20 Dec Happiness is the Key to Successful M&A
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Mike Harvath 00:04
Hello, and welcome to This Week Shoot the Moon podcast broadcasting live in direct from Revenue Rocket world headquarters in Bloomington, Minnesota. We are the world’s premier growth strategy and m&a advisory firm focused on IT services companies. With me today are my partner’s Ryan Barnett and Matt Lockhart. Gentlemen welcome.
Matt Lockhart 00:26
Hey, Mike, how’s it going? As we’re approaching the end of the year here, doing pretty good and excited, so good to be with you.
Ryan Barnett 00:37
Good morning Matt, Mike. This morning, I woke up to the most beautiful covering of snow all over trees. And then I get I wake up look at my phone. And Mike has texted me the most gorgeous picture of a winter wonderland. And it really brought back some good feelings of what it’s like to take some time and reflect, take a little bit of time to understand that the little joys in life and sometimes huge joys, even seeing some beautiful snowflakes on trees, as a is a comes down can remind you that there’s a lot to look forward to. and today we’d like to take advantage of that and look at how happiness in your life and can really help translate into physics success, and help be something really solid in a merger and acquisition process. So Mike, why don’t you get us going.
Mike Harvath 01:33
Yeah, absolutely. I mean, I think we all want to be happy, right? If important. Happiness certainly contributes to better health and wellness overall. And I think, you know, if you’re working in tech services, tech enabled services, as many industries are, you know, it’s a stressful thing. And I think self care. And you know, we’ve all learned kind of that self care, super important kind of probably been further amplified through the COVID experience. But I think, you know, happiness and what you do every day, since you probably spend more time working in your respective businesses, than almost anything else in your life should be paramount. And I think, you know, happiness in your own personal happiness, I think will correlate, and does translate into better business success. But there’s certainly some integral components to that. And some of that has to do with just running and building the enterprise. And that has a lot to do with growth, and it has a lot to do with profit. If you’re a, if you frequent this podcast at all, you know, that we talk a lot about, you know, profitability, kind of being the right to continue to employment, that you have to have, I think, a good strategy for growth and profit in the business. And if you do, it’ll set the foundation for all kinds of goodness that can come in your life, not only, you know, personal growth and success, but financial growth and success, but, but also more importantly, building a world class team, where you can surround yourself with great people with great ideas, that makes the work much more frankly, enjoyable. And I know for myself, that’s certainly what you know, we’ve built here at revenue rack and I’m so blessed that we have such a great team of people that we work with and and, you know, it’s a little bit of a shout out here to Matt and Ryan has been great partners and great contributors to our our mutual success every day as well as everyone else here at the firm. But I think as we think about what we’re building and what we’re contributing to life in general and our ability to do great stuff for our team and facilitate philanthropy as well as facilitate interesting you know, m&a transaction all starts with sort of personal happiness and growth.
Matt Lockhart 04:03
I think this is awesome, Mike. We’re not mental health professionals here at revenue rockin so little disclaimer there. That being said, we do get to see a lot of things and and I think that that the the observations that we get by being able to see so many different companies and various stages and companies that are building and growing and we’re working with on the strategy side and they’re fired up and they see all of the great opportunities that they can tackle in growing their business and growing their teams and, and or in the m&a cycle either buy side or sell side, you know, the opportunities to come together with a different party and and I think that part of this kind of what you’re characterizing as happiness i i sort of think of it as positivity, and hope and go gratitude and meaningfulness that our clients that we see in our clients that they, they see all of these things and and, and they’re just going and getting it right. You know, it’s interesting that you character, that that happiness thing I saw a little as we’re living in the COVID land or coming out of the COVID land, we know that, you know, mental health was a challenge for a lot of people. And so I think it’s getting the, you know, really good attention. And that’s a really good thing. And, you know, happiness kind of comes and goes a little bit, but transitioning from just happiness into positivity and meaningfulness. I think that’s really a great subject as it pertains to what we see in successful businesses. So great topic, Mike, especially at the end of the year, as we’ve got this Norman Rockwell scene out our windows here in Minnesota, it’s pretty cool.
Ryan Barnett 05:59
We take the other approach, if there’s negativity in in your business, that can translate across your team. So it’s pretty easy for a team to pick up. If you lean in and kind of embracing the negativity, it’s, that can be hard to keep on growth path, when you when you see so many things in your way. So it’s really important, I think, to have that positive growth mindset, I will say is when you if you transition this into the m&a world, buyers want to understand and engage with teams that are embracing that positive mindset. And Mike of what do buyers look for? When it comes to this attitude? And this can be growth, it could be profit, but just in general as well.
