Advisor Insights with Patrick Lauzon and Sam Kersheh

Louise Broekman:

Welcome to the Advisor Insights Interviews. I’m Louise Broekman, the founder of the Advisory Board Center, and I’m here with another very special case study with Sam and Pat here today. Welcome both.

Sam Kersheh:

Happy to be here. Thank you.

Louise Broekman:

Thank you. Sam, I’ll start with you, Sam. You have an advisory board for your business. Before we get into the detail, love to have a little bit more of information about you, Sam.

Sam Kersheh:

I’m Sam Kersheh. I’m the CEO of the Kersheh Group. We are a wholesale distributor of men’s, women’s, children’s family, sleepwear, underwear and socks. The company was founded in 1978 and I joined the family business in 1994. And we are selling primarily to the US markets. We’re headquartered in Montreal, Canada, and we sell to brick and mortar retailers like Walmart and Sam’s Club and Kohl’s and JCPenney to name a few.

I’m looking forward to hearing more about it. Sam, Patrick Lauzon, would you like to tell you a bit about yourself?

Patrick Lauzon:

Yeah, thanks, Louise. So Patrick Lauzon, I founded Gray Substance and basically what I’m trying to do with Gray Substance is really help companies connect with talent to bring them lasting and substantial improvements that will impact your businesses.

Louise Broekman:

Right, okay. Alright, so we’re going to get into your role as the chair of the advisory board. Sam, you talked a little bit about it being the family business and I guess the succession plan over to you over a period of time. Tell me about the organization today and the trigger too of what was that point in time that you thought it was important to have an advisory board?

Sam Kersheh:

Well, if I look at my entrepreneurial journey, I joined the family business in 94, worked hard, made some good moves, recruited some great talent around me and was able to scale the business. And we’re at an interesting reflection point because we are a family owned business, but really the goal is to evolve to a business that’s owned by a family. And so what we’re really looking to do is bring on professional management. So we recently hired a CFO that’s done this before, that’s scaled businesses. We brought in executive coaches. Our executive coach is based out of Denver, Colorado and he’s joined us as well. And what I’m trying to do is really bring in professional management and professional advisors to come and really help us get to that next phase. And about a year and a half ago or two years ago, I decided that as part of the journey, it was really, really important to surround ourselves with like-minded individuals that have a certain expertise in a specific area of business.

And Pat and I have known each other and really excited to have the advisory board. It’s been about a year now that we launched this thing. And it’s been really important in the evolution of the organization. And it’s all about surrounding yourself with top talent and not being afraid to tell you the truth on what you need to do, what you don’t need to do and therefore, and so it’s really a fun time at our company. We’re in the process of updating our three-year strategy plan and we’ve got pretty aggressive growth plans. We actually want to double our business in the next three to five years, which in this environment is very dynamic of course. But I do believe that we’ve got the talent, we’ve got the advisory, we’ve got the professionals around the table, we’ve brought in professional management, and I think it’s really, really exciting and critical in order to accomplish what it is we want to accomplish.

Louise Broekman:

It sounds like it’s been exciting times and exciting times ahead as well. Sam. Can I just go back to that point of when you had a business coach and you wanted that shift into an advisory board, what was that shift in your mind to create an advisory board of many voices around the table rather than having individual advisors?

Sam Kersheh:

Well, the coach thing is interesting in the fact that we’re implementing Rockefeller habits and scaling up, and so there’s a process in doing so. Also, we wanted to make sure that while we do so we ensure that the culture is strong in the organization. And Rockefeller really goes by three guiding principles, which is accountability, communication, and process. So it’s really important for us to be able to do that in a way and cultivate an environment and then combine that with our growth objectives, combine that with our wanting to be a better version of me, which I’ll get to in a minute. Then I said to myself, okay, what else do I need to do? And the advisory board I’ve never really answered to anyone before and I’ve only been accountable to myself. And that was good for a period of time, but now it’s in an effort to try to get to where we want to get to.

