Working in a very small office supply retail store in high school back in the mid ‘80s, Mark Newhall, founder and CEO of Execution Specialists Group, ESG, learned early on how businesses operate and how you could, as a partner to them, bring value to the products and services. Now, as CEO of a management consulting firm, he shares the day deals closed, they were the ones rationalizing the distribution footprint, putting the distribution systems, warehouse systems and order management systems in place, and training the workforce on new things. He says they’re driving not so much on the strategy of the company, but on how to execute in line of the company worldwide the tenets of the strategy.
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Mark Newhall, CEO ESG, One Of America’s Best Management Consulting Firms (2nd Year In A Row)
We’re fortunate to have Mark Newhall. He’s the Founder and CEO of Execution Specialists Group, ESG. He was most recently recognized, and I would let him talk about the recognition and what it means to him. Mark, thanks for taking the time.
Thanks, Bob. Forbes in 2016 surprised us with recognizing ESG as one of America’s best management consulting practices. It was a surprise to us. We didn’t apply for it. We didn’t even know it particularly existed in a myriad of Forbes lists that get put out. The way they went about identifying these companies was through talking to some of the largest companies in the United States, “Who are the big firms that you use? We’re looking for advice, support and advisory services. Who are those boutique firms that you count on and they make their first pass through?” Apparently we came up enough for where they said, “We want to go deeper and understand who this firm is.” They go back to the clients that we’ve worked with and talked a lot about the value that we deliver and how they worked with us. They go talk to our peers. “What are your thoughts on working with these ESG?” There are people in the value that they deliver. They had roughly a dozen or so categories. Ours was on business strategy. They named somewhere around fifteen or so companies. We’re proud to make that list in 2016 and to make it again in the spring of 2017. It’s a great job by our people and a big deal for them to be recognized for their work.
You talked a little bit about pre ESG road that you traveled. Let’s dig into a little bit about your time prior to ESG.
What’s the first thing you remember as a child? Sometimes it feels that way. I worked in a small office supply retail store in high school back in the mid‘80s and that was before Staples superstores, the internet, fax machines, email and things like that. I learned pretty early on in school and then working for this business services company, how businesses operated and how you could, as a partner to them, bring value to the products and services. We sold typewriters, early Wang word processors, Canon photocopiers and all other printing services. I stayed with that in high school, stayed with that after high school, became a full commissioned outside salesperson and sales manager.
I found my way to a national company that had a smaller operation in Boston. Shortly after, I joined the company Corporate Express which was founded here in Colorado in ’86. They were in the process of going public. They were intending to use the proceeds from that public offering to begin acquiring small and regional office products companies. We were basically their first foray into Boston and Northern New England area. At 25, I became their youngest division president. It wasn’t anything particularly impressive. It was a small $6-million division of what was a fast growing company. They taught me at that young age how to move in from sales management to general management and how you go buy companies. I spent a lot of time on the deal team in the mid ‘90s and went back to Boston. We bought nine companies, over $100 million worth of revenue in about eighteen months. The responsibility and the action around how do you put those nine companies together, previous competitors, a lot of overlap with sales, product, facilities, fleets, competition programs, all those things, I found that that was probably the most fun that I had up to that point.
We sold the company in ‘99 to a Dutch firm. We had a new CEO. He made the rounds. He came back to me after that and said, “I’ve been all over the country and here in Boston. You’ve done an exceptional job of creating the culture we want, deploying the systems, the processes we want, pulling these nine companies together. It’s a model we want to repeat. I want you to come join my team.” For the next ten years, I lived on an airplane. Worldwide, the company, through that same period, completed close to 600 acquisitions, 28 countries, 40,000 people, many different lines of business and trying to create a global value proposition for business customers and businesses out there. We built a large internal consultancy that we were the people that were there the day the deal closed. We were the ones that were rationalizing the distribution footprint, putting the distribution systems, warehouse systems, order management systems in place and sun-setting the old stuff, training the workforce on new things.
When that work was done, it was, “How do we keep these competencies and take on the tough projects?” Early day CRM with companies like Salesforce.com, we were one of their first enterprise customers, first people, to bring it into a contact center. How do we consolidate 30 different customer service centers in the mid-2000s? Not disrupt the customer experience. How you certify the company was ISO 9001:2000 quality systems. We did that. Then I spent a few years in Amsterdam, working for our European President and eventually the Chairman of the company, driving not so much the strategy of the company but how we execute in the line of the company worldwide to the tenets of the strategy. We finished up in 2008, it was quieter at the end of a ride. Fifteen years from that are those early days of the IPO and roughly $40 million to $50 million in revenue to sale to Staples at $8.5 billion and a whole lot bigger fifteen years later. We felt proud of the work we did to build a world-class company and something that is a big part today still of what Staples is all about.
