Title: “When The Transition’s Done – It’s Still Not Done” [PART ONE]
Panelists: Rich Hirschen – Gray Gray & Gray CPAs, Stephen Wilchins – Wilchins Cosentino & Novins, and Aviva Sapers – Sapers & Wallack
Host: Jeffrey Davis – MAGE LLC

Click here to read the transcript

Nathan (0s):
Good morning, Radio Entrepreneurs, listeners, and fans. I’m a producer, Nathan Gove’s. I’m excited to introduce you to another segment of the FBA panel discussions. This is summer 2020. One. Addition is all focused around in transitioning as a family business in the politics related to such a process. This is only part one of three. So be sure to check the description below for links to parts two and three, as those go live, you should also subscribe to Radio Entrepreneurs and be sure to click that bell button so that you get notifications when those other parts go live, as well as all of the other business related segments, we record next. I’d like to introduce our panelists.

Nathan (42s):
We have, of course, our longtime panelists, our returning guests, Rich Hirschen partner at Gray, Gray, and Greg Stephen Wilchins founding partner at Wilchins Cosentino and Novins and our third panelist for this segment, Aviva Sapers. Aviva Sapers is leading Sapers & Wallack, in its third-generation as president and CEO at Sapers & Wallack, a family run in insurance benefits & investment management firm. Integrity is that the root of business under Aviva, as leadership. Sapers & Wallack provides innovative and cost-effective ideas to clients through careful examination and a case by case management approach. Recognized as a leader in women run businesses in new England many of Aviva’s employees have been with Sapers & Wallack for 20 years or longer.

Nathan (1m 28s):
Aviva’s passion, outstanding expertise, and dedication to true caring for her clients and her team has earned the company a recognition on the Boston Business Journal’s lists of the area’s largest women run businesses in 2008 – Welcome to Rich, Stephen, and Aviva. Finally, I’d like to introduce our panel’s moderator and host as well as Radio Entrepreneurs’ host: CEO of MAGE, LLC, Jeffrey Davis. Jeffrey grew up in a family business and is uniquely qualified to moderate and lead this panel. Thank you. And I’ll hand it over to Jeffrey

Jeffrey Davis (2m 3s):
A that’s a high expectation you’ve said strong moderate, or, or we don’t know about that. And I’ve been to Richard have something to say about that. And I actually grew up in five, a not always at the same time, five family businesses and a currently a still a family business, being a family office is being run out of our house. So that, that is a third generation or coming out of our house in addition to what we do it made. So no matter what I do, I can’t get away from family business. A it’s just the reality of life. And I think that’s the way the four of us feel. So let’s start. And I’m pretty excited about this group. A as I respect them a greatly, you know, a, one of the things I find difficult in business, or no, I don’t find difficult, but I know a lot of families, his, how do you start this whole conversation around a transition with a family?

Jeffrey Davis (2m 53s):
Cause they’re not always ready to start the discussion, especially the parents. A, I don’t know who wants to take that first Aviva been on both sides and Steve you’ve had it thousands of times.

Stephen Wilchins (3m 8s):
Sure, sure. Okay. Well, I’ll start. I think the idea would be to, I think if that’s the younger generation that talking to the older generation slash founder, I think you have to have a commitment to the business. If you have to demonstrate that you want to be involved with a business and you want the business to be so successful. So you have to demonstrate to the, to the older generation that there is a commitment that you want this to continue. You also have to demonstrate that to your employees because you wanna be treated as equal employee, not as if a family in employee titled to solve the benefits.

Stephen Wilchins (3m 60s):
So if you’re able to build that foundation, that would be the start of a conversation by approaching the next generation saying, I’m interested in pursuing this as my career.

Aviva Sapers (4m 14s):
I would add to that. I would say it probably goes both ways. A it’s important to the older generation to let the younger generation no, that there is this a potential that there is the opportunity to come in if they prove themselves, or if they do all of the things that Steve, I just talked about a a, and give them an idea that it’s an opportunity. Cause sometimes those conversations don’t ever happen. And, and I’ve often told people a thankfully in my, a situation that didn’t occur, my dad said, Hey, you know, I, I expect some day someone is going to run this business. They were two of us who we’re both family members. They present the wallets and we actually hired an outside consultant who was on the screen with us to help determine if either one of us was capable of being your own it.

Aviva Sapers (4m 60s):
But that was a commitment from my dad’s generation to say, okay, we want to have a, a, a family member in here, but if neither one of these folks or capable will have to look elsewhere. So I thought that that was a nice way to do it, but I’ve talked to a lot of my own contemporaries who were in family businesses who had to start the conversation with their parents saying, Hey, yeah, Sunday, is there an opportunity? And I think to your point, Steve, when people bring it up to the older generation, that’s the beginning of showing, Hey, I’m interested. And I’d like to learn more about what you have in mind.

