Transcript 

Michael Palumbos (00:59.623)

Welcome everybody to the Family Biz Show. I am your host, Michael Palumbos with Family Wealth and Legacy in Rochester, New York. And today we are super excited to bring Shelley Taylor in. 

Shelley Taylor (00:47.671)

and we got it. 

Michael Palumbos (01:11.754)

who plays a really cool dual role role where she's part of a family business for over 30 years at a bar to a Coca Cola distributor in Pittsburgh, Pennsylvania. And as well through her experience and cutting her teeth through her own family business and her own going through education process is currently a family business consultant with Aspen Family Business Group. 

Michael Palumbos (01:39.438)

So welcome, Shelley. We're so excited to have you here. 

Shelley Taylor (01:42.904)

Thank you, Michael. Happy to be here today. 

Michael Palumbos (01:45.95)

So I'm really, really excited because very rarely do I have that opportunity where I have somebody that is a family business coach, family business consultant, working with family businesses that is actively in a ongoing multi-generation family business. So this is pretty exciting for me. And for our guests, I hope, you know, be ready for this because you're going to learn a lot from Shelley. This is just going to be. 

Michael Palumbos (02:13.784)

full of a ton of, you ton of information. So why don't you walk us through Abarta is the name of the family business. Can you tell us, know, what was Abarta doing when they started? Who formed it? What, know, give us the backstory of Abarta. 

Shelley Taylor (02:30.36)

Sure. Well, it's kind of a fun history. was I married in and so it's my husband's family and it was his paternal, sorry, his maternal grandfather who started the business just sort of by happenstance. He worked for a bank in Bethlehem, Pennsylvania. And he was brought in, the bank was in, I don't know if it was foreclosure, but the newspaper, sorry, not the bank, 

Shelley Taylor (03:00.962)

The bank was brought in to oversee the newspaper, the Bethlehem Globe Times in Bethlehem, PA. And so he was the bank examiner who was brought in. And then the bank ended up owning the newspaper. And he, Rolland Adams, my husband's grandfather, at a certain point, so he was working in the newspaper for the bank. And then he bought a minority ownership and then ended up 

Shelley Taylor (03:29.836)

buying the newspaper altogether. So that was in 1935. And over time, he grew the business. We had a second newspaper, the Press of Atlantic City. He ultimately invested in some Coca-Cola franchises across the state of Pennsylvania, both Pittsburgh, and he was from Eastern PA, Bethlehem area. And at that point, he brought in his daughters and sons-in-law to help with this expansion in the 

Shelley Taylor (03:58.83)

So he had three, he had three daughters and three sons in law. So from the very beginning, we had in-law spouse involvement in the business. And over time, those six people in the second generation, the three daughters and their husbands formed ABARTA. And ABARTA is an acronym. 

Shelley Taylor (04:21.474)

taken from the last names of the three daughters. Their last name was Adams. So you get the three A's from Adams. B was one husband Bitzer. R was one husband Rohr. And T was the third husband Taylor. So they formed that company as a way to invest. And then there's a funny little story about how Rollins' wife, 

Shelley Taylor (04:45.902)

pre-deceased him and his estate plan was all of his assets were gonna go to his wife, but instead since she pre-deceased him, his daughters ended up owning the company and he was bold into them. He tried to switch it around and get the stock back and the daughter said, no, sorry, that's not gonna happen. So he sort of gracefully. 

Shelley Taylor (05:13.142)

or not so gracefully, not sure I wasn't around then, retired. So fast forward to the 60s, 70s, 80s, the three daughters, their three husbands, they formed the board of directors. The spouses, husbands were actively running the business. At a certain point, one of the spouses, 

Shelley Taylor (05:37.986)

passed away, their family branch decided to sell. So we were down to two branches, Bitzer's and Taylor's, which to this day remain the shareholders and the operators of the business. My husband is the chairman of the board. He also ran a division for a while. Now he's just the chairman. His two cousins were involved in the business. One is now retired. His other cousin is the CEO. There were two women. My husband has a sister and 

Shelley Taylor (06:07.82)

He has a cousin who's a woman. They did not work in the business. But through all the years, share ownership has been gifted early and gifted often. That was always our mantra, gift early, gift often, passing a lot of the wealth down to the next generation. So the growth in the company has been realized in the next generations and saving estate taxes and, 

Shelley Taylor (06:33.482)

obviating vulnerability on the company side, you know, in the case of untimely debts, et cetera. We've had an independent board of directors, so majority of independents on the board since 1996. And actually nice little accolade, my husband, who is the chairman who I said, they just were recognized by the private board of the year award as in their size category of 300. 

Shelley Taylor (07:01.102)

million to a billion, something like that. So they just this year, we're recipients of that. And they've done an amazing job. We've had a great group of independent directors on the board over the years. And we follow a lot of best practices, not just for privately held businesses, but for businesses generally. So it's been professionally run, know, in quote unquote, professionally run, even though family members are running the business, but it's not like, you know. 

Shelley Taylor (07:29.068)

the family bank or favors or give a job to anybody, that kind of thing. Got it. That was a brief history. might have left out a few things along the way. Fast forward, here we are. The third generation, as I said, is still involved. We have one member of the fourth generation working in the business. There are 19 in the fourth generation. 

