Bruce Werner is the Managing Director of Kona Advisors, LLC, a company that offers governance and advisory services to middle-market companies. His work has covered a wide range of topics, such as board formation, strategy, finance, M&A, succession planning, and all aspects of family business advising.
Bruce works with private company owners in the $10M – $100M revenue range to help them solve the most critical problems. The process starts by defining an ownership strategy, and then, he develops a business strategy to help owners achieve their life goals. After that, he helps to source the capital and talent to fuel growth, leads M&A mandates, provides suitable governance structures, and provides conflict resolution. In the latter stages, he helps owners implement succession and exit plans so that his clients WIN THE GAME OF LIFE.
The 12 Secrets for Personal and Business Success
Bruce Werner has recently published a book titled Your Ownership Journey: 12 Secrets for Personal and Business Success. Created to help inexperienced to seasoned business owners, Bruce demonstrates how to create an ownership plan and apply it to better business decisions. With the help of his book, you’ll be able to identify your personal goals, uncover the resources you need to attract and keep top personnel, promote growth, and develop a strategy for your company’s future.
To get a sneak peek about what the book is about, here’s a sum-up of the 12 secrets:
- Secret #1 → Why The Ownership Journey Is A Rocky Road
- Secret #2 → Ownership Strategy Comes First
- Secret #3 → Get The Business Strategy Right, Then Drive
- Secret #4 → Find Capital And Talent To Enable Strategy
- Secret #5 → Execute Organic Growth And M&A To Achieve The Strategy
- Secret #6 → Assess And Develop Proper Governance
- Secret #7 → Plan For Management Succession
- Secret #8 → Utilize Conflict Resolution And Mediation To Build Effective Relationships
- Secret #9 → Keep Getting Results
- Secret #10 → Know How Selling A Business Works
- Secret #11 → Understand How Family Businesses Are Different
- Secret #12 → Plan For The Later Stages Of Life
And now here’s Bruce Werner.
Full transcript below
Video With Bruce Werner – The Secret to Life is Being Adaptable
Why a Board Helps with Exit Planning | Bruce Werner, Kona Advisors, LLC
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Podcast with Bruce Werner. The Secret to Life is Being Adaptable.
business, work, people, bruce, family, life, book, world, company, years, sell, couple, run, thought, henry, started, decision, question, figure, chicago
Mike Malatesta, Bruce Werner
Mike Malatesta 00:03
Hey Everybody, welcome back to the How’d It Happen Podcast. So happy to have you here. My podcast is powered by WINJECT Studios, and today I’m fulfilling my promise to you with another amazing success story. I’ve got Bruce Werner on the podcast. Bruce, welcome to the show.
Bruce Werner 00:26
Hey, thanks for having me.
Mike Malatesta 00:28
So, Bruce got introduced to me or recommended or referred to me by Henry DeVries. Henry’s episode came out probably a month or so ago. And I met Henry, he wrote an article about my book, really, for Forbes.com. And I had a great conversation with him. And then he followed up with the intro to Bruce. And I thought, well, first of all, I read about Bruce and I was blown away, as you will be. But I also respect Henry’s opinion, having spent a lot of time with him on the podcast. And so it’s really just great to be connected. So let me tell you a little bit about Bruce so that you can get as excited as I am. So Bruce Werner is the managing director of Kona Advisors, LLC, Bruce, I have to ask — Kona, where’d that come from?
Bruce Werner 01:27
So my criteria for the company name was that I did not want to have to spell it on the phone. And I want it to be memorable. And so when I needed to fill in the blank on the legal form, I went through all the kids’ names and nominal mentors, streets and pets and couldn’t find a good story. And we had spent a lot of time in Hawaii on vacation, fortunately. And it was a really miserable day in Chicago. I said, Well, you know, calm was a pretty good place. Most people know how to spell it and everyone kind of likes it. So kind of stuck. Okay,
Mike Malatesta 02:01
fair enough. It’s always cool to explore where names come from, especially if they’re not like your family name or some name like my company was advanced way services as well. There’s not much to explore there. Anyway, so Kona advisors provides governance and advisory services to middle market businesses. His Bruce’s range of assignments has included board formation, strategy, finance, M&A, you name it, he’s done it, including family business consulting. He works with private company owners in the 10 million to $100 million revenue range to solve problems that keep them awake at night. It’s he’s got a process for we’ll talk about it. So I won’t go through it — it’s in the bio — except to say that his goal is to help clients win the game of life, which is a great game to win. By the way. Bruce is an experienced outside director having served on numerous boards during periods of growth, restructuring and crisis management. So the good times and the bad times. He recently published his new book, which is called “Your Ownership Journey — 12 Secrets for Personal and Business Success,” which I’m excited to dig into. Bruce is a Forbes.com columnist, as I mentioned, and he writes and speaks on ownership and governance issues impacting the middle market. He’s also a Vistage speaker as well. I’m a Vistage member and I have not had the pleasure as yet of hearing Bruce talk to our group, but I hope that that’s something that develops in the future since we’re so close, him being in Chicago with me in Wisconsin. So Bruce, I start every show with the same simple question. And that is how to happen for you.
