Bill Canady: Welcome everyone to the Thousand Day CEO. I'm Bill Canady, and this is where we get inside the decisions that build enterprise value. Today I'm joined by Tom Gallagher, CEO and president of Diversified Automation. Tom has spent 35 years in automated services, parcels, and logistics, turning strategic plans into operating results. Today we're going to talk about a test that every leader eventually faces. Can the business keep performing when you hand over the reins? We'll get into leadership transition, the choices behind a useful strategic plan, and how you prepare people to carry it forward. Tom, welcome to the show.

Tom Gallagher: Well thank you, Bill. It's great to be with you. I've enjoyed talking to you earlier and this is gonna be a great little time together.

Bill Canady: I'm excited as well. So we'll go ahead and jump in. So your company has announced a leadership handoff in since January. take us through the moment when succession became a real operating plan. What happened?

Tom Gallagher: Yeah, for me it actually started a little bit ahead of January of of this year because I have I have a really good staff, younger younger folks that have been in the business for a long time. Which is really a nice combination with where you have youth and experience coupled. And that's really what we had. problem was, and this was probably in the fall, we I was looking at a situation where the the our industry has been really good. it's been a very active, you know, area. if you if you aren't familiar with what we do exactly, easy way to explain it is if you buy packages from Amazon or online, you get things delivered by FedEx, UPS. anybody like that, USPS. we are behind the systems that get those packages from the the suppliers to your doorstep. we put in controls and software systems that run conveyors and sorters in those big facilities that UPS and FedEx and Amazon operate. So we're kind of the the the machinery that executes all that for everybody in the country practically I don't know anybody that hasn't bought something online in the past in the past couple of months, let alone a couple of days maybe. So it's been a very good business for us and because of that there's a lot of growth, a lot of companies that are competing for good resources and we have some of the best and that means we've got people that get a lot of phone calls. And I was looking at the p possibility of some of those really key resources getting opportunities to move outside of DA. And I've always kind of followed the philosophy that as a as an employee, you should try to work yourself out of your job, right? You hear that? that's been a pretty good philosophy for me. It's it's a little counterintuitive, but I have progressively worked from one job to the next and found myself here at DA as the CEO. And I hadn't thought about the end of that logic. You know, when you get to the place where you're in the top spot and you work yourself out of your job, how does that look? so I had to come to grips with that, but I've had a long career and I've been talking about moving on for a while into retirement and other things. And I looked at that in conjunction with the the folks that we had on staff that were really capable and probably ready for our next step. So rather than let things blow up and ride out for another year or two here, we're three at DA, I made the decision to step aside and move my staff, my leadership team into these next roles. And it it has worked out so well because the it's been a seamless transition for us. It we began working on it officially in January. but I spent a couple of months ahead of that working with my successor and his successor and the rest of our lead team to get them prepped for this so that in January we made the announcement, but we were already three or four months into it by the time we announced to the staff and you know the the greater world what was going on. And so part of it was i it was it was an easy transition for me because of the people involved. I I I didn't have to import people from outside. I didn't have all those interpersonal dynamics to work out. I didn't have A lot of difficult, you know, getting new leaders familiar with end user customers. all of that was already part of what existed. And I was able to take advantage of it because I made the decision to step aside. I would say that made things exponentially easier. Maybe the single hardest decision to make on a personal level, but the the outcomes have been fantastic. And so here we are, we're in our fourth quarter now of twenty twenty-six. The new lead team takes over at the beginning of 2027. and we just had our Q4 all staff meeting. I co-led it with my successor, and we usually have all of our incoming or existing and incoming leaders speak at those those sessions. We got really, really great feedback from the staff across the board. we've got very low turnover People are very comfortable with how we're progressing through the transition. But in fairness, we've been working on it for more than a year, you know, to get to this place. So it didn't just snap our fingers and say, we're s we're switching, you know, horses at this point and hope you like it.

Bill Canady: That makes a lot of sense. What'd you need to see in the business before you are comfortable stepping aside?

