This transcription belongs to Episode #2, please watch the complete episode here!

 

Morgan (Host): Hello everyone, and welcome to the second edition of the beloved by clients podcast where I’ve been interviewing people who have crazy experiences from incompetent and challenging clients to dive into a situation so that we can selfishly learn from everyone else’s mistakes. I’m happy to be talking to my new friend, Chris Johnston, who was a partner at L2D, and he was just telling me a story about a challenging situation. Let’s go; thank you for coming on, Chris. 

 

Chris (Interviewee): Yeah, thanks for having me. I appreciate it. 

 

Morgan (Host): So you’re just telling me before about when you just started at L2D, and there was a name startup that attached itself to the company, and you had to disentangle a situation. Let’s dive into that part and tell us what happened.

 

Chris (Interviewee): Well, I’ll give it a tiny bit of work history just to back it up just a little bit. So I started in design, specifically interactive design, in 1998 around that time, and I worked through lots of different companies. Over the years, I got more and more interested in sort of the social science aspect of what we do. I enjoyed working with clients, enjoyed doing the design part, enjoyed managing and integrating with development teams, but I wanted to have a little bit more trim toward social science. 

 

So my last position, before I started L2d, I was actually looking to leave the design as an industry. The reason is not out of a lack or reduction of appreciation for designers; it’s just that I had spent a lot of time in that career path, and I wanted to do something different. I was headed towards pursuing a Ph.D. in sociology. But I met these guys, and they had a small firm where they had some decent big-name clients and clients that were internationally scope. Their company was also doing a lot of work with the federal government here in the United States, and they were doing some neat stuff. 

 

Unfortunately, they kind of entered into these bad patterns, and they needed some help in navigating the waters between client relationships. They were looking for somebody that had experience, and I was coming off a creative director position that was successful. I was just kind of on my own doing sort of freelance work consulting while I was pursuing this other avenue.

 

Morgan (Host): interest Okay, cool.

 

Chris (Interviewee): So this was about 2011 where they were looking for somebody to help them kind of navigate these waters. I came on, and it was initially going to be sort of a temporary status like I was only going to sort of bridge the gap, help them kind of get to the next level, we would work through some of these issues, they would hire somebody else said, and then I would kind of exit stage right. In one of these relationships that they were having a lot of difficulty with was with a startup. This startup actually had pretty fantastic ideas for a startup scale, but I’m sure, as you can attest, Morgan, the ideas are not really the value of the startup, you know. There are a million different ideas that come out all the time, and we have pitched ideas constantly that are good, reasonable ideas, and I can see how they can turn into something fruitful. 

 

But it’s the execution of the idea, and turning it into something that’s actually functional is really the difficult work, right? Whether or not you’re talking about establishing hardware, you know, building software, doing UX, engaging with the user, making sure that all of those sorts of patterns work together and sequence work well is the hard work. So, the gentleman that was the founder of the startup had an idea. The gentleman had a really charismatic figure, a really charismatic imposing figure in a lot of ways, even physically imposing, and specifically a strong personality. 

 

He got connected with my two current partners, and they are actually brothers. They’re very nice guys who genuinely want what’s best for the client. Unfortunately, they began a relationship that ended up becoming parasitic, really parasitic. The gentleman who was the founder ended up moving into their office on certain days and bringing his small staff, who were predominantly made up of family members or friends, into our small office. This was during the time where I was starting and, you know, 

 

I come in on a Friday, and there’s like four extra people sitting at desks in our office. I go to my partners, and I say, “What’s going on here?” and they’re like, “Oh, this is, you know, so and so, these are the people that work for him, and they come in and work in our office.” I was like, “So what’s the relationship?” and they kind of started explaining the relationship, and they’re like, “You know, this is a thing. We’ve been doing work for him for months, we’ve been planning the stuff, we’ve been doing this UX, we’ve been doing these comps and turning it into code, and it’s eventually going to turn into this project, and he’s promised us some share, stake, and equity. Now I’m sure Morgan that you’ve probably been down this road before too.

 

Morgan (Host): Fortunately, yes!

 

Chris (Interviewee): Yeah, the grandiose startup idea that we’re all going to be billionaires and you work to try to help out. This is, unfortunately, a little thing that happens a lot in our industry where you end up with really strong-willed, charismatic characters that love to get involved with small development groups and small design groups that are really talented, probably need to be charging more money for their services, and they do a great job selling their goods saying, “Hey, you know, we’re gonna ride this all the way to the top, you just have to trust me.” Unfortunately, they kind of bought into that. 

