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Episode 52: How to Develop a Family Council

In this episode of the Family Biz Show, host Michael Palumbos from Family Wealth and Legacy in Rochester, New York, engages with Lisa and Jay Daniel from the Lodge Cast Iron family. Michael shares his personal experience with Lodge cast iron pans, emphasizing how learning to season and clean them has enhanced his culinary experiences.

Jay and Lisa delve into their paths to involvement in the family business, with Jay detailing his journey from a family-oriented upbringing to a board member role, and Lisa discussing her introduction to the family and the business upon marrying Jay. They highlight the importance of understanding and embracing the family's history and values, regardless of direct involvement in day-to-day operations.

The episode shifts focus to the establishment and evolution of the family council, an initiative aimed at ensuring active engagement and communication among family members, especially as the leadership transitions from family to non-family members. Lisa offers insights into the council's formation, the challenges faced, and the strategies implemented to foster connection and education among family members across generations.

Jay and Lisa stress the significance of clear demarcation of roles and responsibilities, especially distinguishing between the family council's focus on family engagement and the board's focus on business matters. They advocate for the recognition of the time and effort invested by council members, highlighting the support provided by Lodge in terms of stipends, educational opportunities, and acknowledgment of their contributions.

The discussion concludes with advice for other families considering similar structures, emphasizing the importance of identifying objectives, recognizing where the family stands, and being prepared for an evolving process that strengthens family bonds and business success. The episode encapsulates the essence of intertwining family values with business ethos, showcasing the Daniels' commitment to nurturing their family's legacy while adapting to the evolving business landscape.

Episode 52 Transcript


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Michael Palumbos: Oh welcome everybody to the family biz show I am your host Michael Columbus with family wealth and legacy in Rochester New York.

 

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Michael Palumbos: And you and I are in for a treat we've got Lisa and Jay Daniel joining us from the large cast iron family and I meant to grab my pan Jay and Lisa i'm really sorry I was going to show it to everybody, I love I.

 

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Michael Palumbos: Love my large cast iron.

 

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Michael Palumbos: Because I learned I finally learned how to season it and I learned how to clean it and.

 

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Michael Palumbos: I actually i'm thinking might be one of the few people that really loves cleaning up with salt in just my hand going in there, my wife's like oh I can't believe you enjoy doing this, but I love it I love it it's so.

 

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Michael Palumbos: Thank you for joining us.

 

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Jay Daniel: Well, thank you for having.

 

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Jay Daniel: And we love that you love your lodge products.

 

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Jay Daniel: That scream i'll never ever get tired of hearing that and it seems like everybody who gets.

 

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Jay Daniel: their hands on cast iron cookware has kind of a personal experience personal story to share we never get tired of hearing those fantastic.

 

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Michael Palumbos: I loved it so much that I have three now and I have them, you know so that I can use them in other ways, I have this.

 

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Michael Palumbos: Whatever I have a wave that I cook chicken and it works best in the large cast iron because I get a nice seal on it and it cooks it and keeps all the juices and we're not here to talk about that.

 

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Jay Daniel: I am hungry I should warn you, Michael I am on.

 

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Michael Palumbos: So why don't we you know what i've learned is that people are they are drawn to the family business in different ways and different path you know pathways it's not always a straight line and if i'm not mistaken it's not a straight line for either view.

 

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Michael Palumbos: So talk about that a little bit, and if you don't mind.

 

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Jay Daniel: Sure, well, I guess i'll i'll jump in and go first so.

 

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Jay Daniel: My mother and household that I was brought up in the business the cast iron foundry was always a part of the fabric of the family.

 

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Jay Daniel: My grandfather mother side was President of the company, for a period of years and.

 

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Jay Daniel: You know, we would take summer vacations from where we lived at the time in Pennsylvania we'd go back to you know the family roots in South pittsburg and.

 

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Jay Daniel: we'd have a chance to tour through the foundry and see what it was all about so from the time that that I was very little to the time I was a teenager.

 

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Jay Daniel: I actually received my first couple of shares started attending meetings at the meetings you have opportunities to ask questions of the executives and and, at the time, a lot of the executives were cousins and uncles and and so.

 

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Jay Daniel: Eventually, one night, and I think it was about 2006 I got a phone call and said Jerry we're interested in in including.

 

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Jay Daniel: Some folks from your generation and i'm in the fifth generation of large kellerman family.

 

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Jay Daniel: And they said were you know, looking around at you and we're looking around at your cousins we see you started and successfully operated your own business, for a period of time.

 

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Jay Daniel: we'd be interested if you might like to be one of our candidates for the board of directors.

 

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Jay Daniel: I didn't hesitate staff filled out updated my CV got it to them the next day and was elected that June and and it's it's been it's been a wild ride I like to think that I am.

 

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Jay Daniel: Contributing now at least as much as i'm taking away, but I would I would be the first one to admit.

 

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Jay Daniel: In those early years I would say, probably from about 2006 to maybe 2011 2012 I was mostly they're getting an education.

 

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Jay Daniel: Learning and listening and forming my own opinions and and it takes a little bit of time, but now I think i'm at a place where i'm burning my spot at the table and i'm contributing.

 

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Michael Palumbos: Great I appreciate that che Lisa tell us about your your journey, thus far.

 

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Lisa Daniel: So my journey I grew up in a very large family in rural Pennsylvania, and unlike a lot of your listeners I wasn't born into a family business but I like to joke, that I was born into the business of family my mom.

 

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Lisa Daniel: Is the most incredible selfless person that I know and.

 

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Lisa Daniel: She made it her business to ensure that all nine of her kids grew up confident that they could do anything that they wanted in their life, and you know she she made sure we knew the role that we all played in each other's success so.

 

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Lisa Daniel: Connecting each other, was just her passion and that has followed through with me.

 

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Lisa Daniel: my introduction, to a large cast iron was Jay and I got married in 1994 in Pennsylvania, and I had become close with his mom and his brother, but I hadn't yet met this whole giant extended lodge family.

 

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Lisa Daniel: And so on my wedding day in Pennsylvania bunch of uncles throw up in a pickup truck and delivered me my first set of cast iron cookware and I was instantly hooked on the cast iron and the family to.

