Clockwise from back row, left: Louis Jacobs, Jerry Jacobs, Jeremy Jacobs, Charlie Jacobs Emphasis on teamwork The Jacobs family is putting governance structures in place as they transition to third-generation leadership at their sprawling hospitality enterprise, Delaware North.

PLUS • Talking to your kids about wealth • The problem with estate restrictive covenants • Peter Paul Electronics builds for the future

fb010214_Cover 12-16 bs.indd 2 12/18/14 3:41 PM STRONG LEADERSHIP. ENGAGED OWNERSHIP. ALIGNED FAMILY. BUILDING A FOUNDATION FOR THE FUTURE.

Family enterprises see enhanced results in both business performance and family relationships when they master the following:

• Group decision making processes, • Clear understanding of roles and responsibilities, • Proactive management of individual expectations, including around growth, risk, liquidity and profitability, and • Strong communication among shareholders.

This foundation frees leadership to focus on strategy and success, and creates accountability to ensure that the family’s vision is achieved.

For twenty years, The Family Business Consulting Group has helped business owning families plan for long-term success. From next generation leadership development to governance and ownership issues, our consultants provide critical insights, advice and facilitation.

To speak with Drew Mendoza, Managing Principal, Helping family businesses prosper across generations.® call (773) 604-5005 or email [email protected]. There is absolutely no obligation. C THE FAMILY BUSINES S CONSULTING GROUP, INC. and FBCG are registered trademark s O P N U and the FBCG logo is a trademark , of The Family Business Consulting Group, Inc. SU RO LTING G www.thefbcg.com

FBCG_091014.indd 2 8/29/14 10:27 AM FROM THE EDITOR

A kid’s view of wealth

n this issue’s Toolbox column, I review a book entitled The Voice of the Rising Generation: Family Wealth and Wisdom, by James J. Hughes Jr., Susan E. Massenzio and Keith Whitaker. The authors, who are advisers to high-net-worth families, point out that many people who grew up in business Ifamilies feel stifled by their ancestors’ success. Too many of these heirs, feeling stuck in the shadow of an illustrious business founder, attempt to relieve the pressure by unhealthy means, including overspending and substance abuse. How do parents prevent this from happening to their kids? One preventive measure involves having frequent, open and wide-ranging conversations about values, work, entrepreneurship, legacy and wealth. Starting the discussions early helps the younger generation develop a healthy attitude toward money, experts say. An article in this issue by Jeff Savlov, a family business/family wealth adviser trained as a therapist and psychoanalyst, explains that even elementary-school kids are able to participate in meaningful conversations on these topics. And by the time they reach middle school, your children have insights to share that may inspire you to rethink your approach to work and home life. The Openers section in this edition features an interview with Scenic Root, a perceptive young lady who at age 13 is an old hand at having frank conversations about the advantages and disadvantages of growing up with wealth. Scenic—a fifth-generation descendant of C.J. Root, whose company created the original Coca-Cola bottle—has been talking about business and family challenges with her father, Preston, since she was a small child. Scenic said during our interview that the best gift that family members can give to each other is not a material possession, but time spent together. “You’re never going to get that time back if you waste it all,” she told me. In recent study by Merrill Lynch’s Private Banking & Investment Group, 39% of respondents asserted that it’s never too early to begin talking to children about responsible financial behavior, and 11% said these discussions should begin when the kids are ages ten to 13. Yet only 14% of these study participants said they actually raised the issue when their children were nine or younger. Twenty-seven percent said they waited until the kids were ages 18 to 24, and 21% said they procrastinated until their children were 25, or even older (see FB, July/August 2014). Whether you broach these subjects with your kids or you don’t, they are watching family members’ relationship to money, to the business and to the family legacy, and their future habits will be based in large part on these observations. Opening a dialogue with them is likely to be a revelatory experience.

Barbara Spector [email protected]

PHOTO: RICHARD WUEST www.familybusinessmagazine.com 1

fb010215_EditorsNote 12-16 bs.indd 1 12/18/14 3:03 PM CONTENTS

JANUARY/FEBRUARY 2015 VOL. 26, NO. 1

48 Peter Paul and legacy The Mangiafico family faced challenges on several fronts as the time neared for generational transition at their company, Peter Paul Electronics Co. With the help of advisers, the family built a foundation for the future of their business. — Margaret Steen

COVER STORY 52 Simply sustainable 42 Emphasis on teamwork The second-generation leaders of wholesale distributor Hill & Markes run their business with The Jacobs family is putting governance structures an eye on taking care of the environment—and in place as they transition to third-generation leadership developing a third-generation leader. — Ilene Schneider at their $3 billion hospitality service enterprise,

Delaware North. — Dave Donelson Contents continues on page 4

2 Family Business • January/February 2015 COVER PHOTO: JOE CASCIO PHOTOGRAPHY

fb010215_Contents 12-17 bs.indd 2 12/19/14 10:21 AM B:8.75” T:8.5” S:7.5” B:11.125” T:10.875” S:9.875” YOUR VISION. OUR GUIDANCE. THEIR FUTURE.

Few things motivate you more than being there for your loved ones. At Hawthorn, PNC Family Wealth®, we offer highly personalized and seasoned wealth management advice to help ultra-affl uent families and individuals achieve their aspirations. As one of the nation’s top-ranked and largest multi-family offi ces, we have the experience and resources to design and implement a sophisticated investment strategy that aligns with your unique fi nancial, tax, estate-planning and philanthropic goals. Our long history, in addition to the confi dence placed in us by our clients, is an affi rmation of our ability to sustain your legacy for generations to come.

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The PNC Financial Services Group, Inc. (“PNC”) uses the name Hawthorn, PNC Family Wealth® (“Hawthorn”) to provide investment consulting and wealth management, fi duciary services, FDIC-insured banking products and services and lending of funds through its subsidiary, PNC Bank, National Association, which is a Member FDIC, and uses the name Hawthorn, PNC Family Wealth® to provide certain fi duciary and agency services through its subsidiary, PNC Delaware Trust Company. Hawthorn and PNC do not provide legal or accounting advice and neither provides tax advice in the absence of a specifi c written engagement for Hawthorn to do so. “Hawthorn, PNC Family Wealth” is a registered trademark of The PNC Financial Services Group, Inc. Investments: Not FDIC Insured. No Bank Guarantee. May Lose Value. © 2014 The PNC Financial Services Group, Inc. All rights reserved.

Hawthorne_111214.indd 2 10/27/14 11:16 AM

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8 12 38

DEPARTMENTS 55

1 From the Editor A kid’s view of wealth. — Barbara Spector

6 Publisher’s Page Lessons learned. — Caro U. Rock

8 Openers A young fifth-generation member of the Root family shares her viewpoint on family and business. — Barbara Spector

12 At the Helm Dick Yuengling, CEO, D.G. Yuengling & Son, Pottsville, Pa. — Patricia Olsen

38 Conference Report Transitions West 2014 attendees were encouraged to celebrate their companies’ legacy while planning for the future.

55 Toolbox Reviews of The Voice of the Rising Generation and 72 It’s More Than Money. — Barbara Spector

57 Directory Advisers for family companies.

72 Profile Dublin Cleaners. — Sally M. Snell

ADVISERS FORUM

14 Mariana Martinez Berlanga and Peter M. Bloom: Estate constraints, incentive trusts and restrictive gifts often do not work as planned.

20 Greg McCann: Innovation, awareness and practice will help equip your family for success in today’s world.

26 Jeff Savlov: Don’t miss out on early opportunities to talk to your kids about the family’s business and assets.

4 Family Business • January/February 2015

fb010215_Contents 12-17 bs.indd 4 12/19/14 10:20 AM Your brother, your sister, your parents, your children, your business advisor.

To earn a seat at the table, your accountant needs to bring more than a calculator. You want foresight, experience, and commitment to the long-term goals of your business.

For more than a century, we’ve helped family businesses and their owners cultivate opportunities and plan for the future. Discover what we can do for yours. Succession Planning WWW.MOSSADAMS.COM/BUSINESSOWNERS Finance & Expansion Transactions Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory and personal financial planning offered through Moss Adams Wealth Advisors LLC. Wealth Management Investment banking offered through Moss Adams Capital LLC. Tax & Assurance

MossAdams_091014.indd 2 8/29/14 2:41 PM PUBLISHER'S PAGE

Lessons learned

ur recent Transitions West 2014 conference in California, a very successful event that drew 220 attendees, focused on “Honoring the Past and Securing the Future of the Family Enterprise.” We selected this theme not only to coincide with our own 25th anniversary, Obut also to celebrate the history and legacies of family businesses around the country. Numerous companies shared their anniversary photos, videos and stories, including Velvet Ice Cream (100 years), Gault Energy and Stone (150 years) and White Castle (90 years). My father- in-law, Milton Rock, Family Business Magazine’s founder, appeared in a lively video interview to discuss our 25th anniversary. My husband, Bob Rock, closed out the conference with a summary of the key points discussed during the jam-packed, 2½-day event. To highlight a few: • Independent directors offer valuable expertise and an outside perspective that can help your company to grow and thrive, several CEOs who attended the conference said. Investing in family governance can help you separate emotions from business strategy. A family council can address sensitive issues that have been lying dormant for years, in addition to providing a forum to clarify family goals and identify family members with leadership potential. • When a transition in leadership is completed, the retiring leader should be a source of support for the successor and should not meddle. Often, moving offices sends a clear signal about who’s in charge. Undertaking projects outside the family business can provide intellectual stimulation for a former CEO. • If some family members do not share the vision for the company, create a way for them to exit. Offer them a price that they perceive as fair. • Family dynamics often do not lend themselves to impartiality, as one CEO noted. A range of outside experts, from estate and wealth planners to psychologists, can provide objective advice. • An emphasis on innovation and entrepreneurship can be a way to entice the next generation to the family business. Stories were shared about a founder who started working at age seven, and others who tried a variety of businesses before reinventing an existing idea and building it into a multimillion-dollar business. • Keep your family close by creating exciting traditions, such as an annual soccer game or a community outreach project, and by structuring educational activities for the family that will keep them coming back to annual family meetings. As the numbers grow—one company represented at our conference had more than 500 family and spousal members—it is important to communicate. We are continually grateful to conference attendees for their candid sharing of stories and lessons learned. We wish everyone a happy and healthy new year!

Caro U. Rock [email protected]

6 Family Business • January/February 2015 PHOTO: RICHARD WUEST

fb010215_PubNote_cut bs 12-16.indd 6 12/18/14 3:44 PM “I want my family to thrive, and the Family Business Center at Loyola University Chicago’s Quinlan School of Business ensures that.” Dave Juday (G3), Director, and Meghan Juday (G4), Family Council Chair of IDEAL Industries Ensuring success for your business and your family

At the Family Business Center at Loyola University Chicago’s Quinlan School of Business, we know how to help family businesses succeed. Since 1996, participants of our family business institutes have graduated with a broader awareness of themselves, their family business, and what it means to be an exceptional leader.

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Loyola_010215.indd 2 12/15/14 4:29 PM OPENERS

THE GUIDE FOR FAMILY COMPANIES

EDITOR-IN-CHIEF & ASSOCIATE PUBLISHER Barbara Spector [email protected] Young family member ART DIRECTOR Monica McLaughlin [email protected] shares her viewpoint

EDITORIAL ADVISORY BOARD Ross J. Born • Just Born Inc. on family and business Philip A. Clemens The Clemens Family Corporation Lansing Crane Crane & Co. Inc. BY BARBARA SPECTOR the company in 1916. The Root fam- Anne Eiting Klamar, M.D. ily subsequently sold the glass com- Midmark Corporation t age 13, Scenic Root knows pany but continued their association Charlotte Lamp, Ph.D. her way around the Root with Coca-Cola. The family, who in Port Blakely Companies family office. In fact, she has the 1950s moved their business from Sylvia Shepard Menasha Corporation Aa desk there. Terre Haute, Ind., to Florida, built Under the tutelage of her father, what eventually became the U.S.’s larg- PUBLISHER Caro U. Rock Preston Root—president of the Root est independent Coca-Coca bottler. [email protected] Family Board of Directors—and her In 1982, the Root family sold its PUBLISHING DIRECTOR mother, Lynn Root, Scenic has been 57.5% stake in the Associated Coca- David Shaw • GRID Media LLC engaged in dialogue about her family’s Cola Bottling Co., where Preston’s [email protected] legacy and its current business activi- father, Chapman S. Root, had been ADVERTISING DIRECTOR ties. She participates in family meetings CEO and chairman. Today the Root Scott Chase • GRID Media LLC and has been learning about philan- Company manages a real estate portfo- [email protected] thropy and financial responsibility. lio and other family investments from CONFERENCE AND EDUCATION DIRECTOR Scenic is a fifth-generation descen- its headquarters in the Daytona area— Peter Begalla dant of C.J. Root, founder of the Root Florida’s “Space Coast.” The Root [email protected] Glass Co., which designed and man- Family Museum, part of the Museum CONFERENCE MANAGER ufactured the original, distinctively of Arts & Sciences in Daytona Beach, Justine Wood • [email protected] shaped Coca-Cola bottle, patented by Fla., features Coca-Cola memorabilia WEBMASTER and other Americana. Lise Dykes • [email protected] Scenic participated in a panel enti- SUBSCRIPTIONS & REPRINTS tled “Raising Kids Successfully in a Barbara Wenger Successful Family Business” at the [email protected] Transitions West 2014 conference in ACCOUNTING November. She impressed attendees Jerri Smith-Baldwin [email protected] with her insights on family connec- tions. Spending time with family mem- FAMILY BUSINESS bers is more important than receiving PUBLISHING COMPANY gifts of material things, Scenic said at CHAIRMAN Milton L. Rock PRESIDENT Robert H. Rock the conference. “If you have someone CHIEF FINANCIAL OFFICER Lisa M. Cody to actually do something with,” she said, “that’s so much better than just EDITORIAL & BUSINESS OFFICES getting stuff.” 1845 Walnut Street Suite 900 In a recent interview, Scenic offered Philadelphia, PA 19103 a young person’s perspective on life in PHONE: 215-567-3200 FAX: 215-405-6078 a historic business family. An edited www.familybusinessmagazine.com transcript of our conversation follows. Family Business (ISSN 1047-255X) is published six times a year. Copyright ©2015 by Family Business Publishing Co. All rights reserved. No part of this publication may be repro- Family Business: What makes you duced in any form, including photocopy, without permission. Thirteen-year-old Scenic Root is well the most proud about your family versed in her family’s business history. history?

8 Family Business • January/February 2015

fb010215_Openers 12-16 bs.indd 8 12/18/14 3:06 PM This event hosted by the Gallo family

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FBN_SavetheDate_010215.indd 2 12/18/14 2:43 PM OPENERS

Scenic Root: Knowing how committed everyone is. My trying to make up all the time that he didn’t get when he family’s really big, and everyone cares about working was little. Because you’re never going to get that time back together. So I’m really proud of that. They’re always going if you waste it all. to be there for each other. FB: What happens at your family meetings? FB: How many family members are there? SR: I get to miss school for the family meetings. Last year, SR: About 33. I was there for a PowerPoint about finances, [although] I really don’t understand that too much. All my family is in a room together. Everyone in my family is there; usually there’s only one or two people missing. So it’s fun to just ‘My family’s really big, and everyone sit around and be able to watch the PowerPoints and take cares about working together. I’m notes and be there with all my family.

really proud of that. They’re always FB: Hearing about finances must give you an idea of going to be there for each other.’ the topics you want to learn more about. SR: I love to ask questions about things … because you’re not going to know unless you ask questions.

FB: How did you learn about your family history and FB: Do family members live outside of Florida? Do your family office? How did you learn what a family they come from all over? office is? SR: We have some that live in Hawaii and Idaho, and some SR: I really just started going there with my dad when I that live in California. So we’re all spread out across the was little. I used to go with him to work when I didn’t have world. school, and now I go there and I have an office. I sometimes go there to do my homework, and I help around. I shred FB: Have you heard people arguing, or having differ- papers there. I share an office with my grandma’s secretary. ences of opinion? We have the [Root Family] museum in our neighborhood, SR: Not really. They have different opinions, but it never and when I go there, I learn a lot about [the family history]. turns into an argument or anything. I started going there when I was three or four. And since a lot of my grandma’s and grandfather’s stuff is in there, it FB: Are the meetings very formal, with people having makes it easier to learn about it, like the Coke bottle. It all to raise their hands to talk? started to fit together when I really started to get involved in SR: It’s pretty formal. We have presenters from different going to the museum and working at the office—not work- offices that sometimes come and talk at our family meet- ing, helping around—and being a part of the office. And ing. [At those sessions] you usually have to raise your hand that’s when it really just started to come together for me. to comment. But when we have conference calls with just my dad’s brothers and sisters, it’s usually just like, if some- FB: What are the best things and the worst things one stops talking, then you can comment. about being a member of a family with such a great history? FB: Your family reunions also include soccer games. SR: The best thing is that we have so many people in our SR: Those are really fun. It happens during our family family, so if you have a question about the family business reunion, probably a little bit closer to the end. or anything, you can ask anyone in the family, and they’ll be able to help you out. If anything, they’ll just always be FB: People get very competitive, I understand. there for you. SR: Oh, yeah. They do get competitive, but not in a bad And the worst thing is, since we have so many people way. Because [some of] my cousins played soccer when in our family, it’s kind of hard to get to know everyone … they were in middle school or high school. And they are because it’s not like you sit down with someone for an hour really good. So it does turn into a competition, but not like and just talk to them about what they like to do or what their rough or anything. favorite color is. But I wouldn’t say it’s a bad thing, because Last year we ordered shirts. We had white shirts with a I do know a lot about my family. I would just say things that red Coke bottle on them, and we had red shirts with the we would need to work [on], put more time into…. white can on them. They were really cool. Last night my cousins were here from California, and [one of the cousins] went away to boarding school when he FB: How do you feel about the family no longer hav- was little, and he said that he never got to know his parents ing the glass company and no longer having the dis- because he went to boarding school for middle school and tributorship? It’s still an important part of your high school and [also went away to] college. So now he’s identity, right?

10 Family Business • January/February 2015

fb010215_Openers 12-16 bs.indd 10 12/18/14 3:06 PM SR: We still talk about it all the time. Even though we’re you need to work on for years and years. not truly owning it, it is still a part of us…. I think we’re still One of the lessons was trust. You can’t just build a space- really committed to it. ship overnight and trust that it’s going to go up the next We have one of the original Coke bottles in our office. It’s day. Because that’s not how it works. You need to be able to [placed] so all the workers can see it, and I think that’s real- take your time until the thing gets strong enough that you ly important to have that there, too. can trust it. That was one of the lessons I really remember, and one of my favorites, too. FB: Why is it important for the whole family to spend time together? FB: There are a lot of possibilities out there. SR: If you go a couple years without seeing your family, it’s SR: I think that hard work is the most important thing. If not like they’re your family, it’s kind of like they’d just be you don’t push yourself to do something, no one else is friends to you. going to push you to do it. So you have to take control of it, I see my family all the time, whether it’s at the family and you need to push yourself so that you can do it. And reunion or when they come down to visit us. If you spend no one else is going to do it for you. You’re going to need to time together, you’re just going to build those memories. be able to make those decisions if you’re going to be fully committed to something. nFB FB: They’re not just your cousins and your friends, you also have a business relationship with them. How Correction does that feel? The article “Leupold and Stevens sets its sights on enduring family SR: I love that. Because when I get older, and get really ownership” (FB, March/April 2014) contained some inaccuracies involved with the family business, then they’ll kind of be about the history of Leupold and Stevens Inc. my work partners, I guess you can say. So I’ll get to see Norbert Leupold was the president of Leupold and Stevens from them a lot more, I think. And I think we’ll have different 1968-72. Robert (Bob) Stevens was the president from 1972-83. opinions then, because I think boys and girls have different Bob Stevens passed the presidency on to Werner Wildauer in opinions about different kinds of things. But I think we’d 1983. work great together.

FB: Is your family teaching you responsibility about money? SR: Our family personally, we have a budget for each one of us that’s set every week. If we go over, then Con ict and uncertainty it’s going to go down the next week. I babysit for kids I know, and when eventually challenge I get the money, I have a bank that I keep it in. And every year, for Thanksgiving, we take some of the most family businesses. money out of the bank and we donate it to charity. And we do food boxes for Thanksgiving, and we donate the We can help. food to less fortunate people. And I think that’s really important to save your money so you can do important things like that.

FB: Your dad uses the space pro- gram to teach you important les- sons. Has that always been a part of your life? SR: Ever since I was little, we’ve Call or email Ron Sweet for a brochure. been to all of the launches. When I go +1 617.500.3110 x 109 there, or watch it on TV if it’s really [email protected] far away…, we do turn it into lessons, like, how much work goes into build- 100 Cummings Center, Suite 405-D, Beverly, Massachusetts 01915 USA ing a rocket. It’s not something you www.ContinuityFBC.com just can do overnight, it’s something

www.familybusinessmagazine.com 11

fb010215_Openers 12-16 bs.indd 11 12/18/14 3:06 PM AT THE HELM

best-paying jobs in the area, with benefits that include hospitaliza- Dick Yuengling tion and a pension plan. CEO, D.G. Yuengling & Son, Pottsville, Pa. Best thing about working in a family business: You’re your own boss. You can do what you think is best, and Generation of family ownership: were almost out of business in the you’re not under scrutiny as in a Fifth. 1950s and 1960s, like a number of publicly held company. breweries our size. I’m very fortu- About the company: We’re in nate. We’ve been lucky. Worst thing about working in a fam- 17 states, and in 2013 we sold ily business: It’s all on your shoul- 2,700,000 barrels. We have 1.2% of One of our greatest successes: Even ders. You have to be committed. the U.S. beer market. with the growth of the micro- breweries, our growth has been My advice for other family business Number of employees: Between 290 ­phenomenal. leaders: If you’re a manufacturer, and 300. stay with your product. Whatever Best advice I ever got: Stay small and you do, do it well and do it right. Years with the company: Probably stay out of the way of the big brew- Watch your expenses and hire good 50 years, but not consecutively. ers. I can’t say I followed it. people. For 11 years I worked in the beer distributing business, at another Quote from our company’s mission On a day off I like to … play golf on company. statement: We don’t have a formal a weekend when possible. I own a statement. I don’t set goals, other home in Florida, and every year I First job at this company: Stamping than we want to grow every year. enjoy a couple of weeks there. numbers on beer cases in an old warehouse as a summer job, at On my wall: Portraits of the previ- Philanthropic causes our family sup- age 15. We were switching from ous generations in this company ports: Through our foundation, we 8-ounce to 7-ounce bottles. I had to that helped make it what it is. donate a lot to local churches, fire blot out the “8” and stamp a “7.” companies and other charitable One of my greatest accomplish- organizations. At some point we’ll Most memorable thing I learned from ments: What I’ve been able to pro- sponsor a scholarship at the local my mother and father: Humility. We vide to our employees. We have the high school.