 

Morgan (Host): So this is interesting. I, unfortunately, know the archetype is far too common.so I want to try and recreate it from the eyes of this gentleman. So far, you said, Give me one example of something he did that was a little bit annoying was when he moved into the office for a few days. That alone is like whatever, because if everything else was going great, then that isn’t a problem. Let’s talk about other examples of bad behavior, and then after that, we’ll talk about how the partners and everyone responded and dealt with it. 

 

Chris (Interviewee): Well, one thing that was one thing that’s a red flag for me was that really, there was never any conversation about you know, “hey, what I’m going to do is I’m going to pay you back for this office space, or my people are going to default to where you need to put them” You know this is our office space; specifically, we were paying for the rent. This is just a red flag because these people are coming in, they are setting up stuff everywhere, and they’re taking desks that other people already have. I was like, “This is my first week, what in the world is going on with this relationship?” 

 

Morgan (Host): I didn’t realize it was your first week!

 

Chris (Interviewee): Throughout the week, I’ve been dealing with, “These projects are a little bit late, this project’s a little bit late” And I knew that working with these guys needs to be on a fast pace because they grew really quickly from being a small group. They grew really quickly, got a few large clients, and really grew out of their skill set of being able to manage these folks. So basically, in the first three or four days, I ended up going on major damage control of a lot of projects that existed. They were fine, and the clients were okay, but they just needed to be communicated with. Then Friday rolled up, these additional staff showed up, started sitting at places, and they’re spreading out. 

 

They were stuffing around, and I was like, “What’s that? And they’re like, “oh yeah, they are doing a project, and they will take this time. We shut everything down in your pipeline and just work on their things on Fridays.” And I’m like, “Okay, well, we have other things we’ve committed to. Can we get that done?” they responded, “Well, you know, this gentleman had opinions about that.” His red flag was that he did not only invade our office, he also had opinions on how we were running our own internal processes. 

 

Which he really shouldn’t have because when it comes to sort of that, at least from my perspective, when it comes to a sort of client and pipeline like how we serve the client sort of perspective, there needs to be a division between what the client can expect and what we can deliver. We need to be honest and transparent to tell our clients that we can deliver on this day, but we need to balance that against all the other charts for every other project. We should be able to tell them, “This is being worked on tomorrow, and this one’s going to be worked on for next week. 

 

We can’t move this other one-off just because you have an emergency.” So this gentleman had sort of carte blanche on specific days to say you’re not working on that. He would go to developers or designers and tell them, “Don’t work on that and work on this instead.” I was like “Whoa, this is a really big boundary violation. 

 

Morgan (Host): By the way, I have a question. In retrospect, because it’s been a few years, from the eyes of this gentleman, do you think it was purposeful bad behavior, or do you think he was just naive?

 

Chris (Interviewee): It’s probably a mixture of both. I mean, I always try to take an optimistic view when it comes to an understanding of where people are coming from. I have to, especially in this situation; I’m coming in as an employee, that is a management employee, but you know there’s going to be a gap situation, right? I go, “Okay, well, this is a relationship they’ve developed, they feel like there’s equity in this, I need to support this as well as I can, and hopefully get it on the right track. Anyway, I’m sorry to answer your question, and I think it was probably a mixture of both. I think they needed to be better about educating, but I also think that there was a lot of machismo that was happening to it. 

 

There was a lot of chest lumping, you know? Like, “Move your stuff out of the way; this is what we’re gonna work on.” Sadly, my partners, like I said, were such nice guys, but in a lot of ways, very passive about these things. They said, “Okay, well, you know, we’re gonna address those now. Anyway, time goes by, we worked for several months, and this gentleman enters into a.. (I’m not going to mention which one it is because they’re fairly well known) one of these big startup incubator contests. 

 

The gentleman had a really good idea for his startup, and he got into that contest. He says, “Hey, there’s this major North American city and I’m gonna be going up here. We’re gonna be doing the big startup incubator contest, we’re gonna be working with these mentors, and they’re gonna take us through this thing and then we’re going to do this pitch in New York City. That’s plain enough that nobody’s gonna be able to figure out what it is. Also, we are going to try and raise funding for this thing.” Now, even after all of this, there were still no promises of being paid back for anything. It was just sort of like it was high in the sky. 

 

Morgan (Host): Wait, just a question. You had mentioned a little while ago that you were promised equity, right? Was the equity promise in writing, in specifics, or was it more like, “Trust me one day I’ll give you something when I have something.”

 

Chris (Interviewee): Yeah, it’s the latter.

 

Morgan (Host): I wanted to point out that giving people promises but letting them down is another red flag because it is a sign that the person lacks the seriousness of his promise.

