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Episode 89: The Future Is Now: Talking Next Gen Readiness

In this episode of the Family Business Show, host Michael Palumbos from Family Wealth and Legacy in Rochester, New York, has an enlightening conversation with Shelley Taylor. Shelley boasts an impressive dual role, being deeply involved in a family business for over 30 years—a bar at a Coca-Cola distributor in Pittsburgh, Pennsylvania—and serving as a family business consultant with Aspen Family Business Group.

Shelley shares the rich history of her family's business, which originated from her husband's maternal grandfather, Roland Adams. He inadvertently ventured into the business world, eventually investing in Coca-Cola franchises and involving his daughters and sons-in-law, thus laying the foundation for A Barta. This enterprise, an acronym derived from family surnames, underscores the collaborative spirit foundational to the business's growth.

The discussion delves into the generational transitions within the family, highlighting the importance of early and frequent gifting of shares to mitigate estate taxes and ensure business continuity. Shelley underscores the necessity of inclusive family planning and education to empower future generations, discussing the establishment of independent board directors and the company's recognition for excellent governance.

Shelley's role as the family council chair is pivotal, orchestrating the educational and strategic planning endeavors for the family. This includes initiating programs like the associate advisor role for younger family members to immerse in corporate governance, thereby preparing them for future leadership roles.

Philanthropy emerges as a significant theme, where family foundations serve as platforms for younger members to learn about governance, responsibility, and community engagement. The conversation also highlights the necessity of continuous learning and adapting, whether through family council meetings, external educational programs, or practical involvement in the business.

This episode offers a profound look into the dynamics of family business management, emphasizing long-term planning, education, and the delicate balance of maintaining familial harmony while driving business success.

Watch the entire episode!

Episode 89 Transcript


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Michael Palumbos ChFC, CBEC: Oh, welcome everybody to the family business show. I am your host, Michael Columbus, with family wealth and legacy in Rochester, New York, and today we are super excited to bring Shelly Taylor in who plays a really cool dual role role where? she's part of a family business for over 30 years at a bar to a Coca-cola distributor in Pittsburgh, Pennsylvania

 

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Michael Palumbos ChFC, CBEC: and as well through her experience and cutting her teeth through her own family business and her own going through education process. is currently a family business consultant with Aspen family business group. so welcome, shelly. We're so excited to have you here.

 

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Shelley Taylor: Thank you, Michael, happy to be here today.

 

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Michael Palumbos ChFC, CBEC: So

 

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Michael Palumbos ChFC, CBEC: I I'm really really excited, because very rarely do I have that opportunity where I have somebody that is a family business coach, family business consultant, working with family businesses

 

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Michael Palumbos ChFC, CBEC: that is, actively in a ongoing multi-generation family business. So this is pretty exciting for me and for our guests, I hope you know. Be ready for this because you're gonna learn a lot from Shelley. This is just going to be full of a ton of, you know ton of information. So why don't you walk us through a bar to? Is the name of the family business.

 

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Michael Palumbos ChFC, CBEC: Can you tell us? You know what was a bar to doing when they started? Who formed it? What you know? Give us the the back story of a bar, to

 

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Shelley Taylor: sure. well, it's it's kind of a fun history it was I I married in, and so it's my husband's family, and it was his paternal sorry, his maternal grandfather, who started the business.

 

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Shelley Taylor: just sort of by happen stance. He worked for a bank in Bethlehem, Pennsylvania, and the he was brought in that bank was in. I don't know if it was foreclosure, but he but the the the newspaper. Sorry not the bank is that

 

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Shelley Taylor: the bank was brought in to oversee the newspaper, the Bethlehem Globe Times, in Bethlehem, PA. And so he was. The bank examiner who brought was brought in, and then the bank

 

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Shelley Taylor: ended up owning the newspaper, and he, Roland Adams, my husband's grandfather, at a certain point. So he was working in the newspaper for the bank, and then he brought him. I bought a minority ownership, and then ended up buying the newspaper altogether. So that was in 1,935, and over time he grew the business. We had a second newspaper the press of Atlantic City.

 

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Shelley Taylor: He ultimately invested in some Coca-cola franchises across the State of Pennsylvania, both Pittsburgh and he was from Eastern Pai, Thatlam area, and at that point he brought in his daughters and sons in law to help with this expansion in the coke area. So he had 3. He had 3 daughters and 3 sons in law. So from the very beginning we had

 

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Shelley Taylor: in law spouse involvement in the business, and over time

 

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Shelley Taylor: those 6 people in the second generation, the 3 daughters and their husbands formed a Barta and a Barta is an acronym taken from the last names of the 3 daughters. Their last names name was Adams. So you get the 3 A's from Adams. B. Was one husband, Bitzer

 

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Shelley Taylor: our was one husband for, and he was the third husband, Taylor. So they formed that company as a way to invest. And then there's a funny little story about how Rollin's wife

 

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Shelley Taylor: predeceased him, and his estate plan was all of his assets. We're going to go to his wife, but instead, since she pre deceased him, his daughters ended up owning the company, and she would, if they were

 

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Shelley Taylor: Then he was bold into them. He tried to switch it around and get the stock back, and

 

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Shelley Taylor: she said they, the daughter said, No, sorry that's not gonna happen. So he's sort of gracefully or not so gracefully. Not sure I wasn't around then retired. sorry I usually have. I'm gonna just interrupt. You can edit this part out.

 

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Shelley Taylor: I hope I gotta get rid of these. I happen. I do not.

 

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Kristina Rocci: Yeah, no problem. We can add it out anything we want.

 

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Shelley Taylor: all right. It's supposed to be on all the time. Okay, that shouldn't do any more. Sorry about that.

