Summary

In this two part episode, the guests discuss the considerations and communication strategies involved in a family business deciding to sell their business. They emphasize the importance of open and proactive communication within the family system, as well as with external shareholders and the C-suite. The guests also highlight the significance of early planning for the post-sale phase, including identifying purpose and impact beyond the business. They stress the need to address potential regrets and ensure a smooth transition to life after the sale. This conversation explores various aspects of transitioning from a family business to a family office. The speakers discuss the importance of understanding one's skills and talents and how they can translate into new domains. They emphasize the need for careful planning and decision-making, as well as the potential challenges of sudden wealth. The speakers also highlight the value of collaboration and a holistic approach, considering both individual and collective philanthropy. They stress the significance of exploring purpose and impact beyond the sale of the business and the importance of capturing family stories and history.

Takeaways

Open and proactive communication is crucial within the family system and with external stakeholders during the decision-making process and after the sale.

Early planning for the post-sale phase, including identifying purpose and impact beyond the business, is essential.

Considerations for each group of stakeholders, such as family members who own the business but don't work in it, should be taken into account.

Avoiding regret of selling the business involves understanding personal goals and needs, planning for the day after the sale, and addressing emotional and financial aspects.

Preparing for life after the sale includes exploring new opportunities, seeking professional advice, and maintaining open-mindedness. Understand your skills and talents and how they can translate into new domains.

Take time to plan and make wise decisions, avoiding impulsive actions.

Consider the merits of earnouts as part of a transition.

Explore individual and collective philanthropy, finding the right balance.

Start early with transition planning and engage in open and honest family conversations.

Blend for-profit and non-profit activities to create a unified approach.

Capture family stories and history to preserve legacy and values.

Chapters

00:00 Introduction and Guest Introductions

04:03 Considerations in Family Discussions Leading to the Decision to Sell

08:24 The Role of Philanthropy and Impact in the Sale Process

11:16 Importance of Communication within the Family System

17:36 Effective Communication with External Shareholders and C-Suite

21:52 Considerations for Each Group of Stakeholders

27:29 Effective Communication Internally and Externally

36:39 Avoiding Regret of Selling the Business

42:21 Preparing for Life After the Sale

52:56 Understanding Skills and Talents

55:31 Transitioning to a Family Office

56:24 Managing Sudden Wealth

57:18 Taking Time to Plan

58:41 Dealing with External Pressure

59:30 Hiring the Right Expertise

01:00:02 Avoiding Impulsive Decisions

01:01:24 The Merits of Earnouts

01:04:01 Exploring What's Next

01:05:02 Collaboration and Holistic Approach

01:08:38 Discovering Purpose and Impact

01:11:15 Balancing Individual and Collective Philanthropy

01:19:36 Transitioning Identity and Purpose

01:23:22 Exploring Family Dynamics

01:29:11 Start Early with Transition Planning

01:32:05 Blending For-Profit and Non-Profit

01:35:29 The Power of Storytelling and Family History

Hi, welcome to the

Family Business Podcast.

2

I'm Russ Hayworth, and I'm a

family business advisor, as

3

well as the host of this show.

4

In each episode, you'll find informative

and engaging conversations with experts

5

from around the world covering a

range of topics relevant to family,

6

businesses and family offices.

7

The show is supported by Family

Business uk, the largest organization

8

in the uk dedicated solely to

supporting, representing, and

9

championing family business.

10

To find out more about their work and

how to become a member, visit their

11

website, family business uk.org.

12

Right.

13

Let's get on with the show

14

Russ Haworth: Well, hello and

welcome back to this two part episode

15

of the family business podcast.

16

We're kicking off.

17

Part two where we left off in part one.

18

So if you haven't listened to part one

of this interview, I highly recommend

19

heading back and listening to that first,

we do get stuck straight into something

20

that we had discussed in part one.

21

So it might not make a huge amount

of sense if you're diving in.

22

To part two.

23

Um, we continue the discussion with

max, with Avery and with Emily,

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from PNC private bank Hawthorne.

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And we are discussing all of the

considerations and things to think about.

26

In terms of selling the family

business and then what to do once

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you have sold the family business.

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This is part two of the two part episode.

29

So again, head back to part one.

