• 47:30
SUMMARY KEYWORDS
family, business, doug, people, called, assets, peer groups, next gens, family owned businesses, talk, pattern, good, wealth advisors, care, part, kids, process, owners, shared, tribalism
SPEAKERS
Damon Pistulka, Doug Gray
Damon Pistulka 00:01
All right, everyone, welcome once again to the face of business. I’m your host, Damon pistulka, and I am so happy and excited for our guest today, because we’ve got Doug Gray coming to us from Action Learning Associates, and he’s on the North Carolina today in the lovely mountains, Doug. Thanks for being here today.
Doug Gray 00:26
My pleasure. I appreciate your excitement. Oh yeah,
Damon Pistulka 00:30
fun.
00:31
Absolute. I loved our conversation because we both have roots in South Dakota, and here we are.
Damon Pistulka 00:38
And here we are. Yes, yes, yes,
00:41
we’re working on huh? Yeah.
Damon Pistulka 00:43
So Doug, we always like to start out with, how did you and Action Learning associates get into what you’re doing today? You’ve been doing it for a little while.
00:55
Yeah, 1997 at the time, a number of people turned to me and said, Doug, you’re an executive coach. And I said, Really? What’s an executive coach? And I’d sort of say that’s a question I’ve still been pursuing and trying to answer. So the short answers have evolved in the last, whatever it is, 30 years with different kinds of clients, in part because of business needs, right? So it used to be small business owners, and then it was larger business owners, and then it was complex family systems, and then it was family businesses and family enterprises, which are when there are multiple branches, maybe that have different habits. And that’s where I’m focused right now, is those family businesses and family enterprises, it’s it’s fun, it’s messy, and it’s a massive part of our GDP. Perhaps you know that quiz question, 20 or 80% what do you think? David, any thoughts? What were they? What were my options? 2040, 6080, or 100% of our GDP in the US,
Damon Pistulka 02:02
I would, I would be going in the 40% range.
02:05
You’re a little low, my friend, at least 60% depends on who you ask. So the Wealth Advisors who have a vested interest in having a higher number will tell you at 65 or or higher percent. So same question, what percent of our our job growth in the US is tied to family owned businesses, 2040, 6080,
Damon Pistulka 02:24
oh, it’s more. It’s more than 60 on that, I’m sure now you’re
02:29
trending up. Yeah, you’re right. And if we were in another part of the country, it would be or world, it would be even higher. But the bottom line is, family businesses define most enterprises, most GDPs in every corner of the world. Think of Asia, whatever country you’re picturing right now, in Asia, there’s some family history, and there’s some tea house down the road that literally has 10 or 15 generations right? Of Homers? Well, those are all family owned. It’s that eldest son gets the farm. No, the eldest son gets the tea house. In that example, in Italy, it’d be the winery. Here, it might be the manufacturing shop, or it might be the Financial Services shop, or it could be a franchise. Think about a lot of those owners. But that pattern is worked great. You could argue, if you’re a white male, or if you’re the male in the dominant culture, in that in that country, it’s not so good if you’re a female, and not so good if in most cultures, if you don’t know what your role might be, let’s imagine you’ve got six kids or eight kids or 10 kids, then it becomes a question, how do you look at succession over time? And let’s imagine that generation one, the founder, does really well and generates 100 million dollar annual revenue business, whatever that means as a bunch of employees, whatever that means. Maybe it’s 100 maybe it’s 1000 maybe it’s 10,000 employees. Then what happens over g2 the kids Look at dad or mom, and they say, ah, the founders were so pivotal in the growth of this business. It doesn’t matter what the business is, and it doesn’t matter what corner of the country or world we’re talking about. The gen two will look at Gen one and say, Thank you. What happens when it’s Gen three or four or five? Now you’ve got an exponentially larger group of people, right? Yes, it’s called the cousin Consortium, and it’s also called Chaos, because they don’t know what to do. And they look around and they say, wow, there’s this shared asset, family capital. There could be money, but it may not be accessible, because it could be tied up. And trusts. So the next gens might be in their 20s or 40s or 50s, right? And they’re holding their breath sometimes, yes. So that’s why I’m interested in this, in this population so much. It’s pivotally important. It’s a massive part of our GDP and our economy. It supports a lot of jobs. And you may also know, I’ll give you one more trivia question, all right, true or false? You know, it’s gonna be true. True or False. We are in the largest wealth transfer in human history, at least $75 trillion that is definitely true. You probably have some stories and other people on your system here that that can provide testimony, yes, about this transfer. So you might think that it’s all like the nasty stuff you see on HBO succession movies, right?
