Build Series EP.2: Upleveling as CEO with Rob Southern and James Bergeron – EP.243

Hood & Strong LLP – One of the nation’s premier full-service public accounting firms, Hood & Strong LLP provides buy- and sell-side quality of earnings, due diligence, assurance and tax services to search funds, private equity firms, and business owners and investors. The H&S Advisory team helps expedite a smooth, cost-effective transaction process that maximizes value and minimizes tax impacts for both buyers and sellers. To learn more about how Hood & Strong can support your M&A objectives, please contact Transaction Advisory Group Partner Jerry Zhou at [email protected].

Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.

If you are under LOI, please reach out to August to learn more about how Oberle can help with insurance due diligence at oberle-risk.com. Or reach out to August directly at [email protected].

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(00:00:00) – Intro

(00:05:36) – James’ and Rob’s backgrounds

(00:12:15) – Upleveling as a CEO

(00:32:19) – Measuring progress as a CEO

(00:35:36) – Discerning signal from noise

(00:43:21) – FInding your management style

(00:48:26) – Adapting to increasingly complex business environments

(00:51:26) – Studying other leadership styles

(00:56:40) – Developing and living inner values in the CEO role

Alex Bridgeman: Rob and James, thanks for coming on the second Build Series podcast, all about upleveling as a CEO. It’s fun to have the executive coach, former CEO, and then current CEO perspectives together in a room, especially since you guys work together. So, this is going to be a ton of fun. But I think the easiest place to start that makes the most sense would be going through backgrounds to give listeners context for each of your backgrounds and setting the stage for things you’ve done to uplevel as a leader and CEO. So, James, do you want to start and kick off? 

James Bergeron: Sounds great. And Alex, first and foremost, thanks for having me. I really appreciate you asking me to be involved. Quick bio, background, so I grew up in New England in a super small textile mill town in Connecticut. I eventually found my way to Harvard Business School, which we can talk about later probably as a result. It just has a lot of relevance to my own upleveling as a CEO journey. I lived and worked in New York City and Australia before living in California for 20 plus years. And after a couple of stints in PE, I completed two self-funded searches that led me to acquiring my first company, which was a specialty film manufacturing business, manufacturing and distribution of wine, champagne, and distilled spirits capsules. So, the very top of a wine or a champagne bottle was made by, about 70% of the market, at least in the US, was made by my company, Maverick Enterprises. The second company that I acquired was an on-prem software business that we pushed into a SaaS model. It was really in the early days of SaaS as well within the intellectual property space. So across those two companies, I was CEO for about 10 years. I also co-founded and was chair of a FinTech SaaS sports business that we exited after about five or six years to a platform company, Elysian Park Ventures, which some people may know as the investment arm of the Dodgers, Lakers, and the Golden State Warriors. For the past 12 years, I’ve spent about, I spend about a third or half of my time CEO coaching within the search fund ecosystem with a focus on, quote unquote, first time CEOs. And I’ve roughly coached about 50 or 60 of the Rob Southerns of the world, if you will, during that time. And in addition, I am a board advisor at Pacific Lake and sit on a couple of boards, also co-invest. And I think you teed it up as well, like, how did Rob and I first start, how did we come together? We’ve been working together for about four years, me as his CEO coach. I think it’s four years in November, if I remember. And I still remember it like it was yesterday, the conversation itself, and the background for me was Rob had a really- grew up with a model where for him, Jim Southern had worked with Irv Grousbeck and things that impacted him that I remember him sharing with me were things like learning and a safe place and being able to count on another person regularly. And I can’t- he used the word mentor; I’ll let him determine whether or not that’s been true or not, but possibly somebody more as a river guide who might have seen some of the things that he knew himself that he would see and also that there’s a lot that he didn’t know or hadn’t seen before. And I had, although I knew Irv and Jim’s story as luminaries in this space, I’ve never met Irv. I’ve only met Jim a couple of times. He probably wouldn’t even recognize me in a crowd. But I loved that he had a model and I loved that he had a framework, those are two really important things to me as a CEO coach, and how intentional he was being already at that point, that he was being about it in the earliest of days of us working together. 

