292. Future-Proofing Your Business: Exit Strategies and Leadership with John Martinka

Change hits like a wave, and most teams feel it first as fear. We sat down with M&A veteran John Martinka to unpack how to turn that fear into focus when ownership or leadership shifts. Our conversation gets practical fast: reframing uncertainty, rewarding continuity, and communicating with a steady cadence even when legal guardrails limit what you can say.

We walk through the three‑legged stool of trust across employees, seller, and buyer, and why retention bonuses tied to time and performance protect both people and the deal. John explains why buyers invest in teams, not just contracts, and how smart leaders involve key talent early without spooking the organization. We also explore how shop‑floor ideas often hold the best growth levers, and how a new owner’s curiosity plus targeted capital can unlock stalled improvements. From culture risk and turnover to customer stickiness and margin discipline, we connect the dots between people decisions and enterprise value.

If you’ve been asked to present to a prospective buyer, you’ll hear how to share the positive truth: clear wins, real risks, and where capital accelerates value, including measured adoption of AI that augments your team. Founders weighing an exit get a grounded checklist on valuation basics—profitability, growth, customer concentration, tenure, and owner dependency—and how to build a bench so the business thrives without a single linchpin.

Ready to lead through change with confidence and calm consistency? Hit play, subscribe for more leadership deep dives, and share this episode with a colleague who’s navigating a merger or transition. Your review helps more leaders find the show.

Chapters

• 0:01 Leading In Uncertain Times
• 0:12 Meet John Martinka And His Background
• 3:04 Change As Opportunity Not Threat
• 7:16 The Three‑Legged Stool Of Trust
• 11:11 Retention Bonuses And Timing
• 14:07 Shop‑Floor Ideas And New Energy
• 17:02 AI As A Measured Growth Tool
• 19:04 Communicating When You Can’t Say Everything
• 22:24 Culture, Turnover, And Customer Stickiness
• 26:08 Preparing Management For Buyer Meetings
• 30:00 Positive Truth And Aligned Narratives
• 33:56 Valuation Basics And Owner Dependency
• 37:00 Rapid‑Fire Wrap And Resources
• 42:36 Host Takeaways And Closing CTA

Transcript

Mick Spiers: 0:01

How do you lead when the future feels uncertain, when your people start asking, What does this mean for us? We don't yet have all the answers yourself. Today, I'm joined by John Martinka, who has spent decades guiding leaders through the human side of mergers and acquisitions. This conversation isn't about deal terms or valuations, it's about people. We unpack how to keep teams focused when everything around them is shifting, how to communicate honestly when you're caught between legal silence and employee anxiety, and how to preserve trust, culture and motivation when two worlds are coming together. If you've ever led through change, whether it's a merger, restructure or leadership transition, this episode will give you practical tools and grounded wisdom to steady the ship while the waves are high. Hey everyone, and welcome back to The Leadership Project. I'm greatly honored today to be joined by John Martinka. John is better known as the escape artist, and he helps small business owners to create large exits. So someone that's a founder, they've built up a business over their entire life, and they're looking to exit the business and hand it over and ensure that their business is well looked after and they they are well rewarded for all of their life's work. That's not specifically what we're going to focus on today. We're going to focus on what it means to lead through those moments of change, whether you're going through an acquisition, where your company is being bought, or you are acquiring another entity. All of this is change, and that change is very unsettling for our people and can be disruptive to the business. So that's what we're going to focus on today. What does it mean to lead when you're going through a merger, an acquisition, a divestment, etc. So without any further ado. John, I'd love to hear from you. Please say hello to the audience, tell them a little bit of your backstory and what inspires you to do the work that you do today, to help small business owners to exit with grace?

