[Transcript]E001: Why Peer Advisory Boards Are Good for Business
Announcer: Welcome to the Catapult Business Growth Podcast. If you are a CEO with revenue exceeding seven figures, and you’re looking for ways to catapult your business, then this podcast is for you. We interview business leaders and talk about issues relevant to growth, management, leadership, and balance. Our goal is to empower you to unlock your potential and manage the unexpected with confidence. Learn more at catapultbusinessgrowth.com. And now, today’s episode.
Nina Radetich: My name is Nina Radetich, I’m your host for today. And we’re gonna kick off this podcast series with an interview with the founder and CEO of Catapult Groups, Brad Mishlove. Brad, it’s great to talk to you today.
Brad Mishlove: Thanks, Nina, it’s good to be here.
Nina Radetich: So, you serve as an executive coach, a mentor, a senior advisor just to so many different entrepreneurs, helping them bring strategy, systems, accountability to their growing enterprises. So, what we wanted to focus today is on pure advisory boards and how they specifically can help businesses. You personally are a big believer in peer advisory boards. Talk about your background and the experience you’ve had with peer advisory boards, and how they were able to catapult the businesses you’ve had in the past.
Brad Mishlove: Well Nina, I’ve been associated with peer advisory boards since around 1999. So, I guess this is probably my 18th or so year involved in that process, first as a customer of a peer advisory board, and now running a company that provides peer advisory board services.
Nina Radetich: Before you go on Brad, tell me exactly what is a peer advisory board, because that may be a new term for some people.
Brad Mishlove: Well for us at Catapult Groups what it means, it’s part advisory board; Which is a board of directors for your company; it’s part business education, part mastermind group, and then one of the other components that we think is really important is bringing in an executive or business coaching element to it to draw it all together.
Nina Radetich: Okay, you said part board of directors? So, kind of acting board of directors in some respects?
Brad Mishlove: Right, it’s an informal board, it’s really an advisory board. And in that way, what happens is is that it’s a lonely job being in charge of a company, it’s very isolating. And to surround yourself with a group of peers; Meaning folks that are running companies similar to yours in terms of size and maybe age, and a diverse industry, so you’re getting a wide variety of experience; gives you people to bounce ideas off of that have the same job as you. Because when you’re running your own company, being the person in charge, nobody else in the firm has that job. And it’s difficult sometimes to bounce ideas off your employees, as the responses are often provided with an agenda. And so, when you’re surrounded by peers, you’re getting unbridled advice, the best that they know. Plus a whole bunch of experiences and perhaps a fast track to the right answers.
Nina Radetich: You have received I would imagine some good advice over the years from your peer advisory boards, yes? What stands out to you?
Brad Mishlove: Well, for example, I was in a very rapid growth company built in the 90’s, the largest landscape company in the state of Nevada, and I think it was about the 60th largest in the country, and we did that from scratch. So we did I think about $200,000 in sales on our first year, and then 1 million, and then 2 million, and then 5 million, and then our combined entities when I sold the company at the end of ’06, we’re running nearly $20 million.
Nina Radetich: That’s rapid growth.
Brad Mishlove: It was, it was. We had all sorts of opportunities, and of course, we had a lot of challenges. Probably the best thing though that came out of my peer advisory group was the advice to actually exit the company just before the market slowdown in 2007. And so I feel very fortunate. Matter of fact, I actually everyday I thank that group and the people in it for the recommendations, the fortitude that they gave me, the confidence it gave me to exit at the right time.
Nina Radetich: That’s invaluable. Was that something where you walked in and you were contemplating, or was this something that they brought up that you hadn’t thought of?
Brad Mishlove: Well, no I had thought about it. And often times in business we think about a lot of things and then we don’t act on them. And I think the groups gave me, one, the right questions, but two, the confidence knowing that I had several people there that had my back. They were interested in my success and they gave me that window of opportunity and the confidence to essentially jump through it, at a time where we didn’t really know what was going on in the market. Because back in that time in the end of 2006, I don’t think anybody really knew that the market was gonna change to the extent it did. We knew it was slowing, statistically, you could look at that, and in the homebuilding business, it was very, very clear that it was slowing down. But, typical slowdown was 10 or 15 percent, not 95 percent. And so, in hindsight, my decision looks brilliant. In the moment back then it looked good. So, again I feel very fortunate for that advice at that time. And I saw that in countless ways through our growth, helping us get the right people in place. For example, in … I don’t remember the year, but let’s say it was ’97 or so. I hired a chief financial officer into my company, and it was the first time we really upgraded our accounting knowledge and software, and to become a very data-driven company. And the gentleman that we ended up hiring; A guy by the name of Garry Carter, and Garry is with two R’s, I think like the baseball player
Nina Radetich: Oh, cool.
Brad Mishlove: -He had a lot of experience. He had been a general manager, he was a CPA, had a master’s in business. He was probably 20 years my senior, and he not only served in my company as the chief financial, but he also served really a mentoring role for me, which was hugely helpful. My group was there every step of the way through that process of finding the right people, going through the interview and really providing the confidence, ’cause to spend the kind of dollars that we invested in hiring a higher caliber, it was a big leap at the time, and it worked out very, very well for it.
