Want an Exit Strategy for Your Business? Here are the 4 Steps Matt Shoup Used to Step Away from His Company for Good!

OWEN: My guest today is Matt Shoup and he is the former president and CEO of M&E Painting. Did I get the title right, or are you still the president and CEO?

MATT: Yeah, still the CEO, they threw me out and changed the locks so I don’t have to do anything day-to-day in the business anymore.

OWEN: That’s awesome, and that’s the reason why we have you on this interview. We’ve actually interviewed Matt before and in the previous interview we talked about how he was able to systematize his entire business so they could run without him. Now, he’s at the point where he has literally stepped out of the business and his employees are deliberately running everything literally without and is no longer part of the day-to-day anymore. The goal of this interview is to learn how he actually did that. What will you say has changed since the last time we talked to you?

MATT: What’s changed since last time we talked is I was finally able to step out of my own way. The team has been ready for a number of years to run things without me and I just couldn’t let myself go. So we had to create an environment where myself and the team, we could allow me to do that.

OWEN: That’s awesome. You also mentioned that even though the business itself was run without you, you’re kind of a control freak and you’re always trying to go back in. Why was that though?

MATT: Yeah, definitely a control freak. It’s just part of the way that I’m wired. Human behavior has always been really interesting to me and it’s just knowing about myself. I like to get in and micromanage things. And I could never give up that control. But I realize that I was bottleneck and I was the roadblock. So when I finally decided I was going to take that full jump that was just something that I needed to get over. It’s a hard thing to do every day but I’m getting better, and better, and better at it as I go.

OWEN: Okay. When was the precise moment when you realized that could run successfully without you?

MATT: Really good question, we closed 2014, it was our biggest year ever in terms of revenue and profit. We really maximized our profit through the systems and the processes that we had. I just realized that I didn’t need to drive the bus anymore. Every time I got on there I’d crash it into something. I go create problems if there weren’t problems. The exact moment that I realized that, we took the leadership team and their spouses out to Las Vegas and we were doing some leadership, some motivational stuff, and some team building. We brought in some phenomenal speakers. We were sitting at the top of the MGM Grand Hotel in a training room, conference room. And I’m just sitting there looking around, and admiring all these people that some have been with the company close to the entire lifetime of the company, and just really proud that we were able to have a year like that, and have a decade of business. I was reflecting over the past 10 years of business. As I was sitting there and just admiring the team and being really thankful for the team, one of my team members joked around and said, ”Hey, it would be better if you weren’t here. Why don’t you take off, we got this thing.” That was really the moment that I realize that I could step away.

OWEN: Wow. How did that feel? At the point where you realize that they don’t need you anymore and the company runs successfully without you. How did you feel?

MATT: it was a lot of feelings, I’ll just share the analogy, and the role that I have is I’m a father, a parent, and I have a 7-year old boy and a 4-year old girl. And obviously, they need me right now. So I’m teaching them skills, I’m bringing them up to eventually by the time they’re 18 I’m going to kick them out of the house and say, “You got to go get a job.” I’m already teaching my son that he needs to get a job if he wants to work. It’s that same idea of raising a child to the point to where they can become self-sufficient. They can move out, they can move on, they can then get married and raise up their own children in the company. My company was ready for that, and it’s just the analogy of, I don’t want to call it a bittersweet but it was exhilarating to know that I could step out and take on that next phase of life, business, and leadership for myself. It’s a really proud moment just knowing that I can leave them and that they would be okay. Yet at the same moment not having them feel like I abandoned them. I didn’t just take off and go do other things, I’m still coaching them. That’s the biggest, not involvement I have in the company but in their lives personally and professionally I’m there as a mentor. I’m not there to help do their jobs. We just help them get better at life.

OWEN: So your role is no longer the CEO or the president but you grew to more like a coach. Let’s talk about that. How is that different from the previous role?

MATT: Yeah, and again, even my role as a CEO I really see the role as a CEO, president, and leader of the company as you should be the visionary, the person that’s stepping out there and looking at what direction the company is going to be headed in 3, 4, 5 years. And then having a team around you build that dream a couple of years ahead of you. I wasn’t really doing that when I was involved as the CEO. I would go ahead and paint the vision and I’d let my company and my team start doing their jobs and their roles. But I would just jump in. Again, I would just get involved in everybody’s business. I’d walk into the office and check in on them, see how they’re doing, make sure everything was going well. I wouldn’t even say that I was executing my job and role as a CEO very well when I was.

OWEN: As a coach now the role is essentially… I’m just trying to get the listener to understand when they get to this point how their job as a coach would be like.