Rob Southern: Well, I learned a couple of things about James actually just now, so glad we did that. Yeah, so my background, like the really quick version, obviously, I did grow up around the search fund model. It was entrepreneurship through acquisition was literally dinner table conversation growing up. When I graduated from college, I wanted to do well by doing good and spent about eight years in clean tech, clean energy in mostly the Boston area before going to business school at Carnegie Mellon. And while I was at Carnegie Mellon, I raised my search fund, started the search in August 2017, two months after my wife and I had our first kid, and then closed 15 months later, November 2018, on the acquisition of Ascend Software. So, we provide accounts payable automation software to large enterprise customers in the cloud. And yeah, to James’s point, I think I knew from those dinner table conversations growing up that my dad didn’t do it alone, and I had wanted to ideally find a partner to conduct a search with during business school, but I just didn’t meet the right person. And so pretty early on, because that would have been in 2019 or so, I reached out to my board and said, hey, I’d like to work with a coach. And one thing that stood out to me, I think my dad told me at one point that in the early days at least, he was probably on the phone with Irv a couple times a week and often for an hour or so. So really just frequent, tactical conversation about running a business, dealing with employees, first time CEO stuff. And I knew I wanted that kind of guidance and mentorship myself. So yeah, I sought it out. What I really liked in James’ profile, excuse me, was he had been a CEO before. And that was important to me. I don’t think you have to have been a CEO to be a great coach, but I knew that I wanted someone, not just in the frameworks and the coaching mindset, but they would really understand and appreciate where I was coming from in any number of scenarios, whether it’s letting someone go, a strategic decision, budgeting, what not. So yeah, that’s my quick background and kind of why I sought out a coach to be with. 

Alex Bridgeman: And so how would each of you define upleveling as a CEO and kind of what that means, especially as a first time CEO where before you even uplevel, you need to learn what the basics and fundamentals are before you can move on from there? So, I’d be curious what each of you see as upleveling and how you would define that. 

James Bergeron: Rob, you want to tee it up here again? Happy to do that. But if you want to run with it, just tell me. I think, Alex, again, great question. I try to, again, think in frameworks which is like what it’s not. And it’s certainly not immediately tangible. I don’t think it’s particularly well understood or defined and it’s definitely not the same for everyone. It’s not one thing, say like developing a classic first 100-day plan that we’re also used to and familiar with and becoming CEO of our first company. And I also think when you think about it that way too in the 100-day plan, how specific it is or how tangible that is and also how finite it is. It’s literally 100 days. And whereas I think that upleveling as a CEO almost has an elusive component to it. It’s a bit obscure, opaque, intangible. But I also think it’s a journey and not a task in my experience. And so then I sort of think about, well, what does it look like? How do we try to think about what it looks like? And for me, I think both as a former CEO as well as a CEO coach, I try to think of that as habits and practices and probably a support system as well. And maybe I’ll even give some examples of ones that I use myself to this day. One of my daily rituals as an example, which is a habit, is I literally write on a notebook, Alex, as you now know, I sent you a copy of it this morning, and I ask myself the question quite literally, what do I need to get right today? And I try to drill that down to two or three things. It’s a habit, and it’s a habit I try to talk and use, be really clear with the CEOs that I work with, how valuable it is to separate the noise from the signal. Noise from the signal is what we’re constantly having to deal with as CEOs. I think the second- So that’s a habit that I use. The second one is practices, things like regular reading. I definitely find I think many searchers are, quote unquote, chained to the business and not spending the time I think to sort of read and take time regularly away from the business. I honestly think a board expects, probably even encourages CEOs to read. But I do think a lot of CEOs think or even feel guilty – wait a minute, should I be reading or should I be in the business? That’s a tough thing to balance, I think, to learn and get comfortable and confident with. And by the way, just as an aside, if Warren Buffett is a voracious reader, my general view is if it’s good enough for Buffett, then it’s probably good enough for us. And then I also think being really intentional with our own development, sort of structurally and with our time, things like the rule of 47, which generally says that for every 40 hours that I’m working in and on the business, I probably need to be spending seven hours a week on my own development as a CEO. And then scheduling that unstructured time, that is key outside. So I think those are some examples for me of habits and then some practices. I’d love to hear from Rob also some that he might use or if he agrees or disagrees with that framework. 

Rob Southern: Yeah, that all resonates. And I think my original concept of it was maybe a little abstract and has become more tactical over time. But it really began as like, I don’t know, someone said at some point, an important skill for leaders is self-awareness. And for better or for worse, I think I definitely have that. The for worse part of it is it can be all-consuming if you’re not doing something productive with the awareness you have of how you’re behaving in front of employees or your approach to a decision or whatever it might be. And so, I knew that I wanted to do something productive with that self-awareness, and upleveling as a CEO means basically to me sharing those insights, concerns, beliefs, whatever, with someone and then kind of going from there and translating them into how you operate as best you can. Another way I thought of it was I bought a $3 million ARR business and hoped that I would grow it to 10 or so in some amount of time and that seemed kind of like myself, as I was and understood myself to me, could do that, maybe, but then what if I want to grow it from 10 to 30 and keep my job? And so, I just knew that like I would have to be learning along the way because sometimes you hear about like the guy that takes it from 3 to 10 but not 10 to 30 or something. So I just wanted to put myself in a position to be that guy if we were fortunate enough to have that possibility. Yeah. And then I guess the last thing I would just say is, and this contradicts that a little bit, but managing imposter syndrome. I think imposter syndrome is very real, even to this day. I will have been in the business for six years in about a month or two months, and I still question whether I should be here and in this seat and if I’m making the right decision and everything. So up leveling is getting comfortable being uncomfortable and still making good decisions and doing the right thing for the business and employees and shareholders in the process. 

