Chris Williams: Brian Pedersen is a veteran of the corporate tax world and a partner at Alvarez and Marsal, a global consulting firm. Brian leads a team that helps companies navigate the maze of local, state, federal and international taxes. It’s a complex world where expertise is highly valued, and experience pays off. Quite literally.
Brian and I are old friends. We’ve shared drinks and conversation over neighborhood dinners for many years discussing leadership, organizational politics, and workplace culture. While his world and the tech world I’m so familiar with seem disparate, the challenges he faces share many common threads. Like all leaders of knowledge workers, he has to build a team of smart, talented, and passionate people, and needs to figure out how to hire, motivate, and retain them. When the output is amorphous – numbers and words, not widgets. This is always hard.
Brian’s work is both mystery and fascination for me. Taxes are an enigma. But several of the smartest people I know, Brian among them, have made careers of it. And my experience with the world of large-scale corporate consulting is but as a consumer at Microsoft, I paid seven figure McKinsey invoices that left me breathless. So I entered my conversation with Brian with a lot of questions about how it works, and how one leads a team of “expertise for hire”, especially at a distance in the remote work era. And that’s what this is all about.
This is Leading Smart, the show about managing in the brainpower age. It’s a field guide to the joys and challenges of leading and working in the modern workplace. I’m Chris Williams, your guide to the stories and ideas that I hope will inspire you to be a better leader in the world of knowledge work.
This episode’s conversation is with a leader in the world of corporate financial consulting. This is Episode 236, my conversation with Brian Pedersen.
Brian Pedersen’s entry into the world of Fortune 500 finances came from what seemed to be an unlikely place. His father, a radiologist, and mother, an amateur geologist, escaped the urban Midwest for the wilds of Montana when Brian was a boy. They loved the outdoors, and Brian soon learned to as well.
Like many of my guests, Brian’s introduction into his field came almost by chance. Early in college, he had abandoned pre-med along with the chance to follow in his father’s footsteps, and was headed to law school. To get his pre-law degree from the University of Montana, he needed a single accounting class. And as Brian told me, for some people, accounting “just clicks”. He enjoyed the details and found the math easy.
So Brian went on instead to get his MBA and was recruited to Arthur Andersen, one of the famous “big eight” accounting firms. A job at one of these prestigious firms was a ticket to a great career. They trained you thoroughly, offered limitless advancement, and paid handsomely.
Brian soon settled in at Anderson. He loved the work and found a specialization in the world of multi-state corporate tax. Then half a career in, after over 15 years, came the Enron disaster.
Enron was a Houston energy firm led by Jeff Skilling an ex-McKinsey superstar. He built a team of self described “smartest guys in the room”. They created a novel market for energy, and the company skyrocketed to well over $100 billion. But their most creative success turned out to be in accounting. The company collapsed in 2001 in a shower of criminal charges that included fraud, insider trading, and being little more than a giant Ponzi scheme. The spectacular fall was the largest bankruptcy in history at the time.
As their longtime audit firm, Arthur Andersen was accused of missing all the signs and was dragged down with Enron. To manage the resulting implosion at Andersen, they hired Alvarez and Marsal, a consulting firm that specialized in troubled company turnarounds, and bankruptcies.
Brian Pedersen: Alvarez and Marsal was a firm that I had never heard of, until fall of ’01 at Arthur Andersen. We were struggling and we had the whole Enron thing was, was clearly going to be something we may not survive. And so A&M was a was at that time a pure bankruptcy, troubled company turnaround firm. We hired A&M at Andersen. And so Marsal, Brian Marsal of Alvarez and Marsal one of the founders came in and was our our chief restructuring officer. And he did a great settled all the leases. He took care of the you manage the cash flow, manage the orderly transfer of various practices to other firms kept the firm out of bankruptcy, for which I was grateful as a partner, and it was a two year assignment that he had.
Well, when that assignment was over, he went back to Alvarez, his partner and said, Hey, you know, there’s a lot to like about a multidisciplinary services firm like Arthur Andersen. And a lot of their values are like ours. And so what would you think about adding some service lines to our existing troubled company, bankruptcy service line.
And so they began to contact some Andersen partners that they had worked with during that period to see if they were interested in joining and building practices at A&M. And I was one of the tax people that that they talked to. At the time, A&M had 250 people, and they were all the core troubled company, folks. And so as those that I was like the fifth tax partner to join the tax practice. And so it’s been 16 years since I joined, we’ve gone from 250 people to 5000 people. And it’s been an enormous success, best business decision I’ve made.
