#405: Breaking Founder Dependency: How to Assess, Recruit, and Integrate the Right CEO with Mike Frommelt
09/05/24 • 72 min
In this episode of Independence by DesignTM, I sit down with Mike Frommelt, the co-founder of Strategic Talent Partners and a seasoned expert in executive search and leadership development for privately held businesses. We dive into the critical role of talent assessment and leadership development in scaling a business beyond the founder’s personal capacity. Mike shares his unique insights on how to assess a company’s leadership team, the challenges owners face when transitioning from day-to-day operations, and the importance of aligning leadership talent with ownership goals.
Watch on YouTube
Mike explains the differences between hiring internally versus externally, and why sometimes promoting from within isn’t always the best option. We also explore the strategic role of a CEO or president and how to identify whether someone has the capacity to think strategically and lead teams effectively. Mike's framework for evaluating leadership potential and his holistic approach to aligning talent with business goals will leave business owners equipped with actionable steps to start building a leadership team that can thrive without their constant involvement.
Mike Frommelt is the is the co-founder of Strategic Talent Partners, a national executive search and leadership solutions firm. With over 20 years of experience, Mike specializes in C-level executive search and leadership development for privately held businesses. He helps companies transition from founder dependency by recruiting and integrating leadership talent aligned with ownership goals. Mike's expertise ensures organizations grow sustainably while equipping teams to thrive. Learn more at www.strategictalentpartners.com.
Chapters:
- (00:00) – Introduction
- (01:20) – Mike Frommelt’s Journey and the Creation of Strategic Talent Partners
- (05:00) – The Challenges of Founder Dependency and Leadership Transitions
- (08:30) – Assessing Your Leadership Team: Internal vs. External Hires
- (14:15) – The Role of Strategic Thinking in Leadership
- (25:00) – Joel Trammell, CEO’s, and finding candidates
- (39:00) – Developing High-Potential Leaders from Within, What Traits to Look for in Future Leaders
- (42:00) – Growth Leadership Model, Assessments
- (51:10) – Compensation
- (1:00:01) – Compensation of C-Suite vs. size of company
- (1:11:00) - Advice for Business Owners, Final Thoughts and Call to Action
Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by DesignTM, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals.
With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by DesignTM to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast.
Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around.
Resources:
Book: Traction by Gino Wickman
Book: The Great Game of Business by Jack Stack
Independence by DesignTM Owner’s Workshop https://ryantansom.com/independence-by-design-workshop
Independence by DesignTM Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching
Ryan Tansom Website https://ryantansom.com/
Ryan Tansom LinkedIn https://www.linkedin.com/in/ryantansom/
Ryan Tansom...
In this episode of Independence by DesignTM, I sit down with Mike Frommelt, the co-founder of Strategic Talent Partners and a seasoned expert in executive search and leadership development for privately held businesses. We dive into the critical role of talent assessment and leadership development in scaling a business beyond the founder’s personal capacity. Mike shares his unique insights on how to assess a company’s leadership team, the challenges owners face when transitioning from day-to-day operations, and the importance of aligning leadership talent with ownership goals.
Watch on YouTube
Mike explains the differences between hiring internally versus externally, and why sometimes promoting from within isn’t always the best option. We also explore the strategic role of a CEO or president and how to identify whether someone has the capacity to think strategically and lead teams effectively. Mike's framework for evaluating leadership potential and his holistic approach to aligning talent with business goals will leave business owners equipped with actionable steps to start building a leadership team that can thrive without their constant involvement.
Mike Frommelt is the is the co-founder of Strategic Talent Partners, a national executive search and leadership solutions firm. With over 20 years of experience, Mike specializes in C-level executive search and leadership development for privately held businesses. He helps companies transition from founder dependency by recruiting and integrating leadership talent aligned with ownership goals. Mike's expertise ensures organizations grow sustainably while equipping teams to thrive. Learn more at www.strategictalentpartners.com.