Damon Pistulka 05:56
My wife thinks that everything is really not that way.
05:58
No, it’s not, however, those are the stories that are frequently told, yes, and they have throughout history. The Godfather, yes. Do you remember Dallas? You and I are old age? Yeah. Well, why is it that that story gets told King Lear doesn’t know how to pass on his assets to his children when the reality is X percent? Let’s say it’s over 90% of wealth transfers happen quietly and easily. Most of the time succession happens quietly. Well, it may or may not be easy, too much of our let’s go back to the farming agricultural roots in our country. Most of the people on this call us based or
Damon Pistulka 06:47
Yes, yes. Most of listeners are in the US. Okay,
06:51
so everybody knows a story of some farmer who was really instrumental when they were kids, and maybe didn’t have any children who wanted to take it on the farm. They had the land, maybe they had the machines, they didn’t have the cash, and they didn’t have the passion. In my family, all the kids go to the city. They get college educated, they realize they don’t need to go. They didn’t have one choice anymore, and instead of having whatever percentage of our economy was farm based, it’s now what, three to 5% or something, it’s really, yeah, massive change. Well, from my seat, what that tends to mean is that farmers don’t know how to pass on the assets to their kids. And you’ve probably seen this a lot, so aggregators have come in and their venture capital backed, their private equity backed, and I hope I’m not upsetting any of your listeners, but the fact is, they don’t care so much about family capital. They don’t care about the local church or the park or the community or the hospital. No. So one reason I’m passionate about this conversation is that every country is built on that social capital, it’s called. And to the extent that we don’t own it privately anymore, as much we are breaking up the fabric of America, the fabric of every country, it needs to be privately owned and it needs to be locally owned to as much as possible. Mm, hmm. So there’s a little bit of a political ramp or angle, or whatever you want to say, yeah, one of the
Damon Pistulka 08:33
ideas, there’s a massive change. And this is, this is both. When you look at business legacy, you look at land or farming legacy. It’s all changing a lot because in in your local HVAC company down the street that’s been in there for three generations is now being bought by the private equity group that doesn’t change the name, but they’re owned by somebody else that’s different motives. They don’t, they don’t sponsor the Little League team every year. They don’t, they don’t, you know, keep their employees when there’s a little bit of trouble in the economy, like the family, like the local owner would. And then they’re you look at the farming farmland in the United States, the biggest, the biggest holders of farmland in the United States, some of the richest people that you know, and some of the countries that that are outside of the US own land in the United States.
09:27
That’s true. And farming is such a dramatic example, you and I can relate to it, because we have those shared geographic roots from our childhood. But what about manufacturing? It used to be that manufacturing Made in America, Made in USA, was the brand, right? Yes, not only because it was good quality, but it was also a way to perpetuate those family businesses in local communities. Manufacturing still a huge. Percentage of the family owned businesses, don’t get me wrong, and it’s under threat because they’re being acquired in the same pattern. Yes, they are.
Damon Pistulka 10:11
Yes they are acquired and combined and all this other stuff. Yep, yeah.