30

If you haven't listened to that already,

then come back here and listen to this.

31

Um, but for those who have

heard part one, enjoy part two.

32

Max as well.

33

I want to come back to

something you mentioned.

34

Earlier you, you shared an example

of somebody who had regretted

35

their sale because the terms of

their earnout weren't gonna be met.

36

And, and obviously that that can

be a negative implication of those

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kinds of, um, arrangements, but, but

there's positive elements that can be

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explored around things like earnouts

as part of a transition rather than

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it being kind of a you, you know, you

sell the business on on a Friday and

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Monday morning, the locks are changed.

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That that can be a quite a

sudden transition for some.

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So there are ways in which

Earnouts can be built in.

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Can you speak a little bit to I in

terms of some of the, the merits and

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and advantages that can come from that?

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Sure.

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Yeah, that's, I, I think

that's a great question.

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Um, you know, earnouts generally mean

that the owner and probably the management

48

team, were still going to be working at

the business for some period of time.

49

Naturally, a buyer is going

to want to offload some of

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their risk onto the seller.

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Uh, by tying part of the

sales price to performance.

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So Earnouts can certainly

guarantee continued profitability

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and, and growth for the buyer.

54

For the seller, it can mean a smoother

landing strip since the day after closing.

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They're still running a company, albeit

as an employee rather than an owner.

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But, uh, it, it gives them

a, a longer landing strip.

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Uh, to, uh, uh, to figure out what the

next day looks like, the day that they

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don't come back, uh, to the business

and, and, you know, their key is taken.

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Um, yeah, I, I, I, you know, I, I

will throw this caution, you know,

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if, if, if earn-outs are going to

be a part of that agreement, gosh,

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negotiate the heck out of them.

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Um, make sure that,

that they are realistic.

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Um, uh, I think that a business owner

can, you know, in, in the bravado that

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comes with selling the business and

negotiating that, uh, that, uh, sales

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price you, you can, it is not difficult

to fall into a trap of, of overestimating

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what you're able to achieve.

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So I, I would just say bad

decisions or unrealistic goals are

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a chief obstacle in, in avoiding.

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Uh, sellers regret.

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So, uh, if, if you are going to include

earnouts and, and many business owners

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do include earnouts in the, uh, in the

sales, uh, the sale of their business,

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uh, just make sure that they are

realistic and that you can attain them.

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Mm-Hmm, absolutely.

74

And we, we've reached a point with

the, the, the fictional family that

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we've, um, created for, for the

purposes of this recording where.

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The, the sales happen.

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They've had lots of conversations kind

of in the lead up to, to that sale

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that's exploring what happens next.

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And I'm keen to understand, uh, again,

perhaps Emily, you can lead off on

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this one, around the exploration

and preparation of what's next.

81

Now I know.

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The reason we're speaking to all three

of you is that all three of you would be

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included in those kind of conversations.

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It's not done in a silo.

85

We, you know, someone asked Max the

question and go, no, sorry, that's not me.

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And then that's it.

87

It's kind of it.

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The, the benefit of having a team

around you is to allow that, but

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particularly from your perspective

at the moment, Emily, how do you help

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families explore what could come next?

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I just love how you're empowering

families around this because.

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That's such an ideal scenario, right?

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Mm-Hmm.

94

Because so often we

experience the exact opposite.

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We experience those silos, right?

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And, um, there's a lot of

reasons for why those can happen.

97

So, uh, it's more about like educating

with the other advisors that are

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involved and, um, the, the teams and

the family around why having a more

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holistic, um, I like to think of it

as like a tapestry almost, right?

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Where it's all woven together.

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And if you're only looking at a

few threads, you're missing out.

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Understand the value of one.

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Uh, I think Max was saying

something about Hawthorne.

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Our role at Hawthorne is so powerful

within the PNC private bank structure is

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we have this, um, team that's nationally

oriented, uh, around the family office

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services and the other investments.

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And then, um, with Max's team,

with the corporate advisory,

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bridging the, the more, um.

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Tactical structures that happen

within the commercial bank and the

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corporate bank with the private bank,

uh, allowing for this weaving in.

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And then, um, what we do is with,

um, even with risk management

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and then with working with the

wealth strategists, we have these.