Michael Palumbos (07:39.15)

But that's fine. 

Shelley Taylor (07:55.886)

And like I said, they're only two active now still in the third generation and only two shareholders left in the in the third generation as well. But all of the 19 in the fourth generation are shareholders. And we have several we have 11 in the fifth generation now spanning from three and a half months old to about 10 years old. But most are most are three and under only one. There's one outlier and then the 10 of them are. 

Shelley Taylor (08:26.094)

Three and under, so we have a little baby boom. 

Michael Palumbos (08:28.658)

All right. I have to stop you for a second. And there's a perfect time to pause because I've got a thousand questions already. You hit on so many really important things that I think I just want to help people digest a little bit of what we told you, what you just said. So the size of a bar, a bar is over $300 million of revenue annually. And so, you know, company that size, obviously the, the, 

Shelley Taylor (08:35.054)

Absolutely. 

Michael Palumbos (08:57.934)

the value of that company is fairly substantial compared to most that are out there. You're in the top 1 % of privately held companies for sure in the U.S. So now I want to ask you to take your coaching hat and kind of move back and forth. You guys have had some best practices and I'm going to come back to that, but you're as a consultant, when you start talking about the things that you talked about, gift early, 

Michael Palumbos (09:26.294)

and gift often, you know, have shareholders that are under the age of three. Just and I know these are rules of thumb, but as a rule of thumb, if you're coaching a family to start gifting, what is the value of that business? Typically, if you're going to if that's if they decide that's a great practice for us, we are concerned about estate taxes. We want to work, you know, work through that those issues. What kind of size, you know? 

Michael Palumbos (09:55.549)

When should I start thinking about that? 

Shelley Taylor (09:58.178)

What I think is important and it's hard, right? Especially if it's a very small business and you've invested everything into it. know, depends on where the business is in its life cycle. But I would say if it's more than just an entrepreneurial stage, hopefully the owners have created some wealth outside of the business. I think where we see people 

Shelley Taylor (10:24.494)

unwilling to or not interested. I mean, there are a couple of things people are concerned about, right? One is if these are all of my assets, if they're all tied up in the company, gifting, if I gift it away, then I don't have anything, right? So what is the balance where maybe you can have a little nest egg at the end when you're ready to retire or ready to redeem and what does that look like? The other thing that we see is the control question. 

Shelley Taylor (10:51.466)

Lots of times people are, in fact, I just had a case just yesterday where someone who's 80 years old owns all the, kids, know, his kid, quote unquote kids, they must be in their at least fifties, right? And they don't, and they're working with him and he owns everything. Well, that's a very vulnerable place to put the business in because people die, right? I mean, you can die at any age and 

Shelley Taylor (11:20.866)

presumably the older you get, the likelihood increases a bit. And you don't want to leave the company, your heirs in a position where they're forced to sell the company to pay estate taxes or to be able to handle whatever mess might ensue. So I think those are a couple of things, right? So the control that the financial end, but then also the control that people are hesitant to give up. 

Shelley Taylor (11:50.626)

What does that mean? When I work with businesses, one of the things I like to talk to the family about is what is your vision? What do you want? What do you see for the family down the road? What do you see for the business down the road? If you want continuity, if you want this business to survive and thrive and flourish in the next generation, and if you want family connected to it, there needs to be planning. You need to be thinking ahead and how are we going to pass down these assets? 

Shelley Taylor (12:20.856)

Practice the control bit. If I do everything and I know everything and I'm not letting you even peel back the curtain a little bit, what position are you gonna be in to be able to take over? Not a great one. 

Michael Palumbos (12:36.138)

We call, you know, what in that conversation, we call that exit planning. I have found very few, especially at the entrepreneurial stage, they don't like the words exit planning so much, because it's like, this is my baby, this is my identity. you know, we get that. We also, you you were part of a family business, became a family business consultant. 

Michael Palumbos (13:03.82)

We were wealth advisors that became business coaches. we used to do the exit planning, and we still do the exit planning, but we would do the exit plan. And then we would tell them, okay, here's the 20 levers that you need to work on to increase the value of the business before you sell it. And here's how to blend with your estate plan and go figure it out. And we would do the estate planning work. We would work with the attorney, but all of the... 

Michael Palumbos (13:33.624)

how do I grow my business and how do I put systems and processes in place? We didn't coach those things. And so we became certified to do those things. So it's kind of unique where, you know, we can actually help them think through those things. think, and tell me, you know, how you feel about this, but a lot of times there are companies, and I say a lot of times, often there's a company that where the entrepreneur gets to a stage where the business is worth way more than they had anticipated. 

Michael Palumbos (14:03.246)

And so I guess the, in this conversation, would be sooner than later, you get past that $10 million of value mark, $20 million, $30 million. There's, there's, there's numbers in there, you know, where you start to build value outside of the business and doing those things. It's probably a really good idea. 

