Advisor Insights with Mike Richardson

Brendan Logue: All right, Mike. Good morning. My time evening, yours. How are you keeping?

Mike Richardson: I’m good. Thanks very much. It’s good to good to be here with you. Hello from sunny, California.

Brendan Logue: Yeah. Hello from a not so sunny Brisbane, but that’s few and far between Mike, we’ve agreed today to, I guess, have a conversation about your background and, and some of what has led to your involvement with us, the advisory board center. Yeah. I thought it worthwhile getting into some of the details and the story of, of your, your journey to independence and, and continued independence as a professional. So I thought it best to kick off, I suppose, with some of the context, some of the Genesis, if you like so keen to hear a little bit about your background, first of all. Yeah. If that suits you. Yeah,

Mike Richardson: Yeah, absolutely. And you know, I’ve been an independent portfolio professional for 20 years now and we’ll come back to it. I’m sure it’s, it’s been one of the most enriching phases of my career in life. 20 years before that, of course I had a corporate career actually started out in the oil and gas business. I’m a geophysicist by training at at college natural training for the oil and gas industry. I became a petroleum engineer with shell international and their international staff quickly realized the course that I wasn’t really cut out for a technical career. I had a blast though working on drilling rigs for two years, which was fantastic. And I quit after five years, went to London business school for full-time MBA and then happened to get into the aerospace business and climbed the ladder ended up as an executive, then a CEO, then the divisional CEO of the aerospace division of a British public company that people have probably never heard of called SP PRC.

And we did some really groundbreaking stuff very innovative paradigm shifting aviation information solutions. As we called it made a number of strategic acquisitions formed a number of strategic alliances, not least of all with Boeing the, what was called the Boeing connection, part of the commercial airplane division of Boeing. And the acquisitions brought the center of gravity of my business increasingly over to the USA from the UK. And so I actually moved here with my family in 1999. And and then a couple of years later I actually decided to pursue a portfolio career and went independent and pursued my passion. And here we are 20 years later.

Brendan Logue: Understood. And, and as part of that composition of your portfolio, as you describe it, Mike, tell me a bit about your the application of advisory boards and where they fit into the, the mix of things that you now have interests in.

Mike Richardson: Yeah, so I became a CEO coach, a CEO facilitator. I quickly settled in around the core concept and specialty of agility, enterprise agility, business agility, organizational agility, leadership, agility, and naturally started getting involved with governance boards with advisory boards and with peer advisory boards in particular. And I became a chair, a facilitator of peer advisory boards for executives and CEOs with a global organization called Vistage. And before that it was called tech, which it’s still called in Australia, for instance, mm-hmm <affirmative>. And did that for 15 years and chaired a number of groups here in Southern California with, you know, 50, 60, 70 members at one moment in time and also traveled the world, speaking about agility to, I think, 400 groups in many countries around the world.

And I always was amazed to discover that everybody was struggling with the same challenge, the same problem in trying to, you know, be in the driving seat of their, of their businesses and sort of fully fill their role fully fill the shoes fully fill the seat. And it was all around the agility challenge. And as I got involved more with governance boards and advisory boards, I became increasingly passionate about moving the needle on what I call conversation flow to cash flow in all of the work that I’ve done around agility, which is now by the way an exploding universe of inspiration cluttered with so many confusing you know, concepts and, and, and offerings and services and products and technologies. I try to cut through the hype and all of that complexity and, and distill it down to something which CEOs in particular can relate to, which I call conversation flow to cash flow.

It takes a little bit of unpacking, but what I noticed was that CEOs were struggling with getting the conversation flow of the business on the right trajectory. I remember once I was, I was doing my workshop in front of a, a room full of American CEO, somewhere in the USA. And I I’m sketching out a picture on, on the flip chart that sort of distills this in a, into a very simple form and starting to describe how the trajectory of conversation flow in a business so easily derails and causes the cash flow trajectory to derail shortly thereafter and a CEO stood up midstream. He, he called a halt to proceedings. He walked in my direction and as he did, so he was pulling his wallet out of his back pocket. He fished inside, he pulled out a $20 note.