 

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Lisa Daniel: The aunts the uncles cousins that was just was what I was used to big family, it was you know I loved it I loved that jays family shared that with my family that we're all connected.

 

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Lisa Daniel: So my first actual introduction to the boundaries and the the extended family in Tennessee was in 1996 shortly after our wedding.

 

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Lisa Daniel: We went there and it happened to coincide with the 100 year celebration of the company, so what a great time to come and see all the people and what they were doing and meet everyone.

 

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Lisa Daniel: And the family gets together every year still to this day, and you know that's that for a long time that was my.

 

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Lisa Daniel: Commitment to lodge was just kind of out there on the periphery, I went to the annual family meetings and I talked to people and I met with people, but I wasn't involved in any meaningful way with the business.

 

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Lisa Daniel: Where my involvement came about was about five years ago, the company came up with the idea of doing a family Council.

 

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Lisa Daniel: And that coincided with the time where our own kids were going off to college and I had a little bit of extra time, and so I have really enjoyed.

 

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Lisa Daniel: Committing some of my time to these projects that we've done with the family Council that will kind of touch on a little bit So for me it was definitely more of a winding path.

 

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Lisa Daniel: You know, we also Jay mentioned our own business that we founded about little over 20 years ago, that was a you know, a very direct path it's a family owned business it's here in sarasota.

 

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Lisa Daniel: Florida, we do spend a lot of our time doing that, but it's been like Jay mentioned a great learning experience for us.

 

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Lisa Daniel: I think it's interesting for us that we have you know, a small business on one side in this great giant large business, on the other side that we're kind of navigating through our lives daily.

 

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Michael Palumbos: Make sure you mentioned the name of your business.

 

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Lisa Daniel: integrated systems it's a technology services company.

 

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Michael Palumbos: Great and I do think it's it's pretty phenomenal how you know the two of you have like both sides of the coin, you know we are the mom and pop small business doing our thing.

 

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Michael Palumbos: And then, on the other side you've got this huge company that you know is extended family members wins extended owners and board of directors and just.

 

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Michael Palumbos: A national you know international touch, probably at this point.

 

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yeah.

 

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Michael Palumbos: you're South pittsburg Tennessee 1877 is when you know.

 

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Michael Palumbos: Things kind of kicked off with Joseph lodge do you mind just giving it, you know I I know we could talk for hours about the whole history and everything but.

 

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Michael Palumbos: Maybe some of the highlights or stories or things that were passed on to you.

 

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Michael Palumbos: Through the years to how we got to where we are today, and then you know, the vast majority of the time so everybody knows when we talking about family councils and the importance of family councils as we're going into this.

 

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Jay Daniel: Sure sure, so I won't bore you with dates and details, but the the short version is my great great grandfather Joseph lodge kind of fell in love with the area.

 

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Jay Daniel: We had a waterway there, there was nearby rail system there was there was lots of there were resources there.

 

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Jay Daniel: That made it a very attractive spot to try to open a business specifically an industrial business, he was an industrialist.

 

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Jay Daniel: By every measure he traveled to South America, he worked with steam locomotives you've done a lot of really great things.

 

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Jay Daniel: But started the original foundry named it for his pastor gentleman named black clock, so the original foundry had the black clock name about 10 years into it, it burned to the ground and.

 

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Jay Daniel: Rather than you know pack it up and try something else, they simply reinvested and rebuilt, the foundry and this time under the name large manufacturing.

 

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Jay Daniel: Probably worth pointing out, we weren't always cookware used to be just whatever you needed cast iron if we could mold it and pour it, it was it was for sale that's that's what kept us grunting and we talked about you know the little business and the big business.

 

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Jay Daniel: And all these different differences through generations, I think, probably the primary piece that's at the heart of it is the culture that company culture.

 

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Jay Daniel: And that's something that scales up it scales down and it move seamlessly through generations.

 

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Jay Daniel: And when I talk about the culture at large, what I talked about really there is a commitment to the employees and the team it's a commitment to.

 

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Jay Daniel: doing it as best as we can, recognizing that we're going to make mistakes, but we're going to learn from those mistakes.

 

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Jay Daniel: reinvesting in the company reinvesting in the Community, and those are things that I think are very consistent across every generation of lodge.

 

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Jay Daniel: And they're things that were embedded in my DNA my business DNA is at work when Lisa and I went to launch her own business, so those are things that i'd like to think.

 

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Jay Daniel: know people would say about our company as well we've had we've had a good run of it on both ends.

 

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Jay Daniel: And it comes down to that that culture, I think that you that you build what are what's, what are the priorities, what are we really trying to do here.

 

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Jay Daniel: And it isn't just the bottom line, and I think in a lot of family businesses you'll find that's often the case it's really more about who we are, as a family.

 

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Jay Daniel: And just can Is this something that we're doing that's worth doing is it something we can be proud of, is it something our our neighbors and our friends can be proud of, along with us so that's that's the story I would share love it.

 

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Michael Palumbos: Go ahead Lisa.

 

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Lisa Daniel: And I would also add to that throughout all of the years that the company has been manned by some incredible you know men in the lodge family at the helm of the business and they've all done a phenomenal job you know just with growth throughout the years but.

 

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Lisa Daniel: Where we tie that into a family Council is about you know five to 10 years ago they recognized the need for some serious succession planning and the fact that there you know might be a time where the family, would not be at the direct helm of the company and so.

 

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Lisa Daniel: that's when they formed the family Council and a lot of times I talked to people about family Councils and they talked about.

 

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Lisa Daniel: Having some family business advisor come in, who recommends it because they have some arguments or disagreements in the family, but the best best time to do this is to do it when you don't need it.

 

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Lisa Daniel: You know, when you haven't thought about it, yet if you're hearing this and everything is running great start a family Council if you don't have one.

 

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Lisa Daniel: So we are at that point now the CEO the company, for the first time, and you know 100 over 120 years was now a non family CEO and it's incredibly important that we have some communication structures in place that the family Council brings.

 

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Michael Palumbos: love it.

 

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Michael Palumbos: Something that popped into my head.

