248 - Scaling Businesses with Heart: An Approach to Leadership and Culture Integration with Agital's Jeff Reynolds

Welcome to Listening with Leaders. I'm Doug Noll, lawyer turned peacemaker. I teach executive leaders how to listen to emotions rather than words so that they can become the leaders everyone wants to follow. And I teach those same leaders how to be authentically present, available, and connected to their families despite being insanely busy. I have learned that we are 98% emotional and only 2% rational. Learning how to listen to emotions is, in my experience, the foundational skill of life. Stick around to the end of the show and I'll reveal how you can be on our next guest in 15 to 20 minutes. So let's get started.

Jeff Reynolds, welcome to Listening with Leaders. You're the CEO of Agile, which can be found at agile.com, uh, and You just mentioned something before we went on the air about this being your company's a hedge fund roll-up. I wanna learn more about that, but first of all, let's tell us a little bit about your backstory. Yeah.

Originally from the Midwest, spent a bunch of years working on a PhD and realized I was great at analytics, but wasn't gonna be a good academic. So I had to figure out what to do with my career. And I found marketing with an analytic focus. And that was, that was the beginning of my career journey. Met my wife, ventured out to California, joined a little privately held boutique marketing services business that had about a little north of 100 employees, and then had an amazing career there where we took it from 100 to 1,200 employees. I really got a sort of an extraordinary experience scaling a business first, very much just organically and bootstrapped and eventually became president of that business. And then we brought in private equity investors in 2015, continued to expand the business both organically as well as with some acquisitions. So that's where I got my first chance to work with growth capital. Left that business in 2020, started writing a book about how you scale people-based businesses. And then I found my current investor group who had a general thesis around the transformation going on in digital marketing. And their model is to bring in an outside CEO with 1,000 company, 1,000 person company experience to get involved early and help guide the, both the acquisition and development of a, of a business. And so we've got a thesis to bring together some of the leading edge digital marketing, cutting-edge techniques and tools and technologies that are available to, to build a really meaningful, broad-based company that can have an impact on the entire marketing industry.

I think you're the first guy I've talked to who— I know of people like you that hedge funds bring in, to outside CEOs bring in and help bring these acquisitions all under one roof. I've talked to people all on the periphery, but I don't think I've ever talked to a real CEO who is doing this work. This sounds like it's interesting and challenging work because you've got all these different organizations, different cultures, different stories, all of which have to be brought together and unified. How do you go about doing that?

Yeah, that is, that is the, the business I'm in. It's my life's work. I'm a trained behavioral scientist and I sometimes wonder how anyone can be a CEO and not have that skill set because I'm in the people leadership business and this is all about people. And culture. And I don't know how much depth you want to go into, but we've got a very, a very thoughtful process about how we bring together. First of all, you got to filter the right leaders and right cultures. You've got to start with a good set of foundations, but every business is going to be a little different, both because of their offering and their value proposition and their culture. And, and so I've got an analogy I use that is a Federalist view. If you think back to the I'm an old political science hack, but you think back to the original 13 colonies, the idea that these groups come together with unique aspects that, but they can be united and create something way more than any of them could have done individually is really part of my philosophy of real local management and local control and being very patient about how cultures come together over time. And so we're, we're just very thoughtful about the way that we integrate, the way that we try to keep the best of those existing businesses while hopefully helping supercharge them for success and growth because besides myself, we got a really talented management team that's worked at all different levels of scale that can be real, real guides to these founders who've usually been working for a decade or more on building their business.

I guess what it offers the founders is the fact that you can do, have, provide, for example, a lot of back office stuff, HR and finance and administration, and allow them to continue to do their creative work. Without having to worry about all that other stuff.

