Family Business, Built to Last

Mark Abbott

[0:00:05]

Sarah.

Sara Stern

[0:00:07]

Hi, Mark.

Mark Abbott

[0:00:08]

This is so fun.

Sara Stern

[0:00:10]

Excited.

Mark Abbott

[0:00:11]

Yeah. Well, thank you for joining me on Founders Framework. And I'm going to do just a little background on you, but then I'd like you to sort of fill it in if you wouldn't mind. You and I have now known one another for about 11 years because I think we met very early on when you joined the EOS community and I was already there. And you've made a name for yourself as the family business expert within the community. And there's a couple reasons, I think, for that, which we'll get into some of that. But number one is your first paycheck came from being a family business member. And then you actually were part of a family business, uh, what it was a institute or academy or something like that for like 10 years before you even became an implementer. So, um, I'm going to say one more thing and then, um, I would love you to sort of provide a little more background here, but, you know, there's the old expression, some animals are equal, more animal, some animals are more equal than others. Sarah's, you know, one of those more equal animals. So, love you and I'm excited to be with you.

Sara Stern

[0:01:38]

It's really fun to hang out with you today, Mark. Well, I'm sure we're going to have a long winding conversation because we always do because it's so much fun. Yeah, your intro of me is so accurate, especially the fun of getting to connect with you early on in my tenure as an implementer. When I joined the community, they say, or somebody said to me that the 100th EOS implementer was in the boot camp that I was in. So we were both super early on in the land of EOS. And when I joined, a lot of the time when EOS implementers were IDSing, they would say, well, so for this issue, I'm working with a family business. And I would notice a few people would groan and a few people would roll their eyes in the room. And I came from running this family business center. And I love that you mentioned my first paycheck was from a family business, but of course not my own, which is a classic story of anybody from the family business. When you're a kid, you don't get paid in the family business. You just work there. So, um, but I think that's how I got to be known in the community. Cause I just started raising my hand and saying, wait a minute. Two thirds of the companies in the U S our family businesses, 80% in Canada, um, 90% in parts of Europe and Asia and Africa, and even more in some parts of the world. So these are the people we get to serve every day and.

Mark Abbott

[0:03:00]

And it's, you know, like you said, we're gonna, we're gonna go off on a bunch of different, you know, tangents here, but, um, let's, let's talk about family businesses for a second, just big picture wise, right? Some of the best businesses in the world. Some of the most enduring businesses in the world. Some of the largest businesses in the world are family businesses. And it's weird that a couple of things. Number one, it's weird that people don't really know, understand, and appreciate this. And in particular, um, that people don't know, understand and appreciate why these businesses are enduring. Right. Um, cause I, cause I've actually gone down, I know you won't be surprised, but I've gone down the rabbit hole on studying, you know, family businesses and I'll explain why in a second. But, you know, it's, it's fascinating that this, thing having family in the business is you know is is is looked at like nepotism and it's bad and you know they're hard clients to have and there's all this negative um energy around it and it's kind of weird sort of the rabbit hole on why it is there. And I want to have that conversation, but I'm going to selfishly explain why I went down the rabbit hole. Yeah, please do. Which is because, as you know, my son is in our business. And we have, uh, probably, um, oh, I want to say four to seven either family sort of units, brother and sister, husband and wife, father, son, probably if I, you know, at least, let's just say seven-ish, right? In the business also? In your business?

Sara Stern

[0:05:19]

In our company, yeah. I love that.

Mark Abbott

[0:05:22]

Okay? Yeah. Now, on top of that, I would tell you that 50 plus-ish, so better said 50-ish, right? Yeah. 50% of our employees came from either friends or family connections, right? And yet, and here's the raw part, right? I got slammed in Glassdoor, you know, a couple of years ago because we have nepotism and we have family, you know, members in the company. And I'm like, you know, guys, this is part of who we are. Right. And, and, and yes, I understand why there is some negative energy around family members because of course those people who are incapable of carrying their fair share or are not core value fits, of course they shouldn't be in the business, right? They shouldn't be in the company. But just because someone is related, right? And to throw like a massive dinger, you know, at people or at me, right? Like it's a wound, right? That's just an ad hominem attack, right? No substance in it.

Sara Stern

[0:06:47]

And it's interesting that that's one of the things that people will pull out of the hat to attack someone in a manner that is unsubstantiated and emotional, right?

Mark Abbott

[0:07:05]

It's just, like I said, it's an ad hominem, and there's no room for that, obviously, in any, you know, in any healthy conversation. But, you know, that's why I went down the rabbit hole. I was like, okay, so I got it, we get this attack, all right, let's go and Look at, you know, what's the story with our own employee base. And like I said, it's, you know, if you do friends and family, it's over 50%. And then, you know, we just recently did our great place to work survey. And, um, we're in the, you know, when it comes to anything associated with the, you know, just with the cultural part of how people, you know, you know, whether you look, whether you love working here, whether you love your colleagues, et cetera. We're in the high 90s, right? And so now there's other areas where, you know, we got some work to do. We passed it for the fourth year in a row. But, you know, but when it comes to just sort of people loving working together and respecting one another, we have great human beings. And so, yeah, it's fascinating how you know, some, and, and, and I, once again, I'll stop talking. Um, but it's fascinating when you look at the value creation and just, you know, and it's, when you unpeel it, it's obvious why these businesses are, um, you know, what's behind the success. It's obvious when you unpeel it, right? Yeah. But the stigma.

Sara Stern

[0:08:27]

It is a stigma. Well, and what a bummer for you, for the company and for whoever put that on Glassdoor too, right? So, you know, obviously something's really sideways there. And that one example that you just gave points to something I see all the time. One is people, for good reason, will make assumptions about a same last name showing up in a company. Because there are plenty of great stories or I should say compelling stories, not great stories, but you know, why do people watch car races? I think to see the crash. I don't know. And to see who wins. I'm not sure, but it kind of seems that way to me. Why can't we look away when there's a, you know, a crash on the you know, on the highway or whatever. You know, there's a thing called a Gawker's Slowdown. I think that's the official name of it. So for some reason, humans like to see that. So Hollywood knows that. So they put, you know, family business stories, Dallas, the TV show, Succession, the TV show, The Godfather, technically a family business, right? The list goes on and on and on. So there's good reason, but also there's like, like you're pointing to, just an assumption that any family business will be dysfunctional, there'll be nepotism, it won't be fair, etc. And what you're describing is the most common situation in a business on the planet, meaning there's more than one family member in the business, And there are family members. I should say there's more than one family member as an owner or a potential owner.