He gave me that $20 note and said, I will give you $20 for that flip chart right now. I said deal <laugh> because I had described for him the challenge that he was facing in trying to drive his business on the trajectory that he needed. And that just helped me become so passionate about working with advisory boards, because that’s the top line of where the conversation flow needs to start and actually even more so coaching CEOs, because really it’s in, it’s in the head of the CEO that the conversation flow really needs to start, and then it feeds into the advisory board and then it feeds enterprise-wide enterprise deep from there. So that’s the only time I’ve ever sold a flip chart for 20 Brendan.

Brendan Logue: So Mike, you spent some time in, I guess you’d say maturely developed very specific scientific and, and you in many ways, some would say rigid corporate structures shelf, for instance, Boeing, the other example that you referenced earlier. Yeah, yeah. What struck me for that example, is it, it was clearly a different audience that you were speaking to earlier. What, what has been your observations of the market for advisory boards and their application?

Mike Richardson: Yeah, it’s, it’s really interesting. You know, I think in all of the work that I’ve done with CEOs and interacted with so many in peer advisory groups or on governance boards or advisory boards, or indeed speaking in workshops, or indeed keynote audiences, which I’ve done a lot of everybody is hungry for independent, unbiased, trustworthy advisory input, really hungry for it. And frankly, it’s really hard to get because most of the traditional places that we turn to get our advisory input is not necessarily unbiased. There’s, there’s a hidden agenda of, of some degree. And that’s why, you know, peer advisory groups have become so popular in recent years and decades, but many of my members and many of the other members that I spoke to are looking for something more than that because their peer advisory experience can often be so diffuse because there are so many members in the group and we’ve got so many businesses to talk about.

They’re looking for something more. And they’re looking to diversify the input that they’re getting into the conversation flow of their business to give them more confidence that they’re addressing the full agenda of everything that they need to be tackling. And I think here in the USA in particular it’s a little bit paradoxical because advisory boards in some ways is a very mature thing here. It’s quite common to, to see that companies have advisory boards of one form or another, but I think it’s simultaneously immature in that I see a lot of opportunities for improvement in the structure of the approach in the application of best practices and frankly, the rigor and you know, I’ve, I’ve been on some advisory boards, frankly, that leave a lot to be desired. And that’s why I went looking for something more over and above, you know, the 15 years of chairing peer advisory groups of, of CEOs, which is, you know a fantastic experience. I was hungry myself for something more. And that’s why I was so delighted to find the advisory board center and the research-based best practice architecture and structure and approach that it takes. And hence I became, you know, certified and I’m real excited now to help advisory boards establish advisory boards, take their game to a next level and, or help CEOs establish advisory boards where they don’t have them. And they’re hungry for something more than they’re getting from other places.

Brendan Logue: Yeah. It’s a good point that you raise. We, we see, you know, particularly in the US market, private equity or venture capital being the, the I guess the kernel that creates the ad, the, you know, the driving force behind what creates the advisory board structure. And so the typical question that should be asked by everybody around that table, are we independent? Who, who are we here to serve? They fall at that first hurdle more often than not. Yeah. Which is was that something that you’d observed to in, and sort of alluded to in that, that last stanza?

Mike Richardson: Yeah. And you know, I talk about conversation flow to cash flow, and we’ll, we’ll talk about that more in a moment. And, and in particular, I talk about the, the quality of the conversation flow. And if you’re not careful it starts to derail a little bit. The quality of the conversation flow is getting distorted by some of the agendas in the room. Some of the lack of independence in the room, some of the lack of structure in the room, and you start to, you know, experience a little bit of wheel spin. My along the way I wrote a book was called wheel spin, and the S was replaced with a dollar sign because that can start to cost you a fortune. Sure. Maybe not immediately, but certainly in terms of the potential of, of your business. And so, yeah, I see some of that.

I see in particular with those kinds of venture banked, private equity bank businesses you got a lot of smart people in the room and that itself can start to distort the conversation flow because there isn’t enough inquiry and discovery and exploration going on and surfacing of options and, you know, staying with the problem before we rush to the solution. And you know, again, that can easily cause it to derail. I remember I was working with a global technology hardware and software company. And they engaged me not on their advisory board. They had an advisory board with the owner and some advisors. And then there was a, a hired gun CEO who engaged me to work with the executive team. And for about three years, once a quarter for three days, we would meet in some part of the world.

