So, going back for just a second, you mentioned something, there are things that they may not be expecting or anticipating, can you give us an example of what one or two of those might be?

Laurie Barkman

Well, in the United States, there's been some recent examples with the CEO and the culture of the management team, and how it's been discovered that there's a culture that accepts behaviors that are unacceptable, such as sexual harassment, creating culture, that antagonistic or negative environment, that does not lead to, that leads to problems when there's people who become whistleblowers, certainly, but in and of itself, it's just not necessarily a fit with the perhaps the culture that the board thought was in place. And so that incongruency, sometimes has led to the CEO having to leave their own company. A famous example of this is Jack Dorsey with with Twitter, and some others in the tech industry, and Silicon Valley, where there's been some, even some court cases about it, whether it's been so I think some civil lawsuits brought against the the people who were being accused.

Maureen Farmer

So Laurie, from your perspective, what can boards of directors do, particularly the nominating committee do to ensure that the culture of the the culture and the values of the CEO candidate is in alignment with with what the board expects it to be?

Laurie Barkman

Well, one question to start would be what are the cultures of the company that the company says exist? And is that just culture theatre? Is it real? Or is it just words on a poster, that people walk by every day to get to the water-cooler and they never look at it, and they never really think about what those words mean, there's some companies that do a great job of bringing their their core values to life, they don't talk about them as someone else's values, they live them. And they, from a management perspective, you know, walk the talk, and then the systems and processes in the company support that. So if a company says we, as part of our core values, we We value diversity inclusion, and then you look at the management team and the layers of management. And if they're measuring, are they measuring the percent of diverse management there? Or if it's more rank and file? How are we doing? What's our scorecard around achieving some of those, some of those goals? And how are we incentivized to bring those core values to life?

There's some companies that do a really nice job, I think, you know, Amazon, love them or hate them, they do some things really well. And then, and I'm not an insider at Amazon, but just from somebody who has visited some of their locations, they have their core values and their distribution centers as an example, written up in every room that's like a, like a work room, a meeting room, and you look around the wall, and there's probably 15 to 20 of them, there's a lot of them. But I think Amazon's also known for having a pretty strong culture, and trying to bring those values in to bear in every day, in their everyday work life. I think one of those things that comes to mind as an example that I've that I've, that I've come to understand, is when they're talking about a idea or new idea how they vet that idea is important. And it's full written sentences on paper. And at the beginning of the meeting, people read what the what the concepts are, and again, full sentences, not just a PowerPoint with bullet points where you have to interpret what these words mean. And that's just one example. I think of how they're bringing some of their behaviors into the fulfillment of that what they're looking for in the core aspect of culture, which I think is about accountability and completeness of ideas, and then also bringing ideas forward from anyone, anyone can produce this document. So it's not about your job title in the consideration of whether or not these these innovation ideas or proven ideas should move forward. It's the merit of the idea itself, which I think is at its core is really important.

Maureen Farmer

Some organizations actually use those core values and mission statements and written values as a filter for making decisions. And when you see these values that are written everywhere, and they are clear to everyone then they that can be a great way to integrate that decision making according to those values and making them alignment. I'm just going to read a quote here from the National Association of Corporate Directors just a recent report published just a few weeks ago, "executives and directors may have a range of definitions in mind as they discuss purpose and values, some may be referring to a long set of values the company brings to its decision making, others may think of purpose as how the company responds to demands of customers, employees, or the community for better efforts on diversity, for example, faster action on environmental imperatives like carbon emissions, some leaders may see purpose mostly in terms of the company's brand products and reputation." So it seems to me and I've done some research in this area, that organizations that have a strong culture in terms of we know what it is, we make decisions based on culture and values, their earnings, their shareholder value is a lot higher. In fact, one study, I recently read indicated that organizations that followed this type of approach had 6% higher margins than those who don't.

Laurie Barkman

It's not surprising, it's a great statistic. It's nice to have data like that, that demonstrates the value. We look at data every day, you know, why shouldn't we be looking at statistics like that? I think there's also similar data about women and people of color on boards and the impact that that's had. So not only the mission driven purpose, but also the diversity of thought and experiences in governance is really important too.