Books I think every family business leader should read: Band of Brothers, because it teaches you to stick with a difficult situation.

I realized I had emerged from the pre- vious generation’s shadow when… I bought the company. I walked into the office and just sat there with appreciation for what the previous owners did.

Future succession plans: All four of my children are with me today and have committed to staying in the company. We don’t know yet which one will run it.

Words I live by: Get up early, go to work, do the right thing and repeat it the next day. — As told to Patricia Olsen

12 Family Business • January/February 2015

fb010215_AtTheHelm 12-12 bs.indd 12 12/18/14 3:07 PM ErnstYoung_010215.indd 2 © 2014 Ernst & Young LLP. All Rights Reserved. ED None. And the nation, too. Making the family proud. Of The Year Congratulations to theEY Entrepreneur ey.com/us/eoy being accepted. Year 2015Award. Nominationsare now leader for theEY Entrepreneur Of The recommend adeserving family business Learn more abouthow you can • • • honored intheFamily Business category: Congratulations also to thefinalists • Business Award winner: Continental Realty Corporation J.M. Schapiro, CEO, Mile Hi Kristy Taddonio Mullins, President, Nuts.com, Inc. Jeff Braverman, CEO, Vita-Mix Corporation Jodi L.Berg, President andCEO, ™ 2014NationalFamily

12/17/14 9:35AM

ADVISERS FORUM

Decision making after death Consider the following hypothetical: The patriarch of a family established a chain of local hardware stores that has thrived despite vast changes in the competitive land- scape, especially intense pressure from larger, well-capi- Estate constraints talized competitors such as Home Depot and Lowe’s. The business owner also shrewdly purchased the real estate often do not in the stores’ locations. In his estate plan, the father transfers ownership of the stores (the family business) to his two children in equal shares. One child works in the work as planned family business but the other does not. The terms of the transfer prohibit the alienation of BY MARIANA MARTINEZ BERLANGA the shares during the children’s lifetime for less than a AND PETER M. BLOOM price predetermined by the parent. They require that if a transfer is to be made, all of the family business assets n a letter to James Madison dated September 6, 1789, must be disposed (e.g., the non-real estate assets may Thomas Jefferson wrote, “[T]he earth belongs in usu- not be sold without the real estate, and vice versa). The fruct to the living . . . the dead have neither powers terms of the transfer also require the creation of a board nor rights over it.” But contrary to Jefferson’s sugges- of directors consisting of three people—the two children tion, in multigenerational family businesses the earth and the father’s financial adviser. Ioften belongs to the dead. Despite the father’s best intentions to plan for the While we are all influenced by past generations, some future, this restrictive structure may generate a set of family businesses (and their stakeholders) are not only problems once he dies. A restrictive transfer implies influenced but also controlled by them. Devices such as that the transferor views his or her heirs as immature elaborate estate constraints, incentive trusts and restric- and doubts their capacity for judgment and for coopera- tive gifts determine which actions the living must take tion in the present and the future. Thus, it may limit the to inherit a full share in a family business, how the liv- heirs’ personal development. In addition, it puts extra ing will manage the business and the terms under which pressure on the relationship between the heirs as they they may sell it. engage in joint decision making about the business. When family business owners are deciding how to dis- Even after death, the transferor remains the decision pose of their interests, they are typically concerned not maker. Yet, for a transfer to have long-term success, the only with the preservation of the business, but also with next generation must make a transition from “the chil- the development and self-sufficiency of their heirs and dren of the family” to a partnership of mature adults the strengthening of the family that owns the business. who are able to make their own decisions. The way these dispositions are made affects the long- term sustainability of the business, the functioning of the Overfunctioning and underfunctioning family as a group and the functioning of individual fam- Family Systems Theory, introduced by Dr. Murray ily members. Despite the attention usually put into the Bowen in the 1960s, describes “over/underfunctioning structure of transfers, some of the most serious problems pattern,” a relationship pattern that is helpful in under- family businesses experience result from intergeneration- standing the underlying family dynamics of a restrictive al transfers that do not accurately assess such impacts. transfer and its implications for the future. One fami- ly member (often a parent)—the overfunctioner—takes more responsibility than appropriate for a given sit- uation, while another (often a spouse or a child)—the underfunctioner—takes less responsibility than appro- priate. Both postures have costs, yet the pattern tends to perpetuate over time. Overfunctioners often feel over- burdened, tired and resentful of the excessive load but

Mariana Martinez Berlanga, Psy.D., operates Bethesda Family Therapy in Bethesda, Md. (www.bethesda familytherapy.com), and is on the faculty of the Bowen Center for the Study of the Family in Washington, D.C. Peter M. Bloom, Esq., operates The Bloom Group LLC in Washington, D.C. (www.thebloomgroupllc.com).

14 Family Business • January/February 2015

fb010215_BloomMartinez 12-12 bs.indd 14 12/18/14 3:07 PM are convinced that things will fall apart if they fail to act. A restrictive transfer implies that the Underfunctioners deny themselves the chance of living transferor views his or her heirs as life to the fullest of their capacities by staying in a more dependent and immature position. Underfunctioners immature and doubts their capacity for are convinced that they can’t do anything different judgment and for cooperation. and resent the miserable position they are in. Analysis, thinking and effort can unlock an over/underfunction- ing pattern. Regrettably, a restrictive type of transfer can preserving both the family business and the family itself. contribute to the persistence of this pattern for genera- The identification of such alternatives should begin with tions to come. a serious analysis of the transferor’s goals in making a In addition to locking such a pattern in place, restric- property disposition, as well as an analysis of the family’s tive transfers of family business interests can carry other serious complications. No transfer can fully and Continued on page 17 accurately foresee the future cir- cumstances that family members and the business will face. In the hypothetical example above, the parent limited the rights of his chil- dren to exit the family business by establishing a minimum sale price. That price may not be realistic by the time the siblings inherit the business. Further, if one of the chil- dren experiences significant finan- cial need—because of an illness or for another reason—and a sale becomes necessary, the restric- tion is likely to cause serious con- sequences for that child as well as conflict between the siblings, who in this case have very different roles in the business. Beyond a foreseeable circum- stance such as financial need, other situations may arise in which the only rational option is to sell the family business. It may turn out, for example, that the land proves to be far more valuable than the busi- ness itself. The children or family members need to have the freedom to sell in that situation, or else one goal of the parent (the financial health of the heirs) is jeopardized. The restriction itself, contrary to the father’s desire to promote his family’s financial security in the present and in the future, may cause unnecessary and otherwise avoidable stress to the family as well as undermine their well-being.

Other alternatives There are many alternative paths that do not carry the risks that restrictive transfers do, while

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FB_FamSubscriptionAd_NewCovers.indd 2 12/16/14 12:25 PM Continued from page 15 process (whether by estate planning or otherwise) relationship style. Often, it becomes apparent that less by encouraging an in-depth examination of the restrictive devices are more effective in accomplishing transferor’s goals and family situation. It should be the transferor’s purpose while avoiding the downside of acknowledged that the success of an intergenerational a restrictive transfer. In the example above, the father transfer is never guaranteed. Nonetheless, the imposed on his children a governance structure for the prognosis is better if a transferor, aided by professional family business. This imposition may imply a concern expertise, considers the characteristics, history, over the children’s ability to cooperate. If that is the strengths and vulnerabilities of both the business and underlying reason for the imposition, the desirability the family involved. Exploring possibilities other than of transferring any asset to them in some form of joint restrictive transfers may provide, in the long run, a ownership may not be the right course. But if, after fur- better chance of achieving the transferor’s goal of ther analysis and discussion, it appears that the siblings preserving and strengthening the family as well as the might be able to learn to work together, an intermediate family business. nFB approach may carry the most poten- tial. For example, the father could transfer certain limited management and ownership rights to the children while he is alive, but retain some control to intervene and guide the children until some determination can be made regarding their ultimate This insightful new book explores how ability to work together. family businesses must innovate in order to Another benefit of a serious anal- remain competitive and viable throughout ysis of the transferor’s goals and generations. Written by a leading family family dynamics is less obvious. business consultant, the book provides: Upon deeper examination it may • a working framework that readers can become clear that multigenera- use to innovate their family businesses tional family dynamics play a larg- • a broad range of tools and pathways er role in a transferor’s decisions that family businesses across sectors can than at first appears. For example, use to stimulate, execute, measure, and a transferor’s birth order (whether reward innovation the transferor was the oldest, mid- • 50+ family stories that will inspire any dle or youngest child) and role in family enterprise to create a strategy and environment that can stimulate success the family help explain the degree for generations to come. to which the transferor tends to overstep the boundaries of his or her areas of responsibility. Another example is a family in which irre- Paperback | 9781137386236 sponsible behavior and decision $23 | December 2014 making from a young family mem- ber in a previous generation jeop- ALSO IN THE SERIES… ardized the business. This past experience might explain a trans- The books in the Family Business feror’s apprehension about giving Consulting Group’s family business authority to the next generation. series provide guidance on how to overcome them and achieve continued Awareness of these factors (family growth and success. The authors are history, habits, fears, values and experts in the field, sharing practical, strengths) may lead the transfer- effective, and time-tested insights from their many years running their own or to assess the extent to which family businesses. decisions regarding property dis- positions are based on past events Please visit the Family Business Bookstore at rather than on a realistic evalua- www.palgrave.com/familybusiness for more information about the series. tion of the present circumstances. Enter code PM14THIRTY at checkout for 30% off these titles An experienced professional can contribute a great deal in crafting an effective asset transfer

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As the family business changes, so will the family’s identity. A family like the Landaals may no longer self-identify as “the box people,” for instance, but rather as an enterprising family that deploys its talent, finan- cial resources and networks in ways that align with its core values and purpose. Thus the family (rather than Equip your family the legacy business) is viewed as the entity through which money flows and where entrepreneurial talent is cultivated. for success in To make this transition successfully, the family will need to reflect on and define its purpose and values. today’s world It should address not only the question, “What kind of business or enterprise do we want to be?” but also, BY GREG MCCANN “What kind of family do we want to be?” The Haws Corporation of Sparks, Nev., had been a andaal Packaging Systems, a family enterprise successful manufacturer of water fountains for more based in Flint, Mich., focused almost exclu- than a century. By the time the company reached the sively on the corrugated box industry for more fourth generation of leadership, the industry began to than half a century. After dramatic changes in experience shrinking profit margins, growing global both the family and the marketplace, the family competition and declining markets. Lbegan to shift its identity away from the box industry In response, the family owners worked diligently to focus more on the family itself. The U.S. corrugat- with management and the board of directors to do two ed paper industry was losing the battle with China, things that saved the family firm: First, they worked to resulting in ever-shrinking margins and consolidation make incremental improvements in their core indus- of firms. The family had prematurely lost three of the try, such as developing filling stations for water bottles. four siblings in the second generation. The Landaal Second, they looked outside the core business for new family created an innovation center to help revitalize ventures that were strategically linked to the family’s the local community, redirecting its focus from corru- purpose and the firm’s strengths. gated paper toward customized packaging, point-of-pur- chase displays and sustainable packaging. Four types of cohesion Landaal’s story reflects a growing trend: Successful How might you involve your own family to more effec- enterprising families are becoming more aligned with tively and proactively respond to changes in your core their values, more cohesive and more resilient in order industry? First, you should establish family cohesion to handle the greater stress and complexity arising from and alignment. One model emerged from a 2008 study today’s exponential rate of change. by Torsten M. Pieper and Joseph H. Astrachan. The In a landmark global study published in 2012, known study found families that have been in business for a as “The FFI/Goodman Longevity Study,” 90% of the fam- century or longer tend to have high levels of cohesion ilies who responded owned more than one business and in four areas. 20% owned more than five. On average, those surveyed 1. Family emotional cohesion: Family members get had changed their core business more than two times. their most basic needs (for belonging, security and A colleague, Rich Morris, points out that in the past, connection) met through the family, which functions one good business idea and communicates well. These families convene fami- might sustain a family for ly gatherings, engage in charitable activities as a group three generations. Today, and take other steps to stay connected. each generation will need 2. Family financial cohesion: The family provides to come up with three for its members through gifts, inheritance and other good business ideas just to mechanisms. keep up with the changing 3. Business financial cohesion: The business provides world. benefits to the family through salaries, dividends and investment opportunities. Greg McCann is the founder of the consulting 4. Business emotional cohesion: firm McCann & Associates and founder and Family members consider the busi- director (1998-2006, 2009-2014) of Stetson ness to be part of their identity. University’s Family Enterprise Center. He speaks, They have a sense of loyalty and writes, consults and teaches on family enterprise. stewardship to the family firm. These four types of cohesion

20 Family Business • January/February 2015

fb010215_McCann 12-16 bs.indd 20 12/18/14 3:08 PM evolved over time in long-lasting family businesses, but they can be deliberately cultivated during the early stages of family enterprise. Mindfulness Matters How might your family create greater alignment, As a leader, you can’t build on a strength or manage a weak- cohesion and resiliency? Family business leaders ness until you are aware of it. Likewise, a family can’t build should consider three factors: innovation, awareness on its shared values and combined strengths or deal with its and practice. weaknesses and blind spots until these points are brought into awareness. I. Innovation with the family’s involvement A quarter-century of research has validated the idea that Innovation is change that creates value. Virtually every meditation and mindfulness practices enhance clarity and business must look at both incremental innovation resilience—the ability to handle stress. (how to improve a store, a product or a service) and Meditation not only increases self-awareness and resilience, breakthrough innovation (how to go from Blockbuster but also develops compassion, empathy and the ability to step to Netflix). The family must approach its enterprises back from a situation and understand other people’s perspec- with an innovative mindset. tives. All these characteristics are vitally important to becoming Family enterprises often resist change. Families tend an agile family business leader in today’s fast-paced world. to seek harmony and stability, which can easily lead to — G.M. stagnation. Once the business enters its second genera- tion, members can become risk-averse, sometimes to an extreme. Cleveland-based Bird Technologies, for example, Innovation should be considered a crucial part of operationalized its values through an ongoing practice the family’s values and purpose. Given the impact of of clarifying the family’s core values and translating rapidly evolving technology, generational differenc- them into business values. The non-family CEO reports es and a changing competitive environment, families periodically to the board and the shareholders on how must be open to rethinking their relationships to their business results were achieved in line with share- enterprises. holder values. This operational, tangible and holistic

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fb010215_McCann 12-16 bs.indd 21 12/18/14 3:19 PM ADVISERS FORUM

II. Deep dive into awareness Consider the time, energy, talent and reporting you Family Involvement devote to your business. Now compare that to the effort as a Strategic Advantage you make to enhance your family’s involvement in its enterprises. A growing body of research confirms that appropriate involve- A family system is highly complex. Each member ment of the family in the business creates an advantage for brings to the table his or her unique behavior patterns, the enterprise. One of the earliest and clearest studies was a roles and ways to deal with stress. Along with this com- 2003 investigation by Ronald C. Anderson and David M. Reeb. plexity comes greater interdependency, so stress and Their findings indicated that a family’s involvement in a busi- change in any part of the system affects the whole. If this ness could create: is not brought into awareness and considered in business 1. Longer-term development of leaders. choices, the family cohesion is put at risk and what could 2. More effective decision making by an aligned family. be a strategic advantage turns into a threat. 3. Greater reinvestment in employees and resultant loyalty. Family leaders should assess each individual’s identity 4. More patient capital, resulting in a longer investment time horizon. and values—what drives them and how they contribute to the family’s individual and collective strengths, weak- 5. Governance by owners with both financial and emotional nesses and blind spots. How does the family cultivate investments. and convey its character and align it with the family’s This is a helpful framework to reflect on with your family. As reputation? Each of these factors can be viewed relative a citizen, wouldn’t you like this from all companies? to the four types of cohesion described above. — G.M. Families and their advisers can be tempted to rely too much on structure and outcomes and thus mini- mize the importance of process and innovation. Your integration of shareholder values with business func- family can’t outsource this self-analysis to a lawyer or tion creates and sustains a culture that exhibits the four accountant any more than your fitness coach can do types of cohesion. your workout for you.

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22 Family Business • January/February 2015

fb010215_McCann 12-16 bs.indd 22 12/18/14 3:08 PM Planning, structures and policies can be productive Families often rely too much on structures after this deep dive into self-assessment. Otherwise, such planning is at best defensive and at worst a land mine and outcomes and minimize the importance waiting to be stepped on. of process and innovation. Too often, we resist dealing with the “soft” or human side of a business—the family—until there is a crisis. This reactive mindset should be replaced in family enter- Just as you might start a fitness program by getting a prises by a proactive model that builds momentum as thorough assessment, you can do the same with your entrenched communication patterns are identified and family enterprise. What are your strengths, weaknesses defined. and goals? You might factor both strength and cardio fit- This proactive process deepens as the defenses and ness into your workout regimen; similarly, you should underlying emotions that fuel negative patterns are factor values, trust, education and communication into exposed. This creates an opening for rebuilding dam- your “family practice regimen.” aged relationships. The family will emerge with a bet- Everyone in the family must be willing to start out ter understanding of one another, a chance to build by working on himself or herself. To focus on “fixing” trust and commitment, and productive methods of one family member will undermine true progress. communicating. The most effective way you can encourage another family member to take responsibility for and work III. Ongoing practice on his or her own issues is by modeling the desired If each year your family went away for a weekend to listen behavior. to fitness experts talk about the latest trends in exercise Most of us exercise more effectively when we work science—and that was all you did to stay in shape—what out with others and when we have good coaching. You kind of condition would you be in? Let’s extend this analo- can find “workout buddies” by attending conferences gy to your family enterprise: If you and your family don’t and peer-group sessions, and a consultant can do the regularly undergo a process of assessment and strategic coaching. But remember, you still have to do the heavy planning, your enterprise will not be healthy. lifting yourself. nFB

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fb010215_McCann 12-16 bs.indd 23 12/18/14 3:08 PM Mark your Calendar! The Private Company Governance Summit 2015

May 13-15, 2015 • Grand Hyatt, Washington, D.C.

,

PRODUCED BY Join private and family company owners, shareholders, directors, advisory board members ® and experts for “one of the best conferences I Confirmed speakers: have ever attended. Contacts, networking and John J. “Jack” Brennan, Director, General Electric Company, Guardian Life resources, all here in a day and a half.”* Insurance Company of America, LPL Financial Holdings, Inc. Lansing Crane, Chairman, Canal Insurance Company, SOG Specialty Knives & *PCGS 2014 attendee Tools and Wells’ Enterprises; Former Chairman and CEO, Crane & Co. Inc. Julia H. Klein, Chairwoman and CEO, C.H. Briggs Co. Session topics include: Jeffrey A. Sonnenfeld, Senior Associate Dean for Executive Programs & Lester • What Private and Family Company CEOs Need From a Board Crown Professor in the Practice of Management, Yale School of Management; • The Board’s Role in Formulating and Driving Company Strategy Director, Lennar Corp. • Refreshing the Private Company Board , Director and Family Council Chair, IDEAL Industries Meghan Juday • Onboarding the New Director Gerry Czarnecki, Director, State Farm Insurance, MAM Software Group, Inc. • Private Company Governance in the Real World Darcy Howe, Director, Heatron and Advisory Board Member, The Bama Companies George Isaac III, Director, Findley-Davies In-depth discussions on: Edward D. Horowitz, Co-Founder and Board Member, U.S. Space LLC • CEO Mentoring/Evaluation Jim McHugh, Director, Southworth International Group Inc. and Kennebec • Board Evaluation Technologies Inc. • Starting a Board Steve McClure, Principal Consultant, The Family Business Consulting Group • Increasing Shareholder Communication and Satisfaction B. Joseph White, President Emeritus, University of Illinois and Director, Gordon • The Role of the Chairman/Lead Director Food Service • Director Liability Bernard H. Tenenbaum, Advisory Board Member, Diesco, Woldenberg Group Optional Pre-Conference Session: Dennis Cagan, Director, Copper Mobile, Acorn Technologies, Truston, HeartStories, Inc., New Law Technology, Inc. Private and Family Company Governance Basics Cynthia Watts, Director, Furst-McNess Company Challis Lowe, Director, Seaway Bank &Trust Paul Bartelt, CEO and President, The Vollrath Company To learn more, and to register, visit Nina Henderson Director, CNO Financial Group www.directorsandboards.com/PCGS15 Janet Morrison Clarke, Director, Cox Enterprises, Forbes Media Holdings And visit www.privatecompanydirector.com

