[00:00:00] Speaker A: Welcome to Business Forward. I'm Joe Reyes and today we're talking about how smart decisions and clear numbers can drive real business growth. You're watching now Media Television.
Welcome to Business Forward. In today's complex economic environment, building lasting corporate or personal success requires more than reacting to short term market trends.
It calls for a thoughtful financial strategy that turns active revenue into durable generational wealth.
Too many leaders put long term security at risk because they never connect their asset management decisions to a clear set of values.
Today, we are looking at practical ways to align personal goals, business priorities and measurable financial outcomes.
Joining me is financial strategist and family business expert and David Kleiman, a partner at Kleiman Financial.
David coaches ambitious professionals on how to overcome operational challenges, build resilient assets, and create sustainable legacies that last beyond the current generation. David, welcome to Business Forward. It's an absolute privilege to have you on the program today.
[00:01:16] Speaker B: Thank you, Joe. It's a pleasure to be here. Thank you for having me.
[00:01:20] Speaker A: Good, good. And before we unpack this blueprint for financial alignment, ensure your leadership team stays ahead of market shifts. Download the free Now Media TV app on Roku or iOS to stream our professional corporate programming live or on demand. You can also catch our full podcast
[email protected] on. All right, David, let's get into it.
So when evaluating a professional's financial portfolio, how can we distinguish between temporary high revenue streams and true sustainable generational wealth?
[00:02:02] Speaker B: Well, it's an interesting question, Joe, and just before we jump into the details of that, I just want to say, like, throughout, there's an underlying theme throughout our conversation. I think we're going to go back to them all over and over again. Is that that the skills required for an entrepreneur to develop and to create his business is almost diametrically opposed to the skills that are needed once it's established and to generate that and to sustain that generational wealth. You know, when a person is an entrepreneur, he's on his own, he's independent, he makes his own decisions. It's all in his head. And we're going to find, we're going to see as we're going to discuss that that's almost the opposite of what he needs in order to, to pass it over generation to generation and to make sure that, that those, that those revenue streams continue when he's able to pass it down.
So a quick answer for you is like the temporary high revenue streams will reflect the strong current earnings, but while sustainable generational wealth that's built on assets that will continue to produce value over time and can be passed on to future generations. And some of the key differences will be the source of wealth is, are you, is it just a flash in the pan or is it something sustainable over time? Is it going to be state as stable or are you able to pass on how to make those market shifts? Because we know markets always do shift and things change in the market. What was successful in one year is not necessarily going to be successful 10 years down the road. So we want to make, in terms of making sustainable wealth, you want to have that, that stability and you want to have that cash flow versus net worth. And those are two different definitions. Net worth is something that you want to build. Cash flow can come and go. And then of course the main part of it is the legacy planning. You want to make sure that you've done your correct estate planning and your tax strategies and your succession plans and that has to be pretty definable. We're going to discuss that a bit more and just to make sure you had that financial resilience as well. So in short, I know maybe I'm going out a little bit more. The distinction will lie in whether financial success is probably primarily driven by current earnings or by lasting income generating assets and a long term wealth preservation strategy.
[00:04:24] Speaker A: Interesting. Very nice. Yeah. All right, so, and so in your extensive work with family owned enterprises, what is the primary structural error that you think prevents businesses from surviving generational transitions?
[00:04:38] Speaker B: So it's a very common, it's a very common error and one of the most common structural errors is that the owner fails to separate the family governance from the business governance while neglecting formal succession planning. So in my experience with family owned enterprises, that primarily structural mistake is building the business around the founder rather than creating a system that can thrive independently of any one individual.
