Transcript:

Michael Palumbos (00:00.206)

Welcome everybody to the Family Biz Show. I am your host Michael Palumbos with Family Wealth and Legacy in Rochester, New York. And today we have Mike Hayes from GLC Business Services. So excited because we started talking and there's so many connections that we had already. Welcome Mike.

Walk us through, you know, what was your journey personally to getting started inside of the family business? And then I'm gonna go back to history of how the business was started and what you guys do and all that stuff. But we always like to hear, you know, how did you get pulled into the family business? 

 

Michael Hayes

Gotcha,

It's a funny story. It always comes back to my father. Again, it's family business. Who helped start the family business? Where does that go? I was born in the 70s, child of the 80s. Just enough classic rocket muscle cars before disco took everything over and really ruined it. Dad was a printing executive, salesman down in New York City for Case Hoyt, which was a Rochester based company and they did all high end lithography. So it was the best of the best printing stuff. He was doing stuff for Tiffany Jewelers, IBM, among many other high profile clients. So with him doing that, we always just thought, hey, we're in Westchester County. We're close to New York. Dad works in New York. This is where everything go. Occasionally we come back to Rochester and see mom's side of the family. And somewhere around 1989, 90, he started getting the idea that printing is not what he wants to do for the rest of his life. And he wanted a little bit more control over things. I think they were going through a sale at that point. Not that he was uncomfortable with what it was, but he also saw the writing on the wall in the printing industry.

 

There were a lot of changes that were going on and not a lot of things that were done over quality versus drive down the cost of doing business and get me a better price. With two friends of his in 1992, they started GLC Business Services. And the focus there was who's got a lot of printing that needs technology on site that doesn't necessarily have the bandwidth to run it. And so law firms really became the primary target. And so they were doing some things with

 

Michael Hayes (01:59.566)

These sorts of services, business process, outsourcing of mail rooms, print shops, that type of stuff in New York City and other primary cities, there wasn't really a focus on secondary city markets. So starting this up in Rochester in the early 90s, they went gangbusters. mean, it started off and they had immediate success. Clients had started having to get all downtown Rochester. 1992 was all that inside the inner loop. Every law firm there. Rochester was a booming economy. There was so much going on. 94, I came on as a lowly messenger.

 

and started getting the understanding of what was going on, at least from the bottom up. Some of those relationships with the top, mean, those came later. But my time started with them in 94, other than, you know, I make a couple of jokes of I was outside the window mowing the lawn as they were putting up stuff on overhead projectors because PowerPoint didn't exist yet. So it was an early start. I saw it from the beginning, even though I didn't always comprehend what was going on business-wise as a teenager, there was always that close affiliation.

 

Very cool. this is where we had our first connection. You didn't know this coming into here, but I worked for the Xerox sales agency at the time and the young woman who had the sales rep for that inner loop area, had, know, your father as a client at the time. And we were always butting heads of who was going to be sales rep of the year. And I'm like,

 

GLC better not come out with another need somewhere along the lines if they take on another accounting firm or another law firm right now I'm in trouble. So that was a whole life

 

And there was such a widespread they were early on too. They were like manufacturers. Why not this? Yeah, sure. Let's get into here Well, how wide does the definition of facilities go? Sure and that niche back to law firms kind of came through the 90s and a little bit more refined through the next couple of years Cool, I that extra service email in a lot of places Replaced in our office messaging all that type of stuff and took volumes down, but it didn't eliminate paper product It didn't eliminate, you know the need for document services. It didn't eliminate the mail fully FedEx still has an

 

Michael Hayes (03:57.93)

They didn't have anything with wet signatures back then. or everything needed wet signatures back then. were no electronics. So, yeah, was the demand was still there and it was always kind of on the periphery of what happens when all this changes. But it was, again, life was good for a long

 

Awesome. So when did you come back into the company? You left her while it sounds like.

 

I went to college in 96 to 2000. I went to the United States Military Academy at West Point. you. Thank you very much as well. Did five years of active duty service after that. I was with the 10th Mountain Division with our plane with artillery shells. Went over to Afghanistan for a tour. Came back from that. Missed the birth of my first child. Thought, you know, again, everything's hindsight now. Didn't think we'd be in the Middle East for 20 years plus or Afghanistan for 20 years plus. So it was one of those, you know, kind of my victory.

 

I did what I was supposed to do. came out of it with some pretty cool military decorations, did my service and thought, all right, let's see what the business world has going on. I got recalled back in a year and a half later, ended up spending a year in Iraq. So there was not to mention six months before that training up at Fort Bragg. it was, I mean, it upended family life. At that point, was a logistics consultant for an important export firm.

 

Very small firm. Rochester was, I think, just off the cusp of still being the number one export city per capita in the United States. So business, again, could have been good, but I had my life kind of turned upside down a little bit, and that happened. When I came back, was still in the freight game, was subleasing space from GLC. So I had an office there, so I was kind of associated, but I wasn't really in there. Dad and I got some good lunches in, and I knew most of the staff. I ended up thinking, not that I wanted to jump into GLC, but...

 

Michael Hayes (05:35.148)

I wanted more opportunities for myself. I wanted to see where I could have more control.

 

Your father and my father must have got together somewhere along the way.

 

I think at one point where I was like, know, dad, you're hiring. He's like, I couldn't afford you. You know, like it was just one of those kind of push away arms distance, length, see where things.

 

was putting the glass ceiling at, you know, in the Xerox agency and Dad slid over his tax return and said to me, said, you know, I don't have a glass ceiling. I can work anywhere in the country that I want to work and I get paid really well for helping people do good things. He goes, what do you get paid for? Sell copiers.

 

So he was on the front leaning edge of acquiring the good talent and redirecting it to another direction. The war for talent starts early and it's good. I was close but not that close. There were a couple things that got me. think there was a blizzard in Vancouver that delayed a couple shipments coming in. There was a strike somewhere in China. There were storms on the Pacific Ocean. And for a just in time industry that needed their equipment. It wasn't me on the ordering side. I was just...