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Uh, people on the ground, right in the

local markets that are the main street

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aspect of our bank, that it's so personal

and you can come in and you can talk

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to this person you've been working

with, with your banking for years.

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And, um, as you're looking at grappling

with these more complex issues

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and these bigger concerns that you

feel really taken care of, boots on

118

the ground right there with these,

this expertise that can come in.

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Um, as needed based on

what's been identified.

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And one of the things that, uh, we love

to consider is like the, the client, um,

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the, the family business owner that's

looking at a sale and getting ready to

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sell is at the center, is at the hub.

123

And then we have, uh, these

suite of services that are

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available and we have, uh.

125

A group that really looks at

what's, what do you need right now?

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What are you gonna need going forward?

127

What do you, so that it's not overwhelming

that we do it in, uh, you know, which

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of the threads we need to pull on now.

129

And always keeping the

bigger tapestry in mind.

130

And so they feel really taken

care of and we are addressing

131

so many different aspects of

what they need to be looking at.

132

And whenever there's something

more complex in front of us, we

133

like to give analogies that make

it easier to think about it.

134

So everybody we work with

knows how to drive a car.

135

But when you first sat down in that

driver's seat for your first driving

136

lesson, that was a very complex

console and you had to learn all

137

these different things and you had to

manage all these different things and

138

it was very overwhelming and complex.

139

And now we do it without

even thinking about it.

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And you know, while we're texting,

while we're drinking a soda,

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while, you know, it's just, but

there is that learning curve.

142

And so helping people by normalizing

it and then looking at, okay.

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You've sold the business,

you've done this preparation.

144

Hopefully there's been some preparation.

145

And then there's this, what is our

leadership and education component we

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wanna do for the family members that

have just received this windfall?

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And that windfall awareness can be huge.

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Um, so that everyone is empowered

around not falling prey to what

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we were talking about earlier

and having a real sense of, oh.

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There's a huge potential here with this

money, and I'd love for Avery to jump in

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in terms of the impact that can happen

and the longevity that's possible.

152

Uh, that makes it expand way

further out than you can imagine.

153

Thanks.

154

Um.

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I think what makes Hawthorne unique

is that if you look at this business,

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and we've all been in this business a

while, two or two plus decades at least.

157

And, um, each and what we were doing

20 years ago, 25 years ago, was

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incredibly transactional, incredibly

focused on hard and soft skills.

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We really sort of defined them

that way, and I loved your, um.

160

Your interview of the Wealth 3.0 authors.

161

I thought it excellent and I think

what they're talking about is the

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future of this business and the

traditional family office structure

163

within a bank, within a, within any

sort of institution like ours has.

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Has been very transactional.

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It's been custody lending.

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You know, we don't wanna advise,

we don't wanna step on toes.

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And what has shifted is that not every

family has the experts they need.

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And we recognize that.

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We certainly don't wanna step on

toes, but we do have expertise

170

to bring to the table as needed.

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So we're very thoughtful and

very, um, curious about how that

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can work for each family, like.

173

You've met one family.

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You've met one family.

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And so as we're going through

that process, obviously we have to

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work together to make sure we are

comprehensive and, and really have a

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good to topographic map of how that

family's working and could work.

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And to Emily's point, helping them

feel good about where they've been,

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where they are, where they're going.

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Is absolutely key to

making good decisions.

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So if you don't do that, the

structure, the right structure will

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not flow and you will end up making

reactionary choices around various,

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um, whether it's foundation versus

daf, or, you know, seemingly innocuous

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choices could be a real problem.

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You have less choices with one you have.

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You know, we stack a lot of vehicles

together, and if you don't have

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that sense of purpose on the front

end, it tends to skew the outcome.

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And I'll, I'll add too that a lot of

families we work with use the creation of

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a donor-advised fund to, uh, begin some of

the education around what does it mean to

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be a savvy investor and to, um, be a good

steward of that wealth and to, um, have

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that impact start to happen and, uh, build

a comfort level around talking about money

192

related to the purpose and impact that.

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And if they also have a larger family

foundation, they can also look at that in

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terms of governance and in terms of how

do we make decisions together as a family.

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And so you can build in education

and leadership components

196

within the structures that, um.

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It's, thank you Molly.

198

I, I think as well what, what

we're, you're obviously all

199

from the, the same organization.

