The Other Side Of Potential

TOSP 107 Transcript EPISODE 107
[INTRO]
[00:00:03] ANNOUNCER: Welcome to The Other Side of Potential podcast, hosted by Dr. Sharon Spano. Each weekly episode takes a deep dive into how successful family business leaders maneuver the unique dynamics between family and business, how do they align to face complex business challenges, how do they build and project the generational wealth, in what ways do they pursue a lasting legacy. Join Sharon as she explores how these leaders adapt and respond to the complexity of life and business in our ever-changing world.
[INTERVIEW]
[00:00:35] SS: Join me today in welcoming my guest, Steve Legler. Steve is a family business consultant, and he differentiates who he works with in his very specific ways. One, he works obviously with families in business. He works with wealthy families. He works with family offices and professional advisors associated with these families, very similar to my own work. So I love the fact that we’re colleagues in this world of family business because I always learn from my colleagues, and I know that we all are very passionate about this work.
Steve is also the author of SHIFT Your Family Business. What a great title. He comes to us today, listeners, with a family story that I know you’ll find quite interesting. He also hails to us from Montreal, Canada, one of my favorite cities. Now, I’ve asked him to be on the show today because, again, as you know, I also work with family business leaders. Even though we’re both in the same field, I think it’s very, very important for you to hear different perspectives. Without any further hesitation, welcome, Steve, and it’s great to have you on the show today.
[00:01:41] SL: Thank you for having me, Sharon. Yes, I do have my unique backstory. You talk about dealing with colleagues. I think some of the richest conversations I have on a weekly basis is with other colleagues who do this kind of work, and it was work that I didn’t even realize existed until about eight years ago when I stumbled into the Family Enterprise Advisor Program here in Canada. Let me take you to the backstory.
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TOSP 107 Transcript
I was born in 1964 in Montreal. My father was an immigrant entrepreneur who had started a steel fabrication business, and I am the third child but the first and only son. So picture this. It’s the 1960s, heavy industry, dirty stuff. Who do you think dad saw as his potential heir? Well, me, of course. So my earliest memories were being told that it was my duty to basically follow my dad into the business, and I didn’t know any better. Every summer of my teenage years, I went to work there. I went to McGill and studied business, of course, because what do you study when you’re told you’re going to have to take over a business. So I did that.
I went to work for my dad’s business for about three years before leaving to go do my MBA. Then I came back in 1991 with my MBA, getting ready to sort of take the reins. By this point, my dad had moved himself up to chairman, had hired an outside president to sort of be the bridge between his leadership and mine. But then a funny thing happened on the way. I got back to the office the first day back in 1991. My dad saw me walk in by his office, called me in, and said, “Close the door. Sit down. We have to talk.” I was like, “Okay. Well, what the heck is this all about?”
Lo and behold, he explained that in the two years I had been gone a lot of our markets had been disappearing, and things didn’t look so good going forward, and we’re going to have to make some decisions about closing, merging, or selling. I was like, “Oh, wow.” Now, a lot of people might think, “Poor Steve. His dream was gone.” Well, no. That’s not exactly true. Because while I knew it was my duty to eventually take over it, it wasn’t exactly like the burning desire in my belly. I was doing it because I could and because I thought I should.
Long story short, six months later, we had sold all the operations and business and gone from 250 employees to 4, and two was named Steve Legler. I was the Legler Junior, and my dad has just bought a farm, so he went off to handle things on the farm and left everything else to me. There was money from the sale. We had some buildings that we still owned. Lo and behold, I was running a small family office. Of course, I didn’t know what a family office was because it was 1991 and I was 27 years old. Most people still don’t know 30 years later.
[00:04:33] SS: Right. That’s true.
[00:04:33] SL: [inaudible 00:04:33].
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TOSP 107 Transcript
[00:04:35] SS: I was just going to say because you and I know, and I know larger companies do. But maybe for the sake of our listeners that someone out there who’s maybe a smaller family business, would you explain what a family office is, because I think they’re very integral part of business growth and sustainability?