Bruce Werner 04:14
That’s a great question. And frankly, I’m still kind of trying to figure that out. I grew up in a family business and thought I’d spend my whole life in the family business, we loved it. It’s all we ever wanted to do. But we woke up one day and found that two customers are 40% of revenue. And they weren’t necessarily the nicest guys in the world. And the business is an asset. It’s not a child. And so we as a family made a decision to sell the business to protect our family. We made the right decision at the right time for the right reason. And for the most part, we all pretty much get along. And then there was the great beyond after that, where I had to kind of figure out what’s next. I thought I’d always go get some corporate job and run a company and you don’t get to watch it 365. But it’s been anything but; I’ve started for companies that did pretty well too, some not so much. If you’re batting 500 In baseball, that’s pretty good. I was a partner in a private equity fund. So I got to sit on the other side of the table. But really, for about the last 10 years, I’ve split my time between being an outside director for private family businesses. And being a consultant working with those same businesses typically tender, a couple 100 million revenue, on the issues that keep owners awake at night. There’s a half a dozen issues that owners are responsible for, and they’re critical ones. And what I found is most people know how to run their business. You know, there’s ups and downs, you need some consultants here and there. But when there’s something new that they haven’t seen before, don’t have experience, they literally don’t know what to do like a deer in headlights. And so they’ll ask around for friend or maybe their attorney. And that’s usually when my phone rings, when they’re kind of stuck. And they need unstuck. And so my process is always well, I’m an engineer by training. So I think, you know, I’m, I’m wired to solve problems. So my question was always, where are you today? That’s point A, where do you want to get to that’s point B. And once I know A and B, I can build a road between them. Most folks aren’t really sure where they’re at today. Point A, a lot of folks need help figure out where they want to get to. And as a private business owner, it’s hard because you can do whatever you want. As long as you’re making money and paying your taxes and your bankers happy. You can do whatever you want. So we got to get those two nailed down, there’s a process for that. And then depending on how complicated we build a road from A to B, and then lead you along the way.
Mike Malatesta 06:48
So let me go back to the to the family business for for a bit as I understand it, it was the third generation when you
Bruce Werner 06:57
right, so our third generation ERATION. There were four dads and six sons in the boardroom. And we had a couple other third generation people in non-executive positions. We had about 3500 employees, about 559 revenue when I left.
Mike Malatesta 07:11
So my recollection from my these? Well, I think it’s moved now. But you have a very large facility right on to 94. Right.
Bruce Werner 07:24
So runway 27 are in Ohio was our Chicago factory. There was actually a street down the building with buildings on both sides. My cousin ran the east side, and I ran the west side. And I spent a lot of years in Franklin Park.
Mike Malatesta 07:40
Okay. Yeah, I passed that building many, many, many times. They’d be when you came in. So I always had I always think about this, you know, third generation, you went to Stanford, Carnegie Mellon, I think, undergrad. And were you one of those people, Bruce, who was like, I’m going into the family business, that’s sort of a predetermined thing, or were you one of those others? Who was like, No, I’m not going to touch that I’m gonna go out in the world and make my own thing.
Bruce Werner 08:09
Well, you know, since I was a little kid, all I want to do is be the CEO of the Warner company. And so I was I was the first one where I’m all about the business, except for a two or three year period after graduate school when my I got to see the bigger world and see other opportunities and said, Oh, there’s no way I’m going to family business. Why would I want to do that? Okay, and after life beat me up a little bit, I saw the real world, I had a better perspective on the benefits and the joys of a family business. Knowing the downsides, let’s be honest. But there’s tremendous advantages in a, you know, a reasonably well run successful family business. And there’s a lot of emotional benefit you can’t get from just a regular job, and tremendous personal growth opportunities. So actually, I finished graduate school and went to work for high tech startup. After the IPO, I started a computer company with some buddies, a lot of tumult there and a couple years later found myself at a crossroad and said, well now what the hell do you want to do? You can either you know, get a job or go to the business. And at that time, our family business was growing nicely. Our fiberglass business was starting to explode they were in the market to hire someone to run this business unit they were gonna hire somebody. And then it happened to be me and that’s how I that’s when that was the window of opportunity for me to join we say there’s windows of opportunity for the kids to come in windows open and close. You don’t you know, there’s more than one just got to pick the right one. Right. And how
Mike Malatesta 09:53
this this beating up you said that you know the world kind of beat you up a little bit. Tell me about that.
Bruce Werner 09:57
Ah, And you know, I wouldn’t want people to kind of miss read my my adjectives, you know, you go to college, you come out you have your first couple of jobs, you have a perception of the world when you’re in college, but yet you don’t know much. And you get out in the real world and see how business is really done and you get kicked to the curb a few times, and you pick yourself up and dust yourself off each go, Oh, that’s not the way I thought it worked. I guess that’s the way it is. Hmm. That’s the, that’s the great part of being in your 20s. And starting your career is you actually learn a ton that can never be taught in a classroom. And so in my case, I started a computer company, I was 25, we raised money. We said we’re not going to make the mistakes every other startup did. We made a few. But I’ll date myself in 1987, it didn’t matter. The stock market crashed in a way this country hadn’t seen since the Great Depression. The market crashed on a Monday, we were scheduled for Thursday to be on Wall Street raising capital. And we went and half the people cancel meetings have people stood there glassy eyed, not knowing what hit them. And so we went broke. And so we thought we were going to take over the world. And instead, I had $1,977.50 in the bank, and a pile of debts I won’t even mentioned here. I was 25 years old, how the hell do I know what to do? All I did do is I said, Hey, we made this mess, we’re going to clean it up. We’re not just bailing out. And so over the course of the next year, we actually work through all of our debts. We had a couple of lucky breaks. For sure. We we went from a hardware software company to a software consulting business, one of our board members had contacted Sun Microsystems, we were kind of leading-edge tech at the time. There are multiple billion dollar company with the problem they couldn’t fix in our 22 year old programmers didn’t think it was a big deal. So like a lot of what were then called body shops, pardon the phrase, you know, we would hire out our team at $1 per hour and I figured out you know, I don’t know all the things they don’t teach you in business school. You know, it’s all about cash. And I would spend weeks going through building Excel sheets listing every single check coming in and every single check going out and making sure it works and running to the bank before four o’clock. So would post that day and not the next day and oh, you know, driving 11 o’clock to go get something done? Like whatever it took that servile. Yeah, right and true story on two occasions. We weren’t paying our payroll taxes. That’s wrong. We thought oh, well, we’ll just skip a few we’ll catch up. And I’m completely against that. I went out to lunch. And the IRS literally walked in to collect back taxes. And our office manager was there super nice lady who like didn’t really know what was going on. And what is LSU tell the IRS guy and that actually happened twice. We got it all worked out we severed our debts it and it’s a lesson I’ll never forget. And so when I as I’ve gone forward in life, it’s always show me cash. got cash, you can always negotiate if you don’t have cash, you got nothing. That’s it seems the story
Mike Malatesta 13:44
that thank you for sharing that that seemed really quick for them to show up. Like you didn’t pay the payroll tax and they’re sort of almost right away. That’s, that’s well, it’s
Bruce Werner 13:53
probably because we were in Boston and they had their offices in Boston.