John Martinka: 2:17

Well, it's a pleasure to be here, Mick, I'm looking forward to a discussion. It's, it's, it's a little different than what I usually talk about, but it's just as important to talk about leadership within a a business, and what happens when a there's a change in the business as anything else. My story is, if we approach it from a business perspective, I got into doing what I'm doing, which is helping people plan their exit of a business, buy companies, sell companies through serendipity. I was many years ago in the 90s. I was in a small Rotary Club, and where I live in Kirkland, Washington. And the I got in, I was young guy. I did really good stuff. And they, you know, all the older people said, Yeah, this guy's really something. And we had to get him to be president. And I was president the year after another gentleman. And we were, it was a brand new club. We were a little closer in age than with some of the other more senior members who started it, and we hit it off, and our wives hit it off, and one day, a little couple years after that, he said something along the lines of, I've always thought you'd be good in this business. And one thing that led to another, he knew I liked but didn't love what I was doing, and I found that I love the variety. For one what I do every It's not every day. Every hour is different. Every segment of an hour can be different, from marketing to holding a client's hand to researching something, you name it. I like educating. I think it's came from my mother. My mother was a lady who could have got a PhD in math and done a lot of different things, but she wanted to teach, so she taught math at the college level and loved educating people, and she wrote a textbook that did very well. And I've written five books on my subjects of buying and selling businesses, and just tell prospective clients, I don't care if you work with us or not. I want you educated. And I think third is just helping people. I've come to realize that what I do changes people's lives. It truly does. If someone has built that business and they're going to sell it and move on to what we call their next great adventure in life, and do it the right way. It means a lot. Or somebody who's going to buy that company and wants to, you know, have a good deal and take over a business that that's going to change their lives. But also, what I found is it changes a lot. Lot of times it changes the lives of the employees. And a little bit of backstory on that is, you take someone who founded a business and they've been at it for it doesn't matter, 20, 3040, years, and they're set in their ways, and you get a good employees who want to do more, and the owner is saying, Well, why would I want to take that risk? I'm making pretty good money right now. I'm not working that hard. And a buyer comes in and they want to grow it, and those employees get energized, because that's the leadership you talk about, is that buyer comes in and says, I'm not happy with where it is. I love the business, which is why I bought it, or why we bought it, but we want to, we want to energize it. We want to grow. And most employees want to be part of something like that.

Mick Spiers: 5:52

You're really good, John, so the first thing I'm hearing is, I love that you found purpose in your life, and that you get great joy from what you're doing. And there's something in there that you love to educate. You love to help people, to make it easier for them, and to make it worthwhile. The interesting thing there is, I'm going to say to you that if I said to most people on the street, your business is about to go through a an M and A activity, it's about to be sold to a new owner, their first reaction is fear. But it doesn't have to be a bad story. This could be a new injection of capital, energy, vision, direction. This could be good for everyone. It's good for the exiting founder. I hope that the exiting founder, you know, lands where they want it to land. Good for the the incoming buyer who wants who's seen something in the asset. And we might come back to the word asset in in a moment, they've seen something in the asset that they like, but I'm sure that they're trying to accrete value and and they can see some ability to unlock value in the in the future, and then for the employees, that this could be a new adventure that gives them what they've always wanted. So how do we get past that fear factor? Though? First John, their first reaction is definitely going to be all, not so sure about this.

John Martinka: 7:11

The Fear Factor is most prevalent with the employees. And I use in my books a three legged stool, and on the top it says, employees stay, and each leg is represented by the employees, the owner and the buyer, and they're all worried that someone else is going to kick out that leg and the stool is going to collapse. So the buyer is worried the employees aren't going to stay, and that's what they're buying. They're buying people, you know, I don't care if it's in a huge corporation or a small business, the people are what make it go. The seller is worried his people that have helped him build the business for the last 510, 20 years. However, whatever their tenure is, are going to leave and wreck his or her deal, and the employees are worried the buyer's gonna get rid of them, which, you know, we're not talking big corporate mergers in my world, but that's rare. People are buyers. Are buying the people, and it's bringing them in at the right time, bringing, you know, not too early, but not too late. I have seen it backfire, where business seller refused to tell anybody. And a couple of his key people were so mad when he announced he'd sold the company, they said, you couldn't trust us. You couldn't bring us in to help we like working here.

Mick Spiers: 8:32

Yeah, interesting dynamic there around the trust. And the thing that I want to pick up on here is when I said they're buying an asset, the asset is the people. Yes, it is the people. And if the people aren't part of that journey, I think it would make it very difficult for the incoming buyer to to even value the company as to what, what am I buying here? If, if the people aren't part of the process? John, so how can we do that differently to make people, make everyone feel like they're part of the process.