 

Chris (Interviewee): I think that there was maybe an original statement of work. I think that there was some sort of, you know, eventually, we would be given this for doing this sort of thing. But at that point, the statements of work were so loose, and there really wasn’t sort of an ironclad MSA to kind of keep this person accountable. I think that those things are good, and I think there are people who probably take offense to that and say, “I should be able to work with somebody because they’re my friend or because I’m connected to them in some ways.” But in some respects, having those just really evens the playing field for everybody and says, “Okay, here’s my obligation, here’s your obligation, we both signed on the dotted line, and we can move forward together happily, because we know we both have to meet an obligation.” There was none of that, but instead, there’s just sort of a general expectation of “You get this thing done,” which is extremely nebulous, right? And it’s like, “When I’m happy with it, then maybe there’s going to be some compensation at the end.”

 

Morgan (Host): By the way, as a minor tangent on that, because I find that interesting, it feels like often in a world there’s like the two extremes. Like “A bunch of 23-year-olds, yeah, we’re fancy together, let’s do this!” or “I’m a nice guy, yeah I’ll help you just make sure you pay me. Yeah, give me $5,000, I’ll do this, and all will be fine. Then the other extreme, it’s like, lawyers with like, these 100 paid contracts that are scary. 

 

But what’s interesting about your case is it actually turns out in the agency world, where there’s this huge space in between those two extremes, where it’s like, where you need more sophistication and clarity than the young kid, but like you don’t need, or you don’t have the money for the gazillion dollar a minute lawyers and their 100 Page contracts for a stupid little website. So there’s a lot of ambiguity that would happen in this program. 

 

Chris (Interviewee): Yeah, and on that sort of spectrum, I feel like it kind of goes from really, the idea becomes when there’s a lot of lawyers involved, typically the idea is so washed down, or the ideas are so bastardized in some ways. It is like there’s so many cooks in that kitchen that you might maybe have investors, you may have Angel, you may have companies that have come in for series A or B or whatever, and they all have what they say. Then so you’ve had like, the exponential growth of like legal documents, right? And that project is almost a non-starter, right? And then on the other end, which is where we were, you have a cult leader-esque figure, right, which comes in and says, “Trust me, I’ve got I’ve got the way of the future. You just need to build my vision and we’re going to be dancing off into the sunset.” That’s just not that; I mean, neither one of those are starters for me. 

 

Like we’ve actually done successful startup work, we’ve done work with startups that have turned in these things that have been legitimate, but a lot of times, that is a group that has proven themselves as either a company or an institution. They proved that they’ve already done projects, they’re successful, they have some capital, and they go, “We want to use this capital that we have, put our skin in the game, use capital to build an MVP, and then we’re gonna build this thing. After that, we’re gonna put together a pitch that’s gonna raise the money that we need to continue to build this thing out, but if the skin in the game is either “I’m a cult leader, I’m going to lead you to the Promised Land.” Or, on the other end of the spectrum, our skin in the game is tons and tons of money, but it comes at the end of a really scary tether. I feel like those are definitely polar opposite ends of that spectrum, and neither one of those are starters for us.

 

Morgan (Host): A 100%. I think a younger version of me was at the informal end and wanted to be at the extreme opposite ends. But the current version of me wants neither of those and is happy in this middle ground. In fact, a lot of the “beloved by clients” style books, this podcast is all about helping people in the same middle ground figure out how to manage this sort of, you know, balance.

 

Chris (Interviewee): That’s great. That’s fantastic. 

 

Morgan (Host): Now, I want to hear what happened in the incubator when they went to New York City.

 

Chris (Interviewee): There’s another major northeastern city. You and I are very familiar with the city, but I’m not going to go into detail. They spent time at a local campus, which was a university, with these mentors doing this right. This gentleman gets to this city, and he goes, “Hey, I’m kind of out of my depth here. I want you guys to come and join me.”

 

Morgan (Host): I didn’t expect that twist; this is exciting.

 

Chris (Interviewee): Yeah, so my two partners left for like four months to go to this other location. They’re like, “Here are the keys, we’re all going this direction and we’ll speak to you soon.” I legitimately think it’s because they felt like, “Okay, we got into this startup incubator, maybe things are moving forward. Something that will happen eventually and It’ll be good for us or good for him.” As I said, they were such nice guys, and they wanted to see it through. 

 

So they were like, “We need to help him out.” So what he did was that he rented a house with some of the money that he’s already raised, and they moved in with him. It’s a really bad situation because they brought their families with them. They’re living in that place for several months, going through this incubator with him, cranking out work trying to do work for us. I’m sure I’m communicating with him remotely and saying, and as I said, this is 2000, 2011, 2012, so obviously, things are a little bit different, and it’s not so easy to just make a zoom call. Then he’s been really getting more and more irritating, and I’m getting more and more irritated because I’m demanding time from them because they’re my business. 