 

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Shelley Taylor:  so fast forward to the sixties, seventies, eighties, the the 3 daughters, their 3 husbands, that they formed the board of directors, the the spouses, husbands were actively running the business

 

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Shelley Taylor: at a certain point one of the

 

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Shelley Taylor: spouses passed away, their family branch decided to sell, so we were down to 2 branches, bits, and tailors, which to this day remain the shareholders and the operators of the business. My husband is the chairman of the board. He also ran a division for a while. Now he's just the chairman. His 2 cousins were involved in the business. One is now retired, his own.

 

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Shelley Taylor: Their cousin is the CEO There were 2 women. My husband has a sister, and he has a a cousin who's a woman. They did not work in the business, but through all the years share. Ownership has been gifted early and gifted often that was always our mantra gift, early gift, often passing a lot of the wealth down to the next generation. So the growth in the company has been realized

 

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Shelley Taylor: in the next generations and saving estate taxes, and, you know.

 

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Shelley Taylor: obviating vulnerability on the company side, you know, in the case of untimely debts, etc. We've had an independent Board of Directors, so majority of independence on the Board since 1996. and actually nice little accolade. My husband, who is the chairman who, I said They just were recognized by the private board of the year award, as in their size category of

 

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Shelley Taylor: 300 1 million to a billion something like that. So they just this year by, we're recipients of that. And they've done an amazing job. We've had a great group of independent directors on the board

 

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Shelley Taylor: over the years, and and we will follow a lot of best practices, not just for privately held businesses, but for businesses generally. so it's it's been professionally run, you know, in quote, unquote professionally run, even though family members are running the business, but it's not like, you know.

 

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Shelley Taylor: the family bank, or, you know, favors or give a job to anybody. You know that kind of thing. So

 

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Shelley Taylor: That was a brief history. I might have left out a few things along the way, but that's fast. Forward. Here we are.

 

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Shelley Taylor: The third generation, as I said, is still involved. We have one member of the fourth generation working in the business. There are 19 in the fourth generation, And like, I said, they're only 2 active now, still in the third generation, and only 2 shareholders left in the in the third generation as well, but all of the 19 in the fourth generation are shareholders, and we have several. we have 11 and the fifth generation now spanning from

 

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Shelley Taylor: 3 and a half months old to about 10 years old. but most are

 

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Shelley Taylor: most are 3, and under only one. There's one outlier, and then the 10 of them are one under. So we have a little baby boom.

 

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Michael Palumbos ChFC, CBEC: I have to stop you for a second. There's a per time to pause, because I've got a thousand questions already. You hit on so many really important things that I think

 

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Michael Palumbos ChFC, CBEC: I I just want to help people digest a little bit of what we told you what you just said. So the size of a bar of a Barta is over 300 million dollars of revenue annually, and so you know a company that size? Obviously the the the

 

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Michael Palumbos ChFC, CBEC: the value of that company is fairly substantial compared to most that are out there. you're in the top. 1% of, you know, a privately held companies for sure in the Us.

 

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Michael Palumbos ChFC, CBEC: So now I want to ask you to take your your coaching hat and kind of move back and forth. You guys had some best practices, and I'm going to come back to that. But you as a consultant when you start talking about the things that you talked about gift early and gift often, you know, you have shareholders that are under the age of 3

 

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Michael Palumbos ChFC, CBEC: just, and and I know these are rules of thumb. But as a rule of thumb, if you're coaching a a family to start gifting, what is the value of that business. Typically if you're gonna

 

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Michael Palumbos ChFC, CBEC: if that's a if they if they decide

 

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Michael Palumbos ChFC, CBEC: that's a great practice for us, we are concerned about a state taxes. We want to work, you know, work through that. Those issues.

 

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Shelley Taylor: What kind of size, you know. When? When should I start thinking about that?

 

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Shelley Taylor: If it's more than just an entrepreneurial stage. Hopefully, the owners have created some wealth outside of the business. I think we're where we see people unwilling to or not interested. I mean, there are a couple of things people are concerned about. Right. One is, if if this is

 

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Shelley Taylor: if these are all of my assets. If they're all tied up in the company gifting, you know. If I gift it away, then I don't have anything right. So what is the balance, where maybe you can have a little nest egg at the end when you're ready to retire ready to redeem. And what does that look like? The other thing that we see is the control question.

 

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Shelley Taylor: Lots of times people are I. In fact, I just had a case just yesterday where someone who's 80 years old, owns all the his kids. You know, his kid quote unquote kids. They must be in their at least fifties, right? And they don't, and they're working with him, and he owns everything. Well, that's a very vulnerable but vulnerable place to put the business in, because people die right. I mean you could die at any age, and

 

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Shelley Taylor: presumably the older you get, the so likely it increases a bit, and you don't want to

 

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Shelley Taylor: leave the company your heirs in a position where they're forced to sell the company to pay State taxes, or to be able to handle whatever mess might ensue. so I think those are. Those are a couple of things. right? So the the control that

 

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Shelley Taylor: the the

 

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Shelley Taylor: the financial end. But then also the control that people are hesitant to give up. And so what does that mean when I work with businesses? One of the things I like to talk to the the about is, what is your vision? What do you want? What do you see for the family down the road? What do you see for the business down the road. If you want continuity, if you want this business to survive and thrive and flourish in the next generation, and if you want family connected to it.

 

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Shelley Taylor: There needs to be planning. You need to be thinking ahead. And how are we going to pass down these assets and

 

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Shelley Taylor: practice the control bit? You know, if if I do everything and I know everything, and I'm not letting you even peel back the curtain a little bit, what position are you going to be in to be able to take over. not a great one.

 

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Michael Palumbos ChFC, CBEC: We we called, you know what in in that conversation we call that exit planning mode. What I have found very few, especially at the entrepreneurial stage.

 

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Michael Palumbos ChFC, CBEC: They don't like the words exit planning so much because it's like this is my baby. This is my identity, and you know. So we we get that we also, you know you.

 

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Michael Palumbos ChFC, CBEC: We're part of a family business, became a family business consultant. We were wealth advisors that became business coaches. So we, you know we do. You know, we used to do the ends of planning. We still do the exit planning. But we would do the exit plan. And then, you know, we would tell them, okay, here's the 20 levers that you need to work on to increase the value of the business before you sell it. And here's how to, you know, b blends with your state plan, and let's you go figure it out.