Number one, I was tired of working for an audit firm, you know, that just the audits very risky. And there are a lot of rules restricting what you can do. So that was, that was a big thing. We don’t have audit, and we never will. I also thought that you know, in a firm like A&M, if the economy is good, all all boats rise with the tide, everyone does well. When the economy turns, it’s good to be in a firm with restructuring DNA, because there’s a lot of bankruptcy work to do. And that was tested. You know, pretty early on. I mean, I’d been there maybe two years, two and a half years when the recession hit. And, you know, we, our firm was the restructuring firm that ran the Lehman Brothers bankruptcy, we ran the Washington Mutual bankruptcy, we ran Eddie Bauer, a lot of other ones, we had great years. And so in the 16 years, I’ve been there, we’ve never had less than a double digit growth year.
CW: So I want to back up a little bit. When you’re fresh out of school, are you just, are you doing people’s taxes? And are you are you doing client interface? Or are you? What are you doing when you’re when you’re when you’re a young buck in your industry?
BP: So it’s interesting. Everybody that comes out of school and joins a firm, like, like ours always is nervous, because, okay, I’ve graduated, they’re gonna expect me to know how to do everything. And on day one, they’re gonna put a bunch of work at my desk and say, get this done. And so I do a lot of recruiting. And I certainly expected that I didn’t know what to expect. And, and the reality is, you know, school is is more of a gating mechanism. I mean, it you know, if you if you get good grades, you’re intelligent, then we know, you’re the type of person that can grasp what we want. But we know when you join a firm like ours, that we’re going to train you in what to do from the ground up. And so I always tell people, the first year I was out of school, I learned more than pretty much my entire college career.
There’s a lot of training. There’s a lot of of official training that we invest in firm-wide training, outside training, etc. But the best training is on the job training. And so you’re as a new person, you’re given tasks, discrete tasks, like, I need you to prepare this schedule, or I need you to research this question. And your job is to do it by a certain deadline, and the time allotted to do it, then do it the best job that you can.
And so so I would say the first year, first couple years, you’re focused on gaining technical knowledge. And you’re focused on gaining knowledge of the process that we go through to get work the client. So so Chris, that could be working on a tax return, it could be working on a research memorandum, it could be compiling a schedule, all kinds of different things.
CW: And are you working for a partner? Is that how that works, you are assigned to a partner? Is that the way that works?
BP: No. So the first couple years, you’re there, and we’ve carried that through to our firm today, you’re, you’re, when you’re a staff person, or a senior associate, the first two levels, you’re in what we call a staff pool. And so you’re available for any partner and any any person to use if you’re available.
And, and that’s, that’s an outstanding thing for the young folks, because they get exposed to a lot of different things. And, you know, when I came out of college, out of grad school, I said, Well, you know, I think I want to try international tax, or family wealth planning, or personal financial planning. Those are the three things I’m interested in. And I got to try them all. And I hated personal financial planning and family wealth planning, but I loved international tax. So I did that for five years, I kind of gravitated toward that.
So so you get a lot of experiences, the first, you know, three, four years in various areas, and then you through aptitude, a combination of aptitude and interest. And a need, you kind of naturally fall into one of those, one of those specialty areas.
CW: Explain to me sort of how an engagement works. So if you’re the guy who is responsible for owning, you know that this client comes and says, Hey, we need you to dig us out of a bankruptcy, or we need you to do our taxes, they you get engaged with a partner, right? And then that partner just draws from this pool, the various people they need at various stages, is that how it works?
BP: Yes, although the pool is people that are 1, 2, 3 year people. And then, you know, the typical firm would would would promote a partner and 12, 14 years. So there’s a big space in between where you have a structure you have, you have associate, you have senior associate, you have director or manager that the firm’s called senior director or senior manager, and then partner after that.
And so typically, by the time you get to be a manager, or director, you’ve, you’ve got five, six years of experience, and you’ve kind of slotted into a practice area that you like, and there’s that, and that’s what you do for the rest of your career. So on my team, for example, everybody, but the pool people are on my team. And so if a client calls me, or if there’s a situation where I get Yeah, I get, there are a lot of ways to get client work, you know, my own efforts, blue sky, referrals from others in the firm. And so if one of those comes across my desk, I, you know, I gather the team, and maybe the top two of us that the most senior people will go to a meeting or be on a call. And then and then we’ll come up with a proposal to do the work. And then once we get the work, we will work with the youngster youngster to delegate tasks and build a project plan.
CW: So you have a number How many people do you have working for you directly?
BP: Probably at this at this point time, six or seven?