The day after the deal’s done, what was going through your mind that next morning?In fifteen years, from concept to one of the world's biggest companies that does what we do, I was proud of it. Click To Tweet
When Staples bought the company? I had been hundreds of times over the person that found out their company got bought. Immediately you start worrying about my job, my benefits, my time, my contributions, my compensation and all those kinds of things. There I was, that person, for the very first time and the only time in my career, I had a rough ten minutes and then I sat back. Staples was tremendously fair. They were transparent. “You’re the strategy guy. We didn’t buy your strategy. We need to clear out what got us here. It’s what we bought but we want to take it to a different place.” I was able to rationalize that pretty well. I looked at the fifteen years. We built a hell of a company. The people that I got to work with over those years, hundreds of leaders and lots of executives and investors, if you stepped back of it and you said, “In fifteen years, from concept to one of the world’s biggest companies that does what we do, I was proud of it.” I looked at it as this giant project because that’s what I had lived in for so long. I had no intention of starting a business. I said, “It’s been a ride. I’m going to sit back, take some time, and figure out what’s next.”
There’s that period of time, traveling, entertain yourself and figure out that you do not have to be somewhere until you choose. You get the thought process to start ESG. The Execution Strategy Group struck me. That says a lot about exactly what you had in mind to do. Talk about the thought process of getting ready to go back out and start ESG.
I have to admit I did not have an a-ha moment. I did not sit back and say, “I’ve got an idea. I need to write a business plan. I need to write a pro forma. I need to go find investors.” I didn’t do any of that. I took a month after finishing Europe that summer of ‘08. I got on my motorcycle and I rode about 4,500 miles all around the Pacific Northwest and came back and it’s like, “That was fun.” Now it’s September of ‘08 and I said, “I’m going to go down to that timeshare I bought in Mexico and never use because I was working too much.” I played a bunch of golf and was down there for few weeks and had a voicemail in October while I was in Mexico. I heard this quiet voice on the phone and a person introduced himself and said, “My name is Frank and I know this person at Corporate Express. He’s on a board with me. I run a food service company. We’ve made some acquisitions and we need to put them together. We’re not sure where to start and we thought you might have some insight for us.”
I didn’t do anything with the voicemail for a few days. I found myself in an internet café because times were different. We didn’t have our smart phones then on a beach in Mexico. I looked up who this person was and who the company was. He was the CEO of the largest food service company in Canada. I called him back quickly and he invited me to their US headquarters. I flew from Mexico through Denver, got a suit, went up and saw these guys. I didn’t know what I was getting myself into. The whole discussion was, “Why don’t you join our team as an employee?” I had a real sense of resisting that because all I had ever known was pens and pencils, office products, and things like that. It was flattering. It was a tremendously impressive company, 100 years old, fourth generation, family owned, family managed. I got to meet the CEO, the chairman, some board members. I reiterated, “I don’t think I need to join as an employee because I won’t bring expertise in your business.” They were quick to say, “We’ve got plenty of people around here that know the business. What we need is some expertise. Where do we start putting this together and where do we do it in a way that’s thoughtful for our customers, our people?”
I respected how caring they were about that and I said, “Why don’t I just come in and take a look?” They said, “Great. You can be a consultant. We don’t like consultants but we’ll let you be one.” It was literally around Thanksgiving, I was on the Secretary of State’s website and paid my $25 and searched some names. When it comes down to it if you’re going to have a consultant, what did I value? Having bought $100 million worth of consulting at Corporate Express over the years, I valued an ability to execute, not a firm that would tell me here’s what you should do. I had a place, but I was always interested in third party support that could help me go get it done and fill in the gaps where I don’t have the expertise. I came up with that name; it was a mouthful. Execution Specialists Group scares everybody so we shortened it to ESG.
We love the question, ten years later, what does it mean? People have an a-ha moment when you get down to it. Strategy isn’t much of anything without an ability to execute. The name has served as well over the years. That’s how it started. It was about five days into that engagement with that first client, that’s where I had my a-ha moment. Sitting with their executive team, looking at the challenges, very familiar P&L client distribution challenges that I had faced for many years on the operating side of the business. This aspiration to, “We’ve got to go after it. We’ve got way too many systems, our customers are confused. It’s expensive. Where do we dig in?” I realized there’s a business here. The skill sets that I have and what the people that had worked with me had would potentially be valuable. We went all in with that first client and they were our client for seven years on different things. It felt much like the work we had done at Corporate Express. It’s a fine company.