 

Michael Hayes (06:41.018)

this is when you need it, this is when you have it. I can't guarantee the weather. And so those sorts of concerns said maybe it's better to look into something else that's a little bit more stable for me. I knew I wanted to be on the sales side. I knew I wanted to bring things in, but at the same time wanted more control.

 

Let's talk about the business then, what it did, the services it provided versus what's it look like today? I'm so curious to know, you know, the technologies and the world has changed dramatically. And when did you start to pivot along the ways around some of these things?

 

Questions about pivoting the entire time I was back. So from 2011 until becoming CEO in 2017, we were constantly talking about what's the next evolution of this? Where do things look like? It's also where we kind of uncovered a couple of the differences and philosophies of the other owners where, you know, my father and I like putting it the same way. goes, if you got four owners of a company and that, sorry, that changed as well. When I came in in 2011, I wasn't an owner. I had some sales success. So did my counterpart, one of the other owners sons.

 

And we were both brought in as, you guys know what you're doing here. We're going to give you a piece of the company, or you're to buy a piece of the company. And we're going to see where this goes through the, through the, the rest of the transition, which really didn't have an end date. was just, this is the way we assume things would look. Here's the arranged marriage. You two come together and, and, and see how things go. And unfortunately it didn't, it didn't go, say, I think the best way to put it is that you can have people that have the best of intentions as partners. But if you don't have the same vision, you can't.

 

You can't have four different partners looking out the different window of a car and assume you're going forward. It's just, it's a house divided, just can't stand. And so that we kind of uncovered over some time. We opened up a consulting division that was much more focused on, you know, the higher end strategy. And that's ended up where we ended up splitting. My father and I stayed with the personnel side of where we were putting people on site, sourcing talent, staying close to the new technologies coming out. And then the other two kind of went on their way towards let's talk high end.

 

Michael Hayes (08:40.258)

Let me talk to a managing partner. Let me talk where you can cut some costs on these things, that things have been around the business. know what I'm doing, kind of pushing things in that direction. But for my father and I, was always, we want to be close to the people, right? mean, we're people persons, guess, if phrasing that properly. He's definitely the sanguine Irish talk. The first thing he does when he walks into a place is go to the bar and make friends. mean, it's one of those, he's got a great personality for our business.

 

Today, what are the services that you're providing? When did somebody hire you?

 

Yeah, so there is still quite a bit of a focus on the traditional services because you still need people in chairs and facing clients to do things. A lot of the focus is going away from those high end on-site document rooms. Not that they don't exist, some of them do. There's always clients that say, we like having this capability on-site. This is what our attorneys are used to. This is what our professionals are used to if they're not just using attorney teams. We still have a focus there. The bigger focus, again, since COVID happened, COVID was like an RFP on every account that we had.

 

It was you, deal in people and we made the decision to deal in people with the split two years prior, but we deal in people and no one's allowed on site. You know, no one wants to interact with each other. Everybody's scared of the virus. Everybody. How, how are we working this thing forward? And it's funny, my father immediately pulled out the playbook from 2000 when there was the anthrax scare and it were 2001, excuse me. And that was after, after nine 11, but there was the anthrax here and he says, how are we handling mail? How are we doing this?

 

How are we cleaning things up? How are we keeping employees safe? And for me, that was energizing to look at to say, yeah, we are taking care of people. Our business is the people that we manage, that we have. It's those relationships. we've got so many, I always brag about, in our industry, it's a high turnover industry, twice the national average on tenure. And we've got plenty of employees that push 25 years with us. We've got a couple over 25 years.

 

Michael Hayes (10:33.122)

that we celebrate, we make sure that everybody in the company knows life is good if you stay with us and build up that trust and we'll take care of you, you take care of us and it's a good relationship. But back to the original kind of the question of what are we doing with services? It is a lot of hospitality right now. As people are coming back to the office and a lot of, know, I'm working remote or I'm coming in from another area. You know, do you have an office concierge that says, these are where the bathrooms are. This is what the bathroom code is. Here's the wifi code.

 

By the way, are you expecting anything via FedEx because it's going to come into the mailroom that we also still manage because things still come in there. There's a big combination of office services though and records workflow where everything that used to be handled in paper and it's in Redwells or it's offsite with third party storage vendors, sometimes you still need that. Sure. And sometimes the attorneys that need it aren't in the building. So you can recall it.

 

scan it, somebody's got to get it in the document management system, somebody's got to make sure that it's routed the right way, that's following all the cybersecurity guidelines that the firm has as far as their proprietary product. that attention to detail as far as cybersecurity confidentiality, it still has to do with documents and records. But then also that hospitality focus has been big for the onsite piece. The secondary offshoot has been a lot more into HR. And so for 32 years of managing people,

 

We know a lot of things because we've seen a lot of things and there's best practices for all sorts of different strategies, right? You can get into office administration, you can get into business structure and you can talk yourself into circles and down rabbit holes of, know, what's this? What's best? What's this? What's that? The reality is for most of our clients, their brain work is a limited resource. And to sit there and constantly argue about structure or deal with structural issues or things that are, you know, repeatable and on a, a, on a reoccurring timeline. That's the definition for outsourcing.

 

Give it to somebody that knows that, that that's their expertise, that that's their business, and that we'll take that ball and run with it.

 

Michael Palumbos (12:30.636)

Love it. You said that your tenure is double that of the industry. Whenever I hear that kind of figure, statistic, I relate that right back to company culture. Talk to us about, you know, what is the culture of your company and how has it evolved through the years and how do you maintain that company culture?

 

It's the company culture has always been about the people. Right. And I think the way it was set up and the way my father and his partners set it up really was to take a look upwards and say, we're in this with you. Now I'm wearing a GLC uniform shirt today. I figured that was appropriate to represent the company with. It really does come down to the job that gets done on site and making sure that every employee knows. Number one, I might not know exactly what their hire start date was.

