David Baker (Think Shift)

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David Noël:  Hello and welcome to the Manitoba Business Podcast, featuring interviews with business leaders and entrepreneurs based in our wonderful province. I’m David Noël.

Today’s guest founded a company called Think Shift, which is a full service marketing agency with a twist. In addition to being the marketing brains behind mega-brands like Monsanto and Cargill, Think Shift has begun to position itself as a leader on the subject of leadership. Our conversation steps through the entire genesis of the company, including the prospect of leading the leaders.

If you enjoy today’s episode, and I hope you do, please consider adding a review on iTunes. Positive reviews will have a big impact on the success of the show. Of course, please don’t be shy about sharing the show with your friends as well—the website is www.manitobabusinesspodcast.com

Without further ado, here is David Baker:

[to David] Thank you so much for coming on, David. You were telling a little bit about that you got started in the web marketing side of things. Can you give a brief overview of what the beginning looked like?

David Baker:  Going back 18 years?

David Noël:  Exactly, yeah.

David Baker:  Before I started Mars Hill, I was with the Winnipeg Jets, in sales and marketing. What I wanted to do when the Jets left to go to Phoenix, I really wanted to start an advertising agency, so I started Mars Hill as a full service ad agency.

David Noël:  Why did you want to start in that agency?

David Baker:  I had always loved to create. Going back, I went to a school for public relations. I love the idea of creative and coming up with ideas, even television commercials, and even using humor, but just getting connected with people. I like the connectedness that advertising provides.

David Noël:  This was the late ’90s. You were starting an ad agency and why not start a web agency? Was that the thought?

David Baker:  We had actually moved into the web it was ’96. I started the agency trying to get businesses. Any time you start out, its really challenging. You need revenue, so you end up taking whatever you can get. From the agency business it was a pretty tactical area, some small brochure, newspaper ads. The newspapers, they’ll mock up all the ads for you.

Those printing companies were doing desktop design. It was very difficult to get much margin and never mind even the business. We’d get a little bit, but the opportunities that kept coming up were web based and so it’s, “Do you make websites?” “Absolutely,” so we’ve got to be able to figure out, “How do I make a website?”

The first person that I hired was an HTML coder, and because he knew HTML and this is websites, “You do design too, right?” “Absolutely,” because he knew how to use Photoshop. I just didn’t know any better. You start working and building some websites. It was challenging, because nobody had budgets allocated for websites, so you really had to do two sales.

One was this idea of trying to convince somebody to build a website and then they say, “OK, I guess I need one.” Then the second sale was, “Can you pay me enough so that I can pay my staff?”

David Noël:  That’s really tough when you need to educate your clients as well as selling to them.

David Baker:  That’s way back a long time. We grew a little bit, making small websites.

David Noël:  How did that happen? It sounds like you were just, by sheer force of will, pushing the company forward at the very beginning. You were I guess the sales person for the company.

David Baker:  Yeah, I was the salesperson.

David Noël:  Were you just cold calling people or how did you build the result?

David Baker:  It was cold calling and was just networking, predominantly. People that you knew. I was the salesperson, the project manager, the accountant.

David Noël:  It eventually started growing. What did the growth look like in the first few years?

David Baker:  It looked like hiring the first staff member. I then hired a part time designer, was the next person. I think we got up to four people. The year after I hired another programmer. We grew from an IT perspective, not from a marketing perspective.

David Noël:  I see, so you were building an implementation team, basically.

David Baker:  Yeah, in hindsight. I didn’t see the difference at the time. I needed to hire people that could help us deliver the thing that we were selling, which was…

David Noël:  In that case, if you were building an “implementation team,” was it you that was then actually doing the messaging and stuff like that?

David Baker:  Right. I would do some of the writing. I’d work with some of the clients to do some of the writing. We didn’t really get too involved in content creation. We were more about housing this infrastructure that they’d put content in. Then we moved into the place. We needed a content management system. There weren’t a lot of them, so we built our own content management system.

David Noël:  This was before the days of WordPress or any of that stuff.

David Baker:  Exactly. A lot of web development firms did the same thing, where you get your own system. But then you’ve got all the challenges. They change your browser, a new browser comes out.

David Noël:  Now you’ve got this system that you need to update forever.