CW: And are you um, but but you guys are divided up in sort of practice areas. So that if someone is talking with a client, and and they’re talking about, you know, I don’t know, whatever it is, and then they go, Oh, by the way, I got a tax problem. That’s when they say, Oh, hey, you need to meet my buddy, Brian here and they pull you in? And then I see. I see.
BP: Absolutely correct.
CW: So does do all layers of the Earth to the top few layers do client interactions? Or is it just the partners?
BP: No, no, no, no, we we give our younger people exposure, a client interaction where we include them in the Zoom calls, we include them on the phone calls, and actually, when you know, when we’re able to go to a client, we bring them and I say to my client, listen, these are younger members of the team and they’re here to listen and learn to take notes. I’m not billing you for their time, right? This is this is just in they’re always like, Oh, that’s great, no problem.
And so you know, we try to give them exposure to client situations early. When it comes to dealing directly with clients. You know, if you’ve been if you’ve been with our firm, five, six years, you’re a manager, director level person, you have client relationships. And and certainly a senior manager senior director has it client interaction.
And part of part of creating a good team in our industry, is is choosing people and giving them enough experience to know when they need me, when they need the partner, I have a certain level of trust that certainly the people that work for me above a certain level, absolutely have client contact, email, telephone, Microsoft Teams, whatnot. And I trust them implicitly that if there’s a situation that they’re not sure of, or they haven’t seen before, that’s, you know, that’s a good question. Let me run it by Brian, let’s get Brian involved.
So, you know, I tell people a lot when they’re when they’re brand new staff, their job is to do what they’re told, as well as they can, within the time allotted, if possible, and communicate if there are issues. When you when you’ve been there, two, three years, you get promoted to senior associate, now you’re starting to delegate for the first time. And you’re more responsible, instead of being responsible for a task, you’re more responsible for a project or discrete piece of the project. And then when you get promoted the next level, which we call director at our firm, then you not only do you have project responsibility, but you have you starting to get some client responsibility. And and then as you can promoted beyond that, I call it a director to senior director, all the way up to partner continuum of getting more comfortable with client facing things, more marketing, more revenue generation, the closer you get to to partner.
So for example, a young new director might be responsible for a good chunk of client relationships and client management and you know, making sure the clients tasks are, are being are being done properly. And then as you get closer to partner, you’re going to demonstrate to us that you can generate revenue, generate new relationships, and do business development, as well. And so it’s a continuum of skills.
My area of expertise is advising clients, mostly corporate, mostly fortune 500, but not always, on on state tax issues. So So Washington tax Oregon tax, California tax, and, and part of my job from a consulting standpoint is to look at the footprint of where they’re filing state taxes, how much they’re paying, what does the org chart look like? And how does the org chart contribute to how they are filing and paying tax and, and make that as efficient as we can. And so we do a lot of restructuring work for that, to that end, you know, our job is to make sure that they don’t pay more than they have to pay that they that they should pay. That they pay what they should, but not more. And so part of that sort of understanding the interaction between how multi-state corporations revenue is divided up among the states and taxed and which entities in the org chart are paying where and so a lot of times we do entity simplification, entity rationalization, we efficient-ize, if that’s a word, the org chart from a state tax perspective.
CW: So why does Why does a Fortune 500 company need A&M? Why don’t I mean don’t they have smart people?
BP: They absolutely have smart people. What we have that they don’t have is experience in different industries with different companies. Since we do work for a lot of different companies, we see different issues, we see different stances, taken by states we have we have, you know, familiarity with a lot of different states.
And so when I’ll give you an example, one of my Fortune 500 companies called and said, we’re having trouble with with some tax situations in in Michigan. And you know, what, can you help us? I said, Well, yes, we can, because I’ve dealt with Michigan before, one of our one of our bankrupt clients. And again, we can always talk about bankrupt clients because it’s a matter of public record. So PSG Performance Sports Group was a client of ours in bankruptcy several years ago. And one of the brands they own is Bauer of the hockey, hockey skates.
CW: My, my favorite hockey skates were Bauers.
BP: That’s right. And so so they had a big issue with Michigan. And you know, one of the things that that that we bring to the table, you know, that the Fortune 500 may or may not have, it’s we’ve got experience with very high levels of people in the various state departments of revenue, because we settled a lot of big ticket items with those. And so, you know, we can make a few phone calls and get to the right person and have a constructive dialogue.
So I think I think why a Fortune 500 would hire us is we see more than just their industry. And we’ve seen we’ve seen states apply the rules in different industries that you might be might have an analogy to their industry to apply. We’ve seen a lot more state issues, typically, it’s just experience and what we’ve seen and what we can bring to the table that they haven’t seen.