 

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Michael Palumbos ChFC, CBEC: And we would do the estate planning. We, you know, we would work with the attorney. But all of the how do I grow my business? And how do I put systems and processes in place? We didn't coach those things. We became certified to do those things. So it's kind of unique where

 

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Michael Palumbos ChFC, CBEC: you know, we can actually help them think through those things, I think. and tell me what you know, how you feel about this, but a lot of times there are

 

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Michael Palumbos ChFC, CBEC: companies that they say a lot of times that they're often there's a company that where the entrepreneur gets to a stage where the business is worth way more than they had anticipated.

 

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Michael Palumbos ChFC, CBEC: And so I guess the you know, in this conversation it would be

 

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Michael Palumbos ChFC, CBEC: sooner than later, you get past that 10 million dollar of value, mark 20 million dollars, 30 million dollars. There, there's there's there's numbers in there, you know, where you start to build value outside the business and doing those things.

 

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Michael Palumbos ChFC, CBEC: Yeah. it's probably a really good idea to bring somebody like yourself or me in, and to and to start thinking through all of these things is more often than not

 

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Michael Palumbos ChFC, CBEC: the people that got you to where you are, the advisors that you're we're working with that had done your contracts and your wills and your by cell agreement may not have the expertise

 

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Michael Palumbos ChFC, CBEC: for this next step.

 

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Shelley Taylor: Sure, I and one of the things like I when I mentioned the vision which we call it a shared family vision.

 

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Shelley Taylor: it definitely a lot of people in my line of work who don't come, maybe from tax or law or wealth advising.

 

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Shelley Taylor: we come from a behavioral sciences, approach and organizational behavior. And so we're looking at the system. We're looking at the family system and the business system. And we're looking at relationships and connections and sort of

 

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Shelley Taylor: facilitating conversations. I mean, we all know, communication is huge in any environment, business, environment, family environment, family, business, environment, right? That's like always the one thing that that

 

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Shelley Taylor: is a challenge, no matter where you are. especially with electronic communication, right when it's not face to face anymore. So we try and create an environment where people can talk where they can have the conversations, whether they're difficult conversations, easy conversations, but also getting everyone in the same room. is really valuable because people are hearing the same message, at the same time able to have a dialogue about it, and

 

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Shelley Taylor: come to agreements. Consensus. Figure out how they want to move forward what the plan is

 

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Michael Palumbos ChFC, CBEC: right.

 

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Michael Palumbos ChFC, CBEC: We you you call it the shared family vision. We call it the the family roadmap. Love that it's that vision, the purpose. What are the reason of talking about the results that you're looking for in the obstacles that may be in your way? And just getting that all on the table opens up a dialogue and a communication like you said, that's super important to begin.

 

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Michael Palumbos ChFC, CBEC: let's talk about your entree into a Barta, and you know how you developed your skill set, and what were the things that you did for the family business through the years? I think that's important to here, you know, for 2 purposes, you know. 2 reasons. One, I think it's so many times you and I've talked about this is that

 

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Michael Palumbos ChFC, CBEC: many times a family business has been. You have to be a blood member to join the family business, and that is something that run from day one. Almost your, you know family didn't do that. So talk about your role and how that's evolved through the years. And

 

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Shelley Taylor: well, I married into the family, which then meant. I married into the family business, and my husband, as I said, is a third generation owner, and in 1,990 we started a family business process, and by that I mean, we hired an independent consultant facilitator to come in and work with our family, and from the beginning that advisor suggested that spouses be included.

 

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Shelley Taylor: And so the family was okay with that. the reasoning behind that, as you and I discussed, a lot of families are really reluctant to do that, because maybe personalities, or whatever reason. But

 

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Shelley Taylor: a really strong argument in favor of doing that is, the spouses are the parents of the next generation.

 

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Shelley Taylor: there are lots of other reasons, too. One is that communication factor and hearing the message directly and etc. seeing how people interact with each other instead of just hearing it from a spouse outside of the context. But as parents of the next generation, there's a vested interest right? And there's a role that these parents play, whether they're blood family or married in. So we we spouses, we're all included. We have from the very beginning had a very

 

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Shelley Taylor: we said from the gecko. We wanted this to be non-judgmental open door kind of thing. So family members are at different places in their lives at different times. We were all having a lot of babies. People were different places in their careers. Whether or not they were in the family business, so some people would attend a meeting, and then not we would. We had a twice a year meeting schedule

 

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Shelley Taylor: but sometimes then they would miss the next 2 meetings right? So maybe a whole year, a year and a half would go by. But everyone was always included welcomed in whenever they could attend. We had meeting minutes that we would circulate and and send out to people

 

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Shelley Taylor: So that process with that facilitator we we did that for 12 years. And then we took a break. and then we realized, wow, these kids that were, you know, these, these next Jens, the the fourth generation were kids. But now they're teenagers and young adults. And we need to get back together because

 

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Shelley Taylor: we don't know whether or not any of them is gonna work in the business or lead the business, but we do know that they're all they are all owners, because we did. We have done had the shared gifting and estate planning And so, as owners, they're going to be responsible for the the governance ownership, governance side of things. So we need to make sure that we educate them. So we

 

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Shelley Taylor: did. Another search found another facilitator, and we've been involved in the our current process now for about 10 years.

 

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Shelley Taylor: my role specifically just real quick. And then we'll get back and you can ask some questions. I am the family council chair. So that means I keep things moving between meetings. I keep track of all of our committees. I answer questions, even if I don't know the answer I have to figure out the answer. so there's a really, you know, a great revolving door, or a pass through door between my professional work and my family work, and each really informs the other. I get a lot of learning and experience on both sides.

