Episode 179: Behind the Merger with Genumark's Mitch Freed and Rightsleeve's Stephen Musgrave

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Anytime there's, uh, like a merger like this, there's gonna be change. A bunch of stuff is gonna change. We're gonna have to change to fit with January a little better. They're gonna have to change a bit to like fit us in. Like, all this stuff is gonna— there's change coming, you know, it's coming. But like, if we hadn't been bought, there would have been a lot of— it's just like there was other change coming too.

I was gonna say on your change point, we had our sales awards last week and I talked about here's our 3 sort of goals for the year. And one of them was embrace change. And then I said, this will probably be the last time I put embrace change as one of our goals because it is status quo moving forward. There's just— the world is moving too fast.

GenuMark is one of the largest companies selling promotional merchandise in North America. The Promotional Products Professionals of Canada named GenuMark yet again the top large distributor and national distributor of the year, and they consistently rank in ASI's top 40 distributors by revenue in North America. In October of 2019, GenuMark acquired Right Sleeve right before the pandemic hit. Right Sleeve, too, is a multiple award-winning agency. So what happens when the largest distributor in Canada and one of the most progressive brands in the business face integrating their companies, their brands, and their clients? And what happens when this integration happens in the midst of a pandemic? Today you'll hear the story of how Mitch Freed, GenuineMark's Vice President of Strategic Initiatives, and Steven Musgrave, BrightSleeves Vice President and General Manager, guided the merger and their teams over the past several months. Hi friends, I'm Bobby LeHew, the Chief Content Officer at CommsQ. Yesterday we hosted the first of our community meetups. We gathered to talk about developing your sales playbook. With meetups, we're taking live interviews featuring insightful talks by the most streetwise entrepreneurs and mashing those up with a community hang and a micro-learning lab. It's a fast hour with friends, and you'll walk away with real-time tactics from pros. You won't want to miss the next one where we'll be talking with Kelly Byrne, the director of marketing at IMM Marketing Group. Join us April 21st, 4 to 5 ET. You can register at commonskew.com/communitymeetups. This episode is brought to you by CommonsKew, the work from anywhere platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. To learn more or begin your free trial now, visit commonskew.com. Now here's my conversation with Stephen and Mitch, where you're hearing Mitch respond to my question about why this merger made sense for both GenuineMark Rice Sleeve?

There were 3 main things that why, why this was super attractive for us. The first was it was a totally additive customer segment. Rice Sleeve is great in camps and schools. We dabbled but never been really strong in those segments, I would say. Toronto tech scene, again, dabbled but not really strong. I wouldn't say the GenuMark brand carried from tech company to tech company in this hub that we have. We have a pretty strong tech hub actually in Canada, and I would say the RS brand did and does pretty well there. So additive customer segments. The second was, you know, we've been looking and talking about sort of GenuMark 2.0, if you will, for a long time. Bobby, I remember you and I talked about it a couple years ago when we talked on this podcast. And With GenuineMark securely becoming a second-generation family business where we have lots of runway ahead of us, the idea of adding great young talent is always top of mind for us, and Right Sleeve is just filled with that. So from the people side of things, it's sort of the biggest win we could have asked for. And then the third reason was just— I'm going to go into details, but I would say like the integration, when we thought about it, was doable. Like, integration is never easy, but when we like looked at what Bright Sleeve had going for it, we're like, okay, this could work. And those were really strong management in place, obviously led by Steven. You know, Steven was going to come along for the ride. We felt that if we had to on a worst-case scenario and just keep it a standalone entity for a really long time, it would continue to be successful. So it would run well. So that sort of makes it quote unquote easy. It's not— again, nothing's easy, but easier.

Yeah.

And then the second is like, how often is it that you're about to integrate two companies where technologies are similar or the same? So our ERP systems are very different. Like Right Sleeve is on QuickBooks from an accounting and sort of ERP standpoint, which is very similar to, I would say, probably most common SKU customers, whereas Jenniemark has a proprietary custom ERP solution. So that's a challenge and that still remains a challenge and we're working on that. But, you know, the fact that we were both on common SKU was and is just so unique. Like, that's such an interesting opportunity to be able to buy a company that is already masters in the technology that you're trying to get better at and knowing even better. So, so those are sort of the three things that we really thought about and why we thought it made a lot of sense. At the outset.