PCGS15_2pg.indd 2 11/19/14 12:33 PM CONFERENCE PROGRAM

Wednesday May 13, 2015 9:30-10:45 am Strategy and the Private and 3:45-5:00 pm Onboarding the New Director Family Company Board In bygone days, a new director would serve for at 3-8 pm Registration Open What the board needs to know in order to least a year before being expected to contribute 4:00-5:15 pm PRECONFERENCE SESSION help formulate and drive a private company’s in a meaningful way. But today’s competitive strategy. How a board sets strategy. Company environment puts pressure on private companies Private and Family Company Governance strategy is perhaps the key role a private to appoint board members who can hit the Basics company board plays. Does that board set ground running. This session will focus on best This session will provide nuts-and-bolts strategy or oversee the company strategic plans? practices for new director orientation. What information on how a board can help a private What’s the right balance? And how does a kinds of documents and training sessions should company to grow and thrive. Panelists will offer board’s role evolve as a company strategy is be provided to bring the new director up to insights on determining whether a fi uciary pursued over time? speed? What is the role of the board chair, the or advisory board is right for you, the optimal Speakers: Meghan Juday, Director and Family lead director, the CEO and key managers in this number of board members, director recruitment, Council Chair, IDEAL Industries; B. Joseph process? And what can reasonably be expected of board composition and managing concerns White, President Emeritus, University of Illi- new directors? about director liability. nois and Director, Gordon Food Service Speakers: Bernard H. Tenenbaum, Advisory Moderator: Steve McClure, Principal Consul- Board Member, Diesco, Woldenberg Group; tant, The Family Business Consulting Group 10:45-11:00 am Break Nina Henderson, Director, CNO Financial Speakers: Darcy Howe, Director, Heatron, Ad- 11:00-12:15 pm Refreshing the Board Group; Janet Morrison Clarke, Director, Cox visory Board Member, The Bama Companies; Enterprises, Forbes Media Holdings Competitive circumstances change—but board Jim McHugh, Director, Southworth Interna- membership often doesn’t. As the shifting tional Group Inc. and Kennebec Technologies 6:00-9:00 pm Group Dinner marketplace, new technologies and globalization Inc.; Dennis Cagan, Director, Copper Mobile, Old Ebbitt Grill, a Washington, DC create new demands on management and the Acorn Technologies, Truston, HeartStories, landmark. Cocktails on the observation deck, CEO, how can a private company ensure that Inc., New Law Technology, Inc. with panoramic views of the White House, its board is composed of engaged members who Washington Monument, Lincoln Memorial, 6:00-7:15 pm How Private and Family have the expertise and energy the company National Cathedral and the Potomac River. Company CEOs Work With Their Boards needs currently and in the future? How can What do private and family company CEOs the board balance new perspectives with the Friday May 15, 2015 expect from their boards, and how can the institutional memory and valuable insights of board help a CEO lead his or her company long-serving directors? How can a board prevent 7:30-8:30 am Breakfast groupthink? Panelists will discuss age and term most effectively? Sitting private company 8:30-9:15 am Keynote Address CEOs will discuss their working relationships limits, board evaluations, finding n w talent Speaker: Lansing Crane, Chairman Canal with their boards and how their boards have and new skills, and tactfully asking ineffective Insurance Company, SOG Specialty Knives & been a guiding force for providing discipline, directors to leave. Tools and Wells’ Enterprises; Former Chairman accountability, strategic guidance and expertise. Speakers: Jeffrey A. Sonnenfeld,Senior Asso- and CEO, Crane & Co. Inc.. Speakers: Julia H. Klein, Chairwoman and ciate Dean for Executive Programs & Lester CEO, C.H. Briggs Co.; Paul Bartelt, President Crown Professor in the Practice of Manage- 9:15-10:00 am Table Discussions ment, Yale School of Management; Director, and CEO, The Vollrath Company Working to a case study, conference attendees Lennar Corp.; Gerry Czarnecki, Director, State will work in small groups to discuss potential 7:15-9 pm Networking reception and Farm Insurance, MAM Software Group, Inc.; solutions. buffet dinner Challis Lowe, Director, Seaway Bank & Trust 10:00-10:15 am Networking Break Thursday May 14, 2015 12:15-12:30 pm Break 10:15-11:15 am Private Company Governance 12:30-1:45 pm Lunch and Keynote Address 7:30 am Registration Open in the Real World 1:45-2 pm Break This session will focus on boardroom 7:30-8:30 am Breakfast challenges—when theory meets reality. How can 2-3:30 pm Breakout Sessions 8:30-8:45 am Conference welcome a board manage dissident shareholders, a rogue (45 minute sessions, repeated once. Attendees director or a difficult CEO? What happens when 8:45-9:15 am Keynote Interview may select two sessions to attend). an ownership group won’t heed the board’s Jim Kristie interviews John “Jack” Brennan, • CEO mentoring/evaluation recommendations, or when a faction of the chairman emeritus, Vanguard; Director, • Board evaluations board members favors advice that’s off-target? General Electric Company, Guardian Life • Private board committees Panelists will share their war stories and offer Insurance Company of America, LPL Financial advice. There will be time for hardball questions • Role of the chairman/lead director Holdings, Inc. from the audience. • Starting a board 9:15-9:30 am Networking Break Speakers: Edward D. Horowitz, Co-Founder • Increasing shareholder communications and and Board Member, U.S. Space LLC; George satisfaction Isaac III, Director, Findley-Davies; Cynthia • Director liability Watts, Director, Furst-McNess Company 3:30-3:45 pm Networking Break Conference Close

PCGS15_2pg.indd 3 11/19/14 12:33 PM ADVISERS FORUM

minimum, a couple of years earlier, when the students are in ninth grade (ages 14-15), if the intent is to have them carefully consider the family enterprise as an option. Ideally, a long-term, proactive approach with plenty of open, healthy communication (a best practice for Don’t miss out enterprising families) should start as early as elemen- tary school. Whether the child’s path will lead to a major role in on early chances the family business, a minor role or an independent path, starting conversations early—even when children to engage kids are quite young—is important. Doing so stimulates thinking and allows for managing expectations about BY JEFF SAVLOV scenarios that are potentially problematic (and may harm family relationships) if ignored or delayed too nterprising families are waiting too long to inte- long. When addressed openly and early, these same grate the next generation. Even though succes- scenarios can take a positive turn and are often benefi- sion is arguably the most widely covered topic cial to both family and enterprise. More discussion can in the field of family enterprise, many of my cli- mean fewer faulty assumptions on the part of either ents (and those of my colleagues) are still miss- generation about what the family’s relationship will Eing crucial opportunities to engage the next generation be to the enterprising endeavors in which they are early in the game. involved and, in particular, what any individual family A generation ago, children and teens were bare- member’s role will (or will not) be. ly included in any discussion about family assets. But don’t wait for the final hour. Sometimes this silence lasted until the children were well into adulthood. These days, it is not unusual for Why plant the seeds early? families and professionals to see the high school and Teens who go off to college knowing that their parents college years as a starting point for serious discussions own a successful company may very well set out with about the family’s assets and legacy. This is a shift to less motivation, believing that they will have some fun be applauded. However, too much potential for early and then automatically enter the business. A different communication is still overlooked. set of problems can arise when a child attends a great Think about it this way: Junior year of high school college and works diligently, assuming he or she has (ages 16-17) is a year of great consequence for young earned a place in the business—but then discovers there adults. Those headed toward college are taking uni- is no open position in the family firm. If that child has versity entrance exams that can have a major impact an older cousin who is already working in the business, on their futures. They are visiting colleges, thinking the family might create a position for the child in order about majors and exploring what they want to do with to be “fair” (since the cousin already has a job there), the rest of their lives. Those not headed to college even though the added expense can’t be justified and are faced with a different set of choices and, in some the need doesn’t really exist. Other times a parent pulls ways, are under more pressure in a society where col- hard on a child to coax him or her into the business lege degrees are highly valued. when the child might prefer to pursue other passions With so much focus on and interests. Out of love and loyalty to the parents, the figuring out the future child might end up in the family firm, doing work he or during junior year, enter- she doesn’t enjoy. prising families should There are many more examples of poor outcomes already have started hav- when communication isn’t open and expectations ing meaningful discussions aren’t managed before major life choices are made. about how a family busi- Conversation along the way minimizes surprises for ness fits (or does not fit) everyone as people make their choices, and helps the into the young adult’s life. family develop a common vision for what they are try- This should happen, at a ing to achieve together.

What to discuss and when Jeff Savlov is president of Blum & Savlov Inc., a family business consulting firm in Highland Park, Middle school is an excellent N.J. ([email protected]). time to start having these con- versations in developmentally

26 Family Business • January/February 2015

fb010215_Savlov 12-16 bs.indd 26 12/18/14 3:11 PM appropriate ways. There is plenty that can be done assessed over time to make sure they are being good even earlier with elementary-school-aged kids in a contributors. (This also assumes and relates the value casual, pressure-free and fun style. Remember, this that family members need to contribute: to give and is not about setting compensation or making hiring not just take.) decisions; it is about opening minds, communicating and relating what you as parents value most about life, family and sharing. A long-term, proactive approach with plenty of open communication should Elementary-school-aged children. As a family therapist, I have helped young kids and their families start as early as elementary school. deal with very serious issues, such as death, a major illness, divorce and more. It is possible to talk to kids about almost anything in a productive and thoughtful • How to decide how much family members get paid. way if the discussion is conducted at their develop- • Who can become an owner? mental level. • Is there a fair way to treat family members who Some basic rules of thumb will guide you: Be honest, choose not work in the business in terms of estate approach the topic in a way that is comfortable for you planning? and engage your child’s natural curiosity and inter- For this conversation, it is quite helpful for the est. If he or she seems bored or annoyed, back off and senior-generation members to clarify their values and find a new approach. This is not a conversation you show how they are living by them. (The importance of want to push on young kids; it should unfold naturally. identifying values and instilling them in children has Young kids love to have their input on “adult” topics gained acceptance with progressive enterprising fami- respected, and they often have brilliant thoughts to lies around the world. Many good articles on this topic share. Be sure to encourage their playfulness and don’t have been written.) worry about answers from elementary-level kids that For example, do the parents support the possibility of do not make sense to an adult businessperson. the children doing work they are passionate about even Be supportive of their attempts and come up with “what if” scenarios to help them see different sides to their responses. If a child says everyone in the family should be allowed to work in the business, you might respond, “That is really nice that you want to see everyone have a chance to participate. We also value keeping many family members involved. What if there are not enough jobs for everyone and not enough money to pay everyone who wants to be part of the business?”

Middle-school-aged children. Kids this age are going through massive physical and emotional chang- es yet are more than just hormones, acne and tumul- tuous peer relationships. Their brains are developing rapidly and they are becoming deep thinkers as well. These young folks are capable of thinking about the meaning of life (as well as dating and how un-cool their parents are), and they might surprise you with their responses. For middle-school students, you might set the stage directly by telling them that you’d like their thoughts and opinions about the family business. Get their views on some of the challenges that families typically grap- ple with as a new generation matures and decisions are made about whether they will be involved and how. Among the many areas that can be discussed are: • How to figure out how new family members enter the business. • How family members will be evaluated and

www.familybusinessmagazine.com 27

fb010215_Savlov 12-16 bs.indd 27 12/18/14 3:11 PM ADVISERS FORUM

Getting the Discussion Started

Questions for middle-school-aged kids: • What if one of you works in the family business and makes a • Should payment for work in the family business be related lot of money and the other becomes a schoolteacher and makes to what people get paid for the same job in a similar non-family a lot less? Will this be a problem? Do you have any ideas about business? Should it be higher or lower, and why? how to handle it? • What if more than one family member wants to be the boss • All families get into arguments and disagree at times. How or president? can family members disagree and still work together well? Can • If two or more siblings are both really good contributors to the you think of rules that would help? family business, is it possible they can share being boss or president? • If you won $100 million in the lottery, how would you spend If so, what will happen if they disagree on something important? your life? • How can we tell if the senior generation (mom, dad, uncle, aunt, etc.) stays around too long? What are your ideas about how to han- Questions for elementary-school aged kids: dle that situation? (Simply asking this question conveys to the next • What do you like about sharing? What is hard about it? generation that the senior generation recognizes there is a time to • When are the times you really enjoy being with the family? hand over the reins before death, or is at least willing to look at the When it is not fun? issue of passing the baton at some point. Not all senior-generation • You have some of your best laughs with your siblings and also members value this; tailor this question to your personal values.) your most angry times. Why is that? • How will we be able to tell if a family member is not doing a • Do you ever feel like you do not get enough attention from good job? How should that be handled? Is it possible to handle Mom and me? Is there a way we can do a better job of having this situation without harming family relationships? “alone time” with each of you and “whole family time,” too? • Can you think of ways that being both family members and • What do you know about our family business? business partners can be a problem for us going forward? How • What would be fun about working with Mom and Dad (broth- might that make us a stronger family? ers, sisters, cousins, aunts, uncles), and what would be not so • Owning a business means it is yours. You decide to keep it or much fun? sell it to someone else for money. You hire the person who runs it • Do you think knowing we have our own business might ever if you do not run it yourself. Some owners get paid without work- stop you from doing something different with your job and life— ing in the business. Do you think owners should always work in something you might like more than our business—when you the business? Why or why not? What if an owner does not work grow up? there and does not know how the business runs? What should • How do you and your (sister/brother/cousin) struggle with that owner’s role be? sharing things now? Are there rules about sharing now that you • Your cousins are all older than you and your brother. They think might be good rules for working in our business together? will be old enough to try working in the business before both of • Who in our family works in the business, and what do you. What if when you are old enough to work there isn’t enough they do? room for more people? What if there is room for you both but • How do we get along at work? How do we get along as a your cousins have so much more experience that they will run it family when we all get together? without much of a chance for either of you to take a lead role? • What do you think it would be like to work with (brother/ • What would it be like to have Mom or Dad be your boss? Do sister/aunt/grandma/cousin)? you think you could work your way up to being our boss? What • Are you good at cooperating? Who in our family is the best could go wrong for us as a family? at it? Who needs to work on it? • How will it feel if your younger sister/brother excels in the • For each person in our family, can you name something they business and becomes your boss? are very good at?

if it means the children won’t be part of the family busi- positive. Then, families waited until someone died ness? If so, it is important to get this across to the chil- to discuss wealth transfers and did so through attor- dren so they don’t feel pressured to join the business neys in sterile and formal ways. Now, many families when it is not their passion. Similarly, if meritocracy consider the late teens and early twenties to be an is a family value and it is expected that family mem- acceptable age to begin grooming stewards of family bers must earn what they get (rather than getting things wealth and humans of good character. The next leap simply because they are family), this value will inform is to fully integrate the newest members of enter- the conversation. prising families, starting in their earliest years. This lifelong, organic integration of family, values and The lesson: Talk more, start earlier, have fun sharing will create stronger families and healthier The shift from a generation ago has been quite societies. nFB

28 Family Business • January/February 2015

fb010215_Savlov 12-16 bs.indd 28 12/18/14 3:11 PM SPECIAL ADVERTISING SUPPLEMENT

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ustaining family wealth for multiple generations requires planning and education. Among the questions that must be Sconsidered: • What are my long-term goals? How much will I need in order to achieve them? • Do all of my short-term financial decisions fit in with my long- term plan? • Have I done enough to mitigate business and personal risk? • Will the ownership structures I set up today have a detrimental effect on my heirs in later years? • What is the right way to begin talking to children about wealth? • What can I do to avoid raising an entitled child? • When should children be provided with details about the amount of wealth they will someday control?

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fb010215_WealthMgmtSupp.indd 29 12/18/14 3:42 PM The Artful Dodger Jack Dawkins, one of the Equally skillful was the Houston-based Elkins family Art owners, dealers and estate lawyers around of the works of art. The IRS claimed “fractional (and their tax attorneys) who recently received a the country are reveling in the decision. While interests” could not exist in art; therefore, a most celebrated characters in significant decision from the U.S. Court of Appeals there is long-standing tax law supporting valuation discount was improper. A distinguished art dealer for the Fifth Circuit.1 The IRS had rejected the discounts for other types of tangible and intangible and other legal art experts supported the Elkins Charles Dickens’ novel “Oliver Elkins estate settlement, hitting them with a $14.4 assets, this is the first case that extends such family contention. The appellate court ultimately million tax bill, in effect saying: “Please, sir, I want discounts for minority interests in works of art. agreed granting a 52% to 80% valuation discount Twist” — better known as the depending on the work in question. The estate tax some more!” But, the Tax Court, backed up by Wealthy art collectors have faced the challenge refund will flow to the Elkins Foundation, a $210 Artful Dodger — had certain skill the Appellate Court, validated the Elkins estate of tax efficiently passing art down to future million endowment that carries on the family’s plan techniques and legally supported the family’s generations. Selling art during their lifetime exposes civic legacy. and cunning when it came to contention that the art collection deserved a them to a 28% capital gains tax while passing pickpocketing. The Dodger significant valuation discount thereby reducing works at death triggers inclusion in their estate at Obviously, the Elkins family isn’t the typical collector, exposure to millions of dollars in estate tax. full value, exposing them to the 40% estate tax. but in theory this ruling could extend to collectors of was an ironically honorable At the root of the tax challenge was a massive Previously, art lawyers would use LLCs to obtain various wealth levels. Most likely though, it will be character that represented a art collection, over 64 works by artists, including business discounts for lack of control, fractional more meaningful for those estates whose taxable Picasso, Pollock, Cezanne, and Twombly, collected ownership and lack of ability to sell. This plan was assets exceed the $5.34 million estate exemption “victim of society” and “victim for three decades and worth an estimated $24.6 limited since a business purpose was required for for 2014. Further, this decision is only legally binding million dollars. the LLC. This case opens the door for other estate on districts located in the Fifth Circuit, generally of circumstances.” planning options for art. Louisiana, Mississippi, and Texas. However, it would have significant persuasive authority on the tax The Elkins family also used various tools, including court and districts throughout the country. At this a grantor-retained income trust (GRIT), a lease, time, it is uncertain whether an appeal will be made co-tenancy agreement, and a disclaimer power to up to the U.S. Supreme Court. transfer partial ownership rights of the art to each of their three children. The divided ownership interests resulted in their contention that restricted ownership impacted the value

To learn more about SEI Private Wealth Management, please visit our website at seic.com/artful or call 1-888-551-7872 to reach a team member.

Private Wealth Management | 1 Freedom Valley Drive, Oaks, PA 19456 | seic.com/privatewealth

SEI Private Wealth Management is an umbrella name for various life and wealth services provided through SEI Investments Management Corporation, a registered investment advisor. Neither SEI nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

© 2014 SEI 142211 (12/14)

1 Estate of James A. Elkins Jr. et al. v. Commissioner; 140 T.C. No. 5; No. 16597-10

SEI_010215.indd 2 12/15/14 10:31 AM 142211-PWM-FamBusiness_Ad.indd All Pages 12/15/14 9:58 AM The Artful Dodger Jack Dawkins, one of the Equally skillful was the Houston-based Elkins family Art owners, dealers and estate lawyers around of the works of art. The IRS claimed “fractional (and their tax attorneys) who recently received a the country are reveling in the decision. While interests” could not exist in art; therefore, a most celebrated characters in significant decision from the U.S. Court of Appeals there is long-standing tax law supporting valuation discount was improper. A distinguished art dealer for the Fifth Circuit.1 The IRS had rejected the discounts for other types of tangible and intangible and other legal art experts supported the Elkins Charles Dickens’ novel “Oliver Elkins estate settlement, hitting them with a $14.4 assets, this is the first case that extends such family contention. The appellate court ultimately million tax bill, in effect saying: “Please, sir, I want discounts for minority interests in works of art. agreed granting a 52% to 80% valuation discount Twist” — better known as the depending on the work in question. The estate tax some more!” But, the Tax Court, backed up by Wealthy art collectors have faced the challenge refund will flow to the Elkins Foundation, a $210 Artful Dodger — had certain skill the Appellate Court, validated the Elkins estate of tax efficiently passing art down to future million endowment that carries on the family’s plan techniques and legally supported the family’s generations. Selling art during their lifetime exposes civic legacy. and cunning when it came to contention that the art collection deserved a them to a 28% capital gains tax while passing pickpocketing. The Dodger significant valuation discount thereby reducing works at death triggers inclusion in their estate at Obviously, the Elkins family isn’t the typical collector, exposure to millions of dollars in estate tax. full value, exposing them to the 40% estate tax. but in theory this ruling could extend to collectors of was an ironically honorable At the root of the tax challenge was a massive Previously, art lawyers would use LLCs to obtain various wealth levels. Most likely though, it will be character that represented a art collection, over 64 works by artists, including business discounts for lack of control, fractional more meaningful for those estates whose taxable Picasso, Pollock, Cezanne, and Twombly, collected ownership and lack of ability to sell. This plan was assets exceed the $5.34 million estate exemption “victim of society” and “victim for three decades and worth an estimated $24.6 limited since a business purpose was required for for 2014. Further, this decision is only legally binding million dollars. the LLC. This case opens the door for other estate on districts located in the Fifth Circuit, generally of circumstances.” planning options for art. Louisiana, Mississippi, and Texas. However, it would have significant persuasive authority on the tax The Elkins family also used various tools, including court and districts throughout the country. At this a grantor-retained income trust (GRIT), a lease, time, it is uncertain whether an appeal will be made co-tenancy agreement, and a disclaimer power to up to the U.S. Supreme Court. transfer partial ownership rights of the art to each of their three children. The divided ownership interests resulted in their contention that restricted ownership impacted the value

To learn more about SEI Private Wealth Management, please visit our website at seic.com/artful or call 1-888-551-7872 to reach a team member.

Private Wealth Management | 1 Freedom Valley Drive, Oaks, PA 19456 | seic.com/privatewealth

SEI Private Wealth Management is an umbrella name for various life and wealth services provided through SEI Investments Management Corporation, a registered investment advisor. Neither SEI nor its affiliates provide tax advice. Please note that (i) any discussion of U.S. tax matters contained in this communication cannot be used by you for the purpose of avoiding tax penalties; (ii) this communication was written to support the promotion or marketing of the matters addressed herein: and (iii) you should seek advice based on your particular circumstances from an independent tax advisor.

© 2014 SEI 142211 (12/14)

1 Estate of James A. Elkins Jr. et al. v. Commissioner; 140 T.C. No. 5; No. 16597-10

SEI_010215.indd 3 12/15/14 10:31 AM 142211-PWM-FamBusiness_Ad.indd All Pages 12/15/14 9:58 AM The Business Strategies Group Family Business Case Study A division of AXA Advisors, LLC

Situation You can call me Larry; that’s what most of my customers call me. Who are my customers? They are pleasure boat owners who need docking, equipment, repair, or maintenance services. I started sailing when I was young, and it became my passion. Over 33 years, I’ve built the largest marina in the region. In fact, I own I built this business marinas on both sides of the lake, with valuable real estate attached to each. I’ll even rent you a boat if you for me; but one day, want to take a cruise for a day or a month. it will become a Problem I built this business for me, and I plan to keep running my marinas until they drag me away. But realistically, at legacy for my age 61, I know one day this business will belong to my family. That has worried me for some time. They’re not ready to run this business on their own today; and if something happened to me sooner rather than later… children. well… they may ruin it or worse yet, fight over it; and the family’s business legacy will surely die with me.

I’ve been reluctant to meet with any financial professional because this seemed more of a personal, “family matter” rather than a business concern. However, a BSG professional asked me if I were willing to share just 20 minutes of my time during which he asked me about what keeps me up those nights when a worry about my business just won’t let me sleep. We got to talking about this legacy concern of mine.

My BSG professional asked me two key questions: 1. How did I plan to choose a manager/leader from among my children and other family members and did I plan to groom them for the responsibility? 2. How was I going to tell my other family members of my choice without them all feeling as if I disinherited them?