 

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Michael Palumbos: Of course it's now no i'm.

 

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Michael Palumbos: Just you know going looking at the history, the energy, you said they didn't know it was just a foundry that and they were anything that was cast iron, so I mean it's interesting I would tell anybody that if you have a large cast iron pan.

 

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Michael Palumbos: Go to the lodge website and take a look at the history and you know you survived the Great Depression because you were had some garden gnomes and lawn ornaments and you know and just really neat how all these things kind of came together.

 

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Michael Palumbos: yeah through the years to survive.

 

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Jay Daniel: And it's it's a lot of fun to be a part of it now probably hasn't been a lot of fun to be a part of it really over the last 1520 years but.

 

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Jay Daniel: truth be told, there were a lot of years that were very, very thin there were a lot of years where the goal was just to make enough money.

 

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Jay Daniel: To pay the employees to pay the family and do it again the next year, and so this all the success that that we're experiencing now didn't come overnight, where we were in the long game, without any question.

 

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Michael Palumbos: that's I mean it's admirable and it's real and that's you know so it's like you lived through the depression.

 

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Michael Palumbos: We just had the pandemic, you know and it's not over yet we're still dealing with this stuff and sure that couldn't have been you know, a whole lot of fun going through to 2020 and 2021 you know, in a manufacturing industry.

 

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Michael Palumbos: And you're doing these things.

 

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So.

 

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Michael Palumbos: Very cool I get here alright so we're going to take the shift, then this is, you know the family Council in your definition why don't you guys kind of you know.

 

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Michael Palumbos: define a family Council from your perspective sending every people you know, everybody has maybe a different idea of what what does it mean to have a family Council.

 

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Jay Daniel: So there are any number of articles that we read in preparation for launching our family Council.

 

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Jay Daniel: And it's you know least I think gives gives myself gives me gives the board a little too much credit when she says that we came up with as a week had advisors all along the way.

 

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Jay Daniel: What we had identified as a threat, of course, was our succession, or lack of succession planning, so we did bring in some really talented people and a common thread was what are we doing around the family, to make sure that the connections are maintained with business in a way that's.

 

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Jay Daniel: that's preemptive, if you will, so make sure that all the communication is present, and that the the family feels that as we make these transitions we're not looking at additional risk.

 

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Jay Daniel: and family Council is something that came up again and again it was something that we introduced to our shareholders doing a shareholder meeting.

 

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Jay Daniel: I had a number of family come to me after the meeting and say I just don't get it, what is it you're trying to do what is it you're trying to do.

 

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Jay Daniel: And the simple answer there, I think, is we're trying to brace him prepare for the future we're trying to take a look at what the company looks like has the current generation receives behind the curtain and the younger generation step forward and man, the helm.

 

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Jay Daniel: Having those open lines of communication, having some better education around what it means to be a shareholder responsibilities that are entailed.

 

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Jay Daniel: and setting the right boundaries, you know our executive team is a fantastic talented bunch and they have to be given the avenue, they have to have some roadway to do their magic.

 

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Jay Daniel: So that's I mean for me that's it would be easy to throw up a venn diagram and say.

 

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Jay Daniel: You know here's the company executives here's the family and here's where they mash and in the middle here you've got this wonderful thing called a family Council and the truth of it is it's not quite that easy and it's and it's always evolving.

 

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Jay Daniel: What we, I think the simplest way to put it now would be the company, the corporation when we have communications to share with the owners group the shareholders in the family.

 

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Jay Daniel: Those come from the corporate Secretary, and the chairman of the board or the CEO when we have a wider scope.

 

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Jay Daniel: Then we go we'd like to take those opportunities through our family Council because family Councils, representing not just the shareholders.

 

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Jay Daniel: But all those folks we considered to be stakeholders, though they're the ones in the younger generation, and we want to prepare them, we want to help them know the story.

 

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Jay Daniel: We want them to be just as proud, as we are, when the day comes, for them to take a more active part in the business so that's that's what I think our family Councils all about.

 

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Michael Palumbos: Let me Lisa i'm going to come to you hold it for just a second because I want it, I think there's a piece here that we need to thread together for some people, that may not have all of those.

 

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Michael Palumbos: That that awareness and so through the years from you know from the time the business was was started, how many branches of the family are there today.

 

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Jay Daniel: Great question i'm going to actually I should just defer that one to leave with my family tree experts so.

 

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Lisa Daniel: So the founder of the company, Joseph and and Elizabeth Harvey lodge they had two children so there's two main branches of the family.

 

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Lisa Daniel: One of those branches is extremely large they they had many children and those children had many children, on the other side of the family is much smaller, so we.

 

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Lisa Daniel: We communicate with people across six you know six or six generations family members who are are now old enough to be you know communicating I think the oldest six 610 family members 30 years old.

 

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Lisa Daniel: We have new 610 Members being born, every day, but the total number of people that the family Council communicates with is over 100.

 

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Lisa Daniel: yeah yeah so it's a large group and it's growing every day.

 

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Lisa Daniel: And so that's what I mean the part that I would add here is the family Council it's about communication it's about finding ways that you can communicate with people where they are, how they want with meaningful content.

 

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Lisa Daniel: One of the ways that I kind of tie it back is like all the child rearing experts out there in the world they have always said, you should have family dinner around the table with your family.

 

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Lisa Daniel: that's great if that works for you, but even in our tiny little family with our three children growing up.

 

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Lisa Daniel: We didn't have time to sit around the table and have dinner we're not that we're not that family, we have three kids they do all kinds of different activities they're constantly going in other directions.

 

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Lisa Daniel: And I spent a little bit of time, you know feeling like a failure as a mom because I couldn't sit down and have family dinner but.

 

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Lisa Daniel: What I realized is that at the core of that what they were trying to say is you need to connect with your kids and you need to do it meaningfully.

 

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Lisa Daniel: And so we did that we made sure that we talked to them about all the little things every day, so that when the big difficult conversations came up they knew we had their back.

 

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Lisa Daniel: They didn't it wasn't foreign to them to talk to us about things, in fact, most of our kids friends come and talk to us about those things so.

