Being open with your employees about financials and other aspects of the business takes real courage. When you are fully transparent, you share all that you can. When you embrace being fully transparent, you can connect with your team members in new ways. Our guest today is Tiffany Sauder, Founder of Element Three, a marketing partner to fast-growth companies. Element Three was #4125 on the 2019 Inc 5000 list. It also has grown consistently by making the Inc list six times in a row. We discuss the power of being fully transparent. I love that she goes beyond open-book management in this interview by sharing her courage of vulnerability. Join us for this conversation if you want to be fully transparent and drive new company growth.
Don't miss an episode. Subscribe to Growth Think Tank.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
One of the things I often teach those leaders when they call me and say, should I hire this agency? Or how should we think about marketing spend, is to get really clear on one of three things, the metrics, the goals, you need to have accomplished. give those to the agency and then get out of the way. Because if you knew the answer to how to get there, you would already be doing it, you don’t. So stop pretending like you do and don’t control sort of every time I have to change a knob, let us run, and hold us accountable to the goals. The other way is to hire an agency or a marketer for a very specifically defined project that has an outcome you’re looking for. It might not be business school part it, but sometimes it will. Or the third is admit to the whole room, you don’t know. And pay for the thinking to get to a place where you have a really good hypotheses in the same way that you’ve put together pro forma and your financial statements. To say, based on what we know, we these are the sort of funnel economics we think can hold up in the marketing funnel. But the truth is, nobody in the room knows for sure, because we don’t have any historical so but lets at least work against these assumptions and stay really close. And I think, I think honestly, agencies don’t have an abundant enough mindset to sort of stop the train with clients to say, oh, you’re getting ready to give me money. I’m really excited about that. Let me just take that as fast as I can. Versus saying let’s let’s like slow down for half a minute and get really clear about which one of these three scenarios are you.
Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs, the fastest-growing privately held companies. I am the host. My name is Gene Hammett. And I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow?
Gene Hammett [1:45]
Ever think about the openness you have across your culture? the openness of financial numbers is one level. But also the openness of conversation we’re really talking about is not just openness, but it’s transparency. One of the top articles I’ve written for Inc magazine has been about radical transparency. When you think about your transparency, the organization, would you say that it’s radical, remarkable? Barely there? How would you describe that level of transparency? In other words, where do you draw the line, most fast growth leaders draw the line at where they’re legally allowed to share that information. They don’t share salary numbers, they share nearly everything else. And they have conversations about nearly everything in the organization, because they believe in the power of transparency, for connection and trust. Today, we have a very special guest, we have the founder of element three, they’re a sixth time Inc list. The ranking company, they were on the list most recently in 2019, at 4125. That really fast growth over the years. But the one reason behind that. And I talked to the founder of this, her name is Tiffany Sauder, about this is transparency. Transparency was such a critical element to how she wanted to move the business how they move forward. I say that to you with a smile, because I really love this conversation around transparency. being fully transparent is something I think of as a leader that you must have. So So when you think about transparency, listening to this episode, listen to the courage, she has to share all of herself, not just some. Now, if you haven’t already checked out the training, we have four leaders for fast-growth companies about the three mistakes, to create the kind of team that you really want to create a player’s and track the top talent and create a strong culture in your organization, I walk you through not only the three biggest mistakes but how you can fix them. And you can get that training at genehammett.com/training, very simple. But what you would get when you come into that is a very succinct way to look at some of the mistakes that are very common across the companies that I talked to all the time. And you will get the actual specifics behind how do you move forward to that? How do you recognize some of these errors of ways? Go to genehammett.com/training
Gene Hammett [4:08]
Hi, Tiffany, how are you?
Tiffany Sauder [4:10]
I great Gene.
Gene Hammett [4:12]
Excited to have you on the podcast.
Tiffany Sauder [4:14]
Thank you. It’s fun to be here.
Gene Hammett [4:16]
Well, I’ve already let our audience know a little bit about you at a personal level and what you stand for as a leader. But tell us about element three.
Tiffany Sauder [4:24]
Yeah, so element three, we’re a marketing consultancy HQ in Indianapolis. And we work with companies that really are in a growth moment. Sometimes that’s of their own choosing meaning they’ve made a strategic acquisition, they’re wanting to go out into industry. Sometimes it’s, I would say, an uninvited moment of growth, or maybe a competitor has made a move and they’re trying to sort of counter reacting to sort of react to that. But love working with culture minded leaders that have really exciting and aggressive sort of moves they want to make for the brand in their business and helping them bill bill go to market strategy. at scale to support that.