Mike Harvath 06:52
Yeah, you know, I think buyers are attracted to winners. And winners tend to have a positive growth mindset. They’re people that stop to ask their team a thorough que. And to help them. There are people that are leaders in their community and their and their business and ones that want to go to a place that will provide for, you know, not only revenue and profit growth of their business, but personal growth of themselves and their team. And I think buyers really liked that they see that as a culturally positive thing that they’re attracted to, that they want to aspire to learn from. If they’re, if they’re a positive person. Now, I think it’s pretty hard to do m&a, whether you’re a buyer or a seller, I think there’s a lot of challenges and obstacles and things. Now we’ve often talked about m&a being the most unnatural act in business. And unless you’re in the right headspace, for doing those deals, you’re going to struggle with getting them done, whether you’re in the buyers chair or the sellers chair, because as an obstacle presents itself, you know, you have to sort of come to it with this concept that you’re either going to be a winner, or you’re learning something, and that you’re not going to be losing. It’s not a zero sum game. And there’s a lot of compromise that meet in the middle associated with them. And I think, you know, leaders that have a growth mindset are positive and positivity are the ones that find the path, the ones that throw their hands up, and certainly don’t provide that inspirational, you know, ray of light for their team and for the people they interact with. Just don’t and so, you know, food for thought, as you’re thinking about your choices and kind of for ’23 and growing your business and or, you know, conducting deals in the space. I certainly think that it starts with the collective teams leadership, and the general fabric of the business as you move forward is really critical to that. And it will attract lots and lots of suitors if you do it right.
Matt Lockhart 09:21
Well, I think it goes both ways, right? Even for buyers to to demonstrate, you know, we always talk about culture is one of those fits that has to come together. And that that positive bright outlook from both buyers and sellers really is a key into culture and obviously for buyers to be more attractive, being positive and etc etc I think only leads to good outcomes.
Mike Harvath 09:50
Yeah, just gonna say not to mention the fact you get the bonus of living longer, not to completely take a right angle here, but I read a study recently so if you People who generally don’t have a growth mindset are positive lived seven years longer than those adults. So I kind of liked that deal as I get older, I think, you know, if, if I can get a little bit more road under the tires, just by focusing on having a positive growth mindset, being happy, I’m all in.
Ryan Barnett 10:21
Cheers to live in a bit longer, I think it is critical if you if you’re looking forward and happy in life, it’s a lot easier to live life. And that’s a big point, Matt, where I was going to say that if you work with a lot of sellers lately, and and selling your businesses is one of those things where you’ve got a lot of emotional attachment to your your customers and your employees. You’ve got a lot, it’s your oftentimes your monetizing your life’s work. So it’s a stressful process, what kind of things Matt, have you seen or helped done to help sellers really, and keep the goal in mind and keep that positive perspective throughout the process?
Matt Lockhart 11:07
You know, it’s, I guess, probably a little bit more art than it is science. But one of the things that I think that we do pretty well is setting expectations, right out of the gate for our clients that what they’ve got in front of them and, and what to expect, and that it’s rarely a straight road, as Mike talks about it being one of the most unnatural acts in business and so, but then also, another thing that we do is, is make sure that there’s positive interactions between the buyers and sellers continuing to keep their, their eye on the prize, and that there’s a reason that these two firms are coming together, it’s good for everybody, you know, when you find those cultural fits, and strategic fits, and, obviously, financial fit, that’s not to be taken lightly. And so keep your eye on the prize. And then also, you know, I think another thing that we do really well is keep them out of the fray, you know, and do a good job as an advisor to play our role of, of not not having them be involved in everything that they don’t need to be involved in, so that they can stay positive. And, and, you know, really setting that expectation on both sides of the table that, you know, it’s really important to stay positive throughout the process, and come together and continue to build trust. And so each deal is its own little journey. And, you know, we are dealing with people continuing to run remind everybody that if it were robots, it’d be a lot easier, but we’re dealing with people. And so, you know, I think that it just kind of goes back to that where Mike kicked us off, which is, you know, stay positive, stay happy as much as you can, and everybody’s going to be feeling better.