Nina Radetich: So, was the group then provided; Like you said; a level of confidence for you to take the next step, but isn’t their accountability as well in there?
Brad Mishlove: Well, there is. First of all, nobody in a CEO group … Once you present an issue or an opportunity with them, the group and then the individual members want to know what you’re gonna do. And of course it’s always your decision as to what you’re going to do, but they don’t want to come back the following month to the meeting or the month after that and hear you complaining about the same
issues. I mean, the comment would be, “Brad, is this really a problem? Because if you’re gonna keep bringing it up, do something. Otherwise, we don’t want to hear about it anymore.” So, that level of accountability I think is critical.
Nina Radetich: So there’s no hearts and flowers that go on in the advisory
Brad Mishlove: Well, there’s a lot of kidding around. We’re not formal, we’re wearing typically jeans and polo shirts. It’s a very casual environment. Albeit now we host it in a boardroom of a country club, but it’s still very casual. We like to call it ‘carefrontational’. So, we confront people in a caring way.
Nina Radetich: I love that, carefrontational.
Brad Mishlove: It’s kind of a goofy word, but I think it works for us.
Nina Radetich: But I think it sums it up of what goes on because there is the accountability piece, but it’s nicely done in a way that is motivating, rather than intimidating.
Brad Mishlove: Right. So, entrepreneurship I know from the outside sometimes it looks really glorious, but for most entrepreneurs, it’s very difficult, it’s very difficult. There are so many moving parts and pieces, so many decisions, and it takes lots and lots, probably almost an infinite amount of good decisions to build a really great company. It takes one bad one to tank it. And so, conversations might be, “I’m looking to acquire this company.” And when you present the reasons, your group might be saying, “I don’t think this is a good maneuver for you.” And in that moment, they might have saved you from catastrophic loss. So, that type of thing goes on as well. And then sometimes you’ll hear, “That’s a great strategy, feel comfortable going forward.” And I think having a group of a dozen or so CEO’s to help you through that process is very, very helpful.
Nina Radetich: So what goes on in a typical meeting then of a hot Catapult Group’s peer advisory board meeting?
Brad Mishlove: Well, I can’t quite tell you. No, I’m just kidding.
Nina Radetich: It’s top secret.
Brad Mishlove: So we do operate in a confidential environment, so all the members are under an NDA.
Nina Radetich: Of course, but the format so that somebody who’s looking into doing something like this would understand what they’re gonna get out of it and what to expect.
Brad Mishlove: Right. So, the format is actually pretty simple and it runs fairly regular. 8 out of our 12 meetings during the course of the year will have a speaker, a professional resource typically flown in, and they will present on a topic. And it could be something like estate planning, it could be on marketing, it might be on finance or on hiring the right people for the right seats in your company. A variety of topics. And that provides an educational background for the members. So, they’re getting experts in their field coming in and providing that. And that’s … I don’t want to say the easy part, but that’s the easy part, you’re
having a listen to a lecture, it’s in a very intimate environment. It is interactive, meaning that you can ask the speakers questions and how it applies directly to your business. But in my opinion, the real magic; Nina; happens when people are presenting issues and opportunities for their firm, but also listening to the issues and opportunities presented by others.
Nina Radetich: And is that the difference? Because I think a lot of people might say, “Why do I need a board of my peers when I can hire an executive coach and work one on
one with somebody?” Is that the difference?
Brad Mishlove: So, when people ask me whether I will just coach them, I generally say, “If the group is not gonna work for you in any way, shape or form, then I will do that.
But I want you to understand fully it’s not as good.” And the reason it’s not as good is that one person cannot give you the level of feedback that a mastermind group can, it’s impossible. The collective minds in that group, the bounce-back, the feedback, the experiences, and that testing and pushing back and forth is not replicable by one individual. And so, in that, the group gives a far better experience. Not only on your issues or opportunities … And over time typically our members, they go from having issues to really working on opportunities.
Nina Radetich: That’s great, it’s a transformation really.
Brad Mishlove: There is a transformation from that. And so, it starts out more tactical and ends up typically more strategic. What I wanted to convey is that the issues and opportunities that you work are important. I think there’s a lot of learning from listening to what others are doing as well. And so, whether you decide that whatever your colleague is doing is wonderful and you really like that concept, or whether you decide that you’ll never do that, those are both good learnings. And so that collective learning that comes from hearing the other issues, opportunities, and sometimes it’s systems, processes or as simple as, “Hey, I’m using this piece of software and that should work fine in your business, and in your industry, they don’t use it at the moment.” That’s a win. That’s a checkmark in the win column to me. It just accelerates your learning, but it accelerates your business at a much faster rate.
Nina Radetich: Where are people typically when they decide it’s time for a peer advisory board? What pushes them over the edge there?