 

Well, they’re not my business partners at this point, but they’re the two partners that run the company, and like I’m having to kind of handle everything at home. I was handling our team and managing the studio as an employee that’s maybe nine months.

 

Morgan (Host): By the way, from your eyes, even the frustration aside, it’s like, “Wait, I just took this job, and the partners leave like what’s happening?

 

Chris (Interviewee): Yeah, but it still was great because it showed that they had a lot of trust in me, and our relationship, personal relationship, and professional relationship has continued to flourish, really out of transparency and just mutual respect. But I think that they were just thinking, “Well, we’re just gonna do the best we can for this guy and, I don’t know, well, hopefully, we’re running on goodwill, and we’re gonna be able to come out in the end on this. So they go do this, they go to New York, they do this giant pitch, they come back home here where the studio is, and still, money wasn’t rolling in. We still haven’t had all these series of funding, and these different things that we were expecting, these million-dollar checks, weren’t coming in. There was some money that was coming in, but it was really from either local foundations or different things that were kind of involved in the startup acceleration. So when they came back to our office, we planned that we needed to move out of the current office that we’re in because we are going to be outgrowing it. 

 

And he says, “Well, I just got this office space, down in this sort of business development area. There is this sort of new upcoming; I think that sometimes they call it like acceleration zones. There’s a company that gives immigrants an office, and he’s like, “I have this office space, and I’d like for you guys to move into the office with me.”

 

Morgan (Host): Like, for your company to get rid of the office and his whole company to move in?

 

Chris (Interviewee): Yeah! And I’m like biting my nails, you know, and they’ve come back from this thing, we finally kind of took a breath, they’re working on the projects again, we had some internal issues with maybe with a senior developer, there were some things that were going on, we were able to kind of settle things out, and then all of a sudden he’s like “I want you guys to move into this office with us.” I gave my protests, but at the same time, like I said, I’m an employee. I’m not even an employee that’s dedicated the rest of my career to this. This is just sort of like an intermediate position. So I say, “Okay, well, whatever you guys feel is the best, then we’ll do it.” So we end up moving to the gentleman’s office, and he’s decorated everything according to his brand. 

 

So now, we’re living in his space, though we’re using our own furniture to a degree, it still looks like we’re part of his company, like we’ve been absorbed into his company. He sort of takes this position within the office, a real kind of almost sort of imposing position; he splits everyone up in the different offices, so there’s no more cross-pollination between departments, and he makes it so that he can talk to very specific people. So all of a sudden, we’ve moved from what we really love is a sort of familiar environment where somebody who’s working in production can go and talk to a manager. 

 

Obviously, there’s still some boundaries there, but you know, we love that idea that we can be able to have those interactions, and all of a sudden, it’s now divided, hot, and really intensely hierarchical. He’s at the helm and it all kind of came to a head because one of our employees ended up really getting close with him. There was a bit of a bond where the person became a confidant in some ways, and there’s some real sort of, it’s kind of strange interactions. 

 

Morgan (Host): I’m getting so excited; what happened?

 

Chris (Interviewee): I came into the office one day, and he, the head of this company, hired a developer specifically for his work, right? We’re still doing stuff, but he’s hired a developer to do other projects that he had. The problem was that he had taken my chair from my desk. He took the chair from my desk, and he gave it to this new developer. So one day, when I came into the office, I saw this brand new developer sitting at the back of the office, and he’s got my chair. I didn’t have anywhere to sit, so I’m like, “Where did my chair go?” He came out of his office, he got in my face, and he said, “That’s my blank chair and that is not yours.” I was like, “I don’t know what I’m gonna do,” and he was like, “I don’t know what you’re going to do. ” 

 

Then after that confrontation, he started flexing, like he was gonna punch me. And I’m like, “Wait a minute, wait a minute, wait a minute.” And all of a sudden, the air is clearing for me, and I’m seeing that this guy hates me. This guy hates me because I’ve been a bit of a thorn in the side like I kept on saying that we need boundaries, you need this, and we need that. My current partners ran out towards us, and they’re like, “Whoa, whoa, whoa, whoa.” Then everything subsided, you know, they had to jump in between us, and he got really mad. He ran out the back, he kept cursing, and there’s this whole thing, and I left for like the rest of the day. 