Michael Palumbos (14:28.322)

to bring somebody like yourself or me in and to start thinking through all of these things, because more often than not, the people that got you to where you are, the advisors that you're working with that had done your contracts and your wills and your BICEL agreement may not have the expertise for this next step. I guess that's- 

Shelley Taylor (14:54.19)

Sure. And one of the things like when I mentioned the vision, which we call it a shared family vision, it definitely a lot of people in my line of work who don't come maybe from tax or law or wealth advising, we come from a behavioral sciences approach and organizational behavior. And so we're looking at the system. We're looking at the family system and the business system, and we're looking at relationships and 

Shelley Taylor (15:22.946)

connections and sort of facilitating conversations. I mean, we all know communication is huge in any environment, business environment, family environment, family business environment, right? That's like always the one thing that is a challenge no matter where you are, especially with electronic communication, right? When it's not face-to-face anymore. 

Shelley Taylor (15:45.496)

So we try and create an environment where people can talk, where they can have the conversations, whether they're difficult conversations, easy conversations, but also getting everyone in the same room is really valuable because people are hearing the same message at the same time, able to have a dialogue about it and come to agreements, consensus, figuring out how they want to move forward, what the plan is. 

Michael Palumbos (16:10.296)

Great. You call it the shared family vision. We call it the family roadmap. Love that. It's that vision, the purpose. Talking about the results that you're looking for and the obstacles that may be in your way. And just getting that all on the table opens up a dialogue and a communication, like you said, that's super important to begin. Let's talk about your entree into a BARDA and 

Michael Palumbos (16:39.286)

you know, how you developed your skill set and what were the things that you did for the family business through the years. I think that's important to hear, you know, for two purposes, two reasons. One, think it's so many times and you and I've talked about this is that many times a family business has been, you have to be a blood member to join the family business. And that is something that run from day one almost your, you know, family didn't do that. 

Shelley Taylor (17:07.042)

out. 

Michael Palumbos (17:07.767)

So talk about your role and how that's evolved through the years and. 

Shelley Taylor (17:09.783)

door. 

Shelley Taylor (17:12.622)

Absolutely. Well, I married into the family, which then meant I married into the family business. And my husband, as I said, is a third generation owner. And in 1990, we started a family business process. And by that, mean, we hired an independent consultant facilitator to come in and work with our family. And from the beginning, that advisor suggested that spouses be included. And so the family was OK with that. 

Shelley Taylor (17:41.036)

The reasoning behind that, as you and I discussed, a lot of families are really reluctant to do that because maybe personalities or whatever reason, but a really strong argument in favor of doing that is the spouses are the parents of the next generation. There are lots of other reasons too. One is that communication factor and hearing the message directly and et cetera. Seeing how people interact with each other instead of just hearing it from a spouse outside of the context, but 

Shelley Taylor (18:10.794)

As parents of the next generation, there's a vested interest, right? And there's a role that these parents play, whether they're blood family or married in. we spouses were all included. We have, from the very beginning, a very, we said from the get-go, we wanted this to be non-judgmental, open door kind of thing. So family members. 

Shelley Taylor (18:34.574)

are at different places in their lives at different times. We were all having a lot of babies. People were at different places in their careers, whether or not they were in the family business. So some people would attend a meeting. And then not, we had a twice a year meeting schedule. But sometimes then they would miss the next two meetings, right? So maybe a whole year or a year and a half would go by. But everyone was always included, welcomed in. 

Shelley Taylor (18:59.596)

whenever they could attend, we had meeting minutes that we would circulate and send out to people. So that process with that facilitator, we did that for 12 years. And then we took a break. And then we realized, wow, these kids that were, these next-gens, the fourth generation were kids, but now they're teenagers and young adults. And we need to get back together because we don't know whether or not 

Shelley Taylor (19:27.712)

any of them is gonna work in the business or lead the business, but we do know that they are all owners because we have had the share gifting and estate planning. And so as owners, they're going to be responsible for the ownership governance side of things. So we need to make sure that we educate them. So we did another search, found another facilitator, and we've been involved in our current process now for about 10 years. 

Shelley Taylor (19:57.742)

my role specifically, just real quick, and then we'll get back and you can ask some questions. I am the family council chair. So that means I keep things moving between meetings. I keep track of all of our committees. I answer questions. Even if I don't know the answer, I have to figure out the answer. So there's a really, you know, a great revolving door or pass through door between my professional work and my family work. And each really informs the other. get a lot of learning and experience on both sides. 

Michael Palumbos (20:27.736)

love it. The question I used on my face, I appreciate that. When, what spurred the first consultant? What led to that? What was the thinking that the family was going through at the time when they brought the first consultant? 

Shelley Taylor (20:42.35)

Yeah, that's a great question. My husband's cousin was in business school and he took a family business course. And I don't know if you recall this, but back in the late 80s, 90s, family business was not thought of as it is today. was sort of like, and I don't really necessarily want to use this, this phrase, you know, was like the little secret. was, you didn't, you didn't. 

Shelley Taylor (21:05.9)

You weren't proud of it. You didn't stand up and say, look at what we've done. People were in business school. Because my husband also was in business school right around the same time. And everyone was going to these huge multinational corporations. And to say you were going back to work for your family business, which my husband wasn't really sure. Actually, then he was back in the business at that time. So his cousin took a course on family business. And he learned the statistics, the 33%, 13%. 

Shelley Taylor (21:34.338)

the ones that have the best chance of survival are the ones who engage in planning and family strategic planning. And so he's like, he brought it to his dad who was at the time CEO and chairman and said, you know, I'm involved in this business. I'm working here. This is where I plan to spend my career. I don't want to be this 30 to one shot, right? So his dad said, okay, you you guys, tasked the, the second generation tasked the third generation at that time with. 