And hopefully—

Yeah, my, my own philosophy is once you get past about 50 employees, particularly in the services types of businesses, the next set of challenges are really business challenges that are different than the— a lot of people that start these businesses are digital marketing experts at their craft. And, uh, they're very involved in building out a capability to deliver that in a beautiful way. But then once you hit 50 employees, it starts becoming a, I need to, to bring in a bunch of other people in these very disparate disciplines of finance or accounting or IT. And so sometimes when I'm even talking to founders, I buy, I'm like, I, I bet you'd love a, a mentor, a fractional CFO, a fractional chief people officer, a fractional— I've got all those people. Join us and you can stay focused on serving clients and growing your business and we'll help you scale.

Yeah, exactly. So what does it get you up in the morning? It gets you to go to work. You've been doing this for a long time. I can tell you're excited about it.

The, I, I've loved marketing since the day that I entered it. My wife and I laugh sometimes. I think of the 80% of our, the people that stood with us in our wedding were in marketing. Always this great combination of left brain, right brain, and little bit creative, but commercially oriented people. And so I, I love our business in general and I love the people that work in marketing. And so what really gets me out of bed in the morning is trying to create an extraordinary company where top people want to come join, learn, grow. Because my basic philosophy is that if we're growing the talent of individuals and they stay with us as a business, we're going to grow a valuable business. And so I really, I like leading, I like leading in general. I like leading leaders and I like the kinds of people that do the work that we do. And so I'm just very motivated to, to be of service with the nicks and cuts and broken bones of my 25 or 30-year career to hopefully guide us to a really exciting future. That's a win for our clients. That's a win for our people, a win for our shareholders. And that's a balancing act. And I, I think we're going to be successful at it, but it's a challenge. It's a lot of people.

Yeah.

A lot of people work to try to make sure you can create that kind of environment.

So you run into a situation, people, okay, I'll use your words, people work. When you're talking about people work, what kind of, what kinds of things are you talking about? This is something that a lot of people, a lot of leaders don't get, I think.

So, um, Trying to create— so my general view is that we've got to empower our people to deliver for our clients. And so I think what often happens at scale is that a business model, a mechanistic mindset that made sense when you were building manufacturing or all sorts of other kinds of businesses, bring a lens to scaling people businesses that just is a— it's not the right mental model because what people have uniquely, and I'm fully ready for AI to have its impact on our world, but they will never replace what motivated people can do when people are like geared up themselves to get up every morning to go make an impact. That's a, that's like a 10x leverage factor in a business versus people that are checking a box every day at work, as well as their creativity. And I sometimes refer that we're in the business, we use a lot of technology, we're taking advantage of some of the great technology platforms that have impacted marketing like Google, like Facebook, like like Bing, like TikTok. But there's still always this last bit that is what a valuable partner like us does to take what those tools can do and really make it work to help drive someone else's business. And I, I borrow from Jeff Bezos when I'm like, we're in that business of the last mile to the customer and our creativity, commercial savvy, strategic orientation, depth of understanding of our clients and their business makes a huge impact on, on ultimately the value that we can deliver for our clients. And so we've got to create a culture and environment where people get to leverage their motivation and creativity, uh, and make decisions. And so that's going to be a very flat, local decision-making thing rather than a hierarchical place where people way far removed from the day-to-day issues are somehow seemingly thinking they can direct the orchestra properly.

It strikes me that what you're talking about is absolutely correct, that the as businesses scale, it become, the, the business becomes more complex in many different ways. And so what people try to do is they try to simplify it and that's when it becomes mechanistic and bureaucratic. And that's when you crush the human spirit and crush, you crush culture.

So I, what I believe we really are doing is scaling culture. And, and so how do you scale culture? And it's ultimately through leadership and through the right kind of blend of guardrails and freedom so that people can, can operate in the culture. Different even parts of marketing, a creative department versus maybe a heavily analytic paid media group that they're gonna have different people with different needs. You try to create a, a, a stiff shirt IBM, one culture out of that, you'll just destroy left and right. And instead you've gotta have the right sense of, I always think it's a common mission, vision, and values that binds us together. But then a lot of group and leader freedom to, to do the work of their teams and deliver that for clients.

