How to Win Over a Team That Didn't Choose You

Welcome to the next episode of Bought the Biz. I'm here with Garth today to talk about how to win over your team and how to balance making people-related decisions out of fear versus discipline. This ultimately devolved into a lot of talk about compensation, which is something you should be prepared for and expect to spend a lot of time on. So budget for it, plan for it, get educated on it. Let's dive in.

Bought the Biz is a podcast for ETA entrepreneurs who've gone from searching for a business to actually running one. It tells the real story of what happens after the deal closes. The day-to-day operational, emotional, strategic, and leadership challenges that just don't show up in the highlight reels.

The show is story-driven and practical, sharing real experiences from operators along with clear, actionable takeaways you can use in your own business today.

I'm Garth Fossano.

I'm Christi Loucks. Welcome to Bought the Biz.

One of the best parts about buying a business is walking into a team that's already in motion. People who know customers, know the systems and the work inside and out. You're not starting from scratch, and that's a huge advantage. But there's a flip side. They didn't choose you. They've already built a culture, habits, and relationships that you're stepping right into the middle of. If you don't earn their trust early, it can be an uphill climb to lead them anywhere new. Those first interactions with your team can define your relationship for years. So Christi and I wanted to talk to you today about winning over this team and what are some of the things that we did early on to build trust and, you know, sort of learn the culture as well as make some changes to the culture that we walked into. So, uh, Christi, tell me a little bit about what you found in your first couple weeks at the company you bought.

Yes. Garth, well, I found a lot of things. And so when, when I stepped in, you know, I've mentioned this before, I stepped into a team that I was actually the only US employee.

I did not know that. I assume there was somebody else there.

No, I don't believe so. I'm thinking back through my head right now and I don't believe so. So we had Canadian, a Canadian living in Spain, India, Philippines, and one at the time, one, one person in Nigeria. Very random. So I was the only— oh, and one Irishman, our seller, lived in Ireland.

I don't even know where to start with that. It sounds super complex from like compliance, I assume they were like all contractors. So then you bought a business with all contractors. That, that also sounds scary in some ways too, but that's like a whole nother topic. So yeah, you get it in here. I assume you knew this before the deal closed too, that they were sort of all over the place.

Yeah, knew they were all over the place, knew that they were contractors. However, I would say 90% of them had been with the company for 3+ years. So while they were contractors, they functioned as full-time long-term employees, which is why, to your point, I wasn't concerned about that. But what it meant was that, you know, I inherited— I don't know, like, that's maybe not the best term, but like, I walked into a team that was vastly diverse, none of which, like, none of those people I could meet actually in person, except for minus the one that lived in Canada. And so the, the, the, um, the endeavor to build those trusted relationships had to start immediately and had to be very positive, like right out the gate, just because of the cultural gap, the time zone gap, you know, just true proximity, uh, was a huge part of this business. So, um, so that's kind of the situation that I walked into. I, I think the, you know, the very first maybe, I guess, learning that I had in the business was like, I can't try to be the seller and run this company. I have to be me to run this company well. I can't try and mimic his style, his process necessarily, like I have to run this business, of course, keeping with the things that make it go smoothly, but like, I have to be me in this company or else I'm going to fall flat on my face. So when I came in and started building these relationships and, you know, talking to the team, it was very much about getting to know each other, them getting to know me so that they understood how I worked, what I cared about, what my values and like priorities were. And simultaneously, I wanted to understand them. So it was very much about like establishing the relationship so that they understood who I was, and how I was going to be like running the company.