 

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Lisa Daniel: it's really it's about the communication and if you extrapolate that out to you know family business it's the same way.

 

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Lisa Daniel: If the only time that you reach out to your shareholders, is when you need him to make a big decision or when you need to break bad news.

 

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Lisa Daniel: that's not the right way to do it, what do you want to do is open up that framework of communication celebrate the little things celebrate the family, in addition to the business and not to what we're trying to do with the Council.

 

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Jay Daniel: and get and get that engagement and keep that engagement and one of the things I would say as an early an early dividend, if you will, of creating our family Council.

 

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Jay Daniel: And it turned the attitudes actually have a few of our our elder statesman We brought the family Council together and cousins that had grown up in states.

 

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Jay Daniel: distances thousands of miles apart from one another, my generation was actually the first generation, not to have grown up in South pittsburg.

 

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Jay Daniel: Not to have spent time working in the foundry between school years, and so, for us having that family Council gave us really the first great opportunity to get to know each other one another on a regular basis, and so.

 

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Jay Daniel: A lot of the fourth generation who were asking me questions after the initial meeting what's this all about they came back to me later and they said hey I get it now.

 

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Jay Daniel: You guys know each other, now, and you respect each other now and you're able to identify where the big contributions may be coming from down the line and you've got everybody you've stoked a passion for this company that.

 

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Jay Daniel: Just wasn't there before and so that's where we give that's where I like to give a lot of credit to the folks that we've had on our family Council.

 

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Michael Palumbos: there's one more piece, I want to just kind of interject to make sure that people are catching this somewhere along the lines after Joseph and it was Anna.

 

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Lisa Daniel: Was that right yeah Elizabeth yep.

 

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Michael Palumbos: and Elizabeth they hit they started this company and they had shares the company and it sounds like those shares were gifted to their children.

 

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Michael Palumbos: Right.

 

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Michael Palumbos: yeah man to children and so now what's that.

 

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Jay Daniel: And, in fact, to this day that's that's the most common way our shares change hands it's it's through a gifting process yeah.

 

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Michael Palumbos: yeah, and so I want you, so what happens now is you know when you go from the time when Joseph and and Elizabeth passed and there's passing their shares on now, we have, how many different owners of the business out there today.

 

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Jay Daniel: i'd say we're in the ballpark of about 55 owners right now.

 

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Michael Palumbos: So they still have a privately held business.

 

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Michael Palumbos: mm hmm that you know is there's there's dividend stakeholders, you know ownership shares out there of this business that how many how many family members are actually working in the business today approximately.

 

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Jay Daniel: surprisingly few is the honest answer so i'd say we have.

 

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Jay Daniel: At this moment.

 

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Jay Daniel: For three by bloodline and one that's a spouse.

 

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Michael Palumbos: So okay.

 

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Jay Daniel: For come to mine and my apologies, are gonna have to go out right now, if I missed.

 

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Jay Daniel: Anybody absolutely.

 

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Jay Daniel: it's it's about four out of you know 500 plus.

 

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Lisa Daniel: Employees and i'll add that working in the businesses uh you know you're saying day to day in the business days answer is correct, but when you add to that the family members who are on the board of directors that number goes up.

 

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Lisa Daniel: When you add to that the.

 

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Lisa Daniel: family members who've been elected to the family Council and who are actively involved in roles in that that number goes up as well and that's kind of the benefits of these structures is that people can be involved, without making it their everyday job.

 

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Michael Palumbos: yeah, and so it really becomes really important to paint this picture for people to say i've been gifting my shares out to family members for generations now.

 

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Michael Palumbos: And now we have owners that you know don't know what's going on in the business I own something that I don't understand.

 

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Michael Palumbos: I might not even have a connection to it, the way that that you know people in the past have or eat your like Jay or the other people that are on the board.

 

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Michael Palumbos: They have a different connection to it are the people that are working there have a connection.

 

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Michael Palumbos: there's the vast majority of people don't and so that's what so now, I hope that this is painting a picture for those of you who are listening to say.

 

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Michael Palumbos: You know this starts to make sense, because for a lot of families, you might be passing it from one generation to the next and you're passing it from three family members to five or three family members to six or.

 

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Michael Palumbos: Two and that's a lot of what's happened in many, many family businesses, but for those you know that are out there, where you have this success, and you have large numbers happening, and where the family branches off, and you have been doing that for years it gets complicated doesn't it.

 

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Lisa Daniel: yeah yeah and lightning like Jay said, I mean the key to all of that.

 

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Lisa Daniel: is keeping people engaged, while they're not there every single day and that's how you maintain these large numbers of people.

 

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Lisa Daniel: With with ownership shares that they know they're not involved in the everyday business.

 

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Jay Daniel: And it is it's it's critical it's crucial it's a risk to the business, frankly, if the shares past generation there's fewer shares, obviously, to go to each recipient.

 

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Jay Daniel: And so there's a natural dilution that that often occurs as well, and so what you don't want to end up with is a multi million dollar company that has a bunch of disillusioned or disconnected owners, that is not good for the company.

 

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Jay Daniel: So we're we're we're very happy that we got the family Council launched at the time that we did, there are, of course, you know.

 

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Jay Daniel: Things that you couldn't read in books at the time things you know some things that we navigated that.

 

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Jay Daniel: That, some of which were still navigating today some some roadblocks and obstacles to get through, but.

 

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Jay Daniel: As long as everybody's pulling in the same direction, with the same end goal, which is what's best for the family what's best for the company, then you know these these things are bumps in the road we get through them we get over them.

 

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Michael Palumbos: yeah and like to what Lisa said, you know earlier it's you know when's the best time to start a family Council when there's no issues and we don't have.

 

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Any.

 

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Michael Palumbos: And it's easy so Lisa let's talk about you know the formation of the family Council what were some of the things if you don't mind sharing any hiccups or things that you would have liked to have done differently.

 

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Lisa Daniel: Sure, so the board of directors, you know decided this would be a great idea to do the family Council they pulled in a couple of family members as an interim family Council, with the goal of.

 

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Lisa Daniel: You know, looking into this figuring out some of the governance and the logistics of it, and you know moving forward from there, so they spent the first maybe six months or so gathering that together they wrote their bylaws and their Charter and they they.