Tom Gallagher: Well, for me, you know, w we have we have a set of core values that we operate on at DA. And those core values, a lot of companies I've worked at, they're more window dressing than than reality. I like the fact that at DA, and one of the reasons I I worked here years ago for the founder. And he called me back when he was getting ready to exit the business and asked me to take over, which is that's a difficult challenge to take over a business that somebody else built from the ground up and let them walk out the door. we had similarly really good transition during all of that. but you know, for me, part of our core values is being customer focused, and being professional, being collaborative. And the collaborative piece is probably the single biggest focal point for me. We had before we got to this point, we had a few other leadership changes. And a lot of it had to do with our inability as a group to collaborate at the at the highest level that we needed to. and it it was going to hurt the business long term. So we we had to we had to change some some personnel out, even at the the top levels of the company. And those were difficult things to do. as a new CEO for the parent company, they had some questions about are why are you changing out some of the the core leaders? And I I explained why and they said, Okay, we we understand and they can they they once they saw how it was playing out, they fully supported those changes. but that was really the number one thing for me was that we had to we had to have the right leaders to be able to collaborate

Bill Canady: Mm-hmm.

Tom Gallagher: really closely and and not everybody agrees on everything and w it's we have plenty of tense tense, you know, topics that we have to work through together. You have to have people that can mesh really well in order to get through those. And so Over the past two years, we've gotten there. We've got that team in place now. And they they are just really clicking. the other piece was there was one structural part of the business that we had to change. and that was that we were we had our feet kind of in multiple pools. And typically in our business, 90% of the work or more that we do. is working for a prime integrator, somebody that is responsible for the whole turnkey job. They they have the the prime contract with the end user customer. They hire us as a subcontractor to do all the controls and software, but we're not the we're not the prime. And so our business is really reliant on our relationships with those prime contractors.

Bill Canady: Mm-hmm.

Tom Gallagher: And the the the the founder as he grew the business He very creative guy, super entrepreneurial. his name's Tony Young. He actually has another business now called Aegis Sortation. and he was he was testing the waters on how to do turnkey integration before he left DA. And so what was happening was as he was testing those waters, he was doing turnkey integration projects just like our prime contract customers Do. So they started to look at diversified automation, DA, yeah, for short, and say, hey, are are you guys our partner or are you becoming our competitor? And they were they were concerned about that. And it was, it was, we were having a lot of difficult conversations about where we were headed with with those end users, with those integration contractor customers. And So we we said, and that was that was a pretty big part of our business, or it was becoming a big part of our business. So we had to pivot from that and say, going forward, we're going to focus on our core strength, which is controls and software integration. We're not going to do turnkey projects anymore. We went out to the end user customers that we were working with who said, Hey, we're grateful for that work, but we really need to operate in this limited sphere for everybody's benefit. And we went went out and talked to all of our core customers and made it clear with them this was the direction we were going. going in almost immediately we saw reactions very positive reactions from them and we offset the the integration turnkey integrated scope that we were doing that was you know 30 30 plus million dollars a year that we were giving up

Bill Canady: Wow.

Tom Gallagher: but yeah so it wasn't a small decision for us we were we were you know it was close to 30% of our business that we were saying no to And I had to find a way to backfill that, which was one of those tough conversations I had with our parent company about whether or not that was achievable. And I I assured them that

Bill Canady: It's a little scary thirty percent on the line.

Tom Gallagher: well, I I I really believed that that was a real holdup for us. And it didn't take long for us to for that to prove itself out in real life, and we we more than offset the that back you know that backfill that we had to hold that backfill hole that we had to satisfy and we proceeded to grow just tremendously over the next two years. We've we've added we were we were about 130 people I think when I started in as CEO and we're north of two forty I think at this point. So and that's over like an eighteen month span that we've we've added all that staff. So

Bill Canady: Holy cow.