[00:04:52] SL: Yeah. Basically, it’s a structure and it may have no employees or one employee. But ours is basically a virtual family office where I take care of the investments that the family owns and the family assets, and I deal with the professionals in the legal and the accounting world to make sure all the family stuff and tax returns are all taken care of, and take care of a little bit the other family households that are part of this, so my mother and my – I have two sisters. I handle the business end of things. But that’s not exactly like a full-time job and so that’s –
Now, I’m getting back to 2013 when I stumbled into this program called Family Enterprise Advisor and I’m in this room in Toronto with a bunch of people who work for banks. They’re accountants, they’re asset managers, they’re life insurance specialists, and they’re all there because they have a lot of family business clients, and they’re trying to learn the language of family business, how to serve those clients better. I had nothing in common with all those people in the room, except there were people at the front of the room who were teaching us all about things that they do with families, helping them clarify their purpose, their value, their visions, their goals, helping them prepare the rising generation, helping them plan family retreats and have family meetings.
It was like such an eye-opener to me. It was a calling, in fact, and I jokingly say that I finally figured out what I wanted to be when I grew up, but I was in my late 40s at the time. But seeing that this world that you were talking about before exists, I didn’t know it existed. Now, I have colleagues on just about every continent who I know who do this kind of work, and it’s fascinating. I think we don’t do a good enough job as a group of letting the families that are out there that could use our services and use us as resource. We don’t do a good enough job of letting them know that we’re here, so I’m glad to be on your show today to help fix that.
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TOSP 107 Transcript
[00:06:54] SS: Well, I think you’re right about that because similar to you, I have been working with family businesses kind of inadvertently, if you will, because my work for many, many years was always in corporate. Of course, some of those included family businesses, but I hadn’t really thought of it as a separate avatar entity, if you will. What’s exciting to me about it is the opportunity to enhance and strengthen the family system, as well as the business system because I’m often heard to say I believe families are the cornerstone of our society. Of course, it’s ever-changing as those structures keep changing as to what is a family in today’s world.
But then also, I think business as we would all agree is obviously the cornerstone of our economy. So when you put the two together, to me, it is a calling as you’re saying that allows me to feel very much alive in engaging in the dynamics between those two very important systems. For the sake of the listener, let’s just expand on the idea for a moment of what a family office is because it can be a structure as you as you discussed where it’s run and managed by someone in the family or the family business. But it’s also we know for many of the larger enterprises, there are family offices that manage multiple businesses. Or sometimes, it’s a very complex sophisticated system because the family enterprise includes multiple businesses. So they have all of their own professionals or their access I guess I should say.
I know I interviewed Molly Grubb some months ago. I think it was last year. She handles several family enterprises and connects them and makes sure that there’s a holistic approach to their services and what they need. There’s many ways that it looks and is operated. I want to make sure listeners understand that because I’m finding with some of the small to medium, and when I say that I’m talking maybe 1 to 10 million, they don’t know, as you said, about those options. They have maybe a more scattered approach. They might have an attorney. They might have a wealth manager. They have an insurance guy or whatever. But they’re not necessarily brought together in a holistic way, and it can get really complicated for the family. Would you agree? Have you seen that as well in Canada?
[00:09:22] SL: Yeah, for sure. I mean, there’s an expression that if you’ve seen one family office, you’ve seen one family office because they are all necessarily quite different.
[00:09:30] SS: Very well-said.
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TOSP 107 Transcript
[00:09:32] SL: Especially at the smaller end, just having the conversation with the legal professional and the wealth manager and the tax specialist, that’s something that a lot of family business owners will kind of not realize how important that is and maybe want to save on some professional fees and just deal with each one of them individually and not have them all come into the room and realize that sitting around in boardroom table. This is costing him thousands of dollars an hour. But really, once you get to a certain wealth level, let’s say, in the eight figures and more, it really kind of makes sense every once in a while to make sure that all those professionals are taking care of things.
If you’re bigger and you have a family office and you have those people that you employ, I mean, that’s obviously a no-brainer. But what I think that a lot of people call themselves family offices miss out on is actually where is the family in the family office. Often they are so focused on the goals of maintaining and or growing the wealth, and they sometimes have their own little fiefdoms where here are the employees that are paid by this family to run this part of their empire. They’re a family office, so ostensibly they’re doing it for the family. But the family is never in the picture, except once a year getting a dividend check maybe or having the family members come in with their tax records to have the accountants take care of doing that.
