenging but it’s – you also have that safety in numbers because if just one person leaves – if you have one person that leaves, it makes it easier to make decisions.
But it makes it stronger too. So they’re looking at developing their bench for people who can sort of support them as they move into a senior leadership role. And if they leave, and they will at some point, you’ve got a number of people who are going to be coming up and taking their place. Does that make sense?
Brandon Laws: So when you think about an overall succession plan, especially in the early stages, how detailed does this plan need to be? Is it just here’s my vision for the future? I want to get out in this many years. What does that even – what does it look like? Is it really a plan or is it just sort of –?
Leo MacLeod: Yeah.
Brandon Laws: We’re going to take it one day at a time and take some incremental steps.
Leo MacLeod: Yeah. Let me tell you about the process that I use because I feel like it’s so personal and it’s so unique that I know that there’s probably consultants who have templates and flows and you need to do this and this and this. I think that’s great. But that’s not the way I work. And the reason is because every organization is different and everybody has got different pain points and different things that keep them up at night. Different things on their mind. So rather than trying to direct him down my own little model. You got to do this first.
Brandon Laws: Step one, step two.
Leo MacLeod: But as they’re going it, they’re thinking, “Yeah. But what about this thing that keeps me up at night?” So what I hear –
No matter how content we are with our career and life choices overall, at some point we’ll inevitably feel stuck. In these moments, it’s helpful to have reliable problem-solving tools at our disposal, along with support from colleagues and friends. That support is most useful when it comes from a non-prescriptive place—in other words, when it doesn’t include someone else diagnosing and solving your dilemmas for you. It’s much more effective to be asked questions so you can find your own insights and determine your own plan of action.
One problem-solving tool that follows this idea is the G.R.O.W. model. It was originally made popular by business coaches Graham Alexander and Sir John Whitmore in the 1980s and 1990s, and it remains a favored tool because it’s simple to follow. It helps people diagnose their own problems and encourages continuous self-improvement.
The G.R.O.W. model can be used in individual problem solving, or someone can take on the role of “coach” to guide someone else through the questions and foster a discussion.
Here’s how to use the G.R.O.W. model:
G – “Goal”
The first step is to establish the desired goal. This goal should be specific.
Ask: What outcome do you want or need to achieve?
R – “Reality”
Next, examine the current state or reality. Identify ways that the current reality varies from the goal.
Ask: What is happening now? How does that differ from your target or desired outcome?
O – “Options”
Then, brainstorm strategies for getting from the current reality to the goal. These options should be actionable and achievable.
Ask: What are some things you can do to get closer to your goal/desired outcome?
W – “What & Will”
Once you have identified at least one viable option or strategy, the next step is to establish a plan of action to test your strategies and evaluate your level of commitment. Make sure to check in on your progress after some time has passed, and readjust your plans as needed.
Ask: What will you do? What is your action plan, and how confident are you in your ability to see it through?
Used independently or when coaching others, the GROW model challenges us to develop accountability and problem-solving skills that are important for any job.
Watch Episode 08 of Transform Your Workplace
How to use the G.R.O.W. Model for Solving Problems - YouTube
BONUS: See how Suzi Alligood uses the GROW model with an employee
How to use the G.R.O.W. model for coaching and problem solving (Role Play) - YouTube
What’s your biggest workplace frustration? Whatever it is, there’s a good chance you’re not alone: as we’ve worked with leaders of small- and medium-sized businesses over the years, we’ve noticed many of them share the same recurring headaches. Here are the four most common issues that keep business leaders up at night—and the best actions you can take to ease the pain.
Headache #1 – Lack of Community
Executing your business strategy requires teamwork and collaboration between departments. Most organizations understand this, but many still struggle to make a community out of their jumbled mix of people.
Modern technology doesn’t often help matters, either. We may seem more connected on the surface, but with less face-to-face interaction with coworkers, many employees end up feeling isolated. To remedy that, business leaders are becoming hyper-focused on developing culture and community inside their organizations.
The most effective way to build community in the modern workplace is to bring people together by opening lines of communication across entire organizations. Manager and employee one-on-ones, all-hands meetings, team-building workshops, and the occasional happy hour are several simple ways to get started.
Headache #2 – Not Knowing What You Don’t Know About Compliance
It’s often what you don’t know that can get you and your organization in hot water. That makes compliance a crucial part of running a business—and one that can cause a lot of anxiety. One legal slip-up or employee complaint could cause your world to come crashing down. It doesn’t have to be this way, though.
