The Family Biz Show Ep 4: Family Governance During Covid-19

Episode 4: Transcript

Michael Palumbos 0:44

Welcome, everybody, to the family biz Show. I'm your host, Michael Palumbos with family wealth and legacy In Rochester, New York. I will give you kind of a background of how we do this. We're having a blast with these things that our guests are awesome. We have, you know, we're blessed that I've been part of the purposeful planning Institute for 10 years now, when J Hughes pushed me to, you know, meet John A, and I'm sure we all you know, go in there matter of fact, if we don't have rendezvous this year, I'm gonna, if Jay was there, I'd be missing my J hug. Because he, I don't think anybody hugs better than J. Hughes. I've got everybody on mute right now. But there's a little reaction button you should be able to see, please go in. And if you have a question, just put the hand up. And, you know, jump right in this is, this is a conversation, this is not a lecture. This is if you know, if you have something that you want to share, or a question that you want to ask either Ella or Steve, or myself, feel free to jump in. We're talking about family governance, which is always a really complicated, but fun conversation. There's a lot to unpack with that. And for those of you who know us, you know, these webinars, these conversations came about 100% because of COVID. We were, you know, last year, we set up family business day upstate New York family business day in Rochester. And we had people from Syracuse and Buffalo and down in the southern tier join us, this would be year number two, we decided to start some seminars live. Our first one was, you know, scheduled for the third week of March, and the rest is history. So we just started reaching out to family businesses to help and we did a, you know, a webinar on cash flow when the cash conversion cycle and how can I shorten that? So I've got more cash inside of my business, as I'm going through this, where do I look for cash, we allow the attorneys and the accountants to talk about PPP and idle and those things. We just talked about, you know, structures of the of the business and, you know, supply chain, and what can we do, and I burned out, I was creating new content every other week, you know, every week or every other week, and it was too much. And I said, you know, let's reach out to my friends and bring you guys all in to bail me out. So I don't have to create the content anymore every single week and, and be doing this. So we've had Dennis Jaffe on here we've had Peter Dupont, you know, we've this week, you know, we've had Cornell Dan vanderley, from Cornell, Tim Beller this week and blessed and you know, super excited to have Ella and Steve on here with us. And you guys are rock stars. I really appreciate you moving things around to get on here. We're going to change the format of this as we move forward where it's not always gonna be a special guests. That's a thought leader. But we're going to be bringing in some family owned businesses who have been through these things and talk about their stories. And just you know, Nick, I appreciate Nick Matt has with us has agreed to do one of those. So we're going to learn about Saranac in a few weeks. You'll see about that in the future. Again. Thank you everybody for joining us. Ella you're a Rochester native so I'm going to start with you. Ella's family has been doing this for years and talking about these things. Why don't you introduce yourself if you don't mind Ella now runs a business called wealth works? She's a partner in that and just some neat stuff.

Ella Chase 4:53

Sure. I'll do a quick intro happy to be with you all. Thanks for having me, Michaels. Always so fun to be with your energy. I know that every person that you interact with comes away refreshed and recharged. So this is going to be a really fun conversation.

Michael Palumbos 5:08

We're very tired.

Ella Chase 5:09

Yes, we will. We all feel some exhaustion. I think we'll end up touching on that point as well. I'm from a long standing family in Rochester, New York, I spent a lot of time in the Canandaigua area and our family businesses varied from financial institutions to life sciences companies. And so I'm actually a sixth or a seventh generation inheritor. As far as family business goes, we are in a majority non-operating owner position. But I grew up with the important components of stewardship and legacy and what you have you use in your lifetime, but you need to take care of the next level. And so that's the perspective that I bring to this conversation briefly, our organization, my business partner, Michelle's actually, from Rochester, New York, as well. She's a second gen family business member, her dad and uncle created, developed and sold a company in her lifetime. So they have all these new liquidity questions. And she and I really enjoyed at looking at, okay, how do we serve the rising generation and females within family businesses to really step up to success, and that's what we coach and consult on. But we're going to talk about COVID today and how we're seeing that affect our clients and what things we should be talking about.

Michael Palumbos 6:31

Thank you so much. Steve Legler, our man from the great white north up in Montreal, a little north of us, tell us about yourself.

Steve Legler 6:40

So my name is Steve Legler. I was Steve Legler Junior. For up until about 11 years ago when my dad passed away. But he was an immigrant entrepreneur had moved to Canada, when he was in his late teens, and eventually started his own business. And I was his only son. And so I have two older sisters. But you know, back in the 60s, they were not expected to be people taking over a business especially it was in steel fabrication. So it was a so I was I was always destined to be the heir apparent for my dad, and did everything that one does in that situation work there every summer during high school, work there straight out of college. And then I went and got my MBA and came back ready to, you know, get groomed for the last stretch before taking over. And then an unexpected thing happened and we decided to sell the business. Well, I say we, my dad said, we're gonna, I'm gonna sell the business. And I said, Okay, so my career plan changed. It's not as if though, this was something I had my heart set on, it was just always the expectation. I went into them managing the family office because we had sold and had a liquidity event. And here we had some real estate some money from the proceeds of the sale. And here I was left with a dad said here, you manage this, I've got a hobby farm I just bought. And so I learned a lot about what it was to manage a small family office for my family. And then about seven years ago, I stumbled into a program up here in Canada called family enterprise advisor, where they teach mostly, you know, accountants and wealth managers and insurance people who deal with a lot of family businesses as their clients, they teach those professionals, what makes family businesses tick, to help them help those clients better. And I had nothing in common with those people in the room. But at the front of the room, there were people who do this and work with families all the time. And like the light came on, and I had my calling and I realized, so that's the thing, just working with families on figuring out their values and their vision and their goals, and how to work together. Wow. And so I jumped in with both feet. I joined the purposeful planning Institute, which is where I met Michael and Ella. And I've been doing this work ever since and love to talk about family governance, even though it's a subject that often scares people. So we'll try and make it less scary.

Michael Palumbos 9:12

Love it again. Thank you both for joining us. So the two topics the way we've broken them up today is how what's going on? You know, right now with the world in disarray, and a little confusion and things happening. How is the I was is a good test of family governance. And then Steve, you know, wrote a recent blog post article called the five silver linings of crisis and when he showed it and shared it with Ella and I Oh, yeah, that's perfect. We'll just jump right into that. So I'm Steve, why don't you kick us off here. You know, how do you how do you say you know, how is what's happening right this moment, in a good test to fail. The governance what do you mean by that?

Steve Legler 9:24

Well, so that was an idea that came to me. I actually wrote a blog two weeks earlier called the pandemic as a test of your family governance. But that all comes from our friend Jim Grubman. So we know Jim Grubman. Well, he's a fellow of the purposeful planning Institute. He was on a webinar a few weeks ago, up here in Canada, for the family enterprise advisors like myself, and he had mentioned that, you know, during this crisis, some families are realizing that it is testing their family governance now. So what does that mean? That means that things that we kind of thought, or assumed were structured in a certain way, all of a sudden, some crisis hits, and people in the family realize that, oh, wait a sec, I was making some assumptions about certain things and what would happen, or how things are structured, and now all of a sudden, something has hit. And my uncle, or my brother, or my cousin is making a certain decision that maybe I thought I should have a say in, or things are happening, and I'm not included. And so people are realizing, hey, wait a sec, we might not have everything structured, in an optimal way. And so this raises the opportunity to sort of start to ask questions and see how, what is our current governance? Have we been paying enough attention to it? And do we need to sort of tweak it and now find new ways to reinvent people who now have concerns? So it's, Hey, wait a sec, it's a reality check. And now, what do we do with it? And maybe we have some time to address this subject now, because of the way we're now working, and opportunities to do it that we wouldn't have had before.

Michael Palumbos 11:48

Great, you know, it's so for anybody that doesn't understand or hasn't heard the phrase before family governances? How are we making decisions? As a family? What is the process for doing that? And you know, one of the things that I think it's really important, Steve, I'm just as you're, as you're saying, it just kind of clicked again, for me is that family governance is a is a process on itself, where you are, in terms of what you're doing in governance today is not where you're going to be five years from now, as long as you're working that muscle, you know, it's like working out, you have to continually have the conversations and add to it. Ella, would you mind jumping in there? What do you what are your thoughts?

Ella Chase 12:32

We're seeing a lot of stress testing for families in a governance scenario, and it is myopic, because there are families that thought they had really good governance that were in play and might have missed things like a global pandemic, which many people never thought about planning for. And so the health and welfare components have really bifurcated from the aspect of like, is the business actually running? Do we have the tools, systems and structures in place, and we're really worried about the patriarch or the matriarch or those who are immunocompromised? It's all happening here. And then what we're also hearing from our clients is this, the rising generation are the ones coming up where even if you are in control, you might be like, forget it, I don't want to do this work anymore. And my only two succession options are death, or preparing someone to lead this. So what are you doing? And how can we utilize the technology that is actually allowing this to happen, where our business continuity and our family government can continue? But we need to make sure we don't stop and unlearn what we've discovered, when the world goes back to normal. This is like such a critical time to really take on the learning and the curiosity to make the system better.

Michael Palumbos 13:51

Perfect. Thank you. So let's talk about before we dive into, you know, I want to take you back a step, just a little bit more basics in regards to governance, and what does it mean in that definition of communication? Some examples may be of where we, where we would be using family governance versus, you know, we're just having fun, you know, this is just this is business as usual. Ella do you want to speak to that a little bit in terms of your experience, you know, with that?

Ella Chase 14:26

So the question is around, where's the governance actually going to move the family forward versus the family time together?

Michael Palumbos 14:34

That and I would, I would maybe think about an example of a governance situation what good governance looks like?

Ella Chase 14:47

Sure, I'm going to give you an example of one of our clients that they are actually in airport manufacturing, and so the business itself had is a G three. So But dad is in place right now it's a female owned business, but mom and dad in place, and then the generation three is in her late 30s. And as the airports have all shut down, they have had to look at what they thought was these booming contracts that would never end. And now complete shutdown. So how do you lay off employees with integrity? How are you managing control and roles and leadership is everyone has to morph in these business roles really, really rapidly. And so the father is used to showing up every day and checking on the airport systems, like that's how he shows up. But he's in his 60s, he likes to golf all the time. But like, that's his thing to be able to be like, Dad, you can't go, you need to stay home. And there's some tension there. But how do you actually begin to let something like COVID? Explore the realms of like, okay, well, I don't want to go back to doing this. I like the golfing. But how are we going to with integrity, take care of our employees, furlough them, bring them back, keep our family enterprise running, and keep the dynamics between parent, child and sibling, all working so that we'll actually show up to Thanksgiving and not kill each other.

Michael Palumbos 16:14

Agree. Thank you, Steve, you want to throw an example in there?

Steve Legler 16:20

What I what I would like to do first actually is just the expression family governance to me, I usually say that it's has three main components and you already addressed actually two of them. So how we make decisions together is number one. Number two is communication. How do we communicate together? And that includes when do we have meetings? How do we meet? Who's in charge of the meetings? Do we have it formally set up or not? And it doesn't mean that formal is necessarily better than informal, informal, gets it done. And the third component is, how are we going to solve problems together? And I know that in some ways, that's sort of just a subset of the first one, how are we going to make decisions together? But it's a like, it's like a flashing red light version of how are we going to get going to solve, make decisions together? And right now, there are a lot of flashing red lights. So it's just bringing to the fore, a lot of things where family members are realizing, oh, wait a sec, how is this going to affect me? And do I have a say? And who's deciding what's being decided? And who gets to decide? And who should get to decide? And who's deciding things down? Because it's an emergency. Whereas if things were more normal, would we have taken the time as a family to come together and make decisions and figuring out the differences between all of those things?

Michael Palumbos 17:47

Great. It's complicated. And that's why that's why these conversations, and in sharing with one another, is so important, because when we look at, you know, what could be versus what is, you need those examples, you need to see, you know, other people talking about these things, and where have you been, because you don't know what you don't know. And, and so just because we've always done it a certain way doesn't mean we have to do it that way, going forward. And with additional layers of generations being added, it gets more and more complicated. So it's, you know, it's exponential. So,

Ella Chase 18:31

For example, in my family council of this, where it took, I don't know, 70 years to change, one of the bylaws that, like parcel post had to be the communication method when everyone who's under 50 is transient and moves every other couple of months. And so we got like, email pass last year and the documents and it felt like it was a five year victory. So like the tiny nuances, I can't vote or proxy anything if I'm not receiving the mail, because I don't have a traditional lifestyle where I live in the same place 365 days a year. And the intention of the governance is to dictate and make sure it's equal and fair, but we have to keep looking at that because the world moves very rapidly.

Michael Palumbos 19:14

Agree yeah, it's neat that you say that because I have been introduced to that life because of Kay, her sister. Just, it's really incredible. Her and her husband live in an RV for the last five years. And, you know, it's like they've joined us on some of our, you know, fireside chats that we've been having for clients just to kind of bring them up to date, but they're like, we're so where are you right now? Oh, we're here two months later to someplace else. We're never in the same place for more than a quarter. So and people are doing that now. And you know, my team has pushed us to say, what is this gonna look like for us when this is all over? Like I think we have to be open to you know, things are going to be different. So, Steve, let's start walking into it. Before we do that anybody have any questions or comments or things that they want to ask right now feel free to raise your hand and join in on the conversation. We'd love to hear if anybody has a question, comment. And you don't have to, but you know, we're open to it. All right, let's talk about the name of that was the five pandemic Silver Linings for family business. So why don't you identify the five, and then we'll go, you know, maybe pass it off to Ella and see where we go with these things.

Steve Legler 20:43

Okay, so you want me to just go through so the first one I had was to reflect on and learn from previous challenges. So what I'm saying there is that just about any family business, it's been around for a number of decades, there's been some kind of crisis or, or story of something that happened along the way. And often, the younger members of the family aren't really aware of them. And you know, dad and mom have tried to project an air of everything is always under control. And they haven't shared some of those darker sides of things, where things almost went off the rails, and they've managed to bring them back. And sometimes it's, this is a great opportunity to actually tell the kids who are old enough to understand, hey, we've had problems before, and we've got through them. So that was number one. Number two, was to co create a pivot. So as things change now, and you realize, oh, my God, we got to change what we're going to do, it's probably a good idea to involve the different generations that are involved in the business in figuring that out together, as opposed to just the senior generation sake. Now we're going to do this. Because as with anything with different generations, the more you involve the younger ones who are going to be involved more long term, the better it is going to be, they're going to feel part of it, and they're going to own it. Right. Another one is then bolster the family brand. There are all kinds of stories about businesses that are going into making PPE or hand sanitizer, things like that. They are doing these things for the right reasons. And long term, I think, especially in smaller communities, those kinds of things are going to help the family brand that hopefully can last a long time coming out of this. That I had surrender the baton, or at least part of it, I think there are probably some senior generation people that are looking at this and saying, oh, my God, I was getting ready to retire in a few years. Now we're getting hit by this, I might be stuck here forever. And my hope for them is that they'll look at it a little bit differently. And say, let's see which younger people here can sort of take some leadership roles and show what they've got. And then maybe it'll actually accelerate to the move towards the exit for some of those. And then the last one is to re-emphasize family governance, to realize what isn't working and start to formalize or review certain things that the family could be doing in a in a more inclusive way.

Michael Palumbos 23:06

Perfect. So that's a lot. I mean, and it's fun to be thinking about all these things. And these are great questions that if you're a family, business joint looking at these things, I would just pull up that blog post and as a family, be thinking about going through each of these things, because it's the stories. It's the conversation that we all remember and how we learn as we're doing things. And this is just a great framework. Steve, thanks. Thanks for putting that together. Ella, in terms of your clients, in terms of your family, as you've gone through, you know, have you talked about, you know, the challenges from the past? Does that ring a bell for you?

Ella Chase 23:48

The narrative of the storytelling is super important to just the way our DNA and our human brains are. I'm no neuroscientists, but we can glean so much from that and the power of narrative that we hear that you learn more from the struggle than you do the triumph. And what we're seeing is COVID is a great time to get really clear on what's not going well and a place where you don't feel like a failure, because so many people are afraid to look like they don't know what they're doing. Global pandemic, nobody knows what they're doing. Oh, great news. I don't have to look like the expert, because I'm sure Larry, Joe, Tom, Sarah and Jenny aren't getting it right either. So like the ability to create vulnerability that you can build trust in this time it takes having that trust in the governance to begin with. So first of all, if there isn't that trust to creating a conversation with the important members of your family where you ask questions, and then shut up and listen, as opposed to telling them exactly what you want the answer to be is like tip number one, like get really curious about What is this like for you? Or how are you thinking about this? And that can be across the same generation multiple generations? And then listen for the story around? Oh, okay. Well, some of us have been through the Oh, eight financial crisis. And out of that came this great tech bubble and all these VCs, so the innovation that's possible all the way back to, while your ancestors in the Great Depression did this, this and this and like, okay, we can make it through this, we we've got this we can survive. But creating those moments of compassionate listening is where we see the governance can build the support around being able to move forward.

Steve Legler 25:40

And I can I riff off of that and say that one of my more memorable meetings I had as a facilitator with a family that were going from G three to G four, and the father was sharing with his kids, some of the stories about how his father had brought in a partner, and then he had to go and get a partner to buy out his father and the other partner, and the struggle that that created. And to just be in the room and sitting around the table with his children, only one of them really knew the story, the oldest one, but the other ones were learning it just for the first time. And just the energy in the room and the respect for that and understanding everything he had gone through to get to where they were, was just an incredible thing. So please, any families that have these stories, they need to be shared, because they are part of the family DNA, that is going to help the family stay together over the subsequent generations.

Ella Chase 26:40

And on top of that, and that's a great way to get the younger generation involved, I can guarantee you that my 10 year old nephew knows how to work a computer better than I do. And to have them go around and interview and feel like they can start contributing, and having videos and putting it on Facebook. I mean, there's so many ways that we you don't have to wait till the rite of passage at 25 for distribution or like when you're getting married, or whatever that is to start having these conversations. And then I just want to give a quick shout out this came up in my head. I really love the NPR podcast, how I built this has anyone else listened to like the incredible stories of what are now considered successful CEOs. They talk about their journeys and their businesses. And it's so comforting when you're having a down day or your family might be struggling to listen to the 15 Minute, I tired of how Patagonia was built Toms of Maine, like all of these big Lulu lemon these big brands, but it's not a linear succession. It's the overnight 25 years success or for failed businesses that happened before that. And that is a good way that you can also interact with different family members have their listen to the podcast and come back and discuss it instead of a book club. Like there's different ways that we can engage people remotely and safely and still be on brand and on mission.

Michael Palumbos 28:04

Yeah, I think this is a really good time you were talking about that. Because nobody knows what's going to happen next. And where do we go and how to do this? You know, it's a great time to say to the next generation, the rising generation, and global fail. It's okay, because I'm sure that whatever you do, I couldn't have done any better. Because I don't know any more than you do right now. Because we don't. Now, here's what's happened in the past. And I'll share with you know what happened in a way. But this is not a wait. You know, we know if a vaccine came out tomorrow, this is all over it, it ends. So we know that there's an end in sight where with a wait, we didn't know there was an end in sight, we didn't know what was going to happen in the middle of it, you know, so it is it is different. I also want to throw in that I think, right now is a really good time to be discussing, you know, and somebody else said it, but I just want to reiterate that so it doesn't get family values, what is our purpose? What is and what are our values, and have that conversation because we're making decisions right now. And the decisions that we make right now for the people that work for us and for every all the family members are going to remember the decisions that we make for years. And so now is a really good time to be thinking about, you know, and remembering what are our values. I did this just recently with our team just to say, you know, we need to be thinking about these things and keeping them front and center as we're doing this. I highly recommend that as part of this discussion.

Ella Chase 29:40

David York, who you both might be familiar with through PPI. I would just also give a shout out to his YouTube, his TED talk around this. He's an estate planning attorney, but he has four essential questions and I'm not going to remember what they are right now. But if you don't know where to begin, and you want to start having these types of conversations, I think He does a brilliant job at breaking it down and unpacking it for families of any size. Perfect. Don't

Steve Legler 30:05

Remember the four of them. But I will give a thumbs up to David York and his stuff. He is a rising star in this field of explaining things very clearly, to families about why they should do things a little bit more intentionally and involve their next generation. And so yeah, and it all starts with figuring out the family values, which is something they need to do together. And it's not something that mom and dad decide and then tell the kids, these are our values. They really shouldn't be doing this in intergeneration ally, and figuring these things out together and finding the common values that all the family members have. And building on those. Yeah, you know,

Michael Palumbos 30:47

I like to I like to iterate to your answer that it's what's alive and well, today, it matters so much. Because if these are just aspirational values, they don't mean anything, you can write them on the on the family doctrine and put those pieces together. But if you're not living those values, and finding additional ways to live them, they're worthless, you know, they're not worth the paper that were written on. So that's a really good point. And its okay, to go back as we're changing generations to say, you know, are our values the same today? What are we all going to agree on together? Because that matters. And that goes back into elewana. Stevens talking about CO create the pivot, I think there's a whole lot of things that can be co done at this point, the pivot being one of them, we just kind of talking about this. But you know, whether it's a pivot or something else, what are some other ways of CO creating within the family and between generations.

Ella Chase 31:48

One of the things that we point out to people, and I just want to make it clear for the fabulous people here is that it within family systems that are successful, we don't have to agree on everything, but we can be aligned on everything. So did the differential between agreement and alignment gives a lot of peace and ease to people. Like we can decide that we don't want to talk to each other anymore for 15 years. But we all have to be in alignment on that. And sure there's some work that could be done before we come to that conclusion. But it's not like we sit around at the end of the day, and all Kumbaya, hug each other and love each other. Great if that happens. But when we look at the co-creation component, what we're seeing emerge is, in the value realm, words mean different things to different people. So if the word or is written, freedom is a value, I could ask every single one of you and you would give me 10 Different words of what that means to you. And were the co creation with the intergenerationally or even amongst spouses like what you agreed to as your social contract. 15 years ago, before your business took this up, or this down, can be renegotiated. We just don't have to agree to something that was written once and is not there. But the point for the co creation of among the generations is, hey, when I say that I have the value of let's see, volunteerism, that doesn't mean that I reject your dad mom and dad's philanthropic endeavors to be x. I might be passionate about Wales, you might think that's ridiculous. But we, if we can have a conversation, we can actually back into the value is there the way it shows up or the way we allow it to express itself is different. And it's that independent autonomy, where with resilience, if you want to create thriving, inheritors, we need the creativity and the freedom to like show what that means for us and not feel complete pressure or overwhelmed by what you created, as was the barrier that I need to carry on my back for the next lifetime.

Michael Palumbos 34:00

Yeah, I get I'm reading a book right now I'll share with everybody called the trillion dollar coach, anybody if you've if you haven't read the trillion dollar coach. I think that even though this was not done inside of a family business, the thought process that he had for coaching and the reason why it's called trillion dollar coaches, he ended up coaching Eric Schmidt from Google, some people from Facebook and if you looked at the market cap of all the businesses that he had been coaching for well over a trillion dollars, it's much bigger than that. And this Bill Campbell was a really soft spoken, laid back humble human being that just had a really unique way. And here's what really neat lol you’ll love this is. He used to work at Kodak for a while. He spent time in Rochester so it's a it was really neat as I'm reading this and listening Yeah, I listen to books on audio. As I'm going through it I'm like this is brilliant. And there was just a lot of things that could be brought into the family, because it was all about how do I make the team better? I'm not looking to make Eric Schmidt better. I'm looking for Eric Schmidt, when he's running Google to make Sergey and the rest of the team better. And that's no different inside of the family. And I, you know, when I wrote my book, one of the things that I said about families was, the parents need to make the transition. And it's our responsibility as parents to transition, you have to parent through a certain age, that's just you have to, but there comes a time when you move from parent to coach, mentor, and you need to allow them to make mistakes and do some pieces, you know, do some things differently that you might not do and learn from, you know, like we said, you learn more from your mistakes, right? So, and the crisis, and then then you transition to colleague, and let me tell you, that one's really tough for me, because I'm always going to be dead. And it's really hard sometimes to take that hat off, and just have those good, exciting conversations together. But if we can, as you know, the leading generations be able to make those things happen. That's difficult for my dad, you know, it's really difficult to take that hat off. That's, I think, one of the reasons why he retired because I was driving him crazy with my ideas of what I want to do with families and whatnot, he just wanted to stick to the traditional, let's just do that advanced estate planning and business planning and buy sell agreements, like no one want to dive in and get messy and have fun with this. Steve?

Steve Legler 36:38

I want to take what Ella said earlier about alignment, not necessarily being the same as agreement. And it's more of a consensus building and consensus decision making. And what you're saying, Michael, about how one generation was probably very likely more authoritarian, and one person makes the decision and then tells everyone else to implement it, we're getting away from that really, really quickly. And then so being able to do things on a consensus basis, and, and more democratic decision making is becoming much more important. And where I take alignment, and I haven't written this blog yet, but I probably will, next few weeks is about alignment and engagement. And being and I see them as kind of two sides of the same coin. Meaning like if you have you can't have one without the other. So if you can't really have alignment if the people aren't engaged enough to be aligned, but it's hard to get the engagement if the people aren't already somewhat aligned. So it's, it's kind of like you as you, as you improve the alignment, you should be improving the engagement. And as you improve the engagement, you should be improved the alignment. And for families that want to transition well, from one generation to the next, the more things they can do together in those in that space of alignment and engagement, the more successful they're going to be. It fits that family meeting that that calls and makes everyone come to basically download what's in his brain and tell everyone what to do, which my father had a meeting like that a family meeting in 1985, and didn't call another family meeting until 2006, which he called because he got diagnosed with cancer. So like don't wait that many years and don't have a family meeting where the agenda is just downloading everything top down, start to build the engagement, start to build the alignment start to figure out how both generations of the family can be involved in making the decisions so that when one generation exits, the other one will have been involved in building everything that is there to continue to grow for the next generation.

Ella Chase 38:46

And what about the concept of like having a little fun while this is happening? Like God forbid you like each other, right? Like, could you even find a world where you gather not just one, it's for business matters. We've worked with a family that I love that they hold a family meeting every weekend starting at like the age of two, the children are rotate like, who takes notes for the family and whether to they just color and they sit along and they talk but by the time they're eight or nine or 10 You know, they're taking different notes. And you're like, where are the roles and where can we like let people be who they are but still have them included? And just because you don't have decision making power doesn't mean you don't have influence and that's like a whole another topic but around like the component of don't wait till you have a vote. If you still have a veto, like where are we playing with? Getting really clear within family systems that do I have a vote? Do I have a veto? Do I have influence? What do I actually want? What do I not care about? Like maybe I'm tired of fighting this one battle, but I've been known for 20 years as the one who was like we're not cutting down that tree that takes up that space to be like I'm gonna let that go. How can I show up in a new way, when I've created the story in my head that that's who I am as a person, and therefore I'm disagreeable or on agreeable within the family system,

Michael Palumbos 40:10

It’s nice to always have a voice, you know, it doesn't mean you have to have your way. But everybody has to have a voice in discussions. And without the voice. We don't have the trust, you know, we don't have that space for, you know, healthy conflict. Healthy conflict is good. There's nothing wrong with it, its discussion. But you have to have that foundation, I think, you know, that makes an awful lot of sense.

Ella Chase 40:35

And then there are some family systems where that's not people popular choice, right now that you don't get a voice or vote or whatever, then okay, but don't expect me to do anything for you. But like, that's where the alignment comes in, again, if I've tried to talk, or I want to learn, or I'm gonna figure it out, and you're still saying no, because you're going to control from the patriarchy or the matriarchy, or the grave or beyond, okay, then I'm out or what, and that's where you have to be back to that alignment of what part of the baton is being passed, what's not like, if I can only show up in the way of gender roles, like I'm not going to clean the dishes every year, I'm going to sit with the men in the parlor and smoke cigars this year, like where do we have the little ability to like change how we're showing up. And what's possible.

Steve Legler 41:25

I want to just jump on that baton thing again. As people often make the mistake of thinking that there's really only one baton, and that only one person can hold it at the same time. And there are really a bunch of different batons if you look at it. So there's ownership, there's decision making, there's management, there's all kinds of different things that are going on. And any business that expects to operate, where one person has all of that. And then on Friday, one week decides to pass the baton on Monday morning, someone else comes in and takes over all of those things, that isn't going to work so well. So figure out what you can and what you want to and what the people are ready to take on and start doing things gradually. And transitioning all the knowledge that that one generation has, that will take years in a best case scenario. So start doing it now. And then you can start to include some decision making in part of that in small pieces until the person learns, then that's a great place to start

Ella Chase 42:30

Slowly but surely helped me understand why you're making the decision. Even if I don't have a say like, I'd love to know what was behind it. If it just comes out on a state doctrine when you're dead, like that doesn't help me understand like, what anything about it. And once I realized the context of what was happening for you, while you were making that decision, I can have so much more compassion, if you say nothing and do nothing like Okay, so your post World War Two era person there was, you know, you're beaten and slapped, and there was no thank your and trophies like, okay, when I put that helmet on, I can completely understand where you're coming from. And like what's possible there? You were saying something, Steve, that made me think, and now I can't remember what it is. So if it comes back.

Michael Palumbos 43:16

You got its all interesting. I mean, that's the that's the part behind all of these pieces is that if the conversation happen, then it opens up the door, again, for trust and alignment. But you're not you don't have a chance. If you don't have the conversation. We had a family that came in I did a family meeting, just purely on estate conversation. That was the first one the kids are in their 20s. They just are graduating college. And Dad said, you know, my father never had these. My dad was dead, his dad's still alive. Their grandfather never has these conversations. Everything's a black box. And you know, once it goes in the black box out, so I'm doing these, and the conversation with the family was just brilliant. And the kids really appreciate and understanding why dad may have in the past, done some things differently. We opened up, you know, some pretty raw conversation and allow the space for it. And when we got done the damn, I sat there saying I hope he's going to talk to me again, because there was some parts that you know, was a little tough. And he looked at me said, we're doing this every year that we have to do this every year because my kids are going to change. They're going to get older and they're going to get wiser. I'm going to change and we need to be ready when my parents pass. That's a lot of money that these kids are going to be responsible for someday and we need to get them ready for it. And so this is just wonderful.

Steve Legler 44:55

You're bringing up something actually the annual to do it on an annual basis.  And I'll do a shout out to a fellow Canadian Tom Dean's I know, [Cross talks] that was dumb. So he's written two best-selling books. His second one was called wheeling wisdom. And it's all about telling Pete Well, it's the wisdom of writing a will, and communicating what's in the will to your children. And to do that every year, because things change. And then he's got a series of questions that you always want to talk about together as a family to bring things up to date and keep them current. So wheeling wisdom from Tom beans, is, so I'm glad to know that I'm not surprised to learn that that was part of your inspiration.

Michael Palumbos 45:44

Let's piggy off of that a little bit. But his other book is every family's business. And I will just say that there's a series of questions inside of there, that if the people in the business, whether you're owners, managers working in the business, there's a conversation that should be had that helps to keep everybody really clear on what's next, you know, am I just an employee here? Will I be a stockholder someday? Will I get to be the owner? Is your vision for this business the same as my vision for the business? If it's not, how do we, again, it's conversational. And the more conversation we can have around those interests, the stronger we are. So thank you. I'm glad you notice that oh, you know, you said Tom Dean know, Tom Dean's willing wisdom, and every family's business, and he does them in such a cute way. There, they're the parable, and it’s a story. It's not a lecture. And I think for me, especially, it's just a lot easier to learn in that format than other ways. The other thing I want to pick up on and just come back to books and learning. You know, in this format of leadership, leaders are learners, Leaders are readers. And so be open to these other ideas. And, you know, Steve, gave us some books, I talked about some books, Ella's talked about some things, and some books. And so it's be open to these things, because you'll, you'll get new ideas, and that will expand our abilities. Like we started when we say the family governance system that we have today will not be the same family governance system we have tomorrow, as long as we're learning and we're open to conversation. So we've got to or if there's family, family brand, surrender the baton. And we've got 12 minutes left. And I think there was another piece, and I'm having a blast, you know, this is you, the three of us could sit here all day long, and hope that you guys are having as much fun as we are about this. We love families and we love business, and you put them together and it's just we can talk forever. Is anybody has, you know, put up a question put your hand up if you have something that you'd like us to poke at, if you just want us to noodle noodle about a little bit.

Steve Legler 48:03

It's always more interesting when there's more voices, because we can talk about things at a certain level. But there's other people that might be living something completely different. And if we can help just throw our two cents in on certain things, if they're, if that's useful, gladly do that.

Michael Palumbos 48:18

We'll give it a set, we'll come back to it. So Ella, why don't you talk about, you know, your family. And you and I spoke and as a little kid, I was digging in that rock pile. Yeah, then at the Natural Science Museum, I was a rock collector when I was third grade to that or no second to fifth grade, probably

Ella Chase 48:34

I just stop.

Michael Palumbos 48:49

It just, I think this became my new rock. You know, my new rock collection was just talking about family stuff. Um, would you mind just talking about family brand? What does that mean to your family? And what does it mean to the families that you're talking about? Talking with?

Ella Chase 49:05

Yeah, it can be a dirty word. Depending on, I feel blessed that I am not in conflict with the brand that my family has stood for. We might have written the history book. So it's probably bends in our favor, but the way that it bends, it seems as though you know, we weren't all rapists and murderers. So that's a great start. But when I think about brands, for even a bunch of Rochester families, it's because the community is so small. There is a lot of pressure between people who created the business and how they might have run their business. And then the succession about the rising generation and just because you might have a billion dollar marquee family that everyone knows doesn't mean that you two generations down won't have access to it. Do you have that liquidity, decision making power, or want to do anything with it. And so from a brand, we spend about 50% of our time in Denver. And what I find really interesting about Denver, it's families flock there that are like older money east of the Mississippi families, because they can escape the pressure of the family brand, where you're not going to marry me because of my last name. Your parents aren't employed by my parents, like all of those things were brand can really have impact around, oh, there's a dirty politician, or maybe it's a dirty industry, it's a tobacco oil, those things that people on a brand perspective are grappling with. And even if the brand is ubiquitously strong, it doesn't mean that you personally relate to it, even though it's part of your, your family. And so from a tell me if I'm answering your question, but as the clarity that's needed around how do I want to associate with the story of what the brand is, and how can I bring through what's meaningful for me is where a lot of people struggle that we see around like, I don't align with either the business, the brand, the way my parents ran it, I'm terrified to be as successful as they were, maybe concrete or plastics don't feel sexy to me. So like, what am I going to do? Instead, there's no place for me here. Go find your passion. Like that's not helpful, because now I'm walking around with this name on my back that's also on buildings, and people are targeting me for fundraisers, foundations, can I trust people that I'm dating? Like? There's a lot to say about brand. That's a smattering of things.

Michael Palumbos 51:43

Yeah, I know, I appreciate that. And, you know, in Rochester, for me, because, you know, Dad's, you know, had a 40 year successful career. And we come from a family that has a couple of priests in it. So people know who we are. And, you know, there is brand I get that. And, and so what are you doing? You know, Steve, you talked about this in the aspect of how do we utilize this crisis to bolster the family brand? What are some of the ideas? Or what are some of the things that you're thinking about inside of that?

Steve Legler 52:17

Well, actually, the clarity that's coming to me now of the importance of having the discussions with all the family members, to actually let them voice those things, because often there are younger generation members who either because they don't necessarily, their values don't align with how the family became wealthy, or they have fears of being taken advantage of, because they are known as you know, have those conversations and, and, and leave the space for them for people to be open and authentic about what they're feeling. Because it's, it's, you know, people say, Oh, poor little rich kid, but it's not easy growing up in a wealthy family, especially in a town where as soon as people know your last name, their first thought is, oh, you're one of them. And that that's, that's not something that's easy, and that's for anyone to go through. And that's why they might want to go to school in Denver, or somewhere far away, where their name is not that recognize. And it's really important for families to be able to talk about that. Even if it's just for a sibling group. Sometimes I've worked with a family where essentially, I was the coach for the sibling group. And I got to work with them and said, you know what, it's great that you're working with me one on one, but work with each other and help each other because you're all going through the same thing. So anything you can do to encourage the siblings to help be a resource for each other. And a support group for each other is also something that is worth doing.

Michael Palumbos 53:47

Right? Look for ways to collaborate, look for ways to help them innovate the family, not just the business.

Ella Chase 53:56

Well, what Steve was saying to which is inherent but I want to make it explicit is this isn't a lot of pressure to put on a family that's also trying to run a business or a brand at the same time. You don't have to do it all on your own you've got your Michael resources, you've got your Steve's you've got like to build a team that can help you because it's unrealistic that you can be a leader and be a spouse and be a parent and run a business and listen carefully. Like that's, you're setting yourself up for failure there.

Steve Legler 54:27

Well, it's so that that brings up just the three circle model of the family, the business and the ownership. And, you know, it doesn't need to be one person leading all of those groups. And so if you are still in the at the point where it's important for you to lead the business, maybe it's time for someone else, to leave the family a little bit and create a family council and start to create some family meetings and have different you know, circles of influence of so this these people look after the business stuff These people look after some of the family stuff. And then if there's several owners, maybe there's a small ownership group that makes different decisions with different systems of people with different subgroups that look after different things. And then they all overlap, and they need to be coordinated. But they don't all have to be led by the same person.

