Janna Hoiberg - Change the Way You Think About Business (J1517)

Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow-ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care. There are lots of things you can spend your tax refund on, but one thing you don't have to spend it on, a new smartphone. Switch to Metro PCS now and get not one but two free 4G LTE smartphones for brands like Samsung and LG. Plus you're on T-Mobile's Blazing fast. Nationwide 4G LTE network. Hurry, switch to Metro PCS and get two free smartphones after instant rebate. One heck of a deal only at Metro PCS. Limited time offer, sales tax not included in phone price. Coverage and services not available everywhere. See store for details and terms and conditions. Welcome to the Exit Coach radio show, the show for baby boomer business owners who are looking for cutting edge information as they plan their 3 to 10 year business succession and exit. Every week we interview top professional advisors for their best tips, strategies, and precautions so you can be well planned. And don't miss our 1 minute. Exit Coach tip of the day on exit coachradio.com. And now here's your host. Welcome, thanks very much for joining us today. It's a pleasure to have you all with us. Hey, uh, I wanted to let you know before we get into our next guest that we have been doing a lot of work here at Exit Coach Radio and we have developed the audio library, which is a compilation of several 100 let's just leave it at that, several 100. Uh, interviews with authors, advisors, and thought leaders, very smart people from around the country, and uh it's been categorized into 12 different topic file folders. So whether you're interested in listening to our past guests on things like family business issues like we're gonna talk about today or whether you're interested in growing your business, being a better leader, dealing with key. Employees family members preparing for life after exit it's all there at the audio library at Exitoachradio.com. All you have to do is go in your smartphone, put in exit coachradio.com, and click on audio library. So there you have it. Uh, my, my guest today is Jana Hoiberg. She's been with us many times before. It's always a delight to have her back. It's always a lot of fun. We talk, um, we talk, um. About important things in ways that I think people can relate to and uh she is the, the founder of um her consulting group and she talks about a lot of things with a uh uh around her book called The Backpacker's Guide um to um. Uh, business business success, easy for me to say. It's available on our website or through Amazon, and we're gonna talk today about how you can create a path for the next generation of family business. So Jenna, welcome back. Thanks so much for joining us again and I hope you're doing well. How are you? I'm doing very well and I and it's great to be back and thank you very much for the invitation. Absolutely a pleasure, you know, we always have a lot of fun I think and um and I think it's, it's fun for people to hear from the the angle of the backpacker's guide and before we get into the interview and the serious business, let's talk about the backpacker's guide and uh tell our listeners what that's all about before we get into it. Well, it is my second book, the first one being The Family Business, how to be in Business with People You Love without hating them. And this one just takes a little bit of a different approach to it, and it's not just geared to the family business, but it very much applies. Because if you look at um all of our businesses, whether they're family, um, small, large, whatever, there's times that you've got to climb and you've got to keep persevering through weather, through storms, through sunny days, whatever the case may be. And sometimes you go. Up sometimes you go down, but it really is very much a mindset, and I really came across this concept for after moving to Colorado and starting to do some hiking of 14ers in Colorado, and 14ers, by the way, are the 14,000 ft mountains that we have here. And I'm doing some backpacking and every time I go hiking it's sort of like oh this reminds me of business oh this reminds me of business oh this reminds me of family oh this reminds me of family business and I got tired of having all the ideas and not doing something with it so I put it together and I've been having fun with it. And uh the great part about that analogy is I think when most people think of hiking there it instantly relaxes their mind. And it's, it takes them away from the pressure of business, but you have to realize, especially if you're hiking at 14,000 ft, you better be prepared when you before you start that trip, you better have planned it out, know where you're going, know what the side routes are, uh, know what's gonna happen if anything happens. You really have to plan it just like you say, just like in a business situation, says there's a lot of, a lot of analogies and similarities there. Right, and it's like you read the um the back cover of my book because I talk about the um the back cover even plan. And how important is that to business, but you got to get your map and compass and plot your path. It's the same thing we have to do in our business. Prepare, you've got to be ready and by backpacking, you better not just, you know, go out there and not have prepared both physically and mentally. You know, you've got to improve your fitness, you've got to have the right tools. We need to have the same thing in our businesses as well and persevere. You gotta. Roll with the changes and respond to situations as they arrive, you know, you can twist your ankle. You can do any number of things, and you know that very much applies to all of our business environments, you know, there's been some weather situations, you know, Colorado just got 2 ft of snow. Well, you've got to adjust based on things that happen here in our businesses as well as when we're out on the road. And the good thing about living in the the time that we live is there are often there are tons of um. Tools out there to help you prepare from technology that'll tell you what the latest weather is uh to to guides and books and things like that that'll help you to really prepare so I know that I don't really have to think this through myself but I need to seek out those right tools so I love, I love the analogy and and it it really like I said it