Tom Gallagher: Yeah, and similarly our our top line and our our profits have grown in the course of things too, because there's some other dynamics about how the business works that it was financially a good thing if we could pull it off. And we've we've been successful with all that and we continue to do really well because we were willing to make that pivot. So

Bill Canady: What is the hardest thing for you personally going through this?

Tom Gallagher: well, I hadn't been a CEO before, so I learn new things every day. And that's there are I I don't know about you, but you know, for I think for a lot of people, myself certainly, when you wake up in the morning and you're not quite sure how how the next step goes, we we spend a lot of time in uncharted waters, you know, and That's a little unsettling, to be honest, you know. I I I like to say that I I'm pretty good at rolling and thinking out of the box and going into those those empty spaces. and honestly I've been f fairly successful at it over the years, but every time you start it again, you think I'm gonna get fired from this job. For the f

Bill Canady: That's so true, isn't it? You wake up I tell people I sleep like a baby. I wake up every two hours crying and wetting the bed. So

Tom Gallagher: For the for the first two for the first year of any job I've ever had, I've spent at least a portion of that time thinking I'm probably gonna get fired. that hasn't happened, you know, and for a lot of reasons that are outside of my control. But I I will say that, you know, f although the the the very thing that causes me the most stress is the thing that I really gravitate to. I love I love those challenges, even though they're they're difficult, you know, and they they make you tense and occasionally lose a little sleep. I just love I love that. I I wouldn't want to be in a business that was stable from from day to day and year to year. It would be boring.

Bill Canady: Yeah, they don't they don't need guys like us if everything's going great.

Tom Gallagher: Yeah, I guess.

Bill Canady: Yeah, it's a but yeah, the the unknown and the the excitement and the energy, it becomes a little addictive, but it it it it'll wear on you too for for sure.

Tom Gallagher: Well, the the other thing that I think that that one of the challenges I really have enjoyed here is that the you have a pretty clear picture in your mind of what you think the opportunity is and how to get there and the belief in what the results will be. but we have this large group of people that Some of them are in Louisville, some of them are in our Dallas office, some are out in Las Vegas, other people that are just remote working from home and going to job sites. There's a very diverse group of people in our organization who a lot of whom I never get to talk to face to face. and the challenge is communicating what's in your head, in your heart, to to everybody else in the organization in a way that they believe it and lean into it.

Bill Canady: Mm-hmm.

Tom Gallagher: that that is a real challenge, I think. You know, I I'm a pretty optimistic person. and I I like to think that that carries with the people that, you know, work on our team. I think that I think it's true. We've we've had like I said very low problems w with with retention or things like that. and we just had earlier this year a celebration in Dallas. We have we supported a number of people on a green card program. So we've got a lot of employees that come out of Mexico, really good skill sets out of some of the universities down there. And they've they've been a real, real key part of our you know, our ability to s to execute and grow. and the green card program's interesting. Sometimes you hear about it in the news a bit. it it is a big investment, but I will say, you know, that we've now that we've gone got our first cohort through that, the costs are are well worth it as long as people stay with you. and so the question was, you you have no ability legally to bind people to stay with you after you sponsor a program like that. They're they're free to do whatever they like, which which I think is a good thing. but but it is a little bit of a, you know, a question mark as the as a company sponsoring that and laying all those dollars out. I I was really pleased that we had a celebration dinner for the people that got through the program just earlier this year and had a chance to sit down with them and their families. we had a really nice dinner and it was just it was so affirming to me to say, yes, this is absolutely worth it. And I think, you know. Most, if not all, of those those folks that we, you know, help through that program, they're really, really all in with DA going forward. They're not going anywhere right now because they they love the work they do. They appreciate the company's interest in them personally. And you know, I I think that's certainly something that's part of the DNA of our business, how we how we operate that makes us a little bit different than some of the other people we compete with.

