The many fans of HBO’s hit show Succession know all about how a transfer of corporate power works — the lying, the backstabbing, the jockeying for favored position… So, when it came time for Xssentials, a firm that was formed from the combination of three Colorado custom integration companies and helmed by three owners, to transfer ownership to six long-time employees, you can imagine the drama that was created.
As it turns out, you would have to imagine the drama, because it never happened in reality. It was a very smooth transition of power from former owners David Daniels, Mike Thul, and Chris Thul to new owners Will Brosius, David Brown, Russ Hohensee, Jess Silker, David Stys, and Sean Thul.
How does a transfer of power in a more than 30-year-old, three-location CI business that currently serves more than 3000 customers occur like any other day in the office? Mostly through solid planning and having leaders that are all on the same page.
“We’ve known all along that we wanted the company to go to the employees,” says Mike Thul, former co-owner and current consultant at Xssentials. “David, Chris, and I looked in the company for the most likely candidates and, as it turns out, they were people that have been with us for a long time — that had started with no experience in the business and have grown in their roles.”
Even more fitting, the trio discovered they had two people from each location who could fill the roles. “One happened to be in operations and the other one happened to be in sales, which clearly are the two footholds of your business,” Thul adds. “We’re fortunate that things have developed that way over the years.”
This was not the first successful transition for the company. Xssentials was formed in 2013, when the operations of ESC in Aspen, started by Daniels in 1988, Thul Electronics in Vail, started by the Thuls in 1988, and a joint venture between the two firms, ESC THUL in Denver, all merged to form one business entity. All locations remained open and all worked by its then-current staff — many of whom continue to work at Xssentials today.
“One reason I’ve been with Mike for so long is that Xssentials is a family-owned company,” says Russ Hohensee, former managing director and new co-owner of Xssentials. “Vail is a very small town — as is Aspen — and I think maintaining that kind of family-owned feel has kept people around. We have many employees who have been here for 25 years or longer. So, we’re not looking to make a lot of major changes here. After all, it has worked very well for both Will [Brosius, co-owner, Vail] and I!”
The process began two years ago when the six future owners were named as managing directors. “We communicated the expansion of these guys’ roles two years ago,” says Thul. “We didn’t say anything specifically about the ownership plans. We announced it individually in the different branches. Here in the Vail branch, my comment was that I’ll be turning over a number of responsibilities to Will and Russ. The same thing happened in the other branches, and Chris, David, and I told the teams that we would be less and less involved in the day-to-day business.”
Over the next two years, each set of operations-sales partners ran the company with guidance from the owners. The managing directors would have Zoom meetings every other week, with the owners sitting in from time to time.
“We just added to our roles,” says Hohensee. “I started taking on more than just my sales. I have been trying to help out the other sales members in our location, and the other offices have done the same — making sure we’re supporting our co-workers.”
When the announcement came at the end of August that the ownership was transferring, the employees took it in stride. “I think people knew that Mike wasn’t taking on as much even though he was here every day,” says Hohensee.
At that point, most of the clients were already dealing with the managing directors directly anyway, so that also went smoothly. To everyone involved, it seemed like a natural evolution of the company.
While the original plan was to have the transfer of ownership happen at the end of this year, the managing directors asked to have it moved up to the end of August.
Wait — could we finally have found some drama?
Nope.
“We had planned on this happening at the end of the year because that’s a good time financially for records and the like,” says Thul. “The new owners were so motivated that they said, ‘Why wait?’ So, they were ready, and we were ready. Why wait indeed? Besides, we’re in a resort community and the holidays and end of the year are just an insane time around here. To try to manage this change during our ‘holiday schedule’ would have just been insane. So, it turned out to be quite timely and the stars just aligned.”
Even lawyers couldn’t add an air of animosity to this team. “I didn’t even read the agreement,” Thul adds sheepishly. “I trusted my partner because he likes that stuff. I asked David if there was anything in there I needed to know about, and he said it was all good. And he would know, as he structured a lot of it.”
So, was there any difficulty in this process?
“My biggest challenge going forward is not getting involved in anything new,” says Thul, who will remain a consultant along with the other former owners through the next five years. “That is truly a challenge because that’s what I’ve done forever. Over the last couple of years, Russ and Will have stepped up to a huge extent. I’ll say that something needs to happen, and they take care of it without my involvement. They are very considerate of me and my exit plan, but I haven’t felt for a minute like they wanted me to leave.
“There’ll be a time when it doesn’t look like I’m needed around here anymore, and so my goal is to be here less and less.”
For Hohensee’s part, he doesn’t envision any radical changes to the company. “The small-town, family feel is key to our team atmosphere,” he says. “If your employees are happy and everyone has that team mentality, it’s easier to get jobs done and to keep clients happy.”
For more information about Xssentials, visit www.xssentials.com.
