Transcript

Michael Palumbos (00:47.814)

Welcome everybody to the Family Biz Show. I am your host, Michael Palumbos with Family Wealth and Legacy in Rochester, New York. And we've got a great show lined up for you today. We've got Dr. Jim Kestenbaum joining us today. And Dr. Jim and I have had some really cool conversations over the past six months or a year here. And 

 

Jim Kestenbaum (01:10.168)

here. 

 

Michael Palumbos (01:13.014)

we finally said, I gotta have you on the show. Jim is also, Dr. Jim is also in Rochester. So it made it really nice. So even though you've got us live and, from, you know, over the podcast here, we both are in the same town, which is rare for my guests. So really appreciate you being here. 

 

Jim Kestenbaum (01:33.366)

You're welcome Michael, pleasure. 

 

Michael Palumbos (01:35.572)

So we have a little tradition of just sharing the journey, this whole idea of working with family businesses. It's one thing to be brought into a family business and that makes sense. And a lot of times that journey is kind of twisted and turning, but to become a consultant that focuses on working with family businesses, today that's becoming. 

 

Michael Palumbos (02:03.094)

you know, something that people go and get trained on. 20 years ago, when I started in business, we were searching and, know, trying to figure out all this stuff and, you know, scrambling for information. And here we are, we've been in the same town for 20 years and I had just met you this year. You know, so how did you, what is your journey? How did you get involved in this field? 

 

Jim Kestenbaum (02:21.196)

Absolutely. 

 

Jim Kestenbaum (02:27.586)

There were several steps to it. Really good question. So the first one goes back to graduate school. So I have a PhD in counseling psych. I have a minor in industrial organizational psych. And one of the graduate schools, you can imagine there were a lot of requirements, but there was a lot of opportunity just to take things you were interested in. So I took a placement in learning family therapy. I took a placement in learning how to do assessments and 

 

Jim Kestenbaum (02:55.958)

I remember back then thinking, I'm just collecting these skills. I don't know what I'm going to do with them, but I'm really enjoying myself. So then fast forward, I had my first job in consulting. My boss at that time was a family business consulting psychologist was one of the things he did. I'd never heard of that. So he said, Jim, you're gonna work with me. I work with family businesses. I went, okay. So I know what a family, what do you do with them? And he said, well, 

 

Jim Kestenbaum (03:24.43)

Basically, there are times we need to create a path when they get stuck on the path. We have the skills to get them unstuck. so so begin that journey. That was back in 1989. The skills that I have, it's it's not mystical how to come by it, but you have to have a lot of different skills to do this particular space. And it turns out that what I did in graduate school saying 

 

Jim Kestenbaum (03:52.718)

I'm going to learn a lot of things I enjoy. I'll do my requirements. We're to learn a lot of things I enjoy. That turned out to well position me to do something I didn't know about a graduate school. Um, and then ended up, still do this. I really do very little advertising for it. The skillset. It's so unique. People seem to have a way of finding me. So certainly if I had a boss, they'd say, you need a marketing plan. I probably do. Uh, but this is working. Um, and 

 

Jim Kestenbaum (04:21.952)

It still remains to be some of the most complex, personally satisfying and intellectually stimulating work that I do, because it uses every single skill I have. And in the end, it's the American dream, seeing a business get from gen one to two or to three, I like that dream. So I feel I'm doing my little bit to help families move their businesses to a next shot. 

 

Michael Palumbos (04:49.048)

I love it. That's one of the reasons this whole podcast started was because, you know, COVID was happening and we knew that it was going to have an effect on all the business owners that we served. And we just wanted to help. So we grabbed, you know, the people that I know, in that space to say, what do people need to be thinking about? What do they need to be worrying about right now and planning for? And then it just kind of morphed into what it is today. 

 

Michael Palumbos (05:18.382)

It's very satisfying work and we come at it from very different perspectives. I don't have, you know, a psychology degree. And you said it's you have industrial psychology. Is that what it said? What was the 

 

Jim Kestenbaum (05:33.838)

It's called industrial organizational psychology. it's industrial sort of used to be called personnel psychology. So wages, job descriptions, things like that. Organizational psychology is all the organizational dynamics within a company. So when you look at family businesses, that slices so many different ways. So family, non-family level, internal, external. So it's understanding when you put those together, why do they function the way they do? And then how do you make them function better? 

 

Jim Kestenbaum (06:03.662)

So very germane if that business is something. 

 

Michael Palumbos (06:05.986)

Gotcha. typically, let's just put it out on the table. When do family businesses call Dr. Jim or start their search for somebody like Jim Kestenbaum? 

 

Jim Kestenbaum (06:19.746)

So it's sad that this is the way it happens, but it is the way it happens. It's never proactive. It's never, you have an owner, a couple of owners, usually husband and wife in their mid fifties going, our kids are probably coming up to the teen years. We should do something. That's always sort of the dream. And then, books are written about that. What happens is somebody is feeling very frustrated, emotional, angry. you hear things like from owners, I can't take this anymore. 

 

Jim Kestenbaum (06:50.124)

So that's one thing. The second thing is, that I am rarely the first consultant. So as Michael, you and I've talked about, oftentimes the first consultant is a family friend. And usually what you hear is to the friend, can you talk to the kids? The kids are like in their thirties, but can you talk to the kids and say, what do want to talk about? Well, you know, they're not cooperating and they don't understand how good they got it. And, know, this is a multimillion dollar enterprise and that goes on and on and on. So there is that. 

