Link To Guest Website: https://wcnllp.com/ -&- https://www.gggllp.com/ -&- https://sapers-wallack.com/
Title: “When The Transition’s Done – It’s Still Not Done” [PART THREE]
Panelists: Rich Hirschen – Gray Gray & Gray LLP, Stephen Wilchins – Wilchins Cosentino & Novins, and Aviva Sapers – Sapers & Wallack
Host: Jeffrey Davis – MAGE LLC
Click here to read the transcript
Nathan Gobes (1s):
Good morning, Radio Entrepreneurs, listeners, and fans. I’m Nathan Gobes producer here to introduce part three of three of this FBA panel discussion on transitioning a family business parts one and two are linked in the description below. So be sure to check out those sections, if you haven’t already listened. This segment is sponsored by the FBI as well as Gray, Gray, and Gray and Wilkins Cosentino and Novins. And with that, I wanna introduce our panelists as always Rich Hirschen, Stephen Wilchins and for this segment, Aviva Sapers. But that all handed over to Jeffrey Davis, a moderator and a host.
Jeffrey Davis (39s):
Thank you very much. And you know, when we haven’t said, is it Steve was the president M maybe emeritus now or forever of the FFI and the family firm Institute in new England. So it does, there’s a lot of credit Rich Hirschen in Gray, Gray, and gray responses as a family business association. And you were the treasurer from what I know you used to do this, I used to introduce you all the time. You’d stand up in the back of the room and wave at everybody. I did a great job or queen Elizabeth or, you know, giving the best.
Rich Hirschen (1m 5s):
Thank you. It’s not easy. Yeah.
Jeffrey Davis (1m 7s):
And Aviva Sapers maybe the only company that has a dual, a winner of both the FFN family business, a year award and the FBA family business. The, the year award, she is a double, a gold star champion. I haven’t seen it on NBC news since the Olympics a they have other people replacing her, but a Aviva, congratulations, you are a duel, a winner. I assumed those plaques or still in your lobby of your office, correct?
Aviva Sapers (1m 33s):
Sure. We’ll put them out if you come over.
Jeffrey Davis (1m 39s):
Hey, and we spent a lot on those awards. Don’t say that to me a, you know, I really feel kind of funny asking this question. ’cause if parents weren’t getting along the way, I probably wouldn’t be earning a living and I might have to go to the accounting school and work for rich, but you know, Can parents stay involved in the business without getting in the way? Oh boy, I don’t know any, so I got a hear, you know, and I know Aviva, you can speak from experience, but a who wants to tackle this one first and Aviva, look, your father has been in the business.
Jeffrey Davis (2m 17s):
What? 70 years? Okay, come on. And why don’t you set a us all up or has it ever not been in a way?
Aviva Sapers (2m 27s):
Well, that’s a different question. That’s a totally different question.
Jeffrey Davis (2m 31s):
I’m trying to get this panel going.
Aviva Sapers (2m 35s):
I think my, my personal experiences is somewhat unique because my dad is somewhat unique and we had the good fortune of transitioning the business while he was still around. So it wasn’t under the gun or, or due to duress. But as I said, where he’s a bit of an icon in the industry and there’s a bit awfully big shoes to fill. So what, what his idea of a transitioning was, he would focus on different elements of our business. We started our charitable strategies division, and that was going to be his sole focused, but you know, they can’t solely focused on anything. No, but the hard part, or at least initially was people would come to him for that, for the same type of questions they had all along.
Aviva Sapers (3m 16s):
And they were used to doing for many years, cause we tend to have some long standing employees. And I think it till they tried me on for a while, it was hard to get to know it was happening. And whether I’d be able to fill his shoes to the extent that was necessary, he did, he did transition. I’d say they may have taken, or at least two to five years to transition from the prior CEO two, a mentor. And if the mentor roll was great and you can fill it, it where I bring things to him and get him his way in my leadership style is not a benevolent dictator of which he always claimed T was, but as it’s more of a, co-opting kind of a leadership style.