Mike Malatesta 13:58
It was easy. Okay,
Bruce Werner 14:00
right. Right. Right. They thought it would be an easy score. Yeah. Didn’t matter. There was no cash to give them anyway. We we resolved in close the case.
Mike Malatesta 14:10
That’s a wake up call. Right? You make a decision. Somebody like that knocks I’m
Bruce Werner 14:14
a wake up call. Yeah. You know, just shy of a heart attack.
Mike Malatesta 14:19
That’s just Okay, so you have that adventure. And then and then you join. You join the business. I think you said you ran one part of it. Was that your cousin or your brother, cousin, cousin.
Bruce Werner 14:34
Mike Malatesta 14:37
when you got into that, and it wasn’t what you expected it to be? I mean, you got Oh, absolutely not. Yeah. Okay. Tell Tell me.
Bruce Werner 14:45
Tell me about my cousin. I work for uncle. So we had four dads and six sons. They were kind of three basic rules. You got to work somewhere else first, and I’m a huge fan of that for family businesses and take kids out to work somewhere else. It’s I didn’t get promoted, that’s for the kids benefit, not the parents, you start at the bottom and work your way up. So I work third shift, I work second shift, I work first shift, I was a shop foreman and work our way up. Because that’s the only way to learn the business. The key thing in a family business like that is you can’t put yourself in position where people can pull the wool over your eyes. Because then you’re not because then because then you you’re taking unnecessary risk. And the third rule is because we had four dads and six sons as you work for your uncle, not your dad, just because fathers and sons have enough, not Fisher. So the kids who grew up in Pennsylvania moved to Chicago that kids who grew up in a nice suburb of Chicago, moved to a small town in Pennsylvania. And, you know, dad, and my dad had twin brothers and my dad were in Pennsylvania and the twin ranch Chicago. So those two guys didn’t even need to pick up a phone, to talk to each other to make decisions that was telling telepathic, which was great for the rest of us. But he was a busy guy was really a leader in multiple industries and invented a number of critical new technologies. And I thought it’d be mentored and tutored and all that stuff. And in fact, it was the opposite. But it took me a while to realize he gave me a gift that I wouldn’t know to ask for. He’d let me go figure it out on my own. And he didn’t inhibit me. So I walked into a business that was growing like a weed, super profitable. So everyone was supportive. And I had to figure stuff out, you know, first thing to figure out is what’s important, what do we got to work on? Like, what’s broken? And in a rapidly growing business? It’s it’s not about fixing what’s broken today. It’s about anticipating, what are the issues tomorrow, if you’re growing 20% a year, solving today’s problem is too late. We were a manufacturing business. So we have to be building production equipment, a year or two ahead of when we have to make the product because it takes a year to build the equipment. And you got to guess well, what if there’s a recession? What if the customer changes their mind? Like, should you double your bet or not? Oh, like we need highly specialized toy, there’s only one guy in us who makes it. And he has limited capacity, what are you gonna do? And on and on and on. So I was really frustrated, because I was looking for mentorship and guidance. And fact, again, being young, you don’t always appreciate gifts that don’t have a ribbon on them. After time realized, it was one of the best things I ever did. Because I had this laboratory to figure stuff out. And fortunately, things worked out. Well. We had a great crew, it’s about the people first. And it really taught me a lot about how to manage how to get results through people, which is much harder than doing things yourselves. How to deal with people in broadly different from different cultures, different environments. was great. That was a wonderful
Mike Malatesta 18:14
line that you use that don’t appreciate gifts that don’t have a ribbon on them. In other words, that the non obvious gifts, right, you sort of it’s easy to just let them pass by or ignore them. Just not see them. Right.