I think, I think that's a great piece of advice. You got to be yourself. And if you try to be someone else, you're going to set yourself up for sort of probably years of, you know, a pretty uncomfortable situation for you personally. But I can also see why somebody might be so like really try to recreate that. You know, I think we've talked about this a little bit as well, but, you know, I walked into what I felt like was a very unusual culture to me that, you know, I would sort of describe as a bit of command and control where there were like processes that were built in out by the seller and would be assigned to people. And it was assigned in a way where it didn't really feel like we were giving, you know, authority and autonomy and responsibility of these. It was just like, you got to go check the box. And You know, I think that that is certainly a way to run a business. But I think that, you know, a lot of businesses that don't scale are also run that way where, you know, and look, that doesn't mean you can't create a really strong business in many ways by doing that, which, you know, I felt like what I stepped into. But, you know, that wasn't going to be a recipe to continue to scale the business if like everything had to go through me, if every process I had to define. I think that, you know, ultimately I would become the bottleneck. And so, you know, with sort of the goal of trying to create an organization that can survive for the long run, that was something I slowly understood and realized that I was going to, you know, take steps to change too.

What were the first steps you took to change it?

Oh, well, we started doing some more cultural events, I would say. For the team. That was one thing. So about 30 employees, everyone is remote, and we started doing a couple sort of more fun events. I, I think that maybe something like this had happened in the past, but it wasn't very common. So Halloween was about 30 days after I took over the company. At the time, the company was called Top Dog. And so we sent everyone a dog, onesies and candy, and we all got on a Zoom and talked about like funny stories and stuff in these dog onesies, which was pretty funny. The next thing that we did was we actually did a sort of what you'd call like a president's club trip where we took folks that had, you know, in our top sort of sales bracket, and we took everyone to Vegas and we did an in-person trip, uh, pretty shortly after I took over the organization. And what we were just trying to do is sort of set a little bit of a different tone in that we're a remote company. How do we bring everybody together and, you know, try to, you know, show that we are setting a new tone and we are going to work together and we are going to be more collaborative? Um, it took me a long time though to like break down the sort of here's a task executed on this day, check this box, move on to the next one. So I'm curious, is there anything like that that you found in your organization that you knew you would be changing over time?

Yeah, I could tell right out the gate, just to your point about kind of the, I don't know, not necessarily command and control, but there was like a different way of communicating tasks and urgency and timelines than I normally do. And sometimes I think actually it would do me well to be a little bit more like prescriptive about those things. But I, I don't, just by nature, I'm like a very collaborative person. I want people to feel involved and like they have some autonomy, they have some decision-making power. Ultimately, like I probably will still make the decisions, but I do want to hear what people have to say. So like, I definitely applied that. Kind of right out the gate. And in some, again, like in some pockets, I think it worked really well and others, I don't think it did, to be candid. So, you know, with like my India team, they were just very used to like, tell me what to do, I'm going to go do it. And I'm going to give you what you need exactly when you tell me. And like, that worked, it was fine. I didn't need to interrupt that necessarily. I did because that's, I wanted to know those people. I wanted to like just have more of like a relationship-based approach with them, but I didn't actually need to in hindsight. Yeah. I think to your point about like kind of those, like, I don't know, not ancillary, but like the cultural intangibles that you can create right out the gate is really important. So you guys did an offsite, you did an event, you did the dog costume. Obviously we were a little bit more constrained because we had this geographical, you know, expanse between us. But one of the things we did was, and I actually took a page from my prior employer where we had this, I thought it was so weird when I first started there. But so you've heard of like a BHAG, a big hairy audacious goal. Okay. There's a whole story, but somebody at that company thought it was a goat. Not a goal. So it became the Big Hairy Audacious Goat. So every time like this deal would close, you know, for the business, we would like, the goat would be sent around in emails and everybody had these goats on their desk and whatever. It was just this thing, but I actually loved it because it was just something funny. You have like a little representative, like mascot with the goat on, hey, the company's growing, we're doing cool things. This is something to like celebrate. So we adopted the goat at Revenue Accelerator and Every time, you know, we named him Revy and every time we'd close a new logo, we would, you know, Revy would come into our like Slack channels and everybody would celebrate. And so we, but we established that right up front as kind of like our little mascot of sorts that we rallied around. And I think that doing those things is really helpful to bring everyone together around like the new norm, like the new chapter where it's something iconic. Different, but everyone's in the same boat as it's new.