James Bergeron: Yeah, Rob, I’d also add practices and habits to that, maybe even support systems, which I think you do a phenomenal job with that. So what it is, what does it look like? What does upleveling look like? Habits, practices, well, let’s go to support system. I think one is checking in with your board regularly. I think that’s a truism, and I think that’s important. Beyond that, though, YPO, EO involvement, there’s another support system that you use and you use really well that I think more people could use. You use a CEO coach, of course. And you said something really profound, which is continuously learning. I’ll just say, Rob’s a lifelong learner, Alex, which not everybody is, even in our community. Curiosity, yes, but Rob has a unique- he’s got, in my opinion, he’s got the it factor where you combine tremendous intellectual horsepower with ambition, with consistency, and with a continuous willingness to be curious and learn more and do more. And so, I do think the support system is really important. I once wrote an article, I wasn’t broadly covered, and by the way, it just means that I’m a terrible author, but I once wrote an article likening being a search CEO is a lot like being a mountaineer, someone who can traverse mountains. You would never do that alone. In fact, you would not only never do it alone, you’d never even do it with one or two people. You’d actually do it with a whole cadre of people supporting you. And I do think being a search CEO is very similar. I always call it an extreme sport. Rob, you’ve heard me say that many times before. I think it’s an extreme sport, and I think mountaineering is an extreme sport. And I think having a broad support system is really important. 

Rob Southern: Yeah, definitely. I mean, my kind of tactics, if I was describing earlier just what is up-leveling as a CEO in my mind, the actual how and the tactics of it are what you’re talking about, James. I mean, I’ve adopted your critical three. What are the three things I need to get right this week? I write that down every week. That’s part of my kind of homework assignment that I send back to you. But I also then do it every day – for each one of those things, what am I doing today to make sure that I get that thing done or get it right. I’ve added a Graham Weaver practice of writing my five-year goals down every day. And there’s essentially like one having to do with relationships, one personal, one business. And same thing, like what am I going to do today? And I believe that, I think it’s like James Clear said habits are the compound interest of self-improvement. So, my hope is that even if I’m only like 40 to 60% consistent on a weekly basis, that’s much better than zero. And some weeks, it’s every day, and some weeks, it’s twice a week because I’m in a conference or something and that’s what I’ve got to get right that week. And then, yeah, sort of systems of accountability, so a coach, YPO Forum has been amazing. And then just other frameworks that are available and always think about the growth mindset and just sort of learning and absorbing and trying to put things into practice. 

James Bergeron: And Alex, I’ll jump in here real quickly, which is Rob just used the word mindset. So, I think we’ve identified the first part, which is habits, practices, and a support system of what does upleveling as a CEO look like. The second piece is I think exactly what Rob just said, which is mindset. I think that’s equally as important, if not more important. And so, the things that I think about that either I tried to do throughout my career or try to work on with my CEOs is embracing, mindset-wise, embracing what others before us have learned from successes and their failures and mistakes. I think another one would be the mindset or developing the realization that what got me to this point isn’t going to get me to the next. And Rob hit it spot on. Like when he bought the company at 3 of ARR, he is not the same person today as the CEO. And part of that is that mindset, like almost every six months or every 12 months, that recognition, you know what, it was good then, but it’s not good now for me, for my people, my investors. And that is a critical mindset. And the last one, I think for me, the one that speaks to me that’s probably the one I use most is a belief that if you want to be ordinary, then do ordinary things, and that’s okay. And ordinary even in search, like it’s okay if that’s how you’re built and what you want to do, et cetera. If you truly, however, want to be extra, and I separate these, extra, all caps, extra ordinary, then we have to be willing to do extra ordinary things. Because extraordinary sounds like so untouchable, and that’s why I separate the two. But I think to really highlight the extra ordinary things that Rob does and that people like him do are those practices and the habits consistently and regularly over and over again. So that’s how I think through it. 

Rob Southern: I feel like it’s worth mentioning, by the way, like the jury is definitely still out on whether I will have been sort of successful as a CEO in terms of enterprise value creation and all those traditional things you think about. And it’s an emotional roller coaster day to day, week to week, month to month. From where I sit now, we can have a home run and we can go to zero. You still need to uplevel as CEO because we all kind of take on certain risks and aspire to certain outcomes when we do this, and either way, whatever happens, I will have spent six to ten years of my life dedicated to this and I want to make sure that I personally as a leader have grown from it, and I do believe that we’ll have a good outcome. But it won’t mean that- that can’t be the only measure of was the time well spent. And so, the fact that I’ve put the time and effort into upleveling as a CEO and really just as a person, because everything I learn in this job applies to lots of areas of the rest of my life, that’s just really important to me. 