You and your company can be protected by installing a team of people who know the ins and outs of every law that affects your organization. These people can be employees or outside consultants. Beyond that, make sure all your managers have the necessary training they need to develop the skills and acquire the knowledge to stay in compliance and out of the mess of potential legal problems.
Headache #3 – Talent Acquisition & Retention
Every organization is almost constantly thinking about how to acquire and retain the right talent. Our current labor shortage makes the fight for talent feel like a long and complicated battle, which most organizations probably feel like they’re losing.
If you have people leaving in high numbers, first determine why. High turnover could be caused by any number of things; low compensation, lackluster benefits, weak leadership, and a lack of training opportunities can all contribute to an unhappy workforce. You will never know what your organization’s problem is until you ask.
When an employee departs, conduct an exit interview, and conduct “stay” interviews with current employees, too. Once you have several, examine them together, pull out any recurring themes, and address them with your leadership team. Also, conduct annual employee surveys to find out what your people want from work so you can benchmark employee happiness year over year.
Since having a great culture is often the recipe for acquiring and retaining talent, use the data you gather from surveys, exit interviews, and stay interviews to further develop your organization’s culture. If you have a great culture, people outside your company will notice, and they’ll want to be a part of it.
Headache #4 – Having the “Right” Employee Benefits
This is often closely related to headache #3. Addressing employee compensation and benefits is a never-ending pain for business leaders. Because of external market forces, expectations around pay change constantly. You’re probably tired of hearing about your competitors offering open beer kegs and unlimited PTO to lure in top talent, which you know wouldn’t suit your organization. So how do you figure out what you should offer so you can attract new people and satisfy your current talent?
Progressive employers are shifting to a “total rewards strategy” to determine how they will pay their people and what benefits they will offer. A total rewards strategy considers that not every employee will value high pay over strong and unique benefits, for example, and takes into account what your employees actually want. Organizations using the total rewards strategy regularly check the pulse on pay and other benefits based on market data on each position in the company. Pairing the total rewards strategy with routine surveys asking employees what they want for compensation and benefits is a great way to approach this issue.
Every organization has headaches like these, and some have it worse than others. Just remember that even the worst workplace headaches can be cured.
If you could put all your energy into what’s most important to you every single day, what would your life look like? Would it look anything like your present-day real life? If the two scenarios look more different than similar—if they look like two separate worlds—it may be time to reprioritize.
A time-tested tool for doing just that is known as a “life wheel.” These can be powerful for helping you refocus when you’re feeling off-balance. They give you a space to examine the most important areas of your life and help you restructure how you use your time and energy.
Life wheels have been around for a while, and there are many versions of them out there. They all split the areas of your life into different dimensions, as seen below.
Here’s how to create your own life wheel:
Step 1: Download the Xenium Life Wheel. Choose your lens. You can use your life wheel to look at an overview of your life in general, or to take a deeper dive into smaller subsets of your life. For instance, you could decide to look at specific areas of your professional or personal life in more detail.
Brainstorm the different dimensions that are important for your life wheel. Within the lens you chose, think about what you care about most, what roles you want to fulfill, and what new priorities you want to establish. Fill in the spokes of your life wheel with your top 10 areas. Filled out, the life wheel should look like this:
Assess how you’re doing in each area, scoring them from 1-10, based on how much attention you currently give them. Plot these scores on the life wheel.
Now it’s time to analyze! From these numbers, you can clearly see where you are focused and where you’re not paying enough attention. Consider where you would like to be in each area and know that a 10 might not be realistic across the board. You may even find that you have been far too attentive to certain areas and would prefer to spend less time on them.
Brainstorm specific and timely ways you can improve your prioritized areas. Coming up with actionable goals will help you in your next step.
Take action! Incorporate your goals into your everyday life. You might find it helpful to review these goals each morning when you wake up, or you could keep them posted somewhere where you’ll see them often, like on your refrigerator or your desk at work.
Finally, be sure to check on your progress in a few weeks or a few months. See if you have created a more balanced life wheel or if you need to make some more goals to help you get there.
In fast-paced, commoditized industries, it’s easy to lose sight of bigger company values when we’re intently focused on getting to our next transactions. But it doesn’t have to be this way. Brad Compere, CEO and founder of Capstone Title, a full-service title insurance company based in Austin, Texas, joins us to talk about how to shift company culture to focus more on relationships—with coworkers, clients, and the community—even in transactional industries like real estate.