 

Jim Kestenbaum (07:20.046)

talk with the kids, it doesn't change anything because it doesn't address the problem. So it's actually it's the pleasant version of what the parents have been trying to do. So and then the referral sources are wide range. And so certainly folks like you were very in this space, but also priests, accountants, attorneys, people who hear people's problems. So they're sitting with whomever is their advisor du jour and they're saying this family business is driving me crazy. 

 

Jim Kestenbaum (07:50.39)

And then, because I've been doing this so long, somebody says, it's kind of Dr. Jim. And they'll say, well, I don't want to have therapy. They'll say, that's great because he's not going to do therapy with you. But he's got degrees in this stuff. You go have a cup of coffee with him and tell him what's going on. If he can help, he's going to help you. If he can't, he'll try to refer you. So that's sort of the path. 

 

Michael Palumbos (08:12.174)

Yeah, because at the end of the day, think what's what's happening a lot, a lot of times is they're trying to figure out succession, they're trying to figure out who who plays what roles in the next generation. And then somebody's nose gets bent or somebody's not pulling their weight or, you know, a very a myriad of different things that happen. And, know, dad doesn't think or mom doesn't think that, you know, 

 

Michael Palumbos (08:41.602)

the child's capable, or maybe they're not giving the autonomy that they need to give them so that they can do things their way. So I think it's important to hit on some of those real specific things so that people can hear that it's pretty much anything. you've got things, go ahead. 

 

Jim Kestenbaum (09:00.62)

Yeah, so it's there are some other ones. I'll just add to your list that. Mom and her dad. Know that they should do succession. They're not ready for the big R, which is retirement. It was funny today's news. So Serena Williams, the world famous tennis players in the news, so she said she is ready to now evolve into what's next. So she said, I don't want to talk about retirement because that means something different to folks and so. 

 

Jim Kestenbaum (09:29.998)

She's struggling from retiring from tennis is the short version of this. In the owners that I talked to, I've heard people say, know, I'm looking in the mirror in my head. I look younger than the image I see in the mirror that, okay, I'm 65 or I'm 70. I still, you know, I can still beat the young kids. You can hear things like that. And they see it as an ending, not as an evolution in who they are. So. 

 

Jim Kestenbaum (09:56.782)

that's a big problem in succession planning. lot of people who want to start succession and then they start to see this is going to be real. That for example, you the owner sometime probably in the next two years won't be the president of your company anymore. And it's a time you might not be the CEO anymore. And what I have found the longer I've been at this, it's helping that person to deal with those very personal and intimate thoughts. Cause if they don't, 

 

Jim Kestenbaum (10:25.868)

Succession ain't going to happen. It's going to stop and bad things happen from there. So kids become frustrated. Kids talk about, or actually quit. can fracture the marriage between the owner and their spouse. So it's, if you can find a family who's saying, know what we're trying isn't working. We've tried everything else. Let's try something a little bit different. Let's try something that really allows us to think personally what we're trying to accomplish. 

 

Jim Kestenbaum (10:56.118)

They got half a shot. 

 

Michael Palumbos (10:57.506)

Yeah, no, I think that's a really good point to make sure that people understand that a lot of times it is one of the owners who's not ready to give up the reins. They need to retire to something. They need to evolve to what's next. You know, when I talk about, you know, aging, I want to become an elder, not an older is kind of the phrase that I utilize elders that I look at is 

 

Michael Palumbos (11:26.19)

they're always constantly still learning. know, there's the more I'm looking forward to the day when somebody comes in to be my successor and I evolve to something else. And I don't know what that is yet, but I have just, you know, a friend of mine said, well, why don't you go get your degree in psychology or psychodynamics? And why don't you start doing this stuff? And I'm like, 

 

Michael Palumbos (11:55.454)

I've thought about going and doing some Bowen family systems theory stuff, but I was just kind of using it for what if, you know, I mean, and just adding it to my plate, but maybe it is a way for me to be able to step away from the wealth management side and the estate planning and all the technical work and do more of that stuff. So that was interesting. That happened last week. And I was like, I felt like, 

 

Michael Palumbos (12:22.048)

Now I can see it, but I think to your point, when we're talking to that owner, it's helping them to figure out what's next so that they can be excited about their future and where they're going, right? 

 

Jim Kestenbaum (12:42.07)

whatever is next, it's not seen as something less than. It's seen as what do you want to do next? Including, there are a lot of examples you see in the literature, and this is what I discussed with my clients, so that usually if you're in an executive level, the things that you used to love a long time ago, you don't get to do those anymore. The being the craftsman, as some people call it. So say, you you still own the business. So a simple example is, 

 

Jim Kestenbaum (13:10.06)

you entered into this company, it was just two people, you were a chemist. Still like chemistry? They might go, yeah, I do. Say, do you realize you could go back to the bench and start doing chemistry again? You have the money you need. You could have any job in this company you want. You also, what you were talking about, Michael, go get training in something that is there something that's been a passion for you, but as you've built the business and made it very successful, which actually you have done, 

 

Jim Kestenbaum (13:39.596)

something you want to pursue because now you have the time and resources to do that. So again, it's a, it's helping them to see this isn't retirement, you know, buy white shoes, move to Florida. It's a matter of what's something that you still like. I know typically in, your side of the street, people talk about getting big into charitable giving and volunteerism and things of that sort. Wonderful. Cause then it's sort of a twofer community benefits and the individual benefits, but you can see it as. 