Bruce Werner 18:29
Humans are often guilty of not appreciate appreciating things until they’re gone. Yeah. It’s a corollary. So you get to this point,
Mike Malatesta 18:41
as you mentioned, when you were answering the how that happened, question where the business is $550,000,000.30 700 employees growing quickly, but you start to see that, you know, now, you mentioned 40% of your business to customers, I think it was and you started to see something new and I guess the rest of your family started to see something that made made selling the business or at least exploring it. Attractive, and how, how was the consensus building for that Bruce? Was it sort of, you know, you know, unanimous where you were all thinking the same thing or did something? Some event
Bruce Werner 19:28
was difficult and slow. Okay. So for context, as kids we were, I’m one of 18 first cousins. So it’s a big family. Yeah. And that’s on my dad’s side were the businesses. We were always telling you can never say the word sell, you can’t talk about it. This. This is a gift you got from your grandparents’ generation and you get measured by the difference between what comes to you and what you hand to your children and So the idea of selling the business was just couldn’t be entertained. But there were really two things, you know, the secret to life is being adaptable, you may want your life to go in a certain way or be a certain way, you may want a certain job, but that’s unrealistic. Life gives you what it gives you, you know, the phrases, you know, you don’t get to choose the cards you’re dealt, you do get to choose what you do with them. And being adaptable is the secret to getting closer to happiness in life. However, you may find that and being inflexible, you know, limits your ability to move forward. So, the 90s, were really boom year, the art industry changed dramatically due to the advent of big box retailers, completely reshaping the retail landscape. And we rode that wave, well, we were fortunate. But wave crest, and brake, as well. And what I said before was the risk reward of owning the business changed. So our business was 75 or 80 years old, and we sold it. This is actually 100 years old this year. And, you know, my parents were depression babies, where it was to make sure we put food on the table and a roof over our head, thank God. pretty humble background. But as the business grew, our markets changed. So instead of having 100 different customers, and 150 competitors, we had two big customers and one or two competitors. It’s different risk reward. So the question is, you know, we we own this business to provide for the family. And if there’s a, you know, the business falters, then the family is at risk. And so it was an ownership decision of, you know, sometimes it’s just time to go. Stock because we wanted to, we felt it was in the family’s best interest. And it proved to be the right decision. At the same time, we had all the family business issues of succession planning, liquidity, estate taxes, all that stuff, some of which we could have solved, some of which we struggled with. But when the fundamentals of the business go adverse to you, that doesn’t matter. Yeah. You think of a public stock, you’re either buying or selling. Yeah. Do you want to buy more Amazon, you want to sell it? Do you want to buy more Ford, or sell it? It’s the same principle except you’re betting the family’s security odd. Yeah, and
Mike Malatesta 22:45
it’s a and I’d say it’s doesn’t feel those things. Those, you know, public stocks feel transactional. It’s like, Oh, okay. It’s there’s no, there’s no emotion and component and correct. Less emotion. Yeah. And attachment. Yeah.
Bruce Werner 22:59
So a family business you sell once. You can buy and sell every second.
Mike Malatesta 23:04
Yeah, good point. Good point. So when you when it came to that, when you got consensus, when consensus was built, did you did you go through a process with an investment bank? Or did you identify it? How did you? Yeah,
Bruce Werner 23:18
yeah. So we, it actually took us a couple of years to actually make a firm decision. We went through a number of consultants, which know for either owners or family businesses unsure of their future, get help get advice, it may not be like shoes, the first pair may not fit as good, you may need to go through a couple, we went through a half a dozen consultants to find the one who fit our unique situation with a big family with lots of dynamics. A complicated situation, fortunately, found someone who provided great service in moving us forward. But, you know, our position and I always recommend is fight like hell during the meeting. But when you walk out of the room, there’s one decision and only one decision. And our company was of a size that we needed to have an investment banker to two of my cousins actually were M&A guys at Goldman Sachs. And one of my cousins, I think, I think he was like college roommates with the bank, global head of M&A of Goldman. So it’s not hard to strike up a conversation. And after a competitive process, we did in fact, pick Goldman. And they didn’t even find out. You know, for companies of that size, you need to make a market. Yeah, you know, small, few own a $5 million revenue business is a different circumstance. An ideal I deal with this issue with clients all the time of should I have a bank, or should I not have a banker? What’s the difference between a bank or a broker? Why can’t I sell it? myself whether it’s there are all good options. But they’re really harsh tradeoffs between them. So I always counsel clients on, let’s understand the trade offs first. And then let’s talk about what you’re trying to achieve. And that’s the option to that you get what you want.
Mike Malatesta 25:19
You have the appropriate level of expertise depending on
Bruce Werner 25:22
Right, right. It met for most people, they want a very broad oxygen get maximum price, I’m actually selling a company now a private company where unique circumstances he did not want a broad auction, he said, there’s only two people I’d be willing to sell my company to. We don’t need a banker. You know, I’ve got term sheets, and it was very quiet, very private. That’s what the owner wanted. That’s fine. In his case, he’s, to his credit been really successful. The last dollar is not going to determine happiness for him. protecting his legacy is everything. So what are you gonna do with my business? This is big question. If you pay me a little bit less, I don’t know that I care. And I respect that.
Mike Malatesta 26:11
And from your from, you know, in your process, your sale? What was your? What was it? I know, they’re probably they were probably not consensus on what was important to everyone. But what was important to you.
Bruce Werner 26:26
You know, I’m an engineer by training, I was only a manufacturing and industrial sales. I’d never been involved in buying or selling a company. So it was all it was all new to me. I went to a great business school, but I wasn’t a finance guy. I was a strategy and operations guy. You read about M&A, but kind of wasn’t where my head was at. So I was learning as I was going. The answer? The question is, are we getting fair value for our company? What are the terms and conditions? What are the employment requirements of us personally? What am I on the hook for? And what happens going forward? We, we made a decision to sell control of the company and get paid for it. When you make that decision, you’re handing over the keys. And so the big issue is, is that what I want to do? In our case, it was it was the right answer. I agreed with that. So, you know, my joke is the day after the sale, I had to show my employee badge to get into the building. My name is still on the door. But not anymore. Who are Yeah. But a bunch of stuff like that, which I won’t go into but Brave New World.
