Chad Crowe, CEO at Techwood Digital (Atlanta, GA)
Chad Crowe is CEO at Techwood Digital, an employee-owned agency that provides B2B, e-comm, and lead generation services for around 100 clients in a variety of U.S. industries. Founded on SEO, Techwood has over the years added paid search, branding, and some design elements and development – in a gradual transition to becoming a full-service agency.
Chad had been doing SEO and paid search in a job he loved when he met Jack Ogilvie, owner of Techwood. Jack wanted to add paid search capabilities to his organization’s offerings. How did he win Chad away from his dream job? With the opportunity for ownership at Techwood.
In the first month, Chad started changing Techwood by defining four components for the onboarding process: core values, mission, process, and value chain (how does the agency continually add value to the client?). The agency’s core values, to which any new clients or new employees have to agree to accept and focus on include:
- Have a “How can I help?” attitude. “How can I help the situation be better?” “How can I be more engrained?” This attitude promotes growth.
- Embrace curiosity, knowledge, and improvement.
- Provide second mile service. Do a “little bit more, a little bit surprising, a little bit extra” to strengthen the relationship. (Hijacked from Chick-fil-A, Chad says, this is NOT scope creep.)
- Be open and honest – with self, coworkers and clients.
- Have lighthearted fun (which requires trust) but also have heartfelt sincerity.
- Be respectful. Chad applies this to his worldview when he says respect is “something the whole world needs right now – this level of respect for everybody that doesn’t question so much as it seeks to help.”
The right clients and the right employees are people who have a “core values fit” with the agency. Chad admits that, in the past, he optimistically hired a few “almost fits” that, over time, did not work out. Today, he says he is “more intentional about slowing down” until he is convinced that the new hire is 100 % before he ever makes an offer.
A few years after Chad joined Techwood, the agency was doing very well and had great growth and a few “amazing” employees. Jack and Chad decided it was time to consider transitioning the agency to an employee ownership model. But how to do that without incurring big tax penalties?
In this interview, Chad explains how the agency set up an ESOP, or Employee Stock Option Plan, to put agency ownership in the hands of its employees. About two years ago, the agency became 100% employee owned. The cost of conversion was high, but Chad claims the benefits have been even greater. He says there are “a lot of very unique and interesting things that go on when you transition to an employee stock option plan” – among them being the opportunity to create “an evergreen company . . . where everybody can work forever under those core values.”
ROB: Welcome to the Marketing Agency Leadership Podcast. I’m your host, Rob Kischuk, and I’m joined today by someone from my same hometown here in Atlanta, Georgia – Chad Crowe, CEO at Techwood Digital. Welcome to the podcast, Chad.
CHAD: Thank you. It’s so kind of you to extend an invite.
ROB: Good to have you here. You’re building something special. Why don’t you start off by telling us about Techwood Digital and what you do and where you specialize?
CHAD: We are a digital agency. We really cut our teeth on SEO as a product line. Everything we do has a core there. Then after several years in the SEO arena, we expanded to include a paid offering, so we do paid search really well as well.
Our philosophy and what we’ve been trying to do is add services as time goes on. But of course, you don’t want to blindly do that, so it’s been a slow add over the years. Last year we added branding and some design elements and development to our stack. We’re slowly becoming more and more of a full-service agency out of Atlanta, and we service a lot of clients all over the U.S. We’ve got several in the New York area, Michigan area, and out in California.
We don’t really specialize in an industry. We’ve got probably 100 clients that span lots of different industries. We do B2B, we do e-comm, we do B2C lead gen, and we take our learnings and try to focus and become really good at the things we’re focusing on.
ROB: It’s an interesting mix. Is there any common thread between customers? Or how do you end up attracting such a diverse portfolio of clients, both in terms of business as well as geography?
CHAD: It’s going to sound kind of lame, to be completely honest. As we were talking about before the podcast, we are an employee-owned agency, so really the common thread between all of our employees and all of our clients is everybody has agreed to accept and focus on our core values of having a “How can I help?” attitude and being open and honest and second mile service and all of those things.
Really, the common thread that we’re looking for through all of that is people whose values align with us and we feel like we can really successfully win. I’m sure all agencies have an onboarding process, a sales process. Our sales process is definitely extremely hands-on. Like I said, we’re really trying to focus and find people who are going to be a cores value fit that we can really, really help.
I guess as lame as it sounds, that’s kind of it. We’re looking for people who hold the values that we hold true as well, and I feel like if we’re aligned there and we’ve done our basic research to make sure that we can help you and that there’s opportunity there, we’ll have a great partnership. And that’s been what we’ve been focused on. We’ve brought in people over the years, and they just continue to flourish. As they transition to other jobs, they bring us along and we keep the previous client.