Bill Canady: No, it speaks volumes. The same questions that you get on that is the same thing when you pay for college education. You know, you go, you give someone a degree, and the figures tell us that something greater than 80% of people once they graduate will leave us. And and the theory is, well, why would you do it? Well, you you well, you do it because you want the best possible people, and plus it's kind of the right thing to do. So so you'll get that core and it says

Tom Gallagher: Mm-hmm. Yeah.

Bill Canady: more about who you are and what it and what it means. So I I applaud you for doing that.

Tom Gallagher: Yeah. Well, somebody else started that program. I just, you know, carried it through to the completion. For the first cohort. So I can't take I can't take credit for having made the initial decision. but I am absolutely you know thrilled that we stuck with it. And you know, we're and we're planning for our 2027 budget. We have dollars that are allocated now for the next you know five years for more cohorts to come through. and I'm really happy by that. I I think that's a that's a real plus for our business. It's it's a selling point when we're trying to bring people on board.

Bill Canady: I think so. Walk me through a distribu one strategic decision that changed where the company put its time or energy or money.

Tom Gallagher: well, yeah. So I think one of the things that happened more recently, I think the the the single biggest thing that we've done since I've I've come in has been that pivot from doing integrated business just to the just the our core strengths. But more recently, you know, with all the growth that we had, and we did we did have some leaders that came in that came from different organizations and that they they were doing things a little bit differently in some places. And we struggled. We we struggled in 2025 in some of our performance for a few, well, one particular customer. And and it was it was not pretty for for us. Our customer wasn't happy about things. I I personally was at one of our job sites working nights, weekends with our teams to help, you know. pull things out of the fire and get get up and running. which is also really educational to do. But but the one of the things we discovered in the course of dissecting, hey, what happened there? Because we literally went to one customer QBR meeting with them and they gave us they said we're doing a new sub sub supplier ratings review process and so we want to share that with you, your feedback. And they they Told us, yeah, overall, we we performed, outperformed every other subcontractor in our category that they did work with. And it was by a large margin. And there was one of their folks that was sitting next to me at the meeting, and he was just about ready to jump out of his seat because he was so agitated. And it turned out their sampling was kind of skewed to several customers, but not this one customer that we had all the trouble with. And the guy sitting next to me was responsible for that, that customer that we had the trouble with. And he proceeded to just say, well, that doesn't match my experience at all. Not in any way, shape, or form. And we we went and dissected that. And we, for some reason, the leader that we had at the time, we had a strategy for how we how we executed. Our project manager and our lead project engineer are kind of joined at the hip on projects normally. and they go from the the handoff from sales to execution all the way through till customer turnover together, those two. So they're the shepherds of the project, you know, chief executive officer and chief technical officer on those projects, the way we look at it. for this one customer, we didn't do that. We had people just running totally separate from from one another, and the execution was awful. It it just it we we failed in a lot of different ways. And so I don't exactly know why, you know, we did that one customer differently than we did the others, but that's what we discovered. And so we spent a lot of time this past year, A, writing that to follow our normal execution model for projects. And then B, we actually did our first ever middle middle management conference workshop. got all of our people from all over the country into Louisville for a couple of days, reset the the the standard for this is how we're gonna do business across every project, you know, for all customers. We also began establishing more more framework for how the some parts of the jobs are executed. And we added a a lot of communication and data management so everybody could have all the data at the same time and it was updated real time. so those were some big execution pivots that we made this year. and number one, we are we we track on-time completions. That's like one of our KPIs. So we want to have at least 95% of all of our projects complete on time. so far this year, we're 30 for 30 on-time completions. and that's probably you know $100 million worth of work. So it's it's it's quite a bit of activity. And we've got another forty or so that are in flight right now and be finishing out. So in the space of this year, we've identified problems, we've added corrections in and we're seeing the results come out on the other end. So I I think that was a pretty big pivot for us strategically.

Bill Canady: That's really impressive. How'd you how'd you decide what projects to say no to so you could get that done?