Yep, that totally makes sense. I love the idea of bringing in a mascot and sort of that sort of interplay. Yeah, I think that I wish I had done something like that. I'm trying to think back if there were any other things. I think another maybe important topic to talk about is like how we each addressed key employees in the transition. And so in our last pod, I mentioned that we had a key employee that, you know, I think the sort of title GM will make a lot of sense to this, uh, to our listeners. And so he was local. And so I was able to meet with him and have a lot of discussions with him. I think a lot of searchers are always curious if like comp changes and like what happens with that with people. And, um, you know, uh, his comp was, I think, pretty strong at the time. And so we were able to keep that. And, uh, you know, I think that that kept him, him pretty comfortable with, with what he was doing. And. You know, there were sort of costs to the P&L where that wasn't fully built in into the way we expected it to be. So I think you're just going to step into a company and learn some of these things. So yes, expect to pay a little bit more on, in some of these areas. And I'm sure you had some similar experiences, but I think more so than just, you know, the compensation level, you know, he and I have built a great relationship and, you know, we. You know, as our company has evolved, we talk to ourselves as the two co-founders. And, um, you know, I think that that's really important to him. And, you know, he's a part of the journey and where we're going. And, you know, he does know our customer base incredibly well, not just the customers that came with the company that we acquired, that I acquired, but also the customers that, you know, our platform is serving today too. So I think that that's, that's worked out really well. And I'm curious if you have any questions about that or if you have some similar stories too.

Yeah, I mean, did anything, was there anything surprising in how you develop those relationships with the key employees or did you get along pretty well right out the gate? Like, because, because I think, and the reason for asking this, right, is because I think that at least I thought, I shouldn't say I thought that I was going to come in, you know, everyone who was sort of in a leadership position, whether they were leading a function, a process, or like more like the client leadership side, I thought that we'd come in and like immediately be pals, right? Like right out the gate. And, and that usually happens because I think your success is their success too. And they want to be aligned to you, but you know, there were also points of, like I was nervous that I made mistakes in my relationship building with them, and I was nervous that I overstepped or I belittled them, or I like— what— either way, I, I was just kind of constantly like on edge around about those relationships. And I guess I'm just curious if you had any, like, if it was smooth sailing for you, if, you know, if it I don't know if you had a different experience and not to like, you know, the people are the people and they are like, when we walk into these businesses, those people are so incredibly valuable. But I just think from an operator standpoint, it just doesn't always, you don't just always walk in and like start swinging, you know, hand in hand.

I don't think it's swinging hand in hand from day one. I mean, I think like any sort of transition or change, there are going to be people that are excited about this, there are going to be people that are incredibly nervous and there's going to be a bunch of people just sort of in between, kind of waiting to see what shakes out. Um, I think that what I probably did not realize at the time, um, but sort of probably sensed was that like with this key employee, there was a possibility he was going to leave. Um, and he and I have talked about it since, and he said, yep, there's a real possibility. I almost walked on that day. And it was like, wow. Um, you know, I, and looking back, you know, that was the body language that was unspoken. Um, and I think that, you know, you really got to be yourself in that moment and, you know, bring that authentic self, exactly what you were trying to do, what the plans are, what the hopes are. And like, you know, we actually sort of took, he took some time to sort of process those changes. And then he and I also, like, I sent him a worksheet of, like, our goals for the company and where we wanted the company to be in 10 years. And we each filled it out. And then we went and did a hike one day in the Front Range of Colorado here at a sort of common spot. And we sort of, like, talked about it all. And so we did a couple of things that, you know, a little outside of the traditional work environment. I think that we should have him on and ask him actually, but I have a feeling that it was moments like those that where he sort of sensed, hey, this is going to be a little bit different than what's happened here over the last 10 years. And this is a really good opportunity for me to stay involved with. And so I think that that's how it sort of progressed pretty naturally for us. And we're still working together. Nearly 3 years later. Yeah.