 

That, I don’t know, in some ways like incestuous like the environment that it was like breathing these really weird interactions and that just kind of took it to the nth degree. Then we found out that our employee had left to go work for him. Like he recruited one of our senior employees, right? Out from underneath us to go work for him. And it just ended up being really, really bad. So we were like, “Okay, let’s get out of here, and let’s do this instead.” Then we came to a head, and I had to go back and talk to him in the parking lot. I was like, “I don’t know what happened, and I didn’t know what I did. 

 

Let’s just shake on it and just work through this.” He was like, “Okay, you know, that’s fine, we’ll work through this.” I said, “Listen, guys, we need to settle up with this guy and just move on. Things have to change, and we have to get out of this environment because this is just terrible.” They completely agreed with me at this point, and they were like, “That was way over the line. This is not turning into anything that we need.” I said, “Okay, if we were to just break even like we were to take our break-even money and give him a bill basically for the hours that we put in for the last year, let’s do it and let’s leave, let’s get out of here.” So we did, and we made this kind of invoice together, and we wrote on that invoice the amount of money for this year at break-even costs. I mean, we’re profitable here, maybe this is what we targeted, but this is just us keeping the lights on; that’s where we were.

 

Morgan (Host): Wait, just to be clear, for the whole time until this point or the previous year, there had been no invoice? 

 

Chris (Interviewee): No invoice. Not at all. 

 

Morgan (Host): Since we started, they hadn’t even been paid for anything? Okay, so when the story’s over, we’re going to discuss some lessons from this. Okay. I’m so excited. By the way, there’s no way he was pleased with it, right?

 

Chris (Interviewee): No, no, he turned into a spectacle, which is, you know, part and parcel of his personality. See, he goes, and he gets checks because he had money, this man was personally wealthy already from family stuff, and then he also had money that was coming from other people that were granting him sort of startup money. Nothing to where we felt like we could grow, but yeah, there was some money. So he went and got the cashier’s check of this invoice, and he ordered pizza for the whole office. He gathered everyone around, and he placed the check down, and he said, “Here’s the check.” He goes, “You guys can take it and we could end this relationship.” This was the higher office, and everyone was there, the production, everybody from junior all the way up to ownership, and he goes, “You can take the check and we can end this relationship or you guys can follow me, we can turn this into something great.” These were our employees, right? 

 

I wasn’t a part of the actual company at this point, but rather I was just an employee, so I didn’t have any say in what actually happened. But the check was in some ways a red herring; it wasn’t actually going to turn into real money. I think he ended up kind of reneging on that promise. We ended up moving out, and we didn’t have an office anywhere.

 

Morgan (Host): Wait, so the check didn’t turn into real money? I’m very confused because you said that he had a spectacle. He told everyone that here’s the pizza and here’s the check and then asked you if you wanted the pizza or did you want the check? What did your partner say in response? “Oh give me some pizza?”

 

Chris (Interviewee): Well, effectively, they were like, “Well, we need to talk about this. We don’t need to have this conversation.” So they went in and talked about it privately, and then, you know, when they came out of the office, they ended up just kind of saying, “We’re just gonna walk away from the situation. We don’t want to have anything to do with this anymore and the check was coming with a certain expectation that you were going to be held to finishing the thing that you said you’re gonna finish on the original statement work.” So this real pie in the sky seemed to work for several years before that I said was really loosey-goosey and, you know, there wasn’t any sort of ironclad contract, we were going to be held accountable to that, or there was going to be legal repercussions. 

 

So you can take the check, you’re forced to do the work, and then you guys can walk away. It’s like, “Wait a minute, what do you see success out of this? You know, like, does this need to be a functioning startup? Do we need to make all of your hopes and dreams come true? Then we’re out from under your thumb?” So, as far as I know, that’s kind of how the conversation went. All that I know as an employee at this point, we ended up moving out within like a week. It felt like it was damage control, and we really needed to get out of there immediately.

 

Morgan (Host): So you moved out within a week, and also that money never came? So it’s like, “We’re just gonna lose money for the last year.”

 

Chris (Interviewee): That’s right, it was just sort of an insult to injury, but I think that we knew that it was such a toxic environment that we just had to get out. I’m really glad that they took that, I mean, we were a solvent company, and we’ve always been a company that believes in bootstrapping. We have savings, you know, we’ve never lived on credit, things like that. We had money, and we were able to survive, but it was really lean. We’re such a small company at that point; I think maybe 10 people, and we were able to move into one of the partners like living rooms because we had no office, we had nothing, we all knew that we had to work there for the meantime. We went with the trucks, moved everything out, just moved it in there, and worked from ping pong tables for like four days or something like that. We just did what we had to do, and then we ended up moving into another office pretty soon afterward. The experience was one of those times, specifically for me; it was really visceral because I had this confrontation with the person. 