Aviva Sapers (3m 59s):
So I would run things by him and brought with you as well. And it just to get some input and get a sense they would do are where they stood and ultimately make my own decision. But there were times when my decision wasn’t what they wanted and, and dad, especially. And when we get into a few good heated arguments and in the good news is we always hugged and kissed and made up at the end of the day. And, and it, it, it helped us get along. But you know, he, he is now still coming into the office and he’s 93 and he hasn’t been productive in any real way for quite a while. If, if he were pulling huge sums out of the business, that would probably be challenging for me. He happens to be incredibly self-aware.
Aviva Sapers (4m 40s):
And so from that standpoint, we are very fortunate, but in other circumstances, I’m sure if he were pretty heavy on the payroll, I’d probably be resentful in wondering why he should be getting that kind of money and it’s hard, but we’re gonna have that issue or taking the kids away at this point, they shouldn’t be driving each other, but that’s a whole different ball of wax.
Jeffrey Davis (4m 58s):
Well, let me just add to that question before a rich and a Stephen get two. It, because it’s a big, you know, during COVID, you know, I think that there was something that multiple, it was a multiplier and that was the next generation for health reasons. They wanted to run the business. They didn’t want their parents coming to work. So they wanted them home and safe and baby boomers. And I’ve spoken to many doctors, they’re going through a crisis, a crisis of identity right now. They want to work. They feel their young, they feel they are still energetic, unlike their parents in a similar age, or they want to go to work. They don’t want to be held back. They’re being pushed back. And they’re in a lot of ways, you know, I hear from these younger millennial children, a baby boomers, my parents were getting in the way the, they got to stay away.
Jeffrey Davis (5m 47s):
They got to leave me alone right now. And so the push, I actually think during COVID has become stronger. I dunno, what you, what all of you, the two of you or seeing,
Rich Hirschen (5m 57s):
I mean, I think you ask a question. Can the parents say on getting away? I think it depends on who you’re asking. You’re asking the, a younger generation and the answer’s probably no a if he has the older generation and sure they can, you know, it’s not easy. I think it can happen. I think it’s just defining what that role is going to be and holding each other accountable to staying within that role. You know, I think of Aviva said it very nicely, and one of our previous segments that when she took over a CEO, people would still go to her dad asking things that should go to the CEO and she coached her dad over time to say, “Hey, the Aviva’s running the show now and go talk to her.” And I think, I think that’s hugely important than if the older generation can do that and understand that and act like that.
Rich Hirschen (6m 43s):
And then it, and then I think it can work better, but it’s not easy. It takes time, but I think it can be done.
Stephen Wilchins (6m 51s):
I think it also depends on the business. I think Aviva, you have very large shoes to fill your dad was alleged and is a legend and you know, a personal service business. So it was a very hard, you know, it, you know, his presence is a huge impact on the business and what you services you provide and products you sell. But in other industries, it’s a lot different, you know, if you’re dealing with a real estate company, a family that has real estate, it’s a lie, if not as important to have that person around. Okay. Because the president’s personal services and they’re the Goodwill is it is as important as the Goodwill, a Bill Sapers passing it to the Aviva is a lot different.
Stephen Wilchins (7m 39s):
so I think, I think the, you know, the, the older generation could stay around, but the role, as rich said, has to change. And that’s a change to more in an advisory pro and mentoring type of role, rather than a authority or a situation where I’m, you know, you get into a fight because they have one track and their thinking about this, but the next generation disagrees they have to defer. Certainly. Great. So do you want to hit on that one before I go onto my next question or pass?
Rich Hirschen (8m 16s):
I can pass in. Think we’ve beaten that when up, you know, I, I think, I think we were all saying similar things. It really understand what the role is and make sure everyone stays in their lane.