John Martinka: 9:04

Well, it goes from company to company and the type of worker. Lot of times, if it's a, say, a blue collar, a factory or service people, they're not as concerned about it. If it's more of a office white collar, I've seen them get more more concerned, more worried about what's going to happen. And a lot of it has to do with the headlines. We read headlines about big companies and they're going to slash jobs and all that. And it just isn't like that in the, you know, the lower middle market, the middle market, because the people are valued, like you just said, and the machinery, the vehicles, the working capital, the inventory, none of that is worth much without people. Someone has to run the machine, drive the truck, you know, handle the finances, all of that.

Mick Spiers: 10:00

So the reframing here, I think, that I'm looking for is, if you're on the receiving end of this, if you're you're a team member or a team leader in a business that is being sold, your first thought is probably going to be the fear of loss. And what I'm hearing John is to is to reframe this and go, Well, what are we going to gain from this, and the fact that I am the valuable asset that's being bought here some, some buyer has seen something in our team. We should almost take this as a badge of honor to go, oh, this, this person is willing to put their own money on the table because they've seen our work. They've seen our value. So instead of feeling the fear of loss here, almost take it as a compliment that someone is coming in and has seen something in you and wants to invest in you and the team to grow into the future. How does that sit with you, John?

John Martinka: 10:57

Well, that's that's really good, and it's, when do you bring people in? I'm, I will say, I've been, I've, thinking back over the last year, we've probably had five or six transactions we've worked on, and every one of them, the seller brought in people during the process, but also at different levels, had retention bonuses for those people. I mean, one owner of a small company, very profitable with a small number of employees, it was in the digital space. He brought them in right away, and he said 15% of the sales price is going to you. It's going to be a formula based on seniority, job title, and will be paid out at the end of 123, and three years, so that you will stay to help the buyer did that right up front. Others have had bonuses or retention bonuses, again with a lag. You don't want to give it to them at closing, say, Hey, here's$50,000 and they say, I see ya. So it's you need to stay for a year. And after a year there are, they're usually pretty happy with the new ownership and and it works out. So it, it's how it's approached. It's like anything else in life. Mick, it's, how do you approach it? Well, you know, as a leader of a company, the owner, you know, this is one place where you where they have to take charge, and they want to, they want to assure that things go well. They may have a note from the buyer that gets paid over time. They don't want repercussions that the buyer, especially if it's a larger entity or private equity, gets upset and comes back at them and says, You didn't do what you could do to retain, help us retain the employees, or there's an earn out, meaning they get paid based on better performance. So that leadership comes into play there is not just thinking about yourself, but thinking about the components that got you where you are.

Mick Spiers: 13:08

So this feels like a win win for me, for sure, John, the any of those formulas and techniques and incentives that you're talking about, first of all, if, if I'm getting a retention bonus that says that I'm going to get payouts in year one, year two, year three, whatever it looks like. Now I do feel like the valued asset that's being purchased. I feel I feel good about myself, first of all, that I the fear of loss can go away because this person is putting hard money on the table to keep me around here. Then for the purchaser, they're not buying an empty asset where they're going to put money on the table. And within three weeks, everyone left. The person was buying those people, and now all of a sudden, they're not around. So I can see a huge win win there, in terms of that. The other thing you said, there about then? Well, what about an incentive for performance improvements? One thing I've always thought here, John, I'm going to test this thought with you, is that nearly always the best ideas in a business as to, what can we do differently? What can we do differently to grow to be more profitable, to be more efficient, all this kind of stuff. Most of those ideas come from the shop floor. I'm going to say to you that there's going to be many circumstances where the founder was a very strong leader that had their own vision and were almost blinkered in that vision and may not have been listening to the people on the shop floor. Now the new owner is going to come in with curiosity and go, Hey, team, tell me what you think. What do you think we should do differently? So you also through this process might you might get a financial benefit of the bonuses that you're talking about, but you might also get a new license to rethink the way you do things, and get a chance to do things that you've always wanted. To do in the business, but the previous founder was a little bit more very rigid in their thinking. How does that sit with you?