Gene Hammett [5:01]
So this is probably one of the best podcasts for that, because we we tailor the content to those leaders that want to grow fast. And so excited to have you on the show.
Tiffany Sauder [5:11]
Thank you very much.
Gene Hammett [5:13]
We were talking about, you know, being a fast-growth company, you made the Inc 5000 multiple times. I don’t have it in front of me, but you’ve made it, like consistently across the years 2014, 2015, 2016, 2017, 2018, 2019 How is that possible?
Tiffany Sauder [5:31]
Well, you know, we also at the beginning of this, we’re talking, it really was about focus, um, when I observed about this industry is that underneath a million dollars, and like sort of top-line revenue, there’s just a gajillion of them, you know, a couple people who would have some type of a creative or web design or sort of digital background set up a shingle. But really, we’re not running businesses, of growth, for businesses, of growth. And my background is in finance. And so I really looked at this as a business opportunity have sort of sense curated, certainly a marketing-minded brand. But I really was like, you know, I think that it’s odd that as agencies, we promise growth, but we really don’t demonstrate the proof of concept in our own walls. And I have a spiel that I talked to agencies and really tried to scold them on, do you really don’t believe the cops are works if you’re not spending your own money and energy building a growth engine for yourself. And so we’ve invested really early on our own sales and marketing, team brand management, and really experimenting with our own resources. And, you know, like, a lot of things, if you set out to be good, and you don’t quit over a really long period of time, um, you start to work the kinks out. So that really was the sort of business basis that built this into a growth company.
Gene Hammett [6:58]
Well, I can appreciate that, because I’ve worked with a lot of companies like yourself, and they’ve lacked that focus. And, and they overemphasize the and this is just my personal opinion, the awards in the system, right? The things that recognize their quality or creative work, or is important, but are they truly getting the results that our clients need? And I would imagine that part of what you’re doing at element three is looking at those results and how what you do translates into an ROI.
Tiffany Sauder [7:32]
Yeah, I think too many times we learn the industry from ourselves, I had a mantra early on that was I’m not going to spend time with people who can’t spend money with me. This means 15 years in I have remarkably few relationships, really in the marketing space my business can meet my network is really all in the business community. And so listening clearly to like, what is my end consumer really want from an agency? How do we construct ourselves in a way that is lean and mean, and the places we need to be? And is adding sort of premium value and other places? And yeah, the result is a big piece of that.
Gene Hammett [8:08]
Well, I want to dive into what is it take for you as a leader? Because you’ve got to jokingly said, you know, it’s, it’s one thing to, to grow a business is another one to run it? What have you learned maybe the hard way, is the most important element of running a business.
Tiffany Sauder [8:27]
Yeah, you know, I have learned I, we were talking earlier, I read books, and then sort of summarize them into very simple things I can remember. And one of them. It was a Jim Collins book, and, and he talks about this thing called bullets than cannons. And essentially, it talks about to do something small before you do, you know, sort of expend all your resources into a big cannon, then you don’t have any gunpowder left over to calibrate and, and I would say early on, we got lucky with a couple of cannons that we fired. And so my belief was launching cannons wins new marketplaces. And so we not only I would say, got to a place where our culture was very tired of assembling and watching cannons, and sort of the reverberation that came from that. But when you’re keeping companies you can run out of money faster that way. And so we I think one of the things I’ve learned now that we’re bigger is being more disciplined in the size of effort that we initially launched, and how do we pressure test some of our early assumptions, and I really about I would say back into that lesson, I wasted a lot of money, launching cannons, that probably could have been bullets that would have told me earlier that that’s not a good place to sort of arc Element Three.
Gene Hammett [9:49]
Every leader listening in here is probably can relate to wasting money on something and marketing is usually one of the areas where we waste money, and we wish we had it back. No offense, Tiffany.
Tiffany Sauder [10:00]
Yeah, do you want me to speak to that?