BSG Strategy The BSG professional led Larry through a comprehensive, methodical planning process to identify the family member who would make the best successor leader/manager, as well as two other family members capable of filling two key positions on the executive team. For each position, Larry began to document his expectations for running the business day-to-day and also hired a coach to increase the management skills of his chosen successors… grooming them for the responsibilities they will one day shoulder without him. The Helping business owners protect, preserve and pursue BSG professional helped Larry set up a detailed plan to keep the business intact and continue successfully once he is gone. In addition, the BSG professional coordinated with Larry’s CPA and attorney, to facilitate the more value from their business, more tax-efficiently. ® development of a comprehensive estate plan including wills and trusts to help reduce inheritance taxes and to “equalize the inheritances” for those family members who would not be involved with or benefit from the business.

bsg-advisors.com | 201-743-6846 The Business Strategies Group is a division of AXA Advisors, LLC. AXA Advisors, LLC, AXA Network, LLC and AXA Equitable Life Insurance Company are affiliated companies and do not provide tax or legal advice. Securities offered through AXA Advisors, LLC (NY, NY) 212-554-1234, member FINRA/SIPC. Annuity and insurance products offered through AXA Network, LLC. Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and Securities offered through AXA Advisors, LLC (212-314-4600), member FINRA/SIPC. Investment advisory products and services you should seek advice based on your particular circumstances from an independent tax advisor. offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and insurance products offered © 2014 AXA Advisors, LLC, all rights reserved. through AXA Network, LLC. {(If used in CA or UT)AXA Network, LLC does business in California as AXA Network Insurance Agency of California, LLC and, in Utah, AXA Network Insurance Agency of Utah, LLC.} AXA Advisors and its affiliates do not GE-97117b (8/14)(Exp 8/16) provide tax or legal advice. GE-93720 The Business Strategies Group A division of AXA Advisors, LLC

AXA_2pg_010215.indd 2 12/17/14 9:45 AM The Business Strategies Group Family Business Case Study A division of AXA Advisors, LLC

Situation You can call me Larry; that’s what most of my customers call me. Who are my customers? They are pleasure boat owners who need docking, equipment, repair, or maintenance services. I started sailing when I was young, and it became my passion. Over 33 years, I’ve built the largest marina in the region. In fact, I own I built this business marinas on both sides of the lake, with valuable real estate attached to each. I’ll even rent you a boat if you for me; but one day, want to take a cruise for a day or a month. it will become a Problem I built this business for me, and I plan to keep running my marinas until they drag me away. But realistically, at legacy for my age 61, I know one day this business will belong to my family. That has worried me for some time. They’re not ready to run this business on their own today; and if something happened to me sooner rather than later… children. well… they may ruin it or worse yet, fight over it; and the family’s business legacy will surely die with me.

I’ve been reluctant to meet with any financial professional because this seemed more of a personal, “family matter” rather than a business concern. However, a BSG professional asked me if I were willing to share just 20 minutes of my time during which he asked me about what keeps me up those nights when a worry about my business just won’t let me sleep. We got to talking about this legacy concern of mine.

My BSG professional asked me two key questions: 1. How did I plan to choose a manager/leader from among my children and other family members and did I plan to groom them for the responsibility? 2. How was I going to tell my other family members of my choice without them all feeling as if I disinherited them?

BSG Strategy The BSG professional led Larry through a comprehensive, methodical planning process to identify the family member who would make the best successor leader/manager, as well as two other family members capable of filling two key positions on the executive team. For each position, Larry began to document his expectations for running the business day-to-day and also hired a coach to increase the management skills of his chosen successors… grooming them for the responsibilities they will one day shoulder without him. The Helping business owners protect, preserve and pursue BSG professional helped Larry set up a detailed plan to keep the business intact and continue successfully once he is gone. In addition, the BSG professional coordinated with Larry’s CPA and attorney, to facilitate the more value from their business, more tax-efficiently. ® development of a comprehensive estate plan including wills and trusts to help reduce inheritance taxes and to “equalize the inheritances” for those family members who would not be involved with or benefit from the business. bsg-advisors.com | 201-743-6846 The Business Strategies Group is a division of AXA Advisors, LLC. AXA Advisors, LLC, AXA Network, LLC and AXA Equitable Life Insurance Company are affiliated companies and do not provide tax or legal advice. Securities offered through AXA Advisors, LLC (NY, NY) 212-554-1234, member FINRA/SIPC. Annuity and insurance products offered through AXA Network, LLC. Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and Securities offered through AXA Advisors, LLC (212-314-4600), member FINRA/SIPC. Investment advisory products and services you should seek advice based on your particular circumstances from an independent tax advisor. offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and insurance products offered © 2014 AXA Advisors, LLC, all rights reserved. through AXA Network, LLC. {(If used in CA or UT)AXA Network, LLC does business in California as AXA Network Insurance Agency of California, LLC and, in Utah, AXA Network Insurance Agency of Utah, LLC.} AXA Advisors and its affiliates do not GE-97117b (8/14)(Exp 8/16) provide tax or legal advice. GE-93720 The Business Strategies Group A division of AXA Advisors, LLC

AXA_2pg_010215.indd 3 12/17/14 9:46 AM Focusing on the next generation.

Pitcairn believes that family success is measured over generations. Through the integration of investment advice, flexible trust services, comprehensive planning, and wealth administration, we deliver critical services to multi-generational families and family offices filling a single need or providing a full solution.

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To explore how we can partner with you, please call Rebecca Meyer at 800-211-1745 or contact us via email at [email protected].

Pitcairn_010215.indd 2 12/17/14 3:02 PM The Insights and Resources of a Trusted Partner

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To Learn More About Rockefeller & Co.: Loraine B. Tsavaris Managing Director 212.549.5302 | [email protected]

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Rockefeller_010215.indd 2 12/19/14 7:38 AM        

Afhe is an independent, non-profit, association of attorneys and non- attorneys practicing in trusts and estates, corporate law and tax areas; afhe members provide a multi- disciplinary counseling and advice to  publicly and privately-held family enterprises and their owners.  The 2015 afhe Annual Conference & Membership Meeting is scheduled for April 22-24, 2015 and will take place at the vibrant and serene, bold and enchanting J.W. Marriott Scottsdale Camelback Inn Resort & Spa; located at 5402 East Lincoln Drive; Scottsdale, AZ 85253. The J.W. Marriott Camelback Inn offers a breathtaking 125 acre campus with mountain views, luxurious renewed accommodations and legendary signature services. The properties Paradise Valley resort has free Wi-Fi in the lobby and  gardens so you can stay connected while enjoying views of Camelback and Mummy Mountain.

Afhe has assembled a stimulating and enlightening array of educational sessions to be presented by some of the most knowledgeable speakers in their respective fields. Please see below for a brief description of some of our keynote speakers from afhe’s 2015 Annual Conference & Membership Meeting.

Join us for afhe’s Golf Outing on Saturday April 25, 2015 at the TPC Scottsdale Stadium Course, which annually hosts the Waste Management Phoenix Open. The TPC Scottsdale Stadium Course has been rated as one of the top ten public courses in the US.  Afhe means family business! Bring your family and join us in celebrating afhe’s 20 year anniversary.                                        

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Attorneys for Family Held Enterprises (afhe) 2800 West Higgins Road, Suite 440  Hoffman Estates, IL 60169  847-885-8796  www.afhe.com  [email protected]

AFHE_010215.indd 2 12/17/14 1:33 PM       SPECIAL ADVERTISING SUPPLEMENT   Successful Family Business Planning Afhe is an independent, non-profit, association of attorneys and non- attorneys practicing in trusts and Are you ready to start? estates, corporate law and tax areas; afhe members provide a multi- s a business owner, you face the challenges of running employee who understands the company. Also think about buy- disciplinary counseling and advice to your business while anticipating future challenges sell agreements, a gradual sale to an interested employee, an  publicly and privately-held family related to business and management succession, estate employee stock ownership plan or a sale to a private equity firm. enterprises and their owners. A taxes and liquidity, death and disability. Careful planning helps  protect you from the unexpected, gives you time to share your Taxes and Liquidity The 2015 afhe Annual Conference & Membership Meeting is scheduled for April 22-24, 2015 and will Without sufficient liquidity, your estate may be forced to liqui- plans and allows you to work with your advisors to minimize take place at the vibrant and serene, bold and enchanting J.W. Marriott Scottsdale Camelback Inn Resort date assets at substantially less than market value when estate & Spa; located at 5402 East Lincoln Drive; Scottsdale, AZ 85253. The J.W. Marriott Camelback Inn offers the tax consequences of an eventual ownership transfer. a breathtaking 125 acre campus with mountain views, luxurious renewed accommodations and taxes come due. To protect your business and your family, you legendary signature services. The properties Paradise Valley resort has free Wi-Fi in the lobby and Keeping it in the Family need to consider the effect estate taxes will have on your long-  gardens so you can stay connected while enjoying views of Camelback and Mummy Mountain. A good place to start your succession planning is to determine term plans. Have a qualified appraiser provide a business val-

Afhe has assembled a stimulating and enlightening array of educational sessions to be presented by whether you – and your children – want to keep the business uation at regular intervals – this will allow your advisors to some of the most knowledgeable speakers in their respective fields. Please see below for a brief in the family. Consider your own goals, and your children’s. adjust your estate plan to cover your potential tax liability. description of some of our keynote speakers from afhe’s 2015 Annual Conference & Membership They may not be interested in the business or may not have the By taking the time now to work with your advisors to pre- Meeting. Stepping away aptitude to run a company successfully. And, of course, own- pare a succession plan and a wealth transfer plan, you can Join us for afhe’s Golf Outing on Saturday April 25, 2015 at the TPC Scottsdale Stadium Course, which ership and management are not necessarily linked. Depending protect your business and your family, and give yourself peace annually hosts the Waste Management Phoenix Open. The TPC Scottsdale Stadium Course has been on yourStepping circumstances, you may find separating ownership away of mind. rated as one of the top ten public courses in the US.  succession from management succession is appropriate. Afhe means family business! Bring your family and join us in celebrating afhe’s 20 year is easierStepping withLEGAL, INVESTMENT ANDaway TAX NOTICE: This information is not intended to be anniversary. Selling Your Business If you want to sell, work with your advisors to assess the mar- and should not be treated as legal advice, investment advice or tax advice.   Readers, including professionals, should under no circumstances rely upon  ket for isyour business, easier provide a valuation analysis and with prepare this information as a substitute for their own research or for obtaining specific     the business for sale. Consider selling to a business partner or legal or tax advice from their own counsel.   is easier with    someone showing      someone showing  someone showing  Stepping away  you the steps.    youis easier the withyou steps. the steps.     someone showing     youWhen the it comes to succession steps. planning, there’s no such thing as too soon. Northern Trust has the insights you need  to make a smooth transition, while avoiding pitfalls. Getting in front of a plan to transition your business can help ease When it comes to succession planning, there’s no such thing as too soon. Northern Trust has the insights you need  management changes, minimize tax liabilities and give you more liquidity for investing in your future. Take the first  When it comes to succession planning, there’sto make no a smoothsuch thing transition, as too while soon. avoiding Northern pitfalls. TrustGetting has in thefront insightsof a plan you to transition need your business can help ease  step and call Dan Honegger at 813-277-3103 or visit northerntrust.com/business. to make a smooth transition, while avoidingmanagement pitfalls. Getting changes, in frontminimize of a tax plan liabilities to transition and give your you business more liquidity can forhelp investing ease in your future. Take the first  step and call Dan Honegger at 813-277-3103 or visit northerntrust.com/business.  management changes, minimize tax liabilities and give you more liquidity for investing in your future. Take the first  step and call Dan Honegger at 813-277-3103 or visit northerntrust.com/business.   When it comes to succession planning, there’s no such thing as too soon. Northern Trust has the insights you need to make a smooth transition, while avoiding pitfalls. Getting in front of a plan to transition your business can help ease management changes, minimize tax liabilities and give you more liquidity for investing in your future. Take the first step and call Dan Honegger at 813-277-3103 or visit northerntrust.com/business.     

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AFHE_010215.indd 2 12/17/14 1:33 PM fb010215_WealthMgmtSupp.indd 37 12/18/14 3:55 PM WEST 2014 November 12-14, 2014 Ritz Carlton Marina del Rey, CA

Conference emphasized celebration and planning

ttendees at Transitions West 2014 explored to Celebrate and Grow the Family Business.” Sam Gault, ways to honor their family companies’ past president of Gault Energy & Stone; Luconda Dager, pres- successes while securing the future of the fam- ident of Velvet Ice Cream Company; and Jamie Richard- ily enterprise. The conference, held Nov. 12-14 son, vice president of corporate relations at White Castle at the Ritz-Carlton Marina del Rey in Califor- Systems, described how their companies capitalized on Ania, drew 220 participants; 76 families were represented. major anniversaries as an opportunity to develop family Before the official opening of the conference on Wednes- cohesion, communicate family values and market their day, November 12, first-time Transitions attendees and companies. Jeff Saccacio of PwC served as moderator of others who wanted to reinforce their knowledge attend- the panel. ed a session on “Family Business Basics.” Family Business After the panel session, Andrew Taylor, executive chair- Magazine editor-in-chief Barbara Spector provided some man of Enterprise Holdings, delivered the opening keynote insights into the Transitions experience. JoAnne Norton, address. a consultant with the Family Business Consulting Group, The welcome reception that followed the keynote speech explained basic family business terminology and concepts. included a birthday cake in celebration of Family Business Peter Begalla, Family Business Magazine’s conference and Magazine’s 25th anniversary. education director, offered suggestions on how to get the most out of the conference. Transferring ownership Thursday, November 13 began with a panel presentation Landmark anniversaries on the subject of “Passing the Torch: Planning a Transi- The opening program on Wednesday evening started with a tion of Ownership to the Next Generation.” At this session, panel discussion entitled “Milestones: Using Anniversaries senior-generation family business leaders addressed the

From left, moderator Donna Trammell of Bessemer Trust; Jo Anne Allen, trustee, DWA 1989 Family Trust; Jeni Carriere-LaDuke, family council member, Carriere Family Farms; Nick Shepard, communications director, Smith Family Council, Menasha Corporation; and Debbie Brown, chairman, Laird Norton Co., spoke about ‘Creating the Successful Family Meeting.’

38 Family Business • May/June 2014

fb010215_TransWestReport 12-16 bs.indd 38 12/18/14 3:45 PM A trio of panelists discussed how family companies can Speakers at a session on ‘Raising Kids Successfully in a use their milestone anniversaries to develop family cohe- Successful Family Business’ (from left) were Michael Basore, sion and promote the business. Speakers (from left) were president of TKM-Bengard Farms, and his son, Myles Sam Gault, president of Gault Energy & Stone; Luconda Basore; Henry Hunte II, director and family council chair Dager, president of Velvet Ice Cream Co.; and Jamie at H.G. Fenton Co.; moderator Anna Niichols of Altair Richardson, vice president, corporate relations, White Advisers LLC; Scenic Root, a next-generation member of Castle Systems. the Root family; and Scenic’s father, Preston Root, presi- dent of the Root family board of directors.

delicate art of retiring and preparing to give up control. After each panel session, attendees discussed the ideas They also spoke about methods of transferring ownership, presented by the panelists and how they might apply these including ESOPs, buyouts, gifting, financing and trusts. Don concepts in their own family companies. Freeman, chairman of Freeman; Jim Warjone, chairman of Port Blakely Companies; and Steven High, chairman of H.J. High Construction Company, were the panelists. Moderating the discussion was Patricia Armstrong of Abbot Downing. Conference participants then split up into groups based on number of family members involved directly or indi- rectly with the family business: small (one to ten family members), medium (between 11 and 25 family members) and large (more than 25 family members). Each group ana- lyzed a case study developed by the Kellogg School of Man- agement’s Center for Family Enterprises. Facilitating the discussions were Mark Haranzo of Withers Bergman, Bryant Seaman III of Bessemer Trust, Lloyd Shefsky of the Kellogg School, JoAnne Norton of the Family Business Consulting Group, Dirk Jungé of Pitcairn and Scott Winget of Ascent Private Capital Management.

PHOTOS: ON LOCATION PHOTO PROS www.familybusinessmagazine.com 39

fb010215_TransWestReport 12-16 bs.indd 39 12/18/14 3:45 PM A session entitled ‘Passing the Torch’ addressed ownership Howdy Holmes, CEO of Chelsea Milling Co., makes a point transfer. Speakers (from left) were Jim Warjone, chairman of in a breakout session led by JoAnne Norton of the Family Port Blakely Companies; Don Freeman, chairman of Freeman; Business Consulting Group. moderator Patricia Armstrong of Abbot Downing; and Steven High, chairman of H.J. High Construction Company. children in a business family. Sharing their stories were Michael Basore­ , president of TKM-Bengard Farms, along with next-generation member Myles Basore; Henry Hunte Family leaders and healthy kids II, director and family council chair of H.G. Fenton Co.; and “Family Leadership Roles and Responsibilities” was the Preston Root, president of the Root Family Board of Direc- topic of a discussion moderated by Rhona Vogel of Vogel tors, along with next-generation member Scenic Root. Anna Consulting. This session examined the key role of the fami- Nichols of Altair Advisers LLC moderated the discussion. ly leader, as opposed to the leader of the business. Speakers Optional sessions on Thursday afternoon offered the were John Reininger, chief relationship officer at The Clem- opportunity to participate in small-group discussions on ens Family Corporation; Barb Quasius, treasurer and CFO a range of topics: family councils, next-generation family of Windway Capital Corp.; and Antonio Luis Ferré Rangel, members, non-family executives, senior/managing gener- chief operating officer of Grupo Ferré Rangel. ation members and married-ins. A session entitled “Raising Kids Successfully in a Suc- The day concluded with a group dinner at Killer Shrimp cessful Family Business” focused on key developmental Restaurant, with remarks by Kevin Michaels, second-gen- tasks, issues and proven approaches to raising healthy eration owner of the restaurant.

Corporate culture The opening session on Friday, November 14, was a keynote interview with Lou Gentine, chairman of Sargento Foods Inc., who discussed his company culture and code of ethics, among other topics. Nancy Drozdow of CFAR was the interviewer. Gentine and Drozdow’s discussion was followed by spe- cial “focus sessions” on key topics of interest. Topics were “Creating a Family Social Media Policy” (facilitated by Dirk Jungé of Pitcairn), “Family Employment Policies and Com- pensation” (facilitated by David Guin of Withers Bergman LLP), “From Business Owner to Family Enterprise” (facili- tated by Debbie Bing of CFAR), “Mentoring the Next Gener- ation” (facilitated by Greg McCann of Stetson University), “Communications, Conflict and Conciliation” (facilitated by Lloyd Shefsky of the Kellogg School’s Center for Family Enterprises), “Wealth Management” (facilitated by Martim de Arantes Oliveira of Ascent Private Capital Management), “Tax and Estate Issues” (facilitated by Jeff Saccacio of PwC) and “Next-Generation Roles in the Family Business” (facil- itated by Shannon Zur of Vogel Consulting).

Andrew C. Taylor, executive chairman of Enterprise Holdings, delivered the opening keynote address. The company, found- ed in 1957 by his father, Jack C. Taylor, now generates annual revenues of nearly $18 billion.

40 Family Business • May/June 2014

fb010215_TransWestReport 12-16 bs.indd 40 12/18/14 3:45 PM Nancy Drozdow of CFAR interviewed Lou Gentine, chairman Caro and Bob Rock, owners of Family Business Magazine, of Sargento Foods Inc., in a keynote presentation. celebrated the magazine’s 25th anniversary.

Small-group discussion sessions offered conference attend- The roles and responsibilities of family leaders were the focus ees the opportunity to share their family business experienc- of a panel discussion. From left, moderator Rhona Vogel of es and to learn from each other. Vogel Consulting; Antonio Luis Ferré Rangel, chief operating officer of Grupo Ferré Rangel; Barb Quasius, treasurer and CFO, Windway Capital Corp.; and John Reininger, chief rela- Family meeting tips tionship officer, The Clemens Family Corporation. The conference’s final panel session offered tips on “Cre- ating the Successful Family Meeting.” Sharing ideas on how to make family meetings more robust were Jo Anne Allen, trustee of DWA 1989 Family Trust; Nick Shepard, communications director of the Smith Family Council, Menasha Corporation; Debbie Brown, chairman of Laird Norton Company; and Jeni Carriere-LaDuke, family coun- cil member, Carriere Family Farms. The event concluded with a wrap-up session led by Bob Rock, president of MLR Holdings LLC, and Ronda Ritter Ray, a family director of E. Ritter & Co. Rock and Ray highlighted key points that emerged from the conference sessions. Transitions West 2014’s Platinum sponsor was PwC. Gold sponsors were Bessemer Trust, Abbot Downing, Vogel Con- sulting and Ascent Private Capital Management. Silver spon- sors were the Family Business Consulting Group and CFAR. Bronze sponsors were Withers Bergman LLP, Altair Advisers, Pitcairn, and Kellogg School of Management Center for Fam- ily Enterprises. Supporting sponsor was iLEAD. The confer- Jeff Saccacio of PwC led a breakout session that focused on ence was presented in association with Stetson University. nFB tax and estate issues.

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fb010215_TransWestReport 12-16 bs.indd 41 12/18/14 3:45 PM EMPHASIS ON TEAMWORK Delaware North grew from a tiny peanut vendor in Buffalo, N.Y., to a sports and entertainment company spanning four continents with $3 billion in sales. Its owners, the Jacobs family, are putting governance structures in place as they make the transition from a strong leader to a trio of third- generation members.

BY DAVE DONELSON

he Jacobs family believes in taking a long- term approach but doesn’t shy away from non-traditional management ideas. This Tyear they celebrate the 100th anniversary of Delaware North, their burgeoning hospitality ser- vice empire, by inaugurating a trio of CEOs. The company has had only two chairmen in its history—a statistic that remains unchanged despite recent management moves. “We’re a group of profes- sionals who have spent our lives in this,” says patriarch Jeremy Jacobs, Delaware North’s second chairman. (His father was the first.) “There’s a desire every day to make it better and to grow it bigger.” Jeremy took a long-contemplated transition step at the end of 2014 when he announced he was re- linquishing his title as CEO while remaining as chairman. His two oldest sons, Jerry and Lou, will serve as co-CEOs of Delaware North. The youngest son, Charlie, will become CEO of the family’s Boston properties, which include the TD Garden, home of the Boston Bruins, a National Hockey League team owned by the Jacobs family, as well as basketball’s Boston Celtics. Progress toward succession has been slow and de- liberate. Numerous consultants and advisers were engaged along the way. Hard lessons Jeremy learned

42 Family Business • January/February 2015

fb010215_Jacobs_CoverStory 12-18 bs.indd 42 12/18/14 3:22 PM PHOTO: JOE CASCIO PHOTOGRAPHY

Above: Jeremy Jacobs (second from left) with his sons (from left), Lou, Jerry and Charlie. Left: Delaware North will celebrate its 100th anniversary this year with the opening of a 12-story headquarters building.

from the sudden death of his father and the tumultuous times that followed (which included multiple federal in- vestigations of the company) also have shaped how he and his sons are carrying out the transition. Jeremy Jacobs is well known as the chairman of the NHL and owner of the six-time Stanley Cup-winning Bruins. Delaware North, the Buffalo, N.Y.-based family enterprise, encompasses various operating companies that provide con- cessions at sports venues around the world; run casinos and racetracks across the country; feed and entertain 350 million airport travelers; and provide lodging, food and recreational opportunities at some of America’s biggest national parks. Jeremy’s father, Louis Jacobs, founded the company in 1915 with his two older brothers in Buffalo. Louis sold pea- nuts at the city’s ballpark and popcorn at a local burlesque house while his brothers rented canoes and shined shoes at Delaware Park Lake. The trio won a Major League Base- ball concession contract from the Detroit Tigers in 1930, a relationship that exists to this day. Louis eventually bought out his brothers when their health deteriorated. Louis’s son Jeremy later bought out his two brothers, Mark and Law- rence, who pursued other interests. As it grew, the company changed its name from Jacobs Brothers to Sportservice to Emprise and, finally to Delaware North, the name of the two streets in Buffalo where it was originally located. In 2014, Delaware North reached $3 billion in annual sales, employed 60,000 associates and served a half-billion customers.