 

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Michael Palumbos ChFC, CBEC: I love it. The the the question that you saw my face, and I appreciate that. When

 

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Shelley Taylor: what's bird? The first consultant? What? What led to that? What was the thinking that the family was going through at the time when they brought the first consultant in. Yeah, that's great question. my husband's cousin was in business school, and he took a family business course, and I don't know if you recall this. But back in the late eighties, nineties, family business was not

 

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Shelley Taylor: thought of as it is today. It was sort of like, and I don't really necessarily want to use this this phrase. You know, it was like the little secret it was

 

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Shelley Taylor: you, didn't you? Didn't. You weren't proud of it. You didn't stand up. And you know. Say, look at what we've done. People were in business folks. My husband also was in business school right around the same time, and everyone was going to these huge multinational corporations and to say you were going back to work for your family business, which my husband wasn't really sure. Actually, then he was back in the business at that time. But So his cousin took a course on family business, and he learned the statistics.

 

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Shelley Taylor: You know the the 33, 13, and the ones that have the best chance of survival are the ones who engage in planning and family strategic planning, and so he's like he brought it to his dad, who was at the time CEO and chairman and said.

 

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Shelley Taylor: you know I'm I'm involved in this business. I'm working here. This is where I plan to spend my career. I don't want to be this 31 shot right. So his dad said, Okay, you know, you guys, he tasked the so the second generation tasked the third generation at that time with finding a facilitator doing the interviews. It was all up to them. But the second generation said, We retain veto power. If you come up with someone that we don't feel we can work with.

 

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Shelley Taylor: you know, we'll let you know, but otherwise go for it.

 

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Shelley Taylor: And it worked, and we went through the same process. when we hired this current consultant 10 years ago.

 

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Michael Palumbos ChFC, CBEC: the ability to go out and do the search, to find somebody that they feel comfortable with with the intended. Obviously, the the generate, the current leading generation of, you know, control and generation gets me to power. And we want to be comfortable, too. But you're teaching

 

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Michael Palumbos ChFC, CBEC: all kinds of really good things, you know, it's it's they have to communicate together because they have to agree. You're teaching them to, you know. So you're you're working together to do that, you're, you know, bringing in those cognitive and those abilities of discernment, you know, to say, you know, why is this one better than the other one. How old were was that

 

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thirties at that

 

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Shelley Taylor: time? No late

 

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Michael Palumbos ChFC, CBEC: yeah, late late twenties, early thirties.

 

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Michael Palumbos ChFC, CBEC: things you can ask the rising generation to do the faster they're going to grow and mature, and, you know, develop in all the areas that you want them to develop anyways.

 

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Shelley Taylor: next generation rising generation. This is yours, and and we, as the senior generation, have to acknowledge that, recognize that and say we're we're letting go a little bit right, I mean, and that's one of the hardest things to do, and so to give them that agency, not only the opportunity to work together and think through these things, but also

 

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Shelley Taylor: setting, you know, being role models and like, here's how you step away, I mean. And you're probably familiar with this, too. I mean one of the things that that we see is often patterns. Repeat for good or for bad, through the generations. Right? So if you have dysfunction often that repeats. But if you have empowerment of the next generation, you know, that's a pattern that can repeat

 

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Shelley Taylor: sort of the gifting, for you know how people handle shares, whether you need to buy your shares. You know, as as younger generation, whether they're gifted, whether people hold on to them, they'll death right. So a lot of these things tend to repeat. And so I think.

 

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Shelley Taylor:  what the second generation did. The first generation model was slightly different. As I said. You know, he wanted to maintain that control. But from the second generation on it's really been sort of

 

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Shelley Taylor: lifting, lifting the next generation up, giving them the opportunity to to move forward and figure things out on their own and and take control of some of the things

 

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Michael Palumbos ChFC, CBEC: got it. And and so now you know people here things like the family council and family governance. And you know I I I want to make sure that they understand that you go back to what we were talking about with exit planning. You know, a a 10 million dollar value business probably isn't doing

 

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Michael Palumbos ChFC, CBEC: a lot of these things. They just haven't gotten to that level, because it's just not the need for it. But it, you know, at the same time. I have a family business. It's probably in that that value that they have

 

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Michael Palumbos ChFC, CBEC: brought in coaches. I've done some coaching with them and some consulting with them around these areas, and they put a family employment policy in place.

 

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Michael Palumbos ChFC, CBEC: and they're starting these conversations because they are third generation. And they do see the fourth generation is already showing interest, because the work that they do is so hands on and so in your face. It's, you know, it's not behind closed doors. They're out in the world, for you know, a construction company, you know, and so young boys and girls to sit there to like.

 

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Michael Palumbos ChFC, CBEC: Wow! Look at what we do, and they and they, you know, they've been teaching, you know, and showing them

 

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Michael Palumbos ChFC, CBEC: what they do. Even even when the kids were 3, 4, 5, 6, the grandkids at this point. you know they they did a a a mock demolition, and you know the the some of the

 

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Michael Palumbos ChFC, CBEC: G 3

 

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Michael Palumbos ChFC, CBEC: would stand there or G 2 yeah, or G 2 would stand there. And they asked the children, the the grandkids, and their kit and the kids, how would you take down this building. And the kids have, you know. So, grandpa, they're standing there pretending to be the building and the grandkids. Oh, why we do this! And I would, Karate chop. But but that's the kind of thing to start those patterns early, if you and and that's planning, and that's that's, you know, planting seeds to grow trees. Right?

 

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Shelley Taylor: Yeah. so just, you know, just a note about the size of the business and complexity, and and what kind of

 

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Shelley Taylor: planning they might have in place. I actually another one of my roles is, I work at the University of Pittsburgh at the

 

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Shelley Taylor: through a program. It's called the Institute for Entrepreneurial Excellence. But it's a program for family businesses and entrepreneurial, closely held businesses. It had its genesis in the

 

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Shelley Taylor: mid nineties there was a dedicated family business program, and it just merged into this program for help businesses. But one of the things that I offer through that that I do there. I've been involved in a lot of ways over the years. But currently my role is family business consultant, and we have a lot of businesses that are

 

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Shelley Taylor: 5 to 30 million, you know. 10 to 50 million, I mean, a lot of them are in that under 25 million.