So, we’ve really been more of a referral-based growing agency for years. That’s the common thread. It’s just really focusing on who we want to be and who we want to work with.
ROB: That is such a fascinating dynamic that you mention, that employee churn in the marketing industry – if you stick in it long enough, there’s a virtuous cycle. There’s the dynamic in marketing between agency and brand and vendor that seems to ebb and flow, and vendors can also be clients while you’re at it. It’s fascinating that longevity can sometimes correlate pretty well.
CHAD: Absolutely. I’m also referring to clients. Their senior marketing person, who’s a person we interact, that person leaves and goes to another company because they’ve gotten great results and want to continue up the ladder. They bring us into a new company as well. We’ve definitely had it from the employee side. Our employee turnover is actually really low, so we see it more on the client side.
ROB: Right. I mean even more sometimes one of your clients may get tired of brand for a while and they go work for another agency, but then they pop their head back out, and maybe they actually like you, Techwood, more than they like the shop they were in for a while. But you make a great point that the best client is probably someone you helped earn a promotion by switching jobs, or you helped them success well enough that they go somewhere else and they want to bring you along and take them to the next level there as well.
ROB: With Techwood Digital, tell me about the origin story. What made you decide to start this company and transition you from whatever you were doing before?
CHAD: It’s kind of a long and fortuitous story. I’ll try to abbreviate it. I met a guy named Jack Ogilvie in college. We met through weird circumstances in that my roommate was Jack’s best friend in high school. Jack was going to Georgia Tech downtown; I was going to Reinhardt University all the way up in Waleska, Georgia. There’s nothing to do in Waleska, Georgia, so my roommate and I would come visit Jack in Atlanta. That’s how I met Jack.
It was probably 7 years after graduation – I was working for a large company in Cumming, Georgia, owning their paid presence and their SEO and working there – when I went to a tradeshow in New York and I ran into Jack. We were talking about “Hey, what are you doing? What am I doing?” Jack actually started Techwood shortly after college, so he owned Techwood at that time. He built the company on SEO and was looking to try to focus and own and be really good at the paid space and was trying to solve that. That was the piece that I brought to the table.
You’re in the Atlanta area; I don’t know if you’ve heard of AutomationDirect, but they’ve won the Atlanta Business Chronicles’ “Best Medium Size Company to Work for in Atlanta” for nearly 6 years in a row. Just a really, really good company. As we were talking, I said, “Hey, here are my specialties. Here’s what I’m doing.” He’s like, “I’ve got this agency. I really want you to come work for me and figure out the paid side.” Like I said, AutomationDirect is such a great company. I had zero interest in switching jobs.
So, we left that conference, just reconnecting and talking. Several months later, it was like, “Hey, I really think this is a great way to go.” He made me an offer to transition into ownership at Techwood, so that’s how I joined. Techwood grew from an SEO agency to a paid agency.
Several years into that, things were going really well and we had several very amazing, outstanding employees. We had these core values and this mission statement we were really holding to. The result has been great growth. Looking back, we said that we wanted to be considerate of everyone. We wanted to help everyone. We wanted to have these values that we hold dear. We were looking for the next level of that.
As we looked at that, Jack and I decided that it was time to transition the company into more of an employee ownership model. At that time, we were looking through lots of different mechanisms to do that, and we stumbled across a mechanism called the ESOP, or employee stock option plan. Probably about two years ago, we transitioned the company into 100% employee owned through an employee stock option plan.
Again, it’s just put more teeth to our core values. Every time I feel like we’ve taken a step to say, “How can we be more engrained there?”, the result has always been growth. We’re continuing to grow today.
ROB: We often get questions and curiosity on this podcast about ways to facilitate ownership. There’s a perception, I think, that it’s a very expensive process. Talk about how you thought about shouldering the cost. Did you find it expensive, or did you find it to be manageable through some tools you found along the way?
CHAD: For us, we found it very manageable. But again, it’s based on what you’re trying to do. We weren’t trying to completely go away from Techwood. I had complete interest in continuing to work at Techwood and continuing to work for the long haul. We’re working to build what we’re going to call an evergreen company, a company that we want to focus on being a place where everybody can work forever under those core values that we want.
So that was our intention. With that, the bill to actually convert it was pretty large, but I think the benefit has definitely outweighed the expense. There’s a lot of very unique and interesting things that go on when you transition to an employee stock option plan.