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fb010215_Jacobs_CoverStory 12-18 bs.indd 43 12/18/14 3:22 PM to our company’s future and we have an active, informed shareholder base. That really helps for long-term stability.” His brother Jerry is 53; Lou is 51. They have three sisters: Lynn Reichenbach, 55; Lis- ann Jacobs, 54; and Katie Robinson, 48. All are shareholders, although only the three sons work for the company. Jere- my Jacobs has 18 grandchildren and two great-grandchildren.

Learning from the past Jeremy is now 75, robust and actively involved in company management. He shares many responsibilities with his sons while concentrating more on NHL matters and philanthropic inter- ests with his wife, Margaret. Jeremy has long worked to prepare his sons for the transition. The need to be ready was a lesson he learned the hard way when his own father, Louis, died suddenly in his office in 1968, leaving the company in Jeremy’s hands at the tender age of 28. “I was not ready for it,” Jeremy says. “Nobody should go through that.” On the other hand, he adds, “If you can live through it, you gain a great deal of knowl- edge. But I would not subject anybody to that.” Jeremy had worked for this father his entire life. “He was tough—a hard guy to outwork,” he remembers. “He worked seven days a week, 20 hours a day.” His father left behind a flourishing company with some $50 million in sales at more than 500 operating units, including England’s Royal Ascot Race Track, the New York World’s Fair and innumerable baseball stadiums. But the company also had some unsavory aspects that caused serious problems for several years. The U.S. Justice De- partment began investigations in 1972 Above, top: The Jacobs family started out selling by popcorn and peanuts. into possible antitrust violations, labor Above, bottom: The family, who own the National Hockey League’s Boston Bruins, union contracts and connections with celebrates after the team’s 2011 Stanley Cup victory. Jeremy Jacobs (in yellow tie) organized crime by Delaware North pre- enjoys the moment with his children (from left), Lisann Jacobs, Lou Jacobs, Katie decessor company Emprise. The investi- Robinson, Lynn Reichenbach, Jerry Jacobs and Charlie Jacobs. gations culminated with the conviction of the company (along with six reputed “We’ve evolved from sports to race tracks to arena man- mobsters) for concealing ownership of the Frontier Hotel and agement, and we’ve got a real estate project in Boston that’s Casino in Las Vegas. The company’s pari-mutuel operations pretty serious,” Jeremy says. “I hope the family grows itself and liquor licenses were severely affected, and Jeremy spent into the future.” years working to recover the company’s good name. Growth is very much on the mind of Jeremy’s three sons, “It made you stop and think about everybody you do Jerry, Lou and Charlie. They’re even more concerned with business with,” he says today when asked what lessons he preserving value for the future, however. “We take ourselves learned during that time. “You have to examine them and quite seriously in what we do, but we also have a sense of hu- you have to be more responsible for the personalities you mility about us,” 44-year-old Charlie says. “We’re committed expose yourself and your business to.”

44 Family Business • January/February 2015

fb010215_Jacobs_CoverStory 12-18 bs.indd 44 12/18/14 3:23 PM Lou Jacobs says his father firmly passed along that concept came of age. All three of them worked elsewhere for sever- to him and his siblings. “The lesson of those accusations is al years and worked their way up within Delaware North what a blotch on our reputation could mean to our business,” across a range of jobs and divisions. “When I graduated from Lou says. “We’re very hypersensitive to that type of thing.” college, he told me to go find a job on my own,” Jerry says. The proof that the lesson was learned is in the company’s “Dad wanted me to know what it was like to hold a job before success today. “We do a lot of business with national parks, I came to work for him.” port authorities, municipalities, airports,” Lou points out. “Whether it’s the racing commission, or liquor licenses, or Hard lessons Jeremy Jacobs learned the parks commission, or the city of Chicago or Atlanta, we have to make sure we’re indisputably ethically clean.” from the sudden death of his father Holding high-profile positions like Jeremy’s NHL chair- and the tumultuous times that manship, however, involves scrutiny by sports fans and the press. The 2012-13 NHL player lockout generated harsh back- followed have influenced the way he lash, and the family’s dispute with a Wellington, Fla., real is passing leadership to his sons. estate developer was the subject of an unflattering Boston Magazine article that same year. “Occasionally, there are is- sues that we become involved in that are played out in the The sons didn’t have it easy after they joined the com- public landscape,” Lou says. “In the case of the lockout, our pany, Jerry says. “He was very hard on me in terms of his father is the chairman of the Board of Governors for the NHL, criticism. It was always a little heavier than it was on others. and his role in ensuring the league’s health and success is Not that he wanted to toughen me up, but because he want- something very important to him. It was unfortunate that the ed to make it abundantly clear to me and everyone else that lockout happened, and no one wanted it—especially him.” I wasn’t entitled to anything.” Jerry says that approach had Jeremy Jacobs received the St. Jude Award for Inspiration two positive outcomes. “In order for me to do my job, it was in Sports at the Global Sports Summit, a meeting of sports important to know I could do it on my own,” he says. “You franchise leaders and owners, in August 2013, and the NHL can’t be a strong leader if you don’t have self-confidence. was named “Sports League of the Year” for 2013-14 by Sports- Looking back, I wouldn’t have the respect of the executives Business Journal and SportsBusiness Daily. I work with today if it had been any other way. It was a gift Lou says of the Wellington controversy, “It’s a complicated he gave me.” With a laugh, he adds, “I can say that now.” issue, with a Boston real estate developer attempting to com- Until their appointments as CEOs, Jerry, Lou and Charlie mercialize a protected preserve. We will continue to work held the title of “principal” of Delaware North. They don’t so hard to see this area protected, as it’s important to our family much divide their duties as surround them. “We really try and important to the community. We do not shy away from to operate as a group of three,” Charlie says. “We each have supporting candidates and causes that are important to our our own direct focus day-to-day, but we try to be interchange- family or to our company.” able.” He oversees the large Boston operation, which includes the Bruins, TD Garden (which is undergoing a $70 million Training ground upgrade) and a nearly 2 million-square-foot mixed-use proj- In addition to teaching them to stand fast for their beliefs, ect under development adjacent to the arena. He travels to Jeremy also made sure his sons really wanted—and were Buffalo, where his brothers are headquartered, for weekly capable of—responsible positions in the company when they management meetings chaired by his father every Monday.

Boston’s TD Garden is a Delaware North property.

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fb010215_Jacobs_CoverStory 12-18 bs.indd 45 12/18/14 3:23 PM “We have a partnership model we’re Delaware North around the world working on, where we work very close- ly together,” Jerry explains. “Lou’s office elaware North Sportservice is the for operations on park property, Delaware is across the hall from mine, and we oldest and second-largest (with North has invested in numerous resort, bounce decisions off each other until we D27% of revenue) division in the food and lodging properties of its own come to agreement. It works very well.” company, with 55 clients like Busch Sta- adjacent to them, like Tenaya Lodge at None of the three professes to have or dium in St. Louis and CenturyLink Field in Yosemite. want a dominant leadership position. Seattle. The division, which harkens back Travelers passing through Los Angeles, to the company’s roots by operating food, Atlanta, Newark and dozens of other air- Management and the board beverage and other concessions at stadi- ports around the world eat at hundreds Another lesson Jeremy learned from his ums, has served customers at Super Bowls, of restaurants and other facilities operat- long experience is the importance of pro- the Olympics, the World Series, and even ed by Delaware North Travel & Hospitality. fessional, non-family management in a the Little League Baseball World Series in The company recently acquired the Pati- company the size of Delaware North. “To Williamsport, Pa. na Restaurant Group, whose high-pro- think we possess all the knowledge and The largest division is Delaware North file portfolio includes New York’s famed professionalism within the family is mis- Gaming & Entertainment, which gener- Rockefeller Center Ice Rink and Rock leading,” he says. “We seek out the best ates about 29% of the company’s reve- Center Café, the Grand Tier Restaurant and brightest in the professional man- nue. This unit specializes in racing venues at the Metropolitan Opera, and the Miche- agement of the company.” The family with added video gaming, table games, lin-starred Patina Restaurant in the Walt incentivizes top management and keeps full-service restaurants, retail shops and Disney Concert Hall in Los Angeles. career paths open. “To say you can’t be hotels. You won’t find these venues in Las International operations are a growth ‘president’ if your last name isn’t Jacobs Vegas or Atlantic City, but the company center for Delaware North. In 2014, it is to cut people off,” he says. has steadily built business in places like debuted a joint venture with a local con- Chuck Moran, who joined the compa- Memphis, the Quad Cities and Cincinna- cern to provide catering and food services ny in 1992 as a VP of finance, is Delaware ti. In early 2014, the company gained the to the Singapore Sports Hub, marking a North’s president and chief operating right to build a video lottery terminal on return to the Asian market after a 20-year officer. “We’ve also taken a lot of time New York’s Long Island. hiatus. In Australia, Delaware North owns to beef up the next level of profession- Delaware North got into the national several resorts and recently extended its al management,” he observes. “We’ve parks concession business in 1993 when concession contract with Melbourne & brought on a lot of people over the last it won the contract to serve visitors to Olympic Parks, home of the Australian ten years, groomed them, and switched Yosemite National Park. Today, it also Open Grand Slam tennis tournament. assignments to give them diverse experi- manages the Kennedy Space Center vis- On the other side of the globe, Delaware ence. We’re preparing for the next transi- itor complex and Shenandoah National North serves soccer fans at two of the tion.” Current plans call for him to retire Park, among dozens of other attractions. three largest stadiums in London, Wem- at the end of 2015. In addition to the government contracts bley and Emirates. —D.D. The company also has a strong, active board of directors, a majority of whom Wembley Stadium, London are independent members. “We look for people who have both related experience in the business and those who have un- related experience because they bring a different perspective,” explains Delaware North director Howard Fluhr, who is also chairman of consulting firm Segal Com- pany. “In a private company in general, in addition to the obvious fiduciary du- ties, you want to have a range of points of view on the board. That’s even more important in a family business.” Jeremy Jacobs and his sons serve on the board, along with six outside directors with backgrounds in finance, sports law, hospitality and consulting. The board meets four times per year. At each meet- ing, Moran gives a report and operating managers make presentations about var- ious aspects of the business and pending matters. “That gives us not only insight

46 Family Business • January/February 2015

fb010215_Jacobs_CoverStory 12-18 bs.indd 46 12/18/14 3:23 PM Above: Delaware North’s Space Shuttle Atlantis attraction at Kennedy Space Center’s visitor complex. Right: The company owns and operates Tenaya Lodge at Yosemite, a resort located two miles from the national park.

into what’s going on, but exposes the board to those people as well,” Fluhr says. Jeremy purposely built a strong board. “The quarterly re- views, compensation committees, audit committees—in a family structure they get lost,” he points out. “But in the corporate structure, the board forces that upon you. That’s one of the better things we did years ago.” cludes the six siblings, and we present the same financial data the board gets. We discuss the strategic direction and major Family governance moves in management. We get their feedback, and that goes When it comes to completing the transition to the third gen- into the equation.” In addition, he says, “We just formed a eration, Jeremy says the plan must be developed and carried family assembly, which includes spouses and G4s. Then we out by his sons. “They spend a lot of time making sure they have a family council, which consists of the six siblings. It don’t get in one another’s way,” Jeremy says. “It will happen deals with the business of the family, not the business of the within that structure.” business. The shareholder meetings are about the business.” Jerry concurs. “He’s absolutely right. If we don’t come up Although no other family members currently work at Del- with a solution that’s ours, it’s worthless. Of course, the real aware North, Jerry says, “We’ve crafted a family employment test will be when our father is no longer around.” policy and begun to take steps connecting to G4 in terms of “They have such a great formula with Charlie, Lou and what opportunities the company might offer and how they Jerry all working together,” says 48-year company veteran might go about pursuing them. We’ve been very careful to Rick Abramson. “They all have different thoughts and points make sure there are no expectations that family members of view, but when one talks, he speaks for them all. It’s a work in the business. We don’t want to make it a burden. It strong, unified family.” should be more of an opportunity.” This didn’t happen by accident. “My brothers and I decided He summarizes the family’s careful approach to the in- we wanted to work better together and get to another level tersection of family and company business by observing, of performance,” Jerry explains. “We brought in a consulting “We watch closely what happens around family-owned com- group to help us do that.” They adopted the High Performing panies. We’ve seen how family disputes can pour over and Team model from Guttman Development Strategies. “It was destroy a good business. We’ve seen how business decisions a lot of work, a lot of drama; many, many hours of thinking can be made on an emotional family basis that is really wrong this through and talking openly about how to do it,” Jerry for the business. Our mantra is, ‘We’re trying to protect the adds. “It’s worked very, very well.” business from the family and protect the family from the “On the family side, they made a deliberate choice to do business.’ ” this just as siblings, as opposed to involving their father,” says “All of it is in the interests of long-term continuity,” says Stephanie Brun de Pontet of the Family Business Consulting Brun de Pontet. “They understand that, in order to succeed Group, who has worked with the brothers on family gover- over multiple generations, it’s important to invest in the fam- nance issues. “They felt it was important for them to gel as a ily relationship as well as the strong business practices they group for the future. The dynamic would be different if their have developed.” nFB dad was in the room.” Jerry points out that they are deeply invested in sound Dave Donelson is a business writer in West Harrison, family governance practices. “We have regular shareholder N.Y., and the author of the Dynamic Manager Guides and meetings on a quarterly basis,” he explains. “That group in- Handbooks.

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fb010215_Jacobs_CoverStory 12-18 bs.indd 47 12/18/14 3:23 PM peter paul and

The original Peter Paul Electronics Co. building in New Britain, Conn. The Mangiafico family faced legacychallenges on several fronts as the time neared for a transition to the third generation of leadership at their company, Peter Paul Electronics Co. With the help of advisers, the family built a foundation for the future of the business, which has locations in Connecticut and Puerto Rico.

BY MARGARET STEEN

aul Mangiafico Sr., an emigrant from Sicily to Con- more efficient and create a formal governance system. necticut, had an entrepreneurial bent. After running For Paul S. Mangiafico, a son of the founder, the fami- a beauty salon for a time, he set his sights on the ly business—whatever it was—was always part of his life. Pthen-booming industrial sector. In 1947, he created “When I was young he had the beauty shop, and on week- Peter Paul Coil Co. to ends it was my job to wash the towels and dry and fold sell to the television and them,” says Paul, who today at age 78 is the company’s chair- locomotive air brake in- man. “When he started Peter Paul, I was too young to work dustries. The result was in the factory, so I had more menial jobs,” Paul says. “But I a lasting family business worked alongside the engineers and was always learning.” that today is being guid- He continued to work at Peter Paul Coil Co., which in 1953 ed toward expansion became Peter Paul Electronics Co. by his grandchildren. In the 1960s, the business expanded into solenoid valves, The path has not used in industrial automation. This gave the company op- always been smooth, portunities in new industries, such as oil and gas, and new though. As the family locations, like Europe and Asia. grew and competition At various times all three second-generation siblings, plus increased, the second their spouses, were involved in the business. Paul S. Mangi- and third generations afico and his brother Michael Mangiafico Sr. primarily ran worked hard to expand the business along with their mother, Josephine, after their the brand globally, father’s death in 1979. (Michael Sr. died in 2010.) modernize operations, Today the company is owned entirely by family members, Founder Paul Mangiafico Sr. make the business with the second generation (but no single member) holding

48 Family Business • January/February 2015

fb010214_PeterPaul 12-17 bs.indd 48 12/18/14 3:25 PM a majority of the shares. Some family members own shares in the company but don’t work there. Peter Paul, which generates annual sales of about $20 mil- lion, sells to a wide range of industries. Customers include makers of automated equipment for the food and beverage industry, manufacturers of air conditioning systems for the automobile industry and makers of aerospace equipment and medical devices. “We are positioning ourselves to be a high-end, complete solution, competing globally,” says third-generation member Michael Mangiafico II, 41.

Puerto Rico connection A key part of the company’s strategy involved expansion into Puerto Rico in 1972. The Puerto Rican government was offering incentives to attract American businesses at a time when Peter Paul was looking to expand. The island reminded Paul Sr. of Sicily, which added to the attraction. He sent his son Michael Sr. to lead the effort. The company had pioneered a way of making a better-per- forming coil, and it moved the coil operation to Puerto Rico while keeping the valve operation in Connecticut. The Puer- to Rico unit was named Peter Paul Electric. The addition of the Puerto Rico plant expanded the com- pany’s—and the family’s—horizons. Shelly Mangiafico Cyr (Michael Sr.’s daughter) moved to Puerto Rico when she was legacy two years old, and her siblings were born there. “Mom took care of the paperwork at Peter Paul Electric, and I’d be in the playpen in the office,” says Cyr, now 45. Today Cyr is the company’s marketing communications leader and helps in human resources. Her husband, Sean Cyr, 44, also works for the company, as facilities mainte- nance manager. Her sister Lisa Ann Mangiafico Takacs, 36, is production manager. “I remember a very family-oriented company: Everybody that worked in the building, we all knew each other,” says Kevin John Mangiafico, 39, about his childhood in Puerto Rico. Even after moving back to the United States, he knew he wanted to work for the family business: “I always knew I’d be part of it,” he says. Today Kevin is executive vice president of Peter Paul Electric in Puerto Rico, and has made a home there: “It’s warm and sunny every day—I enjoy the island very much,” he says. Michael II also experienced both parts of the business grow- ing up. He spent his early childhood, plus two years during high school, in Puerto Rico. He also spent ten years there after college, and today he travels there frequently on business. The family returned to Connecticut when Cyr was 13. The family had maintained close connections, so the transition Top: Peter Paul treasurer Josephine Mangiafico (foreground), was not too difficult. “We tried to come to Connecticut at least wife of Paul Mangiafico Sr., at work. once a year at Christmas, so I knew what snow was,” Cyr says. Today, the Puerto Rico and Connecticut operations are Center: Teresa Mangiafico Cocina, Josephine’s sister, working two separate companies, though closely connected. Peter the coil winder at the Peter Paul Coil Co., surrounded by her Paul Electric, in Puerto Rico, makes coils that are used in the parents, Sebastiana and Paul Mangiafico (in back) and Paul valves produced by Peter Paul Electronics, in New Britain, Mangiafico Sr. (front). Conn. The Puerto Rico operation has about 45 employees. Bottom: From left, second-generation members Michael and Michael is president of that company, and his brother Kevin Paul S. Mangiafico with Paul Mangiafico Sr., at the compa- runs the operations there. ny’s original location.

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fb010214_PeterPaul 12-17 bs.indd 49 12/18/14 3:25 PM In New Britain, where Michael is CEO and his cousin Mark His promotion is part of an effort to move leadership to the Mangiafico is president, there are about 150 employees. Arelis third generation. As chairman, Paul has moved to more of a Mangiafico, Michael’s wife, is a production control specialist. supporting role. “I keep my finger on the pulse of everything that’s happening,” Paul says, “and try to keep it so I’m not Transition complexities making the decisions.” Mark, the president, is Paul’s son; Mark worked in the New Britain factory as a teenager on Michael, the CEO, is Paul’s nephew. weekends and during school breaks. “It was a big part of my The family had to overcome challenges to get to this point. life,” he recalls. “It kind of spawned an interest in all things Cyr notes that it is more difficult for the six members of her mechanical and electrical. I was a tinkerer; I liked to know generation to collaborate than it was for her father and uncle how things worked.” to run the company as a team. “They spoke to each other After graduating from college with an electrical engineer- every day,” Cyr reflects. ing degree, he wanted to go out on his own. He worked In 2008, Peter Paul received a Family Business of the Year outside the family business for six years, then returned to award from the University of Connecticut. But there were Peter Paul and learned from some of the longtime engineers signs of potential problems. The transition to the third gen- before they retired. Ultimately he ran the engineering de- eration, when the number of family members usually grows partment; recently, he was promoted to president. significantly, is a perilous time for any family business. The family had no clear succession plan, The Mangiafico family in 2008, when Peter Paul received the University of Connecticut’s and it had plants in two places—New Family Business of the Year Award. Back row, from left: Shelly Mangiafico Cyr and her England and Puerto Rico—that were husband, Sean Cyr; Jen and Gary Mangiafico with son Cole; Kevin Mangiafico; Michael divided by language, culture and life- Mangiafico II and his wife, Arelis; Mark and Serafina Mangiafico. Front row: Ginny style as well as an ocean. and Michael Mangiafico Sr.; Lucy Devin (sister of Michael Mangiafico Sr. & Paul S. The company also had aging tech- Mangiafico); Paul S. Mangiafico and Lisa Mangiafico. nology and facilities, Michael says. And it was vying with multination- al companies that had bought its ­competitors. The family members realized that, as Mark puts it, “we’re not the first family business to have these types of issues.” They engaged outside help, particularly from David Tate, an assistant clinical professor at Yale University and principal at Tate Con- sulting Group. In 2012 the Mangiaficos formed a family council as a forum for dis- cussing business and family issues. The council consists of members of the third generation and meets about once a month. The Mangiaficos’ desire to estab- lish a family governance structure stemmed in part from their expe- rience in 1979, when founder Paul Mangiafico died. Although the lead- ership transition at that time was rel- atively smooth, there were worries about estate taxes. With memories of the difficulties inherent even in a fairly simple transition, members of the third generation realized the next transfer of ownership and manage- ment would be even more complex. “It’s difficult to have those conver- sations: leadership succession, estate planning, ownership succession,” The current Peter Paul Electronics Co. building in New Britain, Conn. says Mark. Tate coached Mark and Michael sep-

50 Family Business • January/February 2015

fb010214_PeterPaul 12-17 bs.indd 50 12/18/14 3:25 PM arately and together, helping them realize how they could best work together to help the company. “Most people can see a step or two steps ahead; Michael can see five or six steps ahead,” Tate says. “He is a very passionate, driven person who has a really good ability to influence others.” The two cousins say joint coaching helped them achieve their goal of working together better. “We really learned how to leverage each other’s strengths to be a great leadership team,” says Michael. The cousins approached Paul and said they were creat- ing a forum—the family council—for handling difficult de- cisions, and that they could come up with a succession plan that everyone in the third generation agreed with. The creation of the family council was “really important in helping unite the third generation,” Tate says. A key part of the new family council’s discussions focused on how Michael’s vision could be melded with Mark’s op- erational strengths. Wilma Pastrana, the first lady of Puerto Rico (in pink shirt) with “We started to look at it from a different perspective: What (from left) Kevin Mangiafico, Arelis Mangiafico and Michael is the succession that should happen, rather than just, ‘You’re Mangiafico II. The first lady, an advocate of consuming fresh the oldest, so you’re entitled to it,’ ” Kevin says. and natural food, visited Peter Paul Electric’s headquarters When the third generation agreed, they presented the plan in Fajardo, Puerto Rico, and toured the company’s communi- to Paul Mangiafico and Virginia Mangiafico, the widow of ty vegetable garden for employees. Paul’s brother Michael. The two senior family members were on board, and the new leadership structure was established. “The competitive landscape was changing.” Working with Tate, Mark says, “allowed what can be very The company engaged outside experts to help them re- emotional topics to be discussed in a very rational manner.” solve their business issues. In addition, Michael identifies For example, one issue that came up was the future of several other essential steps they took to turn around the the other third-generation members. With the roles of CEO company’s performance and improve its governance: They and president filled, would there be growth and leadership overhauled processes, built political capital so they could take opportunities for the others? advantage of government incentives for manufacturing, and “When you first start talking about this topic, you immedi- focused on coaching and leadership development training. ately envision some sort of glass ceiling,” Mark says. How- Company executives looked carefully at their processes, ever, he notes, the next generation is aiming to grow the aiming to control costs and time their supply purchases bet- company. “With growth and expansion, there’s going to be ter. This helped the business’s cash flow and made it more a plethora of leadership opportunities.” efficient. In the past year, the company has also created a share- “The changes really made a difference in terms of opera- holders’ agreement and new bylaws for its board of directors. tions, finance and accounting,” Tate says. “From there they In addition to Tate, the company worked with other outside were able to overhaul their business practices in a number help, including legal counsel to help draft the shareholders’ of different areas.” agreement. “A key to our success is having the right outside They also won funds for modernization from the state consultants in place,” says Mark. A family employment pol- government in Connecticut, which was trying to keep busi- icy is currently being created. nesses from moving manufacturing jobs out of state. The council is laying a solid foundation for the future. “To be a company that’s now poised for the future, not “It’s only going to get more and more complicated” as the working with older, antiquated technology—that was huge,” fourth generation gets old enough to join the business, says Tate says. Gary Mangiafico, 45, manager of the production preparation Just when the business was turning around, the 2008 re- process. Gary, who is Mark’s brother, is in charge of new cession hit. “The recession was a significant setback,” Mark product development for Peter Paul. says, “but we went back to the basics, made sure we stayed true to our vision, and bounced back from that as well.” Turnaround time The family is looking toward the future, Mark says. “The The last decade has seen not only a shift in leadership six people that are involved in the business in the third gen- but also a turnaround of the company’s business, which eration, they’re really all in: There’s a lot of commitment,” struggled amid competition from low-cost regions in the he says. “The six of us are completely committed to the late 2000s. business and to the family, so that makes it easier.” nFB Family members realized that Peter Paul was no longer operationally efficient at a time when, according to Mark, Margaret Steen is a freelance writer based in Los Altos, Calif.