There’s a lot of opportunity for family engagement and family and alignment, and I was talking earlier about learning about working with families to have them clarify their goals and their vision and common values. I know a lot of the multifamily offices that serve, let’s say, dozens of families. They are all sort of gearing up and employing people like you and I who want to work in the family circle of things and help families in those areas as well. I think that’s an idea whose time has definitely come, and I’m glad to be hearing a little bit more about it all the time where a family office is seen as something that is actually for the family and not just –
[00:11:53] SS: Not just the business.
[00:11:53] SL: The office of the assets and the financial. The financial capital is very important, but it can’t be the only capital. There’s the human capital, the intellectual capital, the social capital of the family that is so important for families to succeed in a transition from one generation to the next.
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TOSP 107 Transcript
[00:12:12] SS: Well, for sure. I know the statistics are controversial and ever changing, and I was reading something just yesterday about 75% of – Or no. 50 to 60 percent of new ventures fail in the first five years, but also 75% in the first 10, and that’s not specific to family businesses. The numbers are always moving about whether or not they make it to third gen or not. I find myself running into more and more fifth and sixth generation, and I think it’s going to be interesting to see how the research plays out as a result of COVID, what I’m seeing in my community. I have two questions on my mind for you linked to this.
My husband and I were commenting the other day. It seems like those small mom and pop businesses have survived well in COVID here, obviously based on what they, what type of business for sure, like your smaller restaurants. What we’re seeing is a lot of the chains, the big conglomerates are the ones folding. It’s kind of interesting to me because I think it’s going to be a while but, we’re going to see some interesting statistics evolve as a result of COVID.
Before I ask you about what you’re seeing, I don’t want to lose sight of this because you have a very wonderful tagline on your website that I think proves the point or stresses the point I should say of what you just said about how happy you are to see the families being more of a focus than just the business. Can you share that with us?
[00:13:48] SL: Well, I just recently updated my website, so I don’t know if you’re talking about the same line that I think I might have used to have. But I do have on the back of my business card helping enterprising families create the harmony they need to support the legacy they want.
[00:14:04] SS: Yeah. That’s – I love that, but you had something on the side I saw the other day. I’m going to paraphrase, and then maybe you can –
[00:14:11] SL: Okay.
[00:14:11] SS: Stop working on your business.
[00:14:14] SL: Okay. That’s the subtitle of my first book, SHIFT Your Family Business. It’s stop working in your family business. Start working on your business family.
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[00:14:24] SS: Yes. I love that, Steve.
[00:14:26] SL: A lot of people have – They know the what about don’t work in your business, work on your business. But the other thing is what’s more important. Are you a family business where the noun is business, or are you a business family where the family is more important, the family is the noun? You were talking about fifth and sixth generation businesses that I wanted to ask you. What are those businesses that have survived through many intergenerational transitions? What do they have in common is that they actually focus on the family part and not just on the wealth. They make sure that the family members themselves all learn about the importance of stewardship of the family assets. They’re conscious of the legacy of the family name. They often have a family foundation. They’re pillars of their community. They’ve learned this, and it was probably hard to go from first generation to second generations. But then it’s easier from second to third because you have a role model.
Some families are able to go to the third, the fourth, and the fifth generation, and I think it’s important for the people who are going from generation one to generation two to look at some of those families and see what they’ve done right and use them as models and focus on some of the more important family aspects and not just on the business stuff.
[00:15:44] SS: Well, it’s absolutely true because I think we both know that if your emphasis is more on the business than the family, you make different decisions. When what we see is when it works well, to your point of you know the family appreciates stewardship and legacy, and they’re building up the next gen and all these different factors that we know are so important, is the family is involved in a different way, and there’s ownership.
Now, it may look like a lot of things. I see people who are – I actually met a woman the other day, and she’s independently wealthy. The grandmother built a substantial business in Argentina, and she’s quite removed from the whole thing. She lives here in the states and she said, “I get one-sixth of the business.” But she’s not involved at all. So we know it can look like a lot of things. Different people come in and out. But if there’s a core group that are engaged and appreciating and have a sense of the need for legacy and wealth protection and all of that, I
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think that supports someone being an outlier such as this woman. I mean, she was very clear, “I have no interest in it.” But yet she reaps the benefits of it.