That sounds like you as the CEO sound like you're doing a lot of coaching in your local leadership teams and brainstorming with them what their problems are, making sure that they're meeting what they need to meet in terms of financial project, you know, as well as delivering quality product to the client. And so a lot of your time, it sounds like, is spent listening and working with the people, as you said, the local people. Yeah.

That's genuinely what I enjoy is the opportunity to— these entrepreneurs that join our businesses are incredibly talented. They're, they're cutting-edge people that took the entrepreneurial plunge in 2008, in 2012, in 2015. The different businesses join us with different lengths of tenure, and I just have, I have tremendous respect for the, the fortitude it takes to do that, the creativity, the courage, the leadership, the resiliency. And, and so they've usually got so many wonderful— by the time they pass our filter of joining our business, so many wonderful characteristics. And so it's, I'm not doing a turnaround job on these businesses. I'm helping these leaders. Oftentimes it's a little unlock to an idea or a way they viewed the world that made total sense when you were 20 people, but doesn't make sense when you're 60 people and giving them perspective on thinking differently about that. And then they get unleashed and unlock the next period of their own growth. That's pretty fun to watch. Pretty cool to be a part of.

I was going to say, that's probably pretty exciting for you to watch the growth and the maturation of all these people and what they've done with their own little businesses.

Yeah.

That's the— when I look at my career, I really had an amazing opportunity to be a part of one business for 18 years that scaled from 120 to 1,200. And then, by the way, that was a privately held business, and the founder sat in the office next to me, and he'd started it in 1973, and I joined in 2003.

Wow.

So with his stories and my experience, I had this 50-year lens from entrepreneur, one person in a box of business cards to 1,200. And I got to see all these careers and I got to see how that business evolved. And we grew organically, bootstrapped really successfully for a long time, long before we ever brought in outside investors. But that long-range view, people who I knew from being an entry-level 22-year-old looking for a place to hang their hat as, as pure raw material that then went on to run businesses and have this extraordinary impact. I, I got to see those journeys. And I think for these younger businesses full of very talented 20-somethings, I'm able to look out into that future and know that if we create the right environment, these folks can go on to be extraordinary leaders in our business and, and have wonderful careers that are very fulfilling. And that's a really exciting thing to be able to try to build an organization around and inspire a group of people too.

Yeah, I think that having that perspective of decades of work probably is really advantageous for you to be able to guide, guide the younger people along. What do you think is unique about you as an individual that you bring to the table that makes everything so successful?

Oh gosh. So I think it begins with my general orientation as someone that, like, when I joined that company in '03, I was a person who needed a job looking for an opportunity. I wasn't a fancy minted MBA. I didn't think I was necessarily going to go on to be a president or a CEO. And then I got to be a part of what an organization did to help me achieve And so I think at the core of who I am is a guy that, that just has a great deal of connection to what it's like to be an employee and, and what it takes to create an environment that people really enjoy what they're doing and want to stick around and believe in leadership. And so I think there's a, there's an orientation to me that's just very much connected to, to my employees and my people and their in their journey. I think I've always been a good strategist by orientation. That was a core to the business that I grew up in, but being able to think in, in long-term, being able to think 2 or 3 chess moves ahead. And then maybe, maybe lastly, the, the unique background in the behavioral sciences. Again, it's too long for a 30-minute podcast, but the, the ways that I'm able to connect disparate theories and ideas about how people and groups and relationships and organizations work has given me a unique perspective, I think, on, on how we build teams and relationships at work that are successful.

You're an Integrator. I can sense that. Yeah. Did you ever finish your PhD?

I didn't. I was in the midst of the dissertation when I ran out of money, ran out of gas, and and realized that I wasn't going to be an academic. And then it was like, I'm going to spend another year writing this paper. I just didn't have it in me, but it also sits in my craw because I don't quit very many things very easily. And so in some ways, I want to start writing the book about scaling professional services businesses, which I wrote. I've written about 30,000 words of it. A little bit of that was because I got a chip on my shoulder for a thing I didn't finish 25 years ago.