 

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Shelley Taylor: I would say, and they engage in planning. They put together a board, a board of directors, or a board of advisors. That's one thing that I support some of the clients with is is putting together board and and finding either directors or advisors. you know. So the ones who

 

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Shelley Taylor: can get some education, the family businesses, you know. Family business programs at at universities are great resources, and just put a little plug in there. because it's a place where you can be with other family businesses and learn from them. You know you attend a program. So you're learning from the speaker. But you're also learning from other people who are in your situation. and you just get each other right off of that and then and then you can learn about all of these

 

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Shelley Taylor: structures, processes, procedures, and whatever model color flavor, you know, is best for you at that time. But you have an understanding that

 

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Shelley Taylor: planning is really important, and structure is really important and not just knowing who on the business side who reports to who and that kind of structure, and how decisions are made. But

 

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Shelley Taylor: take it to the family side. What does that mean? What does that look like? So so I think there's room for all size businesses really to engage in this type of planning and and conversations. The meetings might look different. For instance, our family council, our family meetings. We meet for 3 days twice a year over a weekend Friday through Sunday, you know, half days. Right? So we we arrive Friday and and leave Sunday, but

 

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Shelley Taylor: some of my clients who are smaller. I'll meet with them for 2 h or 3 h every 3 months, or 4 months, or 6 months, you know. So so the scope

 

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Shelley Taylor: of this of the

 

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Shelley Taylor: enterprise, and that is is mirrored in maybe the scope of the planning. But that doesn't mean that planning doesn't play a role, doesn't have a have an important role.

 

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Michael Palumbos ChFC, CBEC: You know, the statistics don't change regardless of the size of the company or the value or the value. The statistics are the statistics because

 

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Michael Palumbos ChFC, CBEC: of entropy and because of the lack of communication and the lack of trust. And if you're not developing and planting those seeds to grow, trust to, you know, enhance communication. it doesn't matter what the value of the business is. You're still gonna end up selling it or moving it along, or

 

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Michael Palumbos ChFC, CBEC: whatever the case may be. yeah. what? So you've got the family council

 

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Michael Palumbos ChFC, CBEC: you're working with you? Obviously. Is there any work or thought what it. What's the thought around? We have, you know.

 

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Michael Palumbos ChFC, CBEC: owners that are 3 years old.

 

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Michael Palumbos ChFC, CBEC: What is the families? Yeah, I think that's a interesting topic. We, you know when you have owners, you've gifted shares to these young children. What is the family's philosophy around them? And what are you teaching? How do you take a 3 year old and start to raise them, you know, from day one as an owner.

 

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Shelley Taylor: Well, that's a really good question. So soon. I think our family meetings are gonna have to have programs for the the fifth generation. One thing we did when we were meeting back in the nineties was, we got the kids together. because we all had lots of babies at that time, and they did more like Mini camp kind of stuff. But they also had a chance to sit with their grandparents, and do some.

 

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Shelley Taylor: you know history at an at an appropriate level for their ages. So there was a little bit of exposure through that. And then we have, as they get older at age somewhere between 14 and 16, we've actually had a ceremony called the Coming of age ceremony, which then means that they are now invited into the process, and they can attend the family meetings, and maybe they don't start with the full on

 

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Shelley Taylor: full day kind of stuff, but we do day parts for them. And another exposure, another. A great learning opportunity for our rising generations has been a family foundations, and we actually have 2 foundations which were split way before in the in the second generation. So

 

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Shelley Taylor: instead of just one large one. They are in the family branches, and both families have embraced the philosophy of bringing those next generation family members into that process early first as an as as as as as observers, and then as full trustees on those family foundations, and they're able to participate in decision making present their own projects. we also have.

 

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Shelley Taylor: what we call a discretionary amount. So all the trustees have a certain amount that they can give to

 

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Shelley Taylor: legitimate. Yeah. 501 c, 3. And then they can do without having to put a proposal in front of the foundation for so that's a great learning opportunity. so we haven't had anything but you. Now, I'm thinking we're going to have to start getting getting going on the fifth generation. But

 

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Shelley Taylor: we believe in. There's a lot of a lot of wealth was created, and there's only a certain amount. We have a a low dividend policy. Everybody lives really

 

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Shelley Taylor: reasonably. There's not a lot of ostentation where there's no oscillation, I mean in our family. And so over the years, it's like this is our

 

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Shelley Taylor: you know it's like the Grandma Silver. It's it's opportunity, opportunity. It's not entitlement, and that's the philosophy that has been passed down from generations. So

 

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Shelley Taylor: and you can't just you. You own these shares. We also have

 

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Shelley Taylor: a priority order for people to redeem their shares as each generation needs to look at it again. In fact, we have a big initiative right now that the fourth generation is working on is what is ownership going to look like for them? What did how do they want to look at redemption, or, you know, liquidity, a pool, redemption, opportunities, pools, etc.

 

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Shelley Taylor: But in the prior generation you senior generation, in active family member had priority, and the youngest working in the business can't sell his or her shares until everybody else has been taken care of. in the order that there, and that's how it's gone in the third generation, with the retirements, etc. So the port generation will figure that out for themselves. But nobody has ever had the mindset of

 

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Shelley Taylor: what? What you know. What can you do for me? And what does this do for me? And why do I have this? What does it mean? And part of that is, we try and do a lot of education. So this

 

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Shelley Taylor: fourth generation project that I mentioned, we're doing a whole lot of education educating the fourth generation. What does it look like to

 

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Shelley Taylor: gift shares? How does how is value created in the next generation. How does that diminish

 

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Shelley Taylor: or, you know, reduce liability, exposure, taxes, etc., all that other stuff in the senior generation so really trying to help everybody understand value. The State planning prenups are a big thing in our family required

 

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Michael Palumbos ChFC, CBEC: life insurance, you know, but this is great, I think in as you're talking about the fifth generation, you know. My gut says, you know, I'm I'm looking at the Abarta website, and you have your core values listed right on the website, my, my, my gut, and tell me if I'm on the right path here is that those core values are the same core values shared throughout the family.