Steven, same kind of question to you. Why did this purchase make sense for Rightsly? We know why it made sense for Mark and Catherine, not just selling the business, but focusing— so they had two businesses to run, so focusing on Commonsku. But how did this make sense as you were looking at Jimby and Mark? You're like, here's what we can gain through this partnership.

Yeah, like I knew I was going to be stuck around after they left, but was like instantly excited about this. I think a big part of it is the opportunity to take kind of the approach we take at Right Sleeve and the things that we think are important about how we do what we do, but put a lot more resources behind them. The biggest one, the second I heard about the acquisition, I was like, oh my God, we're gonna have a warehouse now. We're gonna have like in-house fulfillment and warehousing. 'Cause we've done that sort of business for clients over the years, but we were using all like 3PL companies and they're good. They've been great partners to us, but But the kind of like hands-on, precious Snowflake approach we like to take with every project we do is a little easier to execute when you have like true control over, over the process. So like resources like that, kind of a more robust approach to like how supply chain is managed and vendor relationships, things like that, were all super exciting. And then I think bigger picture, we'd grown a lot at Right Sleeve. Over the years. And we were kind of reaching that spot where I'm like, I don't know how to describe it, but there needed to be like some new energy or ideas or something to like have us keep growing and kind of push through that, that next barrier. So that idea of having access to this years and years of experience at JanuaryMark, while also having met Mitch a couple times before and knowing like his vision for the future of the company, it was just very like, I think this is like a kick in the butt we need, like, to, yeah, keep things going into the future.

So that's cool.

Were there fringe benefits for both of you that you didn't see?

Yeah, I would say that, that actually, like, the fringe benefits, just, I would say, Bobby, like, they came on faster because of COVID I said before, like, we, we meant for this to be like a very standalone entity for a while, as we like to say. Like, let's let Right Sleeve marinate. Let's let it chill. Let's let, like, let's watch it let's talk to Stephen a bunch, let's learn what they're doing. Let's just see what's going on here. I mean, that didn't happen because of the pandemic. Like, yeah. And Stephen, I don't even remember what the, when the moment happened, but I don't think it was a plan where we said, you know what, Stephen's going to be part of like the corporate executive team. I don't think that was the plan when we bought Right Sleeve, but because COVID happened, the exec team started talking and meeting way more regularly than we ever did, at least formally, you know, we have at least a weekly meeting. I mean, it sounds obvious, but, you know, when you're in one office space, you're kind of talking all the time, and we didn't set aside the meetings the same way. And because that— well, Steven better be in on these meetings all the time. And then Steven basically joined that team that I don't think was the plan on day one at all. I don't think Steven was expecting it. I wasn't expecting it. So, you know, having him in there was definitely a fringe benefit. That was not expected. And then also with that sentiment, if you think of that being Steven's sort of regular contribution to Jenny Mark, sort of corporate level of thinking about things, we also spread a person by the name of Elizabeth Wimbush, who was the director of supply chain at Wrightsleeve, who's just a superstar if anybody knows her.

Yeah, she is.

Yeah, she's awesome. And pretty quickly we realized she was just doing all these great things that could so easily be transferred to the whole corporation, the whole organization. Why is she just doing it for this piece that that kind of accounts for, you know, 15 to 20% of the business depending on sales that year. She should be doing it for the whole company. And so having her sort of, you know, be in between both was not an expectation, but it happened pretty fast. And I think it happened faster because of COVID So definitely a fringe benefit that's been— that again was not planned. So just, you know, personnel crossing over sort of faster than we thought has been a huge fringe benefit, I would say.

Steven, anything to add to that?

I mean, I think my personal fringe benefit is getting this more access to like the leadership team at Jenniemark, and I think that's helped Right Sleeve kind of get through the pandemic. Yeah, like just leaning on those kinds of years of experience. I think one of the things I was surprised about is like I immediately thought, what benefits can we get from Jenniemark? Like, I was like, they have a warehouse. It's literally the first thing I thought when I heard that the acquisition was happening. But I think like the thing that's been cool. It makes me, it makes me very happy about if we were going to get bought by a company, that they're the company that bought us, is, is the element of like, what can we add to what Janie Mark's doing? And I think Liz is like a great example of that. I think about all these like things that we have been trying to accomplish for years at Rightsleeve that are important to us around things like sustainability, or even like looking at diversity and inclusion, brand building, you know, how we think about vendor relationships and partnerships, all this kind of stuff that like you know, has been percolating at Rightsly for years and getting to kind of spread that into January a little bit more and say like, hey, like this is how we think of things. What do you think of that? And then be very open-minded to trying new stuff and doing things like moving Liz into this bigger role. Just like, I think the open-mindedness and willingness to like share, like lean on our experience too, has been really like fulfilling over the last year and a half.