Many times it was in Australia UK, Europe, USA to do, you know, a quarterly strategic review and update, and really drive the conversation flow onwards and upwards up the kind of desired trajectory that, that cash flow could follow. And I, I had them, you know, do the classic thing of of 12 month moving average graphs that was sort of a proxy for share price. You know, they are obviously they were a private company and it was beautiful. What we saw was in inflecting curves, they became increasingly confident in what were they were doing, but there was this advisory board operating, you know, above that arena. And they had a wonderful CEO in my estimation and for reasons, I still do not understand to this day at the end, after three years of working with them and seeing fantastic results in the graph, I dunno, what kind of conversation flow was going on in the advisory board, but all of a sudden they let go the CEO and replace him with a member from the advisory board who became the full-time CEO.

And I have no idea what kind of distorted conversation flow they were having. My engagement with them came to an end simultaneously. But I stayed in touch with many of the folks who increasingly jumped ship and of course never got to see the numbers ever again, of course, but I heard on the jungle drums, you know, that the grass just went the other way and everything created. And you know, it’s just an example that you, you really have to be careful with the, the quality of the conversation flow that’s occurring and when you get it right, it can have fantastic results. And when you get it wrong, it can do the exact opposite.

Brendan Logue: Like it’s a really interesting point. And it’s part of why we use the advisory board center exists you know, observing that this, this profession, if you like as, as an advisor board contributor, as an advisor or a chair for that matter that, that it was ill understood or, or, or misunderstood by many. And, and so setting out to provide some standards, some guidelines, some, some, some principles, if you like, is, is why we exist and to support those who are doing the, the good work that, that you are involved with as, as we’ve shared in the past. So you’ve mentioned confidence a couple times there that is the currency of business. I’m keen to just scratch a little bit at the surface there, cause that, that is, I’m sure the, the, the tone that will resonate most with those who have an interest in business, which quite frankly, is, you know, 99% of the, the, both the community and, and those who we serve. Yeah.

Mike Richardson: Yeah, it’s exactly it it’s been, it’s been the, it’s been the question of my career and, and, and sometimes I think I’m a slow study because it took me probably 35 years to arrive at the clarity that I’ve been sharing. And I’ll, and I’ll unpack it a little bit more right here. But you know, here we are in the face of accelerating disruptive change. Gosh sure. You know, we’re just coming out of the pandemic, but, you know, before, during, and after the pandemic, there’s a lot of non pandemic related, disruptive change occurring that actually many authors and pundits say is, is just going exponential. You haven’t seen anything yet. And actually there’s an acronym for that. It’s called VUCA volatility, uncertainty, complexity, and ambiguity, VUCA.

Brendan Logue: It’s a military term, isn’t it?

Mike Richardson: It’s a military term that came out of the army co war college, I think in the eighties but is now widely used in the commercial world, because I think it’s a very apt description of what we experience that we have this very volatile uncertainty complex, and not least of all ambiguous. It’s confusing. It’s confounding flow of disruptive change coming at us. And, and the question is, well, what stops us being the disrupt E and what helps us stay the disrupt or what helps us find opportunity inside the threat of VUCA. And that’s been the quest of my career to cut through the clutter, the hype, the complexity, and get to the essence of that, that I’ve been mentioning here, that I call C to C conversation flow to cash flow. Now it needs to be unpacked a little bit because people will often challenge me.

What do you mean conversation flow? You mean we just sit around and talk. It’s like, clearly, no, this actually opens a door to an agile mindset because by conversation flow, what I mean is the unfolding flow of how you link and accumulate individual thoughts, questions, decision, and actions you see for, for an agile mindset person. Agility’s a context sport. You have to contact reality. And the way you do that is you take a real action. That brings reality into the conversation that is then telling you what’s working and what’s not working. And you adjust, adjust, adjust from there. So thoughts, questions, decisions, and actions opens the door to an agile mindset. So what we really mean is agile conversation flow to agile cash flow. Now, if you, if you walk down the hallway to your CFO and you ask your CFO what they want of your agile cash flow in some way, shape or form, what they’ll tell you is, well, I want quantity as much as I can get, I want quality.