John Martinka: 15:08

Oh, that's absolutely right there. You know, good employees want to do, do well, do more. Have career advancement. You know, they're, they're, you know, you want to have those a people for their level of what they're doing, and you want them to be challenging and wanting to grow. And I'll give you a quick example of a deal from a number of years ago, and the buyer came in. It was an individual, and he convened a four person management team, that, and they didn't know what was going on. And they knew what was going on because, as a side story, they were offered to buy the company, which they thought was just great, until they found out they'd have to sign on a bank loan and personally guarantee it, and everything that goes with that. And then they said, No, maybe business ownership isn't for us. So that comes back to ownership is leadership, and not everyone wants that kind of leadership. But he did a very short survey with them, and this is one of the things I won't forget, because one of the questions was, what's the company's biggest weakness? And all four had a similar answer. And I remember he told me, one of them said the biggest weakness just walked out the door.

Mick Spiers: 16:33

Interesting.

John Martinka: 16:34

They were thrilled.

Mick Spiers: 16:36

So there's the opportunity there, and that's not going to be universal, like founders, you know, put their heart and soul into businesses, but sometimes they trip over their own shoelaces and and they may not have the self awareness that they are the bottleneck that is throttling the capacity of the business to grow. They might be the choke point in the business, but they don't see it yeah.

John Martinka: 17:02

Yeah. If we move that into today's world, we're going to have to wonder about leaders grabbing onto or not grabbing onto AI to help their business. Some are going to go right into it at a too fast, and it won't work. Some are not going to go into it and get left behind, but others are going to go into it or they measured pay. Measured pace and know what they need it for, if you know if it's suitable for their business. And they're going to move forward on it, and they're going to, they're going to lead the movement within their company to use tools like that.

Mick Spiers: 17:38

Yeah, and we shouldn't kind of what's the word I'm saying here. We shouldn't pigeonhole all all founders to think that they're all like that, but you could be in that situation where the founder had the right ideas for yesterday but maybe does not have the right ideas for tomorrow, and may be stuck in old ways of thinking. And here's an opportunity, here's a license to lean into a new world, an AI powered world. How can we use AI to augment the business, not replace the business, not replace the people, but augment the business and augment the way that people work, to unlock more value for everyone, to make everyone's life easier, to take processes that used to be cumbersome and stressful and make them, make them a value, adding part of the business. So, yeah, very good. So the first takeaway I'm taking away here, John, is the reframing that if you're in this situation and you're a senior leader in a business where the founder is exiting and a new buyer is coming in, instead of fearing what you're losing, ask yourself the question, what might you be gaining? And the gain might be financial, it might be identity. You might get a new position in the organization, but it also might be a license to try new things under new leadership with a new vision. The other mistake I see a lot John, in all of these situations, is communication in any kind of change, whether it's a merger and acquisition or a major change to an organization, communication is something that often falls down, usually a black hole, usually a lack of information, and in a vacuum of information, people start drawing their own conclusions, they fill in the blanks. What advice could you give to leaders out there, when everyone knows something's going on but no one's talking about it, how do we get this communication right?

John Martinka: 19:32

Well, it, I think it starts with the owner or leader, whether it's the you know, it's the owner or a CEO that the founder owner has hired, you come to realize that they need to know what's going on in the company. And you you know, they use an analogy is, you know, there's, you know, there shouldn't be anything close to an ivory tower. They have to be communicated. With the employees. And you read stories about some very successful people in major companies who are always talking to the employees. They know who they are. They know about their families. You know, there's a there's a technique that you know is known as management by walking around, which means get out of the office and go see what's going on and ask people, How are they doing? What would they like to see different? And it doesn't matter if it's someone on the shop floor, you mentioned before, the shop floor is where a lot of good production improvements come from. They don't always come from the outside advisor or someone in the C suite. They come from the people who are doing it every day.

Mick Spiers: 20:45

Yeah, really good. So the first thing I'm hearing is to get out of that ivory tower and walk around. What I want to kind of extrapolate here, John, is that if you think that you're keeping things well kept secret, the chances are people already have an inkling that something's going on. And what I want to ask people is, do you want them to draw their own conclusions, or do you want to control the narrative and get out there and have a dialog with them? So I'm hearing, get off your butt and go around, walk the shop floor and have a conversation with people, and then you can, I'm going to say, immediately, nip in the bud any misinformation where people have drawn the wrong conclusion, and you can hear from them their ideas about about what could be done throughout the process. How does that sit with you, John?