200

Um, that's not always the case with,

with families that they have kind of

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a whole, um, sort of coherent team

that are, are working with them.

202

And I think part of, of what

we're trying to highlight.

203

Is the importance of getting advice and

input from multiple different areas,

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not for it to be led by a particular,

uh, ambition around, right, we've

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gotta sell this business, but let's

ignore what's gonna happen next.

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Or how we then deal with communication

internally and externally.

207

It's about how do we take a much bigger

picture view of all the different facets

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that are gonna be impacted through this,

and how do we manage that best because.

209

Uh, we're kind of preaching

to the choir a little bit here

210

with, with the, the four of us.

211

But the, the outcomes that come from

that are likely to be more beneficial

212

than if you operate in a siloed.

213

And if you don't know the areas,

because perhaps your legal team

214

don't have access to, to the same,

uh, level of support internally as,

215

as they would, um, at PNC Hawthorne.

216

But, but in terms of the, the benefits

and merits of broadening that conversation

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out amongst advisors, there's a really

important role for the advisors to play

218

here as well as the families seeking

that advice and the kind of, um.

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The, the collaboration and, and

the operating amongst disciplines

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that, that is needed in order

to get to that positive outcome.

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And I say, I, I assume I'm

preaching to the choir given

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that that's how you operate.

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But I don't think we can understate

the importance of that as an approach.

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No, I think we really saw, I mean,

if you just look at the way we're

225

practicing this type of, uh, client

engagement 20, 25 years ago, it was

226

incredibly siloed, incredibly, um.

227

We were lucky to have good relationships

with lawyers and CPAs and one or two

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staff members, and then we really had to

fight to get certain conversations going.

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Whereas I think the zeitgeist has

changed, but also our structure lends

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itself to that very holistic, rather

than giving them, you know, the menu

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of options, pick one or pick five.

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We really sort of have a

very comprehensive, uh.

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Analysis process and, um,

analytical process that helps

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the family begin to prioritize.

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Like Emily said, this is, these

are our top, top concerns now.

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This is our next phase.

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So they really begin to have some,

at least a structure in their

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mind about, okay, we can breathe.

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This is gonna be fine.

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We've gotta process, we're going.

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And it, that's, that

peace of mind is huge.

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Yeah.

243

I, I think I could give an analogy

of where it doesn't work or where.

244

It's not coordinated

where it is in the silos.

245

Uh, back from my law practice days where,

uh, a client, um, they, they needed some

246

liquidity and so it was, and they had a

bunch of cash sitting in their business.

247

I.

248

And so their financial advisor sitting

in this silo said, well, you can

249

just distribute that money from your,

you know, they had to pay taxes.

250

That's what they needed.

251

The, the liquidity for you can

just distribute outta your,

252

outta your corporation and,

and pay your taxes with that.

253

Oh, that sounds like a great idea.

254

They did it and doing that violated

the terms of the, the covenant on

255

the loan that they had with the bank.

256

Um, and so it, it blew up

a transaction as a result.

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That's not gonna happen.

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Where it's a, it's coordinated advice

and, and that's, you know, a a again,

259

what I think the value of, of what we

do is, is, as, as Emily pointed out,

260

that that technical side of what's

going on with the business, what's,

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uh, what the, the transactions that

the business is doing, coordinating

262

that with what you want to accomplish

as a family that is so often ignored.

263

And, and not addressed.

264

And that's, I what, I think

that's what leads to regret.

265

And we definitely highlight the

importance of collaborating.

266

And one of the reasons why, um, like

what you were saying Russ makes it

267

is so important is that, um, people

who are looking at selling a business

268

are going to need to choose who's the

right team for them around it, right.

269

There's MA specialists and

then there's the PR folks.

270

And, um, you know, at PNC,

we've, we've actually partnered

271

with some really important, um.

272

About players within those fields,

and Max can speak more to that.

273

And then we also, uh, cultivate these

relationships with, um, you know, other

274

advisors so that whoever that family that

we're working with has chosen, they know

275

that we are here to support that endeavor

and to work really closely with them.

276

And then internally, we, uh, collaborate

really, um, deliberately around any

277

clients that we're working with that are.

278

Looking at selling a family business.