Shelley Taylor (22:02.338)

finding a facilitator, doing the interviews. It was all up to them, but the second generation said, retain veto power. If you come up with someone that we don't feel we can work with, we'll let you know, but otherwise go for it. And it worked and we went through the same process when we hired this current consultant 10 years ago. 

Michael Palumbos (22:24.078)

Brilliant, brilliant. just, I want to give you a kudos and I want to make sure that people hear what you did that was so different. We're giving the next generation the ability to go out and do the search to find somebody that they feel comfortable with, with the intent that obviously the current leading generation, you know, controlling generation gets veto power. And we want to be comfortable too, but you're teaching 

Michael Palumbos (22:51.124)

all kinds of really good things. They have to communicate together because they have to agree. You're teaching them to, so you're working together to do that. You're bringing in those cognitive and those abilities of discernment to say, why is this one better than the other one? How old was that? 

Shelley Taylor (23:13.742)

They were in their 30s at that time. No, late 20s, early 30s. 

Michael Palumbos (23:22.222)

That's great. That's phenomenal. Really, really impressive. I want people to hear that. The more things you can ask the rising generation to do, the faster they're going to grow and mature and develop in all the areas that you want them to develop anyways. 

Shelley Taylor (23:43.95)

Shelley Taylor (23:44.25)

And I think it's also an acknowledgement that this is your future, next generation, rising generation. This is yours. And we as the senior generation have to acknowledge that, recognize that, and say, we're letting go a little bit. And that's one of the hardest things to do. And so to give them that agency, not only the opportunity to work together and think through these things, but also setting 

Shelley Taylor (24:12.354)

you know, being role models and like, here's how you step away. I mean, and you're probably familiar with this too. I mean, one of the things that, that we see is often patterns repeat for good or for bad through the generations. Right. So if you have dysfunction, often that repeats, but if you have, empowerment of the next generation, you know, that's a pattern that can repeat. 

Shelley Taylor (24:34.006)

sort of the gifting philosophy, you how people handle shares, whether you need to buy your shares, you know, as, as younger generation, whether they're gifted and whether people hold onto them till death, right? So a lot of these things tend to repeat. And so I think, what the second generation did, the first generation model was slightly different. As I said, you know, he wanted to maintain that control, but from the second generation on, it's really been sort of. 

Shelley Taylor (24:59.47)

lifting the next generation up, giving them the opportunity to move forward and figure things out on their own and take control of some of the things. 

Michael Palumbos (25:08.748)

And so now, you know, people hear things like the family council and family governance and, you know, I want to make sure that they understand that you go back to what we were talking about with exit planning, you know, a $10 million valued business probably isn't doing a lot of these things. They just haven't gotten to that level because there's just not the need for it. But, you know, at the same time, 

Michael Palumbos (25:36.692)

I have a family business that's probably in that value that they have brought in coaches. I've done some coaching with them and some consulting with them around these areas. And they put a family employment policy in place. And they're starting these conversations because they are third generation and they do see the fourth generation is already showing interest because the work that they do is so hands-on. 

Michael Palumbos (26:06.318)

And so in your face, it's, know, it's not behind closed doors. They're out in the world. It's like, you know, a construction company, you know, and so young boys and girls to sit there and be like, wow, look at what we do. And they, and they, you know, so they've been teaching, you know, and showing them what they do. Even, even when the kids were three, four, five, six, the grandkids at this point, um, you know, they, they did a mock demolition and, know, the, 

Michael Palumbos (26:36.244)

some of the G3 would stand there or G2 would stand there and they asked the children, the grandkids and the kids, how would you take down this building? the kids have, know, so grandpa's there standing there pretending to be the building and the grandkids are, I would do this and I would karate chop it. But that's the kind of thing to start those patterns early if you, and that's planning and that's 

Michael Palumbos (27:05.289)

That's planting seeds to grow trees, right? 

Shelley Taylor (27:09.198)

Shelley Taylor (27:09.558)

Yeah, so just, you know, just a note about the size of the business and complexity and what kind of planning they might have in place. I actually, another one of my roles is I work at the University of Pittsburgh at the, through a program it's called the Institute for Entrepreneurial Excellence, but it's a program for family businesses and entrepreneurial closely held businesses. It had its genesis in the. 

Shelley Taylor (27:35.63)

mid 90s, there was a dedicated family business program and it just merged into this program for partly held businesses. But one of the things that I offer through that that I do there, I've been involved in a lot of ways over the years, but currently my role is family business consultant. And we have a lot of businesses that are five to 30 million, know, 10 to 50 million. I mean, a lot of them are in that 

Shelley Taylor (28:03.082)

under 25 million, I would say, and they engage in planning. They put together a board, a board of directors or a board of advisors. That's one thing that I support some of the clients with is putting together a board and finding either directors or advisors. So the ones who can get some education, the family businesses, the family business programs at universities are great resources. I just put a little plug in there. 