John Martinka: 21:35

Well, I think it is. It's the old success, you know, like the old suggestion box in companies and people would write things down, but it's a lot more effective if the if you, as the owner or a any leader, are hearing it firsthand, directly from that person, because you're showing interest, we all want to be paid attention to. And you, you do a lot with leadership. You know a lot about it, but it's you, you lead. You know you need lead by showing interest and empathy and other things that make people feel comfortable. I will give you an example on the other end of it, and this is, you know, you see companies like this, and I don't care if they have 10 employees, 50 employees, 100 employees, whatever the number is. And if you have a more of a dictator, and this one client we had, he would, here's what he was known by, his drive bys. And what he would do is he would hover over someone's desk, and he'd watch him for a while, and he what I had heard in work, you know, talking to the employees on a consulting project was and he would all of a sudden just stomp away and go, don't worry about that. It's just my money. Well, how does that make people feel? And you wonder why you have turnover in companies like that. When the economy is bad, they stay when the economy turns around, they go get another job.

Mick Spiers: 23:05

Yeah, yeah, very good job. So what everyone universally wants in the in the workplace is to feel seen, to feel heard and to feel valued. And if you're sitting in that ivory tower working on the exit strategy without going around and talking to people, you're going to alienate them, and you're going to make them feel unseen, unheard, not valued. And that's going to impact your company at the time where you want, you want things thriving at the time that the new owner or the person that's putting money on the table is looking to value the company, you want it thriving on all cylinders. This is not the time to go into a box and not talk to people. What are your thoughts there?

John Martinka: 23:48

Oh, you're absolutely right. And when it comes time to transition a company, and it could be a transaction, but could also be an owner, saying, I want to bring someone in to run this company so I can step back be chairman of the board. A CEO is going to look at how are things going. You know, two big things in analyzing a company and its value, are customers and employees? Are you treating the customers well? Are they sticky? Are they staying year after year after year? Are they paying you enough for your product or service to that the margins are where they should be, and then on the employees, it's, what's the tenure? What's the turnover? You know, there's always going to be some turnover. I mean, it's, it's inevitable, because things happen, people move, they have a family situation, or they just, they see advancement somewhere else. But when you start seeing turnover at, you know, instead of losing 10% of people a year, it's a 25% and we're not talking fast food restaurants or teenager employees, but we're, you know, we're starting to see that high turnover that gets really expensive. Massive. And that comes, that comes a lot from culture. And I was on the board of a company for many years, and unfortunately for the CEO, we had to replace her, because the culture just wasn't there that, you know, there, there was turnover. People weren't as productive as they could have been, and what the management team just to summarize, they would say, when there's a tough decision to be made, she'll say something like, Oh, I'm gonna go work on the strategic plan. Well, that doesn't instill confidence, and while her top management team, only one was one had left, but ended up coming back. There was a lot of turnover, involuntary turnover, in the ranks of 100 some people.

Mick Spiers: 25:55

It's very expensive. It's expensive to the operations, but it's also going to be, yeah, what an A new potential buyer might be looking at and going, well, what am I buying here?

John Martinka: 26:04

Yeah, and it's, it's a reputation out there too, because word spreads. If you know, if you've got, you're in an industry, and you know you're people are seeing that they're going to go somewhere and say, yeah, it just wasn't happening. There would, no one would make a decision. No one. People aren't happy, and then people won't want to go work there good people.

Mick Spiers: 26:26

You also put up that the customers see it too, right? So if the if there is, because all of the customers, they're people too, and they want to do business with people that they know, like and trust, and if they're trying to do business with your company, and all they see is a revolving door, and they see different faces every every few months. Then they get frustrated, and they go and start taking their money elsewhere as well, and before you know it, you've devalued what might have been something quite magical.

John Martinka: 26:55

Yeah, a new sales rep every 6 to 12 months doesn't build a lot of loyalty.