 

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Michael Palumbos ChFC, CBEC: Yeah, pretty pretty similar. Yeah. I was my my wife and I just went through a program where we were. We're working on our family core values. And then we're gonna bring our children in to talk about these things. So we can look at the longevity of our.

 

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Michael Palumbos ChFC, CBEC: you know development of our family and the longevity of the family business.

 

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Michael Palumbos ChFC, CBEC: I'm second generation purchase the business, for my father had no idea if any of my kids will do this or not. I have a couple that I would really, you know, there's there. There's a plant in a few seeds, but when we, when I looked at the core values inside of our business.

 

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Michael Palumbos ChFC, CBEC: and then the core balance, my wife and I had. The intersection was really really strong. What was neat is I did not. I was not the driving force behind the core values in the business. It was the the team that we worked with. So it was. You know, you you surround yourself with people that share the values. And it's really important.

 

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Shelley Taylor: Yeah. And often, often the families values are reflected in a family business, if the culture is one that's

 

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Shelley Taylor: reflective of all that, for sure

 

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Michael Palumbos ChFC, CBEC: I have 2 side notes for you. One is you? You probably know J. Hughes.

 

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Michael Palumbos ChFC, CBEC: the name. So Jay and I did a podcast. On the grandparent grandchild, philanthropy project that you might want to take a peek at as your generate it working with the the next, the fifth generation.

 

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Michael Palumbos ChFC, CBEC: And then, do you know, Jeff, say I love it all

 

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Michael Palumbos ChFC, CBEC: so Jeff. Sab love. Check out his website. Look Sablov, and blown blum and sav love. He has done a lot of really great work with children under the age of 4,

 

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Michael Palumbos ChFC, CBEC: and in in in planting these seeds of what does this work look like? What does wealth look like? How do we talk to them about these things, and it was just mind blowing. In my opinion I haven't seen anybody really take that and run with him. Run with it. So his He's got several blog posts and articles that he's written about things

 

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Shelley Taylor: that might be right up your alley.

 

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Michael Palumbos ChFC, CBEC: I always try to, you know. You know as much values as you are sharing and talking with the people that are listening. I would love to be able to give it back to you as a little a little bit here and there.  let's talk about.

 

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Michael Palumbos ChFC, CBEC: Let's talk a little bit about philanthropy again. where you know. So I I I use this term, and not everybody agrees with it. But I think philanthropy is a wonderful sandbox for entrepreneurship

 

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Michael Palumbos ChFC, CBEC: within the family business. And I've talked about it an awful lot, because.

 

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Michael Palumbos ChFC, CBEC: my belief is that you know

 

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Michael Palumbos ChFC, CBEC: you're not going to break

 

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Michael Palumbos ChFC, CBEC: anybody's jobs. You're not gonna ruin the business, you know you can. But you're learning leadership and communication and working together and team building, if you're doing doing those things right. So you know, at through the years, you know, what are some of the projects that you might have had, you know, rising generations working on? And how? What? What does that look like in your family?

 

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Shelley Taylor: Well, that that's a good question. so in our in the family foundation, in terms of

 

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Shelley Taylor: that for that piece we have.

 

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Shelley Taylor: we? encouraged our Well, first of all, I I can from the from the role model of my mother in law, I was brought in the same spouse opportunity here they brought me in completely in the foundation, and

 

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Shelley Taylor: after a couple of years she said, Okay, I don't want to be President anymore. And there I was president of the family foundation as a spouse, everybody fully supported that. So we're doing the same thing with our next generation, you know, first, in a role of assistant treasure or assistant secretary and and Vice President. And now they're fully moving up into those leadership roles for the foundation, which is, which is great. I I think another great opportunity on the philanthropy side

 

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Shelley Taylor: outside of the foundation is the opportunity to sit on nonprofits and to get involved outside the bubble of the family and outside of that, and to be really involved in learning governance. You know, it's nonprofit. It's slightly different on that side, but to have that exposure in that opportunity meeting other people who are doing similar kinds of work and and being on boards. I think it's a great learning opportunity for for

 

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Shelley Taylor: young adults.

 

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Shelley Taylor: And then, outside of the philanthropy in terms of projects, we, the family council, is

 

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Shelley Taylor: rife with opportunity for leadership and project. We have had so many committees over the years writing things like rewriting our employment policy because we had one, and then and we rewrote it. But we've had a project to figure out a communication platform for the family. So a place where we can chat, share documents do planning. So we have? the software that we use for that? these

 

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Shelley Taylor: this project, actually a really big one that we recently did. One I've already mentioned is this

 

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Shelley Taylor: education about share ownership, this fourth generation project. So that's huge. It's got a lot of moving parts. And that's being led by the fourth generation. And then we also recently went through a process to select our first

 

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Shelley Taylor: fourth generation director for the board. We've had a learning. We've had a learning program which I can also talk about in a minute if we have time. But

 

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Shelley Taylor: as part of people who've gone through that learning program, then we're eligible to apply for a director position, and that was completely led by the fourth generation as well. We had involvement with from our independent directors to help them with the interview process, etc. But then they selected from among their own group of of fourth generation family members, selected a director who will be fully on the board. coming up

 

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Michael Palumbos ChFC, CBEC: nice. Let's dive into you know what? You're learning. The learning platform.

 

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Shelley Taylor: Yeah. So we called that that was something we developed. We call it associate advisor.