 

But when I'm on site, I know their name, I take time to see them, I make sure that I connect with them and that they know who they're working for within GLC. And that if they have a with whatever client that they're with, excuse me, if they have a problem with whatever client that they're with, they can always come to us because officially we are the HR channel for them, not the site that I've got them working at. And that's that special thing of that business process outsourcing. It adds that flexibility to a client to say,

 

I don't want to manage your vacation. don't want to hear about the conflict that you're having with this other person. That comes up through my HR, not through theirs. So as far as cleaning things up from an administrative standpoint for a client, all of that work, all of that comes back to us.

 

Take a second and think back. I want to dive into this a little bit. We talked about transition. So if you look at the first transition, there's four partners. What happened?

 

Michael Hayes (14:10.782)

Originally three originally three originally three. Okay, so somewhere right around 2000 That was the first buyout of one of the two one of the three original partners. Okay? The lock going on again. It was before my time. So, you know there I was in my early 20s just saying, you know it's too now right and we're still friends with with The partner who left where we're actually pretty close and he started up another company that I've now got a relationship with as well. So

 

It's mutually beneficial. that was part number one. Then looking at kind of like where everything went through the mid-20 teens. Yeah, that was a little bit different. mean, like said, we were right on the cusp of COVID. So had we seen that coming, who knows what would have changed, what wouldn't have changed, anything else. But where we knew where we were, were just philosophies weren't lined enough.

 

did you work through that? guess that's the question. We have different opinions. But even to get to the point where you said, okay, let's go our separate ways, it took how long of a period of time did it take to do that? How many conversations? How did you get through those pieces? A lot of times people are sitting there at that impasse themselves and they don't know exactly where do I go next.

 

There's always the term the coefficient of friction. Where did you overcome the coefficient of static friction, right? Where was it? Okay, there's tension. Sure. There's obviously things that aren't working well. There were a couple, the writing was on the wall. I mean, I remember at one point, think in 20, it must be 2016. I wasn't CEO at the time. I said, I think we have a communication problem. And I sent an email out to the top four and just said, we need to get together and we need to kind of work through this because, you know, from a communication standpoint, I would use the word broken.

 

one person says one thing, the other one hears something else. Like, what is our vision? What are we getting on the page with? Where are we going? And that was kind of the start of the conversation. It was taken wrong. It was thrown back in my face. So you called me broken. I said, I said, we, I didn't say any individual. Right. I said, we, are not working together well as a And that worked its way around in a couple of the different things, you know, and there's some that like, I really don't want to get into all the details. I'm not looking to disparage anybody or talk down about.

 

Michael Hayes (16:25.954)

how somebody works under crisis or how they treat a partner of 25 years at that point. But it was clear it was coming to an end.

 

And I think not so much to get into the exact details, but it's just that it's tough times happen in every single business. And you're, you know, the fact that you talk about communication being broken at the time.

 

comes back to, and sorry to interrupt the question. think what it comes back to was, you know, there was an understanding of it's not a, there's four of us. It's not about any one of us in particular. It's about the business. And we already know that there's stressors on the business. There's always stressors on the business. I mean, you talk about Porter's Five Forces, you talk about everything else, what's coming from what direction, you know, there's always stress and there's always something. If it's insurmountable or if too much ego gets in the way to solve a problem or if the ego is looked at as the problem, that's a big deal.

 

That's a really big deal. And if that can't, if can't get past that, that's where those conversations and conversations have to have to end up there.

 

So now here's a couple other side questions. The buy-sell agreement that was there between the partners, did that help or hurt the process?

 

Michael Hayes (17:31.16)

That really helped the process. was actually, it was very well written. The early parts of GLC as far as what was, again, we're working with lawyers primarily back then. All of that, that focus, there was no shortage of legal minds to give their opinions on how we should structure things. And we listened to it. They did it. So not to mention the first original partner was bought out 15 years prior.

 

had gone through something already so they probably whatever didn't go well at that point.

 

at what percentage of what was that buyout based off of what percentage of valuation how did we value the company because you know again we're small business and when they started it early on that was part of the question it's always part of the planning like what's the liquidation event like what's our what's the end what you know does this go on in that two years is there is there a buyout point is there where is this and so that initial partner buyout did fix this is what this is what we're worth and this is how we look at ourselves the banks didn't agree but the partners did

 

And so when we put the buy sell together, I mean, it was was simply that it was here's two partners that want to go in one direction. Here's two partners that want to go in the other direction. Here's where the revenue is coming in from the company right now. This is what your share is worth. And it's by yourself. You want it or do want to give it to us?

 

I think it's important for people to understand that the buy-sell agreement can help or hurt you as you're going through those things too many times, too many times. I've seen a buy-sell agreement that says, you know, here's the valuation, here's how we're going to value the company, and then it sits on the shelf for 15 years and it's never adjusted. It's never fixed. And so it becomes a really big problem if you're not looking at that buy-sell agreement and going through it on a regular basis.

 

Michael Hayes (19:05.806)

And benefit of that, again, working with lawyers and having so many of them in the family and friends with them and family members, it's better to work something out and talk it out and say, what's the win-win for both situations, right? Both families right here. How does this work on a win-win basis versus saying, I'm throwing my hands up in the air and we're going back to the contract? The contract is there for there's no more conversation. Just I don't want to talk anymore. Just follow the paper. And if you get to that point, it really is unfortunate and sad.

 

But the reality is that's why contracts are there. Exactly. So, you know, like talking through, get to a place that's win-win. And I really think the best thing we did during our split was if you don't want us to pay you, this is what you have to pay me. That's fair. I think it was very fair.

 

I like the term, how do you know that the document you signed is going to do everything that you want it to do when you need it to.

 

Exactly, and I don't know if there's a way to do that but sure but having something on paper that you know Yeah, and they do it so many different ways and you can see of you know There's almost the mutually assured destruction button in certain contracts of if it comes down to this no one's walking away Happy, but but we didn't have that it was it was purely meant to be everybody's gonna go in their time So how do you want it to look and it should look friendly and it should be? Yeah, it should be standard

 

We call it stress testing the document. And so we'll go through and say, Hey, here's your will. Here's your revocable trust. Here's your life insurance trust. Here's your buy sell agreement and operating agreement, whatever the documents are. Let's go through and stress test these things and see what happens when. And that's always just a, it's a nice conversation. It's a fun conversation for a geek like me who likes to dig into these documents and look at them. And we don't practice law, but we can see, you know, the,

 

Michael Palumbos (20:51.234)

roadmap of how these documents lay out and then we can kind of architect them to say, this what you were expecting or not? And then you go back to the attorneys to say, hey, this isn't running the way that we thought. Can you help us out and make the change, know, adjustments?