Gene Hammett [10:04]
Tiffany Sauder [10:06]
Well, as I’ve gotten closer into like some, we talked about YPO, young professionals organ presidents organization as a group I’m part of, and one of the things I often teach those leaders, when they call me and say, you know, should I hire this agency, or how should we think about our marketing spend, is to get really clear on one of three things, the metrics, the goals, you need to have accomplished, give those to the agency and then get out of the way. Because if you knew the answer to how to get there, you would already be doing it, you don’t. So stop pretending like you do and don’t control sort of every time I have to change a knob, let us run, and hold us accountable to the goals. And the other way is to hire an agency or market it for a very specifically defined project that has an outcome you’re looking for. It might not be business goal target. But sometimes people are the third is admit to the whole room, you don’t know. And pay for the thinking to get to a place where you have a really good hypothesis in the same way that you put together pro forma and your financial statements.
Tiffany Sauder [11:10]
To say, based on what we know, these are the sort of funnel economics we think can hold up in the marketing funnel. But the truth is, nobody in the room knows for sure, because we don’t have any historical so let’s at least work against these assumptions and stay really close. And I think, I think honestly, agencies don’t have an abundant enough mindset to sort of stop the train with clients to say, oh, you’re getting ready to give me money. I’m really excited about that. Let me just take that as fast as I can. Versus saying let’s like, slow down for a minute and get really clear about which one of these three scenarios are you.
Gene Hammett [11:44]
I really appreciate that. Because even in the way I spend money with my marketing consultants, it’s a, it’s a version of one of these three, and you’re exactly right, Tiffany, I want to get back to running the business. So some of the hardest parts of our business are really understanding the people and having a connection with the people. One of the things that my team has researched with element three and us specifically, is your belief in the importance of transparency. So what is transparency look like in your organization?
Tiffany Sauder [12:18]
Yeah, so I think there’s kind of two sides to the transparency coin for us. One is open book, financial. So I would say transparency in the financial side of the company, and the other pieces, transparency, and the strategies like the softer side of what are we doing? Why do we make that decision? How do we come to it? What were the options? And where do we land? And what sort of why should everybody get behind it? So I would say we have transparency on both sides. But I’ll spend a couple of a minute or so on the financial side. And what I’ve learned is that a lot of times people ask me, Well, does that mean you share everything? Like you publish salaries? like no, that’s probably that’s not productive? We don’t share salaries across the organization. But really, everything else is shared. We also I would you know, someone’s thinking about this don’t make sure it has context around it.
Tiffany Sauder [13:09]
Most people, if they see a PnL laying on your desk don’t understand inherently how to read it. And so it’s not just about showing them the numbers but making sure that the organization understands what is the story. The numbers are telling us not only about our performance over the last 30 days, but what are the leading indicators that we can see in some of the decisions that we’re making? And are we winning, are we losing and being really transparent about that? I read a book A long time ago, called the Great game of business, and jack stack speaks to there is no ignorance, there is no security and ignorance. And in our industry, if you’re in it for very long, you’ve either been part of a risk of a big layoff, you’ve had a friend that had, we’re not known for financial stability, because when a big client goes away, so goes those resources. And so it really was a way of gaining trust, with the talent that I bring in here of, I’m not going to surprise you, I’m not gonna lie to you that I’m not going to promise you, we’re never going to have a layoff or we’re not going to have to make some right-sizing decisions off of losing clients, but you’re gonna know pretty close to the same time I do. So that was a real, I think, an important part of as I was an unknown leader coming into an industry that I had no experience in. It was part of the way that I was uniquely willing to try to sort of win and compete for talent.
Hold on for a second. Tiffany has been talking about transparency. What I want you to think about is one company that has done this really well is HubSpot. They’re a marketing technology company. And they went public in 2014. They went public, and their level of growth allowed them to get to this point and they realize that once they’re a public company, they can no longer be as open or transparent as they were in the past without making some critical decisions. One of those decisions is who is a designated insider who’s on the inside, who’s on the outside this company believes in transparency so much that they requested that every employee, be a designated Insider. It’s a really strong choice. It’s a very bold move, but the payoff, everyone felt like an owner, I share this story with you, because I share from the stage when I’m out there talking to organizations to give you a perspective of how far you could go to have fully transparent leadership. Hopefully, you’ll take this into account. When you think about your transparency. Back to the interview with Tiffany.
Gene Hammett [15:38]
Another part of transparency is about the people and the conversations you’re having. Give us an idea of where you draw that line.
Tiffany Sauder [15:47]
Yeah, you’re saying in like talent development or just across the board?
Gene Hammett [15:51]
Yeah. Just the kind of conversations beyond money.