Brandon Laws: Welcome back for another episode of the Human Resources for Small Business podcast. I am your host Brandon Laws. Hey, in today’s episode, I have an amazing discussion with Brad Compere. He is an attorney who specializes in real estate transactions in Austin, Texas. He has got more than 17 years of experience working to improve the real estate closing experience for both commercial and residential clients and is a leading expert of the title and closing industry in Central Texas.
He is currently the President and CEO of Capstone Title, a full service title insurance agency, which he founded in 2014. So you may be asking yourself, “OK. What is he doing on the podcast that is all about HR?”
Well, he has a business that is in a commoditized industry and he has worked incredibly hard with his business partner to intentionally develop a culture where for one, people are really excited about their work, but to attract customers that are passionate about the same things that they are. So you’re going to love this conversation. We talk all about the things that they’ve done at Capstone Title to intentionally develop the culture, to bring in the right people and it’s just a great story. So you’re going to love this.
One thing I wanted to mention, and it ties in really nicely with this, is I want to tell more stories. I want to talk to people who have either, as an HR person, been in that seat at the table where they’ve really helped develop the culture, bring in the right people and have either had successes or failures in doing so, or I want to talk to the business owner who has led that charge and developed a business in their vision and bringing in the right people as well.
So if you have any referrals for guests on the podcast that have an amazing story to tell, please either email me – link is in the show notes – or reach out to me on LinkedIn or Instagram or Twitter, whatever you want to do. You can find me in any of those places.
So anyway, I will step out of the way. Enjoy the episode with Brad Compere.
Brandon Laws: Hey Brad. It’s so awesome to have you on the podcast. Welcome.
Brad Compere: Thank you very much, Brandon. I appreciate you having me.
Brandon: You’re welcome. So give me your background. You own a firm. You’re an attorney. What are you up to nowadays?
Brad: So the main portion of my time right now is spent leading the title company. Capstone Title is a title insurance agency, a Texas title insurance agency that provides title insurance and residential and commercial closing services for real estate transactions in and around the Austin area and really throughout the State of Texas.
I also am managing partner and owner of a law firm – Compere and Gorman – and we specialize in real estate transactions. So I split my time between the two businesses. But quite frankly, most of my time is spent with the title company because it’s scaling quickly and we have 18 team members. So it definitely takes the bulk of my time.
Brandon: You’re a busy man.
Brad: I am.
Brandon: What led you to starting the title company?
Brad: Well, so I have been an attorney now for – oh gosh. Eighteen years? And most recently, over the last 10, 12 years, specializing in real estate. I had a firm before I started these two businesses and I was what was termed a fee attorney closing office. Effectively, we were a branch office but run independently like a law firm of a local agency here. We were able to close transactions through our agreement with that local company.
So I got a taste of it over a five-year period, several years ago, of the title business and the closing process. When that law firm disbanded and we went our separate ways, I saw an opportunity to start a true business. You know, a law firm is definitely a different business than a traditional business. And I saw the opportunity to take my experience and my book of business and start an agency to really dive into a true business operation.
Brandon: You said that – the fact that you’re scaling the title company. I think as an attorney, you basically have to be in it all the time because you’re serving your clients and you – kind of like a dentist – you have to kind of keep it running. You’re the dentist, right? With the title company, you rely on people, right? You can hire people to help you scale. Is that kind of what you’re experiencing right now?
Brad: Exactly. Absolutely. That comes with its own set of challenges. But yeah, the law firm, you’re tied to the billable hour and that’s just kind of built with the model for most attorneys. So if you’re not in the office and you’re not billing hours, you’re not making money. With the more traditional businesses, you can bring on great people to help you build your vision and that’s what we have done and are doing with Capstone Title.
Brandon: I’m glad you said vision because that was actually going to be my next question is, “What was the original vision for the business?” Maybe you didn’t have one at the time. You just saw the opportunity and then you had to create the vision later on. What is that vision?
Brad: It’s funny. When I was thinking about starting a title company, I sat down with a very close friend of mine who’s a very successful residential real estate broker here in Austin. He asked me point blank. He said, “Are you passionate about title insurance?” I kind of thought about it for a minute. I know where he was going with this and I said, “You know what? Not really. I love serving people. I love people and I want to build something great with great people.”
So that kind of became the – I guess our mission statement at first was let’s build a great company with great people. It doesn’t matter the industry. We’re going to build a fantastic company and through the process, we had our core values too which at the time were honesty, integrity, transparency, service and community and kind of the values around those topics.