Mike Malatesta 27:52
And I’m glad you said that because with, you know, when you agree to sell the majority, because I’ve said this a number of times on my podcast, because people asked me about it all the time. And I said, you know, there’s, I think a mistake that a lot of business owners make when they want the money, but they don’t want the change. And you can’t have both, like once you get paid. Yeah,
Bruce Werner 28:16
I just got off the phone with a small PE fund. They’ve made their first purchase. It’s an 80 year old family business. And big owl is the current CEO. He’s 62 years old. He’s been there since 18. He’s never worked anywhere in his life. And they’re still using carbon copy paper to put in work orders. You know, we the yellow goes through counting the blue goes to the to the job and pink gets thrown out because we don’t use it. Yeah, why do I need to hammer this into a computer? Literally, that’s where it was at 327. It is all about change. And I’ll go back to made a comment about adaptability. The other quote I like to use is Charles Darwin. You know, when he was on the Beagle in the Galapagos, he never actually said survival of the fittest. He said survival of the most adaptable. And I was visiting in the Galapagos going on the tour to these great tour guys. You hear that? Like, huh? And then you think about it, and then you bring that home? That’s actually what business is about. Can you adapt to changing conditions that you can either see coming or worse that you don’t see coming? If you can adapt, you might survive. If you don’t adapt. You’re not You’re not gonna, you’re not gonna be around. Yeah. COVID is a great example of that. COVID pick winners and losers by industry, and I wouldn’t want to shortchange those on the tough side, because it was horrific. But, you know, look at the restaurants that stayed open and the ones that didn’t. The ones that are open figured out How to Do takeout only and reduce staff and, you know, they worked out with food truck or whatever it was. And the ones that wouldn’t adapt, wouldn’t make it. Right.
Mike Malatesta 30:13
And speaking of adapting, so, you know, you’re you need a name badge to get in, you’re still employed with the new employer, how was your How was your experience there? How long did you stay? What? What was it like for you?
Bruce Werner 30:28
So we agreed to three year employment contracts. And what I’m about to tell you is very standard, there’s nothing unique, we have a change of control transaction, which is not written, but understood is we need you to stay around until we bring in our team and have a smooth transition. And your you’re going to stay engaged and be accountable and responsible until we kind of say, okay, and it’s kind of duties and responsibilities to spell it out. And then, you know, just quietly go away, is how it’s supposed to happen. Certainly, everyone has a different circumstance, I was one of six in my generation, one had left before the deal for personal reasons. One who was the youngest saw that he had limited professional opportunities. So he left right away. Two of us left when our contracts were up, because of the there was no reason to stick around. And then to stay many years later, because they were negative and useful and productive. And it made sense. There’s a good hang around PE long enough, there’s a lot plenty of stories of things that didn’t go as planned. And you can say, you know, it’s their fault. It’s his fault, whatever, kind of doesn’t matter. You kind of have to have your big boy pants on, they just paid you a pile of money. And it is what it is. Yeah. You know, don’t assume it’s gonna turn out the way you think it is. Because the facts are gonna change. You’ve got a whole new set of decision makers that you don’t even know because they haven’t been hired yet.
Mike Malatesta 32:18
Yeah. Well, you said, you know, when you said about the batch that the thing that popped into my mind was that that’s just like the first thing sooner or later, because of the transitional nature, right? We got to transition this we got to bring in our own team. You you your opinion matters less and less. Never. That’s sort of like artifact? Yeah. Yeah, that’s
Bruce Werner 32:43
what they when they no longer invite you to the meeting you used to run?
Mike Malatesta 32:47
Yeah. Okay. That’s, that’s. So you get out of their booths. And you mentioned, you’ve mentioned a couple of times the various things that you’ve done since, but did you know like you are, you’re helping people now, you know, get to where they want to be right to win the game of life. Did you know where you want it to be? I get so it’s one thing to get consensus on the sale. Right? And but then you are you are, you’re no longer? Well, what are the family business? What?
Bruce Werner 33:14
Once the transaction closes? You’re just an employee, you have your family? Yeah, you’re an employee at a company. You got a boss, you know, like everybody else. That’s fine. Just as a family business. I had never been through that before. Family. I’ve had jobs before, but I knew I was going the family business. I wasn’t like, No kissing the ring and that kind of stuff. Let’s try and get some experience and figure out, you know, move on. So a real issue with family businesses is making the transition from being the insider to being just another employee. There’s a reality check there. And depending upon your facts and circumstances, you know, maybe fast, slow, rougher, easy. But that’s definitely a transition process. And then the truth is, most, most of the younger generation when a bit family business is sold, meaning the kids not the parent, they still have the whole career in front of them, or much of their career in front of them. They’re not most are not just going to the beach and playing golf all the time. Some do. But most want to go do something with their life. And when you know, you got to think about well, why is someone else going to hire you? They don’t need a boss to run their business. They’re the boss. What do you bring into their party to have unique industry expertise they want Oh, you’re really good at sales. You’re not competing, whatever, we’re gonna hire you as a sales guy. That’s a very common path or one of my cousin’s has unique technical expertise in the world. So lots of people want to scoop him up because he is the world’s expert in in X, you know, general management skills that my generation was taught. You know, today, there’s certainly a commodity. And so, you know, the old phrase is you have to reinvent yourself. Well, that’s exactly right. What are you going to provide to the world that they value? No one cares what you want? Yeah, what are you going to do for them? You know, if you’re used to kind of being the boss being in charge, it’s different. So when I left, I said, I’m gonna take a year off to figure out who my wife and kids are. I was traveling 45 or 48 weeks a year. I mean, 6am, Monday to 11 o’clock Thursday, Friday in the office soccer games on Saturday, Sunday, pay the bills and head out. So we’ll take a year off severance anyway. And now just go get a job and climb the corporate ladder. And that’s, you know, wasn’t the way it worked out? You said, How did happen was your opening question. Yeah. I said, I’m still trying to figure it out. Yeah, well, I had a course in mind. And that’s not the way it worked out. So I had to adapt. And we’re, you know, I had no idea I’d end up here. When the journey started. I thought I’d be doing some very different. But those weren’t the cards, I was handed and I played the cards I was dealt.