 

But you know, in retrospect, I didn’t know what he was thinking at that moment, and I didn’t know what his mental state was at that time. I didn’t know if he was stressed out or if there were money problems, I don’t know what was going on, but it was one of those things like a car crash in slow motion. I knew it was coming, and in retrospect, they look back on it and go, “Can’t believe that we did that.” But overall, it’s been great because we’ve been able to learn a lot about how we handle startups and how we handle engagement. We’ve actually had similar pitches since then; we had a pitch from and once again, not gonna mention anybody, from a Russian gentleman who was a local and made lots and lots of money in Russian real estate during the Putin years. 

 

He came here to the United States, he had a very strong personality, and he would just show up out of the blue at our offices and would just come in. He wanted, at one point, his daughter to work for us, and he was pushing her on us. It was just one of these things, there were all these red flags, and we’re like, “We just can’t do it.” It was great because I really saw it as a hurdle that we had collectively jumped over and gone. “Okay, these are going to be toxic relationships and we can see them kind of a mile away.”

 

Morgan (Host): So the story is amazing, and I love the ending. I love the confrontation over the chair like it was the movie version, coming soon. Now, let’s analyze that story, and I want to think in particular basically about the red flags to notice, like the specific things to notice, and also a related but slightly different question of things that were knowing how to work with clients in a more mature way now. Things that you think you, or your now partners, should have done differently in retrospect. So one general theme is that good friend don’t make good neighbors. Just a clarity or broadly like “This is my role and this is your role.” So that’s overarching, and I think a more subtle lesson is to make sure you get paid on a regular basis no matter how much you really like them.

 

Chris (Interviewee): Yeah, yeah, yeah, I think that those are both really accurate.

 

Morgan (Host): I think what’s interesting is that, especially when they are your friends, you have this attitude like, “Of course you will pay me.” like “We all like to do the Rawlinson together and you don’t really need the money.” One of the interesting characteristics of money is that money forces clarity in situations. So if someone is an asshole and they’re not going to pay, better to find that out sooner after three months of work or one month of work rather than a year of work.

 

Chris (Interviewee): That’s right, I mean, one thing that we’ve done in certain institutes is we always have a discovery phase together that we work through with the client from the very beginning. We do that so that we can not only learn more about what the project scope is and so we can actually scope it fairly and accurately, but so that we can have that interaction with the client. We can present something, we can present some strategy, and we can see their response to that. Another thing that we do, this may sound a little bit kind of creepy, but we do a lot of personal intel on clients. We have to, you know, like, I searched legal databases, and we check all of their social media accounts, and we do those things. 

 

I mean, people are going to leave a trail of death. If they’re a toxic person, they’re going to do that, and I think that it’s great because designers, developers, and people that work in E‑commerce or people that are working in consulting and within our field, I think we love to have rose-colored glasses on because we want to think that we can change the world with some of what we’re doing. So we look at people, and we go, “Okay, well I’m going to take the best possible side of them and I want to work on this because they have a good idea and maybe it’ll be something that’ll turn into something that’s fantastic.” But we also have to be a realist about this, you know, we have to protect ourselves a little bit. 

 

We have to say like this might not be great, and I think it would behoove us a lot to spend a little bit more time sort of studying the patterns of abusive relationships. I know that seems like a really bizarre parallel to the kind of working in an agency. But these toxic folks’ relationships take on very similar patterns. Knowing that kind of like “I love you, I hate you” type of wax and wane and abusive relationships, like a broad scale sort of manipulation. I mean, the check pizza thing was kind of a masterstroke of manipulation. 

 

You’re talking to the whole staff of people who don’t have any understanding of the fiscal relationship or what’s going on behind the scenes, and you basically say, “You know, you can take this, walk away with this pay off the money, then go do this other thing, or I can appeal to your higher nature and we can collectively change the world. It’s so tough because there’s an immediate sea change towards seeing this person in a positive light, especially if you don’t have any context for understanding what’s actually going on behind the scenes.

 

That’s a style of engagement, and that’s something we’ve really learned to be super sensitive to, is like, “How are they speaking? If a person comes in and they have this grand idea, whatever, how are they treating us? How are they treating our employees?” You know, if they have a conversation and we bring a dead end, and we bring a designer in who is maybe senior level or junior level, are they speaking to that person, or are they treating that person like a human being? Or are they using manipulative tactics against them? I know this sounds really bizarre, but just a sort of understanding of the subtleties of human interaction. I think it is a huge benefit to us to weed out bad actors. 