It later morphed into quite frankly the word “love”. It was – we realized that we were about loving people and we wanted to make sure that that vision and that mission came through, shone through. So right now, our mission is a three-fold platform. It’s service, community, and love. That’s what we talk about. That’s who we are and it’s all about loving people.
I have a business partner named Will Fair. Will owns a title company in Waco, Texas and it has been in his family, and he has been in the title business all his life and he and I sat down. He’s now my business partner at Capstone. We were introduced to a mutual friend, a banker here in town and when we sat down and kind of talked about our vision, what we wanted out of building a brand new business from the ground up, he mentioned something to me that just really stuck with me. He said, “You know, business and life is really simple. It’s about loving people.”
I just kind of took that to heart and I realized, hey, we’re meant to be partners because I feel the exact same way. So Capstone has really grown out of that concept.
Brandon: What’s fascinating to me is in the five minutes you and I have been talking, you’ve probably mentioned the word “people” probably five, six times and I think for – most people think of a title company, they don’t really think of people. They think of a transaction as part of a process. How do you get out of that where you have an industry or a business that most people think is very transactional, not really relational-driven whatsoever? How did you go about changing that paradigm for most people?
Brad: Really it’s about that vision I mentioned and it’s also just about your actions, how you operate day to day. So for me, one of the bedrocks of Capstone is giving people a great place to work. We spend at a minimum eight hours a day working together and so I want people to enjoy where they work. Our industry and our job can be very difficult at times. It can be very humbling and challenging.
So I want to create an environment and our team and our leadership team wants to create an environment where people enjoy what they do. They enjoy their work family. They enjoy coming to work and being a part of not just transactions but about helping people, because it really is about serving people. That’s why that service piece is first in our three-fold mission statement. It’s that service piece. We really are truly serving people and we want to lead every conversation with, “How can we help you?” We truly want to help you close your transaction. We want to help you and your family get into that new home. We want to help you and your business buy that new piece of real estate and do it in a way that makes them feel good, makes them look good and makes their life a lot easier. We will do it with manners, with respect. You know, it’s about, “Yes, ma’am,” “No, ma’am,” “Yes, sir,” “Thank you,” “My pleasure,” “Please,” using your manners. I mean it’s a basic concept of treating people well but I think it has lost a lot.
Brandon: You founded Capstone Title in 2014. Is that what I heard you say?
Brad: That’s right. We kicked off January of 2014.
Brandon: So most people I think when they start a business, it’s because there’s an opportunity. There’s an opportunity to make some money. Somewhere along the line, though, you came to this conclusion that you really needed to intentionally develop a culture, attract the right people and really see through that vision. How did you come to that conclusion that you needed to build a great culture with great people?
Brad: Well, I mean a lot of it is education.
Brad: You know, reading books. I read voraciously.
Brandon: So you were inspired by maybe some books you read.
Brad: Inspired by that. I also am – I’m a member of the Entrepreneurs Organization or EO and there’s an Austin chapter here. So I’ve been a member there for almost six years. I’ve learned so much through that organization about how to be a great entrepreneur, how to be a great business leader and how to be a better person, quite frankly.
So the support I’ve received through just reading and through my connections and the education I’ve received through EO really kind of buttressed that culture piece.
In addition to – you know, and I had been a part of past businesses and I’ve been an employee of past businesses. I’ve seen how people get treated. I’ve seen how people react to how they’re treated and I wanted to do it differently.
Brandon: Besides stating your mission and your vision for the organization, just using words, what things from a tactical standpoint are you doing to intentionally build that culture? I mean, are you doing anything from compensation or perks and benefits, recognition program? Anything that’s really unique to Capstone Title that is worth sharing that has been kind of a foundational piece for building that culture?
Brad: Absolutely. I love sharing this stuff because I would encourage other small business owners to –
Brandon: Yeah. We appreciate that.
Brad: To reproduce and do some of the things we’re doing too. It’s not – I mean we’re not recreating the wheel by any means. But we’re just being intentional about it.
Brad: So OK, so some of the things, we profit share. That’s first. We celebrate work anniversaries with a card and a $50 bill and the note is, “Thank you for all you do. Go out and have a nice dinner with your spouse, significant other, friend,” whatever.
Brandon: And there’s something about cash too. People love the cash versus the gift card. Just it feels transactional, right? But the cash feels something – it feels like something more.
Brad: Right. And it’s not a huge amount but it just – it’s something to say thank you.