David Baker:  Absolutely. Then new systems are coming out. It was challenging in and of itself, just the idea of a content management system. Then you get into hosting…we bought a bunch of servers and we rented space at the TV center so we were on fiber.

But now you’ve opened a new challenge. You’ve got a 24/7 hosting issue. Then you start to build your own programs to allow the websites to do things that clients want to do. Again, you’ve got all this legacy code that you’ve got to look after, most of which comes without the attachment of revenue, because you hadn’t thought it through, or we hadn’t thought it through.

It was like so many things. You get in and you understand more and more about it once you’re in.

David Noël:  Circling back, then, we’ve identified all these challenges that you ran into. Were you anticipating that going in, or did you just think “I’m going to sell marketing services to people”?

David Baker:  I had no idea. No, I really thought that we could open an agency and I’d be able to sell creative ideas that provided leverage for clients and that they would pay me to do that.

That is true to the extent that you can get paid for it and that you can stick to your guns in terms of the leverage it’s going to create. There’s a downward pressure on ideas, to commoditize, because something that’s risky or is going to move the mark also carries with it a challenge, and what does it misses.

Then in the early years while you’re being driven by a need for revenue, which a lot of times you end up doing is doing what the client wants you to do. “Tell me what I should be doing.” Then, you do that, but you are providing any leadership at that point. What you’ve done is you’ve commoditize yourself.

David Noël:  I can certainly identify with some of the challenges you’re facing, things that I faced in my [laughs] little software company, other people have probably faced. Even outside of marketing, they’ve probably faced these challenges in their own businesses. You realized that instead of being the boss, you have found yourself that a bunch of little bosses, basically in your clients.

David Baker:  Absolutely. Yeah.

David Noël:  How did they make that shift of being like you said a leader, someone who’s actually counseling the clients on what they should be doing?

David Baker:  I could tell you I would make that shift a lot sooner, or try to make that shift a lot sooner. It really happened, when we merged with Bulman Communications Group. Robert Bulman and David Lazarenko were the two partners there. Because they really understood the agriculture industry, they had a deep understanding at a very specific industry.

When we merged, I saw how they operated, in terms of…they were in the company’s sales meetings. They helped to author the marketing strategy. It wasn’t like, “Here’s our strategy. You go do this. Here’s a brochure. You go do this.” They put themselves in a partnership position with the company. This allowed to them, to create a whole bunch of more value.

When you started to produce things, you are producing with a clearer purpose. We started to focus this notion of intentional culture that I mentioned. We set within our intentional culture. One of our key pillars for us is going to be client intimacy. We need to spend money, time, and effort in understanding our client’s business, and the industry that they work within.

In the absence of knowing the client, and the challenges that they face, it inhibits our ability to create value. It moves us to a place observing a commodity market. That is a strategy that may be fine, observe the community market. Do it better, than anybody else. That is the strategy that says, “We’re going to make profit based on being able to do something cheaper, than the next guide, which is in a lot of cases, well developed.

What we said we want to do is know our clients, so that we can create new value that they’re willing to say, “I’m going to give you a sub set of that value.” That helped us increase margins, which helped us hire better people, which helped us do a better job. You really created new cycle of growth, instead of a cycle that is chewing down on your margins.

David Noël:  I could see how. If a client believed that you had some insight into their industry, and that you were providing them with fresh ideas, they would be willing to give you the lead. A question mark that comes up is A, how do you get into that position of knowledge, and B, how do you communicate that to the clients, so that they trust you to do it?

David Baker:  Both are challenging. Are you going to make the investment, in terms of learning the knowledge? You have to acquire the knowledge. Then, you have got to show that you are able to provide some leverage. We do a number of different things. We do a lot of content creation now.

There’s the four principals here. Balaji Krishnamurthy, Chris Bajenski, Dave Lazarenko, myself, we do a lot of speaking. We go out publicly speaking, sharing some of the things that we think we see. If you have some of the challenges that we’re talking about, it might be challenge with the end of culture. How do you connect with the millennials?

It might be a challenge of, how do I move online in a significant way, how do I change my value proposition in how I’m serving? If you have one of those challenges that we’re actually speaking about, then often, you’ll get invited in to typically, at the C suite level. That’s the way that we try to operate

David Noël:  When you started out those Mars Hill, and then you merged with Bulman Communications?

David Baker:  Right. Five years ago.

