Transcription

Katie: You're listening to Never Go Against the Family, a podcast by the University of Northern Iowa Family Business Center. In this episode, Dean Bin interviews Dennis passes who founded the Family Wealth Library and once led his own family's business. Dennis shares his story about how a lack of succession planning ended his leadership and his relationship with his family. Now, he's dedicated to collecting resources and engaging with centers like the UNI Family Business Center to ensure that families are well educated about succession and prepared to transition smoothly to the next generation of leadership and listening.

Dan: Thank you for joining us for another edition of Never Go Against the Family, our Family Business podcast here at UNI at the Iowa Family Business Center. Grateful to have you on and listening with us and even more so grateful to have Dennis pass us with us from Chicago Sweet Home Chicago. He's here with us as president, CEO and founder of the Family Wealth Library. But in his former life, he was a second generation president and CEO of a family business that has some very unique perspectives. On that business. And so excited to have Dennis join me today to talk through a few things. But first Dennis, what is the Family Wealth Library? What are you up to nowadays? What is that all about?

Dennis: Sure. Thanks for having me, Dan. Family Wealth Library is simply a digital representation of a brick and mortar library that is devoted exclusively to the subject of family wealth. And we all know that when we use the term family wealth, we are not talking about financial capitals. We're talking about all the other capitals that families have such as intellectual, human, spiritual, emotional capitals. And the purpose of the library was to aggregate the world's information on those subjects so that people could see that. Well, that really family conflict is not a taboo subject. We're all raised to believe we shouldn't wash our dirty linen in public. And that phrase has a lot of validity. But when we start talking about family business conflict, that phrase does not serve any family member. Well, what is important is having groups such as the family Business Center that is at the University of Northern Iowa where people can get together and discuss and in a trusting atmosphere, the issues that they're dealing with because they are a family business. So by aggregating all of this information, you automatically are telling people that they are not alone that all of these books and articles and blogs, et cetera were written because all family businesses have these issues around the world. So that's the purpose.

Dan: So your audience is certainly family businesses for the most part, I assume, or families that have a business connecting them together or would you not even say that's true. Would you, is your audience?

Dennis: So that's that, excuse me. It, it is true that we're really primarily focused on family businesses and I know that a lot of businesses have liquidity events and then there is the option of, does everybody go their second their, their separate ways or do they decide to remain together and if they decide to remain together now, all of a sudden they're a family enterprise. and the same principles apply whether it's an actual operating business or whether it's a family enterprise that occurred because there was a liquidity event.

Dan: That's great. So I'm guessing maybe some of your own background and experience certainly was what fueled you to start the family wealth library. At least to some extent, can you talk to us a little bit about your background as a family business owner and, and employee active family business member?

Dennis: Sure. Sure. I started working in the family business maybe when I was 10. so been around for a while, obviously not for about 19 years now.

Dan: Yeah.

Dennis: That's right there, there, you know, there was school and after that, there was law school and then the bar exam. But when I started working there, full time, dad was the founder. It was a successful business, we produced trade shows. And we had a lot of business issues and when you're fighting for survival, you're really not thinking about family dynamics. You're just trying to keep the lights on. That's right. You're just trying to keep the lights on after about six years. When we could see that the tide was changing and we were going to survive. Dad came to me and said, sister and brother-in-law would like to move back to Chicago. And they're wondering, is there any space in the business and knowing that my mom wanted to have the family together geographically. When that question was asked, I knew that there was only one answer and that was, yes, of course. I really didn't know my brother-in-law because they lived in New York. And, I haven't had much contact with him but, I certainly wasn't going to disappoint my parents by saying no. So, now he's in the business. The entire 40 years that I spent there did not end well. Because when dad died, there was an undisclosed rage that existed against me. And I found six months later that I had been squeezed out, not a pretty extreme story but that's what happened. And there was a six year lawsuit that ended in a liquidity event. But I decided that ignorance was the driver of all of the negative stuff that happened and that I didn't want other families to go through the same thing that I went through.

Dan: So, and when you say ignorance, you know, what do you kind of mean by that?

Dennis: Well, it's really ignorance of family dynamics. e even though I had been a member of this stage for about 20 years. Excuse me? Yeah, even though I had been a member of this stage for about 20 years, our group never discussed family dynamics. We never had a speaker about that. I don't believe that was unique to our group. It just didn't come up and most of the people in the group, we're part of family businesses. A vivid example of I think don't watch your dirty linen in public. Nobody wanted to really talk about those brother law issues.