Shelley Taylor (28:31.564)

because it's a place where you can be with other family businesses and learn from them. You attend a program, so you're learning from the speaker, but you're also learning from other people who are in your situation, and you just get each other right off the bat. And then you can learn about all of these structures, processes, procedures, and whatever model, color, flavor is best for you at that time. But you have an understanding that 

Shelley Taylor (29:01.358)

planning is really important and structure is really important and not just knowing who on the business side, who reports to who and that kind of structure and how decisions are made, but take it to the family side. What does that mean? What does that look like? So I think there's room for all size businesses really to engage in this type of planning and conversations. The meetings might look different. 

Shelley Taylor (29:28.268)

For instance, our family council, our family meetings, we meet for three days twice a year over a weekend, Friday through Sunday, half days. So we arrive Friday and leave Sunday. But some of my clients who are smaller, I'll meet with them for two hours or three hours every three months or four months or six months. So the scope of the enterprise 

Shelley Taylor (29:56.842)

and that is mirrored in maybe the scope of the planning, but that doesn't mean that planning doesn't play a role, doesn't have an important role. 

Michael Palumbos (30:07.086)

Yeah, and I think it's really important that it may be exit planning, it may be estate planning, but it's also that planning of if you want, know, the statistics don't change regardless of the size of the company or the value or the value. The statistics are the statistics because 

Michael Palumbos (30:29.334)

of entropy and because of a lack of communication and a lack of trust. And if you're not developing and planting those seeds to grow trust, to enhance communication, it doesn't matter what the value of the business is, you're still gonna end up selling it or moving it along or whatever the case may be. So you've got the family council, you're working with, obviously, 

Michael Palumbos (30:58.19)

Is there any work or thought? What's the thought around? have, you know, owners that are three years old. What is the family's? Yeah, I think that's a interesting topic. You know, when you have owners, you've gifted shares to these young children. What is the family's philosophy around them? And what are you teaching? How do you take a three year old and start to raise them, you know, from day one as an owner? 

Shelley Taylor (31:26.39)

Well, that's a really good question. So soon I think our family meetings are going to have to have programs for the fifth generation. One thing we did when we were meeting back in the 90s was we got the kids together because we all had lots of babies at that time. And they did more like mini camp kind of stuff. But they also had a chance to sit with their grandparents and do some, you know. 

Shelley Taylor (31:50.542)

history at an appropriate level for their ages. So there was a little bit of exposure through that. And then we have, as they get older, at age somewhere between 14 and 16, we've actually had a ceremony called the coming of age ceremony, which then means that they are now invited into the process and they can attend the family meetings. And maybe they don't start with the full on. 

Shelley Taylor (32:18.114)

full day kind of stuff, but we do day parts for them. Another exposure, another great learning opportunity for our rising generations has been family foundations. And we actually have two foundations which were split way before in the second generation. So instead of just one large one, they are in the family branches. And both families have embraced the philosophy of bringing 

Shelley Taylor (32:44.27)

those next generation family members into that process early, first as observers and then as full trustees on those family foundations. And they're able to participate in decision-making, present their own projects. We also have what we call a discretionary amount. So all the trustees have a certain amount that they can give to a 501C3 that they can 

Shelley Taylor (33:14.434)

do without having to put a proposal in front of the foundation for. So that's a great learning opportunity. So we haven't had anything, now I'm thinking we're to have to start getting going on the fifth generation. we believe in there's a lot of wealth was created, and there's only a certain amount. We have a low dividend policy. Everybody lives really. 

Shelley Taylor (33:39.756)

reasonably, there's not a lot of ostentation, where there's no ostentation, I mean, in our family. And so over the years, it's like, this is our, you know, it's like the grandma's silver. It's opportunity, it's not entitlement. And that's the philosophy that has been passed down from generations. So, and you can't just, you own these shares. We also have a priority order for people to redeem their shares. 

Shelley Taylor (34:08.767)

As each generation needs to look at it again. In fact, we have a big initiative right now that the fourth generation is working on is what is ownership going to look like for them? did, how did they want to look at redemptions or, you know, liquidity pool, redemption opportunities, pools, et cetera. But in the prior generation, you, senior generation inactive family member. 

Shelley Taylor (34:32.994)

had priority and the youngest working in the business can't sell his or her shares until everybody else has been taken care of in the order that they're, and that's how it's gone in the third generation with the retirements, et cetera. So the fourth generation will figure that out for themselves, but nobody has ever had the mindset of what can you do for me and what does this do for me? 

Shelley Taylor (35:02.488)

Why do I have this? What does it mean? And part of that is we try and do a lot of education. So this fourth generation project that I mentioned, we're doing a whole lot of education, educating the fourth generation. What does it look like to gift shares? How is value created in the next generation? How does that diminish or reduce liability, exposure, taxes, et cetera, all that other stuff in the senior generation? 

Shelley Taylor (35:32.386)

So really trying to help everybody understand value of estate planning. Prenups are a big thing in our family required. 

Shelley Taylor (35:42.414)

life insurance, you know, it can go on and on, but. 

Michael Palumbos (35:45.998)

This is great. I as you're talking about the fifth generation, know, my gut says, you know, I'm looking at the ABARTA website and you have your core values listed right on the website. My gut, and tell me if I'm on the right path here, is that those core values are the same core values shared throughout the family. 

Shelley Taylor (36:07.864)

Yeah, pretty similar. Yep, pretty similar. 