MATT: Yeah, and the number one thing that I do with my team, and I would stress this to the listeners to focus on is I took each member of my leadership team, and I sat down with them. I said what would be the two to three biggest goals that if you accomplished this year in 2015 would absolutely transform, change, and empower you from a professional, personal, marital setting, and work setting? What would those be? And I’m intently focusing on those goals and nothing else. So when I’m coaching with this leadership team, I’m focused purely on helping them attain these goals and making them better.

OWEN: Now, we’ve talked about how you thought after you told that you’re leaving the company. But the listener might also be wondering exactly what steps did you take to transition them now after you’ve told them that you’re leaving the company and then they’re taking over. What specific steps did you take?

MATT: The first step was really important. It’s that mental decision that you are going to do it, that you are going to make that happen. Once you have that decision made you have to start with that end in mind and know, okay, I’m eventually going to do this. The one thing that I like to do is I would test all of the listeners that are listening. If you’re thinking that that might be a decision you make and you want to test the waters and see how things are, just take a mini vacation. Step away from the business. Take a week, take 2 weeks, take a month, and just turn everything off. Turn off the phone, turn off the Facebook, turn off any way that your business could potentially contact you, and I would just say you be the judge as to how long do you think that could be. I think the most I ever did was between a month and two months. But go ahead and take that vacation and see where the holes are. Come back and see where certain bottlenecks were, certain things that didn’t get accomplished would be and you can start to work on those things. The other step that’s really important, the first you’ve got deciding, second is taking that mini vacation. It’s really got to be okay with your team. I had everybody I feel was in the right seat on the bus that was headed in the right direction, and they were all okay with me stepping out of the company. I know some companies where the leader or the CEO’s ready to do it. He or she has taken those vacations, knows where the bottlenecks are, they’ve addressed those. But then they get ready to step out and the team’s just not mentally prepared. So they also need to be prepared for you to step out as well.

OWEN: So you said step three, you said something about ask your leadership. This is after you’ve identified the holes. You took the vacation and see how long you really not have to be there. And now you’re able to see the holes that if at all when you went on vacation any holes came about. Now, you figure out what the holes were. But what you mentioned, ask your leadership. What does that mean?

MATT: Yeah. One of the things that I did, and this was just out of the culture that our company has. I asked the leadership team. I said, “Hey, I’ve decided I want to step away.” I know how I can step away and what the process looks like, but I asked them. I said, “Is this okay? Are you guys and gals okay with this?” They said, “Oh man, we’ve been okay with this for years. We couldn’t wait for you to say that.” It’s just getting that by end and that agreement from the team that you’re going to be stepping out, but that they’re okay to step in where you step out.

OWEN: Step four, you mentioned something about getting out of your own way.

MATT: Absolutely. And again, that’s just my natural style. A lot of the CEO’s, executives, and people that I coach and work with that tends to be one of their issues too, is you just need to step out of your own way. You set your company, your systems, your processes, your people for everything to effectively operate without you there. But then you jump back in the mix. For me it was creating problems. It was always needing something to be involved in.

OWEN: You also mentioned during the pre-interview that you have to force yourself out and give yourself an option to… How exactly did you do that in your own business?

MATT: Really good question, one of the things that was really important and crucial for me was disconnecting myself in every way possible from the business. I changed my email. I now have my M&E Painting emails forward to the COO. Anything that would connect me to the business, my email, business cards, the company vehicle, I turn that over to one of my sales reps. I really created no way to tie me to the business. For example, something as simple as company t-shirts. I had those hanging in my closet with the M&E Painting logo on them. I turned all those in. When I wake up every day there’s no way that I can get involved in the business. Now, I go into the office once a week and I do some weekly coaching sessions. At this point I’m still sitting in on the leadership meetings that they run, and just watching, evaluating them, and then giving them feedback and coaching. But I’d say the only thing they haven’t done yet, which I think they’re going to do is change the locks. I think they’re actually going to lock me out of my own office so I can’t get in.

OWEN: Anyway, the other thing is now you’ve already told them what you’re about to do and you’re taking the steps to actually make it happen. But I’m also wondering what are the precise exit strategy that you actually implemented because there has to be an exit strategy that you implemented to get out. What are the details of it?

MATT: I spoke a little bit about those at the beginning is making that decision, poking holes in the business, making sure you’ve got the agreement and the consistency with the team. The first thing that I did on the actual strategic steps is I did something I call it a rolled up. This is when I realize that I’m not being as effective of a CEO as I could be in terms of what that role will entail. So, I took my last 6 months, and I encourage listeners to do this. Take your last 3-6 months of your day-to-day calendar and schedule. I just threw it on a white board. I just threw everything up there. So when I step out of this, which will be next week, what are all the things that will not be happening. And I realize that was doing about 10% of the finance job over here and maybe picking up some extra sales over there. So that role dump was really big.