Tiffany Sauder [15:55]
Yeah, I mean, I’ll tell I’m pretty transparent in my own journey of leadership. I mean, I was 25 years old. I joke when I got the title of President I was looked more like an account executive. And so I’ve learned a really big part of keeping people on this bumpy road with me, because yeah, being on the Inc 5006 years in a row. I mean, that doesn’t happen. It all looks glamorous on our sort of chart. But it’s, you know, it’s like you hit your head on the ceiling a few times. And so just being really candid about things, I missed things I underestimated. This disciplines that we did, maybe unknowingly early that we let go like sort of go away because nobody was watching it. We didn’t understand that that was such a big part of the success formula, and kind of having to rebuild part of that. And even on the personal front, I mean, I don’t know, maybe there are people who have started businesses, mostly from scratch there, and I’m married for 15 years, my husband has a big career. And this growing business has been nuts. We’ve got three kids with one on the way.
Tiffany Sauder [17:03]
Like, I mean, things are crazy. And so we’ve gotten out of whack, my husband and I were our marriage crashed into the wall and not in the middle of it was I transparent with the company about that. But once we work through it being really transparent about like, Guys, I made some sacrifices, personally that are not sustainable. And here’s what I learned along the way. I feel like I have a responsibility to teach that part of what it looks like to be successful because I think people can glamorize how good we are at making decisions and CEOs when it was like you didn’t see it because my job is not to bring that to work. But I blew it in some areas personally, and I want to share those blemishes with you too so that my company people who work for me don’t make the same mistake.
Gene Hammett [17:49]
As for me what I feel from you saying this is you have the courage to be vulnerable when necessary with your team.
Tiffany Sauder [17:57]
I hope they would say that I feel like it’s a little narcissistic to sort of say it about myself. But it’s I think it’s a cathartic part of the learning journey of being an entrepreneur. For me. I think it gives purpose to the battle scars for me. I think it holds me accountable for internal decisions that I’ve made when I say it out loud. So I think all of that is sort of part of my sort of thing.
Gene Hammett [18:27]
I want to go back to this, you said something about the disciplines that maybe let go of them. And I think I heard too early. Is there some discipline that you were doing in the early days that you had to bring back in?
Tiffany Sauder [18:39]
Yeah, one was around, like, I mean, and I think this is still the most critical number for most businesses. But in mine, we don’t necessarily have 10-year contracts with the government that never expire, you know, we’re fighting every 30 days for revenue. And so at the beginning, I was just obsessed, like, our revenue number was the most important number to me. I knew if I kept my revenue above my expense number I at least live to fight another day. And if I got enough days, I just felt like I could figure this thing out, you know, and it was just my obsession. And it was an I just, I focused on the number I talked about the number as I started getting account people underneath me every single week, we talked about the number like I just never let it get out of my sight. And then once I became an executive and had people underneath me, and we hit our marks more than we’ve missed them. The discipline kind of got sloppy, like, you know, it was like, well, that’s kind of an automatic part of the way that we do business.
Tiffany Sauder [19:42]
And so then revenue started getting super lumpy, which starts to mess up cash flow and all that kind of thing. And it was like that one discipline that seemed almost like an invisible habit that slowly worked its way out of the company. Once we recaptured that it was like Everything changed again. And so I think we didn’t understand that we’ve decided it because it was just sort of this like, nagging obsession in my head in the early days, it wasn’t I was, and it was not like I was like, you know what I’m going to decide to do, I’m going to put in a revenue process that we’re going to closely manage. I never said that to myself. But once we got to the place where we saw, this is broken, how do we fix it, we realized it was an old discipline, that’s something new that we had to create that was going to fix the problem that we had. So that was an example for us.
Hold on for one more moment. Tiffany just said she was obsessed with revenue. And it was a discipline that she had gotten away from, what is the discipline you’ve gotten away from? What is the discipline that allowed you to get to where you are, but for some reason, it faded away, it fades away because you lost interest in it, or because it wasn’t working any longer end up in a bigger organization. We need to really be intentional about this because a lot of times we forget what got us here, and really forget some of the key things, Tiffany, share the story about how that isn’t important for her business to have that focus on revenue. Your numbers may be something different that you focus on maybe it’s not even the numbers, maybe it’s just a discipline that you wish you could bring back. I’m giving you permission to consider that right now as a leader. Now, back to the interview.
Gene Hammett [21:23]
I want to ask you one kind of personal question. And this journey of leadership you’ve had, you probably learned some things the hard way. What’s the moment that you would call it an inflection point where you had to let go of a previous approach for yourself or thinking, belief, and leadership that allowed you to be the leader you are today?