Tom Gallagher: that's that's one of those places where we've grown a lot as a business. used to be when our founder was running things, the business was not quite the same size. And even when it did get there were spikes that they would have in volume, it would be fewer very large projects. Right now it's not unusual for us to have a hundred projects going at a time. And so it was a little easier to manage which to say yes or no to in the past because you had, you know, very large, few a fewer number of very large opportunities to look at against one another. And you just say, well, if we take this on, there's no way we can take the other. It was it was a pretty cut and dry situation. With so many smaller projects that are part of the mix now, that just doesn't work. You can't you can't analyze it, you know, just with you know, kind of general rule of thumb type things. We have too many people on staff, too, too many moving parts for that to work well. So we we spent a lot of time adding resource planning into our into our well execution process. So we we ramped up a scheduling resourcing tool and we we have all of our active projects and all of our potential projects all built into this tool, all scheduled out for the entire duration of the projects, resource by resource. You know, we have literally individual people plugged into the active projects and then resource groups plugged into the potentials. And so every week we have a resource. In fact, I've got one right after this session with you today. We've got a resource scheduling where we'll go back, we'll go and look at the latest forecast. We'll look at our latest opportunities and say, well, if this comes in, what happens? If that comes in, what happens? you know, what do we have room for? What do we not have room for? And so on a weekly basis, we're looking at our resource six months, a year out, and saying, what does it look like? And can we do it? And one of the things that we've done a lot over the last two years because we've we've implemented this is we've gone to customers that have asked us a bid work and said, Hey, we we can't do the work on that schedule, but we're gonna give you a bid for the work because sometimes and it's not unusual in our industry for schedules to change. And so we said, if your schedule changes, if this gets pushed or if it gets pulled forward, let us know. We'll take another look and see if we can fit that into our our game plan. so our our resource planning activities really ramped up a lot. And that's that's the that's the thing that drives our decision. It's all it's it's very data-driven now.

Bill Canady: That's really impressive. Who owns that work planning everything?

Tom Gallagher: it falls under our VP of operations, but it's a collaborative effort with the VP of Operations, our engineering, VP of engineering, and we also have our HR director sitting in all those discussions as well, week to week. And just this morning we had a meeting and we were talking about a very large opportunity that we may have to staff up for. And that we're not gonna have to actually have that staff on board for another three or four months. But we've we actually this morning agreed we're gonna open up vetting of candidates now and start to line those folks up so that

Bill Canady: Martin.

Tom Gallagher: we can pull the trigger and get them on board quickly, you know, after the first of the year, once we can confirm this opportunity coming in. So we've gotten a lot better at it. You know, I I I don't fault the way the the organization was run before because They did everything that they needed to do to to make the business successful and grow it. You can do certain things very well a certain way for a certain period of time, but then you get to a level that those things don't work anymore. And that's kind of where we were. We've we've kind of had to get up over that threshold and put the new framework of how to do things in place.

Bill Canady: that makes sense. Once you implemented that framework and you started going, what did the what changed in that next ninety days? What what did you see different?

Tom Gallagher: a lot more people feeling comfortable taking initiative on things. The the the framework of how to do, how to make the decisions was was really effectively communicated out to our our mid-level leadership. They understood much better what their role was and how they fit with the other you know leaders in the organization. And so we started to see a lot more collaboration proactively without us having to push it. we had, you know, the the Amazon lead engineer talking to the Amazon account manager in sales and the Amazon PM project management team, just doing it themselves to say, hey, what are we gonna do about this one or that one or how do you wanna handle this? the collaboration just got so much better. And we saw it like right after we we had our management leadership workshop. we we began to see it because you know we we live in a pretty virtual world, you know, evidence right here, what we're doing today.

Bill Canady: yeah, we live on these things.

Tom Gallagher: But you know what? it's a funny thing when you bring people together face to face, all of a sudden

Bill Canady: Mm-hmm.

Tom Gallagher: the relationships they get a little tighter. Everybody gets a little bit more comfortable, the communication starts to to blossom. And we

Bill Canady: Mm-hmm.