10:17
So the question often becomes, what does a business psychologist do you talk to hundreds of people a week, and so do I? Well when we see the same pattern happening again and again, I tend to ask, How can I help these people? To be clear, I was in the Methodist Church in that small town throughout Minnesota and South Dakota rural New York, because my dad was a Methodist minister, so I was the kid in the front row with my brother and sister, and we were all being watched, right? Yes, social capital is not an abstraction for me, and when I think about all the wealth that contributes to churches and the arts and charity, it has to come from a sound financial network has to financial capital and family capital are intertwined, just like my fingers. So when I looked around, I asked, what is it that the next gens need to know? In other words, how do they need to behave? Yes, and the short answer was, nobody had a short answer. So there are theories. There were psychologists who had explored other kinds of businesses, but it’s different when you work in a publicly traded company. And it’s different if dad’s the boss or grandpa’s the boss or your uncle is the boss, right? I keep using masculine pronouns because that’s common, more common than not. Yes. So anyways, I reached out and did a 360 research project, which essentially identifies 50 behaviors, 50 things that people could do if they wanted to succeed in their career and globally validated. It didn’t make up a thing, and it’s all based on the feedback that we got in that research. The model is basically, how does the individual fit in the in the world? How does the individual fit in a family? I’ve got kids, I think you’ve got kids. It’s the ancient pattern, right? That’s also the basic roots of what’s called industrial organizational psychology. Io is individual organizational so you can’t see this well, but the gist is that’s the model. Here’s the individual, and here are the three roles that are commonly talked about, ownership, family and business. Roles kind of like three rooms in a house. You go in the front porch, you go in this room and you talk in the kitchen with the family. You go in the say, dining room and talk with the owners, and then you go out in the porch with the business leaders, and you get it done. Those are the three rooms. Yeah. Fourth room that we adopted in this model is down here, and that’s the learning system. Psychologists know that people either are open to learning or close to learning. If you’re open to learning, it’s called a growth mindset. There’s a bunch of research related to that. It’s why people might be listening to this conversation. They have a growth mindset. They want to learn. They’ve got questions. The other kind of folks are fixed. I have a fixed mindset. Damon, I’ve got a fixed mindset a lot about a lot of things, because I don’t understand them, like I don’t understand opera I don’t understand martial arts, I don’t understand a lot of political stuff, and I probably won’t, I just don’t have the intellectual capacity to understand it. Yes, but there’s other stuff I do care about, and that’s, how do we help business leaders learn the skills that they need? And so essentially, we created this process and asked seven different groups to rate Doug, let’s say, on Doug’s behavior in that in that family business. Well, people never get this feedback in their career, they don’t get it in publicly traded companies. So it’s eminently valuable. In fact, it’s rare because it’s an anonymous process and it’s confidential for that person. So the seven Raider groups are a bunch of board members, a bunch of owners, bunch of managers, bunch of peers, bunch of direct reports, bunch of family and friends, because they’re the ones who keep us going. And all those six are contrasted with what Doug thinks about Doug’s performance. Let’s imagine 20 people participate in this process, and they do it this way, and they do it this way. And we talk, and I collate the data, and I ask him three questions, what should this leader start doing and stop doing and continue doing and I take notes a really fancy system like this, yeah, combine it with their digital notes, and then I edit and provide for them that feedback, because they never get it in their careers. So that’s the 360 process. Now, I don’t know if you’re a behavioral psychologist or experience. In this but does that explanation make
Damon Pistulka 15:01
sense? The explanation makes sense because, you know, leaders in general, don’t get that kind of feedback. And in a family business, there’s even different dynamics where they would not make it even less common that they would get it.