Mark Abbott

[0:10:02]

Yeah.

Sara Stern

[0:10:03]

And then there are typically family and friends throughout. This is the most normal, the most typical. And so I would also say, because it's the most typical kind of business, of course, there's great stories and there's hard stories and the hard stories are the ones that get told.

Mark Abbott

[0:10:19]

Yeah. Do you, do you have, um, either theory or research on why family businesses are A, so prevalent, and B, obviously enduring, and sort of what's behind all that?

Sara Stern

[0:10:40]

Well, there is some research. um some one piece that is extremely compelling to me in the research well actually let's back up um in 1978 Harvard came up with this super simple model for family businesses it's a simple venn diagram you know three circles all overlapping in the middle and the three circles are the family system uh the business system and the ownership system and its long name is the three circle model of the family business system because you know if you're an academic you're going to give it a really long name um but I love that model because what it's pointing to is these three very separate things that are actually all working together in one moment inside of a family business and what I The research that compelled me the most, or that made the most sense in my head as to why family businesses endure is actually the family circle. And lots of people want to point to that circle as the reason family businesses are messed up, or they're hard, or they're difficult. But I actually think that's the number one reason they continue, and it's because of this. In the family circle, There's typically a leader. Well, there's a leader of all three circles, whether it's named or not. And of course, in EOS, we talk about visionaries and integrators. But the ownership circle, a healthy ownership circle has a leader and a healthy family circle has a leader. And that person in family business research is called the chief emotional officer.

Mark Abbott

[0:12:10]

which I think is the best title there is, right?

Sara Stern

[0:12:13]

In the business, EOS, we might call it integrator visionary, but lots of business people call it the CEO of the business. There's also the CEO of the family. And I think that's why family businesses endure because that chief emotional officer does things like say, No talk about business at the dinner table. No talk about business on vacation. Sometimes they break ties between a parent and a kid, two siblings, cousins. They'll step in and say, cut it out. Stop doing that. They also do something that I've never seen measured anywhere. Well, actually, I will take this back. I've seen it measured in one company on the budget. They, chief emotional officers do this sort of invisible thing that thank goodness research picked up on. They make sure families have, continue to have traditions.

Mark Abbott

[0:13:05]

Yeah.

Sara Stern

[0:13:07]

And I think that's where you, you create this lasting trust among people in the family so that when things get hard in the business, they can actually have the hard conversation. When things get hard in ownership, they can have the hard conversation. I could go on and on, but I think that's the number one reason they endure.

Mark Abbott

[0:13:24]

You know, it's interesting, um, this won't surprise you, but, you know, I have a series of books I've been working on, and one's called, and it's called the Founder's Notes series, and it's, it's my perspective, right? And it's my perspective, and there's one on culture, right? And rituals and artifacts. Yes. Right? Are, you know, are core to an enduring culture, right? Um, and so obviously you have, you know, you have the traditional core values, but you have rituals and artifacts and guardrails or, you know, elements that ultimately get built up over time and in the best companies, Um, and by the way, this is a small percentage, right? But in the best of the best companies, um, you know, they're, all of these things, right, they're like, they're, they're, they're forever elements. And so if you get some knucklehead CEO who comes along, right, and wants to violate some of these forever elements, whether it's your ICP or your core values or, you know, your compelling why, how you make the world a better place kind of a thing, right? Um, or, you know, they, their actions are inconsistent with sort of, you know, or they get rid of rituals, as an example, at the garden, right? Any of these things, right? The best, best cultures, like, ejected. Right. It just ejects. It's like, you don't belong here. This doesn't, you don't get us. Right. And, um, and, and then, you know, the sadder stories are the stories where they come in and they rip out some things that are really important. And everybody's like, dude, this is who we are as a people, as a tribe. Right.

Sara Stern

[0:15:07]

And so, you know, it's, it's, that makes tons of sense to me that the, that the family circle, you know, needs to have the same things or vice versa, really.

Mark Abbott

[0:15:18]

Patients need to have the same things that really healthy family circles have because, you know, the families have been around a little longer than the than the organizations.

Sara Stern

[0:15:27]

Yes, and ideally in the end, the family is the thing that's lasting, whether or not the business is lasting. And what I mean by that is not what it sounds like, because what people often hear when I say those words is things like, oh yeah, you're right, the family needs to stay in place, so never fire a family member. Never buy a family number out. That's not what I'm saying. I'm actually saying prioritize your family, your time, your time that is only for family. Prioritize those rituals. I have to tell you, Mark, every time I dig under the hood of a family business, I find at least one, and I like weird things, at least one weird family tradition. So this is a compliment.

Mark Abbott

[0:16:09]

Yeah.

Sara Stern

[0:16:09]

And it's funny stuff like, you know, the early November lasagna competition. It's the July 4th riding tractor parade. You know, these are, they're silly. They're not fancy. They're not, usually they're not expensive. But these are things that have been going on for decades. To an outsider, they look a little funny and it's the, it makes the fabric of the family. And it's, it's exactly what you're pointing to in the business. I worked with a family business who, um, they ejected someone over cupcakes. Um, and the founder always celebrated people's birthdays and put thought into it. And it wasn't a big, once a month, they got everybody together and they celebrated every birthday that had happened in the last month. It was what they did. And the founder always bought nice cupcakes.

Mark Abbott

[0:17:01]

Yeah.

Sara Stern

[0:17:01]

And somebody came in and was like, we're spending too much on cupcakes. And they were like, you're out of here. You don't get it.

Mark Abbott

[0:17:07]

Yeah.

Sara Stern

[0:17:07]

You don't get it.