 

Exactly. That's what attorneys are there for. Yeah. 100%. You just watch them turn the clock on and hopefully get an answer by the time the hour's up.

 

Talk about you became CEO when? 2017. So what did the role of CEO look like for you in 2017, number one? And number two, what was that transition like for your dad when that happened?

 

2017.

 

Michael Hayes (21:26.774)

It's funny because dad was the CEO and stayed on as a CEO. So it was the other two partners that were kind of, as we said, we were having these conversations of what a split might look like. OK. And that's where I don't know if it was a passive aggressive would be the word, the wrong word. But you think you know the right way forward. No one can see the future. You take the reins. And there was a little bit of that. think I said our conversations from that point forward were not built on we're going the same direction. So it really was. I think at that point there was that that chasm between us. So

 

What it looked like for me was, does reality look like? What does our sales engine look like? Because that hadn't been performing at a level that we wanted it to for quite a while. the only real wins that we were seeing were on the consulting side. And the consulting wins were very, very big. However, they always had a finite end to them. When your engagement ends, your engagement ends. We can talk about one of them. One of our consultants put together a massive, massive merger with a failing New York City firm. was a 100-year-old firm.

 

Street that was going out of business. And everybody knew that it was the Titanic and partners were jumping ship and everything else. And as a consultant, we put somebody in that place that got the managing partner to focus in the right areas to make sure that the partners knew if you leave, you're leaving your equity on the table because everybody knows what's going on. And when that happened, it was still written up in the, in the, think the Wall Street Journal is of the death of a big firm. But the firm that came in and acquired on good terms, kept the business together, kept

 

all the revenue that was still left within the firm that hadn't left continuing on, that firm is very successful today and more successful than they were before the merger. So watching one of our consultants put that together was incredible. The downside for a small company, I put him on the map and he got acquired by one of the biggest consulting firms in the industry. you know, that kind of takes the air out of the tires on what's up next there, what's up at Patnext. So my focus as CEO really came into where and how we're focusing our strengths.

 

There was this almost idea that we had to be all things to all people and everywhere all at the same time. It's impossible. It doesn't happen. So where we needed to focus our sales efforts were in cities that we already existed, where we already had a strong presence, and where we could really leverage the knowledge of who we were across more of those same professional platforms and say, here's where we are. The struggle is our traditional law firm base at that point was also shrinking.

 

Michael Hayes (23:46.998)

So if you look at what law firms have been doing since 2008 with the advent of say e-discovery back then and then the financial crisis and how many of their clients have real estate and everything else and banking, was kind of messy way back when. But what that did is a lot of firms in the mid-market sharpened their focus on who they would hire selectively as associates. So instead of hiring a chunk out of some law school that they were familiar with, they would pick on one, the best one scoring in the class. And so you have a lot of lawyers at the time that...

 

left the industry or got secondary degrees or jumped out into other places. I got a good friend left the army with me at the same time. That time he just said, I'm going to work for the VA, you know, because one, the veteran aspect, but two, he was a lawyer that was willing to work for the VA. They love to have them, but you know, he kept it the back pocket. goes, you know, they thought I was making lawyer money like this on the outside. He goes, I was looking at unemployment, you know? So, you know, seeing that in the industry, especially from a lot, you know, not all of our clients, but certain ones that were under those significant pressures. When you start limiting your

 

talent at a lower base. Over time, you end up as an inverted pyramid instead of that diamond. Because as the top of the partnerships would retire off or leave, well, they would promote up from within. And so once you have a wider management committee than you have associates to pick from, or junior partners to pick from, you're in tough spot. And a lot of those firms realized that and did the right thing. They aligned with larger firms. That mid-market pressure didn't mean a lot of those firms were failing. It just meant there's a clock starting.

 

And at some point they're going to merge with someone in the MLOT 100 or 200 to make sure that their business continues on and they can continue to get paid.

 

&A is happening in almost every industry and I think you hit on exactly why. There's just not enough people in any industry, they don't have the employees at that lower level that are coming up through the ranks because the baby boomers were such a big, you know, population.

 

Michael Hayes (25:38.882)

I use sports analogies all the time and it's probably the wrong thing for me. I've only had some people with it. you know, I think of baseball. Are you gonna acquire the best talent out there or are gonna have a good farm team? And having a good farm team costs a lot of money. And you say the Yankees get a bad rep for just stealing all the talent that's out there. They got an incredible farm team too. It's, if you're that big, you can have both. If you're not, pick one.

 

Yeah. I talk to family businesses all the time about make sure you have a virtual bench because you can't afford to have a bench, you know, in inter internally all the time. So you have to have this external virtual bench and the virtual bench is just being smart with taking lunches with, you know, competitors, employees that you want to just keep the fingers on the pulse. Not that you're going to poach them, but it's somebody might raise their hand and say, I'm

 

tired of being at XYZ firm and if you're having conversations and lunches and meeting these people and asking about their career and maybe even mentoring a little bit in other areas, you're going to be one of those first choices when they say, I'm ready for something different.

 

You've hit on something again. think that adds to our tenure as well and why we've had been you know part of our culture is that mentorship and bringing people up. If I can promote from within, I want to promote from within. Of course. It's not always feasible. You don't always have somebody that's ready to fill the shoes right then and there and so you have to go to the outside and I think some of that's healthy as well. But I've got a couple great stories right now. My sales lead was our recruiter and I mean right now she's knocking the cover off the ball for it and she goes you know I'm not really a classic salesperson.