Yeah, I know. I was thinking about going back and getting a PhD, but I went around and started interviewing schools and I found out that I'd be the one teaching the classes. So, and a JD and an MA was enough.

This show's called Listening with Leaders.

I don't know if you know anything about my background. I'm a lawyer turned peacemaker, and I've developed a set of skills that allows people to never have a fight or argument again in their life. Stops all fights.

I'm sorry, say that again. You've developed set of skills.

What? That allows people to never have— my promise to my clients is learn these skills and you will never have a fight or argument again in your life. And it allows you to calm any angry person in less than 90 seconds. I don't care how angry they are. And creates instant trust, loyalty, and connection, which sounds consonant with what you're talking about. I'm curious, in your career, how important has the development of your listening skills been? In, in terms of your success and the success of your companies?

Yeah. So are you familiar with an academic named John Gottman who studies conflict in couples?

Very much.

So John's work inspired me back in the mid-'90s, and I'm actually on the board of the Gottman Institute.

Oh, really? Oh, okay.

And, uh, the ideas about conflict from that have fundamentally changed the way that I think about relationships because What that line of thinking really says is that conflict is a part of life. It's a part of all relationships. There is no such thing as a long-term meaningful journey in any way. And whether that's your spouse, your colleagues at work, your client, that doesn't actually require at times there to be difficult conversations about aligning important things. But the, the, this golden ratio that, that Gottman came up with, you need about 5 positives for every 1 negative in the way that you manage that has been a a high-level orientation that I've had for a very long time about how you work with people. And interestingly, what Gottman found also was that you'd think more positives and less negatives would be good. But what happened when people had 10 to 1 or 15 to 1, it actually didn't predict success because they actually weren't dealing with things. They were—

or avoiding—

glossing over them. And in the end, that doesn't work either. You have to be able to talk and to resolve differences. That line of thinking been very beneficial. And then I, I think I, I learned how to manage my emotions almost too much in my growing up, but that I'm able to take very stressful situations and not escalate them, but rather listen and prob— try to problem solve through them. And I think that's been something that's helped me be successful. And I, then I'll throw on a final bit, which is, uh, kind of a belief and an optimism that if people will engage and be honest and work together, that almost all problems can be solved. And so I never give up hope that even in the most difficult situation— now, could I solve the Israel-Gaza situation? Let's just say that's way above my pay grade. There are some really hard things, but the things that generally show up in business life, client life, home life, school, the world. I just have a lot of faith that people of goodwill can come together to solve problems in ways that are mutually beneficial.

Exactly. What I've learned, I, I talk about listening other people into existence. And one form of listening is where your whole agenda is to make sure the speaker is heard from the speaker's frame of reference at both a verbal mean for words, meaning, and, and emotions. And there are, there's very specific ways that you go about doing that, that I've discovered. And there's some really powerful neuroscience behind why it works the way that it does. And you're right, if you've got the patience and you've got the skills, you can always work out problems. And what I teach my graduate students is de-escalate, then problem solve. So we always try to calm people down by listening to them. And once they're calmed down and there are 4 autonomic responses, relaxation responses you're looking for, and when you get those, then they're ready to listen to you. And you have to listen to them first. And that's the process of interpersonal relationships and taking these difficult conversations and making them transformative rather than difficult.

Yeah.

Yeah.

I mean, that's a That's a, it's a lifelong journey because the, in some ways, the, as you grow up, the stakes get higher in some of these conversations. And so being able to manage those things at those levels of complexity isn't always easy, but agree the concept of flooding that once somebody is, is in a state where their heart rate has risen, their cortisol levels are spiking, the brain doesn't work right to solve problems. It's just not a state that anything meaningful can be solved. So you have to find a way to de-escalate. So you and I 100% align there.

Here's the thing that's pretty cool. 2007, Lieberman— a study, a brain scanning study came out of Lieberman's lab at UCLA that showed that when you engage in a process known as affect labeling, which is what I teach, it automatically inhibits the emotional centers of the brain and reactivates the right ventrolateral prefrontal cortex. And it takes about 90 to 120 seconds. And when you do that, exactly what you're talking about happens, which is people calm right down. And now you can have the conversation you need to have. It's, it's, I've never seen anything as powerful in my life as this particular set of skills. And I got to acid test it for 10 years in maximum security prisons, training murderers to be peacemakers. That was a pretty interesting experience.