Michael Palumbos (36:10.572)

I was, my wife and I just went through a program where we working on our family core values and then we're going to bring our children in to talk about these things so that we can look at the longevity of our, you know, development of our family and the longevity of the family business. I'm second generation, purchased the business from my father, have no idea if any of my kids will do this or not. I have a couple that I wouldn't really, you know, there's, there's, there's a planted a few seeds. 

Michael Palumbos (36:39.02)

But when I looked at the core values inside of our business, and then the core values my wife and I had, the intersection was really, really strong. What was neat is I was not the driving force behind the core values in the business. It was the team that we worked with. was, you surround yourself with people that share the values, and it's really important. 

Shelley Taylor (36:47.915)

Absolutely. 

Shelley Taylor (37:03.244)

Yeah, and often the family's values are reflected in a family business if the culture is one that's reflective of all that for sure. 

Michael Palumbos (37:12.972)

have two side notes for you. One is you probably know Jay Hughes, you have heard the name. So Jay and I did a podcast on the Grandparent Grandchild Philanthropy Project that you might want to take a peek at as you're working with the fifth generation. And then, do know Jeff Savlov at all? So Jeff Savlov, check out his website, Savlov and Blum, Blum and Savlov. 

Shelley Taylor (37:27.118)

Thanks. 

Shelley Taylor (37:34.7)

I do not. 

Michael Palumbos (37:41.838)

He has done a lot of really great work with children under the age of four and in planting these seeds of what does this work look like? What does wealth look like? How do we talk to them about these things? And it was just mind blowing in my opinion. I haven't seen everybody really take that and run with them, run with it. his... 

Shelley Taylor (38:03.011)

Yeah. 

Michael Palumbos (38:09.494)

He's got several blog posts and articles that he's written about things that might be right up your alley. 

Shelley Taylor (38:16.458)

That sounds fun. Absolutely. I'll check that out. 

Michael Palumbos (38:19.532)

I always try to, know, as much value as you're sharing and talking with the people that are listening, I would love to be able to give it back to you a little bit here and there. Let's talk about... 

Michael Palumbos (38:36.942)

Let's talk a little bit about philanthropy again. Where, you know, so I, I use this term and not everybody agrees with it, but I think philanthropy is a wonderful sandbox for entrepreneurship within the family business. And I've talked about it an awful lot because my belief is that, you know, you're not going to break anybody's jobs. You're not going to ruin the business. know, you can, 

Michael Palumbos (39:06.882)

but you're learning leadership and communication and working together and team building if you're doing those things right. So, through the years, what are some of the projects that you might've had rising generations working on and what does that look like in your family? 

Shelley Taylor (39:26.53)

Well, that's a good question. So in the family foundation, terms of that for that piece, we encouraged our, well, first of all, from the role model of my mother-in-law, I was brought in, same spouse opportunity here. They brought me in completely in the foundation. And after a couple of years, she said, OK, I don't want to be 

Shelley Taylor (39:56.078)

president anymore. And there I was president of the family foundation as a spouse, everybody fully supported that. So we're doing the same thing with our next generation, you know, first in a role of assistant treasurer, assistant secretary and, and vice president. And now they're fully moving up into those leadership roles for the foundation, which, which is great. I think another great opportunity on the philanthropy side outside of foundation is the opportunity to sit on nonprofits. 

Shelley Taylor (40:25.46)

and to get involved outside the bubble of the family and outside of that and to be really involved in learning governance. It's nonprofit, it's slightly different on that side, but to have that exposure and that opportunity meeting other people who are doing similar kinds of work and being on boards, I think is a great learning opportunity for young adults. 

Shelley Taylor (40:52.726)

And then outside of the philanthropy in terms of projects, the family council is rife with opportunity for leadership and project. have had so many committees over the years, writing things like rewriting our employment policy, cause we had one and then, and we rewrote it, but we've had a project to figure out a communication platform for the family. So a place where we can chat, share documents, do planning. So we have. 

Shelley Taylor (41:22.638)

software that we use for that. This project actually a really big one that we recently did. One I've already mentioned is this education about share ownership, this fourth generation project. So that's huge. It's got a lot of moving parts and that's being led by the fourth generation. And then we also recently went through a process to select our first fourth generation director for the board. 

Shelley Taylor (41:52.066)

We've had a learning program, which I can also talk about in a minute if we have time, as part of people who've gone through that learning program then were eligible to apply for a director position. And that was completely led by the fourth generation as well. had involvement from our independent directors to help them with the interview process, et cetera. But then they selected from among their own group of fourth generation family members, selected a director who will be 

Shelley Taylor (42:21.698)

fully on the board coming up. 

Michael Palumbos (42:24.75)

Michael Palumbos (42:25.695)

Let's dive into the learning platform. 

Shelley Taylor (42:29.484)

Yeah, so we call that that was something we developed. call it associate advisor. We were going to call it associate director, but I actually got advice from from someone when I was in a learning thing myself that said don't do director, know, start them out as advisor or even just in name only. Even if they don't have the fiduciary responsibility, if you call them a director that might be construed that way. So name it. 