James Bergeron: Alex, Rob just teed something up that I think would be awesome for us to cover if you’re willing, which is, okay, so then why in our community does it really matter as a search CEO to focus on upleveling? Because as Rob just said, investors and boards, that’s what we want. Because what happens is from the time you close and become CEO, you have this investment case, five years out, six years out, four years out, whatever. And I think the search community does a really nice job of those first sort of 90 to 180 days, getting first 100 day templates and we can learn from others. And I think they also do a really nice job the last 90 days, supporting through an exit. The middle periods, I think, are the hardest and feels like a desert many times to a CEO, that we’re out there alone, even though they’re there. But I think, so if we think about it, then why does it matter? And I think there’s two components. One is there’s a subjective component. Two, there’s an objective component. The subjective in my mind is like because the outcome isn’t guaranteed, exactly what Rob said. You can go from hero to zero in the snap of the fingers, both EV and figuratively as reputationally, of, oh yeah, did you get 10x, or did you get 2x? Well, again, nothing’s guaranteed. And by the way, even if you’re early on or midpoint, you’re in the money or you’re doing really, really well, you haven’t done anything. And some of my CEOs really get offended sometimes, I think, when I say that. And they say, what do you mean I haven’t done anything, James? I’m in the money. But you haven’t crossed the- you haven’t gotten across the finish line, and lots of things can go wrong – key departure in the midst of an exit, competitive landscape unexpectedly shifts underneath you, systematic economic movements, black swan events. The list is just a mile long. And the other subjective reason I think is important of why to do it is what Rob’s also said is there is life beyond search. You’re a person, you’re a husband, you’re a father, yeah, you’re a son. But also, life beyond is maybe I want to be on a board of directors someday. Maybe- I was very fortunate to be on the board of trustees of my undergraduate alma mater. They obviously lowered the bar that year for six years. If I hadn’t been upleveling as a CEO, I don’t know that I could have had any contributions. And then, PE CEOs, if that’s an aspiration. So, I think there’s lots of good subjective reasons that I think Rob touched on to uplevel. Objectively, I also think that there is a framework, which is skills plus experience equals value. And so, by the way, in our community, one of my favorite quotes is, it’s not the degree but the skill that achieves it. That’s Elon Musk. We all have top five MBAs. Typically, it’s the only way we get in here for the most part. But the degree almost entirely and exclusively to our- it just doesn’t mean anything once you close and you’re now running the company. And so that formula, skills plus experience equals value, I think is an interesting one to think about. And the way I think about it is at the lowest end of that range, you’ve got a burger flipper who is low skill, low experience. Of course, all due respect to burger flippers, but they’re $8 to $10 an hour. On the other extreme is let’s just say a brain surgeon at $1,000 an hour, super high skills, super high levels of experience. The investment case implies for most of us $500 an hour, $250 an hour when you take the equity plus the comp over the time that we run the business. And what happens if the economic component of the equity doesn’t materialize? What part can we as CEOs impact? And it’s the skills part of that equation. Skills plus experience equals value. And for me, the value is dollars per hour. That’s how I’ve always tried to think about it. And I can tell you, when Rob and I first started working together, like so many searchers, myself included, he was probably in the, hopefully he doesn’t take offense to this, $100 an hour range, $75 an hour range in terms of skills plus experience. Whether he, quote unquote, successfully lands the EV that he wants in the investment case, we don’t know yet, but whether he does or doesn’t, he’s going to leave here, in my opinion, at least the 200, 300, 400 dollar an hour of value type of person, type of opportunity in the world because he’s spent so much time upleveling as a CEO. 

Alex Bridgeman: It sounds kind of like what I’m hearing is that in the middle part of that journey as a CEO, progress is really hard to measure. Some of the business areas are easier to measure, revenue, customer count, stuff like that, ARR or retention, those strike me as fairly straightforward to measure, but even then, like you said, Rob, they can kind of come in and out. The qualitative, the personal, what is my skill level as a CEO, is that improving, that feels a lot harder to measure. Are there things that either of you have identified or ways you’ve identified to measure that progress so you feel like you’re making improvements, you’re making consistent progress, even though it’s harder to measure and harder to tell, is there some way to feel that same sense of progress as a CEO when you look at your own style and skillset? 

James Bergeron: Rob, any thoughts of how you think about how would you know whether or not- like I have an idea, as your coach. How do you think about that? 

Rob Southern: The first thing that comes to mind is sort of speed and quality of decision making and how often you get it right, which you can even if you don’t know the ultimate outcome from an investment standpoint, you can look back on decisions over the last month, quarter, year, whatever, and be pretty confident that it was the right or the wrong decision and that you made it fast enough or not. And I’ve definitely learned a lot of ways not to do things. I’ve made lots of bad decisions quickly and that took me too long. But I think the number of decisions that I make more quickly with more confidence and that turn out to be right is definitely higher today, meaningfully higher than six years ago. So that’s the first thing that comes to mind. 