You kind of touched on this, Mitch, but what market opportunities—

you talk about tech, you talk about camps, and for those that aren't up in Toronto, um, obviously most people probably know Toronto is such a tech hub. What they didn't know, what I never knew until I really was connected through Kometski, was how much camp business is up in that part of the country. So those are big market opportunities.

And Stephen, were there market opportunities that expanded for you because of this merger?

I mean, you mentioned the shot, the ability to do fulfillment, that just give you more strength with inside your existing customers. Did you expand opportunities as well?

I'd say we lean more into like strength with existing customer base. Yeah, it's— yeah, it's— that's been the biggest benefit is especially taking lots of the like super custom work we were doing before and turning it into like, like flipping it over to kind of more program stuff that's easier for, for clients to access, like inventory programs, things like that. But with like that existing, like, we still focus really heavily on technology companies.

Liz is such a rock star. She's a great example of how you blended teams and pulled strengths from certain personalities. How did you integrate the teams? Was this— this obviously was a process.

In many ways, it seems as though the business operates as a separate entity.

But there's obviously team integration going on. How'd that process happen?

So I would say like the only place where there's like true team integration, like where you have like people that were originally hired by Jenniemark, people that are originally hired by Right Sleeve, and that are just like working together regularly is the marketing teams. Our marketing teams, like you got like 2 and 3 people and they're kind of come together now as like this one joint group. And that's been really interesting to watch. I think Steven and I underestimated the complexities of that, because the goal with that was essentially, hey, there's a bunch of you in marketing, how cool would it be to get double the output with half the work since, since there's so many of you? That was the goal. And then there's this sort of complicated thing in the middle, which is there's actually two different brands that are being worked on though. And I think that that's created a challenge for this team, because with that double the output, half the work, what does that mean? Well, it kind of means if we're writing a blog post, you could probably span it across both banners, both brands. Yeah. But that doesn't necessarily work all the time. And I think they've done a really good job at identifying the complexities of it. They've done a great job at getting better at it and getting into this groove. But we probably still haven't quite figured that out yet. But that's just a good example of teams truly being integrated somewhat day to day, at least week to week, I would say.

Just watching from the sidelines, it seems to me a very clear example of an organization— both organizations were very clear upfront about what strengths each company was bringing to each other.

And so therefore, that merger made it hard.

I mean, I think a lot of folks might be looking for— well, there had to be tough times and tension. But Stephen, as you and I were talking before we even hit record, the fear is probably larger than the reality and the tensions surely exist just like in any relationship, but not near what you think. And I think that's kudos to all of the vetting that you both did prior.

Yeah. I mean, so just to talk about that, another way that this was super unique is we knew, and now I'm talking prior to Steven's involvement, but we knew each other's companies very well. I mean, Genymark, was and is a very large client of Common Skews. I would say Mark and Catherine, certainly as I joined the industry, I was immediately drawn to them on a personal and professional level and just really saw them as mentors and thought I could learn a lot from them. And there was a friendship there. And then this all kind of came to be and it was kind of like doing a deal with your friends, which is really interesting. I mean, that came with some challenges, but We're still friends. Like we just, we executed something really important and there probably could have been a lot that went wrong, but by and large, I mean, it really didn't. So I think that when you ask the question about like, what were the key surprises and all these, like we just knew a lot even before it even turned into a deal.

Makes sense.

Which makes it, I think, so unique. And I think it's also, you know, This isn't GenuMark's strategy. Just because we just did a deal like this, we're not going to— I don't foresee our growth strategy being an acquisition growth strategy. This was just a really unique situation where it just made sense and we couldn't turn it away.

Yeah.

What I love about that is the value that you just gave to entrepreneurs or folks that want to look at acquisition or thinking about selling, I think that looking for the right opportunity, that's a, that's a lot of the disaster stories come from premature decisions or desperate decisions around integration, selling and things like that. Let's talk about client integration. What did you guys do practically to ensure a smooth client integration, both internally and externally, but mostly with your customers? Was there any communication hurdle?

