By Mike Flaim 

 This article first appeared in the Winter 2017 issue of Massachusetts Family Business magazine.

The Massachusetts Family Business Conference convened this year in Boston’s celebrated Colonnade Hotel on Oct. 25; the annual Family Business Awards ceremony preceded the conference.

Planning is Paramount 

If the focus of the all-day, eight-session conference had to be distilled into a single word to reflect the theme, it would be “planning.” An understanding of the consequences long-term planning has for the success of a family business was the basis on which all discussions were built that day.  

Though attendees had the difficult task of choosing which of the concurrent sessions to attend, common themes ran through each: managing generational transitions, the importance of an outside perspective for the vitality of a family business and how a carefully chosen board of directors can be the best management decision a leader will make were among the repeated ideas. The singular outlier was an extraordinary workshop on cybersecurity that was moderated by a former chief information security officer for the White House. Even there was an understanding of the value of looking to the horizon to ensure a company’s wellbeing.

The Power of Planning was one of the opening sessions and featured the founder and president of Royal Health Group, James Mamary Sr., along with his son, and James Mamary Jr., executive vice president. Also in attendance were Bruce F. Hoffmeister, director of wealth and fiduciary planning for Wealth Advisory Services, and Matt Allen, associate professor of entrepreneurship at Babson College. It was moderated by Mark Andersen of Wilmington Trust. 

Wilmington Trust conducted a quantitative and qualitative survey of 200 owners of privately-held businesses and found that only 58 percent of those surveyed had some semblance of a succession plan in place. Andersen asked the panel to “open the kimono” and discuss ways they’ve breached the subject of succession planning. An audience member chimed in that such a discussion with his father, who is the current leader of their company, consistently ends abruptly because, he supposes, it is linked to his father’s own mortality. Succession planning, like arranging a will, is not something people like to think about, but is necessary for the future. “We have to get past the barriers we have of sharing information,” Allen said. 

With the importance of creating and maintaining an environment that fosters open, constructive communication, one of the panels that immediately followed ran with these ideas a bit further. David Karofsky of The Family Business consulting group led the discussion by introducing the daunting statistic that merely a third of family-owned businesses survive the transition from first generation to second. Karofsky was joined by Jacob Grossman, Andrew Salmon and Ethan Becker to discuss the reasons behind this slim survival rate and offer tips on increasing a business’ odds. The focus again hinged on proper, careful planning for the future, having an objective valuation performed prior to any transition and the management of assets so that neither generation is left lacking resources. 

Lunch followed, with keynote speaker Howdy Holmes. During his address, he assessed the stunting effect that routine can have on a person. He punctuated this point with a simple experiment; he elected two people and tasked them with having a conversation with a simple caveat: they cannot use first-person pronouns. They didn’t get beyond asking “how are you?” His point was rote responses and the ease of slipping into familiar patterns can, at best, keep us from new experiences and, at worst, hobble our personal growth due to these missed opportunities. 

Managing Transitions and Transitioning Management 

One of the first panels of the afternoon was sponsored by Webster Bank, and featured family business consultant Tom Davidow, the father and son team of Geoff Wilkinson Sr. and Geoff Wilkinson Jr. of George T. Wilkinson Inc., and Aviva Sapers, third generation president of Sapers & Wallack Inc. They focused on management issues and transition periods in family businesses.  

Davidow set the table by reminding the audience that the desire for family harmony can sometimes result in avoidance of difficult issues that need to be resolved for the business to thrive. He cited the timely example of substance abuse by a family member, a problem that “every knows about, but nobody wants to talk about.” As a result, other important conversations cannot take place, and the business suffers. The key is to learn how to communicate more openly and completely. It helps to seek outside resources who can help “quiet” family conflicts so that business needs can emerge.  

This call for an outside perspective was one of the common threads found in many of the day’s workshops. Wilkinson Sr. stressed the importance of an objective business valuation, saying, “You want to be taken care of after all the time and hard work you put in” and a valuation can quantify that effort. 

