GOOD CEOs: Issue 13

Our best H1 ever is thanks to… Abracadabra!
 

I had a bit of an uncomfortable discovery last week. 

 
(Yes, my hip replacement is still fine. Sheesh… stop going on about it…)
 

To build UNKNOWN as a solo founder, I’ve depended on regular advice from a load of mega gifted, sharp-witted and shrewd people in my network.

But I realised that if I’d listened to them on one major issue – the business would never have grown to where it needed to be.

Check this out.

The journey of a creative business is non-linear. You get breakthrough years, lumpy years, grinding years, reset years. Then the years when everything seems to compound. Right now, I’d say UNKNOWN is having a reinvention year.

We’ve just had our biggest ever H1.

Two years ago, a former agency chairman approached us for some advice. He was weighing up his next move, and the two front-running options were…

1. Step back into an executive role

2. Acquire some agencies and build a group

As we talked through the details, it became clear that – for him – door number two was far more interesting. We started imagining what this group might look like. Which kinds of agencies would complement one another? Which founders would fit? Where were the gaps in the market?

In the following months, I worked closely with this person – making introductions to businesses that felt like a good match. Our efforts paid off. This chairman ended up acquiring two, then three businesses.

 
I felt 
the sound of
a penny dropping
 

“People charge for this,” I thought.

There was genuine commercial value in helping ambitious buyers identify the right independent businesses – but long before those companies officially come to market.

That experience sparked a much bigger question. If UNKNOWN spent every day talking to growing agencies, surely it possessed something most M&A firms didn't: an early view of who might be about to become a seller.

Traditional advisers knew all the buyers – they were public, well-capitalised and easy to identify. The scarce asset was knowing which founders were internally considering an investment or an exit.

 
Abracadabra*!
 

This revelation inspired the next evolution of our business. When we transitioned from being an executive search agency for the creative industries – to being a talent growth consultancy instead.

Today, our M&A practice accounts for around 30% of the company’s revenue.

But it almost didn’t happen.
 

*More on this word later.
 

💬
Second
opinions
 

When I first started thinking about our M&A direction, I did what any sensible founder might do. I sought the counsel of those closest to me – agency bosses, CEOs, creative entrepreneurs. I asked them all: “Could – or should – UNKNOWN do M&A?”

About 90% of them answered “no”.

Some said we'd become known for recruitment and shouldn't stray. Others said the M&A market was crowded. There’s no white space, was the observation.

Before I abandoned the idea, I decided to get a second opinion, from a different cohort. I spoke to around eight M&A firms. These conversations led me to a new realisation.

 
🪞 Recruitment and M&A are mirror images 🪞

➤ In recruitment, the scarce asset is buyers.

Talented people are everywhere. In the creative industries, there’s no shortage of brilliant minds eager to find their next big thing. Unearthing companies that are hiring for great roles is tougher.

If you’re in recruitment or exec search: relationships with employers are what matters most: Do you have a pipeline of CEOs hiring for great roles?

➤ In M&A, the scarce asset is sellers.

Everyone knows who the buyers are – private equity firms, holding companies, agency groups. Those people have money. They’re visible, famous and constantly in search of the next great acquisition.

But no-one really knows which founders have an internal monologue that’s saying things like…

 
“Maybe I'd take investment.”
“Maybe I want a partner.”
“Maybe I'd sell.”
 

I realised our team at UNKNOWN knew exactly which creative entrepreneurs were starting to think about this. And we could detect it when they gave us news like…

 
“We've just won three major clients.”
“We're expanding into LA.”
“We've launched a new division.”
 

An inside track on the health and ambitions of independent agencies told us something vital.

 
➤ Who is tomorrow’s seller.
 

This whole episode reminded me of a truth that’s often repeated by Alex Hormozi, co-founder of Acquisition.com.

 
“When you make a big life
decision, don't listen to
the people closest to you.
You should listen to the people
closest to your goals”
 

If I’d listened to the people close to us, we’d never have transitioned. But because I went to the source of our goals, we found the impetus to evolve the business.

☁️
Mastering
the uncomfortable
 

Breaking our growth record in the first half of this year feels great, but it’s reminded me of a fact when it comes to building a business. And it’s summed up by another Hormozi-ism…

 
"You can beat 99% of people
if you can master the shame
of rejection, the boredom of
repetition and the pain
of feedback”
 

When you boil it down, an amazing level of entrepreneurial failure can be traced to these things.

 
➤ Firstly, there’s rejection.
 

Founders can’t withstand the demoralising emotional cost of success.

 
Unanswered emails.
Ignored proposals.
Meetings called off.
 

These things tell us stories about ourselves. That we aren’t smart enough, or our idea isn’t valuable enough. The founders who make it are able to detach the grindingly consistent rejection they face from their stories as individuals.