It’s time that I am being held accountable and that I’m being asked, Hey, did you do what you said you were going to do in the last quarter? And if so, great, tell us more. And if you didn’t, why not? And so it’s a really interesting process and it’s trying to get the best version of me in all of this. And that’s where the coaches come in, that’s where the advisory board comes in. That’s where Pat comes in. I often tell Pat, Hey, pat, tell me what I need to hear, not what I want to hear in order to get to where we want to get to. So it’s a really, really fun time in a dynamic environment as I mentioned. But I think we’re doing all the right things that we need to do in order to get to where we want to get to.

Louise Broekman:

Thank you. Pat, you are a serial entrepreneur yourself. You’re a Certified Chair, you chair many advisory boards. What’s been this board experience? What’s this been like from you from I guess the establishment phase through to now? It’s been operating now for quite a period of time.

Patrick Lauzon:

Sam was adamant about being accountable as someone or to a group of people. I think that was the first step where an entrepreneur needs to want to be challenged, needs to realize that there’s a whole bunch of things as all individuals that you don’t know, you don’t know. So basically opening up new avenues, new opportunities that could accelerate your business or could take it to another level. And Sam was really committed to that and convinced, and he mentioned it on the call. Basically he wanted to be accountable and he wanted to be held accountable to delivering for the business because he wants the business to get to another level. He’s been hitting a glass ceiling for a while and he wants to do things otherwise to take it to the next level.

So when Sam and I met, we looked at where he was at, where the challenges were, and basically identified a few areas where we needed better expertise to take it to improve his business on certain fronts. And the three areas that we identified, the first one was not necessarily in that order, but the first one of them was e-commerce. So he had an experience on e-commerce that spanned over a few years and it wasn’t a great experience. He had invested a lot of money and had not gotten the returns on those investments, and he wanted to challenge the organization on if they were well suited to be in the e-commerce space or not. So we identified a strong candidate who’s the president of the largest Canadian company, and basically he’d headed the e-commerce, the whole digital division of that. Previously to that he had been at Facebook and Yahoo.

The following was finance. Obviously at the size of the Kersheh group. Finance is really important. Sam hired a new CFO recently, but he also wanted somebody who understood a family business, a clothing distribution business. So we got a strong finance person who had that expertise. And the final point was he’s a distributor and distributes across the country, but also receives from his product from different areas of the world. And logistics was really important and they lacked expertise at that level. And we got someone who was from a much bigger company, again in the footwear distribution business, and basically got that person on board to really help and challenge Sam and his executive team on new opportunities and new ways of doing things.

Louise Broekman:

So it was really an interesting process for you to identify what those priorities are and then really look at what the voices were around the table to address that. And I guess that’s an ongoing evolution as well as it evolves. Thanks, pat. Sam, if I can go back to you as an entrepreneur, and you’ve got exciting plans ahead, plans to date, what have been the benefits that you’ve really gained from the advisory board?

Sam Kersheh:

Well, I mean the benefits are having different points of views, having people around the table that have gone through the same types of experiences that we have gone through and either validate them or not validate them, shared experiences. So one of the members of our advisory board is in finance and the company that they work with is owned by private equity. So I was always intrigued about that process, the dynamic between company and the firm and the PE firm. So there’s a lot of great insights and learnings and what are the best practices in order to scale a business? What are the top two or three things that are needed? How do you create enterprise value? So there’s all these things and then there’s the immediate short term of, Hey, I’ve got a distribution issue right now, and what are you doing? Or we are in the process of reworking our whole warehouse.

Hey, what did you do when you did your warehouse? And so it’s really at all levels. It’s daily and quarterly, and it’s a year or two or three out. And so it’s really been interesting, and I’ve always been intrigued about advisory boards, but never really took it and tried to really understand the value of it. Pat’s really done a good job in providing me examples, concrete examples of other companies that have achieved success largely due to advisory boards. And so that combination has been really, really helpful. And that’s not to say we may not add one or two other members that have a key skillset that we may look after or may need. And so that’s kind of like to your point, an ongoing evolution. And that excites us too, to bring like-minded people around the table and really identify best practices.

Louise Broekman:

No, that’s great because it doesn’t need to be a fixed structure, and that agility is part of its strength really, isn’t it?