Somehow within that, the rest of the family members probably through governance and whatnot, they’re fine with the fact that she’s getting this one-sixth, even though she’s not active or very much involved in operations or decision making. Now, I’m curious then because I alluded to COVID and some of the things that I’ve seen here. In your interaction with family businesses, what are some of the major challenges you’re seeing as a result of COVID?
[00:17:26] SL: I think it’s highlighted a lot of things because it was a sudden change that affected everyone, and it’s really interesting the way that it sort of bifurcated in the way it affects. Some businesses got extra busy and started making money hand over fist and hire more employees because they were in certain industries. Then there were a whole bunch of other ones that ground almost to a halt. So it’s really interesting to note that like nobody was left indifferent. It was either up or down.
What I heard early on like back in maybe April or May that this pandemic was going to be and was already starting to be a test of the family governance systems that family had in place. Lo and behold, the pandemic hits. Everyone’s forced to shut down. Now, brother number two who
happens to be in charge of the operating business is forced to make a decision that he then makes. Then other siblings, sister, or other brother says, “Hey, wait a sec. Why did he do that? He should have asked us about –”
People were forced into making some moves that maybe if their governance was more evolved and more advanced, they would have been able to make more of a democratic decision, as opposed to one person acting on their own. When we talk about going from one generation to the next, it’s often the case where it’s one wealth creator, and then it goes to a sibling group. So you go from a leadership style that’s more autocratic and then you get to something that’s more democratic. That is a big step for a lot of families, and different people have different interest levels and different abilities and different other things going on in their lives. It’s very important that the information be shared in as transparent a way as possible.
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TOSP 107 Transcript
Let’s just examine a family where it’s mom and dad running things, and they have four kids, and they’re trying to get it to the point where now the four kids are going to be running this. Whatever the assets are, it’s a business. It could be real estate. It could be a combination. How are they going to make decisions together? How are they going to communicate? How are they going to solve problems together? All those three questions I just asked are basically when people ask me what is family governance, that’s what I answer. It’s making decisions together, communicating, and solving problems together.
Families who have already started to figure that out will do better than the ones who just sort of keep it as, “Well, dad did all this by himself, so who is the one person who’s going to replace that?” Well, I can tell you. I grew up in a business where dad did whatever he wanted. But once my dad died, I don’t think my sisters would have appreciated me just doing whatever the hell I want without informing –
[00:20:23] SS: It’s a totally different dynamic, and I talk about that because my PhD as you know is in human organizational systems, so I’m looking at it from a systemic point of view. Those dynamics are so different because, I mean, my listeners often hear me allude to this,
you’re looking at the order in the system. Meaning when it’s just dad – I just interviewed a guy a few weeks ago when I was listening to the podcast this morning as I was getting ready where the dad, the founder then turned it over to the son and daughter.
But now the order is different because you don’t have – Number one, as you as you just stated, you have two number twos who are now moving into number one. Whenever you disrupt the order in a system, meaning who’s first to second, who’s third, there’s the potential for chaos. So you’ve probably seen this. I know I have where the number three son now is the one position to take over, but maybe number one son is feeling left out or slided. But maybe the decision was made by the patriarch or the founder because the number one son doesn’t have the capabilities of running the business. I mean, those kind of things, I’m sure you’re seeing those as well, right?
[00:21:39] SL: These are things that happen all the time. The good news is I think for the families that get to a certain wealth level where they have a number of different entities. So they might have an operating company, maybe a subsidiary. They might have some real estate. They
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might have a foundation. When you have multiple places for people to go, you can more likely find the appropriate place for each person who wants to have a place and who would be qualified for a place.
Now, it’s not always easy to say to son number or daughter number two that your big sister is the one who’s better for this that looks like a nicer position. But there are ways to have these conversations and to figure these things out in a way that makes sense for each family. If a family has enough complexity in it, it sometimes is beneficial that you can have someone take an important role, leading the family council. Someone who doesn’t really know much about or care much about business but really cares more about the family getting together and keeping the family name. Or somebody who’s more interested in donating to worthy causes and can take an important role on a family foundation.