I want high margin cash flow, and I want cadence. I want sort of cash to cash cycle. I want turnover. I want inventory return and those kinds of things. So they want quantity quality in cadence. Well, guess what, it’s the same thing that you need of your conversation flow because where your conversation flow goes, whatever trajectory you drive, the quantity quality in cadence of your conversation flow, the quantity quality in cadence of your cash flow trajectory will follow it eventually, sometimes later, sometimes a lot sooner than your worst nightmare. And so now the question becomes, well, how do I know if I’m driving the right quantity, quality and cadence of conversation flow? Well, now that’s where you have to look yourself in the mirror and you have to really ask, are we talking about the right stuff in the right way at the right time with the right people and the right diversity of thought are we doing it with a sufficient quality of input across a spectrum of personality types and specialties and expertise?

And is it not, it’s not too structured cuz clearly that’s not gonna work. You know, that’s being force creativity. Yeah, yeah. Right. But it’s not too unstructured. So you, you are in that beautiful middle zone that we all know and love. So dearly it’s, it’s the Goldilock zone. It’s the golden mean? It’s where things flow and it’s that and proposition of not too much and not too little structure. So the quantity and the quality, and then not least of all the cadence, the closed loop clock speed with which you’re doing it. And so much so that what I like to one of my favorite things to ask audiences and, and CEOs, and even in one to ones is I’ll ask a CEO say, Hey, how’s your share price? And they’ll look at me like, what, what are you talking about? I’m a private company.

I don’t have a share price. And I’ll say, no, but if you did and you can come up with an algorithm that, you know, for the valuation of your company, that’s a proxy for your share price, right? If you did have a share price, what’s happening with it. And let’s imagine that this is your board room right here, and you are having a board meeting and let’s imagine that the analysts who follow your share price have wired this room for Sam, they’re listening into your conversation flow. And let’s imagine that there’s a TV on the wall over there with a real time chart of your share price. And now the analysts are listening in and they’re thinking, well, this company has some challenges. But, and you know what, they’re just not talking about the right things in the right way at the right time, they had great results last quarter last month, but I just don’t feel confident about their future.

Look at the chart on the wall, your share price is going down on the flip side, suppose they’re listening in and thinking, wow, these guys are up against it. And their future, you know, their, their world is being turned upside down, but you know what they’re talking about the right stuff in the right way at the right time, I think they’ve got a fighting chance of being successful. Look at the chart on the wall, your share price is going up. So that’s how I like to bring it sort of down to ground level for CEOs is to ask them, how’s your share price and are you driving your quantity, quality and cadence of conversation flow on a trajectory that your cash flow can follow. And then your share price can go with it. And, and advisory boards are essential for that. And essential for that confidence factor because advisory boards can enhance the conversation flow. They can enhance the VUCA radar scanning. They can enhance the future proofing of the business. They can make sure there are no blind spots and can really help the, the CEO feel more confident that you know what I’m doing everything possible that I can to assure the sustainable future of this business.

Brendan Logue: No, it’s a, it’s a very good point. You know, you’re, you’re buying in external perspective and thought from, from the point of they are in your corner, they’re there to support you. And I think it’s an important distinction. You know, clearly we talk about advisory boards being a structure there to support the CEO or in some cases the governance board, whereas the governance board, right, is, is there to, you know, impose governance and, and, and decision making responsibilities and obligations onto the executive. So it’s a, it’s a different set of lenses, but it speaks to why advisory boards are such a popular I guess, option for the, the business that’s still found or led, or is trying to achieve something that they’ve not been able to in the past, either as an individual leader or as, as a business themselves.

Mike Richardson: Yeah. Yeah. And it can, you know, obviously there’s an investment associated with an advisory board clearly. And, and but it’s an insurance policy and it really is. You know, you’re ensuring yourself about against VUCA in the future and being as far ahead and, and out towards the fringe of the radar scope to spot that VUCA coming sooner, not later because it’s likely to be a freight train coming in your direction, you know, probably bigger, faster, sooner than you than your worst nightmare, if you are not careful. And so it really is, you know, as you said, we it’s really, the bottom line is, is confidence. In fact, I like, I like to bring people to a bottom line of composure. What does it take to be composed in the face of craziness? It takes that quiet, cruel, calm, collected, composure, and confidence in your agility and your conversation flow and everything that we’ve been talking about in the face of VUCA that, you know what we are gonna be fine.