CW: Do you end up teaching them how to? I mean, I’m assuming part of what you’re doing is, is a no, no, no, you guys, if you did like this, you’d avoid that. And then I mean, you’re not actually filing people’s tax returns, most of the time, you’re just sort of telling them how to file their tax returns.
BP: So yeah, I’m a consultant in my practice, we do have a practice that does compliance work, that does file federal and state tax returns. Typically, a Fortune 500 company does all that internally. They don’t need a firm to do that for them.
But we do have, we do have a group that that does that type of work for, I would say, you know, startups, pre-IPOs, middle market companies, and some public companies, too, that are that have grown to the extent that they don’t, they don’t have that internally don’t want to staff up to do that internally. And our group that does that is really quite good.
But for I don’t do that. It’s almost an oversimplification to say I tell them how to file their tax returns. But it’s true. So what what I do, and then when I come in and look at a situation, and I say, Okay, if we set up a subsidiary here, to do this process, okay. And then we set up intercompany agreements that would have a permanent tax savings in the following states.
BP: And we, you know, we have the ideas, we model those, and we show them what the tax savings would be. And then they take care of finding returns that that do that.
CW: So Anderson implodes? Did you ever think about going to go to work for a Microsoft or somebody in their accounting department? I mean, talk about the difference between what you’re doing and and actually working at one of those firms?
BP: That’s a that’s a fair question that I deal with this question a lot.
CW: I’m assuming you’ve also been made more than one or two offers to do that?
BP: Oh, absolutely. Absolutely. And it, and it depends on what you like, what your personality is, really. For me, personally, I’ve never had any interest in going to work in industry. And the reason for that is one of the things I thrive on, and I enjoy is different situations, different industries, different situations, it keeps me fresh, I consider that to be a challenge to bring, you know, a specific set of knowledge or skills or experience to a variety of different client situations. That’s just me.
I know others, though, who are, are not comfortable doing that, and are more comfortable getting very, very deep in one company situation. I have a client in a Fortune 500 company. She’s the Vice President of Tax, it’s a company in Pennsylvania. She’s also ex-Arthur Andersen, but she’s been there for 20 years. And she knows, I mean, she knows everything about about that company. And you can ask her a question like in 2005 Oh, yeah, that year, we had it, you know, and she just knows it. And she enjoys having that deep knowledge of her company. And, and that’s, that’s a personal preference.
And and it’s certainly a company like Microsoft, they have enough issues in a variety of different places that that that would be interesting. But, but for me, when Andersen imploded, I had hadn’t been a partner for too long at that time. And it’d take me a while to get there. And I had some hard fought hard fought knowledge. And I enjoyed what I did, and I can and I kept it up.
CW: I would imagine that there are people in your organization who get one of those offers and seize the opportunity to get stock in a little company or you know, I mean, it’s a much more exciting and intimate relationship, I would think for some people, right? Do you lose many people?
BP: We lose, we do lose people, for sure. We don’t. It’s funny. We don’t… We back in, I would say the early 2000s. Before the tech bubble burst, we lost more people to like, go to this startup, I’m going to do this, I’m going to do that I’m going to be a billionaire. And then that that market imploded. And so when, we lose people now. It’s not so much for the options or a chance to make big money. It’s more for the reasons I described before.
And I will tell you this too. Part of being a partner in a firm like ours is, you know, what I always tell people in terms of advancement, you could never advance further than your technical skills and your technical ability. But that’s that’s the minimum you have to have that at every level. If you’re going to be a successful senior manager and partner in our firm. You’ve got to drive revenue and you’ve got to sell work.
And there are some People who are smart people, and they get to a certain point, and like, I’m not comfortable doing that, I’m not good at that. I don’t want to do that. And so I’m gonna go somewhere where I don’t have to do that. And that’s part of it too. And my job in my team is teaching folks and having them watch me, because there’s a misconception among young people that join firms like ours, that selling is like being on a car lot, or in a shoe store, you know, and that’s not it at all, you know, what, what it is, is developing a relationship with with your client such that, you know, they will tell you what’s on their mind. And one of the things that I enjoy about being a partner, is to go to either an existing client or a new meeting a new opportunity, and say, so, you know, tell me what’s going on, tell me tell me, what are the issues that you’re that keep you up at night? What are the, what are you thinking about? And then they’ll, they’ll talk about them. And I could say, well, here’s what we’re seeing, you know, and, and that develops a little bit of rapport, and you get a chance for the next meeting at that point.