You’re doing the consulting and you’re able to look top down and dig in. What was the decision to add folks to your company?
They gave me a seat at their table. They were generous. I listened to the leaders of the business, immersing it. They were touring me through warehouses and I was riding with their drivers. I was meeting their customers. It was fascinating for me to, all of a sudden, for the first time, be in a different industry and to see the commonality. They have me sit in on their leadership team meetings. I would observe. I would do my part when we were talking about integration. I remember down more than one occasion the CEO nudging me. He’d have me sit next to him and say, “You’ve been listening to this problem for twenty minutes. What would you do, smart guy?” I said, “I would probably get someone that knows how to get you out of the situation you’re in or could bring some outside perspective.” It would fall on the table. It was really quiet. I remember him saying, “You know anybody?” “Sure.” That was the first quarter of ‘09. Staples were taking costs out as often happens after an acquisition. A lot of the costs were that 120-person team that I had built inside of Corporate Express. Those people were suddenly available as were many people in the first quarter ‘09. I was able to attest to that client, “Here’s the person that I’ve worked with for ten years and this is where they’ve dealt with that problem before. I can attest to their ability to take a look at this problem and give you a sense of what you might want to think about and potentially help you get through it.”
That first time we did that is exactly how we deploy resources today, ten years later. It’s the same model. We started to grow first through bringing on five or six people from Corporate Express, Staples, and brought them into ESG. Just about every one of them is still at the firm today. It’s our leadership team. What I found appealing was the tremendous amount of “been there, done that” experience early on. Those same people I was selecting, the reason we selected them at Corporate Express to join our integration team in the first place was they were what I like to call board operators. They were good at operating businesses, but they loved all that transformation and that chaos that we lived through at Corporate Express with all those acquisitions. They would go in and optimize the business or a function, look around for what’s next, where’s the next hard problem. ESG became a great platform for those types of people to live in because as the client base started to expand and the industries that we worked in started to expand, familiar problems, unfamiliar territory, and the ability to make a difference quickly is the common thing that all of our people today have in their DNA, that love of fast paced. A lot of change, optimization and how do we drive performance in a particular business through a particular problem?
We talked about the acquisition and mergers side of the house. You also talked about transformation. Before we get too far down the road, I always ask, “What’s your business and who you serve?” You’ve talked a lot about it, but maybe we focus toward that transformational work that you guys are doing as you describe what you guys do.
When you look at the types of companies that we work with, they have also in their DNA a growth through acquisition. They’ve been built in distant past through combining companies. Walmart’s a good example where they’re not necessarily acquisitive today, but built their business on a tremendous amount of acquisition and consolidation through the years. We’ve got clients that aspire to be acquisitive. They’re getting ready. If we’re going to go write big checks for big companies, what’s that playbook look and how do we make sure we don’t squander the investment or disrupt the business? We have other customers that have recently made an acquisition. They need to make certain that they hit their synergy targets and whatever they committed to the street, the investor community, the private equity firm, whatever that is.
A lot of our action, if you will, is in that immediate M&A or post M&A environment. The transformation work is part of M&A integration. We also have these clients that haven’t brought anyone in ten years, fifteen years, but they didn’t get through the acquisition or the integration work quite right back when they did the work. They perhaps have become a house of brands, and as margins are under pressure, as economic headwinds take their toll, as the business landscape changes, as pressures come from new competitors, we all know who those are, they have to go back and reconcile and rationalize redundant system for redundant platforms, master data, master product data, or big leftover holdover challenges for companies.
They make a decision often after a strategic review. A new leadership team or a new CEO comes in and they say, “It’s time. It’s time for us to get after this. We have to deliberately get after it. We have to make the investment to get after it.” Those are our best clients. The ones that realize, “We don’t want to live on for warehouse management systems forever. We can’t afford it. We can’t run our business like a franchise. We can’t deploy best practice when we have to interpret a concept for different ways across the network that might be 50 distribution centers.” That’s the work that we do, understanding how to select the one that will survive and then how to move all of those systems from the other three, for example, into that one, always thinking about not disrupting customers, not disrupting business performance.
If you had a prototypical client and you’re brought in by referral or however you come into the company and said, “We have a particular challenge,” what’s your typical approach or steps to identify and then start to execute the solution?