There you go. It's yeah. Happy ending there. But yeah, I just think, you know, I definitely expected and I didn't really have any major hiccups. Right. But it's just, it's not maybe as clear-cut or easy as I thought it was going to be to come in and align myself and align them to kind of my vision for the company. It just, took a lot of communication and again, nothing negative, but just a lot of work and a lot of restating, overstating, revisiting, right? And listening too, from my perspective to what they had to say.

Did you have to adjust any compensation when you came in?

Yes, of course. Yeah.

Okay. So I think like a couple things that people should be sort of remembering as they're thinking about transitioning to this and hopefully in advance of submitting their, uh, you know, business model for funding and, you know, maybe they're like family funding board as well, decision-making, like, yeah, you're probably going to end up spending a little bit more than you initially planned on. Um, I think that you really want to think through the key employees and include that in sort of your due diligence process. And I wouldn't say just don't just due diligence the employees, but, you know, have a targeted plan for each one. How are you going to manage that relationship? And maybe even ask the seller to help you identify like where you should be spending a little bit more of your time, who is going to be a little bit more concerned and nervous about the transition so you can, you know, take, you know, take the time to do it right for on a case-by-case basis. I think that the cultural sort of outside of the traditional office walls, things that we did were also helpful. And think through like what's the right way for you to do that. I mean, if I had, if if, if our team wasn't virtual, it would have been so fun to be in person, I think, as well, and do some of these things on a more day-to-day basis. I think that might have made it both easier and harder. Um, so I, I acknowledge that there are probably some challenges with doing it that way too.

Yeah. One thing on the compensation piece, uh, that I think is important if you have offshore or even just people in other countries is definitely take the time to understand the norms around compensation and norms around annual increases, bonuses, things like that, because they are not— you can't just give everybody 3% cost of living adjustment like you can, like you do in the US. You can't just give people, you know, 5 to 10% raise and like feel really good about that. It's very different across different—

tell me, I'm curious what was different there.

Yeah. So like Okay. So there, I had an Indian team and a Filipino team. The Indian team definitely expected more like, and this is still kind of a, like a swag number, but like 50% increase as of 5-0. Now the conversion on that is still not much. But that's what they expected from—

like, how is it sustainable?

That's what I was told right now. Maybe they're just, you know, like pulling the wool over my eyes, but no. So they had very different expectations around what their increases looked like. The Filipino team, I don't think they were ever going to ask for an increase unless I offered it to them. Now, I also had spoken to a few people and felt that, um, a few people who also had Filipino teams and felt that my team was like pretty underpaid relative to the market. So I did, I actually did end up increasing their salaries quite significantly because I did need them. And I, uh, I knew they weren't going to ask for a bump in pay and I wanted to kind of lock in I guess some goodwill in that sense. But I didn't really need to, this sounds terrible and I don't mean for it to, but I didn't really need to do anything else for them for the rest of like many years, right? Like you just don't need to for that. That cultural norm is different. The India team, I had to give a lot of raises and bonuses and I had to equalize that across two different countries, right? To make sure that I was still being fair in my compensation. Meanwhile, we also had, you know, like 2 Canadians, the Irish seller, like, I mean, we were just all over the place. So I really needed to understand like, okay, what are the norms here across all of these different cultures and how do I address that? And then how do I keep compensation relatively fair when I'm dealing with these crazy factors?