I was on a call three days ago, or late last week, and one of my consulting partners, said, you know, clients don’t necessarily want to hire the smartest person, they want to hire somebody they want to work with. And and, you know, if there’s a if there’s a, if there’s a level of competence, and you prove you can help them, that’s all selling is. All selling is is bringing solutions to problems that you will find out about through relationships,
CW: it’s the same thing as it is with almost everything in leadership and anything else. It’s trust, right? If they, if they look across the table and feel like they can trust you to have your best their best interests at heart, then fine, if they think you are trying to used car sales them into something, they’re going elsewhere, right? It’s…
BP: Absolutely, absolutely. It’s just that simple.
CW: So at your level, so now you’re you know, you’re one of the one of the senior most tax guys at the company, you’re a partner, yada, yada. Do you have? Do you feel like your expertise, your technical expertise of understanding the Michigan State tax laws is sufficient? Or do you have people underneath you who are significantly better at the details anymore than you are? And they were there? Like you were 10 years ago, or 15 years ago?
BP: Yeah, that’s that’s a fair? That’s a great question. I haven’t thought too much about that, other than to say, there are people beneath me that are more granular with respect to specific areas of various state tax laws, you know, I don’t keep up with law changes to the nth degree in every, every state, what I, what I do bring to the table at my level is, I’ve seen this before, or I’ve seen a state take this position before, or I’ve seen in this industry, this has happened before,
CW: or even in the sports equipment industry, they dealt with this, and I see how that relates to the shoe industry over there or whatever.
BP: Exactly, exactly. Right. And so so, you know, I don’t know at what point I felt like at a turn, maybe, maybe I’ve been doing this for 35 years. So, so maybe, you know, within the last 10, 15 years, I felt like okay, now, I’m almost never surprised by by a situation I’ve never, I almost never hear a fact pattern where I don’t have something to say, that’s, that’s based on my experience.
And so, my, my you know, my expertise now is in having seen lots of things. And I have expertise in lots I’ve touched almost every industry you could imagine. And so so, you know, I still have a lot of technical knowledge, but it’s more strategic knowledge than it is granular.
CW: So do you feel like the need to cultivate and develop people underneath you so that boy I really do need I need you know, a California expert or I need a … or is work granular enough that you can pick that up when you need it?
BP: Yeah, it we can pick that up when we need it. I I will say this there are certain states right? A California and Oregon because I lived there a Washington a Texas and Illinois, New York bigger states we deal with all the time. So we’re very familiar with those. And and you know, the thing about state tax is is the rules are very similar state to state but not identical. And so it’s easy to generalize and say typically a state would do this with your fact pattern. Let us have a look and make sure that in your states that we don’t have any weird surprises.
In terms of developing my team, I pick, I like to pick people who are extremely smart, obviously, who like to research and write. But who articulates because, you know, people have this this image of tax consultants as being these green eyeshade guys, you know, that, that you don’t want to let out of out into the sunlight. And that’s, that’s, there are people like that in the industry. And some people join the industry, because they like to put their heads down and crunch numbers and, and that’s what they want to do. And, and, and that’s, I would say, more typically, the type of personality that would go into an industry, you know, are in the in house.
But there are a lot of folks, especially in the bigger firms like ours for the Big Four, who have personalities and who like, who can articulate positions and talk to clients and get to know them. And I so I look for people who are, you know, everybody would hire a smart. But I look for people in the pool that we work with that, that have an ability to articulate a position, who have an ability to listen, digest some facts, and ask the right questions, the critical thinking, and those are the people that I gravitate toward. And because I’ve been around long enough that I know, what traits are going to are going to be a predictors of success in our industry.
And so with, especially today, with, with the research tools that we have available to us, and the internet, it’s much easier to find a discreet answer to a fact pattern than it used to be. But it’s still critical to be able to understand what the question is, from being presented the fact pattern?
CW: Do you guys do mostly project based work? Or is there? Or is it you know, are you on retainer with some people? Is that I mean, is that kind of how or …
BP: ya project, I would say the vast majority of what we do is project based. And so, you know, we we, we would typically in the most firms are like this, you know, have a master services agreement with a client that lays out the terms and conditions that that we have for working together. Yeah. And then each project has a separate statement of work. And so most of our, the vast majority of our work is is like that.
However, there are some clients. Specifically, the client that I just described a little while ago is based in Pennsylvania, and it’s a Fortune 500. client, they said we want to get we want to put you on retainer, X thousand dollars a month for two years. And you know, we’ll call on you if we need you. If we use more than that talk to us. If we use less than that, then then you know, we’ll try to use as much as we can. So that’s that’s not as common, but it’s got to be a company that knows they’re gonna have a lot of issues.