Rich Hirschen (5m 34s):
I think the key is just communication, right? It’s the younger generation communicate. And to older generation, they are interested in the business and in the older generation communicating in the younger generation, what their intentions are and what they want to do. And C C happened. So, no, I think it’s just a communication now is to think whenever you’re communicating and things like this before, and to think about it from the other side of what their thinking through you, no, for the older generation, often times this is their baby. That is something they built up work their whole life, and it’s not easy to let go. And for the younger generation, they want to get in with their own ideas and advanced in their careers. So I think having to perspective of how the other person’s approaching and think about it, I think is important in any of these conversations.

Stephen Wilchins (6m 18s):
I think when the older generation says, I want you involved, but the business, I’m not so sure they understand what that means. Totally. They don’t have clarity what that means and what the steps to implement that. But at the same time that they’re looking at the end result and not looking at it all the little steps and five years or 10 years to get to that process and, you know, to that goal. So I think that even though is all good intentions, okay. There is clarity, there isn’t a good understanding of what it takes to implement that strategy.

Jeffrey Davis (6m 58s):
You know, I’ll, I’ll, I’ll speak from a different little perspective in that I worked for my step-father and I was the youngest in the family. He just came to me and said to me, one day a year, then you’re the person who is going to run the business one day. He didn’t ask me if I was interested. He didn’t speak to his own children about it, who we’re in the business. So you just told me it was my job. And, you know, I didn’t really know how to react other than to sort of take the order and, and figured that that’s the way it was done. And I think the only reason I got it was that I was so intimidated by the process that I did every job that he ever asked me to do. And he thought that was wonderful, that I was willing to sort of get myself so dirty because I didn’t want to get fired.

Jeffrey Davis (7m 40s):
And you, no, I just wasn’t planned out. It wasn’t discussed. And to this day it was never discussed. And I think that that’s a problem, I think rich, right? It’s all about communication. And so, you know, you know, let’s go on to the, sort of the, the, the next question. When do you sort of open up that whole discussion with it and how open really should it be, I know a, you know, Aviva your, your right, you, you know, you hired a consultant. I remember that consultant very well to a, to work with your family. But I also remember since it a full disclosure, when I went back to your father and I, I sort of said that you are the logical one, a to run the business sort of a faint memory.

Jeffrey Davis (8m 20s):
That was that he basically said, well, that’s the one I expected you to pick, or you were probably gonna get fired. Ah, so that was the better choice, but you know, how do you, how do you start to open up that discussion? Because there’s so many different expectations and you know, I, no, I work with some companies that I’ve crossed over the years and family members have heartily unrealistic expectations from father to son or daughter, you know, to what their role could be and should be and how the whole process should have to be handled. And it creates a lot of issues.

Rich Hirschen (8m 56s):
I think getting, you know, someone like yourself or you were involved with Aviva is always a great way to have someone from the outside. So someone who’s got experience in these situations to come in a different perspective and helps guide. So yeah, if I were giving you advice to a family, starting to go through this, it’s, don’t think you have to do it alone. They’re, you know, hire experts, higher people to come in. Would that be accountant or lawyer consultants are so on, but, but bring in people from the outside, the help gain some clarity and do this

Jeffrey Davis (9m 24s):
Right? Which has a good point, Rich, as well as understanding the distinction between ownership, leadership, and management and understanding that each one plays a different role. And, and the next generation may play all three roles are, it may play one roll in getting a better understanding of what that means.

Aviva Sapers (9m 47s):
Someone else who advises us to family businesses that is also different scenarios. In our case, it was the only family member in my family. That’s in the business. There are plenty, they have multiple siblings at which point is who gets frozen. Is, is it a competition, the dad or mom, or whatever, loved one more than the other. I mean, it was just a lot of other factors. So I think your idea of Richard bringing in consultants is a good one. There’s lots of things.

Jeffrey Davis (10m 18s):
Well, there’s lots of different advisors for the process that a lot of times when you’re managing the process and I’ve seen this, you know, it, Steve also, they, they expect you to tell them what they want to hear. And if you really are doing the process correctly, made that joke with Aviva. If you tell them something, they may not want to hear. That could be a problem as well. Right? Right. But also the outside consultant is very important, as well as having the board, having some type of formal fiduciary or non-fiduciary a board of advisors to help provide some guidance and strength for the, for the entrepreneur founding generation.

Jeffrey Davis (11m 1s):
And then the next generation two to provide some experience and seasoned advice on, on how to implement this change over a period of years.

Aviva Sapers (11m 13s):
And I don’t want to necessarily plug the FBA, but organizations like the FBA, where you can join other forums with other family businesses from either <inaudible> you get to hear that you’re not alone, that there are lots of other families going through the same thing and you can find out how they did it, what worked, what didn’t work. So they’re our resources as well. All right. So, you know, you,

Jeffrey Davis (11m 37s):
You just led me down the path of that whole resource discussion. It’s been something I’ve worked with the long time. The four of us are professionals. I get a con. I think that those peer support groups are good, but I think the problem has a lot of times when you’re talking to peers, they tend to tell you how to solve the problem way they wanted it solved with their family. And to me, that can be that causes a lot of problems as well, because they’re not really objective and they’re projecting out their own issues. And a lot of times I find in my work, I’m fighting against that friend, family member or from another family. That’s tried to tell somebody how to do something the way they did it, or want it to have it done, what their family, it would only complicates it.