Tom Gallagher: saw that with our with our leadership workshop.

Bill Canady: Yeah. Mm-hmm. That's really impressive. Let's change gears and talk about the succession that's coming up. I believe gentlemen is Austin. So how did you and Austin decide what you were going to divide while you're going through this?

Tom Gallagher: Yeah, great question. So we had we had gone through a transition, you know, just two years ago, really, from the founder to myself. And he and I had mapped out, you know, how we were going to do business, you know, who was going to be responsible for what at the beginning of the year. And we had we had come to the conclusion that We were gonna announce in January and we were gonna begin to progressively have the incoming person be more and more the the person in front of of the staff or issuing messages to staff and the the the parting person having less and less activity in in things. And by June, we said in in our case we we pushed it to july because of some logistics. We said by July first, we wanted the incoming lead team to be really running things day to day. and I I have a responsibility, you know, P&L responsibility to to our parent company through the end of the year. So I retain all signatory and and I kind of financial related decisions above a certain level until we get to the end of the year. but we and we communicated that to our customers, we communicated that to our staff. And so even smaller things like you know, we have we have a leadership huddle three times a week. so at the beginning of July, Austin began running those meetings. I attend them, but I'm not running them now. physically. I I work here in the Louisville office. I I normally would go in every day, you know, for full days. more and more this latter half of the year, like this morning, I I work part of the day from home. I go in for a little while. So physically people don't even see me as much. They still see me, but not full day, not every day. And you know, it all of those things are little small clues and cues that people pick up on. They see the transition physically, they see it in meetings, they see it in messages and communications. So we've we've been kind of careful and intentional about how we're doing that. Like in this Q four all staff meeting that we had, Austin and I started it, and then I after the introduction, I stepped down and I came back and said a couple of words at the end of the meeting, but I said nothing for the majority of the hour that we had that meeting. And

Bill Canady: That's really smart.

Tom Gallagher: Yeah, I think it I th all those little things, they really matter. You know, people pick up on cues even when they don't necessarily realize it. You know. I think there's there are things that just happen the w the way your mind works.

Bill Canady: When someone goes around him and calls you, how do you handle that?

Tom Gallagher: I I like to loop him in immediately, you know, and remind whoever I'm talking to, hey, this is something, you know, you want to make sure Austin is is in the know about this because he's gonna be the guy that's gonna be, you know, working on this with you, you know, once we get past the end of the year. So and you know, most people are pretty good about that. And and Austin is very responsible and responsive. So as long as as long as the people that call me get what they're after. They don't care, you know. And I

Bill Canady: Yeah.

Tom Gallagher: it it's a small thing for me to say, just do a little training and say, Here's here's the person, here's the person, here's the person. And you know, that I I I think that works out pretty well.

Bill Canady: No, it I've gone through transition myself on both sides and you're it sounds like you're doing it great. What can he change today without needing your blessing?

Tom Gallagher: well he changes things like how we're going about doing our execution work now, because We're continuing to build the team. We're continuing to kind of evolve as we're going along. So we have some different needs with things like we've got parts of our organization that report up under a particular VP that they could report up under two or three different areas. if if he sees fit to shift those things around, as long as it doesn't impact our our bottom line dollars for this year. He's free to do those things. And and Austin has actually put a few things in place already, you know, that that will are different f from the way that we have been running. And, you know, I think those have been good things. you know, we talk about it. It he's not doing things in isolation, nor am I. You know, I think i

Bill Canady: Nothing.

Tom Gallagher: that to me is kind of the the key with all this is we I think we both appreciate the fact that he's got different relationships with people in the organization than I do. You know, be he's been with the company for quite a while as well. So there's a lot of benefit in hearing that perspective from somebody that that has different conversations than I do. And same thing for him. So I yeah he I I I feel like he's got a pretty free hand as long as he doesn't, you know, sign us up for a contract that I'm gonna hear about this year. you know, or you know, fire fire somebody that's gonna blow up the business or, you know, make some, you know, additional hiring obligation that's gonna hit our our you know, P and L this year. and he understands that pretty clearly and he he he respects and understands the you know the reasons why. So And and it's just more evidence of why he's the right guy to be moving next. He he gets it. I don't have to explain all those things to him.