Jeffrey Davis (8m 27s):
Right. So here’s what I see. I used to see a pre COVID and now I’m seeing it a lot more during COVID, you know, cause as you said, it COVID a lot of time. The children would say, you know, dad and mom don’t come to work right now. You’ve got to stay out. And the children were, you know, accelerated their leadership within the business. And now that you know, parents are coming back and I’ve always seen this, they’re saying, what do you do to keep a parent for coming back to the business? Because four, the, the children who we’re running the company that, that, that has so many emotional and operative and organizational issues and it creates Aviva, but I think you’ve seen it all. So your father sort of coming back and forth to a meeting show up to meetings, but you didn’t necessarily invite them two.
Jeffrey Davis (9m 9s):
Sorry, I have to pick on you, but I’ve seen this all the time. And people say to me, I don’t want my, I don’t want my father. I don’t want my mother coming back. It’s, you know, I’ve got this thing down now. They can’t come back. And what do you do? What do you say to them?
Aviva Sapers (9m 25s):
I think Rich said it well earlier communication is key. They had, and I had some pretty tough conversations where I had to say how if I had to lay out or him how it disrupts, what goes on. These have been old generation where it is, for example, the technology is not important. And when we were trying to have some social or awareness and in some internet exposure, or we want it and adapt system’s, it will help make us more efficient internally. And he gets up in front of the, the entire office. Is it something like, what do we get from all of this stuff? So how has this improved the business? How’s it helped a bottom line.
Aviva Sapers (10m 6s):
You know, it just undercuts you every which way you can think of it. And, and, and then I have to have a separate conversation afterwards, scolding him and why he really shouldn’t be attending these types of sessions, which I’m sure he didn’t want to hear and trying to put myself in his shoes. He doesn’t want to feel antiquated either. And so, so I have said it doesn’t, I’ll invite you back in. And when we talk about something that’s right in your ballywick and, and getting them to comply, not so easy. And once again, and the personalities and it is, as Steve mentioned, the types of business has a very different effect because meetings, the, the office meetings or the, the full staff meeting is a very different, depending on the size and the type of business you’re
Stephen Wilchins (10m 46s):
In. I think also, I think I agree with Aviva, but I think also the fact that a could give a, a founder, they give up or a strong purse, they give up that control. I think he got to decide what’s the role. And there needs to be some meaningful role, whether mentoring is a meaningful roll or something, but to actually deal with the operations is not the roll. You want that person. It okay. Because the younger generation as a different, you know, vision, and they are trying to execute in as Aviva, you just said, your dad would interrupt in something that you try to, you know, relate to the employee’s or convey.
Jeffrey Davis (11m 32s):
So, so, so I think you’ve got to have a meaningful role what that is and make sure that person feels engaged and feels wanted. Okay. But at the same time, not be part of the day-to-day operations of, of the company.
Rich Hirschen (11m 51s):
And that’s a great point,
Jeffrey Davis (11m 52s):
Right? So that leads me into my next question. And I don’t know how long will take on it. So I do. What are some of the things you noticed when you’re a transition, a family member or away from being an employee CEO, maybe even the shareholder to just being a board member there, or there it is a transition of roles, but I think it’s also a ripe for many issues, especially for me as a consultant and trying to deal with the change with people. People don’t like change and they just, they are into their habits in the CEOs. These founders have a lot of family businesses. They meant they, you know, I always say that business has been in their mistress. This has been all, they’ve done their whole life and, you know, you can change their titles, but it’s really hard to change their habits.
Stephen Wilchins (12m 45s):
Right. So, yes, I think part of the issue is helping the person find other interests, not only the role of in the business, which is different, but also what are the other interests that I, that are meaningful to me, my stage in my life, and I’m not working in the business. And I think that’s something that the next generation can help with as well, but encourage them to pursue other things, whether it’s reading, whether it’s a charitable organization or something else, but be, or have something that’s meaningful to the person would really preoccupy that person and take them off from feeling the little than feeling, you know, small, because they don’t have the role that they served before I think is very hard.
Stephen Wilchins (13m 39s):
And they feel that the outside community, you know, looks at them differently. And I think they have to look at the view that, you know, that, that they’ve had a role they’ve passed the torch on and now, you know, whatever they’re doing now is meaningful in their own. Right. So great.