 

Right. And I go, but you know us, you know, you've been recruiting for us for six years before I moved her into the role. And then after that, she goes, okay, so I know all the jobs in the company that I'm hiring for. And I go, and what else did you do? You were selling people into the organization. You know, why should I come work for one of the smaller groups out there versus one of the largest competitors? Why work for GLC versus Xerox? Xerox has stock options. Xerox has these things. I could have a greater career path that goes up beyond wherever else. And you know, well, do you want to take that chance?

 

Michael Hayes (27:41.326)

or you want to come somewhere where you're appreciated? And even when it is your time to leave somewhere down the line, I'm not going to hold it against you. I want a great alumni association. I want people that have a good feeling about GLC. We have, I can't tell you how many other site managers and assistants that have gone on to work within law firms that we support. So when my directors have their conversations now on a monthly basis, sometimes it's with clients that used to work directly for them.

 

that we're the site managers. And so that relationship just continues on and it gets better and better. You know, I always make sure that we have our eyes on and we're looking at the right things and we're not doing any sort of group think of, they know what was going on and we know this. Make sure we're bringing an outside perspective to the conversations in every single one of them. But that relationship always helps. If there's trust there that's built up. And I think this goes back also to the split conversation of, you know, 25 years of working together. Where's the trust? Right. Do you trust me to pay you?

 

because I have to trust you to pay me. And when that becomes a part of our culture, you know, where I've got employees and my management team now, I think is the best that we've ever had the business in the history of the business. I mean, they are absolutely fantastic. I could go through each one of them and say, I trust them enough to tell them the confidential information. You know, it's one of those, I can be honest with them and say, I want your feedback because this is what I think is happening. Don't quote me on it. Don't say that that's it. Don't start a rumor. But if this is the truth, how are we going to

 

and having those conversations and pushing that down to a level that we weren't having those conversations when it was an ownership before, or we were having those conversations, but it was with the four of us. It wasn't with leadership team that really touches clients, feels the site, understands what's going on and has their fingers involved in the day.

 

leadership team.

 

Michael Palumbos (29:21.452)

Yeah, I've been asked to do some CEO coaching and leadership development within at the CEO level. And I always tell them thanks, but no thanks. Where I want to do it is if the CEO is willing to bring the leadership team in, because if the CEO is growing, but the leadership team isn't, it's no good. If the leadership team is growing without the CEO, so it's CEO plus leadership team is the coaching program.

 

Absolutely, that's so much of that comes from how you communicate what you expect from communication back up. Again, an army lesson for me. It was, I can tell you a plan from the top down, but if I don't sit and listen to you to refine it from the bottom up, I'm not doing my job.

 

I have to understand that feedback and I don't so important

 

and I don't want to tell you exactly how to do it. I want to give you the right and left parameters and say, figure it out within that. This is the outcome that I need. This is what you can't do on the right. This is what you can't do on the left. Push it down the middle, see what you can get, get us to that end state. And talented people respond to that so well.

 

So you're one of those CEOs that if you left for four weeks, what do you come back to?

 

Michael Hayes (30:25.41)

A full inbox. the business is running and that's my intent. It should not be on just one person. If it's a cult of personality, it dies with the cult of personality. It has to be sustainable and moving on. And if I want to pass this on again to another generation, it's not about me. It's not about me at all and it can't be about me. It's got to be if something happens to me, here's the envelope, open it up and make sure you follow the instructions to keep everything rolling.

 

Business is running.

 

Michael Hayes (30:51.864)

But it's not about me saying, yeah, you want my picture on a billboard saying, get to know me. Let's get to know the business, get to know the people that I have there, get to know our sales process, get to know our care for your business. And that's where I really wanted to focus.

 

I think that's hard for a lot of CEOs because they're good at something. So your dad, like when he had this idea to start this, he was really good at something and saw a niche, saw an opportunity outside of that. He could have easily been the guy.

 

He would very much though say the partners that he had were right in the moment he had. one of them wanted the spotlight. The other one was, you know, liked the spotlight but didn't have to have it. My father was probably the, you know, between those two, Ying and Yang, he was probably the best combination of both where he can take the spotlight but he doesn't want it. You know, he can stand up and talk in front of a room and he's extremely good at it. But it's more operational knowledge and moral character for him. mean, everybody that knows him says, you know, the funny side of it, how about this?

 

One of my directors, when we go out golfing, goes, is your dad in our foursome? I go, yeah. goes, now I got to be honest about my score. It's knowing that with him, it's not what I say, it's what's right. It's how do we get to the right solution? And that builds so much trust. For me, I mean, I had all, how many different military examples I could talk about leaders and people I've worked with and, you know, colonels and generals and wonderful, incredible people. Dad was always that first leadership example. It was always, it was always how he led the, led his business.

 

what standard he kept himself.

 

Michael Palumbos (32:23.224)

That's why you have such a good reputation in the community. you. Talk about transition from dad to you. When did that happen?

 

It's funny because he was right there with me the entire time. So from 2017, I took over CEO, he was still COO. We'd over what's January 1st of this year, it's the official, he's fully out. He's still on the board. You know, I still live across the street from him. can wander over and say, got a bottle of wine. got to talk. But it's, he's still there. And I still like using him. He's got so many great relationships. just, what I never wanted to do was I never wanted to push him away.

 

But I also wanted to give him his time, where he didn't feel like he had to sit and babysit or that he had to stick around longer than he wanted to. So that door is always still open to him. I still, you know, the golf days, the, hey, which client needs to buy a lunch that remembers, you know, we're going to do those things. But at the same time, we're building that responsibility base that's beyond just the ownership team and where my directors and vice presidents can get involved and say, no, this is where I take over.

 

I'm to change gears just a little bit and let's talk about the family dynamic side of things in terms of you know, how many siblings do you have? Nine?

 

I'm the second oldest to ten.

 

Michael Palumbos (33:45.038)

Wow, okay. Any of the other siblings involved in the business at all?

 

All of them at one point or another. and it's funny because no one really wanted it to jump in and to be full time, but it's, know, hey, high school, we got a scanning project. And my sisters would come in and, you know, get to know people in the office and that's what they would do. There is this, it's funny because I suffered with it as well. There's a level of, I don't know what the right word is, if it's responsibility or maybe it is personal ego, maybe it's something else. We all wanted to go out and experience the world on our own before we said, dad, give me a job. You know, and that was something that I've got.