relaxes me to think about it. Now let's talk about the thing that doesn't relax relax me and that's the transitioning of a family business from one generation to the next. That can send you to the mountains for hiking, right? Because in my practice and. Yeah. I see, you know, what the baby boomers turn 70 in 2016, the oldest ones, there's a lot of this going on. A lot of people are saying how do I keep the business rolling and pass it to the next generation and hand it on down. And so this is a very, very important topic, so I just wanted to tell our listeners to listen up here. So go ahead. Right. Well, um, the rules are, um, and the process is. Still the same. The reality is if you are 70 and you're just now thinking about it, then you'd better hurry up because you really should have started thinking about it a long time ago. It is really that planning and sometimes our planning horizon needs to be years, not days or weeks, and especially for transitioning that business, it is laying that foundation, and you, you've got to lay out a plan. And a lot of times, um, the transitioning of the family business sometimes needs to be outside the family. Sometimes the next generation is not desiring, capable, or willing to be able to take that family business on. And therefore, the transition starts becoming very different, but either way, there needs to be a transition. Good point. Good point. Wouldn't it be wonderful if there was a way that you could accelerate 5 years into the future and see how it's working out with your. Son or daughter family member key employee that you decided to turn the business over because that's the big that seems to be, you know, it's the 1st 5 years of that transition it's make it or break it and I don't know what the statistics are maybe you do, but a lot of those don't go through. They find out in the first couple of years, you know, this is not gonna work. Well, the, um, the, the statistics for transitioning to the next generation are pretty small. I mean, when you get to the 4th generation, it's about only about 3% of businesses. Very few really make it for reasons I've talked about, but the transition really needs to start when the kids are in their 20s. Not when, um, or the next generation, not when the next generation is in their 40s. And so I don't care if the current generation is in their late 40s and the kids are in their 20s, you need to start laying the groundwork. By the time. You're really ready to transition. It's almost now I won't say it's too late, but you're behind the bell curve from there. You need to start looking at what their leadership skills are and developing them. One of the questions that I often ask my clients as I'm working with them is I'll say, let's go and look at, you know, your mid 30s, your 30 year old, um. Next generation that is there. Where are they as compared to where you were? And I would say about 95% of them say they're really ahead of where we were. And that's good. But part of it, you have, you have to recognize that, and they have to recognize that they're not as, um, they're not as old as their parents, and they're still going to have to learn things. But the current generation has to allow them to make mistakes and that in the, that seems to be the biggest thing is we want to shelter everybody from making mistakes. Guess what? They're not gonna learn. And that's the hardest part I find for a lot of the current um generation passing things is it's their future and they're often not willing to let the kids make the mistakes. And that's not good because that's like you said, that's how you learn is is by making those mistakes, but I think, you know, I, I. I keep thinking of like, you remember those those driver's ed cars. Where you have, you have the the student um learner has one wheel and the driver's ed guy on the on the passenger side has another wheel that he can grab and hold on to if he needs to and it seems like a lot of these transitions, uh, at least for the early period you need to let the let the student let the the uh the emerging leader. Uh, have the wheel but be ready to grab the wheel in case anything goes off but not grab it, not grab it out of their hands just because of a potential wrong move, but you better be ready because I've seen and I'm sure you have too, a lot of businesses. That the young people come out of school and they say, well, this is what they taught me, and this is what's gonna happen, and they don't see the signs coming and next thing you know, the business has irreparable damage. Well, your analogy is good because I can um relate totally when my son was learning how to drive. And um he had my car, so that was probably his um 1st, 1st mistake. And he was, he went around the corner, should have been going about 15, was going about 30. And came a hair away from actually hitting another car. But the best thing, I lost 5 years off my life. I am not a screamer, but I did scream, you know, at the top of my lungs, and my poor friend who happened to be on the phone with me in the moment at the moment lost 10 years off of her life because she didn't know what happened. And but it caused him to realize what can happen. So we've got to let them go do some things. If I had never let him go at that 30, OK? And I didn't let him, um, but he just did. Um, he would not have understood that and the same analogy goes for, um, a lot of the businesses. And let's face it, Um today's business is different than when businesses were started in the 70s or 80s or 90s or even the early 2000s. The business climate, the business structure, how you do things, social media is different and there's a lot of things that The kids have to find out for themselves what will work and their styles will be different. And that's the piece that, that plays into it, but it's really hard because this current the current generation is going, that's my retirement. That's what I'm going to um to live off, and we just have to understand that the um when my son learned to drive, they didn't have the steering wheel, but they had the brake and it's a great analogy of um understand when to put the brake on so you're not going to drive off the cliff, but allow them to take the corner a little bit fast so that they understand what the implications are. Mhm, yeah. Yeah, that's a good, that's a really good analogy. So let's talk about what, what is, what do you think is the hardest part