 

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Lisa Daniel: started down this path, but you know I think as a hiccup point in hindsight.

 

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Lisa Daniel: I don't think that anybody had a real clear idea of what the long term end goals of it were, and again it could have been because we.

 

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Lisa Daniel: We didn't have any issues we were trying to solve so when you're not trying to work to solve an issue it's harder to figure out where you're going.

 

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Lisa Daniel: So what they did a great job and getting all the governance figured out getting all that sorted.

 

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Lisa Daniel: And then they figured out an election process, the family shareholders of the family actually not shareholders, the family in general voted to elect the actual first elected family Council members, we have a group of seven people and.

 

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Lisa Daniel: From the beginning, you know the elections have run run very well on the people on there really want to be involved and do a good job.

 

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Lisa Daniel: The the part where things were being held up was there was this back and forth of.

 

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Lisa Daniel: We don't know exactly for sure what we're supposed to do and then even if we think we want to do things we feel like we need to ask the board for permission for everything we want to do, and so.

 

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Lisa Daniel: I would say, for people who are who are starting they might consider having a board liaison person or having a board member on the family Council so.

 

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Lisa Daniel: That when the group that's involved with the family Council hits a point where they say we better asked the fan the board about this somebody can say here I don't think it raises the level let's just move forward, it would prevent a lot of delays that we saw.

 

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Lisa Daniel: But we did we did move on and we.

 

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Lisa Daniel: We saw some of those challenges, I saw you know kind of in the background, I I sat in this really unique position because I was really intrigued by the family Council and I went to all their meetings, and I saw all the things they were doing.

 

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Lisa Daniel: But then being married to a board member, I was also hearing this murmuring off to the side of you know what when are we going to see progress, what are we gonna you know what's going to happen here, and so I recognized that.

 

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Lisa Daniel: You can empower people to talk about family all day long if you're not talking about business matters, they can do whatever they want to do right, so we jumped in we.

 

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Lisa Daniel: gathered all of the contact information for all of the family that was key making sure we know who we're communicating with you know who they are, where they live.

 

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Lisa Daniel: All of that information, we wanted to get people's attention and get them interested, so we created a digital family tree people can login they can look at it, they can see biographies of family members, all of that kind of fun stuff that you know the family Council can do.

 

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Lisa Daniel: In that communicating when that happens, then we can move forward to things like helping them educate them about.

 

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Lisa Daniel: family businesses, in general, not even specifically let's look at the large financial statement how about let's learn to read a financial statement.

 

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Lisa Daniel: Some you know so that's what we're working on right now we've done a lot of the family connections already we do.

 

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Lisa Daniel: A great family newsletter we've got a cousin who puts together our cast iron cousins newsletter every quarter.

 

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Lisa Daniel: We celebrate family members, there we bring up upcoming birthdays we talk about like where interesting places people have seen lodge featured like.

 

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Lisa Daniel: You know the campfire on survivor or the 12 days of Christmas giveaway on the Ellen degeneres show you know we can celebrate all that stuff together.

 

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Lisa Daniel: Without any limitations and then we can work with the board to come up with this deliverable about educating the family members about businesses in general and then educating the shareholders about large business specifically.

 

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Michael Palumbos: got it.

 

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Jay Daniel: Events planning is the only thing I would add to that list so we come together, as we have since I was a little boy for an annual shareholders meeting.

 

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Jay Daniel: And it used to be in the fall we've shifted it to the summer, so that we can get younger people engaged used to be a single afternoon now it's the better part of a weekend with events that our family Council helps stage and put together.

 

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Jay Daniel: And it gives us a lot more opportunity to spend time with one another and learn more and more about the business, so the event planning piece was was something that.

 

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Jay Daniel: That got launched I think pretty early on and it's grown to a point now where the executive team and the family Council the like the family Council members will hold planning meetings.

 

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Jay Daniel: As we get closer and closer to the date so there's a there's a lot of value there there's a lot of value there for sure.

 

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Michael Palumbos: When you look at the things that you've done since starting the family, Council, what are some of the things that surprised you the most in terms of.

 

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Michael Palumbos: The impact that it had that maybe you were like we're supposed to do this, but you didn't realize your support, you know, maybe it worked better than you anticipated.

 

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Lisa Daniel: So, from my perspective, i'd say.

 

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Lisa Daniel: I was surprised and.

 

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Lisa Daniel: I went into it expecting to have a difficult time, communicating well with our I call them are well season two generation, so our older generation we.

 

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Lisa Daniel: I knew that technology might be an issue and that they might have some resistance to what was happening in the family, Council, and I think the rest of the family Council members shared that concern.

 

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Lisa Daniel: I was not prepared for.

 

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Lisa Daniel: The difficulty communicating with the younger generation, I thought we would be able to engage them a little easier and what we found we did a lot of.

 

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Lisa Daniel: You know, asking questions what, what are we doing wrong why aren't you communicating with us, and I think what we found is that we have to recognize that people.

 

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Lisa Daniel: Across all ages and demographics it's not even really age related just people in general, communicating way different ways.

 

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Lisa Daniel: We have these you know 20 and 30 something to all of the information that they take in and a specific day is from a handheld device in their hand.

 

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Lisa Daniel: It needs to be in a format that they can find on their social media channel that gets hand delivered in front of them instead of waiting for them to go click on it and so.

 

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Lisa Daniel: we're working on, you know communicating more on our you know family instagram channel and things like that, for those people.

 

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Lisa Daniel: And then we're you know we're communicating with people that range from 80 years old, to you know toddlers so.

 

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Lisa Daniel: For the for some people, we know, the only way we're going to get their attention, as if we physically put something in the mail and send it to their address so they can go get it out of the mailbox so we do that too.

 

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Lisa Daniel: So we're really communicating across all spectrums and for me that it was interesting to see that there's a lot of people, I thought would be really engaged to aren't there are a lot of people, I thought would never engaged with us, who are really active now so.

 

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Lisa Daniel: don't I would say don't don't have limiting expectations, you know go into it with an open mind and just work every day to communicate with as many people as you can.