I think Stephen can talk to this better than I can, but I'll just start off by saying I kind of remember when the deal closed, there was a press release that was done. That was mostly within the industry. You know, then there was an article that press release was posted on the Right Sleeve and Jenny Merck sites. And then I believe Mark and Catherine penned a similar release to existing customers. And personally, I hadn't thought about the communication on the acquisition basically since then. Stephen is in a different position than me. But so Stephen, why don't you sort of talk through that a little bit, I guess.

There wasn't a ton to transition because we like, I don't know if we want our clients to know like, yeah, you're still working with like the same team. We still do things the same way. Like we just, it's the same team. We still do things the same way. There hasn't like, we sent out a press release, I think on our invoices now it says it does have January mentioned at the bottom, but largely like it's still like if you're our client and you missed that press release, you probably don't know what happened. And it's not, it's not like we're trying to not talk about it, but we're just also not at a point where we think there's a ton of value in talking about it a lot.

Yeah, for sure. This, this goes to a broader sort of question that I can say we, we for sure haven't fully figured out, which is sort of like, where does the right sleeve band, like, where does it fit within Jenniemark? Like, what is it? So It's actually, we're all one company now. We think the Right Sleeve brand is really important. You can see that because it's everywhere still and we haven't gotten rid of it. We haven't diminished it. We also, I should add, you know, which is very common, at least in our industry, it's not Right Sleeve powered by January.

Right.

We saw no advantage to that play, to be honest. Obviously during the deal we talked about it, but it just sort of never happened and we never really, you know, it just sort of never made sense. Internally, we used to call them like different divisions, but I think the best way to articulate it now is like right sleeve is a GenuMark banner. And I even saw like with talking about this podcast, Steven was almost comparing it to like a Nike versus like a Converse, which I think is a nice comparable. Like Converse, if you don't know—

Very interesting.

Probably don't know that Converse is owned by Nike, but they are. And I can assure you that Nike's management team certainly cares a lot about how Converse is doing. They probably have a lot of sway. And passion behind it and, you know, make decisions. And I'm sure lots of people at the Converse team are involved in, you know, Nike's position in the market, and I'm sure lots of people maybe have jumped between brands in terms of who they're employed by and what brand do they think about day to day. So I actually think it's a really nice example of probably where we're at. And listen, it might be where we're going to be for a long time. We definitely haven't figured that piece out, but I think we're comfortable thinking of it in that real-world example.

That's a brilliant analogy because—

That was all Steven. I think the Nike-Converse comparison is a really good one to where we're at right now.

Well, it's brilliant, Steven, because it also touches on the fact that these brands have distinct audiences themselves. They might blend somewhat, but for the most part, Converse has got this unique vibe and Nike has this unique vibe. Both of them rest on the strength of their brands. There may be something that you think you have to reconcile when you don't at all.

It's— there's like, they have different vibes, they can address different people, but like, I've got Chuck Taylors and Air Maxes in the hallway right behind me, you know what I mean? Like, they can still like, right alongside each other and, right, and have similar like connections to people.

But yeah, and that, that answers all my questions about brand integration because, Mitch, you said something to me earlier when we were talking about recording this, and that is that You know, as far as the brand story goes, you've, you've had different names before, you've acquired different companies, the clients want to know they're working with their teams that have taken good care of them. And they'll know, whatever that transition is, if they've got good people that they're working with through projects, they're going to be okay.

Yeah, very well said.

Last question. You're both leaders of your teams. How would you encourage other leaders to work together through a merger and acquisition? I'm asking you to sort of go back and think back through those steps a little bit, but also kind from where you're at today, what would you do different? Would you do anything different? Or what did you learn as you went through this process that you would encourage others to do?

Stephen, you want to go first?

You can tell from, from talking about this, I feel this is going pretty well.

Yeah, right.

Like, I'm happy about this, this merger. And I think that the big key has been working together on things. Like, when we're approaching problems, it feels, it feels very collaborative. A lot, a lot more open and collaborative than I would have thought if I'd found out Jenniemark was buying us like 6 or 7 years ago. I had a very different opinion of— because they were like the big scary Canadian distributor, right?

Right.

But I felt less scared by them after meeting Mitch at a couple of Commscue events. I was like, oh, they seem like they're doing like cooler stuff. And then since, since acquisition, it's really been just working together and clear communication, kind of like transparency. Put your cards on the table. Yeah, make sure everybody's taking care of everybody, that kind of stuff.