 

some extremely talented siblings. I mean, there's always that joke, you know, if you don't know which sibling is the bad one, look in the mirror, it's probably you. Because I look around and I'm like, man, there's nine and they're all good. I, they're, you know, they're, they're fantastic. They're wonderful people. good friends with, you know, all of them have these deep relationships with them that keep getting better. And the only one, my sister, Sarah was involved in the business other than me, the longest. And her passion is her kids right now, but also she got into the healthcare.

 

line of work and she's now a registered nurse. just actually graduated from the U of R program this past summer. And so from going from, I'm so proud of her. The class invited her to speak. She was the class speaker at graduation and it was such a great speech. One, was humble. It was deep. It hit everybody in that crowd the right way where she says, hey, this is what we do. Our job is service. And coming from a service-based industry where I was in HR and on the management side of things, she goes, I get it.

 

This is a step above. You're taking care of people in their neediest moments versus what we do, which we take care of people in needy moments, but it's never life.

 

Michael Palumbos (35:26.914)

Right. So nine siblings, I've got to dig into this a little deeper. It was just, what were the conversations around, know, how did mom and dad work their way through to say who wants in, who doesn't want in, you know, did you, did you purchase the business from your father? Did you, you know,

 

the details around that. Dig into that a little bit. I know, and I'm going to share it. You think this was easy and it's boring and mundane, but everybody is going through these things. And it's how your parents had these conversations is important for people to hear.

 

Right and and so the examples from the generation before always something that I want to rely on as well, too Because it's I think my parents did it right we were never pushed to be in the business with him Beyond you know it was almost the same thing as hey someone's gonna mow the yard this weekend and between my older brother And I it was like all right. We'll go mow the lawn and then if dad said well Hey, I've got some work in the office I'll pay you for it who wants to come in and help with some filing or some scanning we'll learn the copy work and

 

It was never, okay, you did it, you're trained, now you have to take the next step. It was a part of kind of working the family business and just, for lack of a better example, being on the farm, right? Like you're taking care of something that needs to be done and dad asks, so you say, If you take to it and if it becomes a passion, talk to him. All you have to do is ask. And we were all clear with that. It wasn't a fallback, it wasn't a...

 

Well, just in case it wasn't a anything. It was if you want this, there's a door open. And like I said, I've got some incredibly talented siblings. they, a lot of other doors were open. And when you look at

 

Michael Palumbos (37:00.396)

Just the passions didn't align for them.

 

It's funny. Well, if you put all 10 of us together, you know, I've got my sister, Sarah, my brother, Joe. I mean, there's 30 % of the kids where we're like, okay, you guys share personalities, you know, all sorts of, you guys are very much alike. And then there's a couple of four in the middle of them. My brother, John, sister, Kristen, Kristen, actually, she's just as impressive. She's a insurance professional down in Philadelphia and the conversations that she brings back as far as the level of.

 

what she's talking about because it does borderline on law and you're talking about working as comp and where the litigation is and what suits. She is the closest thing to a lawyer, I think, in the family. you know, I got to take that back. My sister Dorothy just graduated from law school this past summer, so she is the lawyer of the family. But the two of them talking on those sorts of issues and labor law, it's incredible to watch it. John and Cecilia and Rose, they are incredible artists. John's side, he makes teeth and very high end.

 

Say dental technician is what's on his card, it is, I mean, he's down in Florida making teeth for famous people that, you know, no one matches the color the way he does, you know, that type of stuff. it's a very, he's at the top of his game.

 

of what you said that, you know, dad, mom or dad never asked. It was just kind of, if that becomes a passion for you. And I talk about that with family businesses all the time. It shouldn't be pressure to come in. My father never pressured me to come in. It was just an, it was an opportunity. And I did do the filing. did some prospecting cards. did, you know, lots of things for him when I was, you know, in high school. I had a great.

 

Michael Hayes (38:35.79)

That's some of the best advice I ever got was from my father to go talk to one of his friends. And it was just, he looked at me when I was getting out of the army and he goes, I was out of the army, I got my MBA and I was talking about leaving the freight forwarding world. And I go, who should I talk to about this? And he goes, I've never seen anyone with your resume. Like I go talk to Dennis, a friend of his. I go and sit with him and very successful businessman, know, he's been the CEO of a major corporation, had a consulting group. And he looks at me and he goes, what do want?

 

I really want to do something that I have more of an impact and more control. I want to do something that matters." He looked at me goes, you know your father owns a business, And I kind of laughed and said, yeah, but I don't want to be a nepotism hire. He balled up my resume and threw it at me and says, this is not a nepotism hire's resume. it's that overcoming some of those self-doubts of am I good enough to fill those shoes. That comes with growth and maturity and looking past all those other things. Working with that has been one of the best experiences of my life.

 

Being able to be the kid that says whatever you want to do now, you're good. You want to stick around? You want to do this? You want something else? You want to go just play with the grandkids?

 

Do you have, you've already mentioned you have kids. How many kids do you have? You have eight kids. Me, my. My wife and I had seven, but it was, you know, we were the Brady Bunch. had to come together to get them. So we always, I'm in shock right now.

 

Heavy kiss.

 

Michael Hayes (39:58.922)

It's yeah, we call the fertility cult of Northern Orondokite, right? My wife is also the second oldest of ten kids. it's and it's funny the way that that plan goes. So none of her siblings are in my business or parents aren't in my business. They've completely different tracks through life. Her mother is much more like my father. My father's much more, you know, and then the other way, my mother's much more like her father. It's a funny mix of personalities and how things happen. I've got seven sisters. She's got seven brothers. But

 

hearing their take on everything too. It brings so much, not just information, but context to any decision that I talk about out loud. There's always an ear to bend. There's always somebody to sit there and say, if my boss did that, this is how I would feel. And that, to me, is something that's invaluable. My kids go from just turned two up

 

What's the age range of your kids?

 

Okay. And has anybody showed any passion or interest?