 

Jim Kestenbaum (14:10.156)

This is a natural next step. I'm not becoming a less than. It doesn't mean that I'm sort of putting myself out to pasture. It's that there's something else I want to go to. And by the way, and this is the other thing, that they've been doing some readying their kids for this. And there have been discussion with the kids. Kids are in their 30s and 40s. The oldest ever, so they were in their 50s. Dad was deep in his 70s. But that... 

 

Jim Kestenbaum (14:39.266)

But it's saying, all right, if, in good faith, I was offering my children the opportunity to be the next gen, let's see what that looks like. And even in the beginning, my advice that we give to people, some people are not ready to work with me. So I'll say, they'll say, I'm not ready to do succession. I'll say, okay, once you do this once a quarter, have a nice lunch with your kids, your spouse, whoever else you want to invite, and just talk about where's the business now. 

 

Jim Kestenbaum (15:09.314)

and talk about what's the vision you all have for the future. And don't even write an agenda. There's the agenda. And just see where it flows. And you might surprise yourself as you learn first and foremost, your kids probably have more on the ball than you realize. And they might have some ideas or some interesting directions. They might even want your job. They might want to spin off a division or start a new subsidiary, but you were so focused on 

 

Jim Kestenbaum (15:37.24)

who's gonna take my job and I'm not ready to leave my job, you limited your thinking. So that's where, simple enough, lunch once a quarter, pretty simple, pretty cheap. 

 

Michael Palumbos (15:47.48)

I love it. I love it. That's a great way of looking at it. And to your point of what you're talking about, you you just said, you know, the kid might not even want their job. the succession means different things to different people. And so there's, know, I think you coined the phrase, there's many roads to succession. And, and so as you're thinking about that, sometimes you don't even know what the options are until you enter a dialogue, until you start conversing. 

 

Michael Palumbos (16:18.03)

I like what you said about meeting quarterly and just say, where do you see as the vision of the company? I would add a little tiny twist to that. Sometimes I think it's fun to just say, what if we did a SWOT analysis, you do yours, I'll do mine, let's talk about them. if vision is one piece, where do we see it? But that we can talk about our strengths and our weaknesses. 

 

Michael Palumbos (16:41.986)

opportunities and threats. Maybe just see what that looks like. If you get bored, maybe you just do one per quarter. We'll do the S this quarter and then the... 

 

Jim Kestenbaum (16:49.678)

Jim Kestenbaum (16:50.181)

Whatever. Sure you can. 

 

Michael Palumbos (16:51.852)

I love that idea. haven't thought about doing that on a quarterly basis. So I think that's really important. If you're not ready for succession yet, then as the family members, if you're going to be talking about it someday, at least have a quarterly lunch where you're talking about these things. 

 

Jim Kestenbaum (17:07.628)

What they'll find also, particularly in this situation, so I'm in a situation like this right now, that there's a kid in the business who really doesn't like the business. It is doing it because of a felt sense of loyalty to her parents. So if you have these quarterly lunches, which sometimes there might be some spin-off one-on-ones that happen between the quarters, you as the parents are figuring out 

 

Jim Kestenbaum (17:35.854)

this thing that I always pictured was gonna happen, some of my kids don't wanna do this. And then you can just be a good parent and just say, so what do you wanna do? And any loving parents gonna say, any way I can help you to get there, I'll help you to get there. And now also, cause I know you don't wanna become the next owner or CEO and president of this, I have some serious planning to do and what's gonna happen next with the business. But at least I know this thing that... 

 

Jim Kestenbaum (18:04.588)

you'll be sitting in my seat, I need to get lost. All of that is wrong. 

 

Michael Palumbos (18:10.414)

Michael Palumbos (18:12.636)

Until you have the conversations, don't know. Why is it important that people, sometimes there are some families that have done a great job. They're thinking about these things in advance. They're having the conversations. Succession isn't an issue for them because they're, and I would say that they're typically their emotional intelligence. 

 

Michael Palumbos (18:37.142)

within the family, their ability to communicate. They've worked on that for many years. And then that's where that comes from. When they get stuck though, why include a consulting psychologist? You said this isn't therapy. walk through, why isn't it therapy? But why is it important that that psychology background is part of it? 

 

Jim Kestenbaum (19:00.864)

It's not, so it's not psychotherapy or counseling because I'm not going to get involved in any of the people's childhood, their, you know, deep concerns with each other. If there's a mental health issue, I refer to a psychologist or some other kind of counselor. The reason for doing that is just that I want my role as the consulting psychologist to remain focused. So if I start wearing too many hats, 

 

Jim Kestenbaum (19:29.102)

It gets confusing about, who is Jim to us? And the first thing that's dropping off the plate is succession, because that's the most feared thing. So it's easier, go work with each member of the family individually, Jim, and we'll get back to that succession thing next year. So that's part of it. What I'm doing though, is systematically first determining where and why are they stuck? So is that similar to counseling? Yeah. 

 

Jim Kestenbaum (19:58.712)

But the topics are different. So I'm going to ask questions like, what are your goals for succession? What are some of the things you think have made this go well? What are some of the things that have made it not go well and why? What would be some things that we get it back on track? So let's say for the air version, what are some things you feel your parents could do that would better facilitate this process? 