There are ways to find key positions that fit each person and to have them communicating regularly with family meetings to keep each other informed of what they’re all doing so that they’re actually all pulling in the same direction. Those are those kinds of things are all based on figuring out the family values and family vision and what are they trying to do together, what can they accomplish, and how can they help each other.
You mentioned the word a few minutes ago about independently wealthy. I like the expression interdependently wealthy.
[00:23:30] SS: Yeah. I do too. Yeah.
[00:23:32] SL: They are dependent on each other, whether they like it or not. That also comes into play when you’re looking from one generation to the next and the relationship of, let’s say, the typical father who doesn’t want to let go to their kids. You know what? There will come a time, God willing, where those kids that you had that you still refer to as children – I like to refer to them as offspring because once you get to be an adult, calling someone children is kind of derogatory. Those offspring hopefully will become more competent than you because once you pass a certain peak, your ability to perform will go down. I don’t know if that’s in your 60s or 70s or 80s, whatever.
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But presumably, you would be happy to have your offspring getting to the point where they are better than you. So it makes sense. They will have more of an impact on you. So whereas you changed their diaper many years ago, there may be a day not too long from now where they are arranging to pay someone who’s changing your diaper. That’s my best – It’s not the most beautiful example to imagine, but I think it brings home the point about the interdependence in a family.
[00:24:50] SS: Well, I think you’re so right. As you pointed out the independent wealth versus interdependent wealth, it’s interesting. I hadn’t thought of it that way but the woman – That was her language, I’m independently wealthy, which was very indicative, as I stated earlier of her role in the company or in the family. Not a right or wrong thing. It was something that they all knew and accepted and agreed upon and probably because it seemed in our conversation that the bulk of the families in Argentina, and she’s chosen a life and a career here.
But I want to go back for a minute to something you said because it’s also very fascinating to me, and I always learn when I’m interviewing. You just keep expanding on the many opportunities. I want to first make it clear to listeners and not define but I guess stress the point you made a moment ago about there are ways to make sure that the governance is in place and that the family is communicating, making decisions, and problem solving in the best possible way.
We all have processes that we engage in. Some are quite different from the other but not any less effective. I love the idea of what you talked about in terms of testing the family governance system. I’m wondering because one of the things that we had here in the States in COVID that I know helped a lot of the family businesses here, large or and small, was that we had a PPP program, which was in the beginning very complicated and frustrating for many people. But now, we’re going into the second round of that, which is essentially a bailout by the government, and the systems are much better. I spoke to a client the other day, and she said, yeah, they were applying again.
That is really what has helped many stay afloat during this time frame. Do you have such a thing in Canada? I mean, what have you seen there in terms of relief for family businesses during COVID?
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[00:26:53] SL: We’ve had something very similar, and I remember when our prime minister announced the first thing back in March last year. They mentioned some amount that they were going to cover. I think it was like 20% of salaries. Like three days later, they came out and said, “No, it’s 75%.” They realized that they really –
I don’t actually have any clients who have been availing themselves to that. I was luckier to have more clients on the end where business actually got better through COVID. But it’s interesting that the ones who were already having family meetings face to face to make the switch to move their meetings online, that’s a lot easier to do than a family that’s not meeting and to start having meetings and do it online. I mean, it is doable, and I think we’re all learning. We’ve learned pretty quickly that the drop off from in person to online virtual meetings, yes, it’s different. It’s not necessarily a lot worse and in terms of the time saving and flexibility and the ease with which to meet.
I’m seeing things like families who used to have a monthly full-day meeting in person will now have like an hour and a half meeting every week over Zoom. Or instead of having that annual meeting where somebody flies in, they’ll do a quarterly meeting for a half a day and do it over Zoom, and it’s actually a lot better in some ways. My view of it is more on the how is it affecting
the way families get together because there really needs to be – People talk a lot about the importance of family meetings, but I always say it’s not the family meeting. It’s not the vacation.