Maureen Farmer

Yeah. And I'm always curious as to how CEO candidates are vetted in that way. I mean, what does the conversation sound like with the board? When they're speaking to a CEO candidate? What are the metrics and how are they evaluating that CEO against those values?

Laurie Barkman 

Well, that's a good question. Certainly, because I think each board is going to probably have a different approach. And how they vet that if there's a current CEO in the seat, or you're talking about a CEO succession, and a new candidate?

Maureen Farmer

Well, typically, in a succession process, like you just talked about the gentleman on Twitter, he would be, you know, out the door, they would be getting a new candidate, but it could even be an internal candidate who's being promoted, or potentially assigned to the CEO or appointed internally. And well, you know, someone can be a very effective c-level leader...transitioning into a CEO role, especially for the first time can be very, very different. Somebody who has been in that role for a long time. And what we see often is that the CEO, especially a new CEO, they struggle to build relationships with every member of the board, because traditionally, they've had one boss, one person they report to. Now they have a team of 10, 11, 12, maybe even 13 people who they are now reporting to so I would be referring to that type of scenario with a brand new CEO coming into that role for the very first time.

Laurie Barkman

Yeah, it's gonna be important to have alignment, I think, certainly in a search process, that they're going to be looking for the right candidate for that business's future, and someone who's going to be delivering shareholder value. So every search to me boils down to three things: strengths, motivations, and fit. And a CEO candidate is going to need to be able to fit in all those areas, the strength side is what have they done in their past that helps the board understand what value can be created based on bringing that person to the table, what inherent experiences they've had in other places with proven environments they've had with building teams and driving shareholder value. And then also perhaps experience with...if there's a company that's in transition, or just experiencing disruption, or they've had some crisis, someone who's coming to the table that may have the right fit...could be someone who's more of a...from a leadership style, right? There's different leadership styles out there...command and control, you know, more of a quiet leader, people who have different styles, again, that's going to be really determined by the  fit for that particular company.

The motivations are really important to why is that person interested in this role? Does their personal mission for themselves align with what the mission for the board and for the business is? And if all three legs of that stool align, then that's probably pointing to the right candidate. You're right. They can come from the outside. They can come from the inside. I was an outside hire for the division that I was running as part of it. It was a third generation company. As you read In the Bio called Jenko, and I was an outside hire for one of the divisions, it was a subsidiary, which is how I had a CEO title for that business unit, I was a little bit against the grain of their typical hire, and being from the outside at the time I was in my young, 40s, and female. And so there were a lot of aspects of that. And I did not come from the industry, either. I had some things in my background that they found valuable, as I use myself as the example here in strengths, motivations and fit. And those when I was interviewing, those are the aspects that I really tried to convey is that I was going to be a change agent. And I was going to help them and grow in different areas that they necessarily didn't have the skill set internally for that transition.

Maureen Farmer

And given your experience with mergers, acquisitions and post acquisition integrations, that probably would have been a great value for them.

Laurie Barkman

Well that experience—Yes—but that experience for me definitely came afterwards. Going through the M&A process had fostered my interest, and then working with business owners...to call myself a business transition Sherpa that I work with business owners now who are looking for that succession and transition, they may not have family members to transition to, they might be looking for a third party exit to sell. And it's probably the biggest transaction of their life. And they only get one shot at it. So, you know, they haven't built their company on their own, why would they sell their company on their own? So having this bit of experience and the certification that you mentioned, my CMA designation, you know, those things really, I think, are helpful to bring a sense of clarity and confidence to the process, when there's a lot of ambiguity to it. And just like any role, someone's going to be new in seats, maybe they've done that role somewhere else. But they're always going to be...when you're new in that chair, you're going to need to set the tone. And as a new leader, you do have that runway and building relationships is an important part of that, and that runway towards a new role is an exciting phase. But it's also super important. So, CEOs are going to be building relationships at the board level, that will have started with the interview process. But that's not about friendships, right? It's about governance. But it is also important to start those working relationships on a strong foundation.

Maureen Farmer

Right, in the first 90 days to 120 days really is an important period of time as well. Absolutely.