Mick Spiers: 27:01

Yeah, yeah, exactly. All right. So one more thing I want to explore here, John, let's put a hypothetical to you, because this happens if you're one of those senior leaders in an organization that is up for sale, you might be called upon to meet the prospective new owners, either do a management presentation, might even just be an interview situation. What recommendations or advice could give to people that get put in that situation where you're a senior leader in a business and you're getting asked to do a management presentation to a prospective buyer? How do I prepare for something like that, and what, what should be in my mind?

John Martinka: 27:44

Well, I'll give you an example that happened earlier this year, because the founder of the company we we did a transaction. The founder had hired a CEO a few years prior. The CEO knew he was this. Founder was going to be exiting, and so he was had intimate knowledge of everything going on, and to the point that when in a purchase and sale agreement, and I don't care if it's a, you know, nine figure deal or a seven figure deal, or there is going to be a section in the contract called representations and warranties, and the owner, the seller is representing, warranting that everything they have told the buyer and which is listed at the end of the contract in writing is true and correct. So they're saying it is true and correct. I warranty it with repercussions if I'm not telling the truth. They asked the CEO to also sign the representations warranties. Because every time they went to the owner and said, What about this? Or what about that? He said, I don't know. Talk to the CEO. So how does the CEO present Himself to those buyers? Well, first of all, by being himself or herself and just saying, here's how we do things. What could have an answer to the question, what do you think we could do better? Why haven't you done it? Sometimes it's just the owner is stubborn. Sometimes it's capital. And if you have a more of a professional buyer for a company, they are going to bring capital in to do those things, you're going to improve the processes to make that CEO's job easier.

Mick Spiers: 29:26

So what I'm hearing here, John, I'm going to throw a term at you that resonated in my head as I was listening to you. I'm going to say, well, be yourself. Was interesting. And I'm going to say, tell them the positive truth now. Now, what do I mean by that? Bear with me for a second, John, and see if this makes sense. Just be open and transparent about what's working, because you do want to show that the company is worthwhile buying, but be open and transparent about the things that aren't working as well as you'd like them to work, because they're going to find out anyway. So they're going. Presentations and warranties that you're talking about. If you I'm trying to paint a few different scenarios here, if you present the company and go, everything's perfect here, and then they buy it. First of all, they probably won't believe it, but then they buy it, and then three months later, they find out that everything that you put in that presentation was not exactly true, then that's a representation and warranty issue, and that's not going to go well. The other part that I'm going to say is the the new buyer is wanting to buy what's great about the company, but they're also wanting to buy what they can fix, because anything that they can fix unlocks new value in the in the company, and makes it more profitable and more meaningful generates new growth. So be honest about the things that are not working. Because every time the new owner that's going to put a check on the table is going to value the company, they're looking for the areas where they can unlock value by fixing those things. So don't hide the things that are not working well. Be honest about what is working well, and then be honest about the things that are not working well, the positive truth. How does that sit with you, John?

John Martinka: 31:08

You said it probably a little more articulate than I was saying it, but you have to tell the good and the bad. Hopefully there's no ugly. And it also comes down to culture. And leadership determines the culture, just like the company I told you I was on the board of directors. But other companies, you're going to have a management team, and the management team needs to tell the same story, the CEO, the CEO, the CFO, etc. It's operations person, and it's different from company to company. To company. A manufacturing business client was asked about the culture, and one of the owners said, we're manufacturing business. 90% of our employees come in at seven in the morning and do their job and leave at 330 that's the culture. We give them lunch every we provide lunch. Every Thursday, it's, you know, that's good. Our operation, you know, our management people up there, they do their job. They relate. Well, everyone's on the same page. Now, if you flip it or to a company that has a lot of more white collar and sales people, you know, you want everyone at that level to be saying the same thing about the culture. They want to they the leader needs to set the goals of the company, the objectives so that everyone knows what they are. Because of a if a buyer comes in, and I don't care if it's a buyer or just an investor that want is going to put capital in, they want to know that everyone in the company is working towards that same goal. You can't have one manager saying, well, we want to maximize sales, and another say, no, we want to maximize margin, and another one saying, you know, we don't care about that. I want to put out the best product possible.