 

Morgan (Host): So, by the way, I agree 1,000%, and I really get general framing. Just to articulate some of these specific details or risk factors to notice from the pizza situation is making private conversations public. Just doing that under any circumstances is a red flag. But if there is an exception, let’s say everyone agrees that the matter would be discussed publicly, but unilaterally taking something private or sensitive and you show them to the group, that would be a major red flag. 

 

Chris (Interviewee): It is exactly.

 

Morgan (Host): My instincts are also related, but slightly different, is the pension for spectacle is another risk factor as well. Because if someone’s putting on a spectacle, that by definition means they’re adding layers on top of the reality, and you always need to understand reality. So even if it’s fun and a good thing like this happened to your bed spectacle, but if it’s a fun show, like there’s still the layers you need to then unwind in order to figure out what’s happening. So maybe be warned of the spectacle type.

 

Chris (Interviewee): Yeah, I agree. I do want to make sure to draw a distinction between somebody who’s toxic and somebody who’s a strong leader. I think there’s a trend in our industry to flatten out every hierarchy to say that there is no distinction between somebody who’s junior who’s just walking in the door from somebody who is a partner like a sea-level or a director. I do think that it’s good to kind of fraternize across those lines and have feedback, but at the same time, there can be strong leaders who can say, “Hey, I have a voice and direction, and I feel like we should take this. 

 

I think that the key difference is whether or not somebody can bring a group in with that and help everyone feel like they’re contributing to that and if that person is actually adding value there. If it’s sort of just your running purely on charisma, or you’re the idea guy… Did you watch the UK version of the office? Ricky Gervais’ character, David Brent, is very similar. It’s like he’s all talk, but it’s really vacuous, right? He’s a great character, but you end up with this sort of like it’s just kind of an “I’m a force of nature,” talking head personality, and I just want to make everyone fall in line with what I’m doing, but I’m not really bringing anything to the table, versus somebody that goes “I’m a strong leader, I have an opinion, I want to take our team in a direction, and here’s why.” 

 

That person goes back and kind of sells the idea to the people that are working on the project, but those people have the ability to kind of have feedback there. Those are two very different personalities, so that’s my only caveat, I just want to make sure that I do draw a distinction between those two things because great companies, yes, they’re built on the people that are doing that they’re actually working production, but they also have leadership that is that have a have an opinion and have a perspective that can really relate and encourage people that are working for them.

 

Morgan (Host): I like your distinction because, yes, I agree, it makes sense. I think if I were to argue as myself, I just made the argument to where people are putting on a spectacle. If I were to seek the other side of that point, I always like the etymology that the English word “person” comes from the Latin persona, which is the Latin word for “mask.” I actually think that’s powerful, like who you are, your personality, it’s literally a mask that you wear like masks that you bring out the hidden spectacles. So like the etymology itself, it ties in on the literal level as well and what I mean to say is, in a way, everything is wearing a mask, and everything is a spectacle, so you always need to be trying to see what is below the surface no matter what.

 

Chris (Interviewee): Yeah, and I think if you’re working in leadership for the reverse side, understanding that you maybe have that mask, right? And be vulnerable in some ways like, what are the things that were driving me in this direction and be open about who you are with your employees or with the people that are working within your group.

 

Morgan (Host): Agreed; by the way, you made a minor point a few minutes ago; I just want to go back to the browser because I think I might disagree. You said that it’s good to fraternize the juniors with directors and so on. My personal take is I actually don’t think that it is good like there are lots of companies that have team lunches and team groups, and I, personally, don’t go to that. I’m not like those people, and I just want to be alone, but you know, ignoring that, you mentioned a little while ago talking about the bad client. Oh, he became really friendly with one of our employees, and we found out he hired him. When a lot of fraternization happens, the interesting challenge is how do you fraternize just enough but not too much. 

 

Chris (Interviewee): That’s a good question, and I think it really depends on the size of your company, for sure. I also think it’s also closely tied to how you’re fraternizing? You know, it’s one thing I think for you to know your team. We are talking about from more of a management perspective now but to know your team, to know what’s going on in their lives, to be able to be sensitive to the fact that they have complexities as well, right. It’s another thing I think, to go, “You can rely on me for anything, bro. 

 

We’re super close buds, and everything’s the same and let’s just let’s just flatten this out. If you have any problems, you know, if you have a problem with my partner, you can come and just blast them to me.” Those two spheres don’t need to intersect at all. Right. And I think that in the same way that we have to draw these sorts of contractual boundaries, there have to be these sorts of unspoken boundaries where you say, “You know, I don’t mind having a conversation with you. Let’s grab some lunch and talk through some of the issues that you’re facing; let’s do these things.” 