Mark Abbott

[0:17:08]

Yeah. And it's, it's, it's interesting. Um, man, oh man, lots of things to go down on this, on this rabbit hole. But it's, you know, it's, it's interesting in that moment. That's a, a coaching moment. And, you know, and you're going to have that. that coaching moment with that person, and they're either gonna sort of understand, you know, why that's important, or they're not. And maybe they won't understand why that's important, you know, that moment, and then you say, hey, you know, you need to reflect on this, whether it's to sleep on it or take a week or two. But this is core to who we are, and it's not going away. Right? And so if you think this is, you know, if you think this is, you know, uh, you know, something that doesn't make sense and, and, and you think that, you know, it's a material issue, um, and you're never going to change your mind, then, you know, you probably don't fit in this, you know, this, this tribe. Right? So it's, it's, and, and that's the, you know, the coaching moment is I, I want you to, you know, I want you to be successful. I want you to have a great life. I want you to enjoy work and, If you're not going to like, like to play the game the way we play the game, then, you know, it's just not good for you or for us. Yeah. Yes. Thank you.

Sara Stern

[0:18:31]

Thanks for being here. Thanks for showing us who we are, which also happens on the other side too. There are, there are parts of any company and for sure parts of family businesses that are accidental. Oh my gosh, this is how we are and we're accidentally super toxic or super mean or not realizing that this thing that is core to who we are, which I would not put cupcakes in that category, right? Celebrating people's birthdays, I wouldn't put that in there. But there are, you know, accidental parts of family businesses that get woven in because humans come with hurts and injuries and pains and things, weird things they do to protect themselves and blind spots and all that kind of stuff.

Mark Abbott

[0:19:12]

Yeah.

Sara Stern

[0:19:12]

And that's the beauty of a lot of the work you write about is an invitation to really look critically at what is your best and what is not your best and how do you lean more heavily into what is your best.

Mark Abbott

[0:19:23]

Yeah. And how to You know, and, and, and, and, and hopefully, you know, we don't need to get into my stuff, but, you know, give people, you know, some tools that are relatively accessible in my mind. And sometimes I, you know, I can see people rolling their heads, eyes at this one, if not rolling their heads. But, you know, it's like the levels of ego and just understanding where you are and understanding where others are. understanding that we're all go you know we all go through these these stages of development and every one of us you know goes through you know I'm in particular fascinated by you know the sixth stage of Lovinger's model which is empathy you know you know we need to go through that stage but and then we need to understand that no we can't all get along no we can't have every single person in the world be part of our company because they're they're not gonna fit the culture they're maybe not gonna like you know, what we do. Maybe they're anti-capitalism. Maybe, you know, who knows what the parts of our, you know, our, our, our, our stew is that's offensive to them. But, you know, generally speaking, you want to be surrounded by people who, you know, who, who dig your chili. That's a better expression, right? Um, and, uh, And, and so, you know, six, six, you know, six is hard. And so, you know, I, when you, when you think about, you know, these frameworks, they just, you know, help you understand where you are developmentally. And, and, and that's not just looking at it from the individual perspective. The same thing is from a cultural perspective. And so what, you know, like you said, What are some of the accidental ingredients or worse, right? You know, we had these two ingredients, but when they came together, they got stinky, right? And we got to figure out how to fix that because it's inhibiting our ability to just like feel like we're all thriving together and enjoying this, you know, what we do on a day-to-day basis. Because I'm pretty sure most people would like to enjoy what they do on a day-to-day basis.

Sara Stern

[0:21:28]

I am so sure of that. And I'm, I'm so sure that I, I think most people don't think that's actually a possibility or a right or an even, they don't even consider that. I don't know.

Mark Abbott

[0:21:42]

I don't know if you've heard this story, but, you know, and someone who's listened to every single podcast of mine would know this story, cause I probably told two or three times, but when we were, you know, sort of, you know, in, uh, I'll say probably five, four, four years in, maybe three years in. We, we hired a, an outside firm to help us with, you know, positioning. And, uh, you know, my whole thing was, you know, I said, look, I, I just want to help people build companies where, you know, generally speaking, people love going to work. And, and so we shared that with these, uh, what are they called? What you call groups, right? Um.

Sara Stern

[0:22:21]

Like a branding group or a.

Mark Abbott

[0:22:24]

Yeah. You know, and, you know, we had five or six, seven people at a time, whatever those things are called. Um, uh, but- Focus group. Focus group. Thank you. Yeah. Yeah.

Sara Stern

[0:22:37]

And- Words are hard.

Mark Abbott

[0:22:38]

What was fascinating, Sarah, was, oh man, this, I, I shouldn't, because this is a, I'll go down too far on this rabbit hole. Um, first of all, the branding organization, the research organization, and my, interim fractional CMO, right? The first three focus groups, and I'm, and I got to the place where I was like, WTF, the first three focus groups had no founders and no CEOs. And that's RICP, right? And a lot of them were in larger companies than is RICP. So I'm like, guys, these people aren't even RICP. And the reason I, the reason I'm like, what the, heck is going on here is because the vast majority of these people in the focus groups thought that was the naivest thing they ever heard.

Sara Stern

[0:23:32]

that a person would love going to work or love their job or would enjoy their life.

Mark Abbott

[0:23:36]

And that people should even be worrying about creating an organization where people, you know, generally speaking, really, you know, enjoy going, if not love going to work. And when I say love, you know, everybody in the company laughs because I always say, generally speaking, I love you. Right. And, uh, yeah, that, that I can tell you the moment I said that out loud, standing on a chair in front of everybody at an offsite. Um, and to this day, now it's a part of our folklore.

Sara Stern

[0:24:05]

It's an artifact or a ritual. I'm not sure which, maybe both.

Mark Abbott

[0:24:08]

Yeah. But, but. you know, back to this companies having accidental, you know, characteristics, um, you know, anybody who cares about building something that's, you know, reasonably, has a reasonable, decent, reasonably decent chance of enduring something you can confidently and competently pass on to the next generation of leaders and or owners, um, You know, you got to work on getting rid of those, what you call, you know, accidental characteristics that are toxic. Yes. Yes.