Tiffany Sauder [21:45]
Yeah, there have been several, but I think that I mentioned to you when we were just chatting before this, that we went all-in on a kind of a business management system called Eos. And people talk about like, you know, you’re gonna hit your ceiling, and you’re not good at everything. And, and I’m like, Yeah, okay, you know, sure. But that process of going through getting really clear about what are the things that I have a chance to be the best in the world at? And how do I get everything else off my plate, and you kind of have, I think, when you’re an entrepreneur early, you almost have to tell yourself, I’m pretty good at most things, like give yourself the courage to do all the things you’re badass or believe you can get.
Tiffany Sauder [22:32]
And as I started to put people in roles that had a chance to be the best in the world at that thing, I started to see an acceleration in the business, like we have an experience. And I would also say a calmness in the business because there wasn’t this volatility of new ideas, which is both my blessing and a personal curse. So that was a big lesson. And you know, they use the language, letting go of the vine, really getting out of somebody’s way and letting them go through failure cycles on their own to get to a place where I could see what did their decision, what outcomes do their decisions lead to. And being totally comfortable with it being a different path and one that I might see or chart.
Let me break in here for a second. If you’re listening on YouTube, make sure that you go ahead and give us a thumbs up. If you like this content, subscribe, hit the bell notification, we’d love to have you come back and listen to more of this content. Make sure that you could do it now.
Gene Hammett [23:30]
Well, Tiffany, I really appreciate you being here. One final question. How do you as a leader, take moments to step back and create time to think about the people in the organization?
Tiffany Sauder [23:43]
Yeah, this is an I think, interesting question. I’ve always I actually have learned the ways that most times the books say to do it like setting aside a day and be by yourself and have a quiet and have a journal, it’s like, you know, nicely bound is actually not how I process information at all. I am externally stimulated in the way that I think and find new ideas. And so I used to try to do that. And I would just be like I hated those days that kind of avoid them, I’d move my calendar and I had this weird expectation that I was supposed to walk out with some like, you know, Jesus Christ Superstar moment, and it’s just never worked for me. And so what I’ve learned, a lot of times, it’s like going to conferences or putting myself into environments that are completely new. And that stimulates my mind and synapses in a way that nothing is familiar. So I’m paying attention to everything. And that’s kind of how I step back to decompress. An as an external Iser and an extrovert. It’s actually to put myself in really new experiences. I find myself my brain opens up in really interesting ways.
Gene Hammett [24:57]
I haven’t heard that before. I love that because I’m an extrovert well, and I’ve been feeling it through this whole COVID thing. Being out and seeing people and engaging, and being a speaker too, I love going to events. So, Tiffany, thanks for sharing your journey here on Growth Think Tank, I really appreciate it.
Tiffany Sauder [25:16]
Awesome. Thanks so much.
Gene Hammett [25:18]
Fantastic interview. being fully transparent takes courage, being fully transparent, is something that I believe you should consider. Because when you want to create more trust, you want to create more loyalty across the company. You want to make sure that people feel connected to you as a leader, being fully transparent allows them to feel that connection. Because here’s the reality, if you don’t share with them, what’s really going on or what’s the numbers really are, don’t make it up in their mind. So I think it’s better to put it out there, to have conversations to teach them and train them, and to educate them on exactly what these things mean they can understand their place inside of it. All that being said, being fully transparent is a powerful way to be a leader.
Gene Hammett [26:03]
Now, when you think about your leadership, you’re evolving right now you’ve got to think about how you want to grow and how you want to be seen. What is your next step? I can help you get clear with that. I call this a clarity call. I know ingenious, right? But when you think about who you are, we’re going sometimes it helps to talk to someone else to get a perspective so allow you to get absolutely crystal clear. So reach out to me and firstname.lastname@example.org that’s my email address. I’d love to get to know you, help you with a clarity call. absolutely free. Love to get to know you if you’re listening to this episode, this deep into it. When you think about leadership, you think about growth, think of Growth Think Tank, as always lead with courage. We’ll see you next time.
Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.
A QUICK FAVOR
And lastly, please leave a rating and review for the Growth Think Tank on iTunes (or Stitcher) – it will help us in many ways, but it also inspires us to keep doing what we are doing here. Thank you in advance!
If you want more from us check out more interviews: