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Episode 11: 5 Ways to Ensure Your Family Business Thrives During Hardships

In this episode of the Family Biz Show, we speak with guests Brad Giles from Australia and Ron Huntington from Seattle. They delve into crucial strategies for family businesses to not only survive but thrive amid potential economic downturns, focusing on the impacts of the ongoing pandemic and flu season.

Brad Giles, a seasoned entrepreneur and business coach, shares insights from his experience in starting and selling companies and the profound impact of the book "Mastering the Rockefeller Habits." He emphasizes the importance of adopting a Stoic mindset, focusing on what's within one's control, and confronting brutal facts.

Ron Huntington discusses his extensive experience in coaching businesses, particularly family-owned ones, through various generations. He highlights the agility and decision-making advantages family businesses have and stresses the importance of strategic planning, especially in times of uncertainty.

The conversation also covers practical advice on cash flow management, leadership assessment, customer and supplier relationships, and recognizing opportunities amid crises. Brad and Ron encourage businesses to adopt a proactive and prepared stance, leveraging strategic planning and execution to navigate through challenging times and emerge stronger.

For more detailed strategies and insights, Brad Giles' book "Made to Thrive" and Ron Huntington's expertise in consulting offer valuable resources for business leaders looking to steer their companies toward long-term success.

If you’re a family business or a family business consultant and want to be on the show, share your story and help other family businesses, send us an email to producer@thefamilybizshow.com or fill out a contact form here!

*not affiliated with Lincoln Financial Advisors Corp.

Michael Palumbos is a registered representative of Lincoln Financial Advisors Corp. Securities and investment advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. Family Wealth & Legacy, LLC is not an affiliate of Lincoln Financial Advisors Corp. Lincoln Financial Advisors Corp. 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-3336807-111820

Episode 11 Transcript

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Michael Palumbos: Well welcome everybody to the family biz show. My name is Michael Columbus. I'll be your host today. I'm with family wealth and legacy in Rochester, New York.

 

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Michael Palumbos: And today we are going to be talking about the five ways to ensure your family business survives and thrives through another wave of

 

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Michael Palumbos: This fall and winter and I am so excited because we're really joined by two fabulous guests. We've got Brad Giles from Australia and Ron Huntington from the west coast in the Seattle area. So welcome, gentlemen, how you doing today.

 

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Ron Huntington: Was well, Michael, thank you for having us.

 

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Brad Giles: Excellent lovely to be here. Thank you, Michael.

 

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Michael Palumbos: Wonderful. So typically what we do on the show is just ask everybody to, you know, share their journey. How did you end up here, you know, we're in the family biz show today. What's your journey been like, Brad. You know, I would love to hear from you. Tell us about your journey.

 

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Brad Giles: Yeah, so I have been a serial entrepreneur. It's a bit like a serial killer, but without the bad parts. If you like you get stuck in a habit, being a serial entrepreneur.

 

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Brad Giles: Yeah, so I've started six companies over the years started the first one. When I was 16 some of them went really quite well. Some of them, not so well learned a lot over the years.

 

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Brad Giles: Probably in about 2001 I read a book called Mastering the Rockefeller habits which always in a company was growing at 6% and it really changed my life.

 

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Brad Giles: Exit of that business started another one sold that one and then probably about 10 years ago I started coaching full time predominantly across Australia with some of the, I guess what I'd call the best companies in Australia.

 

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Brad Giles: Yeah, and that's the 32nd or less story just always loved building great businesses live in Perth, Australia, which is on the West Coast, same time zone as Beijing and for kids happily married

 

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Michael Palumbos: Welcome Ron Huntington, tell us about yourself.

 

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Ron Huntington: Well, this goes back a long, long ways, I think it would be age after beauty in this case if I'm taking a look at

 

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Ron Huntington: We go back a number of years as well. And our good friends and colleagues, despite the fact that we're literally 12 hours around the globe away from one another.

 

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Ron Huntington: I started in a family business. When I got out of school a long time ago, left the family business went out and started becoming as Brad did an entrepreneur.

 

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Ron Huntington: Build a number of businesses exit of them successfully and as anybody knows who's been in and out of family businesses, you have your wins and you have your losses and so

 

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Ron Huntington: I have built and and exit and companies, but I've actually been coaching and consulting businesses for about 30 years. Now you can believe that. And and

 

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Ron Huntington: I specialize, a lot of times and working with first, second, third generation family businesses so very familiar with many of the issues that a lot of your clientele Michael are dealing with them, and many of the listeners obviously on this podcast.

 

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Ron Huntington: But what what i think when I take a look at the family business experience I've had myself. I got into the family business.

 

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Ron Huntington: Then accident with my dad got ill and passed away I inherited that business by accident, and there was about a 35 year difference between the first

 

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Ron Huntington: Taste of the last day. So we sold it successfully, it was a it was a radio station and advertising agency business. And we actually did that about three years ago and

 

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Ron Huntington: And what they say about owning businesses like that kind of like owning a boat.

 

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Ron Huntington: You have an ecstatic day one. It's the most really exciting and invigorating feeling you have, and that's surpassed only by the day that you actually sell the boat or the business so

 

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Ron Huntington: So that's where we've been. And one interesting thing about today's topic is Brad and I kind of hit on this at the same time he was over on the on

 

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Ron Huntington: The left coast in Australia in Perth and I was on the left coast here in the United States.

 

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Ron Huntington: And about the same day. He sent out an email, give us some background on what was happening in Australia and some data that he had compiled them that pretty much forecast. We're going to be in for one

 

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Ron Huntington: Tough ride here coming up. And so, Brad and I have been doing a little bit of collaborating off and on. I think we're kindred spirits and hopefully today, Michael. We're going to share some things that will

 

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Ron Huntington: That will become apparent to a lot of people not things we want to see happening in this environment of the coven 19 and the potential

 

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Ron Huntington: Com a combination of the covert virus with the flu coming up. But, but things that business owners particularly family business owners need to be able to think about while there's still time and there's precious little time to do that, Brad. Would you agree.

 

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Brad Giles: Absolutely. You know the best time to plant a tree was 10 years ago, the second best time is right now. We all know that old adage, and I think that

 

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Brad Giles: You know, I think that there is this is a long play that we're in, hopefully most of the listeners have survived all though they were a bit battered and beaten and so now we've, we've got to be vigilant and aware, saying, how do we prepare to move forward.

 

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Michael Palumbos: Great. Yeah, you. So take me back real quick. And if I'm throwing I don't mean to throw any curveballs but you guys eat Ron, you said that you know branded sent out an email about the same time you're having some thoughts. So this is back in March of this year.

 

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Ron Huntington: Or late, late February wasn't Brad when your friend send out your first emergency flare to pay attention here.

 

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Brad Giles: Yeah, well before that. The first one was on the fifth of February, and that was that was tracking

 

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Brad Giles: That was tracking basically math and I want to come back to metalab as we talk today because

 

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Brad Giles: Because you can argue with politics. You can argue with many, many things, but you can't argue with math one plus one will always equal to. And so that was really based on the math of what we saw in one hand in China and how

 

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Brad Giles: China address that and what was there was already on the fifth of February, some emerging hotspots. And so that was just a private clients circular then I send a subsequent one in February. But then I sent it out to our communities, Ron.

 

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Brad Giles: Probably on the 15th of March. So, and this was just a compilation and and yeah there was enough of a red flag and enough of early stage warning signs that were kind of consistently on my radar and

 

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Brad Giles: I will say the first word of that email was crikey. And that's obviously a steber when your word here, but it's, it's an it's an

 

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Brad Giles: It's a statement to say no one is reacting and there's something that's quite big going on here. Yeah.

 

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Michael Palumbos: So I just want to say thank you because you know you may or may not know this, but when I got a hold of that data. I started to look at the math.

 

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Michael Palumbos: And started in immediately you could see the patterns that you were pointing out and people were still saying all this is nothing and the week before that email.

 

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Michael Palumbos: I had gone to dinner with friends and drinks afterwards and we're just let you know kind of chumming it up and saying, you know, this is just going to blow over. This is the flu. I don't get it. And then you

 

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Michael Palumbos: You shared your data. And that turned into a whole bunch of webinars that we were doing for clients and just business owners in upstate New York. And I think that really helped.

 

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Michael Palumbos: Some of the listeners, you know that were early adopters or, you know, early listeners to, you know, the, the first webinars before this became a podcast that that work that you did created this podcast. You don't know that.

 

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Brad Giles: But that's awesome.

 

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Michael Palumbos: This came from. As you know from that crikey email that we went through and saw the data. So what's the data that you guys are seeing today and what you know, talk about the science and the you know the multi source data what's going on right now. What do you see him today.

 

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Ron Huntington: Well Brad just had sent me up in the last four or five already said there's a brand new study that's just come out here, Brad. Did you have a chance to dig into that during our afternoon hours or and we know we got the most relevant

 

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Brad Giles: No, but what are people talking about right now they're talking about, or is there going to be a second wave. And I wonder if if that's kind of the wrong question to a degree.

 

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Brad Giles: Because let's it's math that we're dealing with. Okay. And I'm going to come back to that point wrong but it's

 

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Brad Giles: The virus has one single objective, it will do anything that it can to grow to spread and we've got a bear that in mind this is not an intellect.

 

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Brad Giles: intelligent being, this is just, it's just going to grow. It's like, you know, mold spores on a piece of bread. If you ever did that in school.

 

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Brad Giles: So the data. One of the points of data that came out today was the surgeon, Europe has now surpassed us cases. So you've got this kind of

 

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Brad Giles: Europe were they had a first wave that we all know and that was quite alarming they locked down they suppressed it and then they went through this summer. And then they

 

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Brad Giles: open things up and then over time. What's happened is that that's now caught up to them. So you can see this this this second real the infinite second wave that's accelerating so fast in Europe. So that's kind of

 

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Brad Giles: I mean, there's no end of graphs, if you'd be entering you know Covina graph into Google, I'm sure you're going to get millions of hits. We all, we all know that. But the major trend. I think in the world.

 

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Brad Giles: I think, in fact, it's twofold, to be honest, run that is number one is that the second wave is all over Europe it's hitting. I know the UK is locking down there. It's just how hard do we locked down, how much can we take is the question in Europe.

 

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Brad Giles: But the other one is human nature. And that's the because you know what, we're all tired of what's happening and everybody there like I just want this thing to be over.

 

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Brad Giles: So if you go. So there was a research came out and last day or two from Pew Research P w and and that said that 21% of people

 

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Brad Giles: Today, this week would definitely get the vaccine. If it would was released 21% okay a further 30% would probably get the vaccine. So a total of only 51% if a cheap and effective and available vaccine was they only 51% would even get it.

 

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Brad Giles: So we've got to think about

 

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Brad Giles: What is happening with the, how is the virus spreading, number one. Number two.

 

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Brad Giles: Was that what is happening in terms of human nature, because the only reason if the vaccine. If the bars. I'm sorry, is simply mass playing out. The only reason the virus is going to spread a second wife, and any further waves.

 

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Brad Giles: Is because of one single thing and that's human nature.

 

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Brad Giles: So that to point that out. That was 51% of people said they they definitely are probably would get a vaccine that's down from 71% in my so we've dropped 20 percentage points from my until now, and people are

 

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Brad Giles: Definitely will probably would get a vaccine. So this is playing out and that will work against us in the longer term, your

 

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Michael Palumbos: Go ahead, run.

 

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Ron Huntington: And the math says, you know, this replication is going to happen. It's not a matter of if, it's just how quickly how exponentially, it will impact everybody, not only in the US, but around the globe.

 

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Ron Huntington: And and you for not at this point. Michael have spoke. I mean, we've all hoped that it would be over by now, we've all hoped that we wouldn't have a second wave well that hope has

 

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Ron Huntington: Likely passed and so hope is not a strategy that will get you through what we need to be able to take a look for for family business owners is

 

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Ron Huntington: With with some of the benefits that family business owners have, how are you going to plan your way through so that you can be agile and nimble and

 

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Ron Huntington: Realistically, facing the next six to 12 months until there is an effective vaccine.

 

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Ron Huntington: And it is distributed in enough of a massive scale that again we can overcome that 51% of the people, because without if it's only 51 this thing is going to be around for quite some time. Wouldn't you agree, Brett.

 

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Brad Giles: Well,

 

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Brad Giles: What the question really is, what is herd immunity. We all hear about this herd immunity in the you know the political speakers get ahold of that and they but um

 

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Brad Giles: If you're going to travel Ron and someone I know who travels quite a bit. How is it going to affect your thinking you know it's it's still going to affect the economy if

 

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Brad Giles: 51% of people have a vaccine permit are inoculated it's still going to affect the way that people think if you actually dig into the data of the economic downturn.

 

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Brad Giles: The economic downturns started in the week or two before the government started telling people to lock down because it was people's fear that drove people to stop going to the movies or to the theater or the, the restaurants, so

 

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Brad Giles: The Human nature is something that's it and how it affects our businesses is something that's really important to think of. And we've got to have a sustainable model.

 

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Michael Palumbos: Yeah, you know, it's which couple of interesting points there is one is that dropped from 71% to 51%. Think about where people were at may

 

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Michael Palumbos: The mindset in May was so different and so fed up with it, then the summer came and went, you know in the in the US and we started to get a little

 

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Michael Palumbos: Easier better you know you had a little bit more were, you know, getting out there now. It's like, ah, I don't need it as soon as if there was, you know, when there's a second

 

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Michael Palumbos: You know, round of this and we're experiencing that cooped up wintertime, the flu plus coven

 

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Michael Palumbos: That number will spike back up to 75 80% will say give me the, you know, give me. Get me inoculated if there's if that's available.

 

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Michael Palumbos: Um, it's very. The other thing that you said that's interesting is the the period, you know, two weeks, three weeks before this really hit

 

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Michael Palumbos: And, you know, just my own personal I was, I was not allowed into our corporate offices for two weeks before because there was a coven case at a conference that we were at

 

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Michael Palumbos: So I was, you know, well before in the beginning of March, you know, we left the conference, the end of February, beginning of March, they sent out a notice don't come into the office. There was a coven case.

 

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Michael Palumbos: And we're still laughing We're still like, you know, you guys are silly and and then and I wish I'd had your paper. You know that email two weeks earlier because that would have given me more time to dig into it, Ron, you know,

 

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Michael Palumbos: talk some more about, you know, the mindset that people should be coming at this with and I know one of the things you know just when I when Brad talked about when we talked about the Stockdale paradox.

 

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Michael Palumbos: I think that, you know, I think that would be a really good thing. Just to remind our listeners. What is the Stockdale paradox. And what is that, you know, the, what is the objective mindset that people need to have around the virus.

 

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Michael Palumbos: Well,

 

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Ron Huntington: You said it, you must remain objective and try and divorce yourself from from, you know, an exuberant level of hope and and basically you know the best case scenario.

 

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Ron Huntington: Or the paradox, which is the worst case scenario and the Stockdale paradox, which I'm guessing a number of your listeners would would know about is simply as as Jim Stockdale was a prisoner of war Vietnam War and

 

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Ron Huntington: He noticed through his prevails there at the Hanoi Hilton that people that were either too optimistic or pessimistic didn't survive.

 

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Ron Huntington: And so the Stockdale paradox says, Put yourself squarely in the middle, control your emotions.

 

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Ron Huntington: Don't get too hopeful, but also, don't get too despondent and try and think your way very objectively through whatever ordeal you're facing. And so that was good advice. Back when this thing surfaced in March. I know a number of us referred to that.

 

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Ron Huntington: But it's even more important now as we look to the second wave, because as Brad said, we've all got fatigue. This is no fun.

 

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Ron Huntington: And it, it throws challenges at business leaders in all industries right now and we're going, oh gosh, not again. I got to go through this for another four 612 months.

 

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Ron Huntington: But I think building that Stockdale resiliency is an important part of what business owners need to be able to

 

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Ron Huntington: Condition themselves to do. And that's why we're having this conversation is how can family business owners who, by the way, I think, are

 

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Ron Huntington: in a much better position to thrive and respond to the next round of challenges and to the first round as well, then a lot of larger companies because they're smaller

 

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Ron Huntington: They can move faster, they can make decisions more quickly. And if they've got a good process to be able to think through what's about to happen.

 

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Ron Huntington: And whatever way it goes. You're prepared with a contingency. Then you've got a pretty good chance of staying right in the middle where that Stockdale paradox works so well for people read what are your thoughts. I

 

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Brad Giles: Yeah, I love the Stockdale paradox in normal times, let alone times like these, it's, it's just

 

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Brad Giles: It's, it's about adopting a Stoic mindset and and just thinking about

 

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Brad Giles: We need to be objective in understanding the data and I want to overlay that in this conversation with something else from Stephen Covey

 

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Brad Giles: Author of the Seven Habits of Highly Effective People or something like that.

 

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Brad Giles: So, and that is the circle of influence and circle of control thinking, okay, so at the moment.

 

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Brad Giles: So I'm in Australia, obviously, Southern Hemisphere. We've just come out of our winter.

 

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Brad Giles: So with so we're in the obviously opposites cycle. In that sense, we definitely see a lot that's happening in US politics.

 

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Brad Giles: Because there's an election coming up and this this conversation isn't really about politics as much as the importance of leaders to

 

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Brad Giles: remain objective in the data that they're looking at. So we all get inputs of data from a whole range of areas. We certainly see a lot here in Australia from America, and to a lesser degree.

 

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Brad Giles: Canada and we've got our own dialogues obviously here that are influenced from from everywhere else, but

 

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Brad Giles: What I'm saying when we overlay the Stockdale paradox with the circle of influence and circle of control or concern we think about what is actually in my control and what is not in my control.

 

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Brad Giles: If there are other people who are influencing me through the news or through whatever I read newsletters or whatever it is, how is that

 

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Brad Giles: Changing my perspectives, if at all, and what are the brutal facts and that's that's part of Jim Collins is worth to and then and the Stockdale paradox confront the brutal facts. So if it's is the thing that that I'm thinking about outside of my

 

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Brad Giles: Control. Is it simply a point of concern is something I can influence or is it in my control and reminding and kind of overlying that I don't know what's your thoughts on that run

 

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Ron Huntington: Um, well, I think that, you know, we

 

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Ron Huntington: Just had a bit of a family emergency here my my grants I locked my wife out of her car so I Brad. I'm sorry. I, I just was looking down and got that message and I missed your question. So you'll have to forgive me, gentlemen.

 

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Brad Giles: That's okay. So is your grandson locking your wife out of the car, you're in your control or is it your influence or is it in your circle of concern.

 

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Ron Huntington: It's, it's probably out of my circle of influence at the moment.

 

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Ron Huntington: But it's definitely circle of concern. But that's we're on the call. Michael continue

 

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Michael Palumbos: Okay, um, this was what makes live calls the most fun, you know, um, when we're talking about, you know, the multi generational family businesses, Ron, you had said you know that they're

 

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Michael Palumbos: Best suited doing during this pandemic and I just want to take that one step further. I think it's that idea that they're multi generational

 

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Michael Palumbos: It that really makes a giant difference we don't you know multi generational family businesses, when you're thinking inside of a family business.

 

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Michael Palumbos: You may be thinking about 20 years from now, who's coming down the road. You're not thinking always about the next quarter.

 

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Michael Palumbos: And that's one of the big giant differences if I'm Carnival Cruise Lines, or one of the other you know fortune 500 companies.

 

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Michael Palumbos: I'm very nervous about this quarter to quarter and what what's going to happen and how do I survive this quarter, where, you know,

 

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Michael Palumbos: A family business. Can you know they can hoard cash they can they can do some of the right things, you know, they can put together and fortify themselves.

 

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Michael Palumbos: They could even start to shift a little bit faster into you know what they were everybody called them in March and April, you know, how are we going to pivot, you know, and how many

 

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Michael Palumbos: You know, alcohol producers battlers turned a bottling you know hand sanitizer, you know, that type of a pivot, or you know i one of my clients was a

 

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Michael Palumbos: Assess this environmental remediation, you know, place and they quickly added, you know, the ability to go into office buildings and remediate. You know, viruses and germs and really keep it clean.

 

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Michael Palumbos: Um, what are some of the other things that you know family businesses should be thinking about right now.

 

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Michael Palumbos: And I guess maybe before I go there. Is there any other data or any other math or any other pieces on that that either one of you want to add to this before we move on to, you know, what do people do about it.

 

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Ron Huntington: Well, I've got my observation is is the advantage that that that family on businesses have here's the span of decision making is much shorter

 

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Ron Huntington: They can react and and i think examine data if they're looking at it faster.

 

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Ron Huntington: They also can make faster decisions. And I think that the reason we're on the call today is to say if you couple that advantage.

 

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Ron Huntington: With an organization that has done its homework and has set in motion a series of contingency plans with well defined triggers metric triggers that say if

 

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Ron Huntington: These things happen, or if these things aren't in place as we go through each of our weekly or monthly business cycles. We make adjustments and by the way.

 

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Ron Huntington: The number of triggers that are tripped will dictate exactly what our response is going to be

 

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Ron Huntington: We didn't see this coming. Last time in March. So everybody had to learn on the run.

 

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Ron Huntington: Right. We've got the the benefit of some experience and some hindsight now, and I've got a number of clients who have taken

 

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Ron Huntington: An approach that says let's sit down and figure out what are the triggers that let us know where either

 

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Ron Huntington: We've either got more opportunities in front of us that we need to be able to position ourselves. Take advantage of because that's one of the

 

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Ron Huntington: One of the joys of a crisis is other people aren't going to be as successful and navigating and as as others. And we want to be able to say, Are there opportunities out there which would trigger

 

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Ron Huntington: Us in an opportunistic direction and would allow us to gain market share would allow us to gain additional margins profitability.

 

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Ron Huntington: new customers, you name it. And on the, on the flip side. Are there triggers that would tell us. We've got to conserve cash, we've got to make some decisions right now to what I call lengthen the runway.

 

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Ron Huntington: That we have in front of us and give us Mike my client goal. Back in March was to say let us find as much

 

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Ron Huntington: Runway length as we can so that we can survive an extra month or two or three or five and give ourselves decision making and maneuvering space to be able to to come out of it on the other end. Now, at that point, we thought, well, maybe this is only going to be six months.

 

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Ron Huntington: Wishful thinking

 

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Brad Giles: Now we know differently.

 

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Ron Huntington: It's not going to be six months, it's going to be 12 1824 probably even or even longer potentially before we get back to any comfort level of normal right so

 

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Ron Huntington: I think the you know what i'm when I'm telling my clients is all right. We did this once before. Now we know you know we're going to

 

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Ron Huntington: Need to face it again. Let's go back and let's rethink our contingency planning and let's let's re examine the triggers. I have the triggers change you still want to be able to have triggers for the upside, and the downside.

 

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Ron Huntington: And we've got this, we've got this a model that we created that can can apply to pretty much any business and if, if you have clients or customers or listeners on the podcast that would want that Michael

 

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Ron Huntington: Have them contact you and you let me know and we're happy to provide it for them. Right.

 

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Now,

 

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Michael Palumbos: Let me come back to some of the questions that you're that you're getting in other conversations that you're having Brad chime in there. What are the let's. What are the conversations that you're having now with client, you know, with the business owners that you're dealing with.

 

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Brad Giles: Well, do you remember the last time that we went through a global pandemic. Do you remember the last time when we went through a global pandemic.

 

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Brad Giles: And it created a global recession and all of the international travel stopped. Well, nobody does right it's beyond living memory, nobody who's alive actually has any recollection or experience on this.

 

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Brad Giles: The second point is

 

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Brad Giles: Anybody with any future prediction is looking into a crystal ball and the facts are there are some of the smartest people in the world working on a vaccine, but there is we have no guarantee that

 

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Brad Giles: The vaccine will be available that it'll be effective, all that it will work or it will be adopted by the population. And I'm not trying to be a doomsday by saying that but what I'm trying to say is

 

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Brad Giles: The conversations. I'm having with clients is let's go to first principles. So what are the absolute basic facts that we can rely on. For example, how much money have we got in the bank.

 

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Brad Giles: Now to Ron's point one of my clients is 125 year old family business and and work with other ones. But that's just an extreme example and and they

 

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Brad Giles: Some people may look at that legacy as being negative

 

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Brad Giles: But you can always look at it from two sides. They say, you know, like there are bad things. We've got arguments within the family or this hierarchy or problems or whatever it might be.

 

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Brad Giles: That are challenges. But equally, the one thing. The one thing that a family wants to do is survive that. That is that is the thing. I think you probably both agree and our listeners.

 

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Brad Giles: That that's so. So no matter what we must survive, we must prevail, because I don't want to. I don't want this thing to go down on my watch and and that may bring negative emotions.

 

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Brad Giles: But in the context of what I just said about coming back to first principles and thinking in the long term and and actually being able to say, you know what, there's a chance that that this thing won't be over with the

 

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Brad Giles: Kind of the flip of a switch, but in actual fact this thing may just keep going and then we'll just kind of slowly, gradually peter out of it and discovering new norm.

 

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Brad Giles: Is a is something that they can accept and therefore is something that can be accepted by all. And what I'm saying there, I suppose, is consider all of the potential circumstances, coming from a place of first principles, because

 

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Brad Giles: What I believe or what one believes

 

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Brad Giles: Is just speculation and and we must prevail, no matter what. That is the absolute, absolute objective.

 

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Michael Palumbos: Love it in some of the ways that you know, Ron, I had a peek at your

 

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Michael Palumbos: You know worksheet. The, the, it's not a worksheet, but the list of questions and thoughts and whatnot. And just think you're fabulous. Would you mind sharing, you know, just breaking down some of those questions and those ideas that people should be thinking about today.

 

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Ron Huntington: Yeah, well we initially when the first wave here we build a series of seven questions that we said, look, this is the Get yourself organized, real quickly.

 

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Ron Huntington: And make sure that you're covering all the important basis that an organization that is is taking control of its own destiny would want to do. And the first thing was, you know, take a look at your cash flow and your cash position.

 

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Ron Huntington: Are you burning through cash or are you conserving cash. Are you are you lengthening the runway that we talked about earlier. And do we have, you know, proper funding sources in place as an emergency if needed.

 

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Ron Huntington: And so at that point we had people looking at their banking relationships, you know, their reserve levels.

 

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Ron Huntington: Now we've gotten some maneuvering Room through the first phase, and I think it's time to take a look again if if this continues.

 

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Ron Huntington: How much runway. Do you have and how strong, would you be and can you take advantage of opportunities if they come along.

 

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Ron Huntington: In the future, or are you going to be taking a defensive posture and starting to just, you know, Batten down the hatches and die for the depths of the bunker.

 

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Ron Huntington: Secondly, is, is take a look at your talent and your and your the capabilities of your leadership is it stronger today than it was six or eight months ago when this thing first tip or

 

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Ron Huntington: You know, does it need fortification, at this point, do you have the right people to take you through wave to that would be one of the things that we look at.

 

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Ron Huntington: You probably have some level of business continuity plan to get you through phase one. If you're still alive and listening to this podcast right now.

 

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Ron Huntington: But the idea is, again, how can we take a look at that and the operations plans backing it up to make sure that we've got things in a solid strong and and resilient position.

 

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Ron Huntington: Team communication your team is depending on you and your leadership to get you through the next round of this thing, you know, have you refine that. Do you have the right messaging going out. Is it practical and objective and honest and truthful.

 

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Ron Huntington: And is your, is your team still behind you 100% by the way that you're letting them know what's going on. You don't want to scare them.

 

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Ron Huntington: You don't want them to panic. But you do want them to have good valid information, then obviously if you're going to get through another round of this are the key relationships that you have with customers and vendors and suppliers are they fortified as well.

 

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Ron Huntington: Supply chain is your supply chain fortified for another round of this

 

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Ron Huntington: You know, we don't know where that's going to go. But what what my clients that are that are positioning themselves properly are doing is they're taking a look at that aspect and ask themselves.

 

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Ron Huntington: Okay, if one of these suppliers goes down. Do we have a backup.

 

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Ron Huntington: Right, okay. And lastly, and you know, I, I'm an eternal optimist. But, uh, but a pragmatist as well. And one of the things we have them take a look at is. So where are the opportunities out there because you want to be able to keep that balance.

 

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Ron Huntington: And you want to be able to say

 

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Ron Huntington: When others falter. Are we going to be able to take advantage of that opportunity and, if so, what do we need to do today to put ourselves in the position to do that.

 

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Michael Palumbos: Right you know it's it's interesting, one of my clients is in the lumber industry and in early on in the year.

 

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Michael Palumbos: They just felt there was a buying opportunity in lumber and just, you know, in that, January, February, March timeframe. They were buying buying buying and as as the virus.

 

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Michael Palumbos: Was, you know, they were getting more and more about it. They were buying more they had the cash to do it. They were very nervous that they wouldn't have the inventory and anybody that you know knows anything about the construction industry.

 

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Michael Palumbos: The summer knows that my client had their best year in business ever because you couldn't get lumber because the supply chains were all you know broken at that point. And he had it.

 

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Michael Palumbos: And was able to capitalize on it so that I think that's a really good point. Ron is, you know,

 

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Michael Palumbos: Taking a look at the supply chains, looking at, you know, in forecasting and thinking and and brand you know the data. Make sure that you're putting all these pieces together and and looking for those opportunities bread, you know, Ron just gave us seven things

 

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Michael Palumbos: Do you want to do eight

 

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Brad Giles: I'm just, yeah. Yeah, no.

 

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Brad Giles: I definitely you know many right um well

 

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Brad Giles: What if this. What if this wasn't a pandemic. What if it was IMAGINE IF YOU COULD whatever you could put on a different lens and hide everything to do with the pandemic, because the problem is is a symptomatic. The, the asymptomatic.

 

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Brad Giles: Component makes people think, oh, it doesn't affect or I need to look at it through a different lens. So what if we just completely take away all of the pandemic component and simply look at the fact that this is a recession like

 

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Brad Giles: Okay, so what happened 10 years ago with the GMC and how did you react to that. What was the time frame between the beginnings of the GMC when we saw the, you know, some of the

 

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Brad Giles: A legend things that would ultimately lead to big problems. How long did that happen and then thinking back even as far as what history tells us about the Great Depression.

 

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Brad Giles: By the point when there was the initial shock and then there was the decline was, I think it was like a year or 18 months.

 

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Brad Giles: And that was the decline in stocks that came about because of unemployment, there was data that came out of, I think I saw it on CNBC in the last week or so 800,000 people in the US applied for unemployment benefit for the first time in their lives. Last week, right. So,

 

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Brad Giles: If we can. The point is not to prove that we're right. The point is not to prove that whatever political affiliation or beliefs in any sense we have is right. The point is to survive.

 

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Brad Giles: And then if we can look at it through different lenses by stripping things away and we only look at it as being well this is a, this

 

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Brad Giles: This is just, it's a recession. Okay, what would you be doing differently. So we know there's a recession. Now there are macro recessionary indicators.

 

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Brad Giles: Irrespective of what happens to the pandemic that tells us already. This is the direction that we're heading. What do you need to do to fortify so I don't know if that was a one or a bonus, but that's my reaction and thoughts, no.

 

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Michael Palumbos: I think it's really helpful. You know, we follow you know being, you know, both growth strategy coaches and wealth advisors were kind of looking at it from both ends. And so we follow

 

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Michael Palumbos: Something from the conference board called the leading economic indicators and that you know we we were able to tell clients in October of 19

 

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Michael Palumbos: Start start prepping things. Things are not looking like they're going in the right direction and that had nothing to do with the pandemic and that was really interesting. So if you marry those pieces.

 

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Michael Palumbos: I had, you know, January we were starting to tell people, we were not changing portfolios. We're not being we're not timers. But if you happen to have cash.

 

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Michael Palumbos: And you can stockpile some cash on March 18 with a really good time for us to start buying. I'll tell you, you know, that really worked really well for those people that listen to me.

 

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Michael Palumbos: Back in October to say start piling up some cash and be ready because there's going to be some points, we're going to be able to put this stuff to work.

 

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Michael Palumbos: And I think that comes true when we're running the business as well is that you know as business owners, we should be following the economic trends that just the data, the pure numbers. Forget everything else, it has such a great point.

 

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Michael Palumbos: And in from going forward. I promise to pull out when I get to the conference boards numbers. I'll share them with you guys because it's just, it's great data.

 

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Michael Palumbos: To be looking at where are we right now. And to your point, we all in a recession right now that we have not come out of that recession and, you know, as of yet. We, the there was a disconnect between the stock market.

 

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Michael Palumbos: And the economic market. And so a lot of people saw the stock market. Take that 30% died. And that's come back. You know, it was, it was raging, you know, do a great job well.

 

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Michael Palumbos: Anytime you throw $2.2 trillion that you know the the the world you know in the US market force the stock market's going to react positively to that.

 

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Michael Palumbos: What people don't know and I'll throw it back to you guys, but what they don't know is that you know 2000 789 we didn't even get close to a trillion. Yeah.

 

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Michael Palumbos: And that and that saved the economy and did some things. So for this was like, you know, just a big boat load of money that came that, you know, was 10% of GDP.

 

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Michael Palumbos: So when you when you put those pieces together. It's a lot so

 

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Michael Palumbos: I really love what you said. Brad that, you know, stop thinking about this as a pandemic and start thinking about it as a recession.

 

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Michael Palumbos: And that might help a lot of business owners take, you know, deep politicize this set it aside. Stop worrying about you know what the virus may or may not do and just say,

 

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Michael Palumbos: You know, let's start looking for opportunities or let's start looking for, how do we, how we're going to survive this thing.

 

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Ron Huntington: And I think Michael and his second wave if the governments around the world, fail to further stimulate

 

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Ron Huntington: The environment will we go deeper into recession. Will it go to an outright depression and as Brad said earlier we none of us have ever been through that before I came pretty close in 2009 2008 2009 but

 

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Ron Huntington: This could be so much worse if the government's can't get their act together. But, you know, we can't depend on the government. I think most of us as family business owners or entrepreneurs are are reasonably self reliant, in many respects, and I think we have to rely on that kind of instinctive

 

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Ron Huntington: Feeling that thinking to be able to work our way through this next year or more. And so coming back to. So what would you do

 

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Ron Huntington: If we were faced with a steeper recession or with us with an outright depression in 2021 all of our clients are right now going through their planning cycles for 2021 through 2023

 

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Ron Huntington: And so we're saying, let's face this we got some new wrinkles to consider. But let's go back through and ask ourselves some of the fundamental questions that we do every year at this time, which is so what's our plan for the next three years.

 

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Ron Huntington: All right, what kind of adjustments. Do we think we need to make to fortify ourselves and to take advantage of those opportunities.

 

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Ron Huntington: Most importantly, is to say, let's go back and take a look at the business model that we operate under

 

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Ron Huntington: And hopefully many of the listeners have have thought that through. They know their business model. If they don't, there's plenty of resources out there to figure that out. But you best figure that out right now because it will be

 

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Ron Huntington: I think a paramount importance to know do we make any adjustments to our business model to either fortify against downside risk or take advantage of upside opportunities and now is a great time in the fourth quarter to be able to do that right

 

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Michael Palumbos: Up. Go ahead, read

 

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Brad Giles: It, it's like the I feel like the real estate agent who every day rain. Hi. Hello. Sean is saying. So great time to buy right now. I'll tell you that.

 

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Brad Giles: But now is the time when you need to have the right strategic planning in place. I just to reinforce your point, Ron, like, you've got to have the right. If you've got sufficient cash reserves the best practice that we were to eat a minimum of two months of

 

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Brad Giles: Two months of fixed expenses cash it bank right so that, and that's really the starting point. But you've got to have

 

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Brad Giles: And if that means you might need to liquidate some assets like it might be the time to do that to have that resiliency. You got to have the business model, right.

 

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Brad Giles: And to be honest, this is the point about the real estate agent. If you don't have a professional plan, who's coming in.

 

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Brad Giles: Like, there will be the greatest return at this point because people like Michael or Ron myself. And there's many, many, many people around the world that do that.

 

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Brad Giles: We do this every day. And we see it and and and I don't want to seem like the guy that says, look at the best time in the market, a boy, but

 

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Brad Giles: You know, this is when professional advice can really, really help because there's so much uncertainty and just knowing what to do. Michael, that's the end of our advert

 

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Michael Palumbos: Now, and I think you're, you're absolutely right when when we talk, you know, remember I spent many, many years solely as a wealth advisor financial advisor before, you know, realizing that my

 

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Michael Palumbos: My family owned businesses greatest asset was their business. That's why we got into strategy because I'm like, let me help you with your biggest asset, not just the ones that I can get out of your biggest asset.

 

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Michael Palumbos: But, so, you know, there's the market, market cycle of emotions. And so, you know, as that as that as the markets doing good and wonderful. It's like, Ooh, maybe I should get it now and everything's great. And

 

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Michael Palumbos: I'm excited. I'm exuberant now I'm gonna put my money in and that's when the market starts to go down.

 

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Michael Palumbos: And then at the very bottom of the market. You know when when things are the worst. And everybody you know just can't stand it anymore.

 

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Michael Palumbos: That's when the vast majority people get out and that's when the market turns around

 

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Michael Palumbos: You know it's it's at the top of the market when everybody's exuberant is when people are getting in and it's at the bottom of the market. And that's why the average investor.

 

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Michael Palumbos: Doesn't typically do well if they're trying to figure that cycle out because the emotions.

 

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Michael Palumbos: Do that and what both of you are saying when we're just talking about, it's the same exact thing when we're running our business. Take the emotion.

 

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Michael Palumbos: Out of this pandemic, I would have to take the politics out of this and just look at the data.

 

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Michael Palumbos: Look at you know what you're supposed to be doing as a business owner, you know, and

 

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Michael Palumbos: You know, we would say that there's seven attributes. Right. You know, and we can take us through what what are the seven attributes that everybody should be thinking about right now, Brad, giving you mind go and going through the seven that they should be thinking about

 

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Brad Giles: I'll switch strike around that.

 

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Ron Huntington: And that's fine you know and we talked about these, and there they follow to some degree that earlier set of questions that we asked. But the first one is leadership and when we start the process of working with our business family on business.

 

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Ron Huntington: The first thing we say is, do you have the right leaders in the right seats using a Jim Collins reference doing the right things within both the company.

 

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Ron Huntington: And the market, are they capable of getting the results you need from them in good times and bad times. You know, do they have that level of

 

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Ron Huntington: Of Stockdale paradox balance that allows them to be solid performers, no matter what is thrown at them. Secondly, then taking a look at the next level, we call it talent.

 

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Ron Huntington: And that is again the right people and enough of them.

 

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Ron Huntington: Whether that means you have more or less, but the right number of them in the right seats to drive stability and growth in the market that you serve.

 

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Ron Huntington: So it's being able to have enough people that will give you the ability to service whatever demand level exists and any cycle any point in the cycle. The third, of course, a strategy. Can you drive profitable top line revenue into your company.

 

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Ron Huntington: Is your sales engine working and and. Is it reliable and repeatable in terms of of its consistency. So it's are we driving reliable top line revenue into the organization.

 

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Ron Huntington: Execution says, can you can you can you deliver bottom line performance that that meets or exceeds hopefully the plan that you've got for yourself, your needs and your expectations.

 

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Ron Huntington: The idea there is most organizations that stumbled badly in the last six or eight months of this pandemic maybe had a workable plan, but they did not have the discipline and the commitment to the execution.

 

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Ron Huntington: To get the results they were hoping for, or that were possible. Have they been more disciplined. So, a lot of them.

 

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Ron Huntington: Left a lot of money on the table, potentially during this last eight or nine months. We don't want to see that happen that bad, that, that leaves a bad feeling in everyone's in everyone's stomach so

 

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Ron Huntington: That then the other three our customers, you know, are your customer retention or acquisition efforts.

 

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Ron Huntington: Are they are they having the desired results are you expanding the REACH and the impact of your sales teams and your sales engine.

 

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Ron Huntington: And that really is building relationships, making sure your customers know that of all the people they could be doing business with your team takes better care of them.

 

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Ron Huntington: And the relationships are more solid more real more honest.

 

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Ron Huntington: And more dependable than any other that they have a choice of moving to then we talk about these play into execution are your systems and processes.

 

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Ron Huntington: Are they in place. Have you got them refined and are they efficient, do they drive and allow near faultless execution.

 

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Ron Huntington: Within your company's performance and its, its brand and reputation in the market. So, so having the systems and processes is a brand and relationship for to fire.

 

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Ron Huntington: That we want to make sure that you're paying attention to. And last is profit and cash and McKinsey came up with a great that you can you can get an off their website and they come up with a great

 

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Ron Huntington: overview of what they call cash excellence in the time of the pandemic.

 

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Ron Huntington: And cash excellence means you're giving your, your sales engine your organization enough oxygen to keep breathing through the toughest times that anybody on this planet in our lifetimes has ever experienced. And so it's giving your company oxygen for growth and for optimally extending

 

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Ron Huntington: Those operational runways that we've talked about earlier in the call here.

 

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Michael Palumbos: Perfect love it. Thank you.

 

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Michael Palumbos: I am i think you know when we, when we got together for our pre show call that I like to do with, you know, with guests.

 

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Michael Palumbos: One of the things that I want, I don't want to miss is that we talked about, you know how to outwit outlast and outplay your competition when it comes to surviving and other you know

 

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Michael Palumbos: combo of coven 19 and the Florida and I think we've done that. That's what this this whole conversation has been about is, you know, really helping people to, you know, do exactly those things.

 

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Michael Palumbos: What I want to do at this point is just as. Is there anything else that either one of you, you know, would like to

 

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Michael Palumbos: Finish up with, you know, what if you could only say if you could only say one thing, or if you just final thoughts you know what were you what what's going through your hat as we've had this conversation.

 

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Brad Giles: I wouldn't probably start by saying a bias to action. You know, we all know the story of the frog in the boiling water inaction.

 

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Brad Giles: You know, has consequences and doing nothing is actually doing something. Okay, so, so I would say think about it, given everything that we've spoken about, think about a bias to action. I'll give you a very quick example. One of the clients I work with

 

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Brad Giles: In March, their revenue went from $20 million to zero in the course of about seven to 10 days per annum revenue dropped it. We've seen that

 

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Brad Giles: It was a pretty tough time to, you know, to be fair,

 

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Brad Giles: We pivoted before that, I don't even really just started working with them. But before that, one of the complaints, they had was about the gross profit margin. It was about 30% in their industry and it was typical

 

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Brad Giles: And it was a compliant and we had a couple of ideas, but we never would have been able to

 

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Brad Giles: It would have been very difficult to execute those ideas to increase that okay this catalyst came along this person had no choice.

 

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Brad Giles: We reinvented the business. They've now got up to almost double almost 60% gross margin revenues. Okay, they haven't got back to 20 million yet they're probably

 

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Brad Giles: I'd say if we analyze it out, they're probably going to do about in this current year July to June.

 

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Brad Giles: They're probably going to do, I'm going to say like seven or 8 million. I go, but hey, it's the first year of a new business model. So it's still pretty good.

 

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Brad Giles: So I wouldn't just say a bias to action they if the pendant pandemic hadn't come along, they would have been stuck with the old model. It's the that forced their hand to change.