Sara Stern

[0:24:44]

Oh my gosh. I worked with an owner's group and this is not, this is not in the business. This is the ownership circle. And I mean, I do this with every owner's group that I work with. We talk about, we tell the stories of how the business was founded. That's an owner's move. times that you shrunk it, times that you grew it, times that you bought another business, or maybe you sold a business, you know, these ownership decision levels. And I asked them to tell these stories. And one of the themes of these stories was a consistent story of helping people, which was beautiful, like goosebumps everywhere. But there was also this consistent story of making it, I'm trying to get the right language, saving people, like literally saving people's lives or, you know, pulling them out of terrible situations. And this ownership group said, we don't want to be the ones who are saving people or, you know, like they didn't say savior. It wasn't about being a savior, but you know, we don't want to be the ones saving people anymore in this business. We want to create an environment where people experience the experience of saving themselves. They come in, they get engaged, they find enjoyment. They do the development instead of us kind of doing it for them. And to me, that was such a powerful thing because this was a beautiful thing that was consistent in the history of the company. And one might argue really powerful and they should keep doing it.

Mark Abbott

[0:26:16]

Yeah.

Sara Stern

[0:26:16]

They also recognized there was a little, there was some maybe Damage being done, which is a little bit of a harsh word, but it wasn't the thing they wanted to perpetuate beneath their view. Instead it was, let's create an environment where you get to experience improving your life.

Mark Abbott

[0:26:34]

Yeah, and you probably know this one, right? But it's the whole, what's the triangle, the hero? Yes.

Sara Stern

[0:26:42]

Oh, yes.

Mark Abbott

[0:26:43]

Thank you. Yeah.

Sara Stern

[0:26:45]

It's the victim, the perpetrator and the, like the savior, the hero.

Mark Abbott

[0:26:49]

Yeah.

Sara Stern

[0:26:49]

Versus the coach and the challenger. And why can't I think of the other, the opposite of victim.

Mark Abbott

[0:26:59]

Right. Look at us being really good. I know the model, but I can't say the words. Perpetrator is fine. Right. But yeah, I think, you know, and I think right now, you know, we've struggled with this. Um, and I think I'm better at, articulating, discussing, help trying to help explain, but not they're entirely right. Um, you know, I think there's tension between, as an example, when you're a company like ours where you have a lot of people in the company that are family, um, and family and friends, right? Um, you know, your instinct is for a lot of employees, you know, but this is a family. And it's like, no, this is a team, right? This is a high performance team. And, um, and what that means is that everybody should be, you know, performing, you know, performing really, really well, right? And what we try to do is we try to balance high care and high performance. And, um, and, and, you know, and early on, I, I used to say to people, we will do everything we will, you know, we will do everything we can to not have a layoff. And, and that was genuine, right? And, and, um, but as soon as, you know, we had to have a layoff because we were growing 80 plus percent and we were hiring to anticipate that continuing and then all of a sudden, boom, right? That, that, that growth rate didn't continue to materialize for, for, for, for reasons we don't need to get into. And then all of a sudden you turn around and you're like, we have way too many people. And then you start having conversations with the leaders and you find that your leaders were over-indexing on care versus performance. And we literally had people who weren't, didn't have a, I mean, literally told me, you know, I kind of haven't really had much to do lately. And I look at them and I'm like, and they're looking at me like, I probably should have told you that, right? And I'm like, yeah, you probably should have told me that, right? And so, and so the point here is that, you know, a lot of, you know, you create these healthy environments and, and then when you have to make a hard decision that's the right, that's right for the long-term best interest of the organization, if people, you know, a lot of people are like, well, you can't do that, right? You can't lay off people or, you know, and that's the big one, right? It's when you have to let, you know, layoff people as opposed to they get it on a one-to-one basis if someone's not, you know, either a cultural fit, which has been like, well, you know, for us, I think it's been like two or three people ever. And then, um, you know, and then you have the, you know, sort of the right seat thing. And sometimes the person was the right seat, you know, at earlier stages. But now, you know, just the nature of the of the of the responsibilities associated with their seat is, you know, it's more complex, it's faster paced, right? There's more ambiguity, because of, you know, AI and everything that's coming around. And they just, you know, they're just no longer both confident and or competent in their scene. And, and, and, you know, you have to make a hard call. So there's always this tension between creating a super healthy environment where, you know, and, and, and, and sort of that tension between high care, high performance. And, um, and I think that, you know, my experience and, and, and I'd love you to share yours is, these issues become far less significant, rifts and layoffs aside, when everybody's held to the same standards in terms of the right people and right seat, right? And then, you know, you get into, you know, and it's when you have people that are clearly, that are family members, that are clearly not right people, right seat, that's where things get yicky. Yes.

Sara Stern

[0:30:56]

I think there's two things that will help. Well, there's about a million things, but two things I'm going to talk about that are good preventative medicine for these situations. And the first one you pointed to, it's same standard, same standard, same standard. And there's so many good reasons for that. One is because you're embarrassing your family member if you let them work at a lower level. Because people pay more attention to family members than they do to non-family members. And if you let them not perform, they know it actually, the family member does, and everybody else does. So you're, I like to say that's an emperor's new clothes situation. If you let your family member not perform, it's the same as like letting that emperor walk in the parade with no clothes on. Like that's what you're doing to your family members. So if you love them, you'll hold them to the same standard.

Mark Abbott

[0:31:46]

Yeah.

Sara Stern

[0:31:46]

Period. Even though that doesn't feel logical. Um, and the other piece that is connected is thinking about those three circles. I encourage all of my clients and actually any family business who will ever hear me. So thank you for listening. Any family business who's listening right now. It's really important to be clear who's which circle you're in when you're talking to someone. So if you're talking to your son about plans for the vacation, but you're on work time and in work hours, you might either want to not do that unless you happen to be having lunch together or be clear. This is dad talking to son right now.

Mark Abbott

[0:32:24]

Yeah.

Sara Stern

[0:32:25]

Not your boss or your boss's boss talking about getting you time off of work. Cause that's a total breach of, you know, the business relationship.

Mark Abbott

[0:32:35]

Um,

Sara Stern

[0:32:36]

I have had clients literally pick the name or what, how they would refer to each other to make it clear. I'm talking to you as a colleague versus I'm talking to you as a family member so that they're clear who's talking to who right now.

Mark Abbott

[0:32:49]

Yeah. One of the, and I've told this story a few times, but, um, one of the best moves I made in my career, um, was back in, 1996 and I was running a multi-billion dollar, you know, lending and investment business. And, um, and, uh, we had a investment committee and what would happen on occasion is people would bring their deals into my office and they'd want to talk about them. And the conversations just got weird, number one. And number two, I'm like, guys, we've got an investment committee, right? So are we having an investment committee conversation without the investment committee right now?