Bill Canady: That's fantastic. how can you tell when you're staying too involved at this point?

Tom Gallagher: I I think, you know, we and you've been through this, so you know that this is one thing that happens. Inevitably, someplace along the line, there's some tension. There's a little bit of a power struggle because you you hit an area that you hadn't really talked about. You you find out that somebody made an assumption that hadn't been discussed and it's not what you had been picturing. When when we've when and and really that's happened relatively few times over the past year, once or twice, maybe twice, I think, that that I can think of two different, you know, times when we got into a place where there was tension, you know. And and I I spent some time thinking about that. I thought, how did we get here? this is a person I really, you know, am sure was the right pick and why do I feel like I'm having a struggle now? and you know, so I thought about that a little bit and there's a piece of it that is there's you know, just on a personal level, y y I'm at a place in my career, I'm so far down the road in life, and I'm in a different life position than Austin is. He's got a he's got a a daughter that just turned one. you

Bill Canady: Wow.

Tom Gallagher: know, I've got a granddaughter that just turned two yesterday. So we're we're we're at different places. And

Bill Canady: yeah. Well, congratulations, by the way.

Tom Gallagher: yeah, yeah, we're we're enjoying all that and we're we're blessed for sure. But but there there were a couple of places where we got there and I thought, you know what, in some ways I Austin is the same age as some of my kids, you know. And they're they're all fully grown and very responsible. You know, they're in Austin's at that stage of his life where he's really hitting his stride. And, you know, some of it I had to think about, well, if it was my son who I really know, I mean, I know Austin pretty well, but not as well as my own son's. And I I thought, how would how would this go if I was working through this with my son in Austin's place? And that was helpful, you know, I think because You know, it it opened my eyes to a couple of things that I hadn't I hadn't really thought about. And that's really the big driver for any of these tension spots we hit where I maybe feel like now I'm now I'm too involved. I didn't really think it through well enough to to to position us the right way ahead of that bump that we ran into. We got through it quickly, but The reason it happened was because I didn't prepare adequately. You know, and and then I felt like now now I'm too involved because I didn't do my job right a couple of steps back. So I mean, since you can't go back in time, you clean it up and you try to, you know, be make sure you own it with whoever you're working with. And I think that usually is appreciated. You say, look, look, made a mistake, my fault. Let's let's figure out how to go forward. And that that generally works pretty well.

Bill Canady: That makes a lot of sense. What'd you get wrong about the leadership change and what'd you do about it once you realized it?

Tom Gallagher: Well, I made a couple of assumptions about how well some of the the incoming leaders understood the dynamics of our relationship with with our parent company, with our relationship with some of our key prime contract partners. and so one of the things that came out of that is we we w you know we had we had a pretty tense project. They're they're on a s a strict timeline and if if things don't happen on schedule, it becomes a problem pretty quickly. And it's not unusual, even with very good partners, for some finger pointing to happen and people on both sides to say, Well you didn't do your job. You you should have done this, you should have done that. And the Helping helping our lead team understand, A, that those things are gonna happen. And B, you know, here's some ground rules for how to deal with some of those, you know, those situations and people that are involved. those were a couple of things that I didn't prepare our our folks well enough for on the front end. and so, you know, I I guess fortunately we've we've had some of those. triggering issues, events occur, and it's been an opportunity for us to sit down together and talk about it and cover some of those gaps in the information. we had this happen just within within the last three or four weeks. We had one of our very, very close partners it's just been it's been a struggle. You know, we we want to serve them. they have some expectations for us that are difficult. And we're trying to balance that against serving them, you know, performing financially, keeping the customer happy and meeting all of our other obligations at the same time. You know, you're always, you know, you know, kind of working that that set of dynamics. And so w we got into some tough spots and this was a good opportunity for our new lead team to to be directly involved in those discussions. And they saw some things that I I know for a fact now that they didn't they weren't aware of prior. And you know, so I was glad that we had a chance to hit some of that stuff before you know, we're on the other side of January. So you know, that they they experienced it first hand. We had a chance to talk about some things. We had a chance to talk about, well, here's some things you might think about or try. Yeah, as you as you kind of navigate those waters. So that was that was