279

And we work not just within,

collaboratively, within the private bank,

280

but with commercial and corporate as well.

281

And, uh, I think that that's one of the

things that we see right out the gate

282

is you want everybody to be on the same

page in terms of what's uh happening

283

and what's needed in each step along

the journey so that the, that whole

284

family system is really well taken care

of, and the business gets to thrive

285

during the sale and afterwards too.

286

I that Max, I was thinking

maybe you could highlight more

287

about specific collaborations.

288

We do some of our, yeah, so, so for

example, in our, in our family and, and I,

289

I look at that as, uh, you know, the, the

tools that we can, we can pull out of our

290

toolbox to, to utilize, uh, when advising,

uh, our clients on, on transition topics.

291

But we have access to Harris Williams.

292

Harris Williams is a, an investment bank.

293

It's a top investment bank.

294

Um, and, and, uh, the, the, the folks

there have, have been invaluable as we,

295

uh, as we work with business owners.

296

Uh, and, and, uh, talking through, you

know, what's what do, what, what's going

297

on in the m, m and A, um, you know.

298

Landscape, uh, what, what's

happening in the industry.

299

I mean, they bring all kinds of resources,

uh, to the table to, to be able to just

300

discuss what a transition or transition

planning might, might look like.

301

Uh, ESOP Solutions is another,

another great, uh, tool that, that

302

we can, we can utilize, um, Julie

Williams and her team, uh, with

303

Advisory Corporate Advisory Center.

304

Uh, just offered just brilliant advice,

you know, uh, investment, bank level

305

advice, uh, before there, there's

ever, before you get to the point

306

of, of needing to sell the business.

307

So there are just, uh, so many fantastic

resources that, uh, again, part of the

308

same family, part of the same community.

309

That we can, uh, rely on to, uh, to

bring good advice to our clients.

310

Yeah.

311

Uh, and again, that highlights the value

of, uh, a collaborative, uh, approach,

312

which I, I, I know is part of the kind of

ethos of, of Wealth 3.0, which again, uh,

313

I think we're all, uh, strong advocates.

314

Um, for, uh, Avery, I'm, I'm

keen to explore something with

315

you around the, the role of.

316

Purpose and identifying purpose.

317

We've spoken, everyone here has spoken

about the kind of identity and purpose

318

that can be tied up within the family

business for, for many different

319

members of, of the family, they kind

of, who they are and what they stand

320

for is represented by the business.

321

How do you go about helping them

to understand a purpose beyond.

322

That in, in terms of going, I'm

now not this, but that doesn't,

323

that shouldn't be a negative thing.

324

How, how do you help 'em see the,

the, the opportunities beyond

325

the sale, um, side of things.

326

So great, great example recently,

um, working with a family member

327

of, of an existing longtime client.

328

And this is the, the next generation

who's selling his business.

329

And in doing so, little

apprehensive about.

330

What he and his wife and their

children were going to embark upon in

331

this second phase, this next phase.

332

And, um, skeptically, he entered

into our Amplify impact process,

333

which I was grateful for.

334

He trusted us.

335

And, uh, the first piece is, uh,

creating an impact statement.

336

And we walk, we walked them through five

questions that we handpicked for them.

337

And these five questions can get

pretty deep if they answer them fully.

338

Right.

339

Uh, and in that process, you know,

he really opened up and we were

340

able to draw out the commonalities

between all of the answers.

341

We had each individual family

member answer these questions.

342

We were able to draw the

commonalities and so for that,

343

in this case, patriarch to see.

344

What he, his wife and their children

have in common, and the way he has

345

raised them and the way he has built his

business and now is about to sell his

346

business, um, was gratifying for him.

347

He had not, this is not something

he would've done on his own.

348

This is not something that, you know,

he could have bought, frankly, an

349

experience he could have bought, but he.

350

Really got into it to his credit.

351

And at the end of that, not only did we

have a very robust impact statement, but

352

the next, the next section of that process

was about not what do you want to fund or

353

what, what do you think your purpose is?

354

It was what capital do you

want to deploy, to what end?

355

What problems do you want to solve?

356

And in going at it that.

357

From that direction, we got to his

purpose and their collective purpose.