 

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Jay Daniel: yeah just to put a little caboose on that I think probably one of the smartest slash bravest things that our family Council did was they designed.

 

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Jay Daniel: That engagement survey and they put it out to the entire families says hey These are the things we've been doing what did you like, what did you not like what are some other ideas that you the family members think we could be working on.

 

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Jay Daniel: And just a really kind of started a dialogue, and it was it was it was a really brave thing to do, on one hand, but it brought them exactly the kind of feedback that they needed to improve and to evolve and get better and better at the things they've set out to accomplish.

 

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Michael Palumbos: So that how many years now has the family Council been in existence.

 

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Lisa Daniel: So I think we started in 2017 or 2016 so.

 

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Lisa Daniel: Six years or so yeah and.

 

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Jay Daniel: into our sixth year.

 

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Michael Palumbos: Ryan and.

 

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Michael Palumbos: i'm going to share one of my favorite.

 

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Michael Palumbos: phrases, because I think it rings true here and I want people to hear it progress not perfection right.

 

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Jay Daniel: yeah amen.

 

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Jay Daniel: amen to that.

 

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Lisa Daniel: I like to say that if your family Council is doing everything you want it to do you aren't.

 

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Lisa Daniel: thinking.

 

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Jay Daniel: Broadly enough, I can make an.

 

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Lisa Daniel: Enterprise right, you know it'll never be finished and and I recognize that there will be programs that we launched that we put a huge amount of time into the fall by the wayside because something new and better and bigger or different will take its place.

 

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Lisa Daniel: And you know there's not part of the problem here that we encountered is like Jay mentioned there's not a.

 

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Lisa Daniel: template for this there's not the large family needs to do these things, because the large family is different than every other family out there, so.

 

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Lisa Daniel: Some some big picture overview at the top of you know, these are the things that make our family unique, these are our family values that we want to celebrate.

 

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Lisa Daniel: These are the things that we want to do that, you know, maybe another family wouldn't do we.

 

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Lisa Daniel: couple of times i've talked to the family events and people are always like you know, give us some specific examples of things you've done and the one that one of the ones that makes everybody laugh is the the annual family swim and.

 

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Lisa Daniel: it's during our family gathering we all jump into the Tennessee river and we joke around that depending on who you are it's either a race or it's a nice leisurely float down the river.

 

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Lisa Daniel: But we do that in honor of one of our founding family members who ran the company and it was a running family story that he would.

 

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Lisa Daniel: It was lunch breaking strip office you know closing swim across the Tennessee river and back, and that was his lunch break and you know get cooled off and go back in so we celebrate that.

 

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Lisa Daniel: As a family in a fun way, but you know so finding ways that you can take your family history and bring it to life for people is is.

 

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Lisa Daniel: Something that you know I just think it goes a long way we've got a lot of interesting things we do, but there's not a template there's not.

 

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Lisa Daniel: Somebody out there that can tell you do these five things and you're going to have a great family Council it's it's navigating your family.

 

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Lisa Daniel: You know, some of these people may already communicate with everybody in the family, effectively and.

 

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Lisa Daniel: The communicating is not the piece, but it's more about what you choose to share and celebrate others might need to go back to the drawing board and find those phone numbers and email addresses and figure out who lives, where and all of that.

 

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Michael Palumbos: I love it and you know, one of the things that I want to.

 

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Michael Palumbos: expand upon just a little bit is that you know we're talking about 50 plus owners and you know 100 family members that.

 

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Lisa Daniel: yeah 100 plus.

 

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Michael Palumbos: Plus yeah so I mean for some people, they just look at that and they're not going to get that I have a family business I have you know i'm fourth generation and fifth generation and yes.

 

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Michael Palumbos: there's you know people that aren't you know we have a smaller ownership group here's my point about making sure we don't miss this is because.

 

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Michael Palumbos: What i've learned through the years and working with family businesses is even if you're not.

 

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Michael Palumbos: In the business, even if you don't own the business, and it has stayed a small ownership share your part of that community somewhere.

 

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Michael Palumbos: And there's there's pride in being tied back to that, and so, whether their owners or non owners.

 

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Michael Palumbos: it's really important that we, we have that connection we keep them apprised we do not need to share, you know.

 

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Michael Palumbos: All the ins and outs of the balance sheet and all the ins and outs of the strategy and where we're going but big picture here's some of the milestones.

 

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Michael Palumbos: so that they can be proud of it and share that while they're out in the Community with other people, I think, is really important, and and like go ahead.

 

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Lisa Daniel: yeah and that's true and it's.

 

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Lisa Daniel: It also makes it easier to share your company successes outside the family, you know when you talk about it inside the family, and you, you develop this.

 

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Lisa Daniel: This way of talking about it with pride that leads to talking about it out into the Community with pride and then that leads to you know the Community recognizing it.

 

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Lisa Daniel: We are lucky and i've said this 100 times it's it's really easy to be part of you know, pushing the this family forward in that area because we've had historians that have come all along the way, who haven't been really organized and really involved and.

 

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Lisa Daniel: we've already have a lot of documented history, and so what the family Council is doing now is a lot more of organizing that information and gathering, you know information from living family members than trying to go back and dig up a story that we don't know about.

 

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Lisa Daniel: But you know at through this process, we can share information to the company, now that the people that are running the company are not family members, they don't.

 

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Lisa Daniel: Have that history, they don't know the people involved and it's our job to draw them into that to share it with them and make sure that it's celebrated.

 

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Lisa Daniel: lodge just announced recently publicly that they're doing a museum in South pittsburg Tennessee so you mentioned about.

 

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Lisa Daniel: You know, going and getting your your favorite cast iron skillet you know come to come to Tennessee you go to the museum later this year.

 

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Lisa Daniel: come to the cornbread festival do all of that stuff but all of that, as possible, because the family recognizes it's not just a business it's it's a family with history and and they're proud of what they built yeah.

 

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Michael Palumbos: When you know how old are your kids when you started the family Council.

 

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Lisa Daniel: So our oldest was probably 25.

 

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Lisa Daniel: And our youngest was.

 

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Lisa Daniel: teenager so.