James Bergeron: Rob, I was also thinking, maybe we all could define it as we do get executive session board feedback quarterly, as an example. Maybe we’ll hear there how we’re doing, what their view is of us. And then maybe the second- although some of that could be subjective, but the clear objective one to me is our annual reviews with our board. I think that’s going to largely determine, I think both mathematically, economically, and therefore objectively, how we’re doing along the way. And again, is it perfect? No, but I think it’s at least a scorecard. What do you think? 

Rob Southern: Definitely. I mean, I think just, we don’t really do formal annual reviews, but we have a executive feedback session after every quarterly board meeting. And I ask for feedback. My board is Keith Gross from Pacific Lake and Mahesh Rajasekharan, the CEO of Cleo. And they go away for 15, 20 minutes, kind of pow wow, and then come back to me and deliver some feedback on my performance, the company’s performance, the board materials. And then, of course, I talk to both of them throughout the quarter or the year. And their observations about how I’m approaching whatever’s going on in the business for sure are a good measure of how things are going and if I’m making progress. 

Alex Bridgeman: Rob, you talked about your decision making improving over time and that’s a good way to measure am I making better decisions than I was a year ago, five years ago. Part of making a decision, of course, is figuring out what are signals to pay attention to and what is noise that is immaterial and not actually relevant to the key decision you’re looking at. Can you talk about distinguishing the two and maybe how you’ve gotten better over time at that signal versus noise distinguishment? 

Rob Southern: Yeah, definitely. I think what comes to mind is decisions about people in particular and sort of short-term versus long-term oriented thinking and decision-making as it relates to people. I was at a conference this week and was fortunate enough to spend time with most of what we now call our senior leadership team which is my executive leadership team and then one each of their direct reports, and I just got to look around the table and say out loud that I feel like not only do we have great people at this table, but each one of them in turn is hiring better people that are right for their role and what the company needs now and in the future than we ever have before as a company. So, if I’m upleveling as a CEO and then specifically the decisions I’m making and the types of people that I bring to the business, then that pays dividends when they in turn do the same thing and bring in the right people for the jobs that we’ve got to be doing. And to the signal versus noise piece of it, there’s always a lot of noise. Like, this customer has this issue, or we have this issue with our financials, or there’s this sort of competitive threat, and that’s important, but it can be noise. And I think about top grading and writing a job scorecard. If you write a job scorecard around the vision you have of the world two years from now that the person you’re hiring today has created, that exercise basically gets you to focus on the signal and not the noise. Because am I hiring someone who’s going to deal with this customer or this specific competitive threat? Or am I hiring someone who’s going to create a resilient, fast-moving business that can meet demands of customers and build their product, et cetera, whatever it might be. So, really just having a clear understanding of what your goals are with hiring in particular, and what the person you’re hiring for has done for you and the business two years from now, because it takes time, and then really focusing on that when you fill the role. That forces you to disregard some of today’s noise. 

James Bergeron: Alex, I’ll also say that strong belief, I mean, I’ve led, built, grown, single digit, high single digit, low teen growers and well into the double digits, and I think noise is exacerbated and compounded by growth. And Rob’s business, he’s quadrupled it effectively in six years. And just think about how much noise he’s had to contend with. And so now we’ll bring it back to upleveling the CEOs in terms of approach, habits, practices, and support system. He has put the appropriate upleveling as the CEO practices and support system in place to handle the noise a lot better than most. And one example really comes to mind for me, Rob, it was a couple of years ago when I think frustratingly, you were having a tough time, I think, identifying the next CTO for the business. And through our weekly sessions, I remember challenging you at some point with something pretty extreme, like, hey, Rob, do we both agree that this role is important and probably the most important thing to get right this quarter to launch off of? And then if so, how do you feel if you figure- I posited to him, how would you feel figuratively if you canceled everything on your calendar these next few weeks and that’s all you focused on? And he took the bait, and he was willing to- I asked him to jump, he jumped, like, okay, I think, yeah, my remembrance is I think he spent 75, 80% of his time over the next two or three weeks on that particular topic. And sure enough, no surprise to me, he had identified the candidate. Now, I think it took time for the candidate to come on board, but we had at least identified or he had identified the person that the business really needed. Let me pause because, yeah, Rob, it still stands in my head, like that one session. 

Rob Southern: Yeah, that sounds about right. And then that person said no. And so I decided, I drove up to Seattle and met him for lunch. And he’s been our CTO for a little over two years now, and he completed a replatform of the application, and we’ve migrated all but two or three of our legacy cloud customers to the new cloud product, which is some good work we’ve done for the next owner, whether that’s us or someone else. So, yeah, that’s about how I remember it and that’s paid off. 

James Bergeron: You know what’s cool, Alex, is what he just said was he was rejected, didn’t accept it, got in a car, drove, spent some time with this person to objection handle, inspire, motivate, pitch. That is and was extra ordinary. There’s the subjective component in my mind of what it takes, I think, to continuously up-level as a CEO. 