Michael Palumbos 55:17

Which goes back to allowing everybody in the family to be doing something. Sometimes, people that aren't involved in the business, are always feeling like they're looking through the window in what everybody else is doing. So finding ways to get them involved differently, is really healthy. It's a, it's a great way to look, that's how

Steve Legler 55:37

I find a way to balance the responsibility and the workload, why have one person who's going crazy trying to run everything and have a bunch of people sitting there twiddling their thumbs, wishing they could be more involved, it's not as easy as snapping your fingers and say, Let's do it, it takes time. But it's worth taking the time to do it. And it doesn't have to be done all overnight. So just to be open to sharing some responsibility with other family members is a win win for them. And for the person who was who was sharing the load with the others.

Ella Chase 56:11

And Michael, what I love about what you're doing in this series, to also bring up to the people who aren't will listen to this is it doesn't have to be just within your family. It's creating peer groups across families, because it can be so lonely and isolating, if you feel like all the decision making pressures on you. And now you're in a COVID crisis and your potentially wife or husband has not stopped their spending and you're feeling a ton of pressure to like figure it out and keep going and doing where can you have the space where you don't have to feel so isolated and lonely and frankly probably full of fear when you have to show face or you feel like you do in front of the family and the business like where do you get to have some relaxation or some resonance with others who are in similar situations?

Michael Palumbos 57:01

Yeah. So that you’re what you're talking about is like the CEO roundtables for family business owners are the next gen roundtables where you can be part of those things. And I've talked about this on the show a bunch of times. But throughout upstate New York, we have many of those available right now in each of the different communities at the university level. And if somebody said, I'm not comfortable with the university level, I want to do something on my own, you know, call pay, and I and we'll help put together a group for you locally without even thinking about it. We're at 1258. Steve, we didn't get through all five of these. This was super helpful. The last one on here says re-emphasize family governance. And I think, why don't we each just take a second to talk about what does that mean? And any parting comments that people you want to leave people with when we're talking about reemphasizing family governance?

Steve Legler 57:57

I think the easiest one is to talk about communication and the fact that right now, people are learning to do more of this stuff over zoom. And I think that as more people get comfortable with it, it's, it's a lot easier to take that next step and say, hey, you know what, why don't we start to have meetings once a month, or whatever, and just get the people on and start talking together and sharing and learning to work together. Because that's often a huge thing is that just learning to work together with your siblings is not always that easy. So any opportunity to communicate and start to do that together. This might be the perfect time.

Ella Chase 58:33

I echo the sentiments and we'll add the layer of fun over it as well. Like maybe you have family zoom game night type of thing where before you could hide behind the fact that oh, I'm remote or I'm not there, we'll just gather once a year and now people are craving connection and we can provide that because of technology. And so where can you just get really curious and be gentle on yourself. You don't have to figure it all out by the end of q2, okay, like just keep trying feel fail forward. Just keep trying love gently and try and get some sleep. That's my other piece of advice. This time.

Michael Palumbos 59:15

If people want to reach you, how do they reach you Ella?

Ella Chase 59:18

Well, they can reach me at like 75 different ways but Ella@wellth-works.com on Instagram at wealth works. Or you can call me my cell number is 617-866-0007.

Michael Palumbos 59:43

Thank you, Steve?

Steve Legler 59:45

I'm lucky I've got a name that's easy to spell Steve Legler and yet not common. So if you Google my name, I should come up and if I don't if you just add family business or something I will come up and I've got a website with a bunch of blogs on it. I add a Contact Me form and subscribe to the blogs. And you can find my YouTube channel and my LinkedIn and to hook up with me and I'm always happy to talk with people about family business.

Michael Palumbos 1:00:09

And Steve's got two books available on Amazon that you can go and grab as well. I'm Michael Palumbos, Kay flaker. Thanks for joining us mighty teammate. We're family wealth and legacy. We're in transition with our we're using this COVID Time to fix our website and move it over. We're really excited about it. We've got this going on. If we can help in any way, we're always open to, you know, a conversation, you can meet with us and there is zero charge to meet with us and we just have conversations. If we can help great if we can't help, you know, nothing's nothing gained nothing loss. We're just here to try to help as many families as we possibly can help them the business wherever we can. So thank you all for joining us. Thank you. Jeff Lee notes holder. Oh, there was a thumbs up. Thank you, Jeff. Appreciate that. You, Jane. Thank you so much. So we will be looking for guests. So we have some family businesses that are on the call today. I may reach out and tap somebody you want to one day as we're doing this. But thank you all for joining us and enjoy the rest of your week. Thank you. Thank you. Thanks. That was fun.

Michael Palumbos 1:01:44

The content presented is for informational and educational purposes. The information covered and posted are views and opinions of the guests and not necessarily those of Lincoln Financial Advisors Corporation. Michael Columbus is a registered representative of Lincoln Financial Advisors Corporation, Securities and Investment Advisory services offered through Lincoln Financial Advisors Corporation, a broker dealer member SIPC, and registered investment advisor insurance offered through Lincoln Financial affiliates, and other fine companies. Family wealth and legacy LLC is not an affiliate of Lincoln Financial Advisors Corporation. Lincoln Financial Advisors Corporation and its representatives do not provide legal or tax advice you may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.

CRN-3193529-080620