Sara Stern

[0:33:46]

You're pointing to the exact thing, right? Who's talking to who right now?

Mark Abbott

[0:33:50]

Right. And so I said, we're not going to do this anymore, right? And I wrote a memo to the whole company, and we had 126 people back then. And I said, hey, look, when you come into my office, right, you're going to tell me what hat I'm wearing. And by the way, I can only wear one hat per visit. So if you want to come into my office for advice on a deal, right, let me know you want me to be, you know, you're coming to me as an advisor. If you want one to come in and you want me to judge something, right, let me know you want me to judge. By the way, remember that even if I judge it, One way, I'm a member of an investment committee and there's a veto cape rights within the investment committee. So it means that, you know, you could get my yes, but someone else could be, you know, could veto it and say no. And so you're kind of wasting your time if you think you're going to come in and get your deal approved, right? Because that's not how it works. So, and what's really interesting is just on Tuesday of this week, so three days ago, I was at my monthly Vistage session and a woman named Irina, I-R-I-N-A, came in and did a whole thing on coaching. And it was funny because what she, her, the gist of her program is the exact same as we're talking about. And, and, and the big takeaways, there were several big takeaways from this, from her presentation. Um, and we'll put in the show notes a link to her name and email. She's awesome. Um, but basically you, we as leaders, you know, we're either coaching, we're leading and managing, Or we're training and not developing, we're training and teaching. And it's one of these three hats. Right. And where things get mucked up is when we don't realize, right, or people are looking for us to do, you know, to do all three, because it's a really weird, funky, it doesn't work conversation. And what she, and the thing that was really struck home is she said, whenever you're coaching and, and I'll, I'll bet this will resonate with you deeply. Whenever you're coaching, you've got to really be listening. It's actually hard, right? First of all, she did three levels of listening, right? One is distracted. We all know that one. Two is just normal, normal listening. And then three is like, you are intensely listening. You're asking, you know, obviously, you know, uh, great questions. Um, you're trying to figure out what they really need. And then at the end, you know, it's like, okay, so what are you going to do? When are you going to do it? And who are you going to tell? Right. And it's a very, very specific conversation. Her perspective was when you're really doing coaching well, you can maybe get 20 to 25 minutes, otherwise it's exhausting, right? And you need to understand, is this a moment where I'm a coach? Is this a moment where I'm leading and managing? Or is this a moment where I'm teaching and training? And never mix those things up.

Sara Stern

[0:37:27]

That's so good. And you know, when you, when you take that model into a business like yours, which is like the, which is like most businesses where there's at least another family member, um, and there's other family members who, you know, people in your company who have family members, there's a fourth, which is, or am I a family member or a friend right now? Because people do ideally make friends at work.

Mark Abbott

[0:37:50]

Yeah.

Sara Stern

[0:37:51]

And the beauty in adding, I'm making this up on the spot, but I mean, but I've seen this. It's like, I'm recognizing this. The beauty of adding that fourth one is also some clarification around a friend does not necessarily then say, oh yeah, your boss is an idiot. That's not necessarily the friend. It's just, are you just coming to me as a friend because you want to vent? Are you coming because you want a hug? Are you coming to a friend because you just want to say it out loud to somebody who loves you? Which is different than venting, by the way. So being really clear. Who are you coming to ask to interact with you? But then also an agreement. Am I willing to interact with you like that right now?

Mark Abbott

[0:38:35]

Yeah.

Sara Stern

[0:38:36]

If I'm your boss and your friend and you just did a bad job, I don't know if I can be your friend right now because I'm actually your boss and you just screwed up. Clarification.

Mark Abbott

[0:38:46]

And so, you just hit on... So, I walked away and I was like, okay, I love this framework. I've been using it myself for years, but I've actually never coached it or taught it, right? Yeah. So I walked away and, and sort of did some work on it and, and you hit on the other dimension. So there's two dimensions here, right? There's what, there's four types of conversations. I just shared three. And the fourth is social.

Sara Stern

[0:39:12]

Soul, S-O-U-L. Is that what you said?

Mark Abbott

[0:39:14]

Social. Okay. Yes. Yes. So we have, we have, we have four types of conversations with our direct reports, right? There's coaching, right? Leading and managing.

Sara Stern

[0:39:23]

Perfect.

Mark Abbott

[0:39:23]

Yes. Training and training, teaching and training. And then there's social. Don't mix them up. Right now, now, so we got that dimension. Now the other dimension, right, is we've got relationships up, sideways and down. Right. And so, right. So think about this is, this is how we, you know, this is how we interact and develop relationships all across the organization. So four types of conversations. Now, as an example, I don't do, or, and I shouldn't do, As a, as a CEO of 110 person organization, right, with a bunch of really smart, you know, um, leaders in my functions, right? Am I doing a lot of training and development? No.

Sara Stern

[0:40:09]

Not outside of time with them.

Mark Abbott

[0:40:10]

Yeah. Not with them, right? Almost none. Right. And so then am I doing leading and managing?

Sara Stern

[0:40:17]

Sure.

Mark Abbott

[0:40:17]

I'm doing a lot of that. Right. And then am I doing coaching?

Sara Stern

[0:40:21]

Sure.

Mark Abbott

[0:40:21]

I'm doing a lot of that. Right. And, um, and just recently with one of my very you know, loved and hugely respected leaders, you know, I had a conversation with him and I said, hey, dude, this is a coaching conversation, right? And, uh, and it, and, you know, and, and I said, well, I'm not leading, I'm not managing. Right. Um, well, that's a different conversation. And he really, he's like, oh, you know, he really respected that conversation. Um, it was very healthy. And, um, and I just think there's, you know, There's some wisdom to compartmentalizing, recognizing the hat you're wearing, not trying to wear two hats. It gets funky.

Sara Stern

[0:41:04]

Oh my gosh. This is beautiful. I, um, connected to what you're saying. Uh, I heard this beautiful story of a dad and a son. Um, the son was not an owner of the business yet, but they were in conversation about it.