When you look back to your childhood – I look back. We used to go camping. We had a trailer. We went camping. I don’t think I remember the details of a single particular camping trip on one weekend to one campground. What I do remember is we used to go camping on a few weekends every summer when I was growing up with my cousins. I remember that. So it’s not the one trip. It’s not the one family meeting. It’s the having a family meeting and then having another family meeting and then having another family. Having the way you run those meetings evolve, giving different people the opportunity to lead and share those meetings to not have it a one-way direction where –
My dad called a family meeting in 1985. We went up north. Me and my sisters and my older sister was married at the time. We spent the weekend there and we never had another family
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meeting again because my dad did the whole thing he thought he knew how to do this by himself. He spent 90% of the time talking and 9% listening and never scheduled another family meeting until 2006 after he had his cancer diagnosis.
Now, it doesn’t make sense to leave 21 years between the second meeting. You want to have a meeting. You don’t have to try and get everything done in the first meeting. The most important thing to do at the end of the first family meeting is to schedule the next one, and it could be three months later. It could be a month later. It could be a year later. But to just have a regular place where it’s a forum, where the family is going to talk about family stuff and the family future and not just what’s going on in this particular business.
Yes, most of the family’s wealth and assets might be part of that business, but you need to take the time to talk about the family relationships, the family vision, what are the values, what is going to drive after this next transition where the people who are in charge now. Fast forward 20 years, how will – The people who are 20 are going to be 40, and the dad who’s 60 is going to be 80. Well, things are going to look a lot different. It’s a good idea to start planning and talking about what those changes are and how the family sees their way through it. Because just having the oldest person say, “This is how it’s going to be,” and tell everyone doesn’t really work so well.
[00:30:52] SS: Well, and the thing that’s so interesting as I’m thinking of the questions I’m asking you around COVID, it’s kind of surreal to me that I’m still asking questions about COVID.
[00:31:04] SL: I hear you.
[00:31:04] SS: Because when we started this whole thing, for us it was March of last year, I remember we did we devoted. I kind of derailed the podcast and focused on COVID for a month. Then I thought, “Oh, I need to be careful because we want these to be evergreen, right? We don’t want it to be about COVID and be irrelevant.” But COVID is always going to be relevant now because it’s changed our world in such a way. It’s like World War II. We’ll talk about it for many, many years. So to me, the evergreen question is kind of off the table.
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But in the context of what you said a moment ago about next gen, for those of us that don’t have a next gen, I mean, I would wish to God I had someone that was willing to help my husband and I with our multiple businesses. We don’t have that, and I see many people who don’t for a variety of reasons. Their children have chosen other paths. But in the time of COVID, in the era of COVID, when you’re required to pivot and change so rapidly, I felt that the businesses who had younger minds, whether they were [inaudible 00:32:16] parents or just people in the workforce or the overall team, did better because if they were acclimated to listen and lean into younger and new ideas, particularly the technology, they were able to adapt and pivot better.
On the flip side, I had a colleague/client who couldn’t adapt to Zoom no matter what, and I’m thinking to myself, “Are you kidding me?” I mean, I’ve been using Zoom forever since it started and I couldn’t imagine how stuck he was feeling if he couldn’t make that smallest really pivot in adaptation because I was seeing so many big companies making. I know. I don’t mean to minimize. I know sometimes it’s easier for a larger company to pivot quicker than a small to medium, mid-size because they have the resources and the team to do so. But I think second generation is vital to how rapidly our business climate is evolving and changing.
To your example of your dad, I mean, if you’re going to be an autocrat, you can only do that so long in this market. Would you agree?
[00:33:30] SL: Absolutely. I mean, I think it’s clear that what this is doing. I also understand the evergreen thing. I’ve been writing a blog for seven to eight years now. When COVID hit last spring, I pivoted and wrote stuff about COVID for about a couple of months. Then I said, “I can’t keep writing about this stuff. It’s not going to be pertinent.” But I also like your point about and I was thinking of the same thing, World War II or the depression or whatever, that these were times in our history that changed certain generations.
My kids right now are 19 and 21, and they’re going through this, and this is going to forever change the way the world looks for them. I think it’s actually maybe fast forwarding a lot of things. People who were thinking, “You know what? I’ll work another five years and then I’ll hang it up,” maybe they don’t want to come back in another year or whenever the things get back to whatever normal is going to look like. Maybe they’ll just say, “You know what? I’ve done enough. I’m going to take my chips off the table and pass things down to the next generation.”