Alex Bridgeman: And this also kind of touches on another topic we were reviewing about developing your own brand and style of leadership. Like, a couple years from now, Rob, you were talking about what does the business need in two years? Well, could you also look inward and think, what CEO does this company need in two years, and how am I going to get there? And what is my- if you walk into Ascend Software, what kind of business do I want that to look and feel and sound like? And part of that is going to be a reflection on your own leadership style and how you decide to run the company. But if you’ve never been a CEO before, you may not know exactly what you want that to look like and what tactics and things you can do that would make that kind of style a reality. How did you look at your own, like look inwardly and think what is my- how do I want to run a company, what is my style, and how do I refine that and iterate that over time? 

Rob Southern: Yeah, I mean it’s definitely evolved. I think in the beginning when imposter syndrome was probably at its strongest in terms of an influence, I still value transparency, but I explained a lot of what I was thinking and what I was doing and why I was doing it and generally sought tons of input and was slow to move, which is probably right for in the beginning. And then over time, I have felt more confident, less of an obligation to explain myself especially to certain people if you’re not kind of, yeah, just it’s felt increasingly, I feel like I think Bill Egan says you don’t owe anyone full disclosure of your thoughts. And I don’t feel a need to explain everything to everyone anymore, but I do value transparency. And most of the time, most people are better off understanding at least the why, generally, behind a decision. And then that gets into long-term vision, North Star, which is a weakness of mine. We have not articulated that, back to self-awareness. Like I know that we have not articulated that well enough to motivate people to the extent that I would like to. And James and I recently have been talking about when do we, how and when do we spend time doing that, and my executive leadership team and I have have begun that. But two years from now, Ascend needs a CEO who’s more comfortable making big decisions about the direction of the company. I won’t be too hard on myself here, but several of the major decisions I’ve made over the first six years, it didn’t really feel like decisions. There just was no other option. We had to replatform or else the software would have collapsed under its own weight and the company with it. And then the decision to launch a payments product was just so clearly, if we were right about our assumptions, the most NPV positive thing we could do, that we put off another big decision. And the next decision to integrate with another ERP and diversify our channel and platform risk feels pretty obvious, and there’s no excuse at this point to not do it because we’ve re-platformed. But two years from now, I’m probably going to need to be making a couple of those decisions at the same- concurrently and they’re not going to be as obvious. The right answer is not going to be as obvious. And so just continuously improving on that dimension. 

James Bergeron: And, Alex, one of the principles that I’ll put out here is the great thing that Rob does have time, and so it’s not tomorrow. It’s not next week. It’s not next month. It’s probably, he’s right, I think it’s probably a couple years out. And framework-wise, I always think like, well, that’s the outcome. Rob knows that that’s the outcome. But what really matters is the process. What’s the process that he takes between now and then to optimize that decision? And what I also know is, what’s great is Rob is really open-minded to, it may or may not be me, in terms of leadership of this organization. And the greatest thing is like it’s not something he’s focused on. What he does focus on is, again, the continuously upleveling as CEO. And he may, actually he may quite likely be the right person. Why? Because of the process that he takes day in and week in, month in and month out to develop those skills and experiences as a leader. 

Alex Bridgeman: And part of what you’re touching on too is that as the business grows and encounters new challenges, it’s becoming increasingly complex. So, the decisions that maybe felt simple and obvious beforehand, there’s a lot more complexity, the business is bigger, more people are involved, there’s a lot more complex dynamics to manage, which is also kind of interesting when you think of your own skill as a CEO. Like if you were playing a video game, and as you get better, the levels get harder. Even though you yourself have gotten better, they still feel just as challenging as they used to. How do you kind of approach that dynamic where your business becomes increasingly complex and you have to keep adapting to a harder and more challenging world? What’s that like? 

Rob Southern: Yeah, well, I’m actually living that right now in a very specific way. This might be too tactical of an answer, but I’ll go with it. I have four direct reports that are executives in the company. I’m acting head of sales at the moment, so I have a couple others that are individual contributors. Each of those four executive leaders has a 20-person team under them; one of them is smaller. The number of initiatives that we’ve got going on that roll out to each of those three people at any given time is five to ten that are each critical in their own right to our success. And we’re definitely reaching the point where I cannot be as familiar and involved with each of those initiatives as I would like to. My nature is to be pretty involved, pretty informed, and helpful in decision-making and executing well on each of those initiatives. And I just can’t. I don’t have the bandwidth and the time and the expertise. And I’ve also always been loathe to ask anyone to fill out a TPS report, from OfficeSpace. Like, one thing that just gets me is the idea of work about work. And so, my executive leaders, for better or for worse, have always operated with a lot of autonomy, probably too much, and now I’m starting to figure out how do I put some structure in place that enables me to stay connected, informed, helpful without imposing too much of a burden on those executive leaders. And that involves having the conviction to assign them the task of providing these updates across as many fronts as I deem it necessary, to consistently really consuming that and figuring out how I engage with it. And just we can’t cover it all in our hour, hour and a half weekly executive leadership meeting anymore. So that’s just an example of where I’m living through it, adopting practices and tools to doing it a new way. 