Bill Canady: I see

Tom Gallagher: that was probably one of the places where yeah, definitely could have done more. No no question.

Bill Canady: Getting ahead of that really makes a big difference. For a CEO getting ready to go through their transition with retirement or to the next role, what should they do the first hundred days once that decision is made to make sure that the incoming has the best chance to be successful?

Tom Gallagher: I I I think, you know, number one, y y y hopefully you're doing things in a fairly orderly, consistent way. I I think that's a that's kind of a core core requirement for for good leadership. Is that you the people that you're working around should already be really familiar with if I get into this situation, Tom's going to react this way. Or if I tell him this is the challenge, he's probably going to tell me to to do these two, two or three things. I think a lot of it for me is you know, well in advance of your you know retirement. Anytime it's it's it's necessary to be to have good. secondary you know leadership you know the rest of your executive team and the people below that consistency in how we do things and making sure everybody understands that framework is really really just core because whether you're leaving tomorrow or three years from tomorrow it's gonna help your business run better because people You can't you're you can't be present for every challenge, every decision all the time. Stuff happens. And so if your people understand well enough your framework for how to make decisions, they can come pretty close to doing what you would have told them to do. You know, to me, that's a that's a really big building block whenever. If you do that well, when you get to this place where you're ready to hand off, you look around you and you say that that person gets it because they already they already understand how I'm doing things. And then then the challenge is more about what are the parts of my job that people don't know about? You know. And you know, I spent some time kind of walking through that and saying, okay, they they don't know about this discussion I have with the parent company, they don't know about this requirement, they don't know about this challenge we've got with the ownership at company XYZ. You know, who are the people that I personally relate to with some of these outside entities? You know, I have to I have to come up with a game plan for making those introductions and starting to build those relationships with the new person rather than me. those were kind of the big things for me that I came up with. What do they not know about already? What do I need to explain to them? Who do I need to make sure that they're connected to? and and do whatever I can to help that those other entities, people, you know, get comfortable with this incoming leader. I I feel like that's as a CEO, if you want good continuity. making sure it's tied together internally and externally. Those are pretty big deals.

Bill Canady: So Tom, where can people go to learn more about your work or or you if they'd like to connect with you?

Tom Gallagher: well, you know, our business, diversified automation, you can go to our website, always that's that's a good place to kind of get a general idea of what we do. that's diversified-automation.com. And for me personally, I guess my LinkedIn, you know, pages is up to date. That's always a good way to connect. I get a lot of people message me that way. And if you're ever in Louisville, Kentucky and you'd like to get together directly, get my contact on LinkedIn and let me know you're coming. And we'd love to sit down, grab a coffee or or a bite to eat with you.

Bill Canady: That's very kind. Tom, thank you so much for walking us through the decisions and work behind a leadership transition. For every leader listening, here's a question to take back to your team. If you stepped away, would the priorities be clear? Would people know who decides? And would your customers still feel taken care of? Pick one responsibility this week. Make the outcome clear. Give someone the authority to own it and agree how you'll be measured on the progress. If this conversation was useful, follow the Thousand Day CEO and share it with another leader. You'll find more tools and resources at billcanady.com. All of Tom's information will be in the show notes of this, his links to his business and everything he talked about. So again, Tom, thank you so much for today. This is a fantastic conversation.

Tom Gallagher: That's cool. Thank you. I learned a few things along the way. Thank you for that.

Bill Canady: You betcha. All right.