Brad: And they get recognition and know that they’re appreciated. Every week during our Monday morning meeting – we have a company-wide Monday morning meeting every Monday at 9:45 and we celebrate greatness from the week before. So we talk about feedback we’ve received from clients or folks involved in transactions. We complement each other and thank each other for being good team members, et cetera. We recognize milestones and other achievements that the individuals are making. So that’s a big part of that and just – it’s just a vocal thing that we do during the meetings. So I think people appreciate that.
About once a quarter, but at least a handful of times a year, maybe twice, two or three times at a minimum, we elicit specific written feedback from the team. We call it the stop-start-continue exercise. We ask everybody, “What do you want Capstone to stop doing? What do you want Capstone to start doing? What do you want Capstone to continue doing?”
We elicit and we say it can be anonymous or you can put your name on it, whatever, however you want to turn it in. But please provide feedback, so we can learn and we can grow. We’re a transparent company. We share our numbers and our financials with our team members and it’s all about everybody being a part of a community.
If it’s a top-down, keeping secrets, everything is confidential, you only know what you – you know, what we allow you to know, it creates drama. It creates friction and it creates resentment. I’ve seen it happen firsthand in the past.
So I wanted it to be different and allow people to feel valued and appreciated.
Brandon: Do you mind if I pull the thread on that, that transparency thing real quick? Sharing financials is always a fascinating topic to me. How much do you share? Do you mind mentioning what you actually share with financials? I think that’s a really good piece of advice for a lot of people because they want to be tied to something bigger than themselves. If you give insight as to the performance – they’re adults; they can take it. But I want to know what you share.
Brad: Absolutely. So we have basically three metrics that we follow every week. So we run our business on the EO’s Traction operating system. It’s the Entrepreneurial Operating System, Gino Wickman, called Traction.
So every week, we have our KPIs, the key performance indicators that we follow and that’s orders in the door, closings that happen, and revenue that comes from those closings in both the commercial and residential. We actually separate it out just to track it because the departments are a little bit different. But every week, we write it on the board. We have a whiteboard that we write the numbers on and what our goals are and whether we’ve met the goal. If we didn’t meet the goal, the number is in red. If we did meet the goal, the number is in green.
So it’s pretty straightforward and so we talk about those numbers. We look at the week before and then at the end of the month, we kind of talk about the numbers from the month and how we did with our goals. So that’s the real sharing that happens is every week and at the end of every month, we talk about our revenue, our profit, how we did on our KPIs and answer questions and we’re completely open with those. We share. Hey, when we have a bad month, we talk about why. We talk about what we’re going to do to make it better and then of course we celebrate the great months.
Then – I mean part of our – we call the – who we are and what we do – it’s tucked away in our employment manual. But part of that is we share our financials. Anything we can legally share, which I think employment information can’t. But other than that, ask. I will show you our financials. No one has ever asked. But it’s there for people to review, look at, our budget, all that stuff if they want to.
Brandon: That is fascinating. Do your employees say anything about that, whether they love knowing that – you know, the business performing well or does it engage them more in their work? What have you heard from a feedback standpoint?
Brad: I think it definitely engages people more. So we were recently named one of the best places to work in Austin by the Austin Business Journal and I think some of the feedback we heard – and it’s anonymous feedback. But the feedback we heard from our team was that the transparency is great.
What’s interesting too is there are some people that came – you know, came to work for us that had worked for some – maybe bigger companies or companies that operated differently. You know, they certainly never saw any financial information and they were just blown away.
On some level, it took some getting used to because they’re not used to knowing. Oh gosh, we had a bad month. Does that mean we’re going to shut down and lose our jobs? You know, you have to go through that. It’s OK to have bad months. You plan for it. Those are going to happen.
The good months offset that stuff and we have a plan in place and share all that – the vision and the plan to make sure people feel comfortable with being able to peek under the kimono, you know.
Brandon: There are a lot of title companies out there. Is the culture your differentiator? Because I wonder with compensation and benefits, if they’re pretty standard across the board in your industry. If you can’t do anything more than what your competitors are offering, is that culture really why people come to you and stay with you.
Brad: Definitely the retention piece.
Brad: And recruiting is starting to get there. It’s a competitive environment right now. Austin obviously, you probably know it’s one of the hottest real estate markets in the country and there’s a lot of real estate transactions out there.
Brandon : Yes, there are.
Brad: People are making a lot of money and quite honestly, a lot of companies are overpaying for that.
Brad: And being a smaller company, we have a hard time competing with that. So we can’t throw a big check at somebody. Then we’ve got to be different. So it’s – we’re going to create an environment where people can enjoy their work. I think that that’s – more people are talking about that. I think in the millennial generation, that’s more..