Mick Spiers: 32:54

Yeah, good. All right, very good. All right, excellent, John. All right. You've given us a lot of interesting thoughts. I'm going to summarize those a little later. I'm going to ask one more question here. Now, the majority of people listen to the show are senior managers in companies like this, and that's why we focused on this. But I do know for sure that we do have some founders that listen to the Sean show John, and they might have built their company, and, you know, put their heart and soul into it over many years, and they are thinking, it's about time to exit. What they often struggle with is just to value what they've built. If a founder has put, you know, 1020, 30 years of their life in this company, and they're at the point where, okay, I am going to exit now it's time for me to go to my next adventure, which may or may not include retirement. How does someone make a realistic valuation of what their company is worth if they're getting to that stage of their life?

John Martinka: 33:56

Well, the number one factor is almost always the profitability of the company. More profits, the higher the value. And then you look at other things, like, is there customer concentration you have? I just saw someone talking, or read about them talking about a company that had top customer was 70% and the second customer is 20% that's a risk that lowers valuation. Employee turnover. We talked about is the company growing. A growing company is going to get more with the same profit level than one that's flat or been going down the last few years. And we talk about leadership, leadership for a founder, even for a CEO, is getting themselves out of as much of the day to day as possible, even if it's not a, you know, not a privately owned company, but one that could face a an acquisition from private equity or bigger firm. You. You don't want the CEO to be too dominant. And I recently met a gentleman who has referred to me, and he sold his company for$90 million 90 million US dollars. His transition with the buyer has been a lot more involved than he ever thought it would be. And he said, It's my fault. I was too important to the company. There are too many things. I was the one who could do them and did them. So leadership or owner dependency is a big deal, but it really comes down to profits and then all those other factors, you know, determine are you going to get x or you're going to get why?

Mick Spiers: 35:45

Yeah, really good, John. So I'll tell you what I'm hearing. And first of all, I'm really pleased to hear that the normal factors are still in play. Why do I say that we've seen some valuations of tech companies. I'm talking big tech companies here where the valuation they've never even turned a profit, and yet their valuation is based on future potential that you some of the numbers are just mind boggling, and everyone scratches their head, and I don't want small business owners to think that could possibly apply to them. So the basics are what still applies. Are you profitable? Are you growing? Are you do you have a sustainable customer base that that is not just a single customer? Do you have low staff turnover, and is the business resilient and stable enough that you've done the right succession planning, that you aren't the linchpin to the success of the business that your leadership team and your your group are going to continue to do what they do, maybe even better than what they were doing. It when when you leave, are the things that I'm hearing here. John, all right, very good. I'm going to summarize a few things here. I'm going to say that anyone in the audience that's going through this process, and you hear that first murmuring of, oh, the company's for sale. The first thing to do is to reframe the fear of, what am I losing, to think about what might I be gaining from this. The second big learning for me here was about the communication. Fill the communication gap. People know they're clever. They know that something's probably going on. Go and have a dialog with them, even if there's some things that you can't share with them, go and have a dialog with them about what's going to happen if someone is called upon to do a management presentation to prospective owners, the best thing you can do is be open and transparent about what's working, what's not working. Any ideas that you might have as to, you know, if only we had a little bit more investment on in this area, we could grow here. Have a bit of vision of what the future could look like, but just be open and transparent. Don't try to oversell it. Don't try to undersell it just be yourself and be authentic about what it is. And if you are an owner out there, the same principles still apply. Is the business profitable? Is it growing? Is it sustainable? Is it going to continue to grow after your departure, these are the things that are most important for you to look after. All right, John, thank you so much for your time. Today, I'm going to take us now. Take us now to our Rapid Round. These are the same four questions we ask all of our guests. So what's the one thing you know now, John Martinka, that you wish you knew when you were 20?

John Martinka: 38:33

Life is about sales for most people, it doesn't mean direct sales, like selling cars or carpeting, and it ties into one of my favorite business books that I am now started rereading. It's by Daniel Pink and called to Sell Is Human. We're always selling. Kids sell to their parents. Parents sell to their kids. Teachers are same thing, and selling to a boss, what a good job you could do, or when you're being hired, what a good person you are. Sales is not a dirty word. It's what we all do. Sell each other, to our spouses, to if they became our spouses, things like that.