In fact, we’re gonna be better than fine. We’re gonna be good if not great. And I was on the board of a of a multi-generational family business for 15 years locally in, in San Diego. And they had a portfolio of automotive dealership businesses. And we went through phase after phase after phase of VUCA. It all started in the, the 9/11 aftermath. We went through oil price shocks. We went through the great recession. One of their dealerships was, was a Toyota dealership. We went through the Toyota Prius crisis with the, the runaway accelerator acceleration problems and, and all of that kind of stuff. And we went through, you know the pan, the pandemic and all of that kind of stuff. And every cycle of VUCA that we went through, we ratcheted up not then.

And you know, here in the states, typically there’s a whole zoned area for automotive dealerships. It’s often called the mile of cars or something like that. And we would start acquiring real estate up and down the mile of cars because we were spiralling upwards and many of our competitors werespirallingg downwards. And, you know, we would be able to pick up the real estate and, and have all kinds of new possibilities for what we could do next with new dealerships and new franchises and that kind of thing. And why, why were we able to do that when they weren’t? Because we did a much better job of having a rigorous structured best practice-based board process, not too much, because that becomes bureaucratic, but not too little, because that becomes chaotic. If you can find that middle zone, not too much, not too little where things really flow, then you can really get the business, you know, and the conversation flow and the share price as, as close as they had one spiralling onwards and upwards, and it was, it was a great little case study that I really enjoyed.

And by the way, not least of all we saw, we saw the next generation of leaders, you know, grow up and, and come up through the business and really find their place as, as agile leaders ready to take on the next chapter of the challenge.

Brendan Logue: It’s really nice to hear all too often, family businesses are struggling with that. So there’s probably a whole other conversation to be had around how that was effectively managed and probably more so with you know, the matriarchal patriarch, it was leading the business. But yeah, let, let’s unpack that. Let’s park that for a moment. Pardon the pun. Yeah. And, and <laugh>, and, and revisit it maybe in time I’m fascinated by your passion and enthusiasm that you have for supporting others. And the curiosity for business we’ve touched on a range of different sectors and, and alluded to the different scale of which you’ve supported businesses of, of, you know, differing size and complexity. You know, what is, what keeps you 20 years on as an independent yeah. What keeps you engaged and, and, you know still learning importantly, Mike.

Mike Richardson: Yeah. thanks for the question. I’m sure like many people, if not everybody listening to this, it’s you know, having an impact and there’s nothing better for me than having an impact on the trajectory of a business and, and potentially a career and potentially a life both financially and non-financially in terms of success and happiness as a sort of integrated, you know, sense of, of prosperity that, that we tend to be pursuing. And there’s nothing better for me than to feel that I helped create a positive inflection point in all of that for somebody, for a team, for a family, for an entrepreneur, for investors and, and provided an insurance policy about, you know, against the opposite happening, because we were always looking ahead, we were always scenario thinking and scenario planning. So there’s nothing better than that for me in being able to see my footprints, my fingerprints in that in other people’s journeys and in, so in my own journey you know, that’s where my sense of prosperity comes from.

Mike Richardson: I said earlier, this has been one of the most enriching parts of my career in my life. I’m 40 years into my career, 20 years into the second half of my career, which has been an independent, you know, portfolio professional. And I look forward to another 20 years because you know, it’s almost like why would I ever want to retire from my passionate purpose? You know, I I’ve got plenty of energy, plenty of passion to keep doing what I’m doing. And it’s a great it, it’s a great journey and there’s nothing better than getting to know people and getting to know businesses and staying sharp with all of that. So I, I just, I just love the work and I’m a big, I big proponent for those, for whom it’s appropriate in their journey in life and their phase of life to consider pivoting perhaps to a portfolio career. I’m a big advocate of it and the sort of independence and flexibility and agility that it can bring you to, to pursue that sense of prosperity. You know, that’s unique for everybody but is really there to be had.

Brendan Logue: No, it’s a, it’s a really good point, you know, it’s people’s, both their industry, their capability, their experience is unique, but as is, you know, where they’re at and that’s an extension of their family, et cetera, there’s a lot to it. So, no, I appreciate you, you sharing that with, with me and, and, you know, conscious of time, I’ve really enjoyed hearing from you about your, your experiences and, and your journey to, to support founders, business leaders, people who are looking to do things differently than what they might have done in the past. Really appreciate your, your observations on, on the US market. And look forward to continuing to work together as we look to mature and develop a profession and one that holds a great deal of, of purpose and impact, as you said. Thanks, Mike.