of transitioning a family business? That actually is very different for every family, and I know that can be a platitude, but it, for some people, it's letting go. For some people, the kids aren't ready, that they don't have the leadership style, they don't have the work ethics, they don't have the The training they don't have the desire. For others it can actually be the existing employees, and the existing employees don't want to respect that next generation. They don't, they don't see them. They see them as the young whippersnapper that, you know, what does this 20 year old know? For some of them it can be the industry that they're in. It needs to go through a major changes to, you know, the old um um horse and buggy. They needed to transition and allow the cars to come in and we've got a lot of industries that are that way and they're, um, so it's a survival, um, type of environment. And so it really does depend on each generation. And a lot of it goes to the respect that they both have for each other and showing that respect in the business as well, cause I see a lot of situations where they will give platitudes to respecting until they disagree. And respect is really shown at the point in time in which you disagree, do you know what, what are the generations do to each other, um, and how they treat each other and how they work together. So I heard you say reluctance, readiness, resistance. Restructuring sometimes the the business isn't ready for this and respect the I guess the five R's of this and you know the the issue I think for a lot of people is that um they, they, they don't know what they don't know um and it it goes back to to uh a basic rule of planning don't wait until so the business is so important to your retirement. That everything's riding on it, including the the notion of happy Thanksgivings forever, which means if this goes, if this goes wrong and your retirement is soured because of it, now there's hostility in the family and there's there's all kinds of other issues, by the way too. I mean just because one child might be coming into the business doesn't mean there aren't other children who aren't that don't have some kind of grievances on their own, right? There's all kinds of dynamics in family business situations. Absolutely and not handling, you know, I've seen situations where you've got 3 and 4 kids and 3 of the kids want no part of the family business, and the 4th does, and the 4th is in there, but the other 3 like to make comments or they Interject when they really don't know anything about the business, so that's where it starts impacting it from there as well. And one of the other things that I'm starting to see a little bit more of, which is I find to be pretty funny to a certain extent is the parents have not been able to. Um, address a certain trait with a child their whole life. But now in the business, they, um, they actually want me to fix that, you know, they've got a bad habit. Well, if you could fix this bad habit, then, you know, all of us will love you. And I'm going, OK, you in there raising and everything, nobody's been able to fix this bad habit. They don't want to fix it, but you expect me to. I it's going and understanding that some of those things just really need to be addressed early on. But we get a very high level of avoidance factor. And it's usually one spouse or the other in a family business, you know, mom's easy, and that's a disciplinarian or vice versa, and that starts to carry out through the business as well. Yeah, you know, you brought up a good point and that is uh uh for for you family business owners that are out there and you know who you are if you have issues that you're not having uh ease working with uh the dynamics of relationships don't call in as a business strategist to do your family counseling work, please. Just leave us out of it, but get, get some good family counseling. Make sure your relationships are in good order and repair. This is, uh, family business succession planning is not counseling. It's very different from that. um, so let's talk about the how does the next generation, and I've seen this many, many times, I'm sure you have. The the the son or daughter comes into the business and 11 summer they're doing part time work and they're starting to learn the business and next summer they're they're a little bit more engaged and involved and before you know it they're they're in some kind of a management or supervisory role and the and the employees who might have been there for a long time are watching this going, uh, I see what's happening how does the next generation earn respect when they're often managing people that are much older than they are? Well, one of the things that I always recommend and it, it goes to the, the progression that you talked about, and that is have a job outside the family business. I recommend usually 3 to 5 years. So that you get input outside the family. And sometimes that's hard, but I think it is so critical because you start, now a couple of things happen. One, you start to see the world outside the family business size, and that will always be good for the family business. Number 2, you'll start seeing other leaders and how, what it takes to earn respect outside of it, and you just get that experience that you can bring in. Rather than, you know, talking to the 50 year old, and they know that you've never worked anyplace else, if you can go say, well, this is how we did it at this company. Oh, that's interesting. That's a different idea. We've never looked at it and you're coming in with credibility. So, that's, that's one of the, I think, big pieces and uh I think it's really critical to the health of the business and the individual and the relationship. The second is, understand that you are different than the current generation. And so, you are going to apply things and do things in different ways. So you need to sit down with that current generation. And let's say, for example, um it's a, a father and, you know, you've now got um two kids in the business. And the father was really easy, was lax and let things, you know, come and go and didn't really hold. People accountable. Well, you believe that they should be held accountable because what you're seeing is a lot of um lack of accountability, therefore lack of productivity and the like. You then need to sit down with the dad and say, we need to talk about what