 

Jim Kestenbaum (20:28.94)

I could take the rest of our hours spinning off questions. In the end, I sit back and I analyze that and say, okay, net net after I've written about 50 pages of notes, what are we learning here about why succession came up to a certain point and it stopped? What you want to avoid is the, know, often discussed anecdotal story of the family that could not complete succession. And then 

 

Jim Kestenbaum (20:57.506)

the main person, dad or mom dies. And then it's two or three days after the funeral. And the kids are sitting in some big living room saying, so now what do we do? And it's like, wow, you picked a time in your life where you will feel the worst about each other in the situation. And that's where you're going to do succession planning and they'll try it. And it's, probably somewhat likely that there'll be discussions about to preserve our relationships. Maybe we should just sell it. 

 

Jim Kestenbaum (21:26.968)

which for some family businesses, that's not a bad idea. But again, they're in the duress of they just buried a parent, not the right moment to be doing this. So with some planning, I don't think anybody really does succession planning in the fifties, but you get into your sixties, it's a time to at think about, all right, you know, do you want to see succession happen or do you want to see a sale happen? Or I'll say this to owners and say, 

 

Jim Kestenbaum (21:56.174)

Maybe you want to go with your boots on, as they say, you said, it's your business. You might want to die in your office. God bless you. Go for it. It's like, it's not my point to judge that, but if you don't want to go with your boots on and Hey, you're 67, you know, we can take out a life insurance chart. The truth is the truth. We should start doing something and do something that you can, you and your family can stick with, with some consistency. So. 

 

Jim Kestenbaum (22:25.324)

is you're aware the family council model works really well for that. And you see where it goes. The thing that's also interesting in this work, and you alluded to this, Michael, in the beginning of the podcast, no situation is ever the same as another situation. And so many unforeseen things come up. So family secrets, betrayals, all sorts of things like that. And again, my skill is to say, OK, 

 

Jim Kestenbaum (22:53.666)

So you just learned something new. So you learned that, you know, uncle so-and-so went to prison and that, you know, he's on your board of directors now. Okay. So yes, it's upsetting. Let's take some deep breaths. Let's see why you're upset about that. And let's start talking through what's a better way forward. Cause the fact is he's on your board and he went, he went to prison, served his time. So is, is the issue that a relative was on your board went to prison? 

 

Jim Kestenbaum (23:22.912)

or is the issue that nobody ever told you? So again, in my skillset, you're mentioning EI before. 

 

Jim Kestenbaum (23:32.534)

I'm pretty unflappable. cause this is the training you're taught back in therapy school. Like, you know, if your client is upset and you're upset, who's got their hand on the rudder. So, so, know, right. So inside I might be going, wow, I can't believe they're saying X, Y, or Z, but that's not what's coming out of my mouth. And that I'm very focused on, we have two big boulders to move. 

 

Jim Kestenbaum (24:01.966)

Leadership and ownership. That's let's keep our eye on the ball. Let's figure out even if we need to make some detours, how we're going to get there. So let me stop the role play. This is the way I sound when I'm in front of clients. It's just like, it's not matter of fact, but it's very calm and very focused. And sometimes I'm the only common focus person in the meeting with the family. Everybody else's hair is on fire. So. 

 

Michael Palumbos (24:24.526)

Michael Palumbos (24:24.946)

It's almost, you know, as you're talking, there's a, it sounds like management consulting. And, you know, you start taking, and we talked about this a little bit, but like you talked about Jim Collins and, you know, good to great and trying to figure out, you're just helping them to figure out what are the right seats? What are the right people? Who are the people for those seats? And, and how do we take, and you know, the love, the power and the money. 

 

Michael Palumbos (24:53.0)

aspects of those psychology, you know, fires and remove them from there to make some logical decisions to be able to move forward and get everybody's buy in. 

 

Jim Kestenbaum (25:03.926)

exactly what it is, as Will said. But again, also it's doing objectively. So I don't care whether the son or the daughter becomes the next CEO. All I'm going to say is, so for example, you can assess leadership and management skill and all of its vicissitudes. So I'll say, if it looks like it's a dead heat between your two kids, I don't know, let's use a quantifiable test or a few of them. Let's figure out what's what. 

 

Jim Kestenbaum (25:30.892)

And the test is not going to tell you what to do, which is a big fear clients. Well, Jim did a test and not to follow the test said, no, all that is, is just information for you to know how you're going to go forward. So if the lesser qualified child is the one you still want to be the CEO. I'll say, okay, how are we going to get them there? Cause just throwing them into that seat, that's going to be bad for that person, that kid, the business and the family. 

 

Jim Kestenbaum (26:01.144)

So if they're missing a skill, most management skills can be learned. So say, are they going back to school? Are we going to get them an executive coach? Are they going to be in a family business study group? There are a lot of different options. Are they going to just read? That would be good. Read some things in this domain. And I assure people then again, that there is some amount of trepidation about testing. I'll say, testing is it's giving you another source of data. Say you're, I'll say, 

 

Jim Kestenbaum (26:30.914)

You own the business, you want to ignore the data, that's up to you. I'm saying use it to inform what you want to accomplish, because there's a lot of good information in there. It's not like a fortune cookie that's going to come true. It's saying if this is where things are headed and you don't like what's going to happen, let's figure out a better plan to get that air in better shape so that as they start taking over more leadership responsibilities, 

 

Jim Kestenbaum (27:00.332)

and ultimately start getting equity that they're going to do something that first and foremost, they're going to feel good about. Somebody who feels good about themselves as a leader, you know this Michael, that always goes better. That the business is going to function better and the family is going to feel good that they gave that air the kind of support that made them successful. So that's another thing that when you look at consulting psychologists, this is part of our skillset. 