Laurie Barkman 

Even if a person is internally promoted, what I would say to that is they need to really approach it as if it was a completely new company. Yes, some people know you, but you're in a new role, you're in a new seat and treat it as such. Don't cut that onboarding phase short.

Maureen Farmer

No, no. And we work with a lot of internally appointed CEOs. And they have reported to us that that period of that relationship with the team internally, especially if they've competed with a peer for the role...there's lots of change that happens after the appointment, it's a completely different experience for them. And, you know, it does take a concerted effort to build those relationships. I think that you know, technical competence and leadership ability is very, very important. But also the ability  to build those relationships one on one, and having a thought out onboarding process that takes into account the challenges that are coming up in you know, the next two or three quarters and building that relationship with the individual board members to help them further understand, you know, what the challenges are going to be. Absolutely.

So, in your experience as the CEO of a company that was purchased by a fortune 50 company, what would you say are some of the challenges that transition presented? And how did you address them?

Laurie Barkman

Well, I was part of the management team that was approached, the owner of the business was my boss, and the chairman of the company. And when he was approached, for the potential acquisition, there were some months of just very, very small circles of dialogue, right between him and FedEx and exploring if this was an option, that as a family business, that the shareholders would be interested in and completing. And after that first phase of discussions was when I was looped in as well as the other senior level executives in the company. At that point, it was a complete surprise, you know, to me, and it was exciting to have that prospect, but we all knew it. We still had to go through the process. And from my approach perspective, you know, I was fully supportive, I wanted to do everything I could to support the deal. And we had a deal quarterback from our standpoint, who ran point of communications with the people who, you know...we even signed nondisclosure agreements internally so that we could not discuss anything about this potential deal with anyone until we were allowed to. And so that's sort of point number one is really keeping things under wraps until you are ready. And then even in a small company, it's still the same issue...you don't want to distract the rest of the organization. And also, we don't know that this is going to go through. So, it's just premature. And obviously, when you're dealing with a publicly traded company, you have a lot of confidentiality that you have to be concerned with, from different perspectives, legal perspective. So we honored that. And we had a group of people that we became, you know, part of the M&A due diligence process, we were, you know, as you shared in my bio, that the company was purchased for over a billion dollars. So we were a fairly comprehensive business, and there was a lot of due diligence, we had to produce a lot of information, we had to organize it, I had to go into the data room, it was tracked and whatever wasn't provided by that time was followed up on, it's a giant back and forth, for just getting it to the data room, if you can imagine this pipeline of information that we've been asked for, that we now need to provide.

And so you go through that phase, and then the next phase of them absorbing it, you know, going through everything, and then there's questions and answers. And then the phase beyond that was their decision making around the new organization, and who would have a role and what those roles would be. So of course, they wanted to meet the management team. And I was, again, part of that. And that was an exciting time, we prepared each of his prepared presentations that will, you know, if for each of us having business units, each business unit different than the you know, they really interrelate as a core but, but we each had the opportunity to present in front of a significant number of people from the corporate environment and say who we are, and essentially, you're selling yourself and environment...let's not sugarcoat it, as well as getting them excited about the business. And after that it led to management agreements. And so by that time, when the deal was ready to close, those of us who had Management Agreements knew what our roles were, and all those details were worked out. And you can't do that after the fact you have to do that ahead of time.

And so for people who have not gone through an acquisition process, you know, I hope this is helpful to describe and of course, there's emotional ups and downs and roller coasters. You know, there's a lot of negotiations that are happening and a lot of deal terms. There's a lot of moving pieces and parts. And so it took probably, you know, from beginning to end, probably a year.

Maureen Farmer

And tell us a little bit about the initiation of the deal. And the owner of the company, and how did that family transition away from ownership of their own company? Was that a difficult process?