There's that means that shows up in many ways it'll show up. There's no formal succession plan and maybe it's in the leader's head. There's no clear governance. You know, it's, it's, oh, I, he's the son, so he can do whatever he wants, even though he's maybe not qualified for that yet, or he has to grow into that. And there's always the problem, always is that lack of documented processes. It's always in the founder's head that's got to be put down. And there's always, always going to be poor ownership planning. What about the future ownership? What about voting rights, inheritance? That's never clearly defined properly. And then of Course, the failure to develop the next generation, assuming that there are qualified people to, to step in and you're not just going to be promoting someone because he has the same last name, that's always usually an issue. And businesses that successively transition across generations will establish the clear governance structures, professional management, documented operating systems, and a well defined succession and estate plan. So ultimately the greatest threat is the failure to transfer leadership knowledge and decision making systems in a deliberate and structured way, which is almost opposed to how we built the business in the first place.
[00:06:23] Speaker A: Do you find that a lot of, a lot of times kids just don't want to be in the business?
[00:06:30] Speaker B: That's sometimes, you know, that's always the case. And if the son doesn't want to be in the business, I have many cases where maybe there's an offshoot that the son can do on his own, maybe there's a branch that the father never really looked at himself or never developed or was something that could, that he could help his son, but at an arm's length away.
So I have many cases like that where the son will go off on his own, do his own thing, but yet he'll still be connected with the father and still be help, and still be helping with, and the father will still be helping him.
[00:07:01] Speaker A: And so when you work with these types of family owned businesses or closely held companies, do you try to force or insist that your clients, you know, have an estate plan in place, that they have an attorney, that they do the things that they need to do in advance before, you know, the inevitable happens and you die and then everybody's trying to pick up the pieces afterwards, you know, what's your take on that? How much pressure do you put on your clients to make sure they've got all their T's crossed and the I's dotted?
[00:07:32] Speaker B: Listen, Joe, you know, you can, you can, you can bring a horse to water, but you can't make him drink. I mean, there's only so much that you can do in terms of putting pressure. You can point out and you can share, you know, the failure stories that you have of people that didn't look after these areas and didn't and ignore them and just went on with, and just went on about their business without really trying to deal with these issues. And then, you know, like the business ultimately fails, the second generation comes in and it's not there anymore, you know, or it's clear shortly after. It's.
Mainly because the, the founder didn't look after these areas. But again, like, like you're Saying, I mean, there's only so much that you can do. There's only so much you can tell if you have a forward thinking, if you have a forward thinking founder that wants it to have that generational success, so then he's open to it. But if not, and many times he's not, not much that you can do. Try to help as best you can.
[00:08:32] Speaker A: Yeah, I'm a CPA and I, and I'm always talking to clients about, you know, if you're a partnership, you need a buy sell agreement, you know, you need insurance. You need to make sure that should a partner die, that person's spouse, if they have one, doesn't become the new partner who may not have an interest or knowledge about business, you know, or maybe, maybe the next of kin, you know, who also may not know what to do. And then next, you know, you got a disaster. It's astonishing how many people do not take that good advice.
[00:09:02] Speaker B: Even some that have the buy sell agreement, you know, they'll pay the lawyer to draw it up, but they haven't funded it with insurance. So, you know, even when one partner passes away, we have one case, he was one of the largest pest control companies in New York City and his partner passed away early. He didn't have the, didn't have the, he had to buy sell, but didn't have the funding for it. And he still, he was a very honorable person. And he paid, continued to pay out to the wife out of his own pocket, you know, as, as the years went by. And then eventually they sold the company and, but you know, he felt that responsibility to pay for the, to pay the wife, even though I don't think it's specified. I don't even think they had a buy sell now that I'm thinking about it more. But he had that obligation. So that's a huge drain on the cash flow of the company.
[00:09:48] Speaker A: Oh, it's terrible. It's absolutely terrible. Yeah, good points.
So, so what are the immediate macro level risks to an executive who fails to integrate a proactive financial literacy program within their household and their businesses?
[00:10:05] Speaker B: Well, I mean, it really comes down to five, six different areas. It's going to be the wealth erosion they're going to have if a person doesn't have the financial literacy in it, and let's say the FA and the successor doesn't have that either.