 

Michael Palumbos (27:29.388)

And 

 

Michael Palumbos (27:29.758)

that was one of the things that I really liked that we talked about before is that you do have a plethora of unique assessments in a bunch of different areas. We talked to you personality, I think you're Myers-Briggs, right? If I'm not mistaken. And then you have, like you said, the management and leadership assessments. I think it really helps you to paint a bigger picture. 

 

Michael Palumbos (27:58.732)

the about the situation by utilizing your background, your skillset. And then on top of that, you have data that you can look at and to say, Hey, you know, this is what, you know, 5,000 other people that have gone through this test. This is what it looks like. And I'm a big believer that if somebody has a motivation and I don't even like the word motivation. If somebody has a passion for being the next leader in the business, 

 

Michael Palumbos (28:28.43)

that you can learn anything. I have made mistakes through my career. I just learned from them. I fall forward, and I apologize and I move on. And so they can learn anything, and that's helpful. And you give them through some of those assessments, here's some of the areas that you should focus on first. a lot of times, I think in a succession plan, the 

 

Jim Kestenbaum (28:34.348)

Yeah. 

 

Jim Kestenbaum (28:39.907)

That's all it is. 

 

Michael Palumbos (28:56.526)

The current generation wants to be focused on the technical side of making sure that you can do all the right technical things like, you know, putting together the, taking the blueprint and making that blueprint come to life. Well, if you can't do that, how are you going to lead, you know, this business? And a lot of times it's probably more often the people skills side of things, maybe so that that leadership and how to lead, because you don't have to know. 

 

Michael Palumbos (29:27.594)

You don't have to do things the same way dad or mom did them to be successful. 

 

Jim Kestenbaum (29:30.624)

 

 

Jim Kestenbaum (29:33.458)

And particularly also, that's a good point, Michael, that I remember years ago, local family business owner contacted me. We're talking about he wants you to do some succession. He's got some kids who are up and comers, but somehow we got to talk about a discussion about his business was changing. I said, what do mean? He said, we're about to take a whole new strategy, but we don't know what it is. I said, well, I'm not your next step then. 

 

Jim Kestenbaum (30:01.132)

So let me get you to somebody who's a strategic planning expert. So why is that? Because who you are today as the CEO, that skillset might not be the same as the next version of your company. And in determining which of your kids fits which role, we want to judge them based upon the new version of the company, not the current version, which you're about to change in like 24 months. 

 

Jim Kestenbaum (30:30.914)

So that's where also I'm hoping this is coming through in our discussion that I really try to communicate a lot of hope to the families because again, by the time they see me, they're really distraught. They've boiled down their choices to a very limited number of choices and there are many more choices that could be made and they don't have to ruin the family in the process. So I'll try to say, know, 

 

Jim Kestenbaum (31:00.502)

Let's, although I'll say I respect that you all can't keep an open mind right now, because you've been chewing on this for five years and it's not been a very delectable meal. But aside from that, you have to trust I've been in so many family business succession scenarios. There are some different things that you could be doing that first and foremost are not going to be as stressful and are likely to get you to a better outcome. So let's, let's take a breath. Let's just all step back for a moment. 

 

Jim Kestenbaum (31:30.218)

see how we got here, see what would be a better way to go forward. And then I talk with people creating something called a succession roadmap. So I don't know if I invented this or not, but I like it, whether I invented it or not. And so all it is is I'll say, okay, now we sort of see that by an approximate date that, for example, mom and dad are going to be out of the business completely. 

 

Jim Kestenbaum (31:59.468)

And I'll say, that's not etched in stone, but let's use that to then work backwards. So now what we're going to do is we're going to work with each other to create a roadmap that spells out tasks that each of you have and the expected results quarter by quarter. So why are we going to do that? That's a big piece of work by the way. Why are we going to do that? Say we need like a succession GPS. Say right now, all I'm hearing is. 

 

Jim Kestenbaum (32:29.386)

Someday you're going to leave and someday you're going to be promoted. I'll say, I'll bet you as we start writing the roadmap, you're going to see, there are a lot of little, but significant things that need to get done. So that when we get to, I don't know, January, 2026, that all those, so you have all those things have been done. You have a really firm foundation of 

 

Jim Kestenbaum (32:55.744)

Now we're ready for success. We're ready to throw some big switches. So usually that's somebody's about to get a major promotion. We start talking about then, and this is where it involves folks like you and the attorney and the accountant. Okay, so how are we going to do the equity transfer? Is it sweat equity? Is it actually purchase? So that's outside of my realm, but I know to trigger it though. So I already know who the accountant attorney and the wealth advisor is. So say, 

 

Jim Kestenbaum (33:25.442)

This is our moment. We're coming up to this like in a year and a half. Let's start having some discussions, let them start building models for you. I'll say, I'm like a trained monkey. What I just said to you, that is the extent of my knowledge, but I know what I don't know. So it gets that sort of going in the background a little bit. when we get to January, 2026, there is the first, if somebody you would typically in a family go from being like a VP to an EVP, which is like a COO, and it might be, here's the first chunk of the business. So. 

 

Jim Kestenbaum (33:55.086)

through whatever means, know, Bobby is gonna get 20 % or whatever. 