One of the things that we have developed over the years of our work, both at ESG and Corporate Express, for lack of a better term, is a success framework. Once we have earned or developed a rapport with that senior executive sponsor, we shift the conversation to what we often called a little bit of the Columbo Approach. “Would you agree then that success of whatever it is to which you aspire would include these types of things? It’s transparency, it’s alignment, it’s clear governance and decision making. It’s predictable plans, it’s disciplined execution, it’s repeatable results where necessary. It’s playbooks, it’s things like that.” Every executive nods their head and says, “Absolutely.” We then take it a step further and say, “Then we have a success framework that we can filter your aspiration through in the early stages of all of our engagements.” They run anywhere from a short time of four weeks, on the long side 90 days, where our team comes in and immerses with the client’s team. We have in front of us as our compass and our guide, that success framework.
T: We have a success framework that we can filter your aspiration through in the early stages of all of our engagements.
We then start pouring into those artifacts, decisions, strengths, weaknesses, charts, policy process, assumptions, financials, and all those types of things into that framework. We interview people. We assess those artifacts. We bring it back here to Denver to ESG. We let our whole team take a look at it and say, “We understand the objective. We understand what it takes to be highly successful because of our track record and our work with many companies. How does this customer, how does this particular company, stack up against that?” We reflect back to that client. It’s this assessment work to say, “Here’s where you’re hitting on all cylinders. Great job. Well done. You’re going to get the results you want in these areas. Here’s some gray area where you either haven’t thought about this too much, your people haven’t done this before, or where your assumptions may be a little bit back in the envelope versus well thought through.”
Two more of the extreme where we see planning taking place in functional vacuums. Transportation, for example, assembles a consolidation, integration or a synergy plan that doesn’t take into account systems and end of life for those systems. What IT might be planning or doesn’t take into account is distribution center consolidation or when leases end or when third party logistic contracts end. That’s the most dangerous thing when assumptions have been made and you’re at the start line of a major initiative, and that cross-functional vetting and pressure testing hasn’t taken place. The output of our first stage of engagement is typically, if you agree on the success framework, now we’ve taken that in-depth look at what you have and what you have prepared and what you’re ready to go do. Here are the holes. Here are our recommendations as to how to fill those gaps.
It could be people. It could be take a step back. Go a little bit slower, go a whole lot faster. It could be resources, it could be changing some assumptions, and it could be communicating with the board. Whatever it is, it’s a lot easier to make those changes, those courses correctly or those trajectory and targeting changes at the beginning, than it is once you get into it. At the end of that, when we deliver that, about a third of our clients at that point say, “Thank you very much. You’re going to help us make a different decision, a better decision,” or they often decide to do something completely different at that point. They say, “Thank you very much and we recognize you are in good shape. You should go off and do your thing.”
About two thirds of our clients at that point say, “We want to make the course corrections. Help us with revising our roadmap. Help us look at strategic alternatives. Help us with the decision making.” It’s filling in that last mile of their strategy and then can you bring some resources to bear? Back to those people we talked about that we brought in the early days that have been there and done what we’re trying to do. Can they supplement our execution team to go out and make sure we stay within the rails that we stayed, within the construct of that success framework, and that we have the transparency we want and predictable results to which we aspire? Those engagements after that initial stage can last anywhere from three months. In some cases, large scale integration is three years, four years. We’re right there with that client the whole way through.
Continuity in accountability is important. We’re going to go into part of the chat here where I quiz you to death and that’s fun. For you, many are avid readers, what’s the most recent book that has altered or influenced your behavior as a CEO?
I’m not a big consumer of what I would call self-help books. I’m not sure why. Maybe that should be a bigger one. I discovered an author, a speaker, a consultant. His name is Alan Weiss. I’ve never met him. I need to at some point. He’s based up in Rhode Island. He’s built a tremendous consulting practice. He’s authored somewhere around 50, 60 or so books. He’s a write up in your face guy, consultant and speaker. I follow him on Twitter. He’s one of the few people I look forward to what’s he coming up with today. There are two books. One is the foundation of our practice and he wrote that book many years ago. It was a book that I found probably a year into ESG and it was more like a workbook. It’s called Value-Based Fees. It’s about selling the value of what we do versus selling a rate. It’s a book that we give to every single person that starts at ESG. It’s all about selling the value of what we do. That’s one end of the spectrum. His most recent book is called Lifestorming and he wrote it with Marshall Goldsmith. I love the style of the book. It’s management fables and Marshall is a bit of the academic and intellectual who says, “Here’s the human behavior bit about whatever problem you’re going to be facing as a business owner.” Then Alan chimes in with almost that fable example of, “I had a client once and here’s exactly the recommendation or the practice of theory in motion and what it means.”