David Noël:  Five years ago.

David Baker:  Four to five years ago.

David Noël:  So around 2010?

David Baker:  Yeah.

David Noël:  At that point, they had already established some expertise in the agriculture vertical. Is that right?

David Baker:  Right. They were a small ag agency focused really on this area, the heartland if you will.

David Noël:  Maybe digging into that a little bit, how did they initially build that credibility that got them the invites into the C suite?

David Baker:  It’s like most organizations. When I started, we had the opportunity with web development sites. We grew in that expertise because we need to eat. In Bulman’s case, they started off. Robert, he had been with McKim at the time years ago when we were national agency.

One of the clients that he had, I don’t know if he had at McKim, but it was Cargill. They started to work with Cargill. They just grew their understanding of the ag industry based on that single client, which then let other clients in the industry.

David Noël:  They had one client that they were able to make inroads with and they learned about the industry. That makes sense.

David Baker:  It was an anchor if you will.

David Noël:  Interesting. I guess you were at Mars Hill and you saw Bulman across the way. What series of events led to the merging of those two companies?

David Baker:  One of the things that we did at Mars Hill was we started to work for a number of advertising agencies. That’s how I met Robert. What would happen is the advertising agency would have the client relationship. They’d be working on the strategy and the brand piece and then knead back in fulfillment if you will on the creation of web.

We were doing this for a number of different clients, agency clients. However, that creative itch that I always wanted to scratch, it was difficult because then I couldn’t go compete in the agency business with the clients that I have.

Things came into a head one day. I had to make a decision. Do I want to grow the business and step out and compete against all of these companies or am I going to stay as a supplier, as a vendor? We were getting treated, we were a vendor. We were getting commoditized, our price was being pushed down, more and more marginalized.

I did not see the opportunity to grow with that field. Challenge is the number one motivator. I don’t know if you’ve seen that. People want to know, “Can I be challenged in this job? Am I going to get things to do that I don’t know if I can do them?” They want that challenge.

The best people, I was unable to attract by and large. I did attract some great people, but they were hard to keep because they wanted more challenge. The more that we got commoditized, the more my margins went down, the more I’d lose good people.

I really came to this crossroads where I had to say, “OK, are you going to jump beyond, do what this change that is going to mean as an agency, you’re going to have to have great abilities on the web and market, your Internet marketing and abilities in house?” That’s what I felt.

When this opportunity came up, Robert wanted to step back a little bit. I said, “This is going to provide a good opportunity for us.” I called Robert, went for lunch. Over the course of about six months, we went down to an arrangement that worked good for both of us. He stayed for two years. Then, he’s now semi retired.

David Noël:  Very cool. That obviously also around the same time as when the name changed to Think Shift, right?

David Baker:  That’s right. We left things as BCG Mars Hill for about a year as we tried to figure out who we are and who we’re going to be when we grow up. That’s when we decided the new identity and the new ethos is around changing the way that people think, both in terms of the culture within an organization and the way that they communicate. That’s the Think Shift.

David Noël:  Then you had this penetration into the agriculture market. I know that since then, you’ve expanded into other verticals. How did you replicate that process of getting inside into an industry and then jumping in?

David Baker:  You got to be intentional about choosing the vertical that you want to work in. Then, you need to hire people that have a passion to be in that industry. You have to invest in training so that people understand. It is simply an investment of time and energy. You need to do it before you need it. Otherwise, you can’t provide that value.

David Noël:  I know that on the Think Shift website, you see brand, culture, and…what are the three pillars on the site again?

David Baker:  Right now, it would say brand, culture, and leadership.

David Noël:  Brand, culture, and leadership, right. Why those three?

David Baker:  Those three things, if you look at the way that the world is changing, that brand is how people on the outside think of you. Culture is how people on the inside think of you. Those two are linked. This isn’t my idea. There’s a fellow named Bob Mumford who says, if I have the mumps and I tell you that I got measles, what will you catch? If I have the mumps and I tell you that I got the measles, what are you going to catch?

David Noël:  The mumps.

David Baker:  You’ll catch what I’ve got, right? Not what I say that I’ve got. The marketing industry used to be all about broadcast, broadcast, broadcast. Let me just tell you this about ourselves. Things have changed. The world is so phenomenally small today. You will get what I’ve got extremely quickly.