15:16
It’s a pattern, isn’t it? We’re motivated by fears that oldest part of my brain. So if Uncle Bob, for instance, said something nasty about your daughter, we’ve got daughters, but my daughter 20 years ago, I gotta remember what uncle Bob said. I heard a story in my last call about somebody who said I didn’t go into education because uncle so and so told me not to, and he had been a teacher for a bunch of years, he discouraged me, and we haven’t talked for decades. And I thought, yeah, yeah, because I know all these people. And I thought, what a discouragement for this person who’s a wonderful educator. She’s gifted in that way, and that could be her calling. Well, if we always listen to the Uncle Bob’s the negative voices? Yes, we’re going to be fear based. Well, let’s, let’s migrate a little bit. Let’s talk about Wealth Advisors, who used to say, your job is to protect the assets. Don’t pay as many taxes as you think you ought to, whatever that might mean. And here’s the trust, and here’s the loophole, and here’s the process so that you don’t have to fulfill your obligation, which led to a lot of fear based decisions about, how do I protect the assets from the government or from giving, from philanthropy? Now we’ve migrated. We kind of had to this thing called a certified financial professional. CFP emerged in part because so many Wealth Advisors misbehaved. They didn’t act in my best interests, your best interests, right? That’s called moving in a different direction in my world. It’s called Positive Psychology. How do we flourish? In other words, how do we take the assets and generate multi generational value over time? And another example would be this giving pledge that you probably heard about. Warren Buffett and others have pledged to give 50 or more percent of their assets away. That’s a good notion. They haven’t done it yet. So in our lifetime. So let’s open the next decade or two. We’re going to see more and more of this, actually, so that when I forgot her name, Bezos, his wife, which,
Damon Pistulka 17:38
oh yes, I forget her name, but she pledged a bunch too, yep,
17:41
and she pledged it often to women, organized and owned nonprofits, right, who really aren’t capable of handling another million or ten million because they don’t have the infrastructure to support it. Hospitals do, universities do, and they’ll take the philanthropy, but we need to be careful that we’re distributing these assets in a careful, intelligent way. So that led to peer groups. And basically, last December, I don’t know, q3 q4 of 2023, a client said, Doug, would you please create a peer group for my son and a non family business leader in our company? And I said, of course. So we sold and marketed and delivered two peer groups and the whole process, all of this is described at next gen peer groups with an s.com people can go there and see how it works. But here’s the deal. People who are those next gens, are often really impatient. They’re they want to respect the elders, but they’re tired of waiting. Mm, hmm. They’re often college educated, they’ve got choice. They look around in social media and digital media, and they see other examples of other people who accelerated their careers doing something outside the family business, right? So those folks are lonely and they don’t know who else to talk to. Anxiety. That’s what the peer groups serve, and we created a number that are open enrollment. People can find them and click on and apply, and then I’ll interview them and make sure they’re good match and all that. And then we’ll move forward. The other reality is groups who need, like an association of construction guys or roofers, need to retain their members. It’s a massive problem. I used to run a nonprofit in DC. I’ve worked with ARP and the Red Cross. When those folks and they’re super well funded, right when they look at their employees, they struggle often. How do we develop and retain the best? Yes, that’s what peer groups can do. So we created another model that supports the associations, that helps them develop and retain people who not only learn the skills they need to be better business people and develop the social collateral that they need. It’s called social capital, but also they show up at conferences. So now we’ve got a and metric right? We can see who shows up at the fall conference in the spring conference, and we’ll have a pre event day to accelerate their their learning. So I think, yeah, the thread here is 360 assessments accelerate individual learning. Often peer groups accelerate individual learning or association or team learning within a certain profession. Does that make sense?
Damon Pistulka 20:48
Yes. Yes, it does. It does because, like you said, we need to get that feedback, and then we need to learn to be able to continue developing so we can become better leaders and and really the next generation. So when you’re in these family businesses, what are some of the things that, if someone’s listening today, that you run into often, that they might go, Hmm, that’s me.
21:17
Yeah. Well, there are a number of things that come to mind. They’re archetypes or patterns that I see again and again and again. One is, I never knew my parents were so difficult, and I come to realize that everybody’s parents are difficult. I don’t mean to sound like a therapist, but there’s a degree of this anonymity we don’t talk about various kinds of abuse. The other day, I had a video recording with a g7 150 year old company and a woman who said that to me, there are different forms of abuse. Could be physical, could be verbal, could be professional. And we see this playing out. It’s called generational abuse. So if, for instance, there’s a history of criminality or suicide or violence or drug or alcohol addiction, you name it down the line, that’s a pattern that often recurs, just like cancer and diabetes. You see these as transgenerational patterns, so I plot them with folks. I use software. One of the best is called Geno Pro, G, E, N, O, and help people look for those patterns so they can see the bad stuff. And then I go to another website and have them look at the good stuff, and I’ll endorse this. Vi, a character.org via character and via is thought to be the values in action, but it’s also the road back in Latin. And the Meyerson family gave away this assessment, and they gave away all the results to a group of folks at Wharton at the University of Pennsylvania and more. And Marty Seligman and others looked at this data, and they basically said, how do we help people grow and learn and such? How do we take the good stuff throughout the family? So if grandma was charitable and mom was charitable. How did the next gens become charitable? And how are we so intentional about our charitable giving that the building over there at that college that used to have the name on the top doesn’t really need the name on the top because we’re going to donate anonymously forever. Now we’re talking like social family. That’s really super powerful. So one answer to your question is, abusive patterns get transmitted over time. So do charitable patterns. And those are called signature strengths, the good things. It’s the thing that makes the pistulka family distinctive, great family distinctive, and we don’t often celebrate those things. I think it’s because we don’t know how
Damon Pistulka 24:12
I agree. We’re too busy being good or bad at what we are.