Mike Malatesta 36:29
So here is you got a new book out your ownership journey. 12 secrets for personal business success. Tell me Tell me a little bit more about here. Where did that come from? And why? Why.
Bruce Werner 36:44
So when I came out of family business, a good friend was a lawyer. And he calls it this I got a problem. I got this really great client, he’s got a problem. I don’t know what to tell him. I’m a little embarrassed, I gotta do something good for him. Will you just go have lunch with him? You know, kind of get me out of it. I said, Sure. I was looking for a job, whatever. Typical private company owner talking about his headache. And I looked at him and said, That’s not a big deal. I can solve that. He goes really? Yeah. Would you pay me? goes? Sure. We shook hands. And I went on, printing up a pile of business cards and became a consultant was No, no more complicated than that. And when I started telling friends, hey, I’m looking for consulting work, they said, Well, you have to have a book, consultants have to write a book. So like, first of all, it’s way too much work. And I don’t have anything to say so poopoo to that,15 years goes by. And I started to have something to say, things I wanted to communicate. And so I started writing columns. So now I’m on Forbes, I’ve been on financial pores for a while I’ve written long form articles for a couple of national magazines on, here’s something I want to say to the world. I did that for about five years and kind of looked at the body of work and said, well, maybe it’s time to go write that book. Let’s take all these disparate thoughts and create the arc of a storyline that has some impact. Because to me, it’s about why is the world better? Because you’re here. It’s not about making money. It’s what’s been your impact on the world? And how are you going to affect that? And so I’ve spent a fair amount of time and did some research on what Writing a book is, and publishers and agony and all that stuff and said, I think I got a book. I think I got one book in me on my bucket list. I don’t know about to. And through a very long journey found Henry, who you mentioned earlier, in this discussion, and Henry was the exact right person I was looking for. I spoke to all kinds of publishing houses and got ridiculous estimate of cost and things that made no sense for me. He actually had a doubt and exactly what I wanted. And he was a pleasure to work with. And so the book came out in March, this is June. And I’m happy with the outcome.
Mike Malatesta 39:25
So it’s meeting your expectations.
Bruce Werner 39:29
You think you always have to ask why are you writing a book? Yeah, the average book in this country might sell 1000 copies. So people who say they’re gonna write a book to generate revenue are mathematically wrong. And so I assumed I’d sell zero books, and I’m gonna give them away. Because to me, it’s about demonstrating thought leadership and it’s a marketing tool. Yeah. Here’s why. I believe I have the credentials to be one or the have a conversation with you, Mr. Prospect. It’s a way to introduce yourself. It’s a high price business card. And if you talk to consultants, and service providers and business professionals, they all say the same thing. Within the business world, you know, fiction is a different world. If you read the biography of Steve Jobs, that’s, that’s another universe from where I am, I’m targeting private company owners, typically, you know, 10 to 200 million revenue. That’s my world. I want to convey why I’m worthy of a conversation.
Mike Malatesta 40:38
I think it was great when you said that, you know, after 15 years, you finally thought you had something to say, because it feels to me like people who want to become coaches or consultants these days, the bar is very low. And there’s a lot of people who wants to talk before they have something to say, Do you feel that way?
Bruce Werner 41:02
I think that’s a very insightful statement. If you go back to what I said about how I got into it, yeah, the only qualification I had was I could print business cards. There’s no barrier to entry. And to people think about hiring consultants and coaches, Caveat emptor, there are some wonderful people out there who can do great things very much. So there’s a lot of people aspiring to that benchmark. And certainly within the professional coaching arena, which I don’t come in as a as a personal coach, there are very credible levels of certification out like master’s degrees, there are certifications that are just a piece of paper, and there’s people who aren’t certified, who could be great or not. Those are people hustling for business, that’s okay. So it makes economy tick. But Caveat emptor, you got to, you know, my advice to people? Forget Me is big, really clearly focused on what you’re trying to get done? How do you define success? If you’re really dialed into that, and you’ve got a North Star, then decision making becomes easier. If you’re fuzzy on success, then you know that it’s hard to make good decisions, because you’re not quite sure. Did you find and that’s why I always push on, what’s the goal? What success if we need to spend more time figuring that out, because it’s complicated and spend the time because once you get that, everything else is easier.
Mike Malatesta 42:47
I very much agree with you. I feel like I’ve been around a lot of entrepreneurs, especially in my career, and I feel like, there are so many who really don’t know what they want. And until you know, until you know what you want. You’re, you’re just gonna be in the game, right? And you’re just gonna be doing the things that you have always done and sort of expecting a different outcome. And it builds frustration, and it builds, you know, it just complicates it just really, but you use the word stuck. I mean, it really gets you stuck and frustrated. But still, there’s not enough pain where you will actually stop and decide or choose what you actually want and then start working towards.