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TOSP 107 Transcript
Those younger people who are more comfortable and grew up with this technology and have great ideas and understand things about society and social networking and the kinds of businesses that people are attracted to with the social impact, I mean, things are changing a lot and fast. These younger people, they’re the ones who are going to have to live with it. So if they’re forward-looking and if you’re lucky enough to have some of these smart, engaged, young people in a rising generation in your family, I mean, I hope the heck you can find a way to incorporate them to do something different and pivot your business to do something related to it, to do something brand new in a whole other field.
I mean, I always talk about people who want to get their kids interested in their business. Oh, I want my kids to take over my business. I always say, “Well, what if you just got them interested in business and maybe they have a passion for something completely different to the family business but they would like to start a business as an entrepreneur?” If you have been successful in your business and have some assets that you can sort of say, “Hey, do you want to start your own thing where you have the passion, where you don’t have to come and follow my footsteps and live my dream? You live your own dreams and invest in your offspring and their entrepreneurial desires in a field that interests them.” If you can figure that out, my god, I think you’re golden.
[00:36:08] SS: Well, I think it’s an interesting point, and we’ve talked about it a lot on the show because the families that I’ve seen who have done this well, and I’d love to hear what you’ve seen if it’s similar or different, they have acclimated their children to business, to your point. Often that started at an early age with them being allowed to come into the family business or businesses in whatever capacity, getting them excited about the family business. So there’s not this whole entitlement thing of you get it on the other end when it’s doing really well. They’ve started doing the simplest things, taking out the trash or whatever as kids, and they learn about business.
Ken Wimberly is one of my favorite guys here in the States who has multiple businesses, and his approach was, “I just want my kids to understand business.” If they choose to be in the family business, great. But if they don’t, I want to at least, to your point, inspire them to be entrepreneurs or good business leaders in whatever capacity they choose. I think that’s very
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TOSP 107 Transcript
wise, which is very different from what you experienced where it was kind of couched as it’s your duty because that feels like pressure to a kid, right?
[00:37:22] SL: For sure. People talk a lot about financial literacy, right? When you have people in the rising generation and some people, they study more social sciences or artistic things and they don’t like math or they’re not good at it, and so they can’t read a balance sheet and that. You don’t have to be an expert with balance sheets but you do have to understand some basic things, and you can start that at such a young age.
In our family, when my kids were young, we used to watch Shark Tank, and I would have the remote, and someone would come out and say, “We want $100,000 for 10% of our company.” I would pause the TV and say, “Okay. So what’s the valuation? What do you think is this worth?”
[00:38:01] SS: I love that.
[00:38:03] SL: There are so many opportunities. You’re driving in the car and you see a billboard with an ad for McDonald’s for this Happy Meal for $4.99. Is that a good deal? Well, how much is it? Are they trying to get the kids because they’re giving away – There’s all kinds of ways to talk about business things. When you go to the restaurant, “Oh, jeez. What’s an appropriate tip?” “Oh, 15%.” “Well, what’s 15% of this $80 check?” Just get them involved in things. They don’t have to become experts, but it would be nice if they did understand some of the basics.
[00:38:36] SS: It’s so important, and I thank you for stressing that because I know for many and I was one of those. Thank God, I married a guy who’s really financially-minded. But my family didn’t talk about money, and there are so many families that think that way. It’s like they – I don’t even understand what that’s about. But for some, it’s like a vulgarity. For some, it’s just pure simple ignorance or lack of understanding. For some –
In my family, it was kind of linked to our faith system, like the religious belief of the Pharisees. I’ve often been heard to say this, the Pharisees. Those were the bad guys that had all the money and, by the way, they killed Jesus. I kind of grew up with this mentality that money was bad and I had to do – I actually I think wrote a book called The Pursuit of Time and Money. In
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TOSP 107 Transcript
doing my research for that, I had to face some of my own demons about faulty premises around money that came to me from early childhood. All of these dynamics are so fascinating to me, and I love this discussion.
We’re nearing the top of the hour, and I promised you I would have you off at a reasonable time. We both have transitions to make. I’m wondering. I have either a question or you can offer us your final words of wisdom. But I’d love your take on legacy and how you see that within the family business structure.