 

My oldest, and again, it's funny, I think I scared him with a lot of different things. know, lacrosse is the family sport. know, played, my father's played, my sister's played. You know, I played at West Point, and my father was an All-American at Hobart and won two national championships. So there's always like, that club is a good one to be a part of. mean, lacrosse is just a wonderful fraternity to be a part of. And I kind of threw him in my oldest two, baptism by fire. And that was the absolute wrong thing to do. You know, I never really pushed him. And then all of sudden I said, hey, you're on a team.

 

Michael Hayes (41:25.132)

And because everybody saw the last name and said, this is lacrosse playing family. They were on team a one and they were like, how come everybody can catch and throw and shoot score? And we're just learning to scoop and play catch. You know, was, it was a bit, it was, it was unfair of me to do that. But I realized that too, I'm not pushing on a lot of different things, but at the same time, I'm to open up those doors and say, is this something that you want to do? My oldest very clearly told me no. And he's not the office type. He is in the trades right now and he's thriving.

 

Wonderful. He's on a well, not construction, but a blank on the word. That's okay. Wow. Yeah. Yeah. He's doing the carpentry track. Wow. You dump all that out before that. We'll start again. My oldest is in the, he's thriving. He's on a carpentry track in the trades and he's, he's doing great. And my second oldest, he surprised me where he's kind of quiet and you know, I always have to kind of probe for information and pull the older one. He's, he'll tell me anything that's on his mind all the time. The second.

 

You know, I'm like, okay, you're quieter in the corner. Give me some feedback. Tell me what you're thinking about. He came up to me at one point in high school. goes, I know exactly what I want to do for the rest of my life. He is a machinist. He was working over at Gleason right now, but he wants that track where he's going to be writing the programs and the codes that spin things out of those lays and big machines that they do. That's pretty cool. Really, really cool. I mean, he's got a passion for that. Still young in it, still inexperienced, but he is so eager to learn it and push forward. It's really cool.

 

At the end of the day, there's not a single parent that doesn't want their kids to be happy. sometimes our passion for what we do overshadows the fact that we want them to be happy and we don't ask, we don't get, we're not curious enough about the kids to help them find their passion. And I think that finding someone's passion, finding what lights their fire is really hard to do for a lot of these kids today.

 

I agree with you 100%. It really is. There's so many demands on time, not just on the kids, but on the parents as well. So being able to take the time with any number of kids and say, what are you looking at? Do you enjoy this? And if not, why? it a, these are just some growing pains. Nobody wins the first time out. You just got to get used to the process and the wins will come type of thing. it, you feel bad because you lost the first game? Or is it, do you enjoy it or do you not enjoy it? And sports need to be fun.

 

Michael Hayes (43:46.424)

You know, that for me is clearly there's a benefit and I get why, you know, hockey lacrosse seasons are now year round instead of just in where they were when I was a kid. But the scholarships are there. They're great opportunities to get into college. Like I said, I don't think I would have gotten to West Point without being a lacrosse player. We're dumb enough goalie. That was always mine. Wasn't really that great an athlete, but man, can I take a bruise? you know, without that in my life, I wouldn't be on the track that I'm on in that path. So...

 

There is that delicate balance of, don't want to push to make it too uncomfortable, but every kid needs to be pushed a little bit on that comfort zone and just say, we exploring everything that

 

Yeah. And I think it's not just sports, but it's in the business and whatnot. And you probably have that same kind of probing, you know, attitude with the employees that you work, you know, that work for you.

 

100%. So yeah, I mean, and it's, it's, it's a funny metric that in our business as well. The tenure is great for me I love it. A lot of our larger competitors would hate it because I, we pay more for people that have been around longer. And if you're just going for contracts on the lowest common denominator, lowest dollar, how do you survive? I mean, that's in the few contracts that we lose. That's usually the context that we lose them in. Somebody comes in and says, you know, you haven't been doing enough to bring in the young labor, the prices up here.

 

And you know, someone brings it. It's funny. it's sometimes those clients come back to us because the experience is so bad of wiping the slate clean and bringing in people, a brand new set of people that they miss what we had. But that's something that I try to bring in as well. Like I, I'm never going to push an employee out based on tenure. I am going to ask them, Hey, I've got another spot open it up and it pays a little bit more. Different responsibilities, different location. You got to get used to a new routine. Are you open to that? And the first couple of times I did that, I had an employee break down in tears.

 

Michael Hayes (45:35.382)

And she said, you don't want me here? don't want that? No, no, I love you here. You're doing fantastic work here. And it's visible to everybody. And I think you could get a little bit more responsibility and a little bit more pay if you're open to this. Wasn't open to that one, was open to the next one. That's great. And after her, you got at least a half a dozen here locally that I'm thinking of over the top of my head. We've done the same thing. Nice. know, it's those great personalities that respect the environment they're in almost more than

 

going out and searching for another 50 cents or a dollar or $2. Love it.

 

What keeps you up at night today?

 

future. always does. mean, just the unknown, know, it's that and a two year old. But no, it's no one knows what tomorrow is going to bring. And there's there's another thing that the army did teach me is if you're planning for what's happening next, you always take the most likely course of action and the most dangerous course of action. And what happens if the most dangerous comes in? Right? Like there's always there's always a bit of that that I probably think about it too much. And maybe that was just something I got to work on. But I always think of things in those terms.

 

What if the worst thing happens versus what's most likely?

 

Michael Palumbos (46:42.926)

doing some SWOT analysis on a regular basis. it. What about, what's the vision for the future for GLC?