24:19
Yeah, there’s a polarity. Yeah,
Damon Pistulka 24:23
but I’ll have some of each.
24:24
I think you’re right. Recently, I wrote something on tribalism, which is the, in my opinion, the number one, most important wonder of the world. We’ve got these pyramids, we’ve got the Great Wall. We’ve also got tribalism, which means I’m going to take care of my loved ones come hell or high water, and I always will. So when I think about how our tribal interests enable us to take care of our neighbors and take care of those who maybe live nearby but aren’t as neighborly as we wish, for whatever reason. And that’s what informs a lot of our decisions and a lot of our behaviors, that sometimes we’re not so smart. We don’t really think with this part of our brain. We react with that part of our brain. So anyways, tribalism is another pattern that I see again and again.
Damon Pistulka 25:20
So what if someone was tribalism? What would that? How would that show up in the business
25:27
in 100 ways, and sometimes they’re not verbal and they’re not stated. Some theorists basically say that culture at a business needs to have artifacts like a cup or a glass that has the name of the business on it. You walk in the lobby, there’s the values, there’s the vision, right? Those are artifacts. The other thing you need are shared beliefs. It’s good and noble to work for or with Doug Gray. That’s a shared belief. And the third thing are unstated assumptions. The unstated assumption is I’m going to work with Doug or his team so that I can accelerate the best things in our business. But it’s out there. We just haven’t named it, so we need a process to assess it, recommend it, celebrate it, perpetuate it over time. So artifacts, unstated belief, shared assumptions, that’s commonly how we define culture? Yeah, very good. I go in, I ask a bunch of questions and I take a bunch of notes. Sometimes I use artificial intelligence to collate it, and then I’ll give it to as a summary. So they can create a constitution.
Damon Pistulka 26:39
Oh, that’s interesting. So they’re creating a constitution. What? What does it in a family business? What does this constitution outline? What are some of the common things that they talk about in it,
26:52
the things that they commonly don’t talk about. That’s why I’m there, right, to facilitate that process. Yeah, so often, it will start with the values that they share, and many families share the same ones, integrity, honesty, service to others, charitable giving, those are fairly common. But there also might be a statement of vision. Here’s where we want to go. There might be a statement of mission. Here are the businesses we’re going to support, and only these, because that’s the golden egg we want to support, say healthcare or franchises or real estate. They might do that because the founders did so, or the elders did so, and they want to perpetuate those. But the value of a charter, and it could be one page or three pages, it’s not really that lengthy. It’s the process of writing it that becomes really helpful. So then the next phase, or part of it, typically has some guidelines or ground rules, good things to do. The hardest part for many families is, how do you make decisions? And we don’t often have structures. My opinion, my experience, is that all we need is a little structure. Sometimes a little structure goes a long way. So let me give you an example. When our kids were in middle school and high school, we’d have Sunday evening family meetings. They hated it. They said, and they weren’t long. They were like, 10 or 15 minutes sometimes. So we looked at the calendar, we also looked at financial stuff, and we looked at important stuff that was going on. And it started out being mom and dad led, and we’ve got two daughters, and then it became they led. Well, that’s the structure. That’s the only structure they needed. Now I facilitate those family meetings for messy family systems, yeah, and it’s often like this. It’s virtual. For instance, there could be three or four elders. This is last Tuesday night, I guess. And then four next gens, biological and in laws, married spouses and whatnot, and we had three Wealth Advisors who were doing their best some slides and such to explain to the kids more about Roths and IRAs and compounding assets and investing over time. Why? Because financial literacy is critically important, and mom and dad can’t do a great job. Yeah, so my role is to encourage the kids who were in their 30s and 40s to speak up and ask questions. We don’t do enough of that. We don’t provide the structure or the process to encourage people to ask questions. Yeah, they did. Does that
Damon Pistulka 29:44
make sense? Yeah? Oh yes, yes, it does, because you’re helping them start off those shared values and then execute that vision and mission by educating and getting people on the same page and then they can move forward
29:57
better. Yep, yeah. And the Wealth Advisors love it, because my message is you need to have a one on one with so and so before our next meeting, which is two months from now. So if I own the process or manage the process, the family will trust that, and then be able to ask the questions as they need them, and get the answers when they need them. Does that make sense? Yeah. So go ahead. Go ahead. Sorry, that’s the power of a family constitution,
Damon Pistulka 30:31
yeah, yeah. It really is. It really is powerful. So as you’re doing this and people are through this process, what are some of the things that they tell you?