The book is an easy read. I love it because you can remember much of the takeaway. One of the things I read in it was, as a small business owner, I always felt like I don’t want to call or necessarily call strangers, people that aren’t in my network and tell them about what we want to do. Maybe someone will refer me and maybe I’ll wait for that next referral. We’ve been blessed by tremendous referrals in our network. We also have to knock on those doors cold. In this particular chapter, the premise of it was is it more problematic to think you’re arrogant if you call a stranger and tell them what you’re great at, or is it more arrogant to sit there and think your phone’s going to ring? Allan slaps you around a bit as you read the book. I’ve taken pieces of it. I shared it with my team. I’ve given out a bunch of copies of it for anybody that’s questioning the value of what they have to offer others, whether personally, professionally or in a business like ours. It’s a great read and I find it to be practical. It’s been good for our business and good for me.
That’ll be interesting when you meet the guy.
One day. I send him notes, he replies. I need to call him and say, “I want to meet you.”
In looking back over your career to date, failures occur periodically. Is there a notable failure in the past that you think has helped you be successful at this point?
A lot of how I’ve learned about my business from others is I may not necessarily know what you should do, but I can definitely tell you what not to do. We’ve been fortunate on the client engagement side. I don’t know that we’ve had failures so much as changes in direction that are unanticipated often from the client where they decide to do something different, they lose a customer, they breach a bank covenant or whatever, those kinds of things. In the beginning, when I came out of Corporate Express, we had 120 or so people dedicated to all these complex projects around when you buy a company. Real estate, HR, sales, go to market, customer service, IT, coming out of Corporate Express we could do anything and nothing scared me. I had a bit of a chip on my shoulder about, “We’ve seen it before. What are we going to do? I know who to go rustle up and put on this project.” I find when you start a business, you cast a wide net because you don’t want to limit yourself. All of the sudden I went from having a great corporate job, benefits, 401(k) and all those kinds of things, I don’t have that anymore. You’re careful not to limit.
As we go into our 10th year this year, I feel like the thing we do better now that we didn’t do as well the first four or five years was being specific about what we’re really good at and saying no to the things that were probably okay but were not awesome at them. I don’t know that I would’ve cast in a different net earlier, but I might have pulled it in faster. We have found ourselves in some engagements where we’re a little bit over our skis. We’re not quite as crisp on some of the things I’ve been talking about around post M&A integration, supply chain or sales effectiveness.
I had a client or prospective clients last week in Boston who had read through some pre-material that we had sent. It’s a very successful, very well-known private equity firm. About five minutes into our conversation first time we met, he said, “I’ve read all your stuff. I get it and I get that you can do a lot. I want to hire you for what you’re awesome at.” That was a nice validation of what we’ve been thinking about these last few years of be focused and have the confidence to say no. If you have to over-explain the value you bring to prospective client, put a limit on how much you’re willing to do that. Much more than two or three meetings of that, it’s time to move on. In an early stage, if I was advising someone starting up a similar business, get there as fast as you can. What is your core value proposition? What are you awesome at? The stuff in the edges will come back. It’s important, but it’s not going to help you close deals and it’s not going to help you, in a closed deal, necessarily deliver results.
Before I go too far down the road, if folks that need to reach out, what’s the best way for them to reach out to you in social media?
LinkedIn is probably the best way. I’m fairly active there. We’ve had a number of our engagements have come through there. People say, “Are you still doing this,” because they’ve moved on to two or three companies. We keep things fairly up to date there. We’ve got some publishing planned that we see LinkedIn as a critical part of that platform to reach everyone in our network. Our website is
Your website is?
With all the stuff that you know, if you could teach a course or share an insight with your best friend or colleague that was starting a business, what would that course be and why?
What’s the business problem you’re trying to solve? One of my hobbies of the last ten years has become an interest in startups, not me starting up other businesses. I’ve invested time and money in five different startups. I’m active with five right now. There had been a few others. They run the gamut. They’re mostly technology companies that I don’t fancy myself as a technologist. The biggest thing I bring to these companies, “What’s the problem you’re solving? How disruptive will you be? How will it deliver value?” There are a lot of smart people out there. There are a lot of data scientists. There’s so much happening with AI, machine learning, and blockchain and things that people get excited about what they’ve created. It does do something technical better, faster, cheaper, more effectively, more efficiently.
My weeks are full of working with CEOs and their leadership teams that are solving right up in their grill practical “I’ve got to figure this out now.” If you come in and talk about cool technology, you have to be able to put it into business terms. What does this solve? I find that in every one of those five that I work with, what they count on me for is to be a bit of the spoiler on when we get to the business that ultimately will write the check for this technology. How are we coaching it? How are we framing it? If you can’t get to that answer quick, you need to relook at what you’re cooking up, what you’re investing in, and what you’re making your life about in some cases.If you come in and talk about cool technology, you have to be able to put it into business terms. Click To Tweet
What’s the one initiative that you executed in the past few years that has helped your company most and elaborate how?