[00:40:05] SL: Well, I think it’s important at some point in whichever generation is currently running a business that knows that their time in that top spot is limited. It might be limited to a couple of years. It might be limited to a couple of decades. But it certainly is limited and if they can start to think of what things are going to look like when they are no longer in the picture. Hopefully, they’re off playing golf somewhere, and somebody else is running their business or sailing around the world. But to start to think of who’s going to own this business, how are they going to make decisions together.
The legacy is much more than just the financial assets. It’s more than the dollar signs. It’s the family and how the family gets along, the family that has harmony, the family that’s aligned and engaged. That’s what you’re going to need to actually have the legacy continue. Somebody put this as an equation. It’s the most basic equation but it’s people plus assets equals legacy. It’s not the assets themselves. You need the people. You need to have the people in the following generation that are going to want to continue what you started.
Whether it’s to run that foundation where you gave millions of dollars to the hospital to build that building with your name or to keep running your business or to keep managing the real estate empire that you’ve built, you need to have some people who are willing to stay with it and steward those assets because the assets themselves do not make a legacy.
[00:41:39] SS: I think that’s so well said. I think I had heard someone else say it a little differently like, “The founder builds the business. The next gen builds the legacy.” But I think it’s a combination of two, of all of it because –
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TOSP 107 Transcript [00:41:53] SL: Yeah. I like that.
[00:41:53] SS: But if the founder is doing a good job preparing the next gen as we’ve discussed, then the legacy is in play earlier on. But to your point, it’s about the people. Well, Steve, I just want to thank you so much for your passion, your energy, your wisdom. I’ve learned a lot from you today, and I don’t say that lightly because I’m entrenched in it myself and always reading and working with people. But again, I always love another perspective from a colleague. I know that the audience enjoyed your wisdom. Are there any – Well, first, let me just say, how can people reach out to you, get a copy of your book, that sort of thing?
[00:42:32] SL: My book is on Amazon. I believe it’s still. I know my – I have a more recent book called Interdependent Wealth, which I know is still on Amazon. I always say when people ask me this question I’m lucky in that I have a name that’s relatively simple, Steve Legler. There’s only – E is the only vowel in there. That shows up twice in the first name, twice in the last name, but it’s not a common name. If you Google Steve Legler, you will probably end up landing on my website and –
[00:42:58] SS: That’s L-E-G-L-E-R.
[00:42:59] SL: L-E-G L-E-R and my website is now at stevelegler.com. Hit me up on LinkedIn. I’ve got a lot of connections there. I create a lot of content in this space. Like I said, I write a blog every week, so that goes up there. You can register and sign up for the mailing list of the blog or you can just follow me on LinkedIn and get it every Monday. Look me up if you want to talk about family business stuff and how I can be a resource to your family or to a family that you work with. I’d love to talk to you.
[00:43:29] SS: Sounds great. Thank you so much for your time, and stay warm up there in Montreal.
[00:43:34] SL: All right. Thanks, Sharon.
[00:43:36] SS: Well, listeners, I just love these conversations. I know you do too and I know you’ve gained some insight. No matter what size your business, you should be thinking along
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TOSP 107 Transcript
these lines and what it means to secure a family legacy as we’ve touched on. Then let me challenge you as I always do to continue the process of personal and professional development and to also remember that when you’re in the midst of transitional moments as we’re in right now.
I think Steve and I made it more than clear, and I know you’re all feeling it. This is an ongoing thing here. We’re going to be years of figuring out what life is going to look like, even when COVID subsides. These are moments. There are opportunities for you to look deep for you to develop awareness about yourself, your business, your family to pivot and adapt the things that are causing you the greatest challenge or where you’re resisting. That’s where the growth is, so pay attention to those moments and know that they’re an opportunity for you to step into your other side of potential.
Until next time, this is Dr. Sharon Spano, reminding you to stay well. God bless. [END OF INTERVIEW]
[00:44:41] ANNOUNCER: Thank you for listening to this episode of The Other Side of Potential podcast. Please leave us a rating and review on your favorite podcast platform, so we can continue helping family businesses thrive. For more information on how Dr. Spano can help you in your own family business, visit sharonspano.com and schedule a complimentary consultation.
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