Mark Abbott

[0:41:22]

And, um,

Sara Stern

[0:41:24]

As owners, they had some really clear ideas of how much they wanted to grow. Um, they didn't hit those goals. They had to do some layoffs. Um, and the dad was the son's boss and, um, at work, um, the night before the dad said to the son, you know, as owners, you know, or as a future owner, we're not We're not doing, we're not making, you know, it's not what we thought was happening is not happening. We're going to have a hard day at work tomorrow. The next day, he laid his son off. Oh, and he said, can you come over for dinner tomorrow night? Your mom and I want to hang out. At work, he laid him off and then he had him over for dinner. And first he said, owner to owner. And then at work, he said, boss to employee. And then at home, he said, father to son. Your mom and I heard you had a bad day at work. How can we help? And isn't that beautiful? It's just, and, and he literally went out into his garage and put duct tape on hats and put them on before these conversations to be clear who he was.

Mark Abbott

[0:42:25]

Wow.

Sara Stern

[0:42:26]

It's, it gives me goosebumps every time I think about this. It does, honestly.

Mark Abbott

[0:42:29]

Yeah.

Sara Stern

[0:42:30]

It's so, and he, he made the hats. He kept those hats. They became these beautiful literal artifacts in their family, in their family business.

Mark Abbott

[0:42:38]

Um,

Sara Stern

[0:42:39]

And adding that piece inside of those conversations around, is it social? What is it? Is it social? Is it training? Is it management? Is it coaching?

Mark Abbott

[0:42:49]

Yes. Yeah.

Sara Stern

[0:42:50]

Oh, wow. The depth and the opportunity to not go sideways in conversations there is incredible.

Mark Abbott

[0:42:57]

And people are going and remember, you know, this was really predominantly around sort of, you know, I struggle with manager and direct report and all that kind of, I still have word issues there and people know I'm, we laugh about how much we play word scramble at 90, but that team leader, team member conversation was really the heart of her three hours with us. But, um, but, you know, the same thing, you know, applies across the organization. Um, and, uh, uh, and just, you know, just, you know. improving the probabilities of high-functioning conversations, right? What, what percentage, and this, by the way, I mean, you know, this is a thing that ultimately our, our software, you know, specifically the AI is, is going to, you know, help us with, right, down the road is, you know, how do we improve the, you know, the percentages of conversations that are genuinely healthy, because, you know, what percentages of those are, you know, what percentage of conversations are genuinely healthy in most organizations? I'm pretty confident the percentage is not as high as we'd all like.

Sara Stern

[0:44:28]

I agree with you. I agree with you.

Mark Abbott

[0:44:31]

Yeah. So let's, I'm going to go, so you want to hear my theory on why family businesses are so successful? Yes.

Sara Stern

[0:44:41]

Let me get my pen ready.

Mark Abbott

[0:44:43]

They're playing the long game.

Sara Stern

[0:44:45]

Oh, absolutely.

Mark Abbott

[0:44:47]

Right?

Sara Stern

[0:44:48]

It's the family circle and the horizon.

Mark Abbott

[0:44:51]

Yeah. Yes. Yeah. You know, and what I, what I find is that as someone who's been focused on, you know, on time span of responsibilities and time span of, uh, of just leadership, you know, you, cause I'm, you know, I think, you know, I'm a huge Elliott Jaques guy and, and, you know, I think about, you know, the, you know, a good CEO owner, business owner, right. You know, to build a business that can be competently and confidently pass on the next generation, you've got to have a pretty decent sense for where the things are going to be in 5 to 10 years. And then, you know, your next level down is 2 to 5, next level down is 1 to 2, next level down is 90 days to a year. And then, you know, the individual early, you know, first, first lower level of an organization called Stratum, you know, is day to day, week to week. And, um, and you know, there's a lot of tension between, and we have it even within our own company, between where people are playing in terms of their time span of their focus, right? And, you know, in a software company, there's this tension between, agile and, um, you know, experimenting versus, no, this is where the puck's going and this is where we got to be in three years and four years and five years. And there's just this tension in a software company, in ours, and I'm sure a lot of others. But, you know, ultimately, you know, what, what a lot of family businesses end up doing, um, is they end up owning assets that make sense for long-term ownership. So you'll see a lot of real estate. Um, you'll see a lot of, you know, I would say, um, natural, um, you know, sort of, you know, you can say real estate, you think about, you know, uh, income real estate, but, you know, a lot of natural assets like, you know, timberland and, and things like that, or railroads. Yes. Right. But just long-term assets that, you know, you're, you're confident are going to be here in 5, 10, 20 years. Right. Which makes sense because you, you're, you're going. You want to be in a, and so if you look at like one of my favorite family businesses in the world is LVMH. Right. And you know, what he's done is he's gone out and acquired these brands that are just extraordinarily durable and yeah, you know, you can have, you know, better and weaker leaders over, over time. And so they'll, they'll do a little bit of this, but they're very, you know, they're, they're just extraordinarily well-known and enduring brands. And I mean, it kind of aligns with, you know, what Warren Buffett used to talk about, which is, you know, you, you want to, you want to buy a business or invest in a business that could suffer, you know, a fool running it for at least one or two times. Yeah. Yep.

Sara Stern

[0:47:59]

Oh my gosh.

Mark Abbott

[0:48:00]

Yes.

Sara Stern

[0:48:01]

Were you going to say one more thing on that?

Mark Abbott

[0:48:03]

No. Yeah.

Sara Stern

[0:48:04]

I, um, part of the reason I first really got interested in professionally serving family businesses is because my parents were back to the land hippies. They were, my job on this planet was to do something to make it a better place to be. Um, and being a teacher wasn't, something that I tried it, but like being in a classroom with 30 other people's kids didn't pan out to be something that was the right move for me. Being a doctor didn't make sense, right? All the kind of typical ways maybe you would give back didn't make sense. Working with businesses made sense for me. And when I started to look at family businesses, I realized that everything you just said is true of the most enduring family businesses. And the other thing is, Because of that long viewpoint, and I think the best ones are looking out a hundred years. I ask all of my clients to look out a hundred years. Like, what is the tree you are planting today that you will not sit under? That's the question I want the answer to.

Mark Abbott

[0:49:05]

Yeah.

Sara Stern

[0:49:06]

Because I want them to have the answer to that. And I realized when you have that kind of a viewpoint, you deeply invest in your community. You make sure the schools are good because you need to have good employees. You make sure the parks are wonderful because you want people to move to your town because you need good employees. You make sure there's art, there's culture, the air is clean. You think about all these things because you want employees for 100 years.