CW: So do you guys hire mostly green? Do you get bigger by merger? Do you hire senior people do you do all the above?
BP: Our firm does all of the above. It’s interesting how things have changed since I started. When I started in the big eight, you never hired an experienced person, everybody out of campus. And and it was upper out, you know, and every year the pyramid got a little smaller.
And I remember it was it was so strange to hire a lateral hire when we started doing it in the 90s. Now everybody does so. So at our firm now, the growth that A&M had had been, gosh, for probably 30 years was all organic. And so by organic that just means hiring people and not acquiring firms. And they obviously grew exponentially when they start hiring Andersen folks to build the practice.
Within the last, I want to say four or five years, we’ve strategically begun to acquire firms, smaller firms, if they are geographical or they make geographic sense, or they make industry sense. And so the firm I talked about that we acquired in San Jose was a 20 person firm, with two partners and that was the first firm that A&M had acquired in any practice area. And it went extremely well. And we’ve then since done several more now they haven’t been giant acquisitions. These are usually relatively small 2, 3, 4 partner shops with with a staff group that fit in and so we’ve gotten pretty good at tucking those in.
But but we have done that we hire a lot of senior people. I mean, we hire, we’re aggressively growing in Europe. And so we’ve hired a lot of Big Four partners over there to start practice areas over there. I mean, the entire non-bankruptcy trouble company practice was was was grow by hiring partners directly. So we do hire senior people a lot.
And then I hire people personally, and this goes for pretty much everybody up and down the up another chain, if I if I have a need for a five year person, I’ll go hire a five year person. Because you know, we have a lot of, we have a lot less turnover than the Big Four to, I think one of the reasons for that is our pyramid is different. So the big four firm, you might have 10, or 12 employees per partner. And here, it’s four or five, we’re much flatter. And and the reason we can do that is we have very few administrative partners in our firm, everybody, including the top two, Alvarez and Marsal are doing client work.
And so one of the appealing things to our young people is that they get a chance to work with a with a senior person all the time on the same team. You know, when I was at KPMG, and I was the national leader of the of the state income practice, I never worked with anybody that wasn’t a younger partner, maybe really rarely, a senior manager that was going to be a partner, but that’s all I ever worked with.
And here at A&M, you know, I have, I have the six, six or so people on my team range from senior manager, senior directors all the way down to, you know, experienced associate. And I actually enjoy that. One of the things I love about working up about my job is I like to teach. And I like to mentor young people. And, you know, I taught, I thought the state course at the San Jose State master’s program for six years. So I enjoy teaching. And so for me, I like working with a small team, and for them, it’s a great recruiting tool, because, you know, if we’re trying to hire a resource at a big four firm is also trying to hire so well, you know, that those are all good firms, but you know, you, you’re talking to me, and that I’m who you’re going to work with, you know, and so, you know, it’s a it’s a, so we hire people all up and down that that experience level as we need them.
CW: So you’ve got a team of people do you? Do you treat it like a team? I mean, are you are you guys together meeting together as a team a lot? Or is it? Are you really mostly focused on projects? I mean, do you get together and do rah rahs, and that kind of stuff.
BP: So interestingly, we have my team and I have a call every morning at 8:30. It’s a half an hour, and it’s it’s a, it’s a call a video call like this. And it’s funny.
We had a very large project, three years or so ago. And it was it was out of state. And frankly, the other thing about our firms, I hire talent to work on my team, and I don’t really care geographically where they live. And so I had a team on that project from, I had somebody from Florida, us a couple people from Atlanta, from New York and me, I was on the west coast. And it was it was at that client in Pennsylvania, it’s very large project, and they’re in Pennsylvania.
So we started the project out there. And I was out there for three or four days. And then I left and the team continued on. And after a couple of weeks, it was not going well at all. We had, we had a couple of folks that have since left that were mismatched with that type of project. And we didn’t realize that until we got into it. So I made some team adjustments.
And then I started having a call with the team every day, at 6am my time on the West Coast because it was 9am their time. Every day, we started doing that, to make sure they’re on the right track to make sure that everything’s going well. And we kind of got into that habit. And we’ve been doing that pretty much ever since. And so before I moved to Houston, we they gave me a break and moved it to 6:30 Pacific time.
But we have a call every we have a call every day at 830. And and sometimes it’s all project based, you know what’s happening on this, that this that this that. Other times it’s like 10, 15 minutes of Okay, what’s new, how’s everybody doing? You know, social stuff, like, you know, how’s your little boy? Yeah.