Chapters:
- (00:00) – Introduction
- (01:20) – Mike Frommelt’s Journey and the Creation of Strategic Talent Partners
- (05:00) – The Challenges of Founder Dependency and Leadership Transitions
- (08:30) – Assessing Your Leadership Team: Internal vs. External Hires
- (14:15) – The Role of Strategic Thinking in Leadership
- (25:00) – Joel Trammell, CEO’s, and finding candidates
- (39:00) – Developing High-Potential Leaders from Within, What Traits to Look for in Future Leaders
- (42:00) – Growth Leadership Model, Assessments
- (51:10) – Compensation
- (1:00:01) – Compensation of C-Suite vs. size of company
- (1:11:00) - Advice for Business Owners, Final Thoughts and Call to Action
Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by DesignTM, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals.
With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by DesignTM to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast.
Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around.
Resources:
Book: Traction by Gino Wickman
Book: The Great Game of Business by Jack Stack
Independence by DesignTM Owner’s Workshop https://ryantansom.com/independence-by-design-workshop
Independence by DesignTM Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching
Ryan Tansom Website https://ryantansom.com/
Ryan Tansom LinkedIn https://www.linkedin.com/in/ryantansom/
Ryan Tansom...
Previous Episode
#404: Design a CEO Compensation Plan Tied to Your Cash Flow & Equity Valuation Goals with Craig Rutledge
In this episode of Independence by DesignTM, Ryan Tansom is joined by Craig Rutledge, an expert in compensation strategy and the Partner at VisionLink. Craig offers valuable insights for growth-oriented business owner-operators looking to step back from daily operations and hire a CEO who can drive both cash flow and equity growth. He addresses the critical need to design compensation strategies that align the goals of the owner with those of the leadership team, ensuring that the owner can manage the company from an ownership perspective without worrying about the stability of their income from distributions or the growth of the company’s value.
Watch on YouTube
Craig discusses how to structure compensation plans that not only attract premier talent but also ensure that these leaders are motivated to make decisions that support sustainable cash flow and increase equity valuation. By linking short-term and long-term incentives directly to the owner’s financial goals, Craig helps owners confidently step back from the day-to-day operations, knowing their company is in good hands and positioned for growth. This episode is essential for business owners who want to replace themselves in operations while maintaining control over their financial future.
Craig Rutledge is the founder of VisionLink, a leading expert in compensation strategy with over 25 years of experience. He specializes in helping business owners align their leadership teams with their financial goals through innovative compensation plans. Craig’s expertise empowers owners to step back from day-to-day operations while ensuring sustainable cash flow and equity growth. His work has guided countless companies in securing long-term success.
Chapters:
- (00:00) Introduction and Background
- (04:50) Craig Rutledge from VisionLink delves into executive compensation strategies
- (07:05) Drafting a compelling compensation philosophy statement
- (12:30) Recruiting and retaining high-level executives amidst compensation challenges
- (18:57) Short-term bonuses and long-term equity growth plans
- (24:42) Importance of aligning compensation with working capital and EBITDA
- (29:00) Phantom equity plans versus actual equity
- (35:00) Structuring executive compensation plans
- (43:00) Structuring compensation to align with strategic business objectives
- (53:00) Structuring short-term CEO compensation plans
- (1:00:27) Designing incentive plans for business success
Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by DesignTM, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals.
With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by DesignTM to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast.
Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around.
Resources:
Craig Rutledge LinkedIn https://www.linkedin.com/in/craig-rutledge-6a32a69/
Craig Rutledge’s company specializing in compensation strategy and planning - VisionLink https://visionlink.co/
Book: "Drive: The Surprising Truth About What Motivates Us" by Daniel H. Pink
Book: "The E-Myth Revisited" by Michael E. Gerber
Independence by DesignTM Owner’s Workshop https://ryantansom.com/independence-by-design-workshop
Independence by DesignTM Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching
Next Episode
#406: The Art and Science of Business Valuations: Insights from Over 1,500 Valuations with Brandon Hall
In this episode of Independence by DesignTM, I sit down with Brandon Hall, an expert who has conducted over 1,500 business valuations across a wide range of industries. We dive deep into the importance of understanding and controlling the value of your business. Brandon shares his journey from a corporate accountant to a trusted advisor in the valuation space, reflecting on the lessons he’s learned from his extensive experience, especially in working with small to medium-sized businesses.
