Jeff Karges - Working In The Family Business and Loving It (H1017)

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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 one minute exit coach tip of the day on Exitcoachradio.com. And now, here's your host, the exit coach, Bill Black. This segment of the show is brought to you by Wired Card and features Jeff Cargas of Relationship Matters Consulting Group, and Jeff, welcome to the show. Bill, it's my pleasure. How are you today? Good, Jeff. Before we get started, did I get your last name right? Could you, could you say it for us? I answered it. I, I answer anything. Carcass is the way you say it, but, uh, I never expect anyone. So I'm, I'm, I'm, I've got a low bar on that one. I. I, I could go any number of ways on that one, Jeff, but it's a pleasure to talk with you. Um, we're gonna talk about working in the family business and loving it, and we're also gonna, we want to mention you, you have a book out called Help the CEO Is Kidnapped by His Daughters. So, we've got, we've got some interesting things to talk about. That book is about, that book's about to publish it done out yet, but yes, that's actually a, a self, uh, bio about what I went through, which you'll understand in a minute, but yeah, that's uh. The family business can be fun, and that's what I help people do, but it can also be extremely lethal. So one has to keep those two things in mind. Well, I know we have a lot of family businesses that listen into the show, so I'm interested to hear about it. And, uh, first of all, tell us a little bit about your professional background, Jeff. Well, ever since I was 15, I worked in a family business. Uh, I went to college, got a business degree, and then went to graduate school out in your area of the woods at Fuller Seminary with the guy that runs eHarmony, Neil Clark Warren, and I studied family systems theory, which is a special, you know, um, practice or discipline about how to work with families in terms of the system of the family. Then my mom got cancer and was dying and not doing well, and my wife and I were California-bound. We moved from California back to Indiana and I ran the business for 10 years and things were booming. Until my mother deceased and um things got very ugly. I was the youngest of 4 and uh needless to say, and uh uh 36 years old after the business grew about 500%, we walked away from it. So it was a very difficult and painful moment, uh, but, uh. we had to do at the time. So ever since then I've worked for family businesses to help turn them around, help them survive, help them not kill each other, and learn how to get along in a way that is positive for the non-family members and for the economy. That's my goal and that's what we do. And, and out of this, um, uh, it's a, that's a tragic story, but, you know, when one door closes, another one opens, right? And not only is that true, but you know, the family business owner is a unique bird. They typically will say to you, no matter who you are, you don't understand me. That is the one thing that I never get from them when they hear my story. They always are like, Wow, you do understand me. So it gives me a great advantage. Well, when they hear the title of your book, they probably really think, yeah, I guess you get it. But, uh, why does it, uh, oh well, tell me, tell me a little bit about now. So, so you all then started, um, with Jeff and you and Rick Pfeiffer, my business partner Rick. Yes, Rick and I grew up together in Indiana, as a matter of fact, and, uh, both worked all around and knew different people. And I had my own business in New York for many years and then moved down to North Carolina to follow the grandchild, which you're supposed to do when you get older, and Rick lived here and we merged the company. He had a consulting practice. And the way Rick and I got together was one of my success stories. He had a net niece whose business was not owned by her. It was about to go out of business and the two owners hadn't worked for 10 years. And the business was getting called by the bank, all kinds of issues, and what happened was I got involved in getting the stock out of the owner and the son's hands into the daughter's hands to get a proxy and a transfer. We got it done and it was absolutely no blood. It worked out where people actually liked each other when it was over, and her business the first year grew about 220% once she got control of the business, so, uh. That's how Rick and I met doing this together. That was about 5 years ago. And then he said, Listen, I want to do this with you because this is amazing. You did it with my own family, so let's do this together. And that's kind of how we merged. So that's a, a project turned into a company. Yeah, it really was. It really was. He, he thought that it would never happen. There was a lot of addiction going on. There were a lot of issues, and his thought was, well, it can't hurt, but this is, this is headed for court, you know, this is headed for probate court kind of a thing, you know. That's, it's tough. There's so many issues that come up in a, in a family business, not only do they have to obviously make it work and make a profit, but they have to be sensitive as far as what hats they're wearing at all times. Do I have my daughter hat on or my son hat on, or do I have my vice president of marketing hat on, uh, and the dynamics can be difficult. So why does it seem like people that work in family businesses are so much more sensitive to change? Well, there was a famous guy named Murray Bowen who actually was a California boy who came up with the theory of a family emotional skin, and the way I would think of that is you're in your own skin and your wife and her own skin, let's say. But imagine you were in the same skin and she goes to scratch your head and that pulls your left arm. In a family business, they're in an emotional skin. So when dad comes in and says to the daughter. I've had it with you. You're, you're failing at your job. I'm not happy with you. He might pull that direction, but everybody in the family feels it. The emotional skin makes everybody feel everything. Now, if it was a non-family member and the dad says, Why didn't you do your job properly, they just go, Hey, I'm really sorry, I'll do a better job. But in a family business, It's a whole emotional thing. It's not just a business thing. So the whole family feels the whole process, and that's what makes it so much more difficult, and that's what you have to work on figuring out a way to kind of, how should I say, you know, work through the mind of those emotions where people can work together and enjoy the job and the business can survive and do well, and