Bruce Werner 43:38
That’s right, and a dilemma that successful business owners have that most people would not have reason to comprehend. If you own a successful business. And you’re making, pick any large number, taking home more money than you can spend. And you’ve got a great team. So you’re not, you’re working 4050 hours a week, but you’re not really worried and life is good, and you have a great lifestyle. You wind up with a it’s not even a first world problem. You can do whatever you want. Right. So what do you do? Yeah, the phrase I use is, you know, when you have a huge, huge net worth, and you can buy whatever you want. It’s what you buy, what you spend money on, to to know signals who you are as a human, your character, your values, all that. And there’s a broad spectrum of choice. That people make choices and when you when you are fortunate to have that level of success. Figuring out what to do with it is is actually a problem for people. I know lots of business owners who probably should sell their business because of their age in life or whatever. They say. I’m not selling the business I wouldn’t know What to do the day after, I have no hobbies, my friends are in my business. It’s been my whole life. And that’s why in the last chapter, the book I talked about having no regrets. Too many people work their careers build a successful business, they go to exit, they figure I’m gonna get this great pile of money, I’ll buy a Ferrari and a big house and all this other stuff. And after about six months, the money doesn’t give joy. And then they wind up unhappy, because they don’t have a purpose in life. So for people who are thinking about exit, I have clients now in their mid 40s, talking about exit because they want to go do it again, somewhere else. You need to have purpose in life. And if you’ve been grinding away for 20 or 30 years, and you’re in your 50s, and 60s, you actually need about five, three to five years of work. Before you sell your business to plan the next stage of life. You don’t pick up hobbies overnight. You don’t make new friends overnight. My observation moreso. With men and with women, it’s hard to make new friends. They’re not your golf. You know, how many new male friends you made? Who aren’t golf buddies, or fishing buddies or bowling buddies? Right? Yeah, very few. And if you’re going to move from someplace up north, where it’s cold to someplace south where it’s warm for six or eight months, a year, nobody knows you. You’ll find a doctor Laureate and dentists. But those aren’t your friends. What are you gonna do you wake up in the morning? You know, okay, you can play golf that kills four or five hours. You go shopping once a week that kills an hour, you got another 100 hours a week to sell. And I know of when my dad retired, he moved to a community in Florida, there was a lot of New York people there. They were very successful Wall Street people in law firms and corporate executives who made 10s of millions of dollars a year and had 10s of 1000s of people very powerful. And they move there. They’re just another old old guy.
Mike Malatesta 47:01
Yeah, who’s got to stand in line for him. He’s got to stand in line for stuff like everybody else, you know, like, that’s
Bruce Werner 47:06
exactly right. And he said, much of those guys died six months. They didn’t have a purpose. And that, and that’s a tragedy, which is why I say, how do you have no regrets, you gotta anticipate that and figure that out. So that, you know, I want you to have commercial success. But then enjoy the fruits of your labor later in life. You know, if you only make it six months after you sell your business, it seems like you worked 40 years for nothing. Right? retire and go to the beach, actually isn’t very healthy doesn’t really work.
Mike Malatesta 47:43
It’s dangerous to it’s a dangerous plan for somebody because that’s not a plan. And when you when you’re an entrepreneur or a business owner, and you no longer have something that’s attaching you to the work, you can be a destructive, you can become a destructive person quickly.
Bruce Werner 48:00
Right? Because, yeah. So it comes out on your spouse and your children and you’re ready to get angry and you beat them up. They didn’t do anything wrong. Yeah. For the last 40 years, while you while you were not coming home and not carpooling, the kids? Yeah. In a traditional setting.
Mike Malatesta 48:19
So you mentioned regret, what are what are a couple of the other like high level secrets that you know, gets get someone interested in, in the book.
Bruce Werner 48:28
So the book has 12 chapters, it’s really, from the time you buy a business or startup isn’t until you exit. It’s a journey with different issues along the way. So the way it’s kind of set up is first, it starts with your ownership strategy. You may run the business, but you’re an owner first, what do I want that business to do for me so I can improve my life? Usually, you know, I need certain economics, how many hours a week do I want to work? What do I want my reputation to be? That’s the ownership strategy. Once you know that, it informs well, what’s the business strategy to get there? So let’s go build the business strategy. Once you have a business strategy, we need capital and talent to make that strategy happen. We need some work on execution along the way to stay the course. There might be some M&A involved to get your strategy done. You’re probably gonna have conflict sometimes. How do we deal with conflict, whether it’s fight with my brother, or my partner cheated on me or whatever? How do we manage conflict and then through it, there’s usually a phase where you’re kind of tired and bored. It’s not time to get out yet. There’s a piece on family business, and then it moves towards kind of the end stage of hey, I’m thinking about maybe getting out. I’ve never bought a soda company before. I kind of don’t trust all these sharks in the room. What do I do? Because most private, come downwards. Only time they buy or sell businesses when they get out. And then it moves for planning for after the sale, but we just spoke about about not having regrets. Having a purpose, building new relationships, because that’s kind of a lifecycle of owning a business. And that assumes kind of a traditional career path. Now I’m working with a couple of CEOs, now they’ve started businesses in their 20s built great businesses are in their early 40s, and kind of do their market change to kind of dive into like, I’m kind of bored, I want to do something else. Great. Let’s figure out how to reposition, you know, reposition you on the next step of the ladder to go do something else, which is well, so if you’re 45, and you have the capital, and you got, you know, let’s take a 10 year planning horizon, where do you want to be in 10 years, that same point a point B build a road kind of approach. They’re the opposite of wanting to go to the beach. This guy wants to run a couple of Ironman triathlons every year and figure that out. He wants to be able to carpool the kids yadda yadda, yadda. Yeah. dozen people a dozen stories.
Mike Malatesta 51:10
So get to two final questions for you first, and this you have experienced on both sides with your with your work and your family business? What are the different dynamics, if there are general different dynamics going on inside a family owned business versus non family owned business from your experience?