Watch on YouTube
We break down the three primary valuation methods: income-based valuations (with a focus on cash flow), asset-based valuations (looking at tangible assets), and market-based valuations (comparing similar businesses in the market). I place particular emphasis on cash flow valuations, which are the most actionable and controllable by business owners like you. We discuss why understanding and managing your cash flow is crucial—not just for keeping the lights on but for driving long-term growth, strategic planning, and maximizing the equity value of your business.
By the end of this episode, you'll have a clearer understanding of how to take charge of your business’s valuation, why cash flow is such a critical metric, and how you can use it to make informed decisions that will help you achieve the independence you’re striving for.
Brandon Hall is the founder of BGH Valuation Services, LLC, is a seasoned valuation expert with over 2,000 business valuations under his belt. Based in Saint Michael, MN, Brandon holds a B.S. in Accounting from Saint Cloud State University and has extensive experience from his roles at Polaris Industries and Best Buy Corporate. A Certified Valuation Analyst® and Certified Machinery & Equipment Appraiser, Brandon is dedicated to helping businesses understand and maximize their value.
Chapters:
- (00:00) Introduction and Background - Journey from Corporate Accounting to Business Valuation
- (06:00) The Importance of SBA Valuations in Business Transactions
- (10:45) Understanding Cash Flow Risk in Business Valuations
- (17:20) Mapping Out Ten Year Loans, Common Misconceptions About Business Valuations
- (21:24) Strategic Considerations for Business Owners: Equity and Cash Flow
- (29:13) Real-Life Examples of Business Valuation Challenges
- (35:20) The Role of the Government and Banks in SBA Loans
- (40:00) Assets and Proactively Managing Your Business’s Value
- (47:00) The Cash Conversion Cycle, Market Approach in Strategic Evaluations
- (52:00) Owner Involvement and Cash Flow
- (1:05:00) Splitting Assets in Divorces
- (1:12:00) Investments - Ryan and Brandon
- (1:22:00) Final Thoughts and Practical Advice for Business Owners
Ryan Tansom is a seasoned entrepreneur, speaker, and the founder of Independence by DesignTM, a transformative ownership framework for growth-oriented business owners. After turning around and selling his family business in an eight-figure exit, Ryan spent over a decade dissecting the lessons learned from his journey. His mission is to help other business owners avoid the pitfalls he encountered by providing them with the tools and knowledge to align their business operations with their personal and financial goals.
With a deep understanding of the challenges faced by owner-operators, Ryan developed Independence by DesignTM to empower owner-operators to create sustainable cash flow, grow their company’s equity value, and achieve true independence. He has shared his insights on hundreds of stages, including Vistage, EO, and industry associations, and has reached over 500,000 listeners through his podcast.
Ryan is passionate about helping business owners get unstuck from the day-to-day grind and design a business that serves their life, not the other way around.
Resources:
Books: "Profit First" by Mike Michalowicz, "The Great Game of Business" by Jack Stack.
Tools: Business Valuation Certification Programs, SBA Loan Programs.
Brandon Hall LinkedIn https://www.linkedin.com/in/brandon-hall-cva/
BGH Valuation Services https://bghvaluation.com/
Independence by DesignTM Owner’s Workshop https://ryantansom.com/independence-by-design-workshop
Independence by DesignTM Ownership Coaching: Ryan Tansom’s Ownership Accelerator programs and coaching https://ryantansom.com/coaching
If you like this episode you’ll love
Episode Comments
Generate a badge
Get a badge for your website that links back to this episode
<a href="https://goodpods.com/podcasts/independence-by-design-572972/405-breaking-founder-dependency-how-to-assess-recruit-and-integrate-th-73359134"> <img src="https://storage.googleapis.com/goodpods-images-bucket/badges/generic-badge-1.svg" alt="listen to #405: breaking founder dependency: how to assess, recruit, and integrate the right ceo with mike frommelt on goodpods" style="width: 225px" /> </a>
Copy