 

Michael Palumbos (34:01.006)

It's interesting because it's like you said, it's different every single time, but there's always a rhyme. There's always a pattern or a beat to what's happening. I love the succession roadmap. think that that really makes, it'll help people to envision what's next and where are we going when we're doing. So I am more, you 

 

Michael Palumbos (34:30.518)

Yes, I do the wealth management and all the technical estate planning, buy-sell agreements and operating agreements. help architect them. don't draft them, but I make sure that they're architected properly. But I also do a lot of work on that growth strategy work. And so on that growth strategy work, when I'm bringing on a new client, we have a quarter by quarter what to expect 

 

Jim Kestenbaum (34:42.232)

Sure. 

 

Michael Palumbos (35:00.152)

for three years. And the whole idea behind that is, in the first meeting, we're doing some cohesive exercises where we're just getting the team to share things like, what was a memorable experience before the age of 12 for you? They're learning things about the other team members that they've never heard before, nine out of 10 times. But you can't start, you need to start there so that 

 

Michael Palumbos (35:29.998)

18 months from now, excuse me, 18 months from now, you can have a conversation, you know, what we call the left, right, you know, thing, left, what do you like about what this person is doing? And what don't you like about what this person is doing? And then do it on the right side as well. And then go continue going around the room. That can't be a first discussion. Otherwise they never want to see our strategic planning work ever again. 

 

Michael Palumbos (35:57.112)

But you have to build that trust. Like you said, you build the trust, you put the pieces together to really get people thinking about, know, that we're not there to tell them what to do. They know the answers. just don't, they don't know the questions. 

 

Jim Kestenbaum (36:13.964)

It's exactly right. And then when they start figuring them out, they don't know to say them. as a child in the family business who really wants to be the COO is not under consideration for that, but wants to have an earnest discussion with their parents and they're going, I don't know how to have this. either I'm going to sound like I'm just trying to glorify myself and it's an act of hubris that I want to be the next COO. 

 

Jim Kestenbaum (36:41.07)

where I say nothing and I'm really pretty unhappy being stuck in the middle of this organization. So if nothing happens, I'm probably going to quit in 12 months. So they'll say to me, is there a way to have the conversation? I'll say, sure, there is. So this is one of the things I'm known for. I can help them to craft the words. I'll say, if I were in your shoes, given what you've told me, this is what I would say. So I do that and get done. And they'll say, wow, you 

 

Jim Kestenbaum (37:09.686)

you did that really well as a thanks. said the point that was like, got to help you to do it well. so we, we'll talk about, you know, I'll say what made you comfortable uncomfortable talking to your parents like that. Can you picture that if you can picture it, when do think you might be willing to try that? So I'm going to inch them forward to get through their discomfort to the point that they're willing to go have the discussion. If it's helpful for me to be there. 

 

Jim Kestenbaum (37:38.666)

not as an advocate for the air, but to say, you know, this is a big issue. I've come to know your family very well. I care about you all. This is an important conversation to go well. So most times I'll be sort of a fly on the wall, but you know, if we go off in the weeds a little bit, I'm going to get you out of the weeds. 

 

Michael Palumbos (37:59.246)

I want to make sure that people don't miss this. So we made a point of talking about the skillset that you come to the table with is to make sure that things that are being said to each of the family members, you have a unique way of talking to them, hearing all of their things, being empathetic to them, and then seeing it in a manner that they can hear it, right? But then- 

 

Michael Palumbos (38:23.736)

Flip it, side two, is as we've gone through the succession plan, as we start to see what needs to happen, you're there to coach them to do exactly what you've been doing, which is to, how do I have a meaningful, critical, tough conversation, you know, in the face of all the things that are going on, because they wouldn't be stuck if they were easy conversations. 

 

Jim Kestenbaum (38:47.246)

Good point. From my perspective, any consulting project will eventually end. It's supposed to end, at least my involvement supposed to. So it's what you were saying in the second point that I want them not just to be able to memorize a script. I want them to understand from an emotional intelligence perspective. How do you first craft? What am I trying to accomplish? What are some of the key points that I want to make? So dot dot dot. 

 

Jim Kestenbaum (39:16.526)

I'll take them through, this is what's going on in my head when I roleplayed those things with you. Okay, now here's the next thing. You try, what do you want to accomplish? What do you think the key points would be? When your parents say some things that are upsetting, how are you going to manage your emotions a little bit? Because if you start flying off the handle, that game is over. So tell me how you're going to be able to deal with that and we'll practice some of that. So again, when the day is done, 

 

Jim Kestenbaum (39:45.836)

I want them to be some version of me, but they have to do it for themselves. It has to be their personality. And that builds strength to them as leaders then that they're gonna be better not only talking to their parents and to their siblings, but also talking to the very important key non-family members in the business, which often are ignored. It's like, Jane or Bob. 

 

Jim Kestenbaum (40:15.33)

They're never leaving. I'll go, you told me a story last week that they're feeling really edgy and they're not sure they can stay. They'll say, say, I know it sets you to talk about that, but the fact is, so I can remember saying in a variety of family business, if so and so were to leave, what happens to your business? And usually the answer is a number of very bad things. This person is a very key player. The only thing is they're not a member of the family, so it limits. 

 

Jim Kestenbaum (40:45.514)

equity and things like that. I'll say, well, if it's okay with you, you're not paying attention to them. So I'll say, in my experience working in hundreds of companies and thousands of employees, I know the arc of the script. They are, and I'll usually make a guess, usually I'll say they are somewhere between 12 and 18 months of quitting. They're going to quit at a point that best serves their purposes because you're not looking after them anymore. 