I have this legacy in my background of office products, which is of course riveting. We had done some work for Office Depot. They were our second client outside of the first food service company I mentioned back in 2010. Office Depot bought OfficeMax in 2014, end of 2013, I believe. They asked us to come in and take a look at the plans they had assembled with a large consulting firm. They’ve spent tens of millions of dollars planning six months prior to close. There were a lot of organizational shakeup as that transaction was closed.
It had an exceptional CEO that they brought in from the outside who said to the leadership team first, “We’re going to pause on execution. We’re going to figure out the leadership team that’s going to take us through this. We’re not going to have two people in an organizational box.” It was legendary that he told the twelve people from Depot and the twelve people from Max roughly that we’re on his team. “There are 24 of you today. It’s the day after Thanksgiving. By Christmas, there’s going to be twelve of you. We’re not going to go through the battle of integration and guess about who’s making a decision in the battlefield.” I saw respect the way he ran that integration from the top down.
About the impact on our company, here was an industry that I knew probably better than most and had been through more integration than anyone in either of those two companies. An outsider coming in and orchestrating an integration approach that was probably the best I’ve ever seen. Not only were they a great client for us and we had dozens of people working on it, from a client size, contribution and revenue for ESG. They’re our biggest client ever, without question. A four-year engagement over 40 different statements of work over that period of time because we brought a lot of value and they said, “You’ve finished that. Now move to this next thing.” It won. The benefit of the company was the financial benefit that it brought to hire the best people to invest in our brand, to focus on our brand more, for me to come out of the day to day consulting and to focus more on the business and what we’re going to be after Office Depot.
I also got to witness up front one of the best integrations of the last ten years or so in that retail big box space in an industry that, in a lot of ways, is a melting ice cube. How many office supplies are we all using today versus a year ago, ten years ago, twenty years ago? We benefited tremendously from that engagement. I believe the client did. I know they did. They recognized us as their integration partner of the year, with quotes and press releases of, “We couldn’t have done it without you,” and nothing was bigger for our people than that recognition was great.
You were talking before about working on the business instead of in the business and the evolution of your role at ESG. You elaborate on that a bit?
That goes all the way back to that first client sitting in that room. My first engagement letter was something I cobbled together to say, “You’re going to get Mark Newhall. Here’s the rate from Mark and here’s what he was going to do.” I spent seven years in statements of work and with a rate or a fee attached to my name, my work and my contributions to the client. It started to feel like I was back in we call them around here JOBs. I didn’t want a job so much as we wanted to build a firm. I was fortunate in that I was able to secure pretty significant fees for my contributions personally. It’s the scariest thing I’ve done in ten years with the firm is to decide I don’t want to take fees anymore. It’ll be three years in June that I invoiced my last fee to a client for a principal engagement role. I went two and a half years ago from working in the business to deciding I want to work on it. I started to think about what are the equity builders of this business? We need a better business development process. We need better IP, we need better playbooks, we need a better website, we need a better brand. I need to get out and see more than one customer at a time.
The last three years for me have been all those things I mentioned. Now my travel it’s a little shorter. It’s more rapid fire, and I can go and see two or three of our clients or prospective clients in a matter of two or three days and share experiences of what we’re seeing across the spectrum of our work, what other companies are doing. I’m proud to say that I work on the business. That’s my job now is not necessarily to be in that principal consultant chair, being paid by the client to do a specific thing. They pay our teams to do that and I’m happy to participate with them. The best question I get and it’s flattering to me is when I see those prospective clients or those active clients and they say, “Mark, what are you seeing out there?” You go from company to company. That builds a bigger part of the business than I ever could, being a consultant myself.
With some of the things that you’ve done over time, what’s the most unusual habit or what others may consider out of the ordinary that’s helped you or your company most?
I spent a lot of time as the youngest guy in the room. At Corporate Express, deal closings, board meetings. In the Corporate Express days, board members would come in and say, “Who’s this guy down at the end of the table?” The CEO would say, “That’s Mark. Mark does all the hard stuff that nobody else wants to do.” It was always this cross-functional morass of things around integration and systems. They were always mission-critical to the company that it be done right. Early in my career, I know this sounds trivial but I took all the notes. I’d write everything down. I’d be the only guy in the room writing everything down. I have developed this thing when I go into a meeting, the first thing I do, you can look at all these pages look the same. There are thousands of them at this point. It’s who’s in the meeting, where are we meeting, what’s the topic. I’ve got my own little crazy shorthand as to what’s being said, but also what are the actions that’s pretty common? I also have a way of saying with particular shorthand that doesn’t make any sense, that’s preposterous, that’s a great idea. I always go back to those notes and that becomes the work we do or the actions we take. I’ve had this habit of collecting these notebooks for close to 25 years and I’ve got a cabinet full of them.