Stephen Wilchins (12m 20s):
All right. And it’s never a perfect on this solution and its better as the family, no together the generation’s is to try to go down a path C at the trial and error and see if it’s working because they could, they can tap differently, a move in each direction ’cause you’ll get there or ultimately, but it’s not, it’s not going to be a clear linear path. It’s going to be a zigzag over a period of years to figure out what works for you to know the family, to make it less fun.

Jeffrey Davis (13m 0s):
They do that for years. Give it to me to, to, to my last question for it, for this segment. And that is, I have noticed with millennials are more so than other generations. Maybe it’s, COVID maybe it’s millennials that they see transition as an outing. And in other words, it’s time for dad or mom to go. And that’s a PR that’s a problem also because you, no, you look at someone like the Veeva or your father is in his nineties and he, you know, he may not be in his office today for all. I know a showing up and a, that was always a part of the process. I know I’m not saying he’s the easiest person on the planet, but I know that you’ve loved having him come to work with you for all these years, but that’s not necessarily the case that I’m seeing with millennials, when has a transition to a transition.

Jeffrey Davis (13m 44s):
How do you work it? And especially Steve, and what is it not a time to just get rid of people it’s not an hour or hour and ousting?

Stephen Wilchins (13m 54s):
No, I think the first-generation, it has to understand when they put vide value to the company and to the family members and when they don’t, and that’s a, that’s a self awareness and not something that’s very important to understand, you know, when should I be pulling back? Do I have to support all of the people in place as my family well-trained is there enough communication? Are we successful in what that means at that time? But they need to pull back the, they needed to pull back as this, the next generation needs to assume the responsibility and perform if they are not performing or the not reacting to the technological changes or the market changes or dealing with COVID and addressing it appropriately, the first generation, it’s not going to have the confidence that the second generation can take over in handle in weather, the storm, because nothing is smooth and easy, no rich, any comments,

Rich Hirschen (15m 10s):
I’d just think its, its having a plan in understanding everyone’s intention. So, you know, every family’s different, every businesses different. So there’s no one way to do this. And you know, it sounds like in Avivas case or fathers still going in and providing value and as you know, it as a lot of years of experience and things like that, I think it was just getting that on the table and knowing if that’s, you know, and to be this case or father’s desire are the other generations desired, just getting an understanding of, okay, what is your role going to be? How are you gonna be compensated? You know, or you who as the final decision and things like that. And I think it just getting it on the table so that you can figure it out a plan,

Jeffrey Davis (15m 49s):
Aviva, this is the end of the segment, but you have experienced all this. You’re transition must’ve been 20 years ago, but it also went on in a process for more than a decade. You ended up transitioning from a younger partner before your father ever permanently left the office. So what are your thoughts on that is we end this segment.

Aviva Sapers (16m 9s):
I think Rich is correct to Steve and they’re both correct. I mean, it’s, it’s different for different situations in my own situation, you know, my dad was a powerhouse. It, that’s not always the case that the leader who was in charge his either an icon in our industry or a powerhouse, actually the next generation may have a stronger person there. And its a question, whether that older generation either acknowledges it, we noticed is that it, or it may not be jealous of it. And then there’s a lot of stuff that can go on. In my case, it was not quite like that for me. It, the hard part was when the, the, the transition happened. I used to always say dead handed over the reins, but kept the whip and, and people were used to coming to dad for everything.

Aviva Sapers (16m 54s):
And when they, even after we had officially made me SCIO they still went to that and I had to code, dad’s saying, Dan, you need to say a Vive is now the CEO and why don’t you go to her? And if, if for some reason maybe she can handle it or, you know, my door is open, but she’s running in the shift now. And, and it’s hard. ’cause I think that there’s that tension of wanting to feel like you’re the main squeeze that you are the big guy, umm, at the same time, you’re trying to do a transition and do you want it to go successfully? So you’ve got to be sensitive to what that could do on the other end.

Nathan (17m 31s):
Thank you for Aviva. Thank you. Rich, Stephen and Jeffrey. Those are some great comments, but this is just part one of three of this discussion on family business transitions, and the links to parts two and three will be in the description below and we’ll be available once those sections go a lot, be sure to subscribe to Radio Entrepreneurs on YouTube, press that bell button. So you get the notifications and follow us on LinkedIn, Facebook I-Tunes or any of the other platforms we stream on that one again. Thanks. Think the FBA in all of our other sponsors for the segment, we’re back with more on Radio Entrepreneurs a after this break.

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