Mike Harvath 13:05
Now, I would add, you know, just as we think about moving through a transaction and focusing on your contribution to the deal, and, and even post merger integration, as you think about monetizing life’s work, right? Certainly, there’s a component of that that is somewhat, you know, self centered, right, you’re looking at a belt this thing for, you know, many years and a lot of blood, sweat and tears into it. And now I want to, you know, monetize it and preparation to do something else, or to donate, you know, some of those proceeds to help society in general or to, you know, whatever it is right, pay it forward, participate in the bigger company together. You know, there’s a lot of different outcomes that could come from that. But certainly, it’s likely that your your role and your capacity will change. And I think being able to be adaptable and nimble and flexible to what that is, and be open to, you know, working in new ways and contributing in new ways will be critical to your own happiness. And I think as things progress, and you move through that journey, that remember it is a journey, it’s not a destination, even the closing of your transaction and moving through that to the next phase, as part of a journey, and having some forethought about that journey, and being able to contribute in a way that, you know, makes that good for everybody that’s around you, I think is super important. And certainly will help not only the outcomes of that transaction be much more positive for everyone, but also, you know, it’ll be much more positive for yourself, because I think if you make assumptions or not, don’t have clarity or think it’s going to work a certain way. You know, that’s that’s really, that can be really problematic, and it gives back to some of our comments about you have to have clear Add about the plan for your life, if you’re going to enter into an m&a transaction, whether that be on the buy side and sell side, because the one thing for sure that will happen with that deal is it will be a catalyst for change not only in your business life but in your personal life and having clarity about you know, what happens after that deal is super important as it relates to your happiness and long term long term well being.
Ryan Barnett 15:28
Great points, both you and Mike and Matt, for us. And personally, it’s been a really great year I gotta I got a ton be happy for get to work with with both of you and work with a wonderful client base that we have. And for us, it’s been a work a year we’re celebrating and really actually looking forward to next year and having that mindset of happiness. Sometimes for me, it takes a little bit of reframing, taking a situation and understanding how it can be something that we can all move forward positively with. But when we can take that growth mindset and political work, it’s a great thing. And it’s something that we can all be grateful for. Mike, Matt, anything what what was this year for you? And what’s the the end of the year wrap up?
Matt Lockhart 16:19
Well, I’ll echo your thoughts, Ryan, and I, you know, it’s been a heck of a year, it’s been well, it’s been a record year for us, and we’re growing, and we’re adding team members. And that’s a whole lot of fun. And I think that, you know, when I think it just a whole bunch of gratitude, really, I think of it as the revenue rocket community, you know, our customers, our clients that we’ve been able to work with this year, and build bridges with and get to know and, and go through the depths, and the valleys are, the greater the revenue rocket teams, our teammates are just awesome. And, and so fun to be with and, and you too, you know, are great to work with. And so, you know, I just think that that gratitude then translates to a lot of hope for next year, and continuing to keep the snowball rolling downhill keeping our Norman Rockwell theme here, but pretty cool, pretty good stuff. And so thanks to you guys, and thanks to the, to the whole revenue rocket community.
Mike Harvath 17:31
Thanks, Matt, you know, and as not to add to the echo chamber, but I would echo all those comments, you know, with the addition of, you know, in many ways, our firm feels like it’s new, like it’s, in any way many ways been inserted with a lot of energy and purpose. Because our clients have been just so awesome over the last 21 years, and our, our team and you know, working with you guys couldn’t be a better experience than it is, for me, in many ways, the culmination of my life’s work. And it’s super satisfying to be here, right now, and almost in many ways feels like the beginning or Renaissance or, or a new star to a new destination, one in which we can help more people and more firms achieve their goals and around growth and m&a and, and really broaden our reach and influence in the work that we do every day and philanthropy and, and no playing a small part in helping people do what they do and achieve their life’s work in a way that makes a big difference for them in the world in general. So I’m privileged and grateful to be here now, at this time. And we will be doing everything we can in the foreseeable future to make a positive impact on this little blue marble that we live on. And look forward to the conversations that we’ll have with many of you in 2023. And certainly wish you guys a very Happy Holidays and fruitful and prosperous 2023.
Ryan Barnett 19:10
Thanks, Mike, good stuff. With that, Mike, well let you do your thing.
Matt Lockhart 19:16
Not just tying a ribbon on it, because we’re coming into the holidays tying a bow on it, Mike what do you think?
Mike Harvath 19:23
I love it, Matt, thank you so much for that. And see, this is just how it goes here every day at revenue rocket. It’s a team effort. So with that, we will tie a bow on it. Even one maybe with those little curly ends, you know that you make with the scissors and all that kind of gabby, the and we will we will be back soon. So I encourage you all to tune in next week. When we continue to talk about m&a and growth strategy for IT services companies can certainly learn more about our firm at revenue racket.com There’s a whole host of resources is available to you on that website or to you tune in and see what’s going on as well as continue to be an active listener of our podcast. Happy holidays. Thanks for all you do. Stay positive and happy in 2023 and beyond. Take care