Yeah. Well, I'm going to throw a wild reflection out here because again, I'm on the sidelines watching this unfold, but in a funny way, it's almost as if COVID may have even helped with the merger in the sense of getting your teams together, because you could have operated even more so as separate entities, even though you're in the same city. When you're in a city like Toronto, you could might as well be in two different worlds, and perhaps the virtual world suddenly thrust everybody together in a unique way. That's a tangent, so I'm not sure if that's the case, but it's kind of interesting.

It's 100% the case.

I think quickly there's some element of Everybody being forced to work remotely, that helped push out that like othering of the two companies.

Yeah.

Like even I can remember in the first couple months I'd be in the right sleeve office. And if I said Janumark, I'd point like north, right. And east to where they are. I don't do that when I say Janumark anymore, cuz I'd have to be like everywhere. Um, so, so it does like really like that physical thing. Like it, like it, it broke down that. That barrier a little bit. But it's also like, anytime there's, uh, like a merger like this, there's gonna be change. A bunch of stuff is gonna change. We're gonna have to change to fit with January a little better. They're gonna have to change a bit to like fit us in. Like, all this stuff is gonna— there's change coming, you know, it's coming. But like, if we hadn't been bought, there would have been a lot of— it's just like, yeah, right, there was other change coming too. And it was, uh, it was kind of a thing where it's like, well, like We can't say, I want to do this the way I've always done it. Like, we would have to do it a different way anyway.

Yeah.

How do we do this a different way together? Like it did, like if I, if I had my choice between like a little bit more friction in the merger and not having the pandemic, I would pick the friction, but like I didn't have a choice and I worked out, we made the best of it.

Right.

But this comment about change is typical Steven Zen though. This is perfect because that's a great leadership tip. You know, the fact you're gonna go through change regardless of the way, whether we have a merger or acquisition, because the client's changing all the time. The client's changing faster than ever before. Mitch, I'll let you answer that question on leadership. Go ahead, Steve.

Yeah, just, I was gonna say on your change point, we, we had our sales awards last, last week, and I talked about, here's our 3 sort of goals for the year. And one of them is embrace change. And then I said, this will probably be the last time I put embrace change as one of our goals, because it is status quo. Moving forward. There's just—

there's—

the world is moving too fast. We invest too much every year in technology and people changes in new roles. So, you know, if you're not sort of embracing change day to day, then it's— this is going to be a tough place for you to be. I didn't say that, but, you know, you know what I'm saying? Like, it really— it has become status quo. So, yeah, it's an important paradigm shift, I think, for everybody.

Mitch, on that last question I asked, as far as leadership goes, and you, you know, you both had your separate entities, separate teams that you were integrating How would you encourage other leaders to work through an acquisition?

If it's not through people, then I don't know how it's going to work. And what I mean by that is, again, I said at the beginning of this conversation, comfort with the acquisition was just knowing there was management in place that was coming along for the ride that we could rely on. I knew Steven, I didn't know Steven well. He has obviously a great reputation and we knew that Mark and Catherine were very busy people and they left a lot to him even when they were around. And so we felt very confident about, even if we weren't jumping in right away, like I said, like it would be in good hands. And if you don't embrace the new leaders right away and bring them onto your team, then you'll probably have more resistance than what's needed. If there's something going on that doesn't feel right to Stephen or I or within our respective teams, Stephen and I know about it. From one another probably that day. You know, we talk almost every day, and I think that's, uh, without that connection or without that wanting to work with those, you know, new people that came in as part of the merger, it might not work. And so I think just embracing that we're just going to have, you know, some new team members that we're going to really get to know and work with day to day and probably learn a ton from, without embracing that going into the closing, I think it would have been— it just wouldn't have been as good of an experience. And I don't think we would have made it this far this fast.

Well, kudos to you two for both actually working hard on this relationship. Not saying that you had to work hard on it. But what my lesson as I talk to you both and take away from it is that you need to have two point people that really do want to work together, comprehend each other, understand, and understand the tensions and frictions and all of that. But the point people in these kinds of acquisitions and mergers are vital. And so kudos to you both for this whole experience, and thanks for showing up on SkuCast to educate us a little bit.

Pleasure, always, anytime.

Thanks so much for tuning in to this episode of SkuCast. Be sure to keep up with our latest content by subscribing to SkuCast on iTunes or to our blog blog at community.commskew.com. Until next time, friends, thanks so much for listening.