There's going to be poor financial decisions, there's going to be excessive debt, inadequate tax planning, uninformed investment choices which will diminish over time. The accumulated Assets, there'll be the succession failures. You know, family members that will take over will be unprepared. You know, unless they had that financial training.
There will be operational vulnerability. You know, it's always important. You know, like you say, that the father put his son in the mailroom to get started and he worked his way up. That son would know every aspect of the business. So operationally he would be well equipped to take over when that happened. But again, you still have the reduced adaptability.
Without a strong understanding of financial principles, they're less prepared to respond to those economic downturns or inflation or interest rates, you know, that we know that happen over time. That's just the way that business is. And forgetting about the not talking about the governance and compliance risks that they may do, they may, they may take certain actions that may go against regulatory issues. That's going to be a big problem. And then of course there's going to be over that legacy disruption that even substantial wealth can dissipate with one or two generations if the heirs lack the financial industry needed to preserve and grow it responsibly. So, you know, it's a strategic investment that the owner, founder has to do in risk management, informed decision making, business continuity and long word wealth preservation to make sure that they have that sustainability.
[00:11:46] Speaker A: Yeah. Okay. And talking about family businesses, yours is a family business, is it not?
Can you tell me about it?
[00:11:54] Speaker B: So we call ourselves actually a son father business is as. Because my son started our business probably about 10 years ago. He was brought into the business initially by the lead estate planning specialist that Merrill lynch would go on his own looking for successor. Brought my son in. My son ended up buying him out. I was working for a hedge fund at the time and my son asked me to leave the hedge fund and come and join him in the practice. So I did that probably about, I guess about 10 years ago. And, and so we've been, we've been chucking along ever chugging along ever since.
[00:12:25] Speaker A: Oh, what fun. It must be nice. I, I, I wanted my son to join me in my CPA practice, but he likes to work on cars. He doesn't want to be behind a desk. He'd rather be behind steering wheel. So, so all right. Hel, in business now. 10 years.
[00:12:40] Speaker B: 10 years.
[00:12:41] Speaker A: Okay. Very nice. And so it's a father son. So you're a partner. Your son owns the business or we're partners.
[00:12:48] Speaker B: We are partners, but we call it a son father business throws people off a little bit.
[00:12:53] Speaker A: Very, very cool. Yeah, you got to, if you're paying attention. You're picking up, right. So.
All right. Well, great. Before we go on to a break, you know your business assets should we know your business assets should support your long term, a life trajectory, not trapped you in a cycle of constant operational strain.
True success requires a clear strategy and disciplined execution, which is where you come in.
So stay with us, folks. When we return from a brief break, David and I will discuss the foundational money conversations that help protect organizations and families during economic stress. We'll be right back.
We'll be right back with more insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
Welcome back to Business Forward.
We're sitting down with wealth advisor David Kleiman analyzing how executives can maximize their financial potential through structured proactive planning.
To safeguard what you build, an enterprise must move beyond rigid systems and create clear, open lines of communication.
Financial vulnerability rarely comes from market conditions alone.
More often it grows out of hidden misalignments, unaddressed risks and a lack of transparency.
When asset structures are intentionally designed around core values, they become a stronger defense against uncertainty.
David let's look at how an ambitious professional can begin auditing current asset protections and identify financial blind spots before a crisis hits.
And to our viewers, to access advanced corporate asset planning tools and learn how to stabilize your company's long term valuation.
Subscribe to our professional executive
[email protected].
so, David, what specific indicator suggests that a business owner's current estate or corporate plan is completely disconnected from their actual long term goals.
[00:15:12] Speaker B: So, Joe, there are several warning signs that will indicate that the business owner's estate or corporate plan is no longer aligned with their long term objectives. The most telling is that the plan reflects where the business was years ago rather than where the owner wants it to be in the in in the future.
So some of the key indicators would be no clearly defined succession strategy. Again, something that we've already, that we've already talked about. Maybe it's that's in his head. Maybe it changes day to day. Who knows what it's going to be? But he doesn't. He hasn't, he hasn't defined it and how that's going to happen.