For instance, the company is making income, and the company doesn’t have to pay income tax on that. There’s a lot of cash left at the bottom line. When you go through the process of an ESOP, you can set out how the employees are going to purchase the company from you as an owner as well, so it’s not like I just took ownership of Techwood and said, “Okay, now we’re all owners.” The employees are definitely earning it or have earned it. On the day we transitioned, we made sure there were some people within the company that would gain stock in the first year just because we knew they’d earned it already.
The employee stock option plan, is it expensive? It’s a big bill to look at, yes. But when compared to the benefits, I think it completely outweighs it. Publix has a percentage of their company that’s in a stock option plan. The owner of Publix, when somebody asks, “Hey, do you ever regret selling that to the employees? How much money would you have earned if you hadn’t done that?”, his response to that question is always, “Probably zero,” because the mechanism has been so powerful. That’s the reason why he feels the company has grown. His response to “Would you do it again?” and “What would you have had if you hadn’t done it?” is always, “Probably nothing. Would I do it again? Absolutely.”
ROB: Ballpark, is that a four-figure bill, a five-figure bill, a six-figure bill?
CHAD: It’s going to depend on all the pieces you need to put in and also the size of your agency and where you’re going. But yeah, you could see a six-figure bill.
ROB: That’s a commitment. But I think employees appreciate that sort of commitment. I think I heard you allude to, along with that stock structure, you also have some sort of distribution structure, right? When there’s profits, you’re aligned and also distributing those to the team. Is that part of the case?
CHAD: You work through an ESOP over the course of years, and you set that out when you’re setting it up. Once the company is completely purchased from you as the owner and into the trust, the company can pay out dividends on those trusts to people who have stock. We can pay those into the form of an investment account. An ESOP is technically a form of retirement account, so it is a tax-free way to get stock as well and pay taxes when they sell the stock.
That’s always been something kind of weird. It’s like, hey, we found the employees who we want to make partners here. If we wanted to just give them stock, it always came with a big tax bill for them, so the ESOP solved that problem as well, which has been pretty interesting.
ROB: Right, it’s a very interesting solution to the problem. I think it’ll be interesting for folks to get out there and look at that option in the market.
You have mentioned core values a couple of times. It’s clear to me that core values are important to you. At what point in the business did you establish those values?
CHAD: When I came in, it was kind of a hole. Within the first month, that was my top goal. It’s just interesting; Jack and I are definitely two sides of the same coin in that he has amazing business acumen. He is probably more of the financial brains, I would say. He understands a lot more and all of that. I’ve got definitely more of a people capital. Seeing that as a whole based off of what I’m good at and where I can fit in – that’s the goal of that. It just has made it easier for us to scale.
I saw it as, how can people make decisions quicker and feel like they’re making the best decisions? How can people operate without having to go through the eye of a needle, which would be me or somebody else? How can they feel like they have a full sandbox to participate and work in?
Core values is one element of our sandbox. We’ve got four different things that are part of our onboarding process, and everything that we do really outlines what that sandbox for us to play in is. Core values is one, our mission is one, our process is one, and the other is our value chain. How are we continually adding value to the client? We’ve got a graphical presentation of how we ensure that when a client entrusts us with a dollar, we give them enough value to warrant that trust.
Those are the four things that I set up. Like I said, it’s been a hole that I saw and I said, hey, we can really scale if we would ensure we have the right people within our organization and tell them what they can do and how they can do it by saying, “Hey, don’t go beyond this line and you’re good.”
ROB: Really, really interesting. Can you run back those core values for us, just so we can digest them?
CHAD: They’re all begged and borrowed from other people, so I don’t want anybody to think that I’ve got some ridiculous insight that nobody else has. It’s pretty straightforward, and I think most people would be like, “Yeah, this is it.” But we tried to be more intentional than that.
Having a “How can I help?” attitude is one of our first and foremost ones. We go into depth and really try to define them. I’m a communications major and specialist, so I am dedicated to ensuring that the team has a unified definition of what that means. It’s interesting when you start thinking of the English language and you think of words like “love” that don’t really have a solid definition. The definition of it is whatever the shared meaning of it is. So, I really focused on not just saying “Hey, here’s our core value,” but “Here’s how we’re going to develop a shared meaning around it.”
So, a “How can I help?” attitude. We define that as in opportunities as well as in arguments or disagreements or different things like that, do we approach the problem saying “Hey, how can I help the situation be better?” That’s what we’re looking for. We’re not looking for people who are going to approach this to say, “You could do this better,” but people who are going to have that level of ownership to it and come to say, “Hey, I’m here to help and I want to make it better” and have that servant heart. So that’s first and foremost.