 
➤ Then there’s repetition.
 

Social media has convinced us that businesses are built through dramatic moments: the funding announcement, the viral post, the dream client. But really, they're built through mind-numbing monotony.

 
Making another sales call.
Writing another proposal.
Following up (again).
 

Showing up on Monday and picking up the thing you were relieved to put down on Friday. I think that volume negates luck. Most breakthroughs are simply the accumulated result of doing ordinary things an extraordinary number of times.

 
➤ Finally, there’s feedback.
 

When you’re working on a team feedback comes in constant supply from line managers, performance reviews. But founders have the opportunity to ignore it. But feedback is fuel. And taking it on eagerly is an undervalued quality for entrepreneurs.

 
Your team has queries.
Your co-founders have notes.
Your market signals disinterest.
 

Many founders protect the ego. But it’s healthier to rush toward these uncomfortable truths. All of the above is about building a tolerance for the emotions cost that must be paid in exchange for success, growth, wealth, and the achieving of your ambitions.

🏆
Playing
to win
 

The second behaviour that’s helped get us to this point is about a mindset distinction.

 
➤ Playing to win, versus playing not to lose.
 

This isn’t a new idea – it takes its roots from psychologists Heidi Grant Halvorson and E. Tory Higgins, who co-wrote a piece in Harvard Business Review back in 2013 entitled: Do You Play to Win – or to Not Lose?

They draw a distinction between promotion and prevention.

 
➤ Promotion focus = achieving gains, advancement, aspiration 😅

➤ Prevention focus = avoiding losses, fulfilling obligations, staying safe 😓
 

➤ Businesses that are playing not to lose become obsessed with preservation.

 
Don't lose the client.
Don't upset the shareholders.
Don't make the wrong hire.
Don't launch until it's perfect.
 

The objective slowly shifts from creating value to protecting what already exists.

On one level, it's understandable: Success creates obligations. Growth creates expectations. Investors demand predictability. The larger an organisation becomes, the more it begins to optimise for certainty.

Which is one of the reasons that holding companies are facing such adversity right now.

Public markets have trained many of them to think in quarters. Every decision is weighed against guidance, margin and shareholder expectations. In that environment, caution becomes rational. Experimentation starts to feel reckless.

There’s a question that helps organisations develop a resistance to this.

With any decision, ask:

 
Are we trying
to preserve yesterday’s
success? Or discover
tomorrow's?
 

🧠
Move it
with your
mind
 

Across the board, I’ve become more inspired by businesses that are able to imagine their way into new categories. What if creative agency brands took their own models of transformation and applied them inwardly?

One story that’s grabbed my attention has been Bending Spoons – an Italian tech investor that buys up iconic (but declining) tech brands, fixes them up, and relaunches them as breathtakingly efficient and profitable outfits. Its portfolio includes the likes of Vimeo, Evernote, Eventbrite – even AOL.

In many ways, it's exactly what the great holding companies once did for advertising agencies.

➤ Buy exceptional businesses ➤ Leave the talent close to the work ➤ Share everything else.

The model created extraordinary value. So why couldn't agencies apply it elsewhere?

 
☝️
Imagine a strategic consultancy acquiring an unloved consumer brand rather than… another consultancy.

✌️
Imagine a creative group buying a retailer, a media business or a software company instead of… another production studio.
 

It would mark a seismic shift from advisory to ownership.

They would redesign the strategy, refresh the brand, rebuild the customer experience. Then create the campaigns, refine the ops, and share directly in the commercial upside.

 
The next generation
of creative businesses
will treat transformation
as an investment, rather
than a service
 

This is only a prediction. But history has a habit of rewarding businesses that realise they're in a different business before everyone else does.

🪄🎩
Abracadabra
 

I promised you we’d return to this word. Recently I learned that one theory of its origin is from the Ancient Aramaic: the phrase avra ke-davra, meaning “I create as I speak”.

I think it’s an immensely powerful phrase.

Because leadership begins as language.

Long before a company changes its strategy, it has to alter its vocabulary. Founders refer to their companies as being ‘global’ way before they can actually back up the claim.

Businesses that start describing themselves differently to before will always – often imperceptibly at first – begin behaving differently too.

Which means every organisation is built twice.

 
First in conversation.
Then in reality.
 

That's why the words leaders repeat matter so much.

Spend enough time around an anxious CEO and eventually everyone begins speaking the language of caution. While a bold leader can inspire the same courageous spirit into the whole company.

Obvs: businesses aren't built by positive thinking alone.

It also takes difficult decisions, relentless execution and years of patient work.

But all of those things begin with a sentence someone is prepared to believe before the evidence exists.

 
Abracadabra!

See you in a fortnight!

Ollie