OWEN: After you did the role dump then what is the next thing after that?

MATT: The next thing that I did was I took that role dump and I realize that I was just picking up bits and pieces of everybody else’s  positions. So I let them retake ownership of those things. I realized that I was taking away some of the ownership of their position and what it entails. So I did the role dump and then I had everybody pick up those bits and pieces. For me, I never should’ve taken that on. A listener may be in a place where they’re dumping a role that nobody’s ever dealt with, or managed, or had the capability to do before. So there’ll be some teaching involved there. For me it was dumping it out and then having everybody come back in and pick up what they wanted to do.

OWEN: This is like just the leaders or the entire team?

MATT: It was the leadership team because most of what I was doing at the time was towards the leadership aspect of the business.

OWEN: Let me give the listeners some kind of insight as to the leaders that you’re leaving behind and their specific role, so that they have an understanding of how you divided up the role that you had amongst them. And who’s going to be taking over the person in charge after you leave.

MATT: Yeah, my leadership team right now is comprised of a director of impressions, that’s also director of operations. Her name is Melanie and she’s the main person that’s responsible for all of the back-end, just the systems, processes, and execution of everything. And just the general impression that we are setting on people as a company when we’re out there. I have two sales reps that are full-time sales reps. And again, part of what I was doing was taking away a little bit from them. I had long-term customers and things that I had to let go of and turnover to them. Then I have a senior production manager, so it’s my senior manager that takes care of the transition from when we schedule a paint job to actually getting it complete. He runs that team. He’s responsible for the hiring, recruiting, and training of other production managers, as well as all of the paint crews. And that’s what I’ve got. I’ve got a fairly small team for what we do. One of the roles that we considered bringing in was a general manager, but again, my role was really just picking up bits and pieces of what everybody else was doing. So we didn’t, technically, need to bring in a full-time general manager. We do have one of the sales senior estimators who takes the responsibility on of that ultimate decision making if something still needs to be decided apart from the leadership team.

OWEN: I found out about this was when I saw your post on Facebook telling people how you’re leaving the company, and some people actual thought maybe you did. Talk about that. Because I wanted to share the handover process of what it was like. Share that story about the Facebook post.

MATT: It’s funny, and I was just totally inspired one day. I’m a very direct writer, direct communicator, and just a direct person in general and I decided I was going to write in analogy this day. And I talked about how I was let go from my company. It basically showed me who did not read the entire post because I got people who thought I got fired, kicked out, voted out, or bought out. I had people wanting to bring me dinner saying, “Are you okay? Are you guys going to make it? Is your health okay?” It was all a positive thing. And that was one of the things that completely separating me from the company. I had to make it official. I had to make that announcement that I was stepping out. That created a lot of interest in that. That was the beginning of the process of exiting for me.

OWEN: That’s awesome. Sometimes situations where someone leaves the company they kind of give ownership of the company to like an employee stock ownership thing. I’m wondering, what kind of transfer method did you use when you’re transferring the control of the company to the senior management. Is it kind of like a shareholder thing. I’m trying to understand the control mechanism behind it.

MATT: Very good question. I’m still the sole owner. I was a sole owner when I founded the company and still am. What we’re doing is we have the leadership team set-up on profit sharing system. So they are directly compensated as a proportion of the profit that they help generate for the business. There wasn’t necessarily a change of ownership, stock, or anything like that, it’s obviously clearly communicated who’s running what in our systems, in our manuals, and everything like that. But they’re on a profit sharing type of basis. That obviously changed as they have now taken full leadership of the company.

OWEN: I just want to clarify that for the listener. So now, your role is just more of the shareholder behind the scenes and then they are the executives, but they also get to participate in the profits that you guys make.

MATT: Absolutely.

OWEN: Just to summarize, what would you say to the listener if they want to get to this point where the business can now be handed over to the employees and have them run it without the owner be part of the day-to-day? What would you say is the very next step that they need to take?

MATT: Once they’ve decided to do it, are you saying leading up to it or after they decided and do it?

OWEN: I guess maybe we should break it into different parts.