 

Continue focusing on high talent and high quality and sourcing high quality individuals regardless of what structure I place them into if it's something that goes to attempt to hire if it's something that's in our traditional BPO if it's a direct hire opportunity We're looking at a lot of those different aspects I still want to do as much as we can with the BPO and the traditional services. My heart's always been there It really is what those turret those teams work so well and the philosophy of a hub and spoke service model It's proven. I mean it

 

We know it works. So, you my heart's always there in building those teams, that acquisition of talent, making sure that we're putting our best foot forward there, incorporating AI into as much as we can do as well. Right. That is the next big piece where everybody talks about it. Everybody talks about it. What are you doing with it? Yeah. Right. And for me, I look at the products that I use on a regular basis from software, and I'm going to take the lead on a lot of them of what they add in to make that software better for me, because I don't, I don't see AI taking a lot of my jobs. What I see it doing is

 

streamlining and making certain things easier for me to identify. So I don't have people in positions that search your inbox for what you're looking for that's lost, you know, or, did I save that attachment in my each drive by my documents, the shared drive, you know, the document management system that everybody can see, or is it still in my email? Microsoft Copilot is going to help you with that. Like that's, and that's not taking anybody's job. That's just making the individual user more efficient. question is going to be.

 

How do you take that? Because that's not new math. That's old math. Our soft sale was always, look how much time we can save you. So we're still saving time, but how much more time can be saved by incorporating these systems both into what our employees do and what our clients do.

 

Michael Palumbos (48:32.736)

I you and I both went through a lot of the same thing. Say if there's any parallels here. When we were younger, email first came out. Were you of the mindset who needs this? I don't need this. I was.

 

Exactly. I remember my first computer class and I might have been in eighth or ninth grade. Like, needs Microsoft Word or Excel? Why do we need Excel? I've got a calculator. You had no clue what the possibilities behind any

 

then Facebook comes out and Google comes out and we're like, you know, who needs a, who needs a profile? When LinkedIn came out, I'm like, who needs this? And then when we started to see, you know, what happened in each of those waves and now we're seeing what's happening with AI and blockchain and quantum computing, I am a huge fan and I swore up and down, I made the mistakes.

 

back then I will not miss this one I'm smart enough to catch it and so are you it sounds like

 

was going to say I've got that chat GPT behind me with my wife, Teresa. I've to give her a shout out as well because she'll say, you know, she used to be my, you know, hey, honey, I'm going to read this email out loud. Does it sound all right to you? And now it's push it through chat GPT and have it do the same thing.

 

Michael Palumbos (49:42.496)

And one of the things that I'm teaching my team is that chat GPT is not going to replace any of you. It's all chat GPT or AI, whatever the piece is, is that it's going to make a better you. It's democratizing intelligence. And if you learn how to use it, you know, you can learn things really quick or at least have somebody guide you through.

 

experiences made me self-aware as well. like I, my emails are usually conversational in tone. Sure. I don't go back to the military writing of, know, this is I'm writing an op order or like this has got to be the perfect five paragraph essay that, you know, uses no passive voice and all syntax is proper. GPT, you could ask it to clean up your grammar. Right. Or make it so it's, Hey, I was just talking about this. Make that more professional. And your conversational notes that go to yourself becomes so much more effective or quicker to be copied into an email that can be sent.

 

I mean, I was thinking about this yesterday as I was driving back from Buffalo. I remember all the lawyers had those little recorders on their desk, right? He had a thousand little mini VHS.

 

My father had them too.

 

It's Norm MacDonald and dirty work. Note to self, right? Like it's all of that stuff. How much of that has been replaced where 10 years ago, 15 years ago, it was Dragon Notes, right? Now you don't need to expend anything other than I've got my cell phone right here and I'm going to use Talk to Text and you're going to come out with a better version of your thoughts than passing it off to somebody else that then transcribes it. You know, not only are you saving the time with that, you're getting a better version of it. It's amazing to watch how that's gone.

 

Michael Hayes (51:16.6)

how much of that we can use.

 

We push the team to talk about prompt engineering, but then the other piece that I'm pushing them is to learn how to create GPTs. And so by creating the GPTs, it's like, if you have a job that you're doing repetitively and you're asking chat GPT or whatever AI you're using to do something, then turn it into a GPT so you don't have to keep putting all those prompts in. And then you're just dumping the information in and getting the output that you need.

 

I always get very careful with that, especially, mean, it's the law firm piece always picks up confidentiality for me. Yes. That's never a line I want to cross. when I'm creating anything, it's hypothetically, know, chat GPT, what do you think about this? Or doing something that really has no... It's a great point. And it's, again, our move from just basic document services into records, which I didn't really bring that much of up, but that was a huge swing for us back in the early 2000s.

 

maturity level of where records are and where records management is. And how it plays, it used to just be records management. Now it's information governance. And it covers so many more things than just words on a piece of paper.

 

fact that you have as many kids as you do, the odds of you having a grandchild are probably pretty high. What do you want your grandchildren to say about your leadership?

 

Michael Hayes (52:33.006)

That's a tough one. I just hope it's positive, right? mean, it's one of those things that everything that I'm doing now, and this is part of, not to sound like I'm the savior for anybody or anything else, I really, it is, it's about bridging what my father built and making a better life for my kids. If they take it from me, fantastic. If my grandkids take it from me, fantastic. If they don't, okay. It's gonna be something that is still there and still has an impact. And that's my goal for it.

 

When they look back on it, it's funny to say it too, because on mom's side of the family, there is some significant history here in Rochester. And Edmund Lyon, there's a park for him in East Rochester. We were just at 1441, the Academy of Medicine for something that was his house. was donated back in there. It was my mother's great grandfather. So looking at that and knowing that here I am 125 years later, talking about him in a positive light, knowing what he did, you know, from an ego perspective, that would be incredible.

 

But big shoes to fill, also knowing like if it doesn't, I just want that happiness and success for the next generation. You know, how it's looked at, if it's recognized, if it's not, like I said, there's been a part of this transition with GLC is just, it's not about me, you know, and accepting that really has brought a lot more peace and focus, emotional stability. mean, everything with running a business, all the things that really, you know, that can set you off one way or the other.

 

Big shoes.

 

Michael Hayes (53:58.742)

and put you on a bad path versus the right one for the company. That is a huge piece. It's not about me.

 

Michael Palumbos
Mike Hayes, GLC Business Services. Thank you for sharing your story. Thank you for your time. Thank you everybody for listening in. My name is Michael Palumbos with Family Wealth and Legacy in Rochester, New York, and you have been listening to the Family Biz Show. Have a great day everybody.

 Take care. Thanks.