Brad Mishlove: It’s generally not in the startup phase of a company. Startups are very, very difficult, there’s a lot of pieces that are moving, but they require the full time; Typically tactical; intervention of that CEO. Most typically what happens is as the company grows and makes a transition from an entrepreneurial firm to a professionally managed firm, the challenges of having the leadership skills to manage; And I’m not a big fan of the term ‘managing people’, but to manage a group of people. Those skills and the personal dynamics of all the people and plus the skillsets and understanding what you need, that is in my opinion much more difficult than a startup. Startup you have control on all the pieces. As your company transitions to this professionally managed level, it becomes more difficult. And the interpersonal
relationships, the skillsets, the getting the right people in the right seats, and then providing the right delegation to them and then allowing them to thrive requires a completely different skillset, and it is my opinion most difficult part for a company. Size-wise it depends on the type of company. So for a general contractor, that maybe a larger than for a service business for example. But typically it’s somewhere in the 5 to 10 million dollar mark where firms are needing those skills
Nina Radetich: Annual revenue, right?
Brad Mishlove: Yeah, annualized revenue. And somewhere north of a dozen or so employees, it just gets more complicated.
Nina Radetich: So, talk to me though a little bit more about the; For lack of a better term; the emotional side. Where is the CEO, where is the president, where is the executive when they say, “This is where I need to go”? Aside from tactical side of things, “My company needs this right now.” There’s something in their head, [inaudible 00:13:08] right? Need to make a change.
Brad Mishlove: I’m a little laughing because a lot of CEO’s come with; Excuse the term; but their hair, they’re like on mach five with their hair on fire, yes. And they’re not a fighter pilot, so it’s an interesting arrangement. But, they’re usually spending far too much time working in their business as opposed to on it. Great things come from working on your business. In your business, especially when you have a business of any girth, you become almost ineffective when you’re working in it. That pull to become more strategic, to get out of the day-to-day operation builds value in the company, builds value for outside buyers, builds value for the inside folks as well, builds value for the stockholders. And that is typically where we’ll start to see CEO’s get interested in improving their skillset to operate that company in a different environment than they were previously doing it as that smaller entrepreneur.
Nina Radetich: When you are hair on fire entrepreneur or CEO executive and you are looking for some solutions, I think; And I’m playing devil’s advocate here, but I think the last thing you want to do is spend an entire day away from your business, right?
And this is an entire day process, isn’t it?
Brad Mishlove: It is.
Nina Radetich: So how does that benefit them?
Brad Mishlove: Yeah, and it’s really hard. That mindset is hard to change, and so I see members go from starting with, “I can’t do that.” To, “I can’t do without it.” And it’s an interesting transition.
Nina Radetich: When does that transition happen?
Brad Mishlove: Well, it starts with a little bit of a leap of faith. They have to trust me or one of my associates enough to step away for that day and to put their phone down. I know a lot of folks today don’t want to do that, but the answers come from not speeding up sometimes, but from slowing down. It’s a little bit counterintuitive, and it works really well. It does require a different mindset, and we don’t get
better from doing the same thing constantly, we get better from finding new ways to do them. And change, it’s going to happen, right? We know that that one thing is inevitable, things are gonna change.
So I think if you’re too close to that business, too close to the weeds if you will, you just don’t see the big opportunities. And I think you’re subject to making more mistakes when you’re running around crazy as opposed to just slowing it down a little bit. So, I don’t know, it’s a theory of mine that you sometimes slow down to speed up, and I think it works very well.
Nina Radetich: What do you find most rewarding about running a peer advisory group? I would imagine you have seen the group come up with solutions that maybe you even as the facilitator did not see coming.
Brad Mishlove: Yeah, so interesting I started out facilitating peer advisory boards right in the middle of the recession. So, the first part of that was essentially talking people off the metaphorical ledge. And my mantra was, ‘live another day, it gets better tomorrow’. And so, that was a number of years of that. Now, fortunately, we have a cooperating economy, particularly here in Las Vegas, it’s starting to get fairly robust.
Nina Radetich: It’s nice to see isn’t it?
Brad Mishlove: It’s about time, absolutely. And we have a number of major projects on the board, and even some under construction that I think will carry our economy here for quite some time. We have a real shift of what I get to do.
So, it was very rewarding during the midst of the recession to help those people live another day and make it through. And fortunately, they did, and I think that felt really … I felt good. Today we’re doing some exciting things with growth with companies that I get really fired up about. It’s exciting to see companies doubling in size, hiring people, creating opportunities for their employees. It’s exciting to see acquisitions. Several of our members are buying companies right now, and that’s pretty neat. So, they’re looking at new markets or new product lines, service lines and adding them, layering them onto their
companies and building these great synergies. And they’re fired up to do it, they’re getting excited about it.
And that for me is very rewarding. I like to see the success, and I hope we don’t go back to what we had years and years ago again, but I also think that companies today are in better condition to weather that because they’ve put in the appropriate systems, they have the right controls, they know their numbers backward and forwards, and they have the metrics in place. But, very exciting times we’re in, and looking forward to much, much more growth coming up in the near future.
Nina Radetich: Great. Brad, thank you, and we so appreciate you sharing your insight on peer advisory boards and of course why they’re good for business. We look forward to many more episodes of Catapult Business Growth. Thanks for being a part of it, this has been fun.
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