So it’s interesting. In that it’s, it’s, it’s really, really amazing that there are a couple people on my team. I’ve never even met personally. We’ve hired them during COVID. And other members of my team have hired, I’ve met them because they’re in Atlanta, couldn’t travel. See ’em every day, know what they look like, know what their personalities are like, right? But I’ve never been in the same room with them.
So so it’s important for us to be a team. And it gives us folks a sense of belonging. It even the younger folks that don’t talk a lot, maybe on some of those calls are hearing what we’re saying. And they’re hearing us sort of decide how to you know what What steps to go forward to in a project? And they’re, they’re learning from that. And so it, we really are a team in that respect.
CW: Are you largely working on one project at a time? Or do you have a dozen in the air at a time?
BP: I would say, a dozen in the air at a time.
CW: I see. I see.
BP: Yeah. And, and they’re different in size and scope. Right. You might have, you know, our smallest project, I mean, you know, we’ll I’ll do it that project for as low as, you know, $10,000. if it’s to help one of my other partners, I’m one of their clients, I’m all the way up to, you know, projects that are seven figures. So. But we..
Yeah, we have a lot of, and that’s another reason that the the daily meeting is important, because we all often have a lot of different things going on. And we want to make sure that nothing falls through the cracks. Yeah.
CW: How big is one of your projects? How many folks does a project take?
BP: Well, it can be as little as two, as few as two, or as many as the entire team is, it just depends on the size, the size of the project?
CW: Right? And the scope? Is there something? Is there something about the project work that you guys do that is? Do you ever? Do you ever walk away thinking God and I’m glad that’s not my problem? I mean, for you guys dug yourself a hole, I’ll help you a little bit, but you are really on your own?
BP: Well, you know, it’s interesting, I would say that, I’m sure you’ve seen, In fact, I know, you’ve seen it, we go we can go in and design the greatest, the greatest outcome. And then if we go back a year and a half later, it’s in shambles. And and it’s it, you know, the biggest challenge we have is, is when a project… Clients want to turnkey project. And and that’s fine, we will certainly do that. But you know, what, what I always try to get clients to focus on is is maintenance, you know, and people turn over, and people get busy and they don’t dot the i’s and cross the t’s and all of a sudden you’ve got a major problem.
And, and it’s interesting. I used to be before I worked for A&M, I used to say, oh, man that this company is teetering on the brink? And I’m glad I’m you know, I don’t know, we but but having worked on several bankruptcies, I you know, we could help him through that, right. So, so I rarely see a situation where I just say this is hopeless, you know, I just, there’s nothing we can do.
Because Because oftentimes, you know, bankruptcy is the option. And I have seen lots of situations where it worked as it was intended. Sometimes the bankruptcies, turns into a liquidation, and then the company goes away. But even that’s orderly, and you could end you could wind down the affairs. But but a lot of them are our actual chapter 11 restructurings, you know, they restructure the debt, the company comes out they’re leaner, no, we help them sort of streamline things.
So rarely do I see a situation where I’d like they’re screwed, is far more common is to go in and see a situation where, because no one’s paid attention over the intervening years. And the best intentions, like I’ve seen, structures that were put in place by other firms 5, 10, 15 years ago, that were great ideas when they were put in that nobody, nobody dotted the i’s and crossed the t’s. Nobody followed the steps and the processes, and you have this big giant mess that you have to unravel. And that’s, that’s painful, because if you’re going to do any kind of spin off or divestiture, it’s got to have it’s got to be clean, and you’ve got to have those problems figured out.
CW: I also would imagine that there is a certain amount of trying to convince the customer that the design was right, the execution was bad versus the design being bad, right? I’m assuming. I’m assuming they want to point the finger in your direction a lot. Right?
BP: Well, it’s interesting, because a lot of the ones we get brought in, we didn’t design it. And so
CW: You’re in there, you’ve got the mop and bucket.
BP: That’s right. So we come in and you know, and I’ll be I’ll be very honest, you know, I’ll say, Look, when this was put in place, it was industry standard. This was this was a good structure. And where we are now is that it wasn’t followed. And, and, you know, oftentimes, there’s turnover at the client. So a lot of times a person that brings us in, also had nothing to do with that original structure. So we’re all new to it, you know?
CW: And very often, they’re probably saying, Can you help me figure out what this is?
BP: Absolutely. And I’ll say, I’ve seen this before it, here’s what the goal was. Yeah. But now it’s not doing that. And here’s what you have to do to fix it. And yeah, absolutely.