 

Jim Kestenbaum (41:15.758)

You're going to get very upset. You're going to beg. You're going to throw money at them. They're going to stay for two more months and then they're going to quit and they're not going to come back. So that's where am I talking with them? It's a matter of that broad perspective. said before, yeah. So you all are kind of like in this bubble that it's only, you know, only people with your last name you're paying attention to say, so it might be a company that has 400 people. 

 

Jim Kestenbaum (41:42.486)

Most of the stuff that happens in this company has nothing to do with the six of you do. So let's look at these non-family VIPs and sometimes we'll say, let's talk to them about how where your succession process is not, how it's affecting them. Because oftentimes the difficulties within the family spill into the non-family members and the non-family members are thinking, do I need to be a part of this? It's like, 

 

Jim Kestenbaum (42:10.646)

I didn't sign up to be a part of your family's problems. I came here for a job. I give you everything. I don't want to be a part of your family dynamic. So I'll explain to the family. I'll say, you're exposing them to too many of your conflicts. And then I'll say, again, let me show you what the arc on the script looks like. Say it's not going to be pleasant, but you have time. So that's where the hope comes in. There are things that you can do to make the situation turn out much better. And then what 

 

Jim Kestenbaum (42:39.574)

I'll recommend depends upon the specific situation, the specific person. But again, it's showing as we talked about before, there are often many more options in front of the family than they think because their bubble is small because they're infighting, their trust is eroded. They're tired and they're angry. So this is my typical client, not all of them. So for those watching this who are family business owners going, why do I have to be that to speak with Jim? No, but 

 

Jim Kestenbaum (43:09.088)

Sometimes it's that if you take a succession plan that really has been just, you know, sitting on the windowsill too long out in the sun, nothing good happens with it. So you try to work with that. 

 

Michael Palumbos (43:20.77)

I love it. We're coming up on our time, but I want to make sure that we are able to talk about a couple of a couple more things. One is. 

 

Michael Palumbos (43:32.782)

I have, I know that in this family business coaching, that's the, the, world that I put family business coaches, they're not advisors, um, into that you call it the consulting psychologist. yeah, there's, there's a world of difference in approaches to this. And I, you know, I just know that from 12 years, 11 years, whatever it is of being around the purposeful planning Institute. 

 

Jim Kestenbaum (43:46.67)

Same. 

 

Michael Palumbos (44:02.016)

and seeing how people are coming at this. Some people are coming at it from the fear-based, only 13 % make it to the third generation. You don't do that. I find that really, love, I wanna make sure that I note this. You come at it, let me show you all the good things that are available and possible, but we have to have some conversations to get there. You bring from that level, there's a real big push. 

 

Michael Palumbos (44:31.028)

share it real quick is Jim Grubman, Dr. Jim Grubman and Dennis Jaffe. I don't know if you know those names, but both of them are talking about Wealth 3.0, which is all coming at everything from a positive spin. And now that I've been talking to you, I think that you've been doing that for a very long time. So I really appreciate that. I know that there's statistics out there that talk about those things, but at end of the day, that's what the Family Biz Show is all about, is just trying to help. 

 

Michael Palumbos (44:59.926)

and be positive and bring, you know, some really good teachings to people. What I want to know is knowing that there's a plethora of people out there, what's the best way for a family to go through and say, how do we know if Jim's the guy for us? Or if it's Lori or Pete or, you what are some of the ways that if you're a family that you're having these conversations? 

 

Jim Kestenbaum (45:25.078)

I guess it's a few things. First, it's not unusual that family business owners know other family business owners. And sometimes they know them pretty well. They could be friends, could be golfing buddies, ask them, hey, know, wheels aren't falling off, but we're having some difficulty with succession. You all did succession. Anybody ever help you how to go or would you do differently? So those kinds of things. Another thing is, that whether you have a conversation or not, 

 

Jim Kestenbaum (45:54.062)

Ultimately, you're going to end up with somebody, a consultant who might be well-referred, but you don't know them. So a thing that I do when I'm first meeting somebody or somebodies, I'll say, why don't we meet for an hour, hour and a half? I'll say, you know, I want to get a little more information that you offer me over the phone or a virtual meeting, but let's use this as an opportunity for me to learn. 

 

Jim Kestenbaum (46:22.23)

Are there ways that I can help you and what would that look like? And for you to learn, are you comfortable just sitting across from me? I'm going to ask you personal questions. If we work together, you know, ask the hard questions, ask about my training, ask about how many family businesses I've been in asking about my success rate. And what does that number mean? I'll say, because when we start working with each other, you want to feel that I'm the right person. So no question is an imply question. 

 

Jim Kestenbaum (46:49.774)

And I have to think also, Michael, somebody's written some good article that you could Google that would say, how do you qualify a good family business psychologist? Um, but those are the things. I think oftentimes when I look at the clients work with me, there's a point in that first conversation, something does or doesn't click into place. So I can tell when both are happening. So certainly I prefer when it does click into place. So we're talking and all of a sudden the conversation is flowing. 

 

Jim Kestenbaum (47:19.054)

They're beginning to tell me some things they haven't told other consultants. They're willing to talk about some of their misgivings about doing this at all, yada, yada, yada. And I can tell we're probably going to work with each other. And I'll say at the end of the meeting, I'll say, you know, it looks like you have some things that I can help you with. I told you the next step. Do you want to take a shot at this? So it's, that is my hack needs sales call technique. It's pretty low key. 