358

And each one has a little, you know,

like Emily said, we use DAF to sort of

359

help everybody sort of execute their

own, their own mini purpose, right?

360

Their own, their own side sidebar.

361

But their collective purpose became

very clear as we were talking about

362

problems to solve, capital to deploy.

363

And that leads into the different,

we explore at least nine

364

structures across for profit.

365

It was just so obvious the, the, the

structures he needed to stack, why

366

they were stacking them, how they

were going to deploy that capital,

367

which, which assets to deploy in each.

368

It just fell right into place.

369

And so for him exploring

his purpose became, uh.

370

In his own words, far more

enlightening than he anticipated.

371

It wasn't, um, it wasn't therapy.

372

We're not trying to have a therapy

session, but it really ended up being,

373

um, illuminating for him and then to have

it have immediate action and, and, um,

374

and, uh, structure was gratifying for him.

375

He even came back and he said,

'cause he was one of those, he

376

said, I don't want ESG, I don't

want any responsible investing.

377

At the end of it, we do

a root cause analysis.

378

At the end of it, he said, wait, I do

need some mission related investments.

379

How do I do that?

380

So I like that's point.

381

What do you want?

382

So that was, that was

gratifying for us as well.

383

That's just such a great example of

when you actually get grounded in who

384

you are, what matters to you, what

is the purpose behind the decisions

385

you're making, you can find that, uh,

you actually can change the trajectory

386

of how you're gonna go about doing it.

387

That's great.

388

And another area I'd like to, to just

explore a little, uh, which again, we

389

welcome input from everybody, but probably

start on, on Avery's kind of with, within

390

Avery's role is the decision to follow

impact and, and philanthropic activities.

391

The decision between whether

that's done on a collective basis.

392

An individual basis or a, or a blend in

between because I mean, we've created

393

quite a nice scenario with the family.

394

We're working, uh, on a,

as a case study here, that

395

everything's been really smooth.

396

I've discussed everything

that's gone along.

397

They've made a decision.

398

It's best interest of everyone

to, to sell the business.

399

Sometimes a sale can come about because

the family can't work together, therefore,

400

forcing 'em down the route of Right now

you've sold one thing, you've now gotta

401

manage this other thing to together.

402

Could be, uh, wouldn't be appealing

to some, I'm sure, but how, how

403

do you go about exploring the, the

role that, uh, it can be either

404

individually or, or collective

or a combination in terms of the.

405

Philanthropy and impact side of things.

406

That's wonderful.

407

Question.

408

As Emily referred to earlier, we

do a, a pretty comprehensive intake

409

process, for lack of a better phrase.

410

Um, we, we work with the family's

wealth strategists and and banking team

411

in order to understand who they are

before we ever actually talk to them.

412

We do as much pre-work as we possibly

can and then have an open-ended.

413

A set of open-ended questions that

we ask them in our first meeting

414

to get at some of those answers.

415

So more often than not,

frankly, families have strife.

416

It's just the nature of family

and more often than not, um, how

417

they deal with it is going to be

incredibly unique and different.

418

And, um.

419

Most, most often throughout the Amplify

impact process, we will acknowledge that

420

and, and work with, maybe we may do two

separate processes or multiple processes.

421

So different branches get to have

their say and feel comfortable,

422

um, in, in what they're revealing

because they may not feel comfortable

423

with everyone in their family.

424

So we will, we will batch it, if you will.

425

And in doing that, I think we we're

really trying to make sure that

426

everyone has time, voice, comfort, all

of the things that they need to really

427

explore what they need to explore.

428

And frankly, the structure

will, will follow from there.

429

Um, there's nothing worse than a

patriarch dealing with a situation

430

right now than a, than a patriarch,

matriarch, wealth creator, forcing

431

upon his or her inheritors.

432

Uh, a family foundation or a family trust

or, you know, collective family structure

433

that they have to work together to do.

434

It's just a recipe for disaster that,

that whole thing of, you know, I'm

435

gonna create a family foundation.

436

So they, they have to work

together and they will like it,

437

and that's just never gonna work.

438

So, um, so we immediately, you know,

disarm that theory and began to sort of.

439

That's why we focus on impact versus

values in, in so many cases because we

440

can back into values, through impact

where there, where that strife exists

441

and, and give everybody a voice.