Mick Spiers: 39:13

That's interesting. We're selling and we're negotiating every day. When you stop back and look at it, we really do, John, right. What's your favorite book?

John Martinka: 39:22

Well, I just mentioned the cell is human by Daniel Pink. But I would say, I think, you know, I've read a lot of novels, and I'm not going to bring up things like that, but I would say the book that really opened my eyes was a million dollar consulting by Ellen Weiss. I think it's now in about its seventh or 10th or whatever. Edition.

Mick Spiers: 39:43

Excellent. Okay, all right, thank you. What's your favorite quote?

John Martinka: 39:46

I don't know about a favorite quote, Mick, but I do have something on my desk that I see every time I look at my below my computer screen, and it's four words and it to be and it's about being aggressive. Of shameless, faster and edgy, so always be leading with those things.

Mick Spiers: 40:06

Yeah, like those words, and it's good reminder that you got it sitting there on your desk. I think going to share a personal observation here. I think far too often we fall into the trap of walking around on autopilot instead of being intentional. And what I'm hearing when I hear those words, John is you're leaning into that as your intention. This is how I'm going to show up today with the with those words. That's really powerful.

John Martinka: 40:32

Yeah, get things done.

Mick Spiers: 40:34

Yeah, exactly. Yeah. Very good. All right. And finally, there are going to be people listening to the show that are going through things like this. They might be an owner themselves or or they might be struggling with processes where their companies are being sold or bought, whatever the case may be. How do people find you? Find your books, how to take advantage of your services, if they'd like to know more?

John Martinka: 40:58

Okay, so company website is nokomisadvisory.com. the books are available on Amazon. And I tell you from the I get small royalties every month from different places, like where you are, in Australia and Europe and mostly in the US just put my name in. John Martinka, my latest book that my daughter helped me write. She's been working with me for seven or eight years now, is exit, risk, style, grace and more money. It's available on Kindle, paperback, and within the next week or two, audio version.

Mick Spiers: 41:40

Oh, wow. Excellent job. That's great news. All right. Well, thank you so much for your time today. Thank you for sharing your wisdom with us. There are it is a stressful time when when people go through these things, but I think you've given them a lot of things that were some powerful reframing that they can look at here in terms of what they're gaining rather than what they're losing. So thank you so much for sharing that with us today, John.

John Martinka: 42:03

It was a pleasure to be here, and I will let me just final thought that the transaction of a company that stress can be the same if there's a leadership change up above, even with no ownership change, and you have to approach it exactly the same as we've talked about.

Mick Spiers: 42:20

Very good, John, that's a great lesson to leave us with. Thank you so much. Another powerful conversation there with John Martinka, thank you for reminding us that leadership through change starts with empathy, transparency and calm, consistency. Your takeaways for this week, communicate early and communicate often, even when you don't have all the details, let your people know what you do know and when they'll hear more. Silence breeds fear and in a vacuum of information, people draw their own conclusions. Be visible and be available. Walk the floor, hold space for questions and acknowledge emotions without over promising outcomes and reinforce the why in times of uncertainty, people need to hear the purpose behind the change as much as the process of it. If this episode resonated with you, please follow or subscribe. Share it with a colleague facing change and leave us a quick review. It really helps more leaders find the show and stay tuned for our next guest, Jeff Hancher, author of firm feedback in a fragile world, Jeff shares powerful frameworks for having tough conversations with clarity and compassion, exactly the kind of leadership skill you need when guiding teams through uncertain times. You won't want to miss this. Thank you for listening to The Leadership Project, mickspiers.com a huge call out to Faris Sedek for his video editing of all of our video content and to all of the team at TLP. Joan Gozon, Gerald Calibo and my amazing wife Sei Spiers, I could not do this show without you. Don't forget to subscribe to The Leadership Project YouTube channel where we bring you interesting videos each and every week, and you can follow us on social, particularly on LinkedIn, Facebook and Instagram. Now, in the meantime, please do take care, look out for each other and join us on this journey as we learn together and lead together.