30:47
I’ll never mention names, because I’ve been in this business since 97 Yeah, but the patterns do repeat again and again and again. And maybe a way to answer that is, to is to tell you that as the peer groups evolved, the participants said, all this content is really good. I like seeing it on the website. Could you write a book to answer Damon’s question? I said, Sure, so I put that information into this book, which is available everywhere and and and they’re basically 10 answers to that question. What are the things that people often ask? And it’s what you might expect. How do I fit in? What’s my role in the family, in the individual system? It’s how do I learn to speak up? How do I express my thoughts and feelings and important topics, how do I keep a positive attitude? Positivity is a choice, but yes, know how to do that in the family system. I’m just going to read them for you. How do I keep confidences about family business, wealth, it’s so important, it’s like a critical concern. Another story might help. So a few weeks ago, I was with client at the country club. They served us lunch. A couple of the elders were there for lunch, and the elders left. So they’re 10 or more next gens, all G threes and G fours, if I remember, right? Well, I used this book, and it gave it to them, and I used some of the content, and walked through some of this and asked, to what extent do you keep confidences about family wealth? And they said, well, as a matter of fact, let’s model that for you, Doug. And they went around and all stated, do you have any conditions or competences that you need to share to the room before we convene this meeting? In other words, have you kept secrets, or do you have any vested interests in the nature of the conversation today that would preclude you from openly participating? I was beautiful. I was so excited, and I applauded them, because not everybody does that, but when they do that, it forces them, reminds them to keep it there and leave it there. The flip side is when some Bozo during covid Who is not being paid and has a price freeze for his employees. Posts on Facebook the new pool or the trip to Italy or the new, you know, fancy, yeah, yeah, yeah. I wish I made this up, but those are true examples. Yes. So family wealth needs to be private, and I always will. And what that leads to often, are family offices. Are you familiar with family offices? Yes. Are your viewers? Explain it a little bit. If they aren’t, they’re they’re sexy. You probably know that, essentially, a family office used to be a way for some advisors to manage the family assets, and it used to be financial only. It’s evolving in part because the millennials are saying I care about my mental health and these other investments in donor assisted funds that grandpa may not care about, or this political group that I know Grandma’s not going to approve of. So they want it discreet, but they want it done. And family offices also will look at a way to pool their resources. So a single family office serves the gray family. We don’t have one, but I’ll make one up. The family office would be the gray family and the pistoca family and seven other families, let’s say, because then there are more assets, and they can look at our insurance needs, yes, our capital assets, our property health care, and they can pool those resources so that you know you’re fine, and you know your dogs and cats and pets are fine. So as family off. Evolve. Their needs are becoming holistic, and the team approach is what we’re seeing more and more and more so, instead of calling your one advisor, like your wealth guy, or your private wealth advisor, and instead of that person saying, yes, of course, we can help you, they can’t. The Merrill Lynch guys only sell for Bank of America products, yes. So they need to turn to their estate lawyer, and then they need to turn to their business psychologist, and they need to turn to a cadre of, let’s say, six or eight vetted people, experts who can support their needs over time. That’s a trend. So, yeah, we’re going to see even more of that ahead.