that's the art of what we do. The, the concept of the emotional skin is probably the best way I've ever heard that put, Jeff, great job. Um. Oh, thanks. It was my idea, but I, he was a guy that I studied in graduate school and I'll never forget it because there, there, I felt it, you know, I understood what he was talking about, you know. It, it really illustrates the point. It makes a tremendous amount of sense. And, um, I'm gonna ask you a couple of questions, but first, we're gonna take a quick break. Uh, Jeff, and then when we come back, I wanna ask you a couple more questions and then ask you for some stories and tips and ideas for our listeners so that they can be well planned because this is a very emotionally charged area. Jeff, we'll be right back after this minute. No problem, thanks. No business owner looks forward to the messy and uncomfortable relationship issues that occur almost every day in a company's daily business life. We welcome these experiences. We excel in these experiences. The messier it gets, the better we prove our expertise. Our combined 70+ years has resulted in deep expertise and broad business leadership experience. We're relationship matters. For a free consultation, contact Jeff Cargas at 919-378-1696. So now you're the person at the party, the trade show, or in the elevator with the marketing bazooka, the wired card, the business card that will play your product or service video, take them to your Facebook or give them directions to your place of business at the tap of a button, and so much more. What can your business card do? Business card conversion, wired card, your business card rewired, plugged in, and turned on. Visit the wiredcard.com or call 412-331-3606, the wiredcard.com. Welcome back friends. Just a reminder that we've interviewed dozens of advisors on a wide variety of topics, and you'll find all of their interviews and highlights online at exitcoachradio.com or on iTunes, and I'm talking with Jeff Cargas, and before the break, Jeff, uh, you talked about the, the reason why family businesses can be so emotionally charged, um, and you know, another key issue that we hear about a lot is, um, how do Business owners choose favorites or successors, um, when you have maybe a couple of kids working in the business. Is that something that you guys get into a fair amount of, of your work? Yeah, pretty much that always comes down to it for a couple of reasons. First of all, you shouldn't ask a, uh, let's say a person who does your gardening work. You wouldn't ask them to do your taxes. And if you think of most family business owners, they're not trained selection people. They haven't been trained in HR selection, and they don't know how to do personality studies in 360s of people. So to ask the dad or the mom or the brother or whatever to say who's the person that's going to go forward is really asking them an unfair thing. So we use a lot of the wonderful testing methods today. We neutralize the, you know, personal decision process and try to give them really objective data and of course we give them our two cents as well, but it really helps them take it out of the. Dad's got to pick a favorite kid to who's the best person to take this business into the future, and I would say 99 times out of 100, the other family members, once you do the process and show the data, they're like, you know what, that is the right person, and it's really a beautiful thing because they can see it almost on paper that they've picked the right guy, even though they aren't the one that was picked. So that's something we pride ourselves in and worked very hard at being successful at. By having a process and you get, you do you get all the Family members that are involved in the business involved early for that so that there's no, no surprises at the end, like you say, yeah. Family and non-family, we have a very unique interview process that we use. It's our own study and survey we've developed, and that process helps objectify the thing. I'll give you a quick analogy. If I looked at you right now and said, Hey, Bill, I notice you have your finger on your face, most people will go in my fingers on my face. They see that as a criticism. When we teach this process, we show them that that's not a criticism, it's an observation. So we help kind of break down that overreaction to criticism and help them realize that's a comment and you don't have to apologize for having your finger on your face. We might be looking for a person who puts their finger on their face. So it's helping them desensitize the things that they tend to overreact to and it really, it really quiets the process down and makes it a more friendly and positive environment. That makes sense. Now how about a situation where you've got The, the, the successor's been chosen, and the successor makes sense and it's the son of the owner, but the, the dad just does not want to leave his chair. He just doesn't want to transition out. Uh, how do you work with business owners in that type of a situation? Well, a big part of that is helping the business owner find out what it is about being in that chair that he likes. That's part of it. And then it's being able to say, all right, since there is no good time, there's got to be a time, so we all agree to that. And then I always kind of leave the family business owner with this choice. You either are going to have the world determine what you are, or you're going to determine what you are. And if you wait and stay in that chair till you die, you're a family business owner, then the world judges you and makes up a decision. But if you figure out a way to transition from that chair or maybe from an analogy standpoint, you don't transition from that chair, you just bring another chair in and put it a little bit to the side and above you. Now you get to determine what your legacy is as opposed to somebody else making it up for you. And people like to get that sense that, hey, you know what, this is a positive thing where I get to control the outcome as opposed to I'm going to wait till something happens to me and then, you know, not have any control of it. So that's a very important part of the process. So one of the ways that I've put that is either you're going to be remembered for your planning or your lack of planning, you choose. That's right, exactly. But you know, one of the things that, that I noticed that, that you said in your, in your material here is that the goal of family business is happy Thanksgivings. What do you mean by that? Well, one of the things, reasons we need our business relationship matters is that, you know, when you go to work and you've had a fight with your spouse or a friend, and you