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fb010214_PeterPaul 12-17 bs.indd 51 12/18/14 3:26 PM Simply sustainable The second-generation leaders of wholesale distributor Hill & Markes run their business with an eye on taking care of the environment— and developing a third-generation leader.

BY ILENE SCHNEIDER

hen the owners of Hill & Markes Inc. purchased the company and expanded the product talk about sustainability, they are refer- line to include school supplies, paper products, rental ring to their company’s longevity as well dishes and cutlery. A second-generation trio joined Was their environmental responsibility. the company in the 1970s: Harry and Harriet’s son, The wholesale distribution company has survived Jeffrey Finkle; their daughter, Andrea Finkle Packer; recessions and other challenges over the course of and Andrea’s husband, Neal Packer. Jeffrey Finkle, 108 years—67 of them under the current family own- 61, is the president, and Andrea Packer, 66, is vice ership. CEO Neal Packer, 65, says the company’s suc- president of marketing. cess stems from the family’s ability to stay focused, The company has evolved since Harry and Harriet’s capitalize on their talent and run the business with day, according to Neal. “It was a small, mom-and-pop high morale and integrity. operation that sold candy, sundries, toys and holi- Amos Hill and Charlie Markes founded Hill & day decorations to convenience stores,” he explains. ­Markes in Amsterdam, N.Y. (about 35 minutes from “These places were going out of business as ‘big-box’ Albany) in 1906 as a candy, ice cream and ice cream stores were growing in popularity. We diversified into cone distributor, making deliveries by horse-drawn our current product lines.” buggies and sleighs. In 1947, Harry and Harriet Finkle Today the company distributes janitorial supplies; foodservice disposables; industrial packaging; office supplies; ice cream toppings and supplies; and or- ganic, gluten-free and vegan snacks and products. It serves a range of customers throughout New York state (with the exception of Long Island and New York City), including hospitals, nursing homes, restaurants, schools and universities, government agencies, vend- ing companies, building service contractors, manu- facturers, food processors, hotels, corporations and grocery stores. Hill & Markes employs up to 190 people, depend- ing on the season. “Most of our employees have been here for ten or 20 years or more,” Neal says. “While lots of distributors have gone out of business in the recessionary economy of a few years ago, we have added employees and kept growing.” Andrea adds that Hill & Markes “aggressively went Harriet and Harry Finkle bought the company in 1947. out looking for businesses to acquire.” She says, “We

52 Family Business • January/February 2015

fb010215_HillMarkes 12-18 bs.indd 52 12/18/14 3:39 PM acquired 12 companies in the past two decades, and we expanded our breadth of line and geography through the acquisitions. Many of the acquisitions were dis- tressed companies whose owners wanted to get out or cut back on running their companies.” After acquisi- tion, Andrea says, Hill & Markes tries to retain as many employees as possible from the acquired company.

A ‘green’ building Hill & Markes has received numerous awards and honors from its industry and its major customers, as well as from business publications and agencies in its region. In addition to offering a number of environmentally friendly products, the company operates in a “green” building that has earned LEED certification from the U.S. Green Building Council. The 130,000-square-foot building was completed in July 2011 at a cost of $12 Under the leadership of million. “Our building is much larger than the building we left, and the energy costs are 20% less,” Neal says. the second generation, the company “To meet the certification standards, water comes evolved from a mom-and-pop off the roof of the building in a special way for re- cycling, the recycled carpeting is made out of soda operation, acquiring 12 companies bottles and there are high-efficiency heating and over two decades and expanding into lighting systems, with outside lighting used when possible,” Neal says. new product lines and territories. Operations began at the new warehouse in March 2011, months before the rest of the building was com- by the Packers and half owned by the Finkles. Neal pleted, in order to serve customers’ needs. “It was Packer, who previously was chief operating officer, really, really important to get the warehouse portion was elected CEO by the family. “This CEO designation done before the summer season, because many of our was a long-overdue process,” Andrea says. “When my customers need napkins, cleaning supplies and other father passed away, we never filled that title until products at that time,” Andrea says. almost a decade later.” A training facility, which holds up to 90 people and The family takes an informal approach to gover- has special sections for product demonstrations, is nance. Jeffrey, Andrea and Neal serve on the board. named after Harry and Harriet Finkle. Family mem- There is also a family council, which consists of the bers recall Harry and Harriet fondly. “My father al- three second-generation principals plus Jeffrey’s wife, ways said that we should treat everybody well and Melanie; Andrea and Neal’s son Jason; and Jason’s be honest with employees, customers and vendors,” wife, Lisa. The family council meets twice a year. Andrea says. “He was focused on taking care of the The objective, according to Andrea, is “checking the customers and employees. He worked hard and spent compass.” They develop a strategic plan for the year, many hours on the road taking care of customers and review succession planning, ensure everyone under- growing the customer base. He passed on that work stands the goals and discuss personal matters. Neal ethic and that focus on the customer. As we grow, we says these meetings give family members a chance to have had to learn to scale that focus on the customer learn how the company is doing and what is planned and impart that work ethic onto our employees.” for the following year, as well as to interact with each When Hill & Markes moved into the new facility, other. employees continued working in shifts to prevent “We use conversation and a third-party family busi- backlogs and ensure continuous customer service ness consultant to help with disagreements,” Andrea with no disruptions. “It was a seamless transition, with says. “He goes through our agenda, helps us to develop business going on as usual,” Jeffrey says. it and asks questions until we come up with answers we can all agree upon. Everyone sits down together Working as a family team and tries to come to agreement.” The three principals try to keep the family relation- “When decisions need to be made about acquiring ship seamless as well. The company is half owned other companies and expanding into new markets, we

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fb010215_HillMarkes 12-18 bs.indd 53 12/18/14 3:39 PM get together with the management team and see what Society, a legal think tank. He was also a sales consultant the payback will be,” Neal says. “If it’s a new territory, at the Corporate Executive Board in Arlington, Va. He we see what the market looks like and what it will cost joined Hill & Markes in September 2009. in terms of whether we have to buy new equipment While Jason enjoyed the earlier part of his career, he and how much training will be needed.” knew that he wanted to be an entrepreneur and either Jason Packer, 36, is the only one of the five third-gen- start his own business or work in his family’s company. eration members currently involved in the business. “I tested family business for a few years and found it Jason, who now serves as both the sales manager and enjoyable, so I have stayed,” he explains. business development specialist, is in the process of “Jason came here with a huge background in business making the transition to vice president of operations. and politics, an MBA and tremendous business acu- He worked in a variety of part-time roles with Hill men,” his father says. “He questions why we do things & Markes during high the way we do them school and college. “I and comes up with new cleaned trucks, filed and better ideas. He has papers, opened mail, brought fresh air, new received product and looks and astute prob- stocked shelves, deliv- lem-solving capability ered orders and made to the business.” sales calls with my Neal says he plans to grandfather,” he recalls. promote his son to vice Jason manages eight president of operations sales professionals, in early 2015, when the develops corporate ac- company expects to counts, generates ideas hire a regional manag- for new product lines er. “He has moved from and plays an active business development role in new technology to sales management implementation. “Ul- and takes on new things timately, my job is to all the time,” Neal says learn the business and of Jason. be the successor to my Andrea describes Ja- dad,” he says. He has son’s training as a “slow trained for that role by but planned transition.” covering his own terri- Because he has taken on tory as a sales represen- more and more respon- tative, working closely sibility over time, he with his mentor (the will be ready to assume company’s executive a major leadership role vice president of sales), when the time comes, meeting with other she says. distributors across the The second and third generations. Clockwise from top left: Currently, Jason country to learn best Andrea Packer, Neal Packer, Jason Packer, Jeffrey Finkle. is working on imple- practices and studying menting a new line of his parents’ and uncle’s business philosophies. “Most food products that complements the company’s food­ importantly, I listened and learned from our other service business. He is also working on strengthening salespeople, our internal staff and our customers,” he ties in the community by becoming more involved in says. non-profits. Jason earned his bachelor’s degree in policy studies “What brings me the most satisfaction about being from Syracuse University in 2000 and his MBA in en- part of my family business is having the opportunity trepreneurship from American University in 2008. His to be entrepreneurial and contribute to the welfare impressive résumé includes a semester abroad at the of the community,” Jason says. “What I’ve learned City University of Hong Kong. He has worked as an aide is to have a mentor, listen, learn and be humble.” nFB to U.S. Rep. Sherrod Brown (D-Ohio) and at the Dem- ocratic Senatorial Campaign Committee, and managed Ilene Schneider is a freelance writer based in Irvine, the fund-raising operation of the American Constitution Calif.

54 Family Business • January/February 2015

fb010215_HillMarkes 12-18 bs.indd 54 12/18/14 3:39 PM TOOLBOX

BY BARBARA SPECTOR

Helping heirs to find their own voice

any young adults who are members of enter- Telemachus tough questions and gives him construc- prising families have trouble finding their tive criticism, just as members of wealthy families must own voice, contend the authors of The Voice of find mentors who can help them navigate the process Mthe Rising Generation, a new book written for of individuation. And those family members must avoid these inheritors. The young people fear they will never the dangerous temptations of a life without work, just as measure up to the founder’s greatness, or “feel that many Odysseus had to steer clear of the lotus flower (which of the important choices in their lives have been made by had a narcotic effect when eaten) on the island of the their parents or grandparents,” the authors write. Lotus-Eaters, the book points out. James E. Hughes Jr. is a retired attorney and author of Some rising-generation members are afraid to take the Family Wealth: Keeping It in the Family. Susan E. Massenzio risk of striking out on their own to do work they enjoy, and Keith Whitaker are with Wise the authors write. Others try to “negate” Counsel Research Associates, a think the family wealth through compulsive tank and consulting firm. The authors spending or excessive philanthropy, or explain that the book’s goal is to keep by refusing to acknowledge bank state- the founder’s dream from becoming a ments. Too many succumb to substance “black hole” that absorbs the dreams of abuse. descendants. The gravitational pull of Hughes, Massenzio and Whitaker this “black hole” is a recurring theme counsel readers that wise choices about in the text. how they spend their time can help them avoid such pitfalls. The authors The Voice of the Rising Generation: assert that work meets a “human” need, Family Wealth and Wisdom even if there is no financial need to By James E. Hughes Jr., Susan E. obtain a job. They define “work” as a Massenzio and Keith Whitaker challenging pursuit that “meets the true Wiley/Bloomberg Press, 2014 needs of others” (as opposed to a sine- 146 pp., $40 cure obtained through the family). The book includes a chapter aimed at heirs in “the middle passage” of life, Hughes, Massenzio and Whitaker particularly those ensconced in unde- prefer the term “rising generation” manding jobs in the family enterprise to “next generation,” because they or those grappling with loss of identity believe the latter term puts “all the emphasis on the after the family business is sold. Siblings or cousins can founder or founding generation.” They also assert that a help each other work through a sense of isolation and focus on stewardship has its drawbacks. “If you become find their individual voices, the authors suggest. a steward only of someone else’s dream,” they caution, The author trio also notes that although trust arrange- “then your own voice will likely fall silent.” ments may be wise from a legal or financial standpoint, A common problem in enterprising families, the book in practice they can make members of the rising genera- notes, is the emphasis on financial capital rather than tion “feel separated from important choices in their lives.” human capital—defined as family members’ dreams, abili- Beneficiaries are advised to educate themselves about ties and relationships. ownership structures and to develop relationships with The authors compare a wealthy family’s struggles to trustees or trust officers. those depicted in Homer’s epic poem The Odyssey. In the Hughes, Massenzio and Whitaker previously co-au- Homerian epic, Telemachus (son of the hero, Odysseus) thored The Cycle of the Gift: Family Wealth and Wisdom, leaves home to search for his father—and to find himself. a book aimed at parents and grandparents of inheritors. Similarly, the book says, members of the rising gener- That book is referenced in the current volume, and a ation must pursue their own passions within the con- helpful model from its pages is reproduced: the “Four text of their family history. In The Odyssey the goddess Cs,” representing one’s sense of control, commitment, Athena, disguised as a family friend named Mentor, asks challenge and community.

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fb010215_Toolbox 12-18 bs.indd 55 12/18/14 3:35 PM While The Voice of the Rising Generation eloquently In many points in the text, the authors put into words describes inheritors’ struggles, it offers few concrete thoughts that readers may have been afraid to express solutions to common relationship problems, other than or even acknowledge. recommending communication and “self-advocacy.” An The authors write, for example, that a family’s finan- appendix suggests workshops offered by Wise Counsel, cial wealth “may inform what work family members the authors’ firm. do, whom they marry, how they raise their children, Yet for people of wealth who have just begun to rec- and how they spend ‘their’ money.” Their book can be a ognize uneasy feelings, the book is a good way to spark starting point for those who want to honor the founder’s deeper thinking and, it is hoped, family conversations. success while living a healthy life of their own.

Practical, succinct wealth-planning advice

state attorney Patricia Annino likens wealth plan- allow goals to be implemented,” the author states, “but ning to sailing. A family leader, she writes in It’s it cannot address the fault lines of emotional issues.” More Than Money, should use “true north” (fami- She also discusses the advantages of having advisers Ely values) as the basis for a plan. External forces work as a team whose members communicate with may dictate a change in course, but true north remains each other—and notes that as the family life cycle pro- a fixed point on the compass. gresses, it’s often necessary to make replacements on Annino urges readers to view their various finan- the team roster. cial and legal documents as parts of a single, integrat- Annino warns readers to think carefully about health ed plan that is congruent with the family’s important care and elder care issues. “As the population ages,” she values. In too many families, she laments, creation writes, “the most significant threat to family wealth and of each document is viewed as an individual exer- harmony is no longer estate taxes; it is now the erosion cise to achieve a short-term goal, such as saving on of wealth by the cost of living and an extended lifetime taxes. What’s more, some family lead- with significant additional custodial ers never get around to creating an and medical care.” important document, or if they do, Estate plans should be reviewed they never update it. regularly, the author advises. “What Annino notes that although every may make sense at the very begin- family has values, there is a tenden- ning when the business does not cy not to think about them until there have value or the real estate is heav- is a shock to the system. Such shocks, ily mortgaged or the children are the author writes, can be negative, very young may not make sense such as a divorce, or positive, like a ten years, or fifteen years or twenty sale of the business that results in sig- years later,” Annino notes. nificant liquidity. “It would, of course, be much better to think about your It’s More Than Money: family legacy before a shock happens,” Protect Your Legacy and to be intentional about transmit- By Patricia M. Annino ting the family values to succeeding 117 pp., $18.80 (via Amazon.com) generations, Annino writes. “A strong family system with shared beliefs,” she contends, “will absorb the shocks The book also presents advice on from the external world and adapt and risk mitigation, including strategies become more resilient and sustainable for protecting the family’s reputa- each time a new shock (positive or negative) occurs.” tion on social media, questions to consider when decid- At less than 120 pages, It’s More Than Money is a quick ing whether to make gifts to heirs, and the advantages read. But the author packs a lot of important, practical of prenuptial agreements. In addition, the book offers information in her slim volume. information on achieving philanthropic goals. For example, Annino urges family leaders to per- In It’s More Than Money, Annino provides ample form a “congruency audit” on legal and financial doc- motivation to stop procrastinating and get to work on uments. “The legal structure can enable a plan and your planning. nFB

56 Family Business • January/February 2015

fb010215_Toolbox 12-18 bs.indd 56 12/18/14 3:35 PM DIRECTORY OF ADVISERS

Advisers for Family Companies Family business centers, professional firms and financial institutions serving family-owned businesses around the world. Visit the Directory of Advisers page at www.familybusinessmagazine.com for these listings and website links.

ACADEMIC PROGRAMS/ Continuity Family Business FAMILY BUSINESS CENTERS Consulting Austin Family Business Program See listing under “Family Business Consultants.” at Oregon State University College of Business 200 Bexell Hall Conway Center Corvallis, OR 97331-2603 for Family Business p: 800-859-7609 f: 541-737-5388 Centenary College of Louisiana Dr. Sherri Noxel, Director Frost School of Business Ohio Dominican University [email protected] 2911 Centenary Boulevard 1216 Sunbury Road www.familybusinessonline.org Shreveport, LA 71104 Columbus, OH 43219 p: 318-869-5149 f: 318-869-5139 p: 614-253-4820 Christopher L. Martin, Ph.D., Dean Deana Gordon, Associate Director [email protected] [email protected] www.centenary.edu/family Dick Emens, Executive Director [email protected] www.FamilyBusinessCenter.com

Baylor Institute for Family Business One Bear Place, #98006 Waco, TX 76798-8006 p: 254-710-6203 f: 254-710-3724 William J. Worthington, Director [email protected] www.Baylor.edu/FamilyBusiness Center for Family Business Indiana University of Pennsylvania Cox Family Enterprise Center Eberly College of Business & 1000 Chastain Road, Box 4900 Information Technology Kennesaw, GA 30144 About this 664 Pratt Drive p: 770-423-6045 Indiana, PA 15705 Dr. Joseph H. Astrachan, Exec. Director Service Directory p: 724-357-2323 f: 724-357-7520 [email protected] A basic directory listing costs $350 Ellen S. Ruddock, Director coles.kennesaw.edu/cfec (same ad copy for six issues). Family [email protected] Business subscribers receive the www.iup.edu/centerforfamilybusiness discounted rate of $250. There is an additional charge of $20 per word to supplement the basic listing. Changes to a listing prior to the annual renewal date cost $25 per item changed. Add your logo and headshot to your Family Business Alliance listing! Cost is $100 for color logo; $50 111 Pearl Street NW for black and white; $75 for headshot. Grand Rapids, MI 49503 p: 616-331-6827 This directory is also available online Chicago Family Business Council Ellie Frey Zagel, Director DePaul University, Driehaus College at www.familybusinessmag­azine.com. [email protected] of Business Family Business makes no independent www.FBAgr.org evaluation of the firms or their services. 1 East Jackson Boulevard, Suite 5000 Chicago, IL 60604 For information, contact Barbara Wenger p: 312-362-7518 f: 312-362-8462 Family Business Center Judy Hogel, Executive Director at (800) 637-4464, Ext. 6072 or University of St. Thomas [email protected]. [email protected] www.chicagofbc.com See listing under “Family Business Centers.”