Operators of these small businesses should be prepared to probably spend an inordinate amount of time on compensation structures and what is the best fit, managing them, communicating them, and how that works. I think, you know, we went through a couple— the plan was not incredibly transparent to our leadership when I stepped in, and that was something that I really wanted to change. Been in a lot of organizations where it was a bit of a black box and you sort of you just got this number that kind of spit out at the end of the year. And that always felt very uncomfortable to me. And sort of, you know, following in the great game of business and sharing metrics, um, I started doing that with the leadership team and made their bonuses tied to sort of revenue and margin outcomes. And, you know, I thought that felt like a, you know, a much, a much better way to communicate and drive towards the same things. But spent a lot of time and like, I think that a lot of people don't necessarily understand those, those types of structures. They're a little bit more confusing than, hey, congratulations, you got $1,000 and people are like super happy versus like, hey, we've got this 2x2 matrix and, you know, this, this number is this and then this one's this and I'll tell it to you what it is every month and you can sort of look at how it's going to be progressing. So I still, I am still actually torn like on what is the right way there?

I think the answer is that there is no right way. Yeah. But yeah, I think like I definitely spent a lot of time on compensation conversations, both internally and externally, meaning like I had to go out and validate a lot of information and like search for the answers to how much should I increase my India team versus my Filipino team versus, you know, my Canadian employees asking for six figures and I need to benchmark her against other similar roles in similar like geographies. Like we have to, there's bands, there's, there's actually like a mathematical process to compensation. It's not just, oh, you're doing a good job. Here's a, here's a raise. Like we have to be within, and that's the HR hat coming on for me that, you know, I spent time there. So like I care about that stuff. But there's a lot of conversation on comp that I just didn't ever think I'd have that many.

But yeah, it's, it's, it's coming. Be ready for this. Where are there any resources that you use that we should maybe link in the show?

Or, well, now, I mean, now I would probably just use like AI for a lot of this stuff.

But the first place to go, I actually, I was thinking like, you know, we had at the time when I took over the organization, we had one contractor in the Philippines and helping with like back office tasks. And yeah, I wish I had ChatGPT at that time to figure out like how appropriate or inappropriate the comp level was because I think it had sort of progressed with annual increases and had gotten to a pretty strong level for that, that market. And like you're saying, there's bands where things are appropriate and not appropriate, and I still am not 100% sure. So I should go ChatGPT that.

Or just talk to people who have done a ton of hiring in that country, right? I happen to have friends who, an old boss that set up call centers in the Philippines and I like, I just had some resources available where I could spot check and make sure that I was directionally correct. I, one of my best friends is also like a compensation director or VP. I don't know what her title is now, but so she, I was like, hey, can you pull some comp data like real quick on the side for me? So I think, you know, just tapping into the people that you know who are maybe doing things similarly, it was helpful for me.

Yeah.

Yeah.

Well, I feel like we've devolved into just talking a lot about compensation, but I think that actually is probably like an important takeaway here is like, yep, you're going to be thinking a lot about that. You're going to get asked a lot of questions about that. Be ready for it and sort of have a plan and a structure. Anything else you want to add before we wrap up?

Sometimes compensation stresses me out. So just talking about this, I'm like, oh, I need to like relax. I mean, They're tough.

It is, I think, one of the hardest conversations you're going to have with your team because you need them, you want them, and this really impacts them and their family. So be ready for it, be thoughtful about it, and you don't always have to have the answers.

Yeah. And to that point, I think maybe like my last comment that I'll make is I think that there's a very delicate balance that we have to find as operators. Between making smart decisions and making like fearful decisions. So when it comes to comp, I definitely find myself starting to gravitate towards this like, oh shit, I don't want them to leave. Therefore I'm just going to pay them. And that's a very fear-based decision because, and there's that, like it's valid, right? You don't want people to leave. And sometimes you do have to just throw money. Like that is sometimes the answer. But to make all of your decisions out of, I am scared of what's going to happen if they leave, uh, I don't think that's wise. And I would certainly try to have a balanced approach of, okay, like, yeah, I really don't want this person to leave, or like, this would be difficult in XYZ ways, but I also need to be smart for my business and have the, the foresight and the, um, discipline to make good compensation decisions.

So true. I was thinking that we hadn't talked about like fear-based decisions versus, you know, from a place of strength. And great. Thanks so much, Christi. And yeah, looking forward to the next one.