Shelley Taylor (42:54.86)

appropriately. So it was associate advisor, they had to write an essay and apply and be interviewed. And then it's a two year rotation, where they attend, we have four quarterly meetings a year, they attend, they are expected to be full participants, they get the whole board book. We pair them with a mentor, this is a really big part of what we do, we have a mentoring program. So their mentor is one of the independent directors, and they meet, set their own 

Shelley Taylor (43:22.648)

cadence of meetings, how they want to handle that. But that director is a resource for this associate advisor, family member. Like, what does that term mean? And what's an appropriate question to ask? And when can I ask a question? And it's been a great, great opportunity, both sides. The directors really love that as well, our independent directors. They've learned stuff from the... 

Shelley Taylor (43:48.854)

the associate advisor. So anyway, that's a two year rotation and then they can apply again if they want. But our goal is to move as many family members through that program as possible, even if they don't ultimately want to serve on the board. It's an amazing learning experience. They are learning a lot about the company, but they're learning also about corporate governance. And they're in a room with all of these great, you know, our independent directors are such fabulous resources. 

Shelley Taylor (44:17.634)

So it's been a really wonderful program and we now are on our third round. So we've had four people complete it and we're on our numbers five and number six. And as I said, we have a director, fourth generation director starting coming up. 

Michael Palumbos (44:33.134)

Congratulations. What about things like, you know, learning around estate planning and taxes and investments and just more on the personal side of stuff? there a, how do you transfer that information? 

Shelley Taylor (44:47.062)

Yeah, and those are all modules. mean, those are things that we do as part of our family council meetings. So those twice yearly meetings, sometimes we'll bring in guest speakers. Sometimes the family members will talk about it. So we bring in guest speakers as in resources. We've also had our independent directors come and speak to the family just for and that accomplishes several things. They get to know each other and also they're great resources. And also those topics. 

Shelley Taylor (45:16.738)

taxes, estate planning, et cetera. That's part of this whole education program that we're doing on this G4 financial education that we're really ramping it up and realize there's so much knowledge to transmit. Side note, one thing we realized as we got going on this round of family meetings with our fourth generation that the... 

Shelley Taylor (45:42.626)

three family members who were working in the business in the third generation, my husband and his two cousins, they wore all the hats. They were on the board, they were owners, they were working in the business. And then we bring in this next generation to try and educate them. And so many questions were, okay, well, is this, you, which hat are you wearing when we're talking about this? So we needed to, we spent several years. mean, now I think we have it pretty well understood, but. 

Shelley Taylor (46:10.734)

peeling back all those layers because those three men throughout their day, they're doing things in all those roles all the time. And so for this next generation who's coming in just from the owner side, family side as well, but the connection with the business is how do we look at it? How do we know which hat am I wearing? 

Shelley Taylor (46:36.526)

helping them peel back all those layers. And then this big education piece realizing, wow, there's still a lot of this technical stuff that we need to communicate. mean, even been like, financial statements 101, how do you read it? Like even there are ways to dig in and get to all the details, but also what's the snapshot look? What do you need to know to just glance at something? What are the three things to look at or something like that? So we try and do a lot of education around all of those topics. 

Michael Palumbos (47:05.838)

We just, as you said that I'm really proud of, we brought in an intern who just did a smash up job this year. We took, we built an Excel spreadsheet that takes the balance sheet and the income statement and then creates graphs so that you can look at it and view it as a picture, not just having to understand the numbers. So for the non-financial people, they can say. 

Michael Palumbos (47:31.266)

Here's what we did last year. Here's what we budgeted for this year. And here's where we're at so they can get a real quick snapshot of what's happening. There was, I just had it and I, come on, Michael. Next, Jen, it was something that you said that I wanted to hit on and I'm not, I apologize, I'm missing it. 

Shelley Taylor (47:57.239)

Okay. 

Michael Palumbos (47:59.694)

You talked about the modules that they're learning. How did you come to determine that and how do you deliver those things? you got guest speakers, like building the curriculum, how long, who did that? 

Shelley Taylor (48:16.27)

Right, well, I guess that's one of the roles of the family council chair and maybe all the people participating and our independent, our facilitator, our consultant as well. But one of the things that I do is I just keep a running tally of all the questions and a standard part of each meeting too. So things will come up in a meeting and then we might not. 

Shelley Taylor (48:42.028)

be able to address it right then, but then that goes on this running list that I keep. Also, there's an opportunity for, know, sometimes we'll send out surveys. What do people want to learn about in between meetings? And this is true for any family that I know that I've worked with and my own. You get there, have a family meeting. There's a lot of enthusiasm. There's a lot of energy. And then everyone goes back to their regular lives. So 

Shelley Taylor (49:08.418)

you forget all the stuff in between the meetings. Maybe you forget a little bit about what you learned, but maybe you also forget what you wanted to talk about the next meeting. So that's my role, keeping track of all those things. Like I said, we also do minutes. So we write up a report of every meeting and I do that together. I work very closely with our advisor, the person who runs our meetings. So we do have a third party facilitator. I work very closely with that person. 

Shelley Taylor (49:36.108)

in between meetings, developing the meetings, after the meeting, writing the report. So we just keep track of those topics and then figure out what's the best way to address them. 

Michael Palumbos (49:47.118)

What's really interesting as I'm hearing this, I don't know if you're familiar with, Tuckman, Bruce Tuckman created the forming, storming, norming, performing of leadership teams and team development. And I think it's really important for, especially in a family business that we realize that you're not always going to go from forming to performing and stay at performing. 