Damon Pistulka 35:42
Yeah, and they’ve been around for a long time, but like you said, they they really have evolved into a lot more than what they were. Because it was all you know, back in the day, a decade or more ago, or two decades ago, it was, it was just taking care of the money. It’s like investing the money. You might have a lawyer in there or something like that. But now it really is more holistic, because they’re, they’re teaching the next gens, some things. They’re they’re involving people like you. They’re worrying about, as you say, health and health Well, being where the money’s going, because it’s changing over the generations, where they want the money to go, and how they want to, where they want to invest the money, and philanthropically, how much is going, philanthropically over the it’s just, it’s really interesting to see that change.
36:36
Another related piece that we haven’t talked about yet is what we’re modeling in a live webinar, and that’s digital trust. Yeah, so the 20 and 30 somethings are more digitally trusting than kids are generation, right? Yes, what that means in business commonly, is that they expect access to the financials they want digital transparency. Owners may or may not want that. Passive owners may not want it. Active owners who have voting rights expect it and need it to be kept confidential, right? Yes. So what happens when there’s a leak in a family business or a board comes to learn something, or worse, there’s a cyber attack, yeah? So I want to make sure that folks are clear on this. Family owned businesses are sitting on assets and have low security. Yeah. It’s kind of like posting on social media that you’re traveling in Greece, which means your home is unsecure and a target, right? And don’t do that. I can tell you that I’ve had clients who are really smart lose a million dollars because of cybersecurity fraud. Same client two weeks later lost a second million. The FBI is involved. The banks are involved. The companies are involved, the insurance companies, because they’ve got primary insurance, and then they’ve got ransom insurance, which is never adequate, all of which has increased 800% in the last 12 months. We’re going to see more and more of these attacks on family owned businesses, just it’s terrifying and it’s inevitable our political campaigns, right? We’re going to see it with AI. We’re going to see it in all kinds of ways which are going to be problems. Yeah,
Damon Pistulka 38:27
yeah. And it is. It is one of these things that you can, you can, you can go a long time without a problem, and it’s not a problem until it is, and then when it is, it’s really bad, exactly.
38:43
So my guy who had the same thing happen in two weeks apart, lost a million and then a second million. What do you say to that? Oh, I’m sorry. They did more rigorous security stuff than you can imagine. There’s a bunch of protocols and good things that we all ought to be doing. Two factor authentication, changing passwords, having multiple sites, and making sure everybody has training so that they hover over the link before they click and open the link which exposes the assets. Often, those are things that we could train everybody. We could teach them on a weekly basis. And we could, there’s bunches of programs for doing so, but maybe it’s a requirement, yeah,
Damon Pistulka 39:32
yeah. And maybe it’s another reason too, that these family offices may become more prevalent too, because and yet, just the data stays there some way, somehow, because it is just, it’s such a scary thing.
39:48
It’s a it’s a reality that the data will stay there. The other day, I was at one of those clients, and they video recorded me with somebody they’ve. Got, I think, 80 clients in a significant assets under management. Yes, that’s one of their realities, is that they provide for the cybersecurity needs of all those and they expect to do so for generations. It’s not like you go to your local I don’t want to pick a name, but you are expected to work with a system that will know your needs and your family values and why you shouldn’t release certain information to certain people at certain times. And all that’s written down, and it’s part of the governance protocols, and it enables people to make smart decisions over time. Yeah, that’s
Damon Pistulka 40:48
great that. I mean, it’s a great thing, because when we talk about, you know, here today, we’re talking about this next gen, preparing this next generation of leaders for this leadership transition. It really, it is being aware of cyber security. It is changing the way that we operate in in light of these kind of things. It is understanding, as you said, if, if you’ve got something going on, you know, you’re like you said, I got a new, new pool, putting it in my house. It’s really nice, and something else is not going to set training to say you don’t put that up there. That’s just not the right thing to do. And because in the past, well, first of all, let’s just look at the founders of these companies. They never had to deal with it. They didn’t. They didn’t. We not born in the digital age. A lot of them, we grew up in the age before cell phones right and now we have a completely different operating environment around us every second of every day. And just if you just think about the amount of pictures that are taken in a second in a day is probably more than there were in weeks or months in the 80s. And and it’s, it’s something that that we have to deal with, and we didn’t have social media, and we didn’t have the the cyber, cyber threats that we do now, it just requires a completely different approach,
42:15
right? Which implies that we’re going to be smarter if only we were smarter. If only we were smarter. Yeah, okay, so who’s the wealthiest man in New York City?