Bruce Werner 51:34
So that question can’t be answered simply, there’s just too much to unpack. But let me try to make it simple have you know, when there’s a family business, you have family, whether in the business or not, you have ownership, which may not be everyone in the family. And then you have the business in the management team, what’s called the three-circle model. That was it’s been around since the 70s, which is, if you’re not familiar with it, I highly recommend reading up on it because it makes me create a language for dealing with these tough issues. Those three circles overlap in a Venn diagram. And depending upon your particulars, they may be heavily overlapped or barely overlap. So if one person owns the entire company and runs it, all three circles are the same. You now If a brother or a sibling owns part of the business, but doesn’t work, work in the business, the ownership circle pulls out. Right? If the family owns the business, and no one works in the company, well, it’s different because we have professional managers, we probably have a board. But not everyone in the family is on the board. So those how those Venn diagrams circle? is the starting point for answering that question. Okay, no two are remotely the same.
Mike Malatesta 53:03
So even in that case, yeah. So even with that description, I mean, that description works for a lot of non family businesses, too, because you have sure different shareholders, you have different management teams sometimes that aren’t shareable. You know, that works there as well.
Bruce Werner 53:21
And the other part is, you know, the three circle models, one of the other is separating business governance, from family governance. So business governance is the Board of Directors, the management team, everyone kind of stands out. But if you have a number of family owners, then how do you run the family? How does the family as owners make decisions done as managers? As owners, the questions are guns and butter, what business are we at? How much debt do we have? How do we capitalize the business? What money do we take out of the business? How much risk do we want and who runs the business? Those only decisions you will make as an owner. Because if I had nonfamily outside executives running the business, that’s what I need to tell them. And then they go run the business. And they should be held accountable to that. It’s not what color is the brochure? Or should we reimburse Johnny for this trip to Vegas for sales or not? That’s a that’s a business decision. It’s not ownership decisions. So So in family businesses, I always talk about what how do you govern the family? How does the family make decisions outside the business? And that tends to be the weak link, and family businesses that are successful over generations figure that out for them? No two solutions are the same that a fairly standard list of to do’s families that don’t deal with that tend to fail.
Mike Malatesta 54:52
On the family. Happy Yeah, okay.
Bruce Werner 54:57
You know, you could have a really successful family owned business us, everyone hates each other. I consider that a failure. Right? Yeah, you know, if you have a great business but lose your family, some people think that’s okay. I’m not judging history has shown that tends to end up poorly. Yeah,
Mike Malatesta 55:19
I mean, anybody who thinks that actually works isn’t inside of their own head long enough to see that it probably is having a long term impact on you, you know, it’s there, it’s there all the time. 24/7 talking to you, bothering you agitating you. So last thing before we go you you, in the bio I mentioned, and I think you mentioned as well that, you know, you help clients win the game of life. And I’m wondering, Bruce, what to you, what is winning the game of life, at least where as you sit here, right, right now,
Bruce Werner 55:55
you know, I’m not going to tell you anything that your listeners haven’t heard before. First is your health. You got to be healthy and okay, and be able to function, then you want to be happy, whatever that means. That’s the biggest issue. It’s good family relationships, whatever that might be. And then some professional satisfaction. You know, I’m answering your question from the perspective of at the end of your life, when money doesn’t matter, because it doesn’t solve your problems. What are you going to be proud of? What are you going to regret? You know, lots of people go through life, they lost success, but their kids don’t talk to them. Another million dollars in the bank doesn’t fix that. There’s people who are not financially successful, but have wonderful relationships, that close with their family. Everybody loves them. Yeah, I would argue in some ways, you know, they may be winning the game of life. I don’t wish hardship on anyone, because that’s no good. But the definition of happiness is accepting your lot in life. It’s not what you have. It’s just accepting whatever it happens to be. And that can be hard for some people. Yeah.
Mike Malatesta 57:18
I think there’s some there might be one other thing to that, you know, accepting what you have is fine, and probably healthy. But it doesn’t mean that you have to accept it for forever, right? Say, Oh, this is where I am now. This is. Okay. And this is where I want to be sort of like what you said on your, your path thing, you know, at the very beginning, right.
Bruce Werner 57:37
But I mean, it’s certainly expected that you want to improve your lot in life. Yeah. That’s different from saying. I’m unwilling to accept the facts. I can’t change and be angry at life.
Mike Malatesta 57:51
Yeah. Okay. Thank you for the clarification. That’s good. That’s a good.
Bruce Werner 57:57
Yeah, no, no, of course, you want to improve where you’re at. But if you completely, don’t accept your circumstance, you’re not gonna be happy.
Mike Malatesta 58:09
So yeah, I completely agree. Yeah. If you don’t accept, yeah. You’re always going to be what is like, I call that right. You’re got a comparison problem, right? You always have a comparison problem and keep it up with the Joneses. Yeah, you can’t solve a comparison problem. Externally, you have to, you have to start with you internalize. Yeah, internalize. Well, thank you so much. So your book is your ownership journey to AWS secrets for personal and business success. I’m assuming you can buy that. Bruce warner.com.com,
Bruce Werner 58:43
Amazon, Apple, Barnes and Noble. But just go to the website, and you can take care of it there.
Mike Malatesta 58:51
And is that where you want people to connect with you as well as Bruce Warner back So Bruce
Bruce Werner 58:56
weber.com is the website for the book. My website is Kona advisors, Kayo Na, advisors. My emails, just send me an email. Happy to connect. Okay.
Mike Malatesta 59:08
All right. Great. Well, Bruce, thank you so much. It’s been great.
Bruce Werner 59:11
Thanks for having me.