Second is embrace curiosity, knowledge, and improvement. We tie those all together when we talk about it because I think curiosity killed the cat and knowledge is fleeting unless it’s geared towards improvement. We want people to be curious. We want people to ask questions. We want people to seek knowledge, but we want them to do it with that goal of improving our processes, improving the service we deliver, improving their lives personally. So, we structured it in that way to make sure that we’re not just chasing questions, we’re not just trying to learn more, but we’re doing it with a very intentional intent.
Next is second mile service and one that, being in the Atlanta area, I know you’re probably aware of. Totally jacked from Chick-fil-A. The idea is that everybody loves to go to Chick-fil-A because of all the special things on top of it. Second mile service is what can we do that’s going to be a little bit more, a little bit surprising, a little bit extra to strengthen that relationship or surprise somebody? We don’t define second mile service; we try to use language and talk about how this is not scope creep. This is putting extra onto what we’re doing. It’s taking a deliverable just a little bit further so a client doesn’t have to implement it themselves, or so that we answer all the questions we can think of before they ask them. That’s second mile service to us.
Next is open and honest communication. Do you want me to keep going, or is that good?
ROB: It’s good. I do like the stealing of second mile service. What’s fascinating with that one in particular is, as I understand it, when they first implemented that program, there was even strong skepticism at the corporate level. I actually interned in the IT department of Chick-fil-A when I was in college, and that was before they got in the second mile service business.
But it took time and it took pressure within their organization to even sell that through, so it’s certainly aspirational. It’s something I think we take for granted now, but if you think about Chick-fil-A 20 years ago, it wasn’t as remarkable as it is now. And they see it in their results. They make three times more money per location than anybody else in quick service food. It’s amazing.
CHAD: Yeah, it’s ridiculous. My roommate in college, who I mentioned, now owns a Chick-fil-A franchise. During college he worked with Kevin Williams, who is one of the very few triple franchisees for Chick-fil-A. Very, very few people actually get to own three Chick-fil-As.
I actually worked for Kevin in college a little bit, and it’s interesting; you go in on your first day, you sit down in the back of the employee section – or at least, it was then – and you listen to basically a sermon from Dan Cathy on what second mile service is and the parallel in the Bible where it comes from. It was eye-opening for me in really having that servant heart and servant eyes to look for those opportunities. That was something that was important to me when I was in the position to instill a cultural element within my company.
Next is open and honest communication. We talk about open and honest communication in different ways. Like I said, because I really want to define that for people, we talk about how openness is a precursor to honesty. You have to be open for feedback. You have to be open for conversations so that people can trust you with that honesty. There is a level of openness that has to happen for honesty to happen.
Again, approaching things with “How can I help you? How can I help the situation? How can I help us be honest and straightforward?” And that heart starts with openness, and I’m going to make sure you know that I’m open for feedback, that I’m open for this. Part of that is going to be that when you give me feedback, I’m not going to jump to the “I’m offended, you suck” mentality. I’m going to jump to the “Awesome, you really care about me and you want me to get better” mentality. So, flip that a little bit, so then we can be open and honest.
We talk about honesty at different levels. There’s obviously honesty with yourself. How are you being honest with yourself when you talk about your workload? Are you really being honest with yourself? Are you putting in the hours and staying focused that you need to? Do you know that you’re slipping a little bit?
Or maybe in the COVID world, you get to work from home and so you leave the TV on in the background, so things may take a little bit longer. I’m okay if that’s what you want to do, but I want you to be honest if that’s what’s happening; your workload is not too much, it’s just that it’s taking you a little bit longer than it used to. If that’s what you need for your balance, that’s okay as long as we’re getting done what we promise we’re going to get done.
And then there’s honesty with your coworkers and honesty with clients. It just expands and goes on. We always want to be honest with results. We want to be honest with what’s happening with people’s accounts. We don’t want to sit on anything. If I have an account manager, an analyst sitting on something saying, “Hey, if so-and-so finds out this, we could get fired,” I’ll tell them, “Well, if you don’t tell them, you could get fired.”
That’s how serious we are with open and honest. There should not be anything at the end of the day that you’re worried about because you went and put it out there. I think if you don’t, you’re screwing yourself over. You’re screwing your work-life balance or your family over. You’re jeopardizing a lot of things. So at Techwood, we want to really focus on being open and honest.
CHAD: Next is actually one of my favorite ones. It’s lighthearted fun but heartfelt sincerity. We want to be fun. We want to be goofy. We love each other. Having fun leads to trust, and trust is just so essential to business. If you’re not having fun with the people you’re with, I guarantee you, you’re not trusting them. In order to have fun, there has to be a level of letting your guard down.