Michael Palumbos (50:12.33)

each generation and each new director and each new addition might take us, takes you back to forming. And so you have to go backwards a little bit to start to build it again so that you can have that storming phase to get to the norming. But it's okay. It's just part of the process. And so you've set it yourself. 

Shelley Taylor (50:33.646)

Shelley Taylor (50:34.286)

Exactly. I think, and this is what I tell families that I work with and we all believe it in our family is that the process doing the work together is just as important, if not more important than any outputs that we might have, any policies that we come up with, whether it's a code of conduct or employment or, you know, belief statement or, and we've come up with a lot of things over the years, but it's the sitting down and the talking about. 

Shelley Taylor (51:00.738)

the stuff and hearing all the voices and coming to consensus, which is really valuable. 

Michael Palumbos (51:07.406)

Remind us again, how today, how many owners are there throughout the company that are family owners throughout the company? 

Shelley Taylor (51:18.894)

Uh, so I think I said there are 19 and I always have to do the math, right? It's crazy. 21 and then there's so 24, 25, something like that. Yeah. Yeah. I mean, so even though we're now moving into the fifth generation, it's not, I mean, it's not because we've also had people, um, so there were first of all shares. we include spouses in the process, but spouses do not own shares. 

Shelley Taylor (51:46.74)

Only the descendants of Rolland Adams, the founder, are eligible to own shares. And so in the third generation, which was my husband's generation, there were five. One is retired, one, well, no, yeah, so two have, yeah, there were, the five of them, two have redeemed their shares and one actually, she passed away, so her shares have been redeemed. So there are only two owners left in that generation. 

Shelley Taylor (52:15.662)

even though it is a pyramid triangle shape, people, know, in the older generations are no longer shareholders. So we have a larger group in the next generation. But with spouses, we have a very large group in our family council. So that's up to probably 30, because we have a lot of, most, many of the fourth generation are married now or have partners. 

Michael Palumbos (52:44.846)

Cool. Yeah, you guys, you have done a remarkable job. It's very impressive to talk about this and to learn from you. I appreciate it. In a past episode, we had Lodgecast Iron. Not too far from you guys, actually. 

Shelley Taylor (53:03.214)

They were recipients also at the private board of the year this year also. That's awesome. 

Michael Palumbos (53:10.808)

That's awesome. And they talked about, did a, all on the family council and what they were doing. And it was, what was great. And I love the fact that, you know, you're willing to share is that they talked about, you know, the mistakes that they made and some of the things that it's not always pretty ways you're doing these things. 

Shelley Taylor (53:30.828)

Well, that's exactly what I was going to say. I mean, it sounds great and it sounds like we have it all figured out. We don't. mean, we have, I'm trying to figure out my, me and my successor, we're trying to figure out our succession, you know, for her as, as family council chair and communication. I mean, that's like the thing, right? So yeah, we, we have to keep working at it. It's not like we haven't figured it out and then we glide. We're working at it all the time, for sure. 

Michael Palumbos (53:59.374)

That's awesome. It's making me think you said we gift. What was the phrase on gifting? Yeah. And so I would just take, think what we've learned from Shelley today is plan and plan early, plan often. Really at the end of the day and communicate is just the foundation of this. 

Shelley Taylor (54:05.016)

gift early and gift often. 

Shelley Taylor (54:13.942)

Yes. 

Shelley Taylor (54:21.448)

Absolutely, having that forum to communicate and following through, think also. 

Michael Palumbos (54:30.094)

Shelley, this has been great. Is there any parting words that you want to share or anything that we didn't talk about that you want to make sure people know? If any people, the Aspen Family Business Group has a website, you can go right out there and find if you want to engage Shelley for your family business. You bring a host of valuable. 

Michael Palumbos (54:56.362)

education and an experience to the table. Anybody would be blessed to be working with you. 

Shelley Taylor (55:02.702)

Thank you, Michael. Thank you. I appreciate that. And one of the initiatives, actually the Aspen Family Business Group, one thing we did this year was, but last year as well, actually, hold a retreat for family businesses. So multiple members of the family can come and be together. We had 35 people this summer at a weekend retreat. So it's a great opportunity. Like I said, like those university-based programs, also I can't speak of them, you know, highly enough that it's just a great opportunity to learn from others as well. 

Michael Palumbos (55:30.958)

Yeah, I'm blessed. have the University of Buffalo has the Center for Entrepreneurial Excellence. St. John Fisher right in Rochester has a family business group. And then we have Cornell and LeMoyne College. like within upstate New York, there's four, there's no reason if you're a family business in the upstate New York region. Anywhere there's somebody going to be close to you that's on that side. I highly recommend them as well. 

Shelley Taylor (55:56.43)

Shelley Taylor (55:56.73)

And sometimes that's a nice easy first step for a family to make too. Yeah, if they're not sure they want to go the family meeting route just yet or engage a consultant. But that's great. They'll hear from the other people how valuable it can be and then they'll take the next step. 

Michael Palumbos (56:12.364)

Yeah. Shelley Taylor, thank you so much for sharing your time and your wisdom with everybody today. Really appreciate it. My name is Michael Palumbos. This has been, you've been listening to the Family Biz Show. I'm with Family Wealth and Legacy in Rochester, New York. Thanks for joining us and be sure to tune in for our next episode. Have a great day, everybody.