Mark Abbott

[0:49:33]

Yeah.

Sara Stern

[0:49:37]

That is the true story of family business on this planet.

Mark Abbott

[0:49:41]

Yeah.

Sara Stern

[0:49:41]

And it's not the Hollywood story.

Mark Abbott

[0:49:43]

That's the true story. That's the true story. And it's, you know, I mean, we're talking about, you know, it's somewhere between one out of a hundred thousand and one out of a million people who want to do that kind of work, right? and who think that long-term and are willing to sort of do the things that are necessary. And, you know, and it's, you know, now to transition this a little bit to, to founders, right. You know, to me, you know, I've talked about there's five types of entrepreneurs, right. The, the, the visionaries and then the disruptors, the visionaries, Steve Jobs, Elon examples. The Disruptors, Sam Walton example, Hewlett Packard example, where they think there's a better way to, you know, serve and, and, and, and compete in this industry. Then you've got lifestyle, which we've seen a lot of, you know, um, and that's, I don't use that term anymore. I find it pejorative. Craftspeople, right?

Sara Stern

[0:50:43]

So- Thank you.

Mark Abbott

[0:50:45]

That lifestyle bothers me too.

Sara Stern

[0:50:46]

Craftspeople. Much better.

Mark Abbott

[0:50:49]

Someone who's building, you know, a dental practice or whatever, but it's more about them, right? and then accidental and then opportunistic. And the reason I bring this up is that the, the, the, the, the time span of sort of vision, right, predominantly sits within the founder, the, the founders who are legacy oriented or visionary, right? Because they are playing that long game and, um, and, and, and they're willing to grind. Right. I mean, not to be selfish or whatever, self-serving here. Right. But I mean, I didn't make, you know, a dollar of salary the first three years I was starting this company. And you're just grinding and you're just like, I got to make, turn this, you know, my vision into reality. And so you're playing this long game and then you have lots of people within your company that are playing shorter games. And there's just like, they're like, well, no, we got to just do this right now. It's like, Oh, right. We gotta, the puck's going here. We gotta, we gotta, we gotta, we, you know, we can spend some of our, you know, we spend a lot of our resources on now, but we have to dedicate our resources, some resources to next and then to later. Right. Otherwise we're going to not, you know, the puck's going to go there and we're going to be stuck right here. And, um, and this is, you know, now, you know, transition the conversation to family businesses and AI and everything that's going on right now. Right. So, you know, we're in a fascinating period of time where, you know, what's the right thing for us to do as, you know, as a family business, given everything that's going on in the world and, you know, And are we putting our heads in the sand? Do we have a point of view? Are we aggressively going after it? Fascinating times, right?

Sara Stern

[0:52:42]

It is so fascinating. I, thinking about those The kind of founders you're talking about, dare I say, the majority of family businesses, not the ones that are in the headlines a lot of the time, the majority of them are more on the craftspeople side. And those founders probably didn't have a long game in mind. They were working for somebody they didn't like working for and said, I could do it better, you know, and I'll go be a better plumber. I'll go do HVAC better. I have it on my desk here, right there. The radio flyer wagon was started, I think it's a fifth generation that's running it now. It's fourth or fifth.

Mark Abbott

[0:53:31]

Yeah.

Sara Stern

[0:53:33]

Their founder was a carpenter and he made the wagon to carry his stuff around. And then people started asking him about the wagon and now we've got the radio flyer. And he didn't, he wasn't thinking five generations out. He was trying to feed his family. And that's where I think a lot of the founders, you know, and I don't know where they fit in there. They're just trying to feed their family. And then a kid comes along and says, can I do this too? Or they need help. And the kid gets involved.

Mark Abbott

[0:54:02]

But at some point, right, they have to flip from. Yes. Right. They have to, they, they have to flip from thinking about, you know, day to day, week to week, month to month. And it's like, Oh, geez, now I got a hundred employees and right. And I've got family members in here and, um, and I really don't want this thing. This is my legacy. I've got to figure out how to play the longer game here and think about Um, the future. So yeah, there's no, and, and, and part of, you know, one of my little missions in life is to help those people that are thinking more shorter term to recognize that, you know, but if you just do a little bit more work. Yeah. Right. If you just, you know, if you just sort of upgrade your operating system, right. If you just start to play this longer and longer game, right. What you have is going to, you know, you, you know, be something you can pass on to the next generation of owners and or leaders. And, and so it's going to be better for the community. It's going to be better for your employees. It's going to be better for your customers. It's going to be better for your vendors because otherwise, you know, you're going to shut down and all of a sudden, you know, everybody's out of, you know, so I, I, you know, like I, I do want to help people move from being, you know, sort of, uh, you know, sort of shorter term oriented to longer term oriented. and to show them that, you know, it's actually not that much more difficult. In fact, it'll probably...

Sara Stern

[0:55:38]

It'll probably feel easier.

Mark Abbott

[0:55:40]

Right? Yeah.

Sara Stern

[0:55:42]

Oh my gosh. Sorry I interrupted you there, Mark. You know, where I think this points back to is our conversation earlier around enjoying the work. When somebody does all the things you just said, the work becomes more enjoyable for them.

Mark Abbott

[0:55:54]

And...

Sara Stern

[0:55:56]

I'm starting lately to have the nerve to say what I'm about to say out loud. I've been thinking this for several months, but in the face of AI, in the face of all the change happening on this planet, it hit me a couple months ago that because of the nature of family businesses, I have this crazy belief that they could actually cause peace on this planet. And I don't mean governments deciding to get along. That's not what I'm talking about. Although I do think that might be a side effect of what I'm talking about. What I'm talking about is when founders or their next generation or their third or fourth, really commit to living a peaceful life that they're enjoying, where they're having healthy conversations, where 80% or more of the conversations they're engaged in are healthy, which means they have to do their own personal work, their own work around their ego and their mindset and the way they approach decision making and how they see the world. That I really believe when more and more owners do that, they become contagious to their company. And the reason I know that is the most trigger happy, angry owners I know are also affecting their business. Their business is always on edge, always freaking out. Everybody's freaked out. So I'm really coming to see that owners that find peace, and I do mean in practical things, they're having healthy conversations. They're doing their personal work. They will then, and I'm saying in air quotes, infect their company with this feeling of peace. Like coming to work will feel peaceful. And then the people in the company will lose an appetite for discord. They'll lose an appetite for dysfunction. They'll lose an appetite for gossiping about their neighbors. They'll lose an appetite for hating the neighbor who votes the wrong way in their mind, right? And that that actually would cause this sense of peace on this planet. And it's pointing to, in the beginning, an owner able to kind of pop their head up high enough to look past next week or next month into a hundred years or let's even call it 10 years, right? What am I trying to create here beyond my next paycheck and the paycheck of my team?