Perhaps there's like what you mentioned also, Joe, outdated legal documents. They did their will and their trusts and their shareholder agreements and their buy sell agreements years ago, but it hasn't been updated to reflect the current reality.
Maybe there's a misalignment between the ownership and the operations.
Maybe the ownership structure now creates tax inefficiencies or governance challenges or conflicts with the owner's long term vision and he doesn't have an exit strategy.
When is it going to be that he's going to retire? Or when is it going to be that the son that's waiting on the sidelines is going to take over?
And the worst to me is communication. The family and the key stakeholders are uninformed. The heirs, the business partners, they don't know. It's unclear about what the future roles are, what the decision making authority. They don't know what to expect. And then of course, there's asset protection gaps that we've talked about.
There's going to be tax inefficiencies. And the most important is that there's no regular reviews. The plan has not been updated to reflect business growth or new investments, family changes, or evolving financial goals.
[00:16:55] Speaker A: So how often do you recommend or do you try to insist that your clients get together and review the plan?
[00:17:04] Speaker B: So it's going to be at least on a quarterly basis. Now some of those quarterly meetings could be shorter, could be longer, depending on what's going on. If it's just a question of review, it doesn't have to be that long. But if there's changes in those communications there that should be on, done at least on a quarterly basis. I used, when I was working for the hedge fund, we used to have a weekly meeting and everybody would share what they were doing and what was going on and what the goals were. Because especially in the hedge fund world, things changed.
[00:17:33] Speaker A: You know, just out of curiosity, what happens when there's a divorce and remarriage and new kids showing up in the, on the block, so to speak, that makes things seriously difficult, doesn't it?
[00:17:46] Speaker B: Of course. I mean, but all of that has to be addressed. You can't, you can't bury your head in the sand. You can't be afraid to, to, to answer the card questions and you, and sometimes some people may get their feelings hurt a little bit, but you know, that's, but you know what, you have that trade off between, you know, and that's the difficulty really between a family business is that you don't want to hurt people's feelings. You have to see them at night. But on the other hand, you know, they've got, you've got to be the mature and professional about it.
[00:18:16] Speaker A: Yeah, yeah. And when it comes to the you know, divorce and stuff like that.
It's not only the business owners marriage and divorce, but what if your successor is married and then gets divorced and then there's other kids. And I mean we see that all the time with people. And for some reason a lot of people are just afraid to deal with their own mortality. I guess that's so they, the conversation, which is unfortunate.
So, so, so David, when the family business attempts to implement new financial rules, which sounds complicated to me, what communication mistakes do you think typically trigger internal conflicts and resistance?
[00:19:01] Speaker B: Well, you know, especially for me, all my kids and myself, climbers, we don't like to be told what to do.
It's always going to be a problem. So now you're telling everybody in your organization what to do. So it's very important to explain the why behind it. You know, that's certain, that's, you know, the most critical. You can't just come DB and be like a, you know, be a dictator and say, okay, this is the way it is without explaining and having a discussion and allowing for input into what other people are, are into what other people can do. So you want to have some top down decision making. You probably remember like a few years ago it was a big deal like the Japanese decision style, they would have meetings for everyone to, to have their own input. I'm not suggesting that we go that far on it. That's like a, maybe a little bit extreme. But there has to be some input. People have to feel like they have some control over their destiny. So you have to take their, take their, their thoughts into consideration. But, and you should want that anyway because they're on the front line, some of them, and you want to hear about that and you want to make sure that your messaging is going to be not inconsistent. It's got to be consistent messaging. You don't want to have one family member says something and the other family member says something else. And of course the problem is lack of transparency. You know, you want to be as transparent, not everything, but you want to be as transparent as you, as you can.
You would try. You want to not mix personal and business issues. That's always going to be a problem. That's always that We've talked about going to bring in some of the emotional family dynamic, especially if it's a second marriage, other kids, and of course ignoring the different levels of financial literacy. If a person is not qualified to be in a position, it shouldn't really be there. And then of course you don't want to implement change too Quickly, people have to get used to it. And again, the last, you don't want to. Don't avoid the difficult conversations.