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Saint Joseph’s University Initiative for Family Business and Family Enterprise Center at UNC’s Entrepreneurship Kenan-Flagler Business School 5600 City Avenue Campus Box 3440, 400A Kenan Center Philadelphia, PA 19131 Chapel Hill, NC 27599-3440 Kellogg School of Management p: 610-420-9355 f: 610-660-1229 p: 919-619-4247 www.sju.edu Cooper Biersach, Director and Co-Founder Center for Family Enterprises [email protected] Executive Programs: “Governing Family www.familyenterprise.unc.edu Enterprises” and “Leading Family Enterprises” March, May and October 2015 Evanston, IL USA Family Solutions Group p: 847-467-6018 See listing under “Family Business Consultants.” [email protected] Professors John L. Ward and Ivan Lansberg Sauder School of Business http://kell.gg/kxf4fambiz Business Families Centre University of British Columbia p: 604-827-4604 Mischa Ragona, Business Development Manager [email protected] www.sauder.ubc.ca/bfc

Families in Business: The Family Business Center From Generation to Generation at Loyola University Teaching best practices and principles of Chicago’s Quinlan School of successful family companies Business Harvard Business School 820 North Michigan Avenue Executive Education Chicago, IL 60611 Stetson University Soldiers Field p: 312-915-6490 f: 312-915-6495 Family Enterprise Center Boston, MA 02163-9986 Andrew D. Keyt, Executive Director 421 N. Woodland Blvd., Unit 8398 p: 1-800-427-5577 or + 1-617-495-6555 Anne Smart, Membership Director Deland, FL 32723 f: +1-617-495-6999 Erin Kuhn-Krueger p: 386-822-7565 f: 386-822-7426 Jacqueline Baugher, Director Marketing & Programs Director Dr. Greg McCann, Program Coordinator [email protected] www.luc.edu/fbc [email protected] www.exed.hbs.edu www.stetson.edu/family Northeastern University The Institute for Center for Family Business Tulane University Entrepreneurial Excellence 209 Hayden Hall Family Business Center University of Pittsburgh Boston, MA 02115-5000 A.B. Freeman School of Business 1800 Wesley Posvar Hall p: 617-373-7031 f: 617-373-2056 New Orleans, LA 70118-5669 Pittsburgh, PA 15260 Ted Clark, Executive Director p: 504-862-8482 f: 504-862-8902 p: 412-648-1544 f: 412-648-1636 [email protected] Rosalind G. Butler, Assistant Director Shelley Taylor, Membership Director www.fambiz.neu.edu [email protected] [email protected] www.freeman.tulane.edu/fbc www.entrepreneur.pitt.edu

UNC Asheville Family Business Forum Institute for Family Business One University Heights CPO#1800 3601 Pacific Avenue The High Center Asheville, NC 28804 Stockton, CA 95211 One Alpha Drive p: 828-232-5091 f: 828-251-6142 p: 209-956-3912 f: 209-956-2586 Elizabethtown, PA 17022-2298 Cindy Clarke, Executive Director Peter Johnson, Director p: 717-361-1275 [email protected] [email protected] Mike Mitchell, Executive Director www.unca.edu/fbf www.go.pacific.edu/ifb [email protected] www.thehighcenter.com

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EisnerAmper LLP The University of Chicago 750 Third Avenue Booth School of Business New York, NY 10017 450 N. Cityfront Plaza Drive, Suite 514 p: 212-891-4087 Chicago, IL 60611 Timothy Speiss, Partner Higgins, Marcus & Lovett, Inc. p: 312-464-8732 f: 312-464-8731 [email protected] 800 South Figueroa Street, Suite 710 Mark Lewis, Senior Associate Director www.eisneramper.com Los Angeles, CA 90017 [email protected] p: 213-617-7775 f: 213-617-8372 www.chicagoexec.net Mark C. Higgins, ASA [email protected] www.hmlinc.com

Kreischer Miller University of Wisconsin-Madison 100 Witmer Road, Suite 350 Horsham, PA 19044 Family Business Center Valuation Advisors, LLC p: 215-441-4600 (ext. 144) 601 University Avenue 2495 Kensington Avenue f: 215-672-8224 Fluno Center Buffalo, NY 14226 Madison, WI 53715-1035 Mario O. Vicari, Jr., CPA, CVA [email protected] p: 716-839-5290 p: 608-441-7327 f: 608-441-7337 www.kmco.com Brian Pearson, CPA/ABV/CFF/PFS, ASA Deb Houden, Ph.D., Executive Director President [email protected] [email protected] http://fbc.wisc.edu

ASSESSMENT TOOLS Continuity Family Business Consulting Reich and Walner LLP 1980 Mountain Boulevard See listing under “Family Business Consultants.” Private Wealth Management Suite 202 Oakland, CA 94611 Wharton Executive Education p: 510-338-0160 Pervin Family Business Advisors The Wharton School f: 510-338-0161 Inc. | Optimizer Reports Inc. Steinberg Conference Center 255 South 38th Street See listing under “Family Business Consultants.” Philadelphia, PA 19104 APPRAISAL & VALUATION FIRMS p: 215-573-0864 f: 215-386-4304 Jen Gers, Director, Financial Services The Baker-Meekins Company, Inc. Relative Solutions, LLC 1404 Front Avenue [email protected] See listing under “Family Business Consultants.” http://executiveeducation.wharton.upenn Lutherville, MD 21093 .edu/open-enrollment/finance-programs/ p: 410-823-2600 f: 410-823-8455 private-wealth-management-program.cfm Ross Adams, CFA - President [email protected] ATTORNEYS www.bakermeekins.com Emens & Wolper ACCOUNTANTS Law Firm, LPA One Easton Oval, Suite 550 Brown Schultz Sheridan & Fritz Columbus, OH 43219 See listing under “Accountants.” p: 614-414-0888 f: 614-414-0898 Bea Wolper [email protected] EY Family Business Services Dick Emens See listing under “Family Business Consultants.” [email protected] www.emenswolperlaw.com Brown Schultz Sheridan & Fritz 210 Grandview Avenue Camp Hill, PA 17011 p: 717-761-7171 Bruce J. Brown, CEO, CPA/ABV, CFF, CVA [email protected] www.bssf.com

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Rachel Landry Writing Life Stories & Business Stories www.rachellandry.com Gould & Ratner LLP Family Business Advisors 222 N. LaSalle Street, Suite 800 Chicago, IL 60601 Meltzer, Lippe, Goldstein & p: 312-236-3003 f: 312-236-3241 Breitstone, LLP Steven Gustafson, Partner 190 Willis Avenue [email protected] Mineola, NY 11501 www.gouldratner.com p: 516-747-0300 x 232 f: 516-747-2956 Jeffrey A. Galant [email protected] www.meltzerlippe.com

Memoirs Productions 5553 Queen Mary, #17 Montreal, QC Canada H3X 1W1 Hemenway & Barnes LLP p: 866-481-9303 f: Call first 60 State Street, 8th Floor Neal, Gerber & Eisenberg LLP Iris Wagner, Founder & CEO Boston, MA 02109 Nationally recognized Family Office and [email protected] p: 617-557-9771 M&A practices providing personalized www.MemoirsProductions.com Frederic J. Marx, Partner legal services to protect wealth for future [email protected] generations. www.hembar.com Two North LaSalle Street Chicago, IL 60602 p: 312-269-8000 f: 312-269-1747 Joshua A. Klein [email protected] Eric N. Mann [email protected] www.ngelaw.com

Reed Smith LLP Orange Frazer Press Three Logan Square Full-service publisher of elegant 1717 Arch Street Suite 3100 custom books. Levin Schreder & Carey Ltd. Philadelphia, PA 19103 37 ½ West Main Street, P.O. Box 214 Practice devoted to tax and charitable p: 215-851-8132 f: 215-851-1420 Wilmington, OH 45177 planning, trusts and estates, private Joseph M. Sedlack, Partner p: 937-382-3196; 1-800-852-9332 [email protected] trust company services, and related f: 937-383-3159 dispute resolution. www.reedsmith.com Kelsey Swindler, Business Development 120 North LaSalle Street, 38th Floor [email protected] www.orangefrazercustombooks.com Chicago, IL 60602 BIOGRAPHERS & HISTORIANS p: 312-332-6300 f: 312-332-6393 www.levinschreder.com Chuck G. Blair BUSINESS & ESTATE PLANNING CONSULTANTS [email protected] James R. Carey Continuity Family Business [email protected] Consulting Rick Y. Gelboim [email protected] Heritage Publishers See listing under “Family Business Consultants.” Robert M. Levin 3217 East Shea Boulevard, Suite 420 [email protected] Phoenix, AZ 85028 David E. Lieberman p: 800-972-8507 EY Family Business Services [email protected] Tyler Maddux, Owner & Publisher See listing under “Family Business Consultants.” Robin Drey Maher [email protected] [email protected] www.heritagepublishers.com Carleen L. Schreder [email protected] Hemenway & Barnes LLP Mary Lee Turk See listing under “Attorneys.” [email protected]

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Relative Solutions, LLC EY Family Business Services Executive Advisors See listing under “Family Business Consultants.” See listing under “Family Business Consultants.” See listing under “Family Business Consultants.”

SEI Private Wealth Management ReGENERATION Partners LLC The Family Business Consulting See listing under “Wealth Management.” See listing under “Family Business Consultants.” Group, Inc. See listing under “Family Business Consultants.”

BUSINESS & IT RISK MANAGEMENT CEO PEER GROUPS EY Family Business Services Chicago Family Business Council John G. Wofford, Esq. See listing under “Mediation.” See listing under “Family Business Consultants.” DePaul University, Driehaus College of Business See listing under “Academic Programs/ CROSS-GENERATIONAL BUSINESS DEVELOPMENT ADVISORS Family Business Centers.” LEGACY PLANNING Continuity Family Business Consulting Executive Advisors The Family Business Center See listing under “Family Business Consultants.” See listing under “Family Business Consultants.” at Loyola University Chicago’s Quinlan School of Business EY Family Business Services EY Family Business Services See listing under “Academic Programs/ See listing under “Family Business Consultants.” Family Business Centers.” See listing under “Family Business Consultants.”

BUSINESS EXIT PLANNING Family Business Network North Hemenway & Barnes LLP See listing under “Attorneys.” Continuity Family Business America (FBN-NA) Consulting See listing under “Family Business Network.” See listing under “Family Business Consultants.” SEI Private Wealth Management COMPENSATION CONSULTANTS See listing under “Wealth Management.” EY Family Business Services EY Family Business Services See listing under “Family Business Consultants.” See listing under “Family Business Consultants.” DVD LEGACIES Memoirs Productions Hemenway & Barnes LLP See listing under “Biographers & Historians.” See listing under “Attorneys.”

EXECUTIVE COACHING Kreischer Miller Continuity Family Business Consulting See listing under “Accountants.” See listing under “Family Business Consultants.” MBL Advisors Inc. 1017 E. Morehead Street, Suite 100 Predictable Futures Inc. - Charlotte, NC 28204 Executive Advisors The Business Family Center p: 704-333-8461 f: 704-342-0782 See listing under “Family Business Consultants.” See listing under “Family Business Consultants.” Luther Lockwood, Managing Principal [email protected] www.MBL-Advisors.com Family Business Network North Rothstein Kass America (FBN-NA) See listing under “Family Business Consultants.” CONFLICT MANAGEMENT See listing under “Family Business Network.” CFAR Inc. See listing under “Family Business Consultants.” BUSINESS PERFORMANCE Predictable Futures Inc.- CFAR, Inc. The Business Family Center See listing under “Family Business Consultants.” Continuity Family Business See listing under “Family Business Consultants.” Consulting See listing under “Family Business Consultants.” Continuity Family Business Consulting See listing under “Family Business Consultants.” Coppertree, Ltd. See listing under “Family Business Consultants.”

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EXECUTIVE EDUCATION Predictable Futures Inc.- The Business Family Center See listing under “Family Business Consultants.”

Family Business Center Saint Joseph’s University Cambridge Institute for Family University of St. Thomas 1000 LaSalle Ave SCH435 Initiative for Family Business and Enterprise Entrepreneurship 1 Main Street, 5th Floor Minneapolis, MN 55403-2005 Cambridge, MA 02142 Sara McGinley, Director See listing under “Academic Programs/ p p: 617-871-1405 f: 617-871-2741 : 651-962-4255 Family Business Centers.” Dina Dvinov, Operations Manager [email protected] [email protected] www.stthomas.edu/familybusiness www.cambridge-institute.org Dr. Ritch Sorenson, Opus Endowed FAMILY BUSINESS CONSULTANTS Chair in Family Business p: 651-962-4252 Family Business Center [email protected] University of St. Thomas www.stthomas.edu/familybusiness See listing under “Family Business Centers.” The Family Business Center at Loyola University Relative Solutions, LLC Chicago’s Quinlan School of Business See listing under “Family Business Consultants.” See listing under “Academic Programs/ Family Business Centers.” Aspen Family Business Group, LLC Leslie Dashew, M.S.W. FAMILY & BUSINESS PHILANTHROPY Burak Kocer, Ph.D. Joe Paul, M.S. Family Solutions Group Bill Roberts, CLU, ChFC See listing under “Family Business Consultants.” Scottsdale, AZ 85255 p: 480-478-4354 f: 480-419-4231 [email protected] Family Business Center www.aspenfamilybusiness.com Hemenway & Barnes LLP Madden School of Business @ See listing under “Attorneys.” Lemoyne College 1419 Salt Springs Road William E. Roberts, Jr. MH007 Auctoris Predictable Futures Inc. - Syracuse, NY 13214 5350 S. Roslyn Street, Suite 310 p: 315-445-4242 The Business Family Center Greenwood Village, CO 80111 Tracy Couto, Executive Director p: 303-740-8001 See listing under “Family Business Consultants.” [email protected] [email protected] www.nyfbc.org www.auctoris.com

SEI Private Wealth Management Family Business Network North See listing under “Wealth Management.” James E. Barrett America (FBN-NA) Managing Director, Cresheim, Inc. See listing under “Family Business Network.” Business planning, management FAMILY BUSINESS development, organization and selection, & WEALTH MEDIATION and “people problems.” 8315 Flourtown Avenue Continuity Family Business Consulting Wyndmoor, PA 19038 See listing under “Family Business Consultants.” p: 215-836-1405 [email protected]

FAMILY BUSINESS CENTERS Conway Center for Family Business Peak Workout Family Business Ohio Dominican University Performance Center See listing under “Academic Programs/Family Visit our online learning center today Business Centers” for free videos, exercises and discussion forums. 4144 N. 44th Street, Suite A2 Delaware Valley Family Business Phoenix, AZ 85018 Center, Telford, PA p: 602-952-9015 Pete Walsh, Master Certified Coach See listing under “Family Business Consultants.” [email protected] www.familybusinessperformance.com

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Center for Family Business Dynamics Family businesses in transition, succession- conflict solutions. 700 Larkspur Landing Circle, Suite 199 Coppertree, Ltd. Larkspur, CA 94939 1101 St. Gregory Street, Suite 225 p: 415-886-1002 Carmen Bianchi Cincinnati, OH 45202 Ralph M. Daniel, Ph.D. p: 513-579-3531 Family Business Family Business Advisor Mark Casella, President/Founder Associates [email protected] [email protected] 14758 Caminito Punta www.fambus.com www.coppertreeltd.com Arenas Del Mar, CA 92014 p: 858-793-2445 or Leslie Dashew 858-922-3155 Human Side of Enterprise, LLC Carmen Bianchi, 21839 North 98th Street Principal CFAR, Inc. Scottsdale, AZ 85255 [email protected] CFAR knows family businesses. For 30 years, p: 480-419-4243 www.familybizconsulting.com we’ve helped clients meet their future with [email protected] innovative plans for strategy, succession, www.aspenfamilybusiness.com governance and organizational development, www.lesliedashew.com keeping the best of their culture intact. Four Penn Center 1600 John F. Kennedy Boulevard, Suite 600 Philadelphia, PA 19103 Blum & Savlov, Inc. p: 215-320-3200 f: 215-320-3204 - Family Business Ms. Nancy Drozdow, Principal Consulting [email protected] Serving family www.cfar.com businesses, high One Man Street, Suite 1370 net-worth families, Cambridge, MA 02142 family offices and p: 617-576-1166 f: 617-576-3015 their advisors with a Ms. Debbie Bing, Principal de Visscher & Co. focus on balancing [email protected] de Visscher & Co. is a fully integrated family dynamics with www.cfar.com financial consulting, investment banking and ownership and management of shared private equity firm serving the capital and assets across generations. liquidity needs of closely-held and family Colarelli, Meyer & Associates, Inc. owned companies. The company identifies, 47 Raritan Avenue, Suite 130 Successor identification/development, analyzes and implements financial solutions Highland Park, NJ 08904 generational transition, family councils, and shareholder value creation strategies for p: 732-296-8047 f: 732-284-4257 strategic planning, other organizational business owning families and family offices. Jeff Savlov, President effectiveness services. Family Capital Partners was established by [email protected] de Visscher & Co. as a conduit for long-term 7751 Carondelet Avenue www.blumandsavlov.com equity capital from Family Offices and patient St. Louis, MO 63124 capital investors, and growing Family Owned p: 314-721-1860 f: 314-721-1992 Companies looking for trustworthy, value- Dan Bean, Partner added and like-minded capital partners. [email protected] “Families Investing in Families.” www.cmaconsult.com Two Greenwich Office Park Greenwich, CT 06831 . p: 203-629-6500 f: 203-629-6547 Francois de Visscher Business Consulting Resources, Inc. [email protected] Helping Hawaii Family Continuity Family Business Consulting Terry Hannafin Businesses succeed since 1981 Building generations of business success [email protected] 126 Queen Street, Suite 212 and family strength. www.devisscher.com Honolulu, HI 96813 100 Cummings Center, Suite 405D p: 808-545-4111 f: 808-522-8935 Ken Gilbert, Senior Consultant/Partner Beverly, MA 01915 [email protected] p: 617-500-3110 f: 617-307-4122 www.bcrhawaii.com Doug Baumoel, Founder [email protected] www.ContinuityFBC.com

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Family Solutions Group Delaware A unique firm focusing on the emotional Valley Family complexities of family businesses and Business executive significant wealth. Center advisors Our three- 255 South 17th Street, Suite 2710 generation Executive Advisors Philadelphia, PA 19103 consulting 301 North Canon Drive, Suite 313 p: 215-985-9881 f: 215-985-9805 team guides Beverly Hills, CA 90210 Edward P. Monte, Ph.D., Principal enterprising p: 310-553-0442 [email protected] families through our strategic and f: 310-553-3009 www.familysolutionsgroup.net emotional planning process which includes Lilli Friedland, Ph.D. President Management and Shareholder Succession Beth, Executive Assistant Planning; and Leadership, Family Council, [email protected] Dean Fowler Associates, Inc. Board and Professional Advisory Council www.executiveadvisors.org 17100 West North Avenue, Suite 202 Development. Brookfield, WI 53005 p: 262-271-5979 340 N. Main Street Dean R. Fowler, Ph.D., President Telford, PA 18969 [email protected] p: 215-723-8413 www.deanfowler.com Sally Derstine, Managing Partner [email protected] http://www.dvfbc.com

Burak Kocer, Ph.D. The Family Business Egeli & Company Consulting Group, Inc. Abdi Ipecki, Caddesi No. 40/10 We help family businesses explore solutions Nisantasi. 34367 Istanbul, Turkey to family business issues, decide on the best Grand Purpose Advocate p: 90-212-343-0626 f: 90-212-343-0627 course of action, and implement plans that 11503 NW Military Highway, Suite 206 [email protected] will help the family business succeed for San Antonio, TX 78231 www.egelico.com generations. Our team of more than twenty consultants p: 210-442-1390 includes specialists in all areas of family Tommy Oliphint, CEO/Founder business, including succession planning, www.grandpurposeadvocate.com family meetings, governance issues, psychology, team building, communications, finance, conflict resolution, strategic Henning Family Business Center planning and family business education. 1006 North Pembroke Court EisnerAmper LLP Effingham, IL 62401 750 Third Avenue 2835 N. Sheffield Avenue, Suite 237 p: 217-342-3728 New York, NY 10017 Chicago, IL 60657 Mike Henning, President p: 212-891-4087 p: 773-604-5005 [email protected] Timothy Speiss, Partner Drew Mendoza, Managing Principal www.mikehenning.com [email protected] [email protected] www.eisneramper.com www.thefbcg.com

GEORGE ISAAC The Family Business Institute, Inc. CONSULTING 4050 Wake Forest Road Succession Planning | Suite 110 EY Family Business Services: Governance | Family Raleigh, NC 27609 Helping you and your family business Dynamics | Performance p: 877-326-2493 ext. 228 f: 919-783-1892 succeed for generations Improvement | Wayne Rivers, President Business Wealth Carrie Hall [email protected] Realization & Transfer Americas Family Business Leader, EY www.familybusinessinstitute.com [email protected] Strategies p: +1-404-817-5740 P.O. Box 50009 Steve Harpole Santa Barbara, CA 93150 Americas Family Business Tax Leader, EY p: 805-969-6602 [email protected] George A. Isaac, President p: +1-314-290-1235 [email protected] ey.com/us/familybusiness www.GeorgeIsaac.com

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Dennis T. Jaffe, Ph.D. Joe Paul, MS 764 Ashbury Street Family Business Counsel San Francisco, CA 94117 4025 SW 6th Avenue Drive p: 415-665-8699 Portland, OR 97230 Dennis T. Jaffe, Ph.D. p: 971-266-8188 m: 503-708-6010 [email protected] [email protected] www.dennisjaffe.com www.familybusinesscounsel.com Relative Solutions, LLC

We enable enterprising families to ‘learn by doing.’ We collaborate with multi-generational families to assess Lansberg, Gersick & Associates their current situation and plan for a 100 Whitney Avenue, Suite 1 sustainable future by: New Haven, CT 06510 Pervin Family Business Advisors Inc. • Creating systems to facilitate shared p: 203-497-8855 f: 203-781-2747 The Canadian leader in the assessment and governance [email protected] resolution of complex multi-generational • Designing and implementing wealth www.lgassoc.com family enterprise and ownership situations transition and business succession plans and business family relationships — for • Empowering next generation leadership business enterprise families and accidental Fredda Herz Brown, PhD., Senior Consultant partnerships™ who demand results, not Fran Lotery, PhD., Senior Consultant recommendations. Carolyn D. Greenspon, MSW, Senior The Legacy 94 Cumberland Street, Suite 604 Consultant Associates, LLC Toronto, Ontario M5R 1A3 Canada p: 800-638-6442 8011 West 25th Street p: +1-416-360-0177 m: +1-416-801-3200 www.relative-solutions.com St. Louis Park, MN 55426 Skype: aron.pervin p: 612-396-9353 Aron Pervin, CMC, ICD.D, TEP, ACFBA Allen Bettis, Principal [email protected] allen.bettis@legacy www.pervinfamilybusiness.com associates.com [email protected] www.legacy www.optimizerreports.com associates.com LinkedIn: www.linkedin.com/in/allenbettis Predictable Futures Inc.- The Business Family Center 11630 Kingsway Avenue Rothstein Kass Edmonton, AB T5G 0X9, Canada 1350 Avenue of the p: 780-702-2499 f: 780-428-1410 Americas Gordon Wusyk, President Legasus Group, LC New York, NY 10019 [email protected] 121 N. Mead, Suite 109 p: 212-997-0500 www.predictablefutures.com Wichita, KS 67202 f: 212-730-6892 p: 316-681-0444 f: 316-681-0589 Paul H. Rich, CPA, Clemens H. Ast CGMA, CM&AA, Reece & Associates, PA [email protected] Principal Emeritus 800 East Washington Street, Suite C John Simmering [email protected] Greenville, SC 29601 [email protected] www.rkco.com p: 864-233-6648 f: 864-233-3706 www.LegasusGroup.com Ronald C. Reece, Ph.D. [email protected] FAMILY BUSINESS DYNAMICS www.ronreece.com Lucid Legacy Blum & Savlov, Inc. - Family Consulting Business Consulting Now scheduling! See listing under “Family Business Consultants.” Expertly Facilitated Family Meetings Naples, FL - February ReGENERATION Partners LLC 2015 Continuity Family Business Offices in Dallas,TX and Scottsdale, AZ Consulting 3811 Turtle Creek Boulevard See listing under “Family Business Consultants.” Suite 300 5630 Lake Mendota Drive Dallas, TX 75219 Madison, WI 53705 p: 214-559-3999 Executive Advisors p: 608-692-5209 James Olan Hutcheson Ann Kinkade, Founder Ellie Hansen See listing under “Family Business Consultants.” [email protected] Mary Ann Zimmerman www.lucidlegacyconsulting.com www.regeneration-partners.com Family Business Network North America (FBN-NA) Reich and Walner LLP See listing under “Family Business Network.” See listing under “Accountants.”