If you want to truly build a brand, you’ve got to back up into “Why do you do what you do.” Get serious about purpose and then ensure that your vision and your mission and the values that you hold are truly whacked out. A lot of people wouldn’t say that’s a brand exercise, but it is. It is the heart of an organization.

You’ve got these two pieces    brand and culture. They’re driven by leadership. The leader of the organization, if she doesn’t get that this authentic and purpose needs to be created, then it’s a marketing exercise. There’s nothing wrong with marketing. You have to do that. It’s got to come from a place of purpose.

That’s why we talk about leadership. We train and help build leaders. Not to say this is how you lead. We’re not prescriptive that way. We are saying that you’ve got to be intentional. Find a way to intentionally create your leadership style and your brand and how you influence people. Then, use that to inform your culture and to inform your brand. That’s the consulting piece that we offer.

We help them. If you’re going to develop brand and you need communication expertise, now we’ve got a full team of programmers and writers and social media folks and designers. That’s all now in house. We’ve got about 70 people here.

David Noël:  Is the consulting piece and part and parcel with the marketing? Do you always sell them together now?

David Baker:  We don’t. Every organization is in different places. That is our brand process, we would say. This is how we want to develop brand from the notion purpose and coordinating, aligning vision, mission, and values.

However, we have a number of clients that we work on, the communication piece, that’s already been done. We’ll work on creative or we have clients in e commerce that all we do is just manage their site, and inventories, and what have you.

David Noël:  How big is Think Shift now?

David Baker:  We’ve got two offices, 68 people.

David Noël:  68 people, wow. Two offices. I had noticed that your second office is in Portland.

David Baker:  Right.

David Noël:  Tell me a bit about that.

David Baker:  Portland is a beautiful city and warm. Our partner Balaji Krishnamurthy is in Portland. His office was in Portland. His focus was and is intentional culture. He’s the chairman of Think Shift today. When we went through another merger, as we saw this opportunity to influence brand based on leadership and intentional culture, it was a great fit.

He really helped us through this transition. What happened is we started to work with his company in a partnership model to help other companies with the brand and culture piece. We saw it was so effective that we said, “We should merge these two companies,” so we went through this second merger.

We’ve got the office in Portland. We do consulting out of here, as well. We travel back and forth a lot.

David Noël:  How did you initially come across…sorry, what was your partner again?

David Baker:  His name is Balaji Krishnamurthy.

David Noël:  Balaji, OK. How did you come across him?

David Baker:  I saw him speaking. I went to an event. He was the keynote speaker. I went up and talked to him afterwards. We just struck a friendship and then started working together. From there, I went to a seminar that he puts on called “L Cubed,” which is this three day leadership course.

It doesn’t teach you, but it helps you author your own leadership agenda. Understand who you are today, and who you want to be in the future, and how you really want to influence people.

David Noël:  Where do you see that going? Obviously, there’s a lot of value in the leadership consulting role, and there’s a lot of value in the communication services that you provide, but I get the sense that you see a trend, a bigger trend that you’re shooting for. Am I right in that?

David Baker:  Absolutely. I think that is where the world is going. The pace of change has been so dramatic over the last number of years, and that pace is just going to continue. Really, it means that we are going to live in a world where there is no continuity.

If you don’t learn to deal with change and not only deal with it but leverage it, lean in and understand that your capacity to take advantage of change is what’s going to determine whether you’re successful or irrelevant. One of the key components in that is the fact that brand and culture will become synonymous. There will be no difference between brand and culture.

What an organization will need to be able to do in order to attract the best people and provide value is have an excellent culture that gets you the people, that helps you get the people that you need to produce value. We have to be totally transparent. Leadership is going to be the component that drives that.

You will see that leadership is going to be critical to your communication strategy, and leadership is critical to your brand strategy. Right now, back up and get them clear so that you can leverage change. If you don’t do that, I think companies are going to get left behind. I don’t think you need to look much further than, say, the Blockbuster/Netflix comparison.

Netflix said, “Things are really changing. We’re going to create a new delivery model. We’re going to create a new revenue model.” Not to oversimplify, but I think Blockbuster said, “Things are changing, and we’re going to give you no late fees for seven days.” They stayed connected to their current model.

You need to really change the way that you think completely. You’ve got to back up, and you need to rethink it. That is this merger brand, and culture, and leadership.