Whenever we move, I’ll go into the cabinet, I’ll take the books out again, put them in a box. I’ll pick one up from 1997, 2012 or whatever. It’s uncanny but I can flip that open and I can look at where we met, what we were talking about, who is the stakeholder, who is the client and who was there. It’s funny in a way the meeting comes back to me and in a real and vibrant way because that’s where I was learning, that’s where I was taking it in. In the beginning of my career I was learning how to do what I do, and now it’s how do you develop insights that are meaningful for clients? It is a little quirky. Sometimes our clients are surprised to see the leader of ESG is the guy writing everything down. It keeps us on point. It keeps us in the details. Our customers, our clients expect us to be in those details and those books are going to be good for a book someday or two. There’s a lot there.
What advice would you offer to a new CEO assuming the role of CEO for the first time?
A first time CEO and it’s an important distinction versus I’ve been brought in because I’ve done this four or five times. To the first time CEO, listening and then gendering support is important. I don’t think it needs to go on forever like it should go on forever. I’ve seen people elevated from within or someone that’s been in an operating capacity and they moved to another company, and it is their first time in that chair. Taking those tours, meeting the staff, listening and giving it enough time to develop a perspective that’s informed when you then have a bit of whatever you want to call it, simply coming out event. Were you then say, “It’s been a month. It’s been three months. Here’s what I’ve learned. Here’s where we’re strong. Here’s where we’re weak. Here’s what we are. Here’s what we’re going to be.”
To do that too early and to do it when you’re uninformed, I’m the one that listens to all the people when they come out of that auditorium and go, “This person is either I want to follow him and I’m excited and they took the time,” or, “They’ve got their head up their ass and they don’t know what we do. They don’t understand. They don’t see the real problems. It largely is, if not downhill, at a minimum, really disruptive for some period of time.” Those great CEOs have an ability to evolve the target, the vision and they spend time listening and then the next activity is aligning. The best organizations are the ones that are aligned to a particular target.
Again, we were talking about military stories earlier. If everybody says that, “There’s the hill we got to go climb. If everybody’s not sure that’s the hill, it’s chaos. If everybody’s not sure of their role towards getting there, that’s chaos. It happens in businesses where there’s great alignment, there’s disciplined execution, there’s transparency, there’s predictability, there’s limited surprises, there’s commitment to the mission. When alignment degrades, doubt creeps in. Uncertainty is there. The kingdoms, the silos start to evolve. When alignment degrades even further, it’s crippled execution, it’s unpredictability, it’s chaos. That new CEO, that’s what they need to be looking toward, “How do I understand it? How do I gain credibility? How do I set the vision or reaffirm the vision based on what I’ve learned? How do I ensure alignment and begin moving quickly?” That’s what I would tell someone.
What is the most common misconception about you or your role as CEO at ESG?
Sometimes we might look a little bigger than we are, whether that’s a website or you look at the kinds of clients. We’ve been fortunate to work with some amazing companies and brands.
That was Caesar’s Entertainment, Gordon Food Service, Office Depot, OfficeMax, Staples, Target, Whole Foods and more.
We’ve had about 60 clients in our nine years and most people would recognize more than half or do business with them. We’ve been fortunate that way. Sometimes our value profit, it makes great sense to those large companies when we go down market a bit. Private equity held firms, startups. Denver is such an amazing business community for startups. There are young people here and it’s an exciting business community. Sometimes people would get excited about the company we are at, whether it’s Forbes recognition, our foundation or whatever we’re doing. They say, “You only worked with large companies,” and it’s a little bit of a 50-yard dash, 40-yard gym thing.
It’s where we have to be careful because it’s where I to spend a lot of time with as startups and entrepreneurs. It’s people thinking either we’re unapproachable or we’re living in this huge land of massive companies. We want to be part of the business community. We want to give back. We want to participate, advise and invest in those types of things. It’s hard to be everything to everybody. I know that’s not what we should aim for, but striking that balance sometimes can be a bit of a challenge.
The best thing they can do is call and find out. Over the past three years or so, what would or should you have said no to?