Laurie Barkman

I can't really speak for them. That would be, you know, presumptuous of me, but, you know, we did have private equity investment. So the family already had some outside investors in the business, and I think they were already considering what some transaction options might be. But that said, I think it was a very exciting time. And of course, it is an emotional time. My boss was third generation. And his family was not part of the company or he had some family members in the company, but not with an intention to transition the company to be run by the next generation...probably a better way to say it. As a consequence, there was a really significant opportunity here for this privately held company to have an exit and they were very loyal to their employees...really big part of the culture was the team aspect. And I really liked that and enjoyed that about the company culture. And so what happened to employees after the sale was important to the owners. I think, for the owners themselves, they did exit the company, and did not have a continuing role in the business. And they've since done some really nice investing through their family and investing in foundations. They have a family foundation, they set up a lovely family foundation, they're very purpose mission driven. And then they also set up a family office and they do investing and have continued, you know, really as a family enterprise and in that way, I think they're a great example of a company that you know, of a family that's embraced the change, and leaned on it and created their next purpose.

Maureen Farmer

That is such a fascinating story. And in terms of your role as a board advisor, and a fiduciary board director, where do you see yourself providing the best value? Like what types of organizations? What size? What type of industries are you interested in serving?

Laurie Barkman

I think a company, a privately held company that is in a mature industry that's struggling with change would be one characteristic. I've also worked in companies where it's more fast growing, and industries like tech, for example, that benefit by more structure. And if you can see here, the confluence is on both sides of that, in my background, I've worked with both startups and very traditional, well established companies, and a thread of entrepreneurship and intrapreneurship kind of runs through both sides. And so those two aspects could be interesting.

And it could be a publicly traded company as well, I don't mean to exclude, but I would say my first preference might be with a privately held company. And size wise, I don't know that I'd put a revenue number on it. But I think a company in the lower middle market is where I tend to spend most of my time and where I have quite a bit of experience. And industries, like business services, I have a marketing background. So certainly marketing services as a category of that. But Business Services is probably the biggest descriptor of an industry that I would be interested in...retail, technology, I have an e-commerce background. And certainly with some transportation and supply chain, I have some experience there. One of my clients is in the energy industry. And through my relationship with him, I've gotten some really interesting exposure to new technologies within energy, such as solar and more sustainable energy development. I don't necessarily say it has to be one industry. But I think what I bring to the table as an entrepreneurial CEO, bringing an innovation strategy, also, with my background in succession planning, and mergers and acquisitions, a company that's anticipating some change in the future, whether it's developing a board or a new board, for transitioning on the board, or for CEO succession, I think, again, the things that we've talked about today play into that.

So mature industries, who want to be more innovative, as well as these fast growing newer companies, I don't want to call them startups, they can be a little more mature than that. But when they're ready for independent directors, and they're ready for that outside influence to help them get to the next level.

Maureen Farmer

And tell me so far in your career, from your experience as a board member, and an m&a expert, and so on and so forth...what has surprised you most in your career so far?

Laurie Barkman

There's so many things, let's say...well, I would say from an observation standpoint, that when you're an outsider looking in, it's easy to make assumptions about what the company is really like. And until you're in there and meet the people and understand the work, all your assumptions are probably wrong.

The other thing that I would say is people are people, and you have to recognize that there's a humanity to the work and that it is very lonely at the top. And I think we might have assumptions around the type of person that a CEO is. And when you get to really know them and understand their vulnerabilities, I think is when you can reach a different point in the relationship and understanding how and what's another way that you can provide impact. And so for me as a board member, and maybe that just speaks to who I am, you know, I of course, I want to look at the numbers, but I also have this element of humanity to me, and I want to get to know people individually, so that we can create a good working relationship...I'll still challenge you on things, I'll still ask you, you know, the tough questions. But you know, where these are coming from, they're coming from a good place again, either in the interest of the shareholders from a publicly traded standpoint, but also as a private company, the shareholders, being the family members and the stakeholders, certainly the employees and so I think those are some of my observations and just to have that confidence and not be intimidated by someone's title, and the more exposure you get to the C-suite, the more comfortable you are and that was certainly my experience being you know, a first time CEO, everyone's a first time at something.