Fascinating.

Where do you see yourself going? You're in the middle of growing this business. I had the investors want, they obviously wanna see this thing scale and expand cuz that's where the money is. You're obviously excited about growing a bunch of young leaders.

Where does this all take you?

It's, Agital as a company and as a brand is new, but it's not new cuz it's made up of a group of entrepreneurs that all, some of them started on the journey in 1996 and some of them started on their entrepreneurial journey in 2018 and everything in between. But Agital, my goal is to create something that long outlasts me. And while we are private equity backed and there's, I do remind our leadership team that someone's teacher's pension fund is counting on us to produce returns and that we are in the business of producing, you know, value, but that I'm really always shooting for this thing that's going to be great for our clients, great for our employees and great for our shareholders. And actually it's a virtuous cycle when you get that going and that direction. So there's a long run of Agital that I hope outlasts me. How long I'll be on that journey, I'm 53 now. And so there, there is at some point there's an end state, but I'm really excited about what we're doing. I'm excited about what we're building. I'm excited for the opportunity to bring together my life's work and be the leader that's needed for this business at this time. And, and so that's where all of my attention is for now and the foreseeable future. And, and when that part is run, or I always, always think that George Washington guy, it was really smart. After 8 years, he thought it was good that leadership changed. So I'm not sure if the number's 8, but I'm pretty sure the number isn't 18 years that I ought to be running this thing. And so then after that, uh, I think I started my career with a thought I was going to be a teacher. And in some ways in my coaching, think of myself as that. The, maybe the book gets finished and I I'm able to do advisory work after that and enjoy some of the fruits and freedoms that aren't, aren't quite as intense as the, the line responsibility of being the CEO of a dynamic business like this. So, right.

That's probably, I encourage you to keep working on your book. I've written 4. The first one's the hardest. After that, it gets easier, but it's just, it's 1,000 words a day, you know, 3, 3 or 4, let's see, 200. Yeah. 4, 4. 4 pages a day. That's all you gotta do. And don't edit until you got the whole thing done, because you don't know what you— you don't know what it's gonna be until you get the whole thing done.

Yeah. I think that's good advice.

What—

one last question, Jeff, and I'll let you go. What's one thing about yourself that we would never know about unless you revealed it to us? Hmm.

What's one thing that you wouldn't know about me unless I revealed it?

You would know that I'm a jazz violinist. Yeah.

I don't have anything like that. It's funny, cause I think of myself as an open book. So I reveal lots about who I am in the day-to-day way that I, that I work. So I, maybe it would just be the sort of hands-on You name it, devoted father that's in the weeds, whether it be cooking dinner back when they were little, giving baths, coaching teams. I've just really, just really loved being a dad and I've got a 15-year-old daughter and a 13-year-old son. And that's as much as I love my work and work probably gets maybe a few more hours just because of how all that works. My, my kids and the fun's been in life and the challenge of that has been a a pretty important part of me. So I don't know if that shows up.

That's good for you. This has been a great conversation. I've really enjoyed talking with you and getting to know you. Thanks so much for your time today.

Yeah, no, I appreciate getting to know you and learning a little bit more about how you've found— there's so many wonderful niches that can be found in the world and you've really carved out an interesting space. What a pleasure to meet and get the opportunity to spend a little time with you.

Thank you.

Doug Noll here. Thank you so much for listening to Listening with Leaders. If you are a successful executive leader who would like to be on this program, please visit podcast.dougnull.com/podcast. If you got something out of this interview, would you please share this episode on social media, just do a quick screenshot with your phone and text it to a friend or post it on the socials. If you know someone that would be a great guest, tag them on the social media to let them know about the show and include the hashtag #ListeningWithLeaders.

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