Alex Bridgeman: And I think you both talked about reading earlier and inheriting that as learning from other CEOs, other leaders who have perhaps faced many of the same challenges you do. What’s been helpful in terms of examining the style and brand of leadership for somebody else and kind of morphing ideas and insights from what they’ve experienced to your own style? Like Rob, if you’re looking at different ways that teams can update you and give you progress on key initiatives, how might you go about studying how other CEOs manage that process and kind of adapt it to your own style? 

Rob Southern: Yeah, that’s a great question. I don’t think that I’ve generally gone about it like topic by topic. I read kind of widely. I’m really interested in like behavioral economics and psychological principles and how they influence behavior of an individual of an organization. But I also read like the biographies, Steve Jobs, Elon Musk, and I’m just fascinated by that stuff, and right now I’m making my way through Poor Charlie’s Almanac, like the recording of all of Charlie Munger’s speeches which is fascinating. And I think mostly what I- a lot of what I draw from that is obviously new material and approaches to whether it’s hiring or fixing a problem in your business but also validation because very few of these ideas are really new or novel. It’s often just having the confidence to implement them and then doing so hopefully, whether it’s something you’re doing once and doing it right or adopting and trying to do it consistently over time. So, I would say, and that’s something James and I have talked about recently is like kind of just when I have maybe this idea of how I should manage part of my business or handle a problem, sometimes when I’m reading, I end that that’s a good approach and then developing the confidence to just go and actually put that into practice. 

James Bergeron: I had no idea, Rob, what you were going to say on that. I loved your answer. Because for me, what I took from it, Rob, was it’s an amalgamation of so many different pieces that you’re taking from. And so, whether it’s books or others, experiences you have or had, conversations you have, again, pulling in your support system, you’re basically taking what works for you and leaving behind the rest to kind of create the truest most authentic version of Rob Southern, and I think that’s great. I think for me, I have tremendous gratitude of early on I was around some great people, some great leaders, Steve Townsend, who ran United Natural Foods for a while, he and I grew up in the same town together, which was pretty ironic because it’s such a small town. Steve Friedheim, who runs Cyrus Capital, I think he partnered with Virgin America, sorry, he partnered with Richard Branson to build Virgin America. I was very, very lucky that Steve was my first boss out of undergrad. And so I’ve been in board meetings between PE and running my own things for probably the last 30 years. And so I’ve just, similarly, actually, it’s really similar to Rob, I’ll grab things that I really either admire or like about someone’s style and beg, borrow, and steal. And what’s the old saying? If you want to emulate someone… the biggest compliment you can give anyone is to replicate or emulate what they do. And so I have tried to beg, borrow, and steal the things that I really think would be unique or impactful for my own leadership style. I think books for me, if anyone hasn’t read it yet, especially in the search community, Steve Jobs’ coach was a guy by the name of Bill Campbell, a book written about him is called The Trillion Dollar Coach. I was lucky to have met him a couple of times, a remarkable person. Rob knows this one, Mr. Monkey and Me I really like. The Knight in Rusty Armor is a great metaphorical journey of a knight. I think any of us can learn a lot from that. And other things, like I think about time, how precious time is in everything we do as leaders and so 4,000 Weeks has also really impacted me. It basically says we’re only around on this planet for 4,000 weeks, so man, you better use it wisely. 

Alex Bridgeman: How would you describe the inner drivers and inner values that you’re living and trying to be a better CEO? Are there driving forces inside you that are pushing you along and are your wind at your back to improve yourself and grow your company. Like I can imagine some motivators being helpful early on, but over a 10 year period, probably less so. What are some of the drivers that long term have been really impactful for you? 

Rob Southern: Yeah, good question. I mean, I can pretty much pinpoint in my career the moment that I decided I actually wanted to do this because my dad was a broken record growing up, like if I would ask him anything related to maybe how I should- what I should do professionally, he would say something like, well, you could buy a small profitable growing business and run it. I’m like, I’m 20, what are you talking about? But eventually, I was fortunate enough to be part of a- I sort of merged his advice with my own aspirations of going into clean energy and clean tech. And I joined a venture-backed company. We grew. It was 150 people and like 35 million of revenue when I started. It was 750 people, 400 million of revenue when I left six and a half years later. And so I got to like grow with the business. And the founders were these two really smart, dynamic guys. But eventually I found that I didn’t like not being in the room where decisions were being made that influenced my life and impacted the lives of my peers and the employees of the company. And I guess I had assumed prior to that that you might only ever want to run a business to make a lot of money or something. And that’s when I realized that actually what I wanted to do was create a rewarding and fulfilling work environment. That’s a really worthy challenge because I was motivated. There came a point where I was really motivated by the mission, but I wasn’t feeling- it wasn’t a rewarding work environment for me anymore. And so that’s ultimately why I actually went the search route, that and the idea of having to move anywhere to do anything, be opportunistic in terms of geography and industry became way more palatable. I just like matured a little bit and could fathom moving to some other part of the country and working in some industry that maybe I didn’t even know existed yet. So, when all that sort clicked, that’s when I- that was just over 10 years ago. It was early 2013 that I made that decision. And so that has probably been the most, the longest standing, most consistent motivating factor for me. James, I think we covered this like when I was interviewing you or we were getting to know each other and deciding whether or not to work together. The other two kind of goals I’ve had throughout all this, I’d say like, maybe in order, the second one would be I wanted to emerge from this with the confidence and respect and admiration of my investors. So even if I don’t put a single point on the board financially here, if I try to raise money or I just kind of want, I want to know that I’m welcome in this community because it’s an amazing community of people. I admire almost everyone in it and would love to just spend my career in it. And then the third one was financial security. And James and I talk about this, these tiers of like financial dependence, financial security or independence, and financial freedom. And for me, financial security is a part of it as well. 