 

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Brad Giles: Um, do you need to be forced to change or can you adopt a bias for action. How can you be the catalyst on yourself. That's probably what I'd say.

 

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Michael Palumbos: Love that. Thank you, Ron.

 

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Ron Huntington: Make a couple of things here and we touched on this when we were talking in the run up to the call here.

 

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Ron Huntington: There's a process called gamification gamification and you know you can let this situation just drive you you know into a miserable downward spiral.

 

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Ron Huntington: Or you can as a leader, you can ask your team to get and stay in the game.

 

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Ron Huntington: And so the analogy that I've been using for years with clients when we hit a little bit of a rough patch and there have been a few I've been in this business for about 30 years and

 

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Ron Huntington: We've had a few ups and downs during that period. But when the, when the I'm sure that they have the same equivalent possibly around the globe.

 

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Ron Huntington: In some fashion, but the original

 

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Ron Huntington: reality show was survivor.

 

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Ron Huntington: They've gone through. I think they call them so 40 seasons of survivor. Now I think most recently, and they outline. Their, their approach right from the outset, it was outwit outplay and outlast your competition.

 

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Ron Huntington: To get the million dollar the $2 million dollar prize and be the last person standing at the end of the competition.

 

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Ron Huntington: So gamification says let's turn this into an opportunity to put our teams into play.

 

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Ron Huntington: And we would like to all be standing at the end of this particular game together.

 

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Ron Huntington: So the questions we would ask you say all right let's rally the team and our strategic planning this year.

 

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Ron Huntington: As much as ever, because when this coronavirus thing hit it was March, we were already into our into our plans and we had to pivot and change and adapt over the last eight or nine months, but now with, with the benefit of a little seasoning and this arena.

 

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Ron Huntington: We can actually say, let's build the outward out playing out last into our planning cycle for 2021 to 2023 and so put those questions to your team.

 

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Ron Huntington: If we're going to outwit outplay outlast our competition and come out with a larger market share better margins for operations more cash than any of our competitors. What do we need to be doing and how do we change and adjust our planning in that manner.

 

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Ron Huntington: And so, you know, I take a look in and I'll conclude on this point, and it's it's a quote that I've been using for a long, long time. From there, for better or worse, we have an opinion of john wayne the actor of the film star.

 

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Ron Huntington: But I've always kind of admired certain aspects of his personality and he has a quote that I've used for years and it's very simple.

 

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Ron Huntington: It's life is tough, it's tougher. If you're stupid. So you got a choice to make here as a business owner to do I want to put together a plan and dive into 2021 and 2022 and 2023

 

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Ron Huntington: With with with a better than then even chance that I'm going to succeed and succeed dramatically, or do I want to wing it and just hope that we'll get through the next 612 18 months.

 

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Ron Huntington: I put my money. I put my money on planning any day of the week. Yeah, yeah.

 

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Michael Palumbos: I appreciate your sugarcoating that a little bit for us because that's, you know, that was perfect, that's well said. That's exactly it. You know, it's funny. I'm we just finished reading the infinite game by Simon cynic and

 

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Michael Palumbos: Were you were using that book, we do the family business book club. For those of you listening and want to join the book club, check us out, but

 

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Michael Palumbos: What I would say you know what's really neat is we're playing and infinite game.

 

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Michael Palumbos: And unless we have an infinite mindset and infinite possibilities and infinite, you know, thinking around this thing and bigger purposes than, you know,

 

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Michael Palumbos: Than the than the rest. We're not gonna. You're not gonna win this isn't a game. There isn't you know there's nobody's keeping score, there's no end zone.

 

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Michael Palumbos: You know, and so you really have to be thinking about what am I doing this for

 

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Michael Palumbos: And this is where you know the you know the week gets separated from the shaft right you know and and you really need to start thinking about it in the you know the john wayne quote is given to us one more time.

 

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Ron Huntington: A life is tough, it's tougher. If you're stupid.

 

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Michael Palumbos: I love it, I love it. So a couple of last, you know, things brad, brad has a phenomenal book out there and then title that book is thrive. Yes.

 

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Brad Giles: Made to thrive in my day.

 

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Michael Palumbos: Thank you. Sorry about that.

 

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Ron Huntington: My friend ground.

 

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Ron Huntington: Absolute endorsement is

 

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Ron Huntington: I've used this I've shared it with my clients with their leadership teams and it really does have a pretty catalytic effect on kind of where they want to take their careers.

 

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Ron Huntington: It really is a great read for CEOs, any, any of the business owners and your network, Michael, I think we get some real value out of it. So it's a great book. Okay, easy, easy to easy to read and simple to understand.

 

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Michael Palumbos: Great. And that's available on Amazon has spread. Yeah.

 

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Brad Giles: Everywhere AMAZON, BARNES AND NOBLE everywhere. Yep.

 

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Michael Palumbos: Okay. And if people want to get in touch with you. Are you on LinkedIn. You do you have, what's your website. Give us that

 

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Brad Giles: Yeah, absolutely. I'm, I'm on LinkedIn. Obviously a in the bread Joel's je le s and my website is evolution partners.com dot A you as in Australia.

 

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Brad Giles: Yeah, and I've got a weekly newsletter as well that I put out which I just share some thoughts and insights that you can see on the website. Thank you.

 

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Ron Huntington: And by the way, grads Brad's weekly insight that he shares his something. It's the first thing I read every Sunday morning. It's, it's in my inbox and I send it to my clients. It's got great information.

 

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Michael Palumbos: Thank you. Appreciate appreciate you coming and sharing bread Ron if people want to get in touch with you. How do they do that.

 

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Ron Huntington: I'm on LinkedIn as well run Huntington HQ AMP T IO n to n and our website is EMT echo Mike tango EMT consulting com and again, happy to provide

 

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Ron Huntington: That to page and Michael, you can send that out to any of your clients as well. Then my requested with my compliments. I think if you got some good value out of it. If they will as well. I'm happy to pass that along as a nice gift.

 

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Michael Palumbos: Perfect. Gentlemen, thank you for joining us again, my name is Michael Columbus. This has been the family biz show

 

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Michael Palumbos: With family wealth and legacy in Rochester, New York. Tune in weekly as we bring new episodes and more incredible value to family on businesses as often as we can have to have a great week, take care.