Jeffrey Davis (13m 59s):
Rich, Do you have any thoughts on this as well?
Rich Hirschen (14m 4s):
I mean, it’s tough and I think finding other things to do, or even within the business, just finding, you know, different ways, you know, I think being a mentor, even in the, maybe not necessarily the specific business, but the industry in general or their positions as a trade organizations or things like that. And when you’re talking about people who have spent generally their entire career working on a business, knowing it’s so wow, there a lot of wisdom to share their, and so I think there are ways to get that out and make the person feel important in that they’re, you know, doing something. So yeah, they could be creative, but, but I think there’s ways to do it.
Jeffrey Davis (14m 41s):
Well, you know, I, you know, this whole transition to a new role, a lot of people tell me, you know, I, I don’t have any hobbies. My hobby was work. And so just, they, they want to go back to work and just sit in their office and joke around with employees and talk and take calls. And it, it compromises the next generation cause they don’t wanna play the bad cop. And I think that that’s an important thing too. How do you sorta manage this process? I think it’s through good counsel, good professionals, because you don’t want to turn the child into the bad cop role all the time. It’s a, it’s a dangerous had to be wearing.
Jeffrey Davis (15m 23s):
Do you agree?
Stephen Wilchins (15m 23s):
Absolutely. And that’s why Jeff you’re a role was so important in that area as well, because you’re able to deliver the message you in a soft way and that they convince the person that they should do things differently. So that’s a hard thing that you do, but I know that you do that successfully. I think
Aviva Sapers (15m 47s):
That the having outside interests is something that children can encourage earlier on and expose them two, whether it’s taking additional courses in and you mentioned it a charitable stuff deed, but they may wanna go back to the school and learn about some of other things and to, and to be a mentor or a role model in their industry as rich talked about. It’s great. So the one thing that can complicate that as long as if it hadn’t been planned out his, the financial situation, you’re assuming they financially, the parents can transition out and still maintain what they need financially. And so one of the things you just want to make sure is you incorporate that is what their cashflow and cash needs looked like when they move onto that next phase and staged because if they have to stay involved for financial purposes, that’s when it can get even here or here.
Stephen Wilchins (16m 37s):
All right. Because if it could be either when you’re dealing with the financial aspect of it could be a gifting or it could be some types of deferred compensation arrangement, or it could be some type of installment sale, or there are many strategies to implement to make sure that they are the first-generation a as well taken care of in could live the lifestyle that they are entitled to. Well, clearly this is a very complicated subject. It’s occupied. I think a lot of us for our career, you discussing, families’ dealing with the legal aspect of dealing with the emotional, a habitual habits and skills, a resentment dealing with the tax and financial issues and just, and being part, and even the insurance, as you said, a Vive, a lot of this stuff can be dealt with through insurance and through proper planning.
Jeffrey Davis (17m 28s):
I think we all feel that way. The one thing for sure is just, don’t take it for granted. It’s not a lie. It’s not a casual process. It’s a process that needs a lot of structure and organization and the right professionals. And we here at the family businesses association and Radio Entrepreneurs, where are you committed to these quarterly segments? A to try to inform these families about how to handle these transitions. And I know all of these experts who I have on my panel, our people that I would call upon and they can be accessed through our a way Radio Entrepreneurs, a website. So with that, I’ll turn it over to our producer. Nathan Gobes Nathan, not part of a family business.
Nathan Gobes (18m 9s):
Thank you, Jeff. No, I’m not, but a thank you rich Stephen and Aviva, of course, as well as Jeffrey mentioned, we run these panels quarterly and we’ll be running another one as we get further into the fall and winter. And so be sure to follow Radio Entrepreneurs on YouTube, as well as any the other channels that we stream on press that bell button. So you get notifications when we release in another video as all of our content, as relevant to business owner’s and family businesses. Once again, I want to thank our panelists. I want to thank the FPA and thank you. Our Radio Entrepreneurs, listeners, we’ll back with another segment on Radio Entrepreneurs.
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