MATT: Okay. Recapping, leading up to the decision, the first thing is you as the CEO, the owner, the founder to decide to do that. So make that decision. The other part of the planning and lead-up process was again taking those mini vacations and evaluating what I was bringing in value to the business, how much it could run when I wasn’t there, And then fixing and filling in those, whether they’re big, wide-open, gaping holes, or they’re just small cracks. I called it too pruning the leadership tree. So that’s another thing that I did. As I was making sure things were okay with the team, finding where we were we can need it to improve I would prune, coach, and teach those leaders. And then again, once I did the role dump, and I said, “Hey, I’m going to be out. This is what the time frame looks like.” I did the role dump and then had everybody pick up their new responsibilities, their new roles, they set new goals around them. And then the biggest and most important thing was tying back to that main decision. Once you decide, you can plan it all out. But until you really pull that trigger… And I think for me this was my baby. I founded this thing 10 years ago. This is like a baby and I’m ready to just step away from it. You really just have to step away and know that it’s going to be okay. And be okay watching a small failure happen. So be okay with your team potentially making your decision that you might not have made and then learning from it. Because that’s what I did coming up in the business. I have failed my way to success, all the way up.

OWEN: What will you say now, coming to the end of the interview, is the very step for the person listening all the way to this point should take in order to get started with creating some form of exit strategy for their business?

MATT: What is the next step look like?

OWEN: Yeah, what does the next step look like for them?

2; Again, to write down, the biggest thing that was the most important for me was that role dump to see what you’re going to be working with. What is your last week look like, 2 weeks, or last month, or last quarter look like in terms of everything that you’re responsible for doing in the office or in the business environment. And who can take those things over.

OWEN: One thing too I think I need to make clear for the listener. Before you even got to that point, the business itself literally had to be at the stage where for the most part you had systemized a lot of the things that you guys were doing, and it was literally running without you. And even up to that point you were even doing tests to see how long can you go away from the business and see if there was any issues. The person who was thinking about this now needs to make sure they got to make sure the business is systematized. And actually I’ve tested that it can run without them before they can now jump into this next phase of the exit strategy. Am I correct in assuming that?

MATT: Yeah, absolutely. If it’s chaos and you’re involved in it, it’ll be chaos when you’re not involved. So you’re having a formal system. And just a lead flow. What is everything look like walking into, through, and out of your business from all regards, absolutely.

OWEN: I’m also curious too, at this stage where you were going through that exit planning and stuff. Were  there any books that you were reading that influenced your decision. I’m just wondering. And if so, name the books.

MATT: There was one that was huge. One of the books that always influenced me as I as building the systems and growing the business was E-Myth by Michael Gerber. He talks about really systematizing and processing your company and everything that’s involved in it. Another one, a guy names Matt Dahlstrom wrote. It’s called Bloom, it talks about inspiring ownership at work. The biggest thing is if me as the founder, owner, CEO steps out that means somebody needs to step back into, take over that ownership. The three big things that he said is give them a role, give them a very clear job description and then give them some key performance metrics and goals associated with it. And then get out of their way, give them the rope to do it. Don’t pull them back, let them go, let them bloom, let them shine.

OWEN: Awesome. What will you say is the best way for the listener to connect with you and thank you for doing the interview?

MATT: Yeah, don’t try to get a hold of me through the paining business because they’ll tell you I’m not there anymore. The best way is what I’m doing now full-time is I’m speaking, I’ve got a new book coming out in June. I’m travelling world actually, sharing a new message. The best way to connect with me is through my website. it’s MattShoup.com.

OWEN: Final question, was there a question so far that you were wishing I’d ask you during this interview that I didn’t ask you. If so, post the question and the answer.

MATT: That is a good question. We covered all of them. I think just to reiterate, or to ask the question again what the biggest thing that I learned from this whole process was. And for me it really is that if you’re wondering if you’re ready, your team’s probably ready. What I found is I was the one that wasn’t ready. I needed to get out of my own way and it was really cool. It was a really peaceful transition. It was like a big weight was lifted off of the office when I left because of like, “Finally, he’s out of here. We can get some stuff done more efficiently.”

OWEN: That’s good. Now, I’m speaking to you the listener. If you’ve enjoyed this interview and you’ve listened all the way to this point, feel free to leave your honest review. You can do that by going to iTunes and then go to sweetprocess.com/iTunes to leave your honest review of the interview. And if you’re using the Android to leave us a review on Stitcher you can do that by going to sweetprocess.com/stitcher. Finally, if you’re at that point in your business where you’re tired of being the bottleneck in your business and you want to get your employees to know step-by-step how you get tasks done, well, then sign-up for a free 14-day trial of SweetProcess. Matt, thanks for doing the interview.

MATT: Thank you Owen, I appreciate you.

OWEN: And we’re done.

MATT: All right.