 

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Shelley Taylor: we were gonna call an associate director. But I actually got advice from from someone when I was in a learning thing myself that said, Don't do, director, you know. Start them out as advisor, or even just in name only, even if they don't have the fiduciary responsibility. If you call them a director that might be construed that way. So name it

 

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Shelley Taylor: appropriately. So. It was the associate advisor. They had to write an essay and apply and be interviewed, and then it's a 2 year rotation where they attend. We have 4 quarterly meetings a year. They attend. They are expected to be full participants. They get the whole board book.

 

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Shelley Taylor: we pair them with a mentor. This is a really big part of what we do. We have a mentoring program. So their mentor is at one of the independent directors, and they meet. They set their own cadence of meetings. How they want to

 

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Shelley Taylor: handle that. But that

 

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Shelley Taylor: director is a resource for this associate adviser, family member like, what does that term mean? And what's an appropriate question to ask, and when can I ask a question? And it's been a great, great opportunity. Both sides. The directors really love that as well. Our independent directors. They they've learned stuff from the

 

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Shelley Taylor: the associate advisors. So anyway, that's a 2 year rotation, and then they can apply again if they want. But our goal is to move as many family members through that program as possible, even if they don't ultimately want to serve on the board. It's an amazing learning experience. They are

 

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Shelley Taylor: learning a lot about the company, but they're learning also about corporate governance, and they're in a room with all of these great. You know, our independent directors are such fabulous resources. so it's a. It's been a really wonderful program. And we now are on

 

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Shelley Taylor: our third rounds. We've had 4 people complete it, and we're on our numbers 5 and number 6. And, as I said, we have a a director, a fourth generation director starting coming up.

 

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Michael Palumbos ChFC, CBEC: What about things like, you know, learning around estate planning and taxes and investments, and just more on the personal side of stuff. Is there alert, do you? How do you answer that information

 

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Shelley Taylor: council meetings? So those twice yearly meetings? Sometimes we'll bring in guest speakers. Sometimes the family members will talk about it. so we bring in guest speakers as in resources. We've also had our independent directors. come and and speak to the family just for, and that accomplishes several things they get to know each other, and also their great resources, and also those topics, taxes, and state planning, etc. That's part of this whole education program that we're doing on this this G 4

 

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Shelley Taylor: financial education that we're really ramping it up and realize there's so much knowledge to transmit side. Note. One thing we realized as we got going on this this round of family meetings with our fourth generation.

 

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Shelley Taylor: That's the

 

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Shelley Taylor: 3 family members who were working in the business in the third generation my husband and his 2 cousins. They wore all the hats they were on the board, they were owners, they were working in the business. And then we bring in this

 

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Shelley Taylor: next generation to try and educate them. And

 

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Shelley Taylor: so many questions were, Okay, well, is this, are you which had are you wearing when we're talking about this? So we needed to. We spent several years, I mean, now I think we have a pretty well understood. But peeling back all those layers, because those those 3 men

 

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Shelley Taylor: throughout their day they're doing things in all those roles all the time. And so for these next, this next generation is coming in just from the owner side.

 

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Shelley Taylor: you know family side as well. But

 

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Shelley Taylor: the connection with the businesses, how do we look at it? How do we know which which which had am I? Am I wearing so helping them feel back all those layers? And then this big education piece, realizing. Well, there's still a lot of this technical stuff that we need to communicate. I mean, even been like.

 

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Shelley Taylor: you know, financial statements 101 like, you know. How do you read it like even? There's ways to dig in and get to all the details. But also.

 

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Shelley Taylor: what's the snapshot. Look, what do you need to know? To just glance at something? What are the the 3 things to look at, or or something like that? So we try and do a lot of education around all of those topics

 

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Michael Palumbos ChFC, CBEC: we just a, as you said, that I'm really proud of. We had brought in an intern who just did a smash up job this year. we took. We built an excel spreadsheet that takes the balance sheet and the income statement and then creates graphs so that you can look at it and view it as a picture, not just having to understand the numbers. So for the non financial people. They can say.

 

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Michael Palumbos ChFC, CBEC: here's what we did last year. Here's what we budgeted for this year, and here's where we're at, so they can get a real quick, you know. Snapshot of what's happening.  There was.

 

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Michael Palumbos ChFC, CBEC: Oh, I just had it, and I

 

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Michael Palumbos ChFC, CBEC: come on, Michael.

 

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Michael Palumbos ChFC, CBEC:  next, Jan. It was something that you said that I wanted to hit on. And I'm not I I apologize. I'm missing. Oh, you! You talked about the modules that that they're learning.

 

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Michael Palumbos ChFC, CBEC: How did you come to determine that? And how do you deliver those things? You know? Yeah, you got guest speakers. But like

 

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Michael Palumbos ChFC, CBEC: building the curriculum. How long? Who did that?

 

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Shelley Taylor: I guess that's one of the the roles of the family council chair, and maybe all the people participating in the and our

 

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Shelley Taylor: independent, our our facilitator, our consultant as well.

 

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Shelley Taylor: But one of the things that I do is I just keep a running tally of all the questions and

 

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Shelley Taylor: a standard part of each meeting to, you know, so things will come up in a meeting, and then we might not be able to address it right then. But then that goes on this running list that I keep. Also, there's an opportunity for you know. Sometimes we'll send out surveys. What do people want to learn about in between meetings, and this is true for any family that I know that I've worked with and my own.

 

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Shelley Taylor: You get there, you the family meeting. There's a lot of enthusiasm. There's a lot of energy, and then everyone goes back to their regular lives. So you forget all the stuff in between the meetings, you know. Maybe you forget a little bit about what you learned. But maybe you also forget what you wanted to talk about the next meeting. So that's my role keeping track of all those things. like, I said. We also do minutes. So we write up a report of every meeting, and I do that together. I work very closely with our advisor.

 

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Shelley Taylor: the person who runs our meeting. So we do have a third third party

 

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Shelley Taylor: facilitator. I work very closely with that person in between meetings developing the meetings after the meeting, writing the report. So we just keep track of of those topics and then figure out what's the best way to address them.