I’m hesitating because it’s the same things rolling around in my head. It’s client sponsorship. There have been times we’ve taken on engagements where we’ve said, “The sponsorships not as good as it should be, but we’ll get them there,” and then we don’t get them there. We look for that change champion. We look for the person that has the juice inside the client where the sponsorship from a board or CEO for a particular person, and it usually is a person, to say, “I’m going to lead this change. It’s going to be hard and it’s going to be cross functional. It’s going to be disruptive but it’s worth the journey.” That’s the person we want signing our engagement letters. We had in our past an aspiration to all those things, but that person or group in some cases, either the funding hasn’t been there or the real commitment hasn’t been there. You get 30 days in, you get 60 days in, and the appetite for what needs to be done isn’t there. It’s not bad for us because we can typically extract from that and we’ve never had problems over we’re not going to pay for it or anything that. It’s particularly disruptive for the client because they have generally gone on record and said, “We’re going to go do this,” and for whatever reason they say, “No, we’re not going to do that.” That’s hard on everybody. Sponsorship for me, just being unyielding on the commitment to change and that you can trace that support to other key stakeholders in the organization, that’s important.I'm going to lead this change. It's going to be hard and it's going to be cross functional. It's going to be disruptive but it's worth the journey. Click To Tweet
In the day to day operation of becoming a CEO, what’s your personal habit or self-talk dialogue that keeps you and the company focused?
I don’t like doing a whole lot in the afternoon. I’m an early morning person. I am up at 4:30 every day. I’m at the gym at 5:00. I am at it at 6:00. I get most of my work done. It’s busy work probably by the time I get into the office at 8:00. We don’t do as much work in the West Coast. It tends to be more Midwestern and East Coast. With time differences, we tend to wrap earlier in the day. I look to pack the mornings and the early afternoons, and then wind it out and let people get to whatever else they need to be doing in the afternoon. I don’t know if that’s quirky or what.
I also encourage short meetings. I encourage meetings where you don’t sit down. It’s, “What do you need? Get to the punch line.” I tell many people I’m pretty good with the joke. Tell me the punch line first and I’ll ask questions. I don’t need the 30-minute lead up all the time, and that frustrates some people sometimes, but in the work that we do, it’s fairly consistent and familiar across clients. It’s rare that we get stumped with, “We’ve never seen this one before.” We see intonations and inflections of it, but the same problem. I tend to be, “Let’s start with the point and work backwards to the extent we need to.” Our clients appreciate that, too.
Last question, for you to talk to your colleagues or clients and they said that you had a particular superpower that is something that you’re best at, what is it?
They would tell you, “He asked the questions nobody else was thinking of.” That’s why people hire us. I don’t think we’re being clever. We’re not trying to be clever, we’re not trying to trick or anything like that because the answers make up the engagements that we enter into. We don’t have a political ax to grind. We don’t have an organizational climb, a feat to accomplish. We are only going to be kept around in a particular client so long as we’re delivering value. It’s not unusual to be sitting in a steering committee meeting with senior executives and other consultants, key stakeholders on big transformation project, and for us to be in the room and for that senior sponsor, at a tough time in a project, to say, “Mark Newhall will tell you.”
What I mean by that isn’t Mark’s the guru. They’re here so we don’t make the mistakes they’ve seen with others. We get there not through telling them what to do but through challenging, “Why do you think that? What have you looked at? What other alternatives have you considered? Have you talked to these other functions? Have you pressure tested assumptions?” There are a million political reasons people don’t ask those questions. If we do a good job, our credibility on the front end and not being punitive but being collaborative, we earn the right to ask those tougher questions. People come to respect the answers. Our tagline is and has been for a long time an informal making strategy happen.
The best compliment I ever got from a client was the CFO of Staples. He said, “You guys are a little scary in the beginning. Small firm, bit of a larger fee than we typically would pay a smaller firm, but you’ve got something here at this “make strategy happen” thing because it was evasive and elusive to us before. We were very dialed into what should we do? Through our work with you, we actually got it done.” About that engagement, we asked a million questions about what were they after and we certified, we’re so specific about what success needed to look that then we can get to it.
Mark, this has been a treat. I appreciate you taking the time and being a guest.
About Mark Newhall
Twenty years of standout executive leadership experience might have a little something to do with Mark’s talent for getting the tough stuff done. In fact, it defines it. He’s unbiased yet focused. He’s practical yet creative. He’s precise yet efficient. It’s no wonder Mark is a trusted advisor to many of ESG’s long-time clients—all while leading business-development efforts and strategically building a team of distinctive corporate leaders with unrivaled agility and skill.
Mark founded ESG in 2008 as a vehicle for executional mastery based on his in-depth know-how of program management, transformation, integration and strategy. Having sat in the C-suite himself, it was Mark’s vision to empower senior leaders with an objective, been-there-done-that perspective, and today ESG proudly transforms the world’s top companies through the power of active execution.
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