 

Jim Kestenbaum (47:47.722)

Likewise, there's some people where I can tell they're not ready and it might be because of me. It might not be because of me. They're just not ready. So I'll say, look, say based upon we talked about, I think if you just got smarter about family businesses to start, you would see that some of your trepidation is unfounded. So either I'll say, here's a book I really like, or give me 24 hours. I'm going to find you one or two articles, read them. 

 

Jim Kestenbaum (48:17.602)

Think about it. If you want to maybe have a little lunch with your family, make copies, we're back to that lunch that I'd like to eat. So have a lunch and have a discussion. And then I'll say, there's some time between now and never you're going to call me. And when you want to just, you know, call and update me where we are. If we should meet, we will. So what's the idea behind that whole approach Michael? It's an empowering approach. I can't change any business. 

 

Michael Palumbos (48:24.674)

Yeah. 

 

Jim Kestenbaum (48:47.424)

I can't change any individual. It's that they have to make the decision that they want to do the hard work and the hard work is going to happen when they're not in front of me. So they have to be able to have a combination of the fortitude and the resilience to be able to have the hard conversations. I'm going to coach them how to do. So again, you can sort of tell in the beginning, where is it, where is this going to go? And it proceeds from there. 

 

Jim Kestenbaum (49:16.696)

So again, I think if somebody wants to just sort of get a primer on how do you pick a person like me? If you Google it, selecting our next family business psychologist or family business advisor or you can play with the wording, you'll come up with things. So it'll be a very detailed list. But again, it's like a gut hunch decision that happens in the first meeting where something goes click, I'm gone, they just became a client. And if it's not, 

 

Jim Kestenbaum (49:44.748)

I'm always respectful. I'm sometimes I'll say, I don't think you're ready. And I realized, you know, you're 72 years old and you're feeling a lot of pressure from everybody to do something, but you're not ready for that. Sometimes I'll say to them also, why don't you meet with me every other week for a couple of months and just talk about how you're not ready. And let's see after your four meetings, maybe you'll feel more ready. And if you're not, maybe you want to go with your boots on. We're back to that again. I'll go. 

 

Jim Kestenbaum (50:15.062)

It's your show. If you want to do that, I'm not talking you out of it. I've told you what's going to happen that won't be that great. But the way I come at all this, Michael, these are personal decisions. It's not my place to scare somebody into if you don't do this, bad things will happen. I'll go. I'll say, you know, it's going to happen. Good and happen bad if you don't be certain things. So you know that already. Let me show you how you can get to be where you want to be. 

 

Jim Kestenbaum (50:44.596)

in a way that I'll help you to get through the pain. Your family's still gonna love each other. I say you're gonna have to have some courage. I'm willing to be the broad shoulders behind you. I've done that before. And in the end, let's make something good happen. And that's, that's all it sounds like. 

 

Michael Palumbos (51:03.093)

And if somebody wants to reach out and find you, get in contact with you, how do they do that? 

 

Jim Kestenbaum (51:08.57)

Email address, I don't know you'll put that with the article or whatever, the podcast. it's drjim at tsgdrjim.com. Also website is simple. It's getdrjim.com. So that's pretty easy. I got better at the second URL than the first URL. So. 

 

Michael Palumbos (51:30.338)

GetDrJim.com. 

 

Jim Kestenbaum (51:32.28)

So anytime, 

 

Jim Kestenbaum (51:32.79)

and again, it's just a chat. And if they like what we're chatting about, we're gonna go have some coffee. And if that works after that, we'll do something. We go from there. I am as low key as I appear to be though in this podcast. 

 

Michael Palumbos (51:47.53)

When here's last question. This podcast airs around the world. so do you you know what are your geographic limitations, are you predominantly upstate New York, do you take on clients virtually do you do any travel. 

 

Jim Kestenbaum (52:05.806)

They do 

 

Jim Kestenbaum (52:06.326)

some travel. I do fairly extensive virtual work. was doing virtually for a brief virtual. It wasn't ever cool, but it before was a necessity. So, yeah, I've done work all over the country. I've never done work outside the country. If it was somebody in another country, you know, with today's international events kind of depends on what's happening in the world. But initially I'll talk to anybody. if they feel though, that they don't want to do virtual work. And I've determined. 

 

Jim Kestenbaum (52:34.958)

that's the only way we do it. I'm in a fairly big network of consulting psychologists. So I'd say, okay, so you need somebody to work with your family in France. Say, give me a week. Say, give me permission just to talk about your family without using your family's name. If I can find you somebody who's, so they might say, you know, we're in and around Paris. I'll say, okay, let me see if I can find you a consulting psychologist in and around Paris. 

 

Michael Palumbos (52:53.399)

Yes. 

 

Jim Kestenbaum (53:02.872)

But I am willing to do certainly will work anywhere. I'm willing to do some travel. The easiest face to face is upstate because this is where I am. But there are, I work with other companies who are not in Rochester. I'm in Northern Virginia. I've been on and off. been in Texas. certainly willing to do that. 

 

Michael Palumbos (53:25.134)

Great, I appreciate it very much. Thank you for joining us everybody. This has been the Family Biz Show. I'm Michael Palumbis with Family Wealth and Legacy in Rochester, New York. Really appreciate you taking your time to join us today and we look forward to having you on the next episode of the Family Biz Show. Have a great day everybody. 

 

Jim Kestenbaum (53:44.824)

Michael, thanks so much. Take care.