David Noël:  How does that translate into your organization? It sounds like you’ve put a lot of thought into what the Think Shift ethos and vision are going to be. How do you communicate that, and how do you attract the right people to be part of that organization?

David Baker:  It’s challenging to communicate that. As people, we have buckets we’ve got to put things in. If things are new, I don’t have a bucket to put it in. You go, “Wow, this doesn’t make any sense.” Some people see this, and they’ve got to clear the bucket.

Zappos is a great example. Zappos saw this well in advance, and they moved from being a shoe store to selling happiness and really saying, “We are going to sell happiness, just customer service.”

David Noël:  They’re also a really interesting example of culture and brand being synonymous. They were and are known all around the world for their culture, and that pushed out through their customer service into their brand.

David Baker:  Absolutely. You see that this isn’t completely unique, but a lot of people don’t see that. What we need to do and it’s challenging, is communicate the larger idea of change and how do you leverage change. That’s what we’re trying to do, is say that we want to work with companies that really want to step back, and learn how to leverage change, and need some help to do that.

In terms of how do you get the best people, we market positions, we market our ideas, we market our content in the hope that like minded people say, “Hey, that’s a place that I want to work. Their purpose is the same as my purpose.”

David Noël:  It seems to me that leadership can’t just be a one person thing. First of all, is that a good assumption on my part?

David Baker:  Everybody gets to define that on their own. One of the things that we try to do is not be prescriptive. I would like everybody to get a definition of what leadership is and get clear in their own minds. For me, this idea of leadership is pretty straightforward. You can look at all the different leaders in the world.

If I asked you to name a bunch of famous leaders, name a few for me.

David Noël:  They’re all going to be out of software. Steve Jobs, Bill Gates, Mark Zuckerberg, Larry Page.

David Baker:  Sure. There’s four of them. Effective leaders?

David Noël:  Yeah, for the most part.

David Baker:  Did they lead the same?

David Noël:  No, not at all.

David Baker:  Not at all, so they were all unique. If you move away from the idea that there is a template that a leader needs to follow and embrace the fact that every leader is going to be different from Larry Page, to Bill Gates, to Gandhi and Pierre Elliot Trudeau. They’re all completely different. What happens is leaders develop their own style.

To the extent that you can be really intentional about that as a leader, you develop how you want to influence other people. There’s no right or there’s no wrong. There’s tools that you can learn, but there isn’t a right or a wrong. Then you understand that what leadership is is simply influence. You learn how you want to influence other people.

Larry Page, he developed his style of leadership, how he was going to influence other people. What we believe has to happen is, first of all, the leader in the organization needs to develop how they want to influence other people. They need to bring everybody else into that same clarity of understanding that every one of us is a leader and every one of us influences people.

The question is, are we going to be intentional about it or not? That’s key to our culture methodology is ensuring that everybody understands that they’re leaders and move into this place of being intentional. Define how you’re going to lead. It’s one of the things that helps you to decide is this a good fit. How do you want to lead? How do I lead?

Let’s articulate it and decide whether we can work together.

David Noël:  What you’re saying is that your culture is one where everybody in the organization takes leadership over their piece of the pie or their piece of the puzzle.

David Baker:  Has to, yeah. That’s part of a real big change in society is this idea, that empowerment. Challenge is the number one motivator. If you’re not empowered, your motivation is going to drop.

David Noël:  That’s really interesting. When I started down this line of questioning, what I was getting at is “How do you foster internal leaders? How do you pick the people inside your organization that are going to be the leaders?” You’ve gone a step further and given everybody autonomy.

David Baker:  They pick themselves. We have what we call an opportunity based culture. We promote opportunities. We provide opportunities. We celebrate those that take advantage of opportunities. Our job is to remove roadblocks and provide opportunity. The leaders will identify themselves, those that are going to really create value and make a difference.

David Noël:  Do you think differently at all about organizational structure within Think Shift compared to other companies, the traditional structures?

David Baker:  Do I think different?

David Noël:  What I mean by that is in order for everyone to be a leader, in order for everyone to have autonomy, it seems to me that what we think of as a traditional management structure might not make a lot of sense. I think that that kind of structure incentivizes some people to feel like cogs in a machine. Does that question make sense?