Damon Pistulka 42:23
No idea,
42:27
Bloomberg. Why? Why is Bloomberg so wealthy? I don’t know. It’s this point you just made. He manages the information flow. Ah, Wealth Advisors sit with their Bloomberg machine, right, which does as much as or more than Google, yeah, currently, yeah, or Google Plus AI currently, we’ll see what time, right? And Bloomberg and his and his team is able to manage the information flow ahead. Well, let’s imagine that businesses in the future are going to be digitally connected, providing a unique value and managing the information in a secure way as a trifecta. Yeah, so when I think about the faces of business, they’re going to lean always toward family members, because they know them and love them and the weak spots, and they’ll hire somebody else to fill in the weak spot. Yes, yes, I hope. And we also know that the employees in those teams are more loyal yes than publicly employed people. They tend to stay longer, and the owners tend to provide more services for them, everything from health care to mental health care and leave? Should they need it? The notion of caring for a loved one. Classic example is women in careers like law who are on maybe a partner track and take time off to have children or take care of an elder. As their elders aging, they never get back on the partner track, which is why we have so many male partners in law firms. Well, what if some of these family owned businesses do everything they can to accelerate the women in their businesses, which is what 52% of our college graduates now yes, and I’m told, yes, yes.
Damon Pistulka 44:23
Well, and this is really something that you you bring a great point that the family businesses can change. As you said, it’s, it’s 60% of the GDP, 60% plus of the growth, employee growth, or job growth in the in the US. There’s a lot that the family business can do to change the the face of of a business, that’s
44:45
right. Yeah. So the purpose of this conversation, I hope, is just open people’s eyes to some of those, those trends and changes. Yeah. Well,
Damon Pistulka 44:53
Doug, it’s been awesome talking to you, because you are a wealth of knowledge and and I can. Only imagine some of the conversations that you’ve had to have, helping these next generation leaders with the founders or the earlier generation leaders and the transitions, because it’s not an easy process. It and and the family dynamics you want to be able to do what you need to do in the business and the financial world, while still being able to have Thanksgiving dinner and not want to, you know, strangle the person across the the table from you.
45:29
That’s not a an occasional example. I hear that every week, yes, can you fix my brother? No,
Damon Pistulka 45:37
exactly, exactly. Well, Doug, if someone wants to reach out and talk to you about their family business, their situation, their trans, next gen leaders that they want to transition. So what’s the best way to get a hold of you?
45:54
There’s a bunch of websites, action, dash, learning.com. Is one of them, next gen peer groups with an s.com is one of them assess next gen.com is? Is? Is another good one. I’m not super active on LinkedIn, but I’m told that I need to be more active. And I’ve lately been adding a sub stack thing every three or four days, okay, called Legacy leadership. All these are free, so I invite people to be part of them if they wish. Awesome. The short answer is, reach out and ask questions. I think just wrap things up. Yeah,
Damon Pistulka 46:30
awesome. Doug, well, it’s been great having you, and we’ve had Doug Gray here from Action Learning associates, Doug’s been helping family business leaders successfully accelerate the transitions. Work through the transitions for many years and just thanks for sharing your thoughts with us today.
46:49
My pleasure. Let’s go play ball.
Damon Pistulka 46:52
You bet. Well, I want to thank everyone for being here. Uh, Richard stopped by and said, yes, he’s familiar with family offices. Thanks for stopping by, Richard. Now those of you that didn’t comment were out there to listen today. We appreciate you if you came in late. Go back to the beginning and listen to what Doug had to say. He covered many good subjects, talking about family business, transaction transition, leadership transition, and the different things that he addresses when he’s in those situations. Thanks everyone. We’ll be back again. Doug, hang out for a minute after and we’ll finish up offline. You bet.