 

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Michael Palumbos ChFC, CBEC: What's really interesting is I'm hearing this. I don't know if you're familiar with

 

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Michael Palumbos ChFC, CBEC: tuckman, Bruce Bruce Tuckman created the the forming, storming, norming, performing of of leadership teams and and team development. And I think it's really important for especially in a family business that we realize that you're not always going to go from forming to performing and stay at performing each generation and each new director in each new addition might take us the invitation back to forming, and we have to go backwards

 

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Michael Palumbos ChFC, CBEC: a little bit to start to build it again, so that you can have that storming phase to get the to the norming. But it it's okay. It's just part of the process. And so you you've said it yourself

 

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Shelley Taylor: exactly. And I think, and and this is what I tell families that I work with, and we all believe it in our family. Is that the process doing the work together is just as important.

 

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Shelley Taylor: if not more important, than any outputs that we might have any policies that we come up with, whether it's a code of conduct or employment, or you know, belief statement, or and we've come up with a lot of things over the years. But it's the sitting down, and the talking about the stop, and hearing all the voices and and coming to consensus

 

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Shelley Taylor: which is really valuable.

 

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Michael Palumbos ChFC, CBEC: remind me, remind us again how today. How many owners are there

 

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Michael Palumbos ChFC, CBEC: throughout the you know, throughout the company that are family owners throughout the company?

 

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Shelley Taylor: So

 

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Shelley Taylor: I think I said, they're in 19, and I always have to do the math right. It's crazy. 21. And then there's so 2425, something like that. Yeah, I mean. So even though we're now moving into the fifth generation. It's not, I mean.

 

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Shelley Taylor: it's not because we've also had people.

 

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Shelley Taylor: So there were first of all shares. So we include spouses in the process. But spouses do not own shares. Only the descendants of Roland Adams, the founder, is, are eligible to own shares and so in the third generation, which was my husband's generation, there were 5. one is retired. One. no. Yeah. So 2 have.

 

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Shelley Taylor: Yeah. There were of the 5 of them

 

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Shelley Taylor: to have redeem their shares, and one actually she she passed away. So her shares have been redeemed, so there are only 2 owners left in that generation. So even though it is a pyramid triangle shape.

 

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Shelley Taylor:  people, you know, in the older generations are are

 

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Shelley Taylor: hmm

 

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Shelley Taylor: no longer shareholders. So we have a larger group in the next generation. but but with spouses. We have a very large group of in our family council. So that's up to probably 30. because we have a lot of

 

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Shelley Taylor: most. Many of the fourth generation are married now or have partners.

 

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Michael Palumbos ChFC, CBEC: Very cool. Yeah, you guys, you have done a remarkable job.

 

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Michael Palumbos ChFC, CBEC: It's very impressive to to talk about this and and to learn from you. I appreciate it. In a in a past episode. We had lodge cast iron. not too far from you guys. Actually, actually, they were recipients also at the private private board of the year. this year also. Yeah, that's awesome. That's awesome.

 

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Michael Palumbos ChFC, CBEC: And they talked about we did a all on the family council and what they were doing, and it was what was great, and I love. The fact that you know you're willing to share is that they talked about.

 

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Michael Palumbos ChFC, CBEC: You know the mistakes that they made, and some of the things that it it. It's not always pretty where you're doing these things.

 

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Shelley Taylor: Well, that's exactly what I was. Gonna say, I mean, it's it sounds great, and it sounds like we have it all figured out. We don't. I mean, we have. I'm trying to figure out my me and my successor. We're trying to figure out our succession, you know, for her as as family council chair and communication. I mean, that's like the thing. Right? So yeah, we we have to keep working at it. It's not like we have it figured out, and then we glide. We're working at it all the time, for sure

 

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Michael Palumbos ChFC, CBEC: it's awesome. it's making me think you said we gift W. What was the phrase on gifting gift early in gift often. Yeah. And so I would just take, I think, what we've learned from Shelley today is plan and plan, plan. Early plan. Often. Yes, really at the end of the day, and communicate as is just the the foundation of this absolutely having that forum to communicate and following through. I think also

 

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Michael Palumbos ChFC, CBEC: Shelley, this has been great. Is there any parting words that you want to share, or anything that we didn't talk about that? You know.

 

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Michael Palumbos ChFC, CBEC: You want to make sure people know if any people, you know, if it the Aspen Family Business Group has a website, you can go right out there and find if you want to engage Shelley for your family business. You bring a you know, host of valuable

 

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Shelley Taylor: education and and experience to the table. Anybody would be blessed to be working with you. Thank you, Michael. Thank you. I appreciate that. I one of the initiative. Actually, the Aspen family business group. One thing we did this year was last year as well. Actually, hold a retreat for family businesses. So multiple members of the family can come and be together. We have 35 people

 

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Shelley Taylor: this summer at a at a weekend retreat. So it's a great opportunity, like I said, like those university based programs. Also, I can't speak of them, but you know

 

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Michael Palumbos ChFC, CBEC: highly enough that it's just a great opportunity to learn from others as well.

 

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Michael Palumbos ChFC, CBEC: Saint John Fisher, right in Rochester, has a family business group, and then we have Cornell and say, Lauren College, so like within upstate New York is, for there's no reason if your family business in the upstate New York region in any where. There's somebody going to be close to you. That's on that side. I highly recommend them as well, and and sometimes that's a nice easy first step for a family to make, too. If they're not, they're not sure they want to go. The family meeting route just yet. Or engage a consultant. But

 

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Michael Palumbos ChFC, CBEC: that's great. They'll hear from the other people how valuable it can be, and then they'll they'll take the next step.

 

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Michael Palumbos ChFC, CBEC: My name is Michael Columbus. this has been. You've been listening to the family business show. I'm with family welcome legacy and Rochester, New York. Thanks for joining us, and be sure to tune in for our next episode. Have a great day, everybody.

 

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Shelley Taylor: Thank you, Michael.

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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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