 

But when it comes down to super close buds like “We’re gonna go and have drinks, we’re gonna have to figure this stuff out together, and it’s me and you against the world,” that blurs the lines of hierarchy, and it undoes what we need in a functional office day to day, you know, being able to kind of go, “Oh, here’s the directive. I need you to work on this.” if I can’t have that relationship with that person and there would be that division, then I can’t ask them to do things and actually demand that it gets done. You know, and that undermines sort of the point of Office hierarchy. So that’s where I agree with you. I’m sorry, thanks for drawing that out. I think it needed a little bit more clarification. 

 

Morgan (Host): Yeah, it’s an interesting point. Now, before we wrap up, I think we were clear on the higher level, a higher level lesson of your awesome story of the importance of boundaries and all these different ways. I’m wondering if there are any other specific little lessons, like being aware of the spectacles. Those that are really obvious, but I just want to say it directly because we haven’t said it directly in case it’s not obvious for someone; a huge red flag was when the client moved into your office or vice versa. It’s tempting to understand, especially when you’re young, and you’re starting out, “Oh wow. We can save a thousand dollars a month or we don’t need to use my living room anymore.” In that case, it would be really tempting, but that’s this massive boundary that leads to exactly the sorts of situations we’re talking about. 

 

Chris (Interviewee): Yeah, and that all ties into all of the sort of relational or physical manipulation sort of stuff that can sometimes happen. From a corporate perspective, a huge lesson is to continually work on your contracts. I mean, I ended up doing it a lot. I talked with our attorney, and I ended up doing a lot of the contract writing just because I kind of have a little bit of a gift for doing that. But our contract has continued to evolve every single year, and there are some people I think that are taken aback by the complexity of our contract. 

 

We went international and experienced working with an International Petroleum Corporation. They were really large; they were part of the top 10 In The World Petroleum Corporation, and we did this work for them. They were great to work with because their lawyers came back, and they’re like, “This makes sense, this contract makes sense.” They had some edits and some corrections, but for the most part, it’s equitable on both sides. We can work together on this. But one thing I’ve noticed is that if we throw a contract at somebody and it’s a pretty good and ironclad contract, even if it’s equitable, if somebody balks at that, it’s typically a red flag. If they balk at the documentation that you really need to establish or your process, right. We use the discovery phase; we have to re-stimulate works specifically for that. 

 

You pay for that before we ever give you scope for something else. Like if you balk at that, you balk at our process, you balk at our contracts, and you say, “Oh, this is way too much. This isn’t fair, whatever,” then there’s a pretty good chance we’re not going to work well together. You’re going to try to kind of manipulate the situation. We have had this happen just this past. Summer with a client that was trying to kind of move in and work with us. There are a lot of demands, he wanted it done immediately, and he wanted everything explained. We backed off of it really fast.

 

Morgan (Host): I agree 100%. I think sadly; this is less like it comes with age and experience. So arguing perhaps means we’re getting old. Oldest defined as anyone more than 15 years ago, my current age so, therefore, I’m that old. 

 

Chris (Interviewee): I agree. I liked that definition. 

 

Morgan (Host): I think a real challenge with implementing your awesome advice other than when you’re too young or just aren’t as busy and through the lens of contracts is I think, especially when you don’t have enough money, you’re not making enough money It’s like “Oh, okay, they want to change this because they don’t like in this way.” But look at the zeros at the end of that check. Even though you know it’s a risk factor, like the contractor process. You see the risk factor, but you just really need that money. No, I think the worst situation is when the red flags are going to be a bad client, and there’s no money, which is a reason why this startup situation is so compelling. A startup with no money and these crazy red flags, that’s the worst. But the ones that are challenging in a different way is where there’s money, but you seeing red flags,

 

Chris (Interviewee): Agree, it’s complicated for sure. 

 

Morgan (Host): It’s complicated, and these are the things that we need to discuss in the future episodes of the beloved by clients podcast. Chris, this was so much fun, I often chat with you, and we should video conference just because it’s fun. Maybe we should do this again without turning it into a podcast just to hang out.

 

Chris (Interviewee): Yeah, I’d love it. I’d love it anytime. 

 

Morgan (Host): Okay, I’m gonna press stop; thank you, everyone, for coming. 

 

Who doesn’t want to do business together with their closest friends? I mean, “getting rich together” is a common promise that every best friend says to each other. But what if letting personal relationships in your business would ruin your business? Would you still want to work with your best friend?

 

This transcription belongs to Episode #2, please watch the complete episode here!