Sam Kersheh:

Oh, absolutely. And we’re about to conclude our three-year strategy plan looking forward to before we conclude, sharing it with the AB and getting their feedback and their insights. And so there’s another layer or stop gap if a, you know what, we didn’t think of that, or what about this? So it’s really powerful and everyone’s paddling in the same direction, and it’s really enlightening for us, despite the many challenges and ongoing challenges we have in business.

Louise Broekman:

Yeah. Thank you. Sam. I’ll come back to you a moment about the lessons learned that you can share with other entrepreneurs. But Pat, you are a Certified Chair, you’re exposed to best practice around advisory boards of clarity of scope structuring, discipline, measurement, independence, and fit for purpose advisors. What have been the lessons that you’ve learned with regards to implementing best practice?

Patrick Lauzon:

So it’s still an ongoing process. So we’ve put some best practice, some structure in the organization. We’re not at a hundred percent because it’s involving process and we need to go with the capacity of the organization. But it is definitely helped structure on the Kersheh groups organization and discipline. Like I said earlier as well, we kicked off the advisory board when there was a new CFO as well. So that’s been a challenge, but also a benefit as well, because now we’re moving at the same speed. The other element back to what Sam was saying earlier, is that the advisory board meets on a quarterly basis, but they’re also very much engaged in ad hoc meetings. So Sam will pull in certain advisors on specific problems or specific decisions that he needs to make. I’m also involved on the Strat plan, so he brings me in with his exec team, so I’m getting a little more involved in the foresight of the organization, and Sam and I will discuss and debate afterwards. So he’s definitely leveraging the key advisors that he’s selected and their competencies to make his day-to-day decisions.

Louise Broekman:

And again, points to that flexible nature of the advisory board and the advisors being able to use those skills. Thank you. So Sam, you’ve had this advisory board now for over a year. What have been the lessons learned for you that you’d like to share with other entrepreneurs who are on this journey?

Sam Kersheh:

Well, lessons learned. Well, here’s what I would say, and obviously many people have heard this before, but if you’re the smartest guy in the room, change rooms. And so for me, the one thing that I’ve always, throughout my entrepreneurial journey is I’ve always been curious. I’ve always been open and willing to hear other people, other people’s perspectives, shared experiences. And even 25 years into my entrepreneurial journey, I still have that appetite to continue to learn. And that’s probably without question, the greatest value of an advisory board. And making sure that I’m the type of leader, that I try to gather all the facts before I make a decision, and then I kind of know the decision that I want to make, and then I’ll table my thought process to advisors. And if I’ve heard something that may alter the change in the decision, I will. But if I don’t, then I’ll continue down that path. And so it’s a really interesting combination of just best practices, adoption application, and then validation as well. Very often you want to hear it from someone else who’s done that, who’s been there to validate many decisions. And so that’s probably to me now year one in working with the biggest opportunity for us.

Louise Broekman:

And it’s not just what people know, but it’s what they think, isn’t it? So it’s that conversation that you have around the table of quality people that you deeply admire and respect for their own particular area of domain expertise.

Sam Kersheh:

Absolutely. And you know what? It’s what you don’t know as well, right? If you’re not afraid to ask those questions, so then you can actually cover those gaps, I, so it can be really, really, really powerful. And to be honest with you, we’re still in that getting to know each other phase. Year one, I anticipate that we will continue to evolve in such a way that the AB will evolve and continue to add even more value as we become acclimated to one another, understand each other’s wants and needs. And frankly, my goal is to be the best version of me. And the only way to do that is to ask our a B, Hey, what can I do differently? Or What am I doing that I need to rethink what I’m doing? And so that’s the AB role. I’ve got coaches as well to cover the day-to-day gaps and opportunities. So it’s really an exciting time to be able to leverage all these resources around me is empowering as well.

Louise Broekman:

That’s terrific. Well, thank you both for sharing this story. I’m looking forward to seeing this next stage of development of the business and welcoming you to Australia when you are looking at your global expansion into this side of the world. Pat, thank you for doing great work as an advisory board professional and using your entrepreneurial experience and spirit to support fellow entrepreneurs. And Sam, I wish you all the very best.