David Baker:  Yeah, it does. Zappos has actually moved to a holacracy. I’m not sure if you knew about that…

David Noël:  Yes, that’s what I was thinking about.

David Baker:  I don’t know enough about holacracy to make a decision on that. I do find it very interesting, though. It is an extension of the same model that I’m talking about in terms of really empowering people. Hierarchy is helpful to some degree. That’s my current thinking. I think what has to change in organizations is clarity of a decision making model.

I’ve met with a lot of different CEOs. I said I like people to have a definition of leadership. Another good thing to have a definition of is empowerment. What does empowerment mean? A lot of people would say, “Absolutely. I’m a big fan of empowerment.” Pretty much everybody. What is the definition of empowerment?

A lot of leaders would say, “I totally empower people to do the right things. I want to let them make mistakes. It’s important to allow people to make mistakes.” Buried in that idea that I’m going to let people make mistakes is actually the belief that I know what’s right. I’m going to let you decide which is the right choice here.

If you make a mistake, that’s fine, but I’m the guy that’s deciding whether you made a mistake or not. What that ends up growing is this belief that you’re empowered to do things that I think are correct. When you’re really empowered is when you know that your boss thinks contrary to you and you still do what you think is right.

That’s when your boss has truly empowered you, and that’s when you have truly picked up empowerment. Both those sides need to happen. Decision making and the clarity of a decision making process is what triggers that. That’s one of the key things that I think organizations need to spend time on.

How do we make decisions, and do we all understand the process for making decisions here? That make sense?

David Noël:  Yeah, that does make sense. Switching gears a little bit, what people have inspired or shaped your thinking, both in business and in life? Among those, are there people that you would consider mentors?

David Baker:  Balaji Krishnamurthy for sure, because both a mentor and really helped to shape my vision of leadership and how things are changing. Strangely enough, Abraham Lincoln. I find that his ability that he had to engage people and tell stories to create understanding is fascinating to me.

Steve Jobs did a phenomenal job. Some of the personality traits, I think I wouldn’t want to employ, but he was a phenomenal influencer.

David Noël:  Interesting. What about books? Do you read a lot of business books? Do those influence your thinking?

David Baker:  I do, yeah.

David Noël:  Which ones do you think of as major influences?

David Baker:  There’s one called “The Brand Gap,” Marty Neumeier wrote that. It paints a really good understanding of what brand is, which is very helpful force. There is a book that I give everybody here, “Man’s Search for Meaning.” It’s not a business book, but Viktor Frankl wrote that.

It’s about his experiences in a concentration camp. He was a psychologist, and his learnings through that. I find it very influential. For me, it comes down to this, the clarity that he came to in that we all have the ability to choose our response.

In one of the worst circumstances imaginable, we have the ability to choose how we respond. That kernel, that understanding is really key for people. So I want people to read that book, who start here.

There’s a book called “Getting Naked,” it’s by Patrick Lencioni. He’s a consultant, and it’s about the value of transparency. It’s really good that we give that book away to people who start here as well. Jim Collins, “Good to Great,” was an influential book.

David Noël:  A classic.

David Baker:  Yeah. There’s dozens of them that I…

David Noël:  Maybe a follow up question to that, how do you come across books? I mean, obviously, everywhere. We all collect books. But are there places you go that you consider good sources for what you’re going to read next?

David Baker:  Typically, what I do is ask for, or receive from people that I respect, book leads.

David Noël:  A tangent on that a little bit. Are there local business people that have shaped your thinking of business or who have been helpful to you in some way? Who have led your development…?

David Baker:  There are a few. I mean, I should take some time to think about that. Joel Reimer, he owns Reimer Express Lines that have been a big help. To me, he’s mentored me for many years. There’s a fellow by the name of J.P. Parenty here in town. He owns an outfit called Parenty Reitmeier, they’re a translation outfit. He’s been early on, especially.

There was a fellow, now he’s moved to, I guess, Ottawa. Jamie Conklin, he owned an outfit called Information Development Training. Was a big influence on me early on as well. Actually, there’s been many, many different business people.

To be honest, this is a great city for that opportunity, that connection and mentorship.

David Noël:  We’re coming up on time here, so I don’t want to take any more of your time. Thanks so much for agreeing to come on and for sharing this morning with me.

David Baker:  You’re very welcome, thanks for asking.

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