 

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Michael Palumbos: What were some of this stuff yeah what was the impact of starting the family Council and your kids.

 

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Lisa Daniel: So um they're definitely more connected to their cousins they.

 

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Lisa Daniel: They see us, you know part of what we do is we pick family members to celebrate in the newsletter and stuff like that and.

 

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Lisa Daniel: We did this amazing video that we did for the women of lodge for international women's day last year, where we literally.

 

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Lisa Daniel: got information about every living and past family member, all the way back to the founders, we learned about what jobs they have.

 

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Lisa Daniel: You know my kids were just amazed that they have cousins who who do these things, who you know are doctors and lawyers and you know, teachers and nurses and.

 

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Lisa Daniel: furniture designers who you know are displayed in galleries and you know just you name it the family does it and so that I think is has been a big impact on a lot of people is like you know just the sense of i'm part of something that is this amazing group of people.

 

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Michael Palumbos: yeah that's a really powerful statement i'm part of something, and so you know we teach families that you know you may not be ready to start a full blown family Council and that's Okay, but when you're getting together.

 

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Michael Palumbos: You know it your summer retreat put some time, and even if it's just you know nine in the morning to one in the afternoon.

 

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Michael Palumbos: You know, to put some family time in there around the business, so that you can put people together we did this one summer, with a family and.

 

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Michael Palumbos: You know some of the youngest you know family members, or you know, maybe 678 somewhere in that arena and we put up some videos of what this family does, and this little girl says, who.

 

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Does that.

 

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Michael Palumbos: family had to tell you, we do that it happened to be a record company so we're you know this great thing of this building coming down, and it was.

 

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Michael Palumbos: And so, then you know, one of the exercises that we put together was you know, we had some of the middle generation will call them, you know the the rising generation that are coming into the business.

 

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Michael Palumbos: pretend to be a building or a bridge and then the six and seven and eight year olds come down and say what's you know what would you do to take this thing and you'd have things like by Jews my superpower of this and I will just.

 

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Michael Palumbos: blow the bridge down and.

 

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Michael Palumbos: And it really started to connect them like you said you know, in a way that was different and some of these kids.

 

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Michael Palumbos: didn't live in the town where they were doing the work any longer, and it was in a change The other thing that they did and i'll share with you is again young kids they would you know.

 

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Michael Palumbos: To get them started early she would say you know, in the last year, because they have family only gets together once a year.

 

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Michael Palumbos: What did you do, and so they would set up, you know all the kids under the age of 10 with you know a great big poster board with.

 

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Michael Palumbos: glitter and markers and Korean and paints and they could put pictures together what they did, and each of the kids with them come up and take a moment to say you know what I did now.

 

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Michael Palumbos: I don't know if you can do that with you've got 75 young kids in our 30 or whatever, that you are, but it was just it to your point, you know Lisa is the fact that there is no right or wrong, you get to write your own rules about how to do this it's about celebrating the family.

 

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Lisa Daniel: Exactly and when it's not tied to specific business things you can you can do whatever you want, you can you can make it, how you want, I mean one of the one of the questions that we asked on our.

 

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Lisa Daniel: survey that went out to include people in the women of lodge video is you know what are you most proud of in your life.

 

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Lisa Daniel: And having that answer from ranges of kids we asked that parents work with their children to make sure the answers we got were their answers, and so, and then, if there were.

 

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Lisa Daniel: You know that we were celebrating also the relatives who passed on and we asked their children to write the survey, how you think your your mother or your grandmother would have answered these questions and so.

 

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Lisa Daniel: We gathered these these amazing things about you know just the pride that people have not in the business, but in what they did in their lives and.

 

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Lisa Daniel: Being able to celebrate that as a family.

 

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Lisa Daniel: You know it all ties back to the business because again it's easier to have really difficult conversations.

 

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Lisa Daniel: with people who you know are good people who you celebrate in other ways, and so it does all tie back, but having having all of this connection and history and that's really what I think the family Council brings that's just invaluable.

 

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Michael Palumbos: Jay from your perspective and from the board's perspective, here we are six years later, what are the impacts for the board what would you, what is the board talk about from that you know about the family counts now.

 

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Jay Daniel: Well that's.

 

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Jay Daniel: As fate would have it we're in the process now of nominating the next shareholder director and among the things that are being discussed.

 

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Jay Daniel: is a recognition, I think that we have had a fair amount of exposure as a board to those people that have volunteered at step forward to the family Council and so.

 

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Jay Daniel: If it were not for that family Council our independent directors specifically would really be struggling.

 

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Jay Daniel: to know who's who and and what what perhaps types of interest what's the level of interest what's what's the potential experience and skill set that these various shareholders might bring to a position on the board.

 

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Jay Daniel: And we're well into that curve now because it turns out some of our best candidates have been those that were actively engaged in the family Council not all but.

 

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Jay Daniel: A strong subset and so and that wasn't something I wouldn't tell you that you know we put that into that wasn't one of the ingredients it wasn't an end result that we had looked at.

 

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Jay Daniel: But it is definitely a valuable result that came out of the exercise, and so that's and i'm sure there are many other examples, but that's that's the one that i'm spending a great deal of my time on these days so it's the one that POPs to my head.

 

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Michael Palumbos: No, I love it and you mentioned earlier that you know being on the board, whoever comes down to the board new.

 

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Michael Palumbos: it's not going to be, you know any impact on that board for 34578 years like there's a lot to learn, being a board member on on a company, especially one as diverse and, as you know, the REACH that lodge has today.

 

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Jay Daniel: Right right exactly yeah so it's been it's sad every now and then I look in the mirror and I say gosh it's a good thing I got on the board when I did.

 

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Jay Daniel: Because I don't know that I don't know that I would have passed the.

 

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Jay Daniel: mustard if we'd had all of this structure in place at the point where I was elected gosh who knows if they even would have picked me i'm so glad they did.

 

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Michael Palumbos: get it and get i'm on the board of a small insurance company and property casualty and the same thing because you're just sitting there going wow there's you know New York state has an awful lot of laws for insurance companies so there's a lot to learn.