So, for me as a first time CEO, all those years ago, I was, of course, I was intimidated. And sometimes I had those self doubts, but then the more I got into it, and the more results that came to the organization, through my team's efforts is very invigorating and very reinforcing. And so sometimes you get praise from the senior level, and sometimes you don't. And I'd say that's probably the last point is, if you're a person that's very motivated by others acknowledgments...you're not always going to get that at this level. And so if you're a board member, and you're on the board, you're wondering, how am I doing? And how am I being measured? It's not like that at this level. And you have to be okay with that, and just know that why you're there matters and just stick to the value that you seek to bring. And at the end of the day, if you're not bringing any value, then that's your answer. Right? How you can define value and how ultimately the board defines value for you being in the room. That is probably your scorecard.

Maureen Farmer

Yeah, and the notion of the CEO is being, you know, a lone wolf, really, because they have a board that they report to, and then they have a team that reports to them. But really, they have no peer inside the organization. And I think that's where, you know, having an outside resource can be very, very helpful for the CEO. Not just in the transition, but just on an ongoing basis.

So, I want to thank you very much for your time today. Our time is coming to a close, I could talk forever on these topics. You have an absolutely fascinating background. One of the things that we like to ask our podcast participants is to offer up a couple of restaurants in their particular city. We collect these restaurants and post them in our e- blast from time to time. So, just curious if you have a restaurant or a watering hole that you enjoy?

Laurie Barkman

Oh, yes. I'm wondering like how many specific listeners you'll have coming to Pittsburgh, Pennsylvania. That's exciting that you do that. So to give my favorite restaurants a shout out. Okay, happy to do that.

There's a place in downtown Pittsburgh called Tako. They're a fun place. And there's a restaurant...there are a few of them around the city called Mad Mex, which is a take on, you know, Tex Mex, but they have their own brand. And they've done a really nice job. And another casual one is called Burgatory. So as a marketer, I tend to focus on the brand of these restaurants. And Burgatory has done an amazing job with their brand and their burgers are pretty outstanding. And I am pescatarian so I don't eat meat anymore. But they have an amazing veggie burger. And I always recommend that even if you do like the real meat, you might like that burger too.

Maureen Farmer

That's awesome. I plan to be in Pennsylvania, not sure if we're gonna make it to Pittsburgh, but I may very well do, so that's great to know. And we'll have it on our E list that goes out on Sundays. And I know you have your own podcast. And I would like to give you an opportunity to talk a little bit about your podcast and tell the listener where they can find you. And the last question I would have is, where are you speaking coming up over the next year so that people may be able to get to know you in terms of a speaker/presenter?

Laurie Barkman

I am available to connect with anyone if they want to reach out to me on LinkedIn, that would be fantastic. Laurie Barkman on LinkedIn. And then also my website is smalldotbig.com. And they can connect with me and I invite you to schedule some time. But if you want to connect via speaking, hear me out as a speaker, one of the avenues is through Vistage and I get booked through the Vistage process. The vistage chairs are the ones who select you, I do a workshop. It's a four hour workshop with Vistage and I'm available to do custom workshops for small teams for business owners if they're interested to help you understand key questions such as defining what your goals are and your vision for transition. What is your business worth today? What are some gaps in value and what might you do about it? And so that's the purpose of the Vistage groups. I'll be doing a virtual presentation in February, I'll be doing an in person presentation in North Carolina in May. Obviously, those are closed groups. It's not open to the public. I'm in the process of developing a webinar schedule for the year. And so the best way to stay tuned for those events would be being a part of my LinkedIn network. And certainly joining my mailing list on smalldotbig.com and signing up for the newsletter there. Succession Stories podcast is available for you wherever you listen to the show. And it's a great resource. If you want additional educational ideas about how to grow your business and create value, it has amazing guests that I have on the show and it's an honor to talk to them.

Maureen Farmer

That's terrific. And just to close off on this quote that came from your other bio: "80% of business owners want to stop working in their business in the next five to 10 years, but most have not planned for that transition. Many need to improve the business first" and so you talk a lot about that in your workshops and webinars.

Laurie Barkman 

Absolutely, yeah.

Maureen Farmer

That's fantastic. Well, Laurie, it's been an absolute pleasure to have you on the show.

Laurie Barkman

It's been great to be with you today.

Maureen Farmer

Wonderful. Thank you. Take care!