James Bergeron: Alex, you know what I love about that? The financial piece of it was last. Whether it was conscious or not, I love that. I also love how big Rob’s why is, how personal it is. And most importantly that I passed the interview, Rob, thank you for- thank God… That was great. I’m not sure I knew I was being interviewed. I love that. In all seriousness, I’ll just say, I also love that maybe we’re ending with this in the sense that I do believe that life is and leadership is a lot about stories, and the richness is in the stories. That’s, I think, a lot of where we learn. And in all seriousness, I feel really grateful, not just to have met Rob, but that he’s in my life and he’s one of these guys that I will know for, I try to know people for 40 years. Rob’s heard me say that before. It doesn’t always work that way, but that’s always my intent. And I probably have learned as much from him as he may have from me. And also amazing, I really feel lucky to call him a friend as well. I think for me for my own journey, I mentioned earlier I grew up in a small textile mill town in Connecticut, and by the way, think three to four thousand people. Today, it’s probably six or seven thousand maybe at best. Neither of my parents were college-educated. So, I’m a first-gen student. My mom made roughly, just to set the stage, my mom made roughly $12000 to 14000 per year. She was a teacher’s aide. She really believed and inspired in my brother and I the concept and the value of education because of that. And my dad was in sales. And when I say sales, for us as CEOs, I mean, he really was an order taker. He was not a professional salesperson. Building materials industry in New England and his best year was right around $28,000. And the reason I say that is because earlier in the podcast, we talked about that formula and how powerful that formula is for me, skills plus experiences equals value. Sadly, but factually, he was laid off, my dad, or fired regularly, causing a lot of financial instability for my family. And so it profoundly impacted me. In many ways, it took me years to fully understand. And it was really from my environment and those experiences that I consciously set out, I mean, I didn’t know what- back at 18 years old, 19 years old, I wasn’t thinking, oh, my why or upleveling as a CEO. But it became a really big goal for me. It became my why that I said to myself, I’m going to develop a thought process and a way of thinking that even if you fire me, I’m going to walk across the street to anyone else and still be valued and valuable. And a little similar to Rob, I want to be in the room making the decision, not being the one having the decision being made to. And that eventually led me to discovering the Socratic method, teaching method, at Harvard Business School. As an aside, there’s pieces of this that Rob probably doesn’t know. I only applied to HBS. I was rejected twice. And after the second rejection, I wrote the admissions committee a letter. We actually had typewriters back then, that’s how old I am. And I informed them that there was no other place I was looking to apply and I would love some feedback. And after about nine months, by the way, I assume they ghosted me, that term didn’t exist back then, but after about nine months, I got a phone call from an admissions committee member, and after about a half hour, she, quote-unquote, encouraged me to apply one more time. And of course, they fortunately lowered the bar that year, that one more time. And early on and throughout my entire career, just in the midst of this podcast, I was willing to consistently and regularly do what we’ve talked about, which is that extra ordinary things and develop a thought process along the journey that meant that I was able to refine and develop and just slowly but surely increase my skills, increase my experience, and ultimately increase the value. So, for me, it was just deeply personal in the beginning, and I think it’s just in my core now. I can’t get rid of it. It’s just maybe even at the cellular level that I don’t even realize. It’s just, yeah, what’s happened over the years, so many decades now. But I would say that from Rob’s story, different stories, totally different stories, different places that we’ve come from. And we both, I think, have really big whys that are personal to us. And maybe that’s the encouragement is make it as big as possible for anyone listening and use these approaches that we’ve hopefully unraveled here today to continuously and constantly up level. 

Alex Bridgeman: I love it. Well, James, Rob, thank you for sharing your time on the podcast. This is a fun and really engaging overview of understanding what it takes to continuously improve and look inwardly at your own skill set and evaluate. This has been a lot of fun. Thank you for sharing a little bit of your time. 

James Bergeron: My pleasure. 

Rob Southern: Yeah, thanks for having us. 

James Bergeron: Yeah, thanks, Alex. I really appreciate it.