the culture is of this company, and the dad in this example, needs to come along the side of the. Um, children and empower them and empower them in front of everybody else, because it is a, uh, an aspect of not power but empowerment because if he goes and says, we're gonna be making some changes and I want 100% support it even if he in this example may not 100% agree, but if he stands behind them, that goes a long way and it is a hard transition from there. So that's really two of the real critical things. And the other is the kids need to understand they don't know it all, and they need to embrace and listen to that current generation, you know, those 40, 50, maybe even 60 year olds. That have worked in that business for a while and they need to say, well, you know what do you see, you know, where are you at? if they get to know that other perspective so it takes listening and asking questions, they can come a long way. That's great, great tips, ideas now, uh, Jenna, we got a couple minutes left but I wanted to um allow you to tell us, uh our listeners more about the backpackers' guide to business success and um tell us again set the stage for for who should read it, why should they read it, what do they get out of it? Well, one of the things that I did with this book is I didn't gear it just to business owners. I geared it as well to the employee. And it's just a, it is a fun way to look at business from a different perspective. So, you know, we talk about um before the journey begins, you know, what do you need to do, you know, planning, how important is attitude and how does attitude and um altitude with your business and your mindset affecting it. You know, how do you gather and lead your team, um, because even for a lot of people, when we go hiking, we don't hike alone, we're hiking with a group. So how do you handle setting pace and um get keeping people together and making sure that they're not hurt and the like. And then, You get on the trail, and there are things like rabbits, rabbits and squirrels and bears that are out there to distract you. Well, guess what? There's rabbits and squirrels and bear bear equivalents in our business. So it really just takes you through all of those in um a sort of a metaphor of understanding and looking at things and understanding that It's, it's a different way of looking at business and a different way of thinking about the challenges that you have in front of you. And The reality is there's a lot to business, but the older I get, I'm beginning to think that the biggest part of business is the mindset and the attitude you have with it. And when you're hiking and you're hot or you're tired, or you're feeling lost, or whatever the case may be, 99% of it is attitude with some perseverance. And doesn't that relate to our business world as well. It absolutely does, and it's, it's a great like I said uh I I'm relaxed just thinking about the concept of backpacking, but when you put it in terms of the fact that there's there's teamwork involved, there are goals involved, there are going to be distractions involved, and and you need to prepare for those and you need to uh first plot it out where. Going to go and um how you're gonna get back and what's gonna happen if you don't get there so it's all, it's all good. um I wish you great success with that and our listeners can find that at your website or through Amazon as I understand, and your website is jennahoiberg.com, right? Right? Spell that out for our listeners. J A N N A H O I B E R G.com and what else would they find at your website? They're gonna find a little bit about um me as far as the consulting aspect with family business. I'm also a um public speaker, so I do, you know, if you've got an association or you've got a group that you want me to have come talk to or speak to, I have information there as well as some testimonials. Sign up for a newsletter, you know, there's a, my blog is on there as well as link. In and there's just sort of a lot of information and I often, you know, my tagline is creating a path for the next generation family business, but the sub part of that is changing the way you think about business because sometimes if you can just make a minor change to how you look at business, it can be a huge difference to the bottom line profitability. Great, great tips, you know, great stories, Jenna. I always enjoy, um, talking with you and, and hearing what you're up to and and what's new with you so I hope our listeners will take advantage of that and go to Jenna Heiberg.com, find out about the the book and what else they can, uh, it sounds like it'd be a fascinating discussion for a business. Businesses that have a group and wanna want a dynamic speaker they can come back and take them down the trail a couple couple mile posts I guess, huh? Absolutely, absolutely, yeah we have we have a good we a good time because it really um applies to you know um to sales success to customer service success to um marketing success when you go and look. Some of the analogies you can dig it into some of the aspects of your business um as well. So I've had a lot of fun with it. It's um having some good traction and um some good interaction and it just applies to that whole family business aspect as well and I greatly appreciate you inviting me back on the show. It's always fun to be here. All right, terrific. Well, thank you again so much for joining us and I look forward to the next time we speak, Jenna. Awesome you have a wonderful day. All right, we're gonna take a short break we'll be right back after this, so please stay with us. You're listening to Exit Coachradio.com, the information station for age 50 plus business owners, where we're interviewing top advisors for their best tips, ideas, and precautions so you can be well planned. We upload new one minute tips every day. Exitcoachradio.com. Come listen for a minute. Thank you for listening to Exit Coach Radio. Time is precious and so are our pets, so time with our pets is extra precious. That's why we started Dutch. Dutch provides 24/7 access to licensed vets with unlimited virtual visits and follow ups for up to 5 pets. You can message a vet at any time and schedule a video visit the same day. Our vets can even prescribe medication for many ailments, and shipping is always free. With Dutch, you'll get more time with your pets and year-round peace of mind when it comes to their vet care.