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Family Solutions Group FAMILY BUSINESS PLANNING 9530 Marketplace Road, Suite 101 See listing under “Family Business Consultants.” Fort Myers, FL 33912 145 NW Central Park Plaza, Suite 107 Port St. Lucie, FL 34986 The Family Business Center at Loyola University Chicago’s Quinlan School of The BSG of Illinois Business il.bsg-advisors.com The Business Strategies Group See listing under “Academic Programs/ A division of AXA Advisors, LLC Family Business Centers.” 1515 West 22nd Street, Suite 300 Helping business owners protect, preserve Oak Brook, IL 60523 and pursue more value from their business, more tax efficiently!® 1751 Lake Cook Road, Suite 200 SEI Private Wealth Management Deerfield, IL 60015 See listing under “Wealth Management.” The Business Strategies Group is a team of financial professionals formed to work Infinity Strategic Partners, LLC with closely held businesses. Every day, 500 Skokie Blvd., Suite 590 THE FAMILY BUSINESS NETWORK we speak to business owners like you. Northbrook, IL 60062 From start-ups to companies that have lasted generations, we help identify new Brian T. Ashe & Associates opportunities in your financial plans. 1440 Maple Avenue, #9B We start by evaluating your needs, and Lisle, IL 60532 breaking down your goals into small, manageable steps. Can we help you take a small step? The BSG of New Jersey nj.bsg-advisors.com Family Business Network North America (FBN-NA) The BSG of Southern California 90 Woodbridge Center Drive, 7th Floor 3501 North Southport, #449 sc.bsg-advisors.com Woodbridge, NJ 07095 Chicago, IL 606576 p: 770-329-9458 2050 Main Street, Suite 500 10 Madison Avenue, 2nd Floor Kirk McMillan Irvine, CA 92614 Morristown, NJ 07960 [email protected] http://fbn-na.org 3435 Wilshire Blvd., Suite 2500 333 Thornall Street, 8th Floor Los Angeles, CA 90010 Edison, NJ 08837

1845 West Olympic Blvd., Suite 1100 The BSG of North Carolina Los Angeles, CA 90064 nc.bsg-advisors.com 21700 Oxnard Street, Suite 1100 Woodland Hills, CA 91367 3201 Beechleaf Court, Suite 450 Raleigh, NC 27604 The Family Business Network 265 E. River Circle, Suite 420 300 South Wesleyan Blvd., Suite 101 23 chemin de Bellerive - P.O. Box 915 Fresno, CA 93720 Rocky Mount, NC 27804 Lausanne 1001 Switzerland p: +41 21 618 04 56 f: +41 21 560 42 25 2755-B Charles Blvd. Alexis du Roy de Blicquy, Executive The BSG of Central Florida Greenville, NC 27858 Director cfl.bsg-advisors.com [email protected] 107 Dorsett Drive www.fbn-i.org 4890 West Kennedy Blvd., Suite 800 Tampa, FL 33609 Salisbury, NC 28144

5337 Millenia Lakes Blvd., Suite 450 One Park Drive, Suite 110 Orlando, FL 32839 Research Triangle Park, NC 27709 Educate your clients and market your services with The BSG of Southern Florida The BSG of Mid-Atlantic sfl.bsg-advisors.com bsgma.com reprints of Family Business Magazine articles. 2 Datran Center 3141 Fairview Park Drive, Suite 250 9130 S. Dadeland Blvd., Suite 1400 Falls Church, VA 22042-4507 Miami, FL 33156 Contact Barbara Wenger at FAMILY BUSINESS SPECIALISTS bwenger@familybusiness 1 Financial Plaza 100 S.E. 3rd Avenue, Suite 1200 Continuity Family Business magazine.com or Ft. Lauderdale, FL 33394 Consulting (215) 405-6072. See listing under “Family Business Consultants.” 2255 Glades Road, Suite 412E Boca Raton, FL 33431

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Crystal & Company GOVERNANCE HUMAN RESOURCE SERVICES See listing under “Insurance Services.” Continuity Family Business The Ahola Corporation Consulting See listing under “Workforce Management See listing under “Family Business Consultants.” Consultants.” EY Family Business Services See listing under “Family Business Consultants.” Coppertree, Ltd. EY Family Business Services See listing under “Family Business Consultants.” See listing under “Family Business Consultants.” Hemenway & Barnes LLP See listing under “Attorneys.” EY Family Business Services INSURANCE SERVICES See listing under “Family Business Consultants.” Predictable Futures Inc. - The Business Family Center. See listing under “Family Business Consultants.” The Family Business Consulting Group, Inc. See listing under “Family Business Consultants.” Crystal & Company Saint Joseph’s University Family Businesses, Family Offices, Initiative for Family Business and Private Trust Companies Entrepreneurship Family Business Network North Financial Square, 32 Old Slip See listing under “Academic Programs/ America (FBN-NA) New York, NY 10005 Family Business Centers.” See listing under “Family Business Network.” p: 212-504-1852 f: 646-810-3639 Linda Bourn, Executive Managing Director [email protected] www.crystalco.com FAMILY WEBSITES & INTRANETS Hemenway & Barnes LLP See listing under “Attorneys.” INVESTMENT BANKING FIRMS de Visscher & Co. Kellogg School of Management See listing under “Family Business Center for Family Enterprises Consultants.” TrustedFamily See listing under “Academic Programs/Family TrustedFamily provides secure Business Centers.” family websites & intranets. High Street Capital Rue Provinciale 62 See listing under “Private Equity Capital.” 1301 Wavre, Belgium The Family Business Center at p: +32 473 378 323 Loyola University Edouard Thijssen, CEO Chicago’s Quinlan School of [email protected] Business www.trustedfamily.net See listing under “Academic Programs/Family Business Centers.” FINANCIAL SERVICES

The Legacy Associates, LLC MidMarket Capital Advisors, LLC See listing under “Family Business Consultants.” 1629 Locust Street Suite 400 Philadelphia, PA 19103 p: 215-875-8201 f: 215-875-8186 Glenmede Relative Solutions, LLC Patrick Hurley, Managing Director Glenmede is an independent investment See listing under “Family Business Consultants.” [email protected] and wealth management firm. Founded in www.mmadvisors.com 1956 by the Pew family, Glenmede serves families, family offices, and endowments, SEI Private Wealth Management and foundations. LEADERSHIP DEVELOPMENT See listing under “Wealth Management.” See listing under “Multi-Family Office.” Chicago Family Business Council DePaul University, Driehaus College John G. Wofford, Esq. of Business The Haverford Trust Company See listing under “Mediation.” See listing under “Academic Programs/ See listing under “Wealth Management.” Family Business Centers.”

SEI Private Wealth Management Continuity Family Business Consulting See listing under “Wealth Management.” See listing under “Family Business Consultants.”

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Executive Advisors GEORGE ISAAC CONSULTING See listing under “Family Business Consultants.” See listing under “Family Business Consultants.”

Family Business Network North Predictable Futures Inc. - America (FBN-NA) The Business Family Center See listing under “Family Business Network.” See listing under “Family Business Consultants.” F/B/O Services, Inc. Administrative, accounting, and tax services only. University of the Pacific MEDIATION Institute for Family Business 2011 Renaissance Boulevard, Suite 102 Continuity Family Business King of Prussia, PA 19406 See listing under “Academic Programs/ Consulting p: 610-272-0800 f: 610-239-8359 Family Business Centers.” See listing under “Family Business Consultants.” Joseph W. Roskos, President [email protected] www.fboservicesinc.com Bruce Johnsen & John G. Wofford, Esq. Associates 13 Cottage Street 824 Munras Avenue, Suite G Cambridge, MA 02139 Monterey, CA 93940 p: 617-661-3200 f: 617-661-3201 p: 831-373-5969 f: 831-373-4604 John Wofford, Sole Proprietor Bruce Johnsen [email protected] [email protected] www.brucejohnsen.com MERGERS & ACQUISITIONS Family Wealth Collective Kellogg School of Management Two Prudential Plaza Center for Family Enterprises 180 North Stetson Avenue, Suite 3500 See listing under “Academic Programs/ Family Chicago, IL 60601 Business Centers.” p: 312-540-9840 Teresa Cherry, CFP, CM&AA, Principal [email protected] The Family Business Center at www.familywealthcollective.com Loyola University The Brynavon Group Chicago’s Quinlan School of Business P.O. Box 160 See listing under “Academic Programs/ Villanova, PA 19085 Family Business Centers.” p: 610-525-2102 George B. Lemmon, Jr., President [email protected] www.brynavon.com Predictable Futures Inc.- Glenmede The Business Family Center Glenmede is an independent investment See listing under “Family Business Consultants.” EY Family Business Services and wealth management firm. Founded in See listing under “Family Business Consultants.” 1956 by the Pew family, Glenmede serves families, family offices, and endowments, and foundations. Relative Solutions, LLC See listing under “Family Business Consultants.” Kreischer Miller See listing under “Accountants.” Glenmede, Cleveland 25825 Science Park Drive, Suite 110 LEGACY STORY WRITING Beachwood, OH 44122-7315 Rachel Landry Writing MidMarket Capital Advisors, LLC p: 216-514-7876 See listing under “Investment Banking Firms.” Linda Olejko Life Stories & Business Stories [email protected] See listing under “Biographers & Historians.” www.glenmede.com MULTI-FAMILY OFFICE Continuity Family Business Glenmede, Morristown MANAGEMENT CONSULTING Consulting 1200 Mount Kemble Avenue Morristown, NJ 07960-6797 Continuity Family Business Consulting See listing under “Family Business Consulting.” p: 973-451-3803 See listing under “Family Business Consultants.” Adam G. Psichos [email protected] www.glenmede.com EY Family Business Services See listing under “Family Business Consultants.”

68 Family Business • January/February 2015

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Glenmede, New York ORGANIZATIONS 590 Madison Avenue, 31st Floor New York, NY 10022 p: 212-328-7332 Rockefeller & Co. Steve Brandfield 10 Rockefeller Plaza, 3rd Floor [email protected] New York, NY 10020 www.glenmede.com p: 212-549-5302 f: 212-549-5519 Loraine B. Tsavaris, Managing Director [email protected] Glenmede, Philadelphia www.rockco.com. 1650 Market Street, Suite 1200 Center City Proprietors Association Philadelphia, PA 19103-7391 1528 Walnut Street, Suite 910 p: 215-419-6100 Philadelphia, PA 19102 Chip Wilson p: 215-545-7766 f: 215-545-3634 [email protected] Shannon Fulforth, www.glenmede.com Membership Coordinator [email protected] www.centercityproprietors.org Glenmede, Princeton 16 Chambers Street Vogel Consulting Princeton, NJ 08542-3708 The Family Business Center at Vogel Consulting is a multi-family office p: 609-683-1005 Loyola University focused on business-owning families. Michael S. Schiff Chicago’s Quinlan School of Business We offer an integrated approach to [email protected] wealth management and deliver creative See listing under “Academic Programs/ www.glenmede.com solutions in the areas of family education, Family Business Centers.” family councils, tax and estate planning, Glenmede, Wilmington and investment advisory. Family Business Network North 1201 N. Market Street, Suite 1501 3415 Gateway Road America (FBN-NA) Wilmington, DE 19801-1163 Brookfield, WI 53045 p: 877-661-2900 p: 262-790-4960 f: 262-790-4990 See listing under “Family Business Network.” Matthew C. Beardwood Nicole A. Van Peursem, Manager [email protected] [email protected] www.glenmede.com www.vogelcg.com OWNERSHIP EDUCATION The Family Business Center at Hemenway & Barnes LLP NEXT GEN LEADERSHIP Loyola University Chicago’s Quinlan School of Business See listing under “Attorneys.” Blum & Savlov, Inc. - Family Business Consulting See listing under “Academic Programs/ Family Business Centers.” See listing under “Family Business Consulting.”

Relative Solutions, LLC Continuity Family Business Consulting See listing under “Family Business Consultants.” See listing under “Family Business Consulting.” Pitcairn A leader in the family office industry PRIVATE CLIENT SERVICES serving multi-generational families EY Family Business Services EY Family Business Services and single family offices. Providing See listing under “Family Business Consultants.” investments, comprehensive planning, See listing under “Family Business Consultants.” fiduciary services, wealth administration, and customized education services, filling The Family Business Center at one need or providing a customized suite PRIVATE EQUITY CAPITAL of solutions. Loyola University Chicago’s Quinlan School of Business The Brynavon Group One Pitcairn Place, Suite 3000 165 Township Line Road See listing under “Academic Programs/ See listing under “Mergers & Acquisitions.” Jenkintown, PA 19046-3593 Family Business Centers.” p: 800-211-1745 Rebecca Meyer, Managing Director [email protected] www.pitcairn.com Offices in New York, Philadelphia & High Street Capital Washington, DC 150 North Wacker Drive, Suite 2420 Chicago, IL 60606 p: 312-423-2650 Joe Katcha, Principal [email protected] www.HighStreetCapital.com

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EY Family Business Services WEALTH INFORMATION MANAGEMENT See listing under “Family Business Consultants.” SEI Private Wealth Management See listing under “Wealth Management.” River Associates Investments, LLC The Family Business Consulting 633 Chestnut Street, Suite 1640 Group, Inc. Chattanooga, TN 37450 See listing under “Family Business Consultants.” WEALTH MANAGEMENT p: 423-755-0888 f: 423-755-0870 Mark Jones, Partner EisnerAmper LLP [email protected] See listing under “Family Business Consultants.” www.riverassociatesllc.com Hemenway & Barnes LLP See listing under “Attorneys.”

PRIVATE TRUST COMPANY SERVICES EY Family Business Services See listing under “Family Business Consultants.” Kreischer Miller See listing under “Accountants.”

Hemenway Trust Company LLC The Family Business Center at 25 Pelham Road Loyola University Suite 401 Chicago’s Quinlan School of Business Salem, NH 03079 See listing under “Academic Programs/ Glenmede p: 603-913-8022 Family Business Centers.” Frederic J. Marx Glenmede is an independent investment Managing Director and wealth management firm. Founded in [email protected] 1956 by the Pew family, Glenmede serves www.hemtrust.com Family Business Network North families, family offices, and endowments, America (FBN-NA) and foundations. See listing under “Family Business Network.” SUCCESSION & CONTINUITY PLANNING See listing under “Multi-Family Office.”

Predictable Futures Inc. - The Business Family Center See listing under “Family Business Consultants.”

The Business Strategies Group ReGENERATION Partners LLC A division of AXA Advisors, LLC See listing under “Family Business Consultants.” Helping business owners protect, preserve and pursue more value from their The Haverford Trust Company business, more tax efficiently!® Three Radnor Corporate Center, Suite 450 Relative Solutions, LLC Radnor, PA 19087 The Business Strategies Group is a team See listing under “Family Business Consultants.” p: 888-995-5995 f: 610-995-8796 of financial professionals formed to work Joseph J. McLaughlin, Jr., Chairman & CEO with closely held businesses. Every day, [email protected] we speak to business owners like you. www.haverfordquality.com From start-ups to companies that have SEI Private Wealth Management lasted generations, we help identify new See listing under “Wealth Management.” opportunities in your financial plans. Hemenway Trust Company LLC We start by evaluating your needs, and See listing under “Private Trust Company breaking down your goals into small, TAX-EFFICIENT INVESTMENT manageable steps. Can we help you take a Services.” small step? SEI Private Wealth Management See listing under “Wealth Management.” See listing under “Family Business Planning.” Pitcairn See listing under “Multi-Family Office.” TAX PLANNING SUCCESSION PLANNING EY Family Business Services Continuity Family Business Rockefeller & Co. See listing under “Family Business Consultants.” Consulting See listing under “Multi-Family Office.” See listing under “Family Business Consultants.” TRUSTEE/BENEFICIARY EDUCATION Coppertree, Ltd. SEI Private Wealth Management See listing under “Family Business Consultants.” See listing under “Wealth Management.”

70 Family Business • January/February 2015

fb010215_Directory.indd 70 12/19/14 7:49 AM DIRECTORY OF ADVISERS: WEALTH MANAGEMENT CONSULTANTS

Wilmington Trust Company WORKFORCE MANAGEMENT Rodney Square North CONSULTANTS 1100 North Market Street Wilmington, DE 19890 p: 302-651-8743 SEI Private Wealth Management Tony Lunger One Freedom Valley Drive Vice President Oaks, PA 19456 [email protected] www.wilmingtontrust.com p: 610-676-2285 f: 484-676-2285 Michael Farrell, Managing Director The Ahola Corporation [email protected] 6820 West Snowville Road Wilmington Trust, N.A. www.seic.com/privatewealth Brecksville, OH 44141 Pennsylvania p: 440-717-7620 f: 440-740-0250 797 East Lancaster Avenue Jeff Ahola, CEO Vogel Consulting Villanova, PA 19085 [email protected] p: 610-520-8470 www.ahola.com See listing under “Multi-Family Office.” Tim Gillespie, President Wilmington Trust, N.A., Pennsylvania [email protected]

Don’t miss the opportunity to place your listing in our Wilmington Trust next Directory of Advisers. Deadline is Wilmington Trust provides comprehensive Wealth Management Services, including January 30, 2015 for the March/April 2015 issue. Fiduciary & Planning, Investment Management, Family Office, Private E-mail: [email protected] Banking and Family Governance & Education to successful individuals, or call (215) 405-6072. families, and businesses.

DISPLAY ADVERTISER INDEX

American Association for Cancer Research...... Page 27 Kellogg School of Management...... Page 21 www.aacr.org familybusiness.kellogg.northwestern.edu

Attorneys for Family-Held Enterprises (afhe)...... Page WM8 Loyola University Chicago...... Page 7 www.afhe.com LUC.edu/fbc

AXA Advisors...... Pages WM4-WM5 Moss Adams LLP...... Page 5 bsg-advisors.com www.mossadams.com

Benchmark Email...... Inside back cover Northern Trust...... Page WM9 http://go.benchmarkemail.com/family www.northerntrust.com

Continuity Family Business Consulting...... Page 11 Palgrave Macmillan...... Page 17 www.ContinuityFBC.com www.palgrave.com/familybusiness

Drinker Biddle & Reath LLP...... Page 15 Pitcairn...... Page WM6 www.drinkerbiddle.com www.pitcairn.com

Ernst & Young...... Page 13 Private Company Governance Summit 2015...... Pages 24-25 ey.com/familybusiness www.directorsandboards.com/PCGS15

Family Business Consulting Group...... Inside front cover PwC...... Back cover www.thefbcg.com www.pwc.com/pfs

Family Business Network North America...... Page 9 Rockefeller & Co...... Page WM7 www.fbn-na.org www.rockco.com

Hawthorn...... Page 3 SEI Private Wealth Management...... Pages WM2-WM3 www.hawthorn.pnc.com www.seic.com/artful

iLEAD...... Page 23 Transitions East 2015...... Pages 18-19 www.nextoppgroup.com/ilead www.familybusinessmagazine.com/transitions

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fb010215_Directory.indd 71 12/19/14 7:49 AM PROFILE

BY SALLY M. SNELL

Son brings tech skills to dry cleaners

ublin Cleaners got its start Greg spent his days running we were able to grow the business in 1934 when Bernard Hudson Cleaners and nights building without increasing the staff,” says Butler cleared out half his Dublin Cleaners from the ground up. Brian, 37, now president. Dublin DColumbus, Ohio, barber- Brian, the oldest of Greg’s three sons, also added a robotic order assembly shop to open a dry cleaning store. often tagged along to the construc- system. Customers can track their He soon realized the cleaning oper- tion site. “I put a lot of miles on my orders through the company website ation was more profitable. Hudson Big Wheel in here,” Brian remembers. or a smartphone app. “Most people Cleaners, as it was known, added a Margaret, 64, built the company don’t expect that [level of technolo- dry cleaning plant, multiple retail name through community involve- gy] from a dry cleaner,” says Brian. locations and a delivery service. By ment. “She was the one that went In 2005, the company joined a the 1960s Hudson had ended deliv- out and generated the business, and wedding gown specialist organiza- eries and transitioned to a primarily I just did the inside work,” Greg says. tion. Greg cleans the wedding gowns wholesale business, cleaning tuxedos They also built Dublin’s reputation and Margaret adds her personal for a tuxedo company and clothes for by cleaning bridal wear. touch to the preservation process. other dry cleaners that lacked their With renewed competition in 1990, The recession and lifestyle chang- own equipment. the family decided to resume deliv- es such as the business casual trend Bernie’s son, Greg, now 67, joined eries. Business grew in the ’90s but hit the industry hard. Dublin has the company in 1975. The popular- halted after Sept. 11, 2001. Brian had grown despite challenges that have ity of polyester clothing decreased been leading a software company in forced competitors out of business. dry cleaning revenues. By the early 2001 when his father asked him to “And not only grown the top line, but 1980s the operation was down to help Dublin Cleaners on a one-year grown the bottom line,” Brian says a single facility. Bernie had died in project to improve its systems. proudly. 1979. The once-thriving neighbor- Brian collaborated with a soft- Since 1982, Dublin Cleaners has hood had changed, and Greg’s wife, ware company to create an identify- expanded from one location to five. Margaret, urged him to relocate. ing barcode that can be attached to A sixth store in New Albany, Ohio, They found property in the town of clothes to reduce labor and improve operates as New Albany Cleaners. Dublin, northwest of Columbus. accuracy. “It was amazing how much Brian, who had planned to stay only one year, has been in the family business for 14 years. “Brian really took [the business] into the 21st century,” says Margaret. “Everything that he has done has made it really leaps and bounds ahead of other dry cleaners.” Brian predicts that future growth will come from delivery services. “Our business in home and office delivery is growing to a point that it might be two times the size of our store business within the next year or two,” he notes. Brian occasionally brings his two children, ages seven and four, to work, where they assist him with tasks like band uniform deliveries. “They have a ball,” he reports. nFB

Sally M. Snell is a writer based in From left: Margaret and Greg Butler with daughter-in-law Laura and son Brian. Lawrence, Kan.

72 Family Business • January/February 2015

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