442

And one of the ways that we support

families in avoiding that, um.

443

An unfortunate and unpleasant outcome

that, that Avery was describing is we have

444

a, uh, family success factors assessment.

445

So it's a very simple, uh, way to

do a 360 within the whole family.

446

And we've identified seven success factors

based on the research that's been done

447

over the years with families that have

really been successful in terms of.

448

What does it mean to stay harmonious

in relating and having continued

449

wealth and, um, resources, um, as

opposed to blowing up and losing

450

it all to legal battles, right?

451

So.

452

In those success factors when you have

all the adults in the family, including

453

in-laws, 'cause they have a lot, uh, that

they can provide in terms of awareness.

454

You get to have a good sense of,

oh, where are we as a family?

455

And oftentimes the um.

456

The wealth creators, uh, can have a

sense of, oh yeah, we, we have really

457

clear communication and everybody knows

everything and we're, and they know

458

it really well and they're grounded in

it, and they have the sense, well, I've

459

told them, but telling is different

than actual communication and listening

460

and finding out the input and finding

out where the other pieces are.

461

And having that 360 can be so

helpful because then we can provide

462

a picture for the family that no

one person is being called out.

463

But it shows where there might be some.

464

Gaps in knowledge or where there

might be some areas to focus attention

465

on that can be so helpful for the

family as they're going through

466

the amplify impact process as well.

467

So we work a lot in conjunction with

each other around these, um, issues

468

again, so that we're weaving in.

469

Um, the why and with the how in

terms of what they wanna accomplish.

470

And I'll say a lot of times, uh,

well, many times Emily and I will

471

have this conversation around which

needs to converse with this family.

472

So we'll work with the local team and

say, does this family need to explore

473

family assistance first in order to, to.

474

To explore their impact or do

they need to explore impact first

475

and back into family systems.

476

Right.

477

And, and every family is different.

478

So that, that dovetail is, is

very real and, and operationally

479

significant for sure.

480

Yeah.

481

And with one of the success factors

being decision shared decision making,

482

it's like you get a lot of data, right?

483

Like, oh, this desire to have everybody

working together does not play

484

out in terms of the, we understand

about how the family's doing.

485

What skills would need to be developed to

be able to do that, and what else could

486

it look like and where is their interest?

487

And it does make such a difference

for them in, in terms of the

488

elements that we've covered.

489

Uh, uh, again, we, we said

at the outset that this is.

490

A snapshot of certain elements of the sale

process, the information education that,

491

that we, uh, suggest families explore.

492

And as, as we've covered a couple

of times, each family is individual.

493

The circumstances will be individual

motivations will be individual.

494

So this is to give families an idea and,

and concepts around what to, to explore.

495

But before we.

496

Bring the episode to a conclusion.

497

I'd just like to, to hear from each of you

around anything that we perhaps haven't

498

covered that again, you would kind of, um,

uh, expect or, or suggest that families,

499

um, explore or, and I'll give you a choice

on this in case we've covered everything

500

that you think we, they, they should.

501

Um, what areas do as a starting point,

do you think would be, um, most useful?

502

So, um, uh.

503

I, I'm not gonna name names and

put you on the spot straight away.

504

If anyone wants to come in with an answer,

we can give others the time to think.

505

Let's do that.

506

Um, I, so I, I'm not sure if this

is exactly on point, but I, I think

507

it's, it's worth noting again,

you know, particularly under the

508

US tax regime, it takes years

to plan, uh, a good transition.

509

And I, I think the most

successful business transitions

510

that I've been involved with.

511

Were people who came to us before they

ever had an LOI on the table before

512

they ever even considered selling

to a third party or transitioning

513

ownership to their children.

514

And they just wanted to start the

planning process to understand what to do.

515

And, and, and so I, I think that's

maybe the best takeaway is start early.

516

You don't have to be.

517

So many business owners we come

in contact with say, I don't need

518

business succession planning.

519

I don't wanna retire.

520

I'm never gonna retire.

521

Uh, and and that's not what it's about.

522

It, it's about planning, because there

will be an exit at some point, one

523

way or another, there's gonna be an

exit, and your toes will be either

524

parallel to the ground or perpendicular

to the ground when that happens.