The conversation then turned to the dual minefields of non-participating family members influencing the business and compensation. On the first point, Sapers was blunt: “No business involvement? No ownership. No compensation. No control.” The rest of the panel agreed. The question of compensation – specifically, if it should scale with responsibility or be spread evenly among participating family members – received no such easy answer. A one-size-fits-all solution to this problem does not exist, and it’s a conversation that needs to happen within the family. Davidow also noted that if the relationship among family members is not intact, the business is at risk. 

The Value of Outside Advisors 

In the session that immediately followed, the role of objective perspective was looked at more closely. The panel was sponsored by the law firm of Tarlow Breed Hart & Rodgers, and featured family business consultant Ed Pendergast, CPA Ken Kirkland, financial consultant Aviva Sapers and attorney Tom Sheehan. 

Pendergast, who has guided dozens of businesses successfully through generational transitions and serves as a director on multiple boards, recommends a business establish an outside board of advisors early on, as a family business can benefit from having a “civilian” in the room with a third-party perspective. 

Ken Kirkland of CitrinCooperman echoed the sentiment Geoff Wilkinson Sr. expressed in the preceding workshop about the importance of a valuation in the transition of a family business. However, Kirkland went a bit further, stressing the need to consider a transition’s impact on the business as well as its impact on all family members. “The design of a transaction cannot paralyze the business,” Kirkland warned. “The agreement needs to balance the retirement needs of the older generation with the income and business needs of the next generation.” 

Protecting the Family’s Livelihood 

A panel moderated by Christopher Mellen, who was a former chief information security officer for the White House, successfully broadened the focus of the conference by hammering home the point that cybersecurity should be a primary concern for all businesses, regardless of size or industry. 

Mellen pointed to data gathered by Juniper Research which projected that the global cost of cybercrime would crest $2 trillion by 2019. He and the panel broke down the variety of tactics hackers to breach a network, and the use of viruses, worms, trojans and malware. 

They then went into a brief case study on phishing, one of the more preventable forms of data breaches. Despite this, however, it’s one of the most consistent scheme hackers use. “A phishing campaign sent to 50 people will net five to six victims in the catch,” Mellen said. 

The takeaway was that there are three things every business should be doing: training and educating; investing in all three phases of security, which are protection, detection and response; and testing employees repeatedly without being afraid of failure. 

“I’m never a big fan of solely relying on technology to stop a problem for you; I think you still need to train your end-user to be able to identify threats,” said Nate Gravel, vice president of information security at web design and development firm GraVoc, in response to an audience member’s inquiry about specific applications that may prevent breaches. 

And if you ever find yourself on the receiving end of ransomware, the consensus was that you do not pay. 

“Contact your local FBI field office,” said Mellen, who told attendees that the FBI is willing to help businesses negotiate with hackers. Of course, the best course of action isn’t to rely on a third party to deal fallout, but to prevent these problems in the first place. Konrad Martin, CEO and director of business development at Tech Advisors, reminded attendees that “your best security is based on your weakest link,” and as such training, education and awareness are the best defenses for businesses of any size. 

 A Supportive Community 

The breadth of diversity and depth of experience in this year’s family business conference proved helpful to many attendees, as evidenced by lively discussions during the well-attended talks. One of the most common themes was the realization that certain commonalities exist between companies, whether they have 10 employees or 1,000 and operating revenue of $200,000 a year or a half-billion; some businesses practices are superior, independent of size or industry. And for those who attended, concerned about legacy and the future of their family’s livelihood, this year’s conference showed that there exists a supportive community from which this special breed of businessperson can gain strength.

Mike Flaim is an associate editor with The Warren Group. He can be reached at mflaim@thewarrengroup.comDeb Drapalla contributed to this piece. She is the regional president of Webster Bank, and can be reached at