In this episode of Tank Talks, host Matt Cohen sits down with Mike Mahannah, partner and advisor at Resonance Consulting, to unpack nearly 40 years of building businesses in Western Canada. Mike shares his path from a prairie upbringing and an engineering degree to becoming a partner at Olympic International in Vancouver, a five-person HVAC sales agency above a fish plant that grew into the market leader. He walks through the 10-year internal succession plan he used to sell the company to its employees, and the hard lesson he learned when a formula-based valuation failed in a downturn. They also dig into the second chapter of Mike’s story: buying Scott Springfield, a Calgary sheet metal job shop, for $1 million in 1990 and turning it into a custom air handling manufacturer. After landing Amazon Web Services as a customer, it grew from $20 million to $160 million in revenue in four years and sold to Modine for $260 million (about 10.5x trailing 12-month EBITDA). Mike explains how he earned a trusted-partner relationship with Amazon, why he sold a future instead of a past, and how he built a culture where mistakes are shared, celebrated, and learned from. He also opens up about straight talk in coaching, his biggest blind spot (firing too slowly), and why planning your exit is the thing most owners get wrong. Whether you’re a founder thinking about succession or an exit, an operator chasing enterprise contracts, or a leader trying to build a healthier culture, this conversation is full of practical lessons from someone who has done it twice. From Prairie Boy to Partner at Olympic International (01:00) * Growing up in Alberta, the oil patch, and the pull toward engineering * Moving to Vancouver in 1978 and joining Olympic International in 1985 as the sixth person at the firm * A small HVAC sales agency selling to pulp mills, mines, hospitals, and large office buildings * Why he bought in for the partners and the relationship, not just the business * Early lessons: grunt work, technical credibility, and hiring people who are both competent and a good fit * Growing the firm to 80 people by his exit, and 115 and counting today The 10-Year Succession Plan: Selling to Your Employees (05:09) * Why a sales agency can’t be sold to private equity: if the salespeople leave, there’s nothing left * Selling equity in 5% increments to key employees, many of whom took second mortgages to buy in * Why “a path to ownership” became a powerful pitch for attracting top talent * Why most owners never plan their exit, and why many cling to 51% for control * The “secret sauce”: using the shareholders’ agreement to keep influence over the board while reducing his stake, until the company could buy him out of its own cash * Planning to keep enough cash in the business for the buyback Valuation Lessons and the Culture Reset (09:46) * Why a formula-based valuation backfired: it grossly undervalued the business in a downturn * Moving to a professional valuator, used only when a transaction is pending * Why Mike wouldn’t change anything about how he executed the succession * The culture reset 15–20 years in: strategies kept failing because the culture wasn’t pulling in the same direction * The three pillars of the culture: win-win-win, communication, and integrity * Why choosing a culture attracts some people and ejects others Buying Scott Springfield for $1 Million (14:00) * Acquiring a Calgary sheet metal job shop in 1990 as a defensive move to get into custom air handling * Teaching them to build quality equipment, starting with a first unit for Lions Gate Hospital * Converting the business from a job shop to a custom air handling manufacturer Landing Amazon and the Data Center Boom (16:19) * Spending over a year proving quality and trust before the volume came * Funding a second plant with personal capital in 2015 after the original plant filled with one contract * Roughly $10 million per giga center order, and never missing a delivery date * The setback: the intermediary pulled out after the plant was built, leaving a new plant and no customer, at a cost of around $3 million * Turning that setback into a direct relationship with Amazon Playing the Long Game on Enterprise Contracts (19:46) * Three gates: engineering and quality control, the buyers, and the legal team * Why Amazon’s one-sided contracts were tolerable after three years of working together * Insisting on a partnership instead of a transactional relationship * Listening for what each stakeholder cares about, including internal politics, so they look good too Selling to Modine: Timing, Process, and Culture (23:28) * Growth from $20 million to $160 million in four years, and why a 12-month EBITDA multiple made sense * Selling the Amazon relationship as part of the asset, and how they handled customer concentration * Why now: the shareholders were at retirement age, and a third plant would have cost $15–20 million * Choosing Engel Advisors, a Detroit boutique, after interviewing seven M&A firms * Preferring an industry buyer over a financial one, and why Modine’s commitment to keep the culture and team won out * The call with Amazon and Modine, where Amazon said Scott Springfield was its best supplier * Mike’s advice: hire a good advisor and sell the future, not the past Never Waste a Mistake (30:28) * Why Mike treats every mistake as an ineffective action to examine, not a personal failing * How hidden mistakes were costing the company, and how he shifted the culture by sharing his own first * Putting $20 on the table for the juiciest mistake of the week * Why one mistake shared can educate 25 people * Where the line is: repeating the same mistake, or three strikes Straight Talk, Blind Spots, and Firing Faster (35:00) * Why Mike hired Resonance Consulting while he was still CEO * Coaching founders who hide behind their numbers * An example of two partners who didn’t realize they were talking down to their staff * Why people self-correct once they see their blind spot * Mike’s own recurring mistake: being too slow to fire, and what happened when he finally let his top two salespeople go Life After the Exit (40:24) * Why planning your transition out is the area where owners are weakest * Having a great life while building a business, instead of sacrificing it * Why retirement should be about staying on purpose, not putting your feet up About Mike Mahannah Mike Mahannah is a partner and advisor at Resonance Consulting, where he coaches founders and operators on leadership, culture, and succession. Previously, he was a partner at Olympic International, a Vancouver HVAC sales agency that grew to 80 employees under his ownership and is now the market leader, and owner and president of Scott Springfield, a custom air handling manufacturer with $160 million in revenue and 550 employees that he sold to Modine. He grew up in Alberta, studied engineering, and has lived in Vancouver since 1978. Connect with Mike Mahannah: linkedin.com/in/mike-mahannah Visit the Resonance Consulting website: https://resonanceconsultinginc.com/ Connect with Matt Cohen on LinkedIn: https://ca.linkedin.com/in/matt-cohen1 Visit the Ripple Ventures website: https://www.rippleventures.com/ This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit tanktalks.substack.com