Dan: My kids watch a show, a cartoon movie that came out and one of the catchphrases is we don't talk about Bruno. This is definitely something I feel like happens in family businesses. We don't talk about the family side or we don't talk about these strained relationships or they don't exist if we don't talk about them, whatever it might be, you know.

Dennis: Yeah. Exactly. So, I, I decided, you know, we had to do something to change that and the library and the efforts that surround the library are really, you know, I think one way of helping to dispel the ignorance that exists.

Dan: Yeah. And so one thing that maybe if, if Dennis of today could tell Dennis of yesterday or Dennis's family of yesterday, I think, sounds like it would be in that realm of kind of family employment, maybe as a starting point for some things. Like what would you, what would you tell Dan Dennis, you know, dentist family as an advisor of something you need to really get right, you know, or for, you know, you to be on a good foundation.

Dennis: Well, lessons learned, there has to be a well-defined process that exists before a family member comes into the business and that well-defined process has to be a process that has been decided upon by family members. It's absolutely essential. you wouldn't hire anybody without there being a job description. And yet, what is the family? That's right. That's exactly right. And you know, there are a whole bunch of examples of processes that can be adopted. But the point that I would make is there has to be a process in place and that process cannot be the decision of one person a the founder, not the, whether it's the founder and the wife, what whatever it is. And I know that most founders still are male today, which is why I say, yeah, I get what you are saying. But, without having that process in place, you're doing a disservice first to yourself as an owner. Secondly to the family member that you bring on third to the family business and fourth to the family itself.

Dan: Yeah. You know, and, and that you on, that's exactly right.

Dennis: And not speak well for any of those people or entities to just go ahead and bring somebody on simply because they're family. It's hard work to develop that process. It brings up a whole slew of issues, I suppose, starting with just governance. Who's gonna, who's gonna make the final decision, right? You want a, let's say it's your, your son or daughter, it makes no difference, your child. Do you want them working outside of the business before they come into the business? What standards do you want to apply? Do you think it's better that they come into the business immediately? Maybe they've grown up in the business as I did. Certainly, when I came in, after taking the bar exam, I knew something about the business. I know all the nuances, even though I had been peripherally involved. Of course I didn't. but, but I had, you know, a little bit of working knowledge but, you know, it, it would have been better for you too. I mean, in the hindsight of, of the lens of siblings and their spouses looking at you if you had gone through the same types of hoops. Absolutely.

Dan: Right. No, there's no question about it. And, oh, by the way, the, the, the family member that comes in, one of the things that they're gonna have to live through is I'll call it the, the Silver spoon, syndrome. How are others going to perceive that person? how is that person going to perceive themselves? Yeah. You know, we like to think that we live in a meritorious society and all of a sudden you're brought in simply because you're part of the Lucky Sperm Club. Yeah. It doesn't, doesn't do a whole lot for self esteem, you know, and it, and it often doesn't sit well with certain groups or certain people.

Dennis: Right. And the more we can do to kind of show some level of they earned it, you know.

Dan: So the point is, at least if there is a process in place that has been decided upon before the hiring took place something that has been well thought out. you, you're much further.

Dennis: Although, yeah, and even just the process of developing that policy or level of governance is, is, is often a very critical part, right? It brings families together to have communication about what is important to us. What types of things are we looking for in candidates? Blah, blah, blah and give people a chance to hear their grievance? Well, I thought, you know, I, I have asked it in school because I figured I was always gonna be able to work here, dad. And now, now you're pulling this on me. What's this all about or whatever, you know, can be part of that conversation too. 

Dan: That's right. And quite frankly, the value of the business I believe is directly attributable to the quality of the bench. Yeah, because people still run businesses today. So you want to have a highly qualified bench and this applies, whether you're thinking of selling the business at a future date or keeping the business within the family, the business within the family. If they're a bunch of incompetents running the business doesn't speak well for the business. So you want to have it right? You want to have a highly qualified bench and that starts first with the hiring concept.

Dennis: Yeah. And I know we have some families that are going from that first gen to second gen as, as your family was when, when you were brought on. You know, and I think they're thinking, well, that's a luxury or an issue we don't have to worry about right now because we're not that big yet. It's just, it's just Dennis coming on. Let's not, you know, let's not get our undies in a bunch, so to speak about, about putting together some sort of a thorough policy when we just need to really keep shooting from the hip and keep growing this thing and we'll figure that out later. You know, I think that is often the pushback I hear from, from less mature family businesses in the sense of how long they've been around and, and I can certainly understand that lens and that need for, we just need to get the kids back here. You know, but, and, and, and we'll worry about other things like that down the road when we're maybe a third gen business or something like that. But, I mean, those issues as in your case. Exactly. You know, bubble up regardless of generation and regardless of how long you've been around as a company. Right.