Mark Abbott

[0:58:11]

Yeah. You know, I deeply believe in what you just said, right? So, um, you know, I, and, and I, and I believe that in order to First of all, unfortunately, I do not believe we're going to get China and Russia and the United States all to get along right now.

Sara Stern

[0:58:28]

Yeah, that's not even close.

Mark Abbott

[0:58:31]

Push that to the side. We won't go down that.

Sara Stern

[0:58:33]

I'm talking about what it feels like on Main Street.

Mark Abbott

[0:58:35]

Right.

Sara Stern

[0:58:36]

But besides that, I deeply believe that the world needs better leadership right now.

Mark Abbott

[0:58:43]

And I don't think you can argue with me on that one. Right. And I deeply believe that the best, the most likely place for those leaders to be developed is within the commercial arena because we're just most exposed to positive and negative feedback loops. and right so number so so there's just it's just the best environment for sort of sort from the chaff right and that we as leaders as we start to sort of think about what I, what do I need to do in order to create something that's going to endure? We realized that we need to have better leaders around us. And then once you start to realize that, then you start to focus on building leaders who are capable of the things that you're talking about, which then gets into levels of ego and helping you understand that, um, that, you know, you need to be able to have a conversation with, you know, let's just say a Nardin Democrat versus a Nardin, you know, Republican and say, hey guys, right, where can we agree? What are the things that help us work together as opposed to just ad hominem attacks and all that tribalism stuff, right? And that ultimately, you know, the best place for us to develop leadership leaders is actually within our own organizations because, you know, what you need to do is have those people that have the higher level of thinking and self-awareness and others awareness so that they can actually be a decent coach. a leader and manager and a decent trainer, right? And cascade this stuff down so that you have this organization that's capable of actually enduring, right? And it won't happen without developing leaders. It won't happen without developing the culture, right? It won't happen without having a particular area of expertise so that you can take advantage of the, you know, the eighth wonder of the world, which is compounding according to Einstein, right? And so, you know, I'm 100% with you, right? Yeah. And it's easier said than done, obviously. Right.

Sara Stern

[1:00:58]

I mean, it's harder. It's, um, in family business, a lot of people want to say, well, you know, when my dad stops being a jerk, when my daughter starts being a better leader, right, they want to point. And I, and that's not special to family business. That's special to being a human for some reason right now.

Mark Abbott

[1:01:15]

No, it's interesting to bring, to connect back to part of our conversation from earlier, right? Is the conversation we're having right now when they do that, right? Are we coaching? Are we in managing? Are we training and developing? Or is this social? If it's none of these, what are we doing? What are we doing?

Sara Stern

[1:01:38]

And to compound that conversation, Mark, always, I mean, what you're saying, and I'm just going to really, you know, really nail down your point, which is, let's stop pointing at the other people to change our lives. Let's change our lives, right? Let's take responsibility. If I'm the mom and my kid's not performing at work, what have I done or not done? What have I done or not done? Instead of looking to everybody else for your answer, what is my role in this? And where am I not peaceful? Where am I not engaging in healthy conversations? Where am I gossiping? Where am I, you know, on goes the list of all the fun stuff that we've already talked about. And that in the end, I mean, that is the power of family business. And also right there is the thing I get to see through my eyeballs. More than the train wreck stories that I see on TV over and over and over, I'm assuming, I'm hoping, that's the world you see through your eyeballs in your day-to-day life inside of your business, is actually people who love each other enough to hold them to a higher standard, to say the really hard stuff. To say, you kind of biffed it in that meeting. to pull each other aside and say, how can we do better? Cause that was, you kind of embarrassed yourself there. You know, that's what I get to see more often than I don't. Cause people do love each other so much.

Mark Abbott

[1:03:05]

Yeah. And once again, not to write beat a broken record, but look. There's four types of conversations and it's actually not that difficult to figure out whether you're doing it well. Right. And so, you know, is this a coaching moment, blah, blah, blah. Right. And are you doing it well? And if you're not doing it well, it's could be because you're mixing this shit up or you're doing this thing. Right?

Sara Stern

[1:03:26]

Number five, yes. Some other something, yes.

Mark Abbott

[1:03:29]

You know, this is not a healthy conversation. You're just tearing someone down. There's no coaching. There's no leading. There's no managing. There's no teaching, right?

Sara Stern

[1:03:38]

It's just- Well, or the sixth thing, you're doing none of it. And you're just hoping and then wondering why they're not doing different.

Mark Abbott

[1:03:46]

Yeah.

Sara Stern

[1:03:46]

Which again, continues to come back to what's happening inside of me. What's happening inside of me? What am I doing that's creating this?

Mark Abbott

[1:03:54]

Oh. Awesome. Sarah, this has been wonderful. I could keep going. I know you could, but I think we'll use this moment to sort of finish it up. And if people want to get ahold of you, you know, the classic clothes, right?

Sara Stern

[1:04:09]

Yes, yes. I have a website. It's my name, S-A-R-A, B as in Beth, Stern, S-T-E-R-N. My name is a sentence. I think it's really funny. I'm not particularly stern, but sarahbstern.com is the easiest way to find me.

Mark Abbott

[1:04:25]

Awesome. Thank you, Sarah B. Stern.

Sara Stern

[1:04:27]

Thanks for having me, Mark. Somebody says Sarah B. Obnoxious or Sarah B. Silly or whatever, but it's Sarah B. Stern for the internet.

Mark Abbott

[1:04:37]

It's been really fun to hang out with you, and I hope our conversation is helpful. Yeah, me too. It was a pleasure. Thank you.