525

So going through that planning process

is vital to make sure that your family

526

can do what you intend for them to do.

527

Well, I'll go next and let Emily be last.

528

'cause I do think that uh, what

we do there is super important.

529

Um.

530

What is undeniable in the world of

purpose is the blending of for-profit

531

nor and non-profit vehicles.

532

Like there is no going back.

533

We are no longer siloed

between this binary, what I

534

call, uh, two pocket thinking.

535

We are truly in a, in a, in an era

of one pocket thinking, where how

536

we spend, give, invest, and, and

earn is, is very much a one pocket.

537

Exercise.

538

We're no longer thinking, oh,

I'll earn my money here and then

539

I'll give it away over here.

540

That's a very robber

bearing mentality, right?

541

We are no longer in that.

542

We are in a one pocket mindset, and so

whether that's acknowledged or not with

543

the family upfront, we're seeing the

effect of that influence in multiple ways.

544

So being able to, uh.

545

Use various examples.

546

Uh, combine generational experiences

and, and share those experiences and

547

help people really understand what

that one pocket thinking means for them

548

and define it and then execute on it.

549

Is, is, is fairly new and it's

an exciting time and there's,

550

there's a lot more to come.

551

There's, it's such a rich conversation.

552

There's so many places to go with it.

553

Uh, I think that the part I wanna

highlight is something that I'm

554

really present to right now.

555

I just spent a few days with

my 88-year-old father, and I'm

556

presenting next week at the family.

557

Um, the Financial Therapy Associations

conference on, uh, the power of

558

storytelling in families towards

building resilience and self-esteem.

559

And I ended up taking some time with

my father to ask him some questions

560

related to historical events and what

are all the different things that

561

led him to where he is right now.

562

And I'm really blessed that he's mentally

competent, physically well, and we

563

are able to have these conversations.

564

And, uh, I'm thinking about a client that

I worked with, um, years ago whose father

565

was running a successful business and

nobody in the family was working in it.

566

And he had a stroke and he was no

longer able to run the business.

567

And she was a social worker at the time.

568

And she stepped in because nobody else

in the family felt competent to, and

569

the mother was completely devastated.

570

And she learned on the fly

how to run the business.

571

She had to deal with, uh,

union, she had to deal with a

572

very do male dominated field.

573

She grew tremendously, but the

whole goal was to get it to a

574

point to be able to sell it.

575

And she never had the conversations

with her father around.

576

What he had wanted, what lessons

he'd learned, how he'd gotten there.

577

And so I think if I left any,

any highlighted one thing, it

578

would be share your stories.

579

Share your stories, and talk to the people

in your family about what matters most

580

to you about what you want for them.

581

I.

582

And what and what you'd want them

to be considering in the possibility

583

of, um, selling the business

or keeping it in the family.

584

And one of the things we do at the

institute is we work with a, um, like

585

award-winning documentary, uh, level, uh,

videographer and also a memoirist around

586

how to capture those stories and how to.

587

Train the younger generations, the

grandchildren, the great-grandchildren

588

in doing the interviewing and curating

the questions and capturing all that

589

information and mind share that can get

lost and unfortunately does get lost

590

often because there's this sense of,

you know, I'm gonna do this forever

591

and I don't have to worry about it.

592

And it's about.

593

Like really taking the time to capture

those and those thoughts and the history

594

and then that creates a foundation

for all the things we talked about

595

today in terms of what it, where we

are now and what we wanna create.

596

Thank you so much for, uh,

joining me on, uh, this episode.

597

Thank you for your input and, um, as we

say the highlighting the importance of

598

the, um, collaborative, uh, approach.

599

Uh, I look forward to, uh,

speaking with you all again soon.

600

Thank you.

601

Thank you Russ.

602

Thanks so much, Russ.

603

Russ Haworth: So that concludes this

two part interview with the team

604

from PNC private bank Hawthorne.

605

As a reminder, if you do want to

find out more about their work and

606

to get in touch with them, um, to

discuss this episode in more detail.

607

You can visit their website,

which is hawthorne.pnc.com.

608

Thank you for listening.

609

If you found this episode useful, please

share it with friends and family and

610

it would be great if you could leave

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611

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612

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613

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614

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615

Dot com slash work with Russ and find

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616

Until next time, take care.