Dan: Well, there's no question about that. No, you're, you're, you're absolutely right. You know, if we think about what we can handle later, it's really too late. Yeah, because cultures get set based on the people that are there and the values that they ascribe to.

Dennis: Yeah, I'm just thinking about that some more now because now that third gen kid is gonna say, well, you know, uncle Dennis got hired and he, you know, blah, blah, blah or he didn't do this or he didn't do that. Why do I have to do that? And, and then, and then that kid's parents are like, yeah, you know, you're right. My brother or sister didn't have to do this or that. Why are we getting the short end of the stick now when it comes? You know, so, it's just like anything else, having a good solid foundation is always gonna be best as you're trying to get, get going and grow.

Dan: Yeah. No, you're absolutely right. That's exactly what happened.

Dan: Ok. Well, as we wrap up here today, Dennis is there, you know, another thought of parting wisdom. You work with a lot of family businesses, obviously as members, I assume you call them kind of members of the family Wealth Library. Are there, are there other, you know, another big piece of wisdom or, or past experience that you like to pass on to them that maybe you could share here as we're kind of wrapping up?

Dennis: Well, I think that it falls right in line with the hiring process and after family members are on board, whether it's one or more ignoring them, not including them in discussions is a recipe for disaster because that family member who's excluded is going to be hurt. You can't ignore their feelings by saying it doesn't matter that this particular subject that we were talking about, really doesn't apply to them. Excuse me, they may very well end up as an owner at a later date. Yeah, it, it, it really does and that hurt can translate to anger and that anger can translate to rage. That is not a recipe for helping a family flourish across multiple generations.

Dan: Yeah, you've got to kind of see past today, don't you? And know that, you know, someday this person that we're hiding in the mail room right now is gonna become a part owner and they could easily be a squeaky wheel.

Dennis: Could have a spouse that is a squeaky wheel or you, depending upon where they are in the organization, you could start to get passive aggressive behavior, could start to get even sabotage, where somebody tells a group of employees work on this project and this family member who has been ignored comes in, later. And, that's all BS and, and all of a sudden the project is slow walking and the employees, they don't know who to believe. No. And they certainly don't want to get in the middle of the family conflict that provides their salary. Right. And so they don't say anything, they talk to you.

Dan: They might have a happy hour with their spouse when they get home. You know, this crazy family I'm working with or whatever it might be.

Dennis: Exactly. That's where you might, you know, the story. But they never filter back to the family and now all of a sudden unless you directly confront an employee, a nonfamily employee, and put them in an uncomfortable position. 

Dan: You can, I mean, I'm cringing right now and even then you might not hear the truth.

Dennis: That's right. You don't know because they're now hunkering down and just protecting them. So, you know, think about that and the effect that that has on the culture of the organization, you no longer have a safe and secure workplace. You know, it's fraught with peril. Again, that doesn't speak well to the continuity of the business when that kind of stuff is going on.

Dan: Oh, absolutely. Yeah, I can totally, I mean, that's why it's sticky out there, isn't it?

Dennis: That's right. It's just not, none of this stuff is easy stuff. But if it's not taken care of, if it's not dealt with, boy, all that hard work on the business is just gonna go up in smoke.

Dan: Yeah, exactly. Right down the flusher, the business. This is awesome. I appreciate you sharing a few things with us today. Again, I wanna make, I wanna make sure folks know about your current company Family wealth library dot com. There's some great stuff out there. You've got some great authors and, and thought leaders that you work with, with that site. Thanks so much for sharing a little bit of firsthand experience. I think that is always what family businesses crave as others who have been in their shoes and, and lived to tell about it, I guess. And, so with that, I'll wrap up this edition of Never Go Against the Family. I'm your host, Dan Bin here with the You and I Family Business Center, Dennis. Thank you so much for being with us today.

Dennis: Well, thank you, Dan. I really appreciate the opportunity.

Katie: Thanks for listening to this episode of Never Go Against The Family, a podcast produced by the University of Northern Iowa Family Business Center. You can find more information about the center membership and upcoming events at https://unifamilybusinesscenter.com. As Vito Corleone advises, never go against the family.