 

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Lisa Daniel: And jays champion i'll tell you that they would absolutely elect him today and every day he's a huge asset to the family, to the company and he's being modest fair but.

 

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Lisa Daniel: yeah I mean another little topical throw out here that I don't want to miss is that.

 

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Lisa Daniel: You know, there needs to be some recognition that this stuff doesn't just happen it's not a super quick easy thing you should never go into this thinking that you're going to spend you know, six months and you're going to have a functioning up and running family Council.

 

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Lisa Daniel: and a recognition that you know, for every little bit of progress that you see, and that the family sees there's tons and tons of hours of backside work.

 

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Lisa Daniel: So lodge does a great job they pay a stipend to the family Council members in recognition that there's a lot of time contribution there.

 

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Lisa Daniel: it's not certainly doesn't you know.

 

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Lisa Daniel: It comes down to a minimum wage, by the time today to quit their regular day job.

 

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Jay Daniel: To go do this that's like that.

 

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Jay Daniel: Right.

 

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Lisa Daniel: But yeah there's.

 

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Lisa Daniel: there's some other benefits them they pay for the travel to the family annual family meetings, if there are additional meetings in person, those travel arrangements are paid for, so you get to have a nice.

 

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Lisa Daniel: You know weekend somewhere with your cousins where you're focusing on work but also getting to connect with each other so having a budget for that is important.

 

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Lisa Daniel: Also, the Board has agreed to fund some educational expenses for members of the family Council in recognition that you know family business conferences are a great.

 

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Lisa Daniel: source of information for people who are in these roles there's no better way to get information than you know sitting here listening to this podcast or going and meeting other family members who are doing this every day so.

 

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Lisa Daniel: Those conferences have been invaluable to me and it's great that the company is willing to pay, you know the family Council members to do that.

 

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Lisa Daniel: And then the biggest thing is just the you know the the kudos and saying you know you guys, are making a difference that you know that goes a long way, the recognition that.

 

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Lisa Daniel: What you're doing is appreciated by the family by the board by the company, you know that it's important to continue to make sure that that happens and not focus on what hasn't been done right, you know, work towards that but celebrate all those things that do work well.

 

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Michael Palumbos: Thank you for sharing that because I I think it's hard to envision what does this look like for the business side as well as for you know the family side so.

 

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Michael Palumbos: If you could go back 10 years ago before the family Council started, and you can now reimagine all of the you know what what you've been through and you're now advising other families.

 

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Michael Palumbos: What are some you know what is some of the advice that you would share with other families that are in similar positions they may not be an exact you know nobody's going to be exactly the same position as you but multiple family members multiple generations multiple ownership levels.

 

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Michael Palumbos: What do you what is what's your advice.

 

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Lisa Daniel: So my my first blush at that would be again look big picture and think about what are the, what are the goals for you, is it more important for you to it will and assess where you are, you know you can't really start a big project like this without knowing where you stand now so.

 

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Lisa Daniel: Are we, a company, who does not even know all of the relatives in the family are we a company that cares who those relatives are who do we want to communicate with.

 

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Lisa Daniel: And what is our goal, you know i've been really lucky that lodge has been very inclusive Another thing we talked about regularly at family conferences, is our spouse is going to be included.

 

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Lisa Daniel: In the lodge family, it has been historic that you know family spouses are involved and included, in fact, all the way back to that second generation, it was a you know, a spouse of the daughter of Joseph and Anna Elizabeth Harvey lodge he was instrumental in running the company so.

 

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Lisa Daniel: assess you know your company who's involved.

 

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Lisa Daniel: How much information, you know about them and then really be honest about who is willing to take on a role to to make it better and how much you're willing to invest in making that happen.

 

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Lisa Daniel: And then, what goals you're working towards and it's you know it's all just a big project plan.

 

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Michael Palumbos: yeah you know, but when you said that the everybody's probably or if you're not familiar with Simon cynic you know it start with why right Why am I doing this, what is the purpose behind all this and if we understand that, then at least you've got a target to work back from right yeah.

 

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Jay Daniel: I would add to that because it's still something I think we struggle with a little bit is put some thought into where the different silos of responsibility are going to be.

 

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Jay Daniel: And and create some clarity around that you know and where we finally landed, I think, is, is where we need to be, which is business and shareholder communications are not the purview of the family Council that's coming from the board that's coming from your CEO.

 

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Jay Daniel: Things like business education event planning business.

 

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Jay Daniel: opportunities in the business, you know all of those things, everything that the family might have an opinion on is the purview of the family Council and how these things kind of mesh together.

 

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Jay Daniel: it's going to be worth your time investment, I think, to really explore that with a couple of different examples and say, well, which which silo might this fall into which would this be a family Council matter with this be aboard matter.

 

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Jay Daniel: get some clarity around that but recognize you're going to make some mistakes and be willing to make those mistakes and learn from those mistakes, but.

 

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Lisa Daniel: Well, and.

 

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Lisa Daniel: Right, like all the way back to that beginning comment of something that went wrong right from the beginning, not having a board member directly involved for us.

 

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Lisa Daniel: keep things where they belong, but also make sure that they're all constantly running you know, alongside each other well because.

 

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Lisa Daniel: You know, an example, I can throw out there is if a family member changes their email address.

 

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Lisa Daniel: How many people are they going to have to notify you know for the family council for the shareholder be no Secretary for the company.

 

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Lisa Daniel: The best way to make that happen is to know you know when people make changes to certain things they have one source of communication and it just magically happens and that's you know really easy to say a lot harder to do I think we're getting there and.

 

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Lisa Daniel: You know that's it's important to know keep things separate but but make sure everybody's all working together for the same end goal.

 

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Michael Palumbos: love it.

 

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Michael Palumbos: We have been joined by Lisa and Jay Daniel you guys are wonderful, thank you for sharing everything that you cannot wait for people to be able to dive into this.

 

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Michael Palumbos: Thank you for joining us everybody, my name is Michael Columbus and with family wealth and legacy in Rochester New York and make sure you hit on that subscribe button, so that you can get future episodes of the family business show have a great day, everybody, thank you.

 

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Jay Daniel: Thanks Michael thanks Mike thanks everyone.

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.

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