That now, I’m trying to think, I don’t believe maybe once or twice in my career was I brought in to fix something that I had originally done? where it was, they were apologetic, they weren’t pointing the finger at me, they’re like, Look, you know, we here’s the memo you prepared on what we have to do, and we didn’t do it. So
CW: And we’ve done three of the 11 things.
BP: Yeah, exactly. it for a year, you know, it stopped altogether.
So yeah, so I would say, you know, execution, after, after the project’s over maintenance, making sure. And we, when we do a structure, for example, or any kind of, you know, a project like that, we often recommend that we check in on it once a year. And, and sometimes a client will say, yes, you know, let’s put that in the agreement. But even if they don’t, I’ll call and say, Hey, how are things going? You know, is everything working out okay. And sometimes I feel like, you know, I get Oh, yeah, yeah, no, everything’s great. And it’s like, Is it is it really, but that’s the biggest challenge.
CW: Circling back around to something you said earlier. So you were, you were remote work before remote work was cool. You felt pretty darn comfortable in picking yourself up from Seattle to San Jose from San Jose to Houston.
This whole COVID thing was a little awkward, and that it stopped you from going and shaking hands and kissing babies. But but from a work structure point of view, it sounds to me like it’s not been a big deal.
BP: Agreed. I mean, it’s really funny. Because I’m an older, I’m an old guy down at work, right? I’m one of the most senior guys been around forever. And there was an attitude among some of us… Not, I wouldn’t say prevailing attitude, but but in the mind somewhere that if we let people work from home, are they really going to work all day? You know? Are they going to be maybe distracted? Are they going to have to go do this, that, the other are they going to, you know, General Hospital’s coming on or whatever.
And, and it what we what we’ve learned is, not only are we getting everything done that we did before, I think we’re getting more done because people aren’t commuting anymore. And there’s a better it’s kind of sounds kind of crazy, but I was talking to somebody the other day said, you know, their work life balance is better. Because if they if they have to take an hour during the day to do laundry or run errands, they can do that. And there’s no stress on them to do it. And they get there at home because I’m commuting so they can work till six, seven o’clock.
And so people are people are actually happier in some respects. For doing that, we’re not, we really haven’t missed a beat. I mean, we our firm grew 18% last year, that we’re lucky, because what we do can be done at home, you have a laptop and a you know, an internet connection. And that’s just what we need. But there’s there’s a real lesson that I think we’ve learned in that this is an option that will that works for people. And so even after this is all over. I think our I think I believe and we’ve talked about this, our work style is going to be a fair amount different than it is now. We might give people the option from working from home, we might give people the option to work two, two days a week in the office. And after.
Yeah, as we see how that shakes out, you know, our biggest expense is, is people. But our second biggest expense is real estate. And you know, we have class A office space in a lot of downtowns around the country. And if we can, if we can cut that down by some meaningful percentage, it’ll be, you know, just that much more money we can spend in our people. So
CW: And and also, I’m assuming travel’s significant, a non trivial number,
BP: and it’s Yes, I mean, that’s the other thing I you know, I think after we get back from this, I used to travel a lot, you know, and go visit clients and do things and I’m still talking to him class, we’re doing this and, and I, I’ll, I’ll be cutting down my travel a lot. And you know, our meals and entertainment expense’s way down, our travel expenses are way down. And yet we’re still getting the work done.
So it’s been a lesson for us in remote working that, that we may have gotten to this point eventually. But having been forced to do it the way we have. It’s, it’s you know, hate to say there’s a silver lining to the whole situation. But we have learned some good things about the way we work. And I think we’re you know, we’re gonna be able to apply those things going forward to be create a better work environment for some of our people.
CW: Well, Brian, this has been fun. Thank you very much. I really appreciate it.
BP: I’ve had a blast, Chris. It’s really good catching up with you. Let’s make sure we stay in touch more frequently.
CW: Brian Pedersen has made a great career doing something he loves while developing talent and building a team that excels in their domain. I very much enjoyed talking with him and want to thank him for spending the time with us to understand more about his world.
Leading Smart is from me, Chris Williams. You can find out more about the show and discover other resources for leaders at my website: CLWill.com. I’m sure you know someone else who’d like the show, please share it with them, or spread the word on social media. I’d also love your feedback. I’m theCLWill on Twitter, LinkedIn and Facebook, or send an email to [email protected]
That’s it for this episode. The next episode continues the series on organizational culture. We’ll look at how to change your culture specifically, who can change it. I hope you’ll listen. Until then please remember that each of the several dozen decisions you make today are part of Leading Smart.