So we want to be lighthearted and have fun, but we also want to make sure we draw the line. Where we draw the line is we don’t want anybody to ever feel like we’re not being heartfelt, that we’re jeopardizing sincerity for a coworker or for a client. So yes, we want to have fun, but we’re heartfelt in that we never want to push that to a point where our clients or our team don’t feel that we have their best interest in mind or we don’t really want the best for them.
Then our last one is respectful and considerate. It’s probably one of the most straightforward ones, but we definitely want to be respectful of each other and considerate. We tie those together because there’s a level of respect that comes from being considerate that we want to achieve. Again, a proactive thing. We want to be extra considerate as a form of respect, if that makes sense. We want to think through things. We want to be intentional with things.
We want to be the first to jump on solving world problems if we can. If there’s something I can do at Techwood to help with some of the social unrest, I want us to intentionally look at doing it right now. We’ve had those conversations in Techwood and we’ve laid out different things we want to do to be extra considerate and respectful.
Again, that comes to that “How can I help?” attitude. We want to approach issues not saying “Hey, you’re wrong in this area and you need to change.” It’s like, “I hear you, I feel you. How can we help? How can we change to make it so that you don’t feel that way or so that isn’t the case?” As we talk about, I think that’s something the whole world needs right now – this level of respect for everybody that doesn’t question so much as it seeks to help.
ROB: Right. It seems like I can barely see someone trying to say something positive without getting an immediate “gotcha” follow-up. There’s a lot more we can do together.
I really appreciate the intentionality and the ease with which you work through those core values. It’s a question I try not to even ask unless I know the person is very confident and comfortable, because there’s nothing more awkward than talking about your core values and you say, “What are your core values?” and they’re like, “Um…” [laughs] That’s a tough spot that I don’t want to put anybody in.
Chad, when you look at the journey so far, it sounds like a lot of things have gone well. I’m sure some things have not gone well from time to time. Maybe not too much lost sleep, but maybe some. What are some things you have learned along this path so far of building Techwood Digital that you might do differently if you were starting afresh?
CHAD: Obviously start with core values and all of that from Day 1. Maybe not, but if Jack had started that way from Day 1, I think things probably would’ve grown smoother and he might not have ever hired me. So maybe it’s good that he didn’t start that way. [laughs] But looking back, I think that’s such a staple.
And then if I’m being more personal in my own reflections, there have been times when I hired people with speculation that an area of one of our core values might not be a good fit for them. I was like, “All right, they fit everywhere else. We’ll push forward.” As time has gone on, I’ve been more intentional about slowing down. If I’m not convinced they’re a 100% fit, then I’m not going to say “Let’s move forward.” I’m going to think, what questions can I ask and what can I do to ensure 100% before we ever make an offer?
From there, the people who have gotten their way into the organization and are not a proven fit, find a way to part ways sooner rather than later. Like I said, at every turn, when we’ve held true to who we want to be and who we are, we’ve always won. So I guess if I could change or go back and do anything different, it would be to be all-in and fight for those faster and harder every day.
ROB: That’s really insightful. It’s one of those difficult experiences where it’s easy to talk yourself into a hire, and it almost seems to me like the moment you start talking yourself into it, you should just move on.
CHAD: Absolutely. In agency life, too, we’re selling our people capacity. You’re always going to hit that stairstep approach, and there’s going to be times that are way more stressful than other times. You’re going to get behind – which has been one of the biggest things about being employee-owned. Having that extra capital to make sure we’re not ever behind on a hiring has been essential and will be really essential to growth this year.
ROB: Practically speaking, how do you know when it’s time to hire?
CHAD: We’ve got balance and load measurements. We’ve always said “Hey, once we hit this percentage of revenue increase or this amount of revenue increase for this business line, that’s another head.” That’s the way we’ve always thought about it, and we’ve always been way too late on predicting when we got there. So, this year we’ve intentionally lowered what those numbers are, not to say that that’s where we want to be, but to trick ourselves into looking before we need it. [laughs]
ROB: [laughs] You’ll be a little bit happier with that, I think, and a little bit less stressed from time to time. Chad, when people want to connect with you and connect with Techwood Digital, where should they go to find you?
CHAD: They can check out our website at techwood.digital. Or feel free to email me, honestly. I’m always happy to have conversations and to make this world a better place. I really want to be an example of a “How can I help?” attitude. Honestly, anybody can email me directly at email@example.com.
ROB: Brilliant. Chad, thank you so much for coming on the podcast. I can’t wait to connect in person sometime around Atlanta because we have that opportunity. But I can’t wait to connect with a lot of people at some point because it’s been a year, man. But it’s all good. Thanks for coming on.
CHAD: Thank you so much for having me.
ROB: Be well.
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