can't get your mind off of it and you can't work at the core of business success, sales, planning, everything, other relationships. What we do is figure out a way to take those relationships head on. That's the messy part we get involved in that people tend to stay away from lawyers, accountants, and we say this is what it is. Let's deal with this. Let's face it. Let's talk about it. Let's get healing here, but let's not sweep it under the rug, and then maybe you don't feel as crazy about that person as you might have at Thanksgiving, but at least you're on the healing road now as opposed to the, I know what he means by that, and all this innuendo and all these wondering what they're up to. The truth's on the table and everybody can move towards a positive ground. I always say that the pothole fills up with dirt unless you fill it up with something first. We get to the pothole, fill it up with our own source, and we stop the dirt from falling into the pothole. That's the way we teach communication and that's how we get ahead of the game. Well, that's great. Now, do you have a maybe a client story for us, Jeff? Yeah, I'll tell you talk about Messi. Let me tell you about a client's story of a client who had an illness and didn't have any children to run the business and had hired a guy to run the business while he was out in his illness in the hospital for about 4 months. The guy, of course, went behind him, hooked up with the CFO and was taking money out of the business and sticking it to the guy completely. I got involved as an interim CEO to try to find a successor and went into the business and Basically, just, you know, had to fire a bunch of people and do a bunch of things and really in essence hold his hand because he couldn't do it himself. But once it got done and once he felt like, you know, somebody had kind of like beaten off the bully for him, he not only found an amazing health recovery because it was bothering him so much emotionally, but the business, he took it back over again at about 63 and has boomed the business and grown it dramatically. He needed somebody to come in and do the dirty work and do the tough decisions and, you know, make it happen and that's one of the things we do for people. Well, and it's difficult for a lot of people because they, a family business, a lot of times the employees are an extended family. Oh, absolutely. Absolutely. he looked at these people. They thought, he thought they were his best friends. He didn't believe anybody would ever do that to him, which nobody ever does. You always think it's, they're always in shock, you know what I'm saying? Yes, yes, yeah, absolutely. Yeah. And before someone starts to engage someone like yourself, what are some signs along the way that maybe they should think about looking into working with someone like you? Well, one of the signs you have to look at really, I think the tragic sign is that every year the statistics for the last 50 years have been the same. 95% of family business owners say my business is going to go on, and only 20% of them have an intentional plan. And guess what? 80% of them don't go on, but everybody thinks it's going to. So if you don't have an intentional plan, if you don't have a written succession plan. That's not a good sign because like that analogy, the pothole, what will happen is the dirt will fall into the hole and it will not the road won't turn out like you thought it will because you're not in control of it. So it's very important to say if we don't have a written plan, how are we going to do that? We've got to do it by creating something intentional and whether it's me or anybody, you've got to begin to get somebody involved to help you do it. You can't do it yourself. It's almost impossible. Because you're being your own if you know what I mean. Yes, of course, and a lot of business owners, of course, they're so involved and wrapped up in the day to day. It's like the forest for the trees kind of thing. So give us again. Why nobody understands me, you know. Yeah, we, we've only got about a minute or so left. Um, what, uh, give us a, a tip or precaution for our listeners, Jeff. Well, you know, we, I think, um, we, we were talking about earlier, when you look at the issue of, let's say, planning and, and, and doing something. People always want to wait till the right time. And what I try to tell people is there is never a good time when you think people are going to be offended, but there is always a better time, and the better time is to do it up front. When I went to work for my dad, my wife said, Your dad needs to sit down with your siblings and tell them you're going to become the CEO, and guess what? He didn't do it. And when they found out they were livid, and he would have avoided so much family pain and long-term family pain had he simply gone in and said, hey, listen, Here's what's going on. So that's important. Also, I encourage people to read about family dynamics. I think when you read that that emotional skin is normal and that it's a part of life, and there's another process called homeostasis and constellation theory, when you read those things, it really helps you realize, you know what, our family isn't crazy, we're normal. And it's, it's normal for us to feel this way and it kind of takes some pressure off of thinking, God, what's wrong with this place? This place is crazy. And I think it's important to become educated. So I encourage people to do that, you know, you can read about family systems anytime on the thing. Another thing that I teach people that people always look at me and go, uh oh, why didn't you tell me that sooner? Is this rule of management. The sickest person, the most needy, the most demanding, usually the one with the addiction, always has the most power. Great stuff, Jeff. Thanks very much for joining us today. We really appreciate it. Can you tell us, our listeners, how to get in touch with you? Well, our website is www.relationship Matters with an S.biz, and our phone number is 919-378-1696 and I appreciate your time. It's been a pleasure chatting with you. Uh, we, we could go on for hours. I'd love to have you back sometime. Would you maybe come back and join us another time? All right, Jeff, thanks very much. I've been talking with Jeff Cargas, a senior partner of Relationship Matters, and we're gonna take a short break and we'll be right back. At Exitoachradio.com, we're interviewing over 100 top advisors to get you one minute tips, ideas and precautions so you can be well planned. We upload new content daily at 6 a.m. and 1 p.m. Exitcoachradio.com. Come listen for us. Thank you for listening to Exit Coach Radio. 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