[00:20:54] Speaker A: Good points, good points.
So how do we shift an organization's mindset so capital protection is treated as a daily operational habit rather than an annual compliance check? Because I hardly ever see that happening.
[00:21:09] Speaker B: Yeah, it's a tough one, but again, it's got to come from the top. If the leaders aren't doing it, nobody else is going to do it. So if the people that, that are in middle management or below the top, they see that you're doing it, they're gonna, they're going to want to do it as well. And you want to make that. You integrate it financial accountability into the daily operations. But again, I wouldn't say do everything at once because if you do too much, nothing's going to happen. You want to bring it in gradually so people can get used to it and they're not overwhelmed, like, oh, I did this for 10 years and now you're changing everything about it.
You know, I don't know what I'm doing. So you let them get used to it over time. Maybe you have a rollout over a six month period. And of course, you know, the major thing to me is always the reward.
You want to have indicators that watch how people are doing it and perhaps reward them on how fast they're able to integrate the new systems into what they're doing some way like that.
[00:22:07] Speaker A: So your world is a complicated world, isn't it?
[00:22:09] Speaker B: It's very complicated.
[00:22:12] Speaker A: All right.
[00:22:12] Speaker B: That's what makes it fun.
[00:22:14] Speaker A: Is that what we call it now? Fun? Okay, good for you.
All right, so before we go to break. When you reduce structural friction in your planning, you create more financial confidence and stability.
And this is what this is David's world.
Strong revenue engines need transparency, discipline and trust.
Stay right where you are. When we return, we will discuss how to lead a complex business turn or expansion without creating unnecessary internal panic. We'll be right back.
We'll be right back with more insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
You're watching Business Forward. Today I am joined by financial Strategy authority David Kleiman as we explore the methods leaders need to guide high stakes corporate transformation with clarity and confidence.
In my years advising enterprises, I have seen that the greatest risk of asset erosion often appears during Periods of operational transition.
Whether a company is adjusting service delivery pipelines, integrating automated tools, or executing a broader restructuring, change requires disciplined execution.
If leaders do not clearly communicate the timeline, the expectations and the financial benchmarks of a shift, the organization can quickly fall into delays and confusion.
So David, how do seasoned executives build operational resilience so their teams can navigate structural change without losing momentum or revenue performance?
[00:24:07] Speaker B: I mean, so obviously it's very important that any kind of changes is implemented correctly.
And you know, some of the areas that will, it will stall is not ne, it's never because of insufficient capital, but because of misalignment. Misalignment, alignment between strategy execution and organizational behavior.
So again, it's going to be strategic misalignance at the leadership level. Everything's got to start at the top, you know, and it's got to be a clear definition of what that's going to, what the new goals are going to be, what the new systems are going to be. Because nobody, nobody wants to change.
Everybody wants to come to work, do what they want to do and go home. So you're going to get a lot of middle management resistance. So that's why it's important that you don't overwhelm them, but do it on a day to day basis. Because there's always going to be that lack of the buy in that's going to, that's going to slow or dilute your initiatives.
And again, you have to make sure there's an incentive. There's no incentive misalignment, but I was suggesting before is that you do some kind of reward to terms of how you're in terms of how you're implementing the new objectives and how you're implementing the new systems. And so that's why you want to make sure that there's a, that there's a clear translation from the strategy to execution. What does it mean? Okay, I want to grow by 20%. How is that going to happen? What are the jobs of each person going to do and how are you going to fight against the cultural inertia again that just people like to do what they've done, they want to continue with what they, what, what they've been doing.
How are they going to, how they, how are you going to get them out of that rut that they're in? So I heard an interesting conversation the other day. That 3M has been around 127 years and they're always coming up with new products and how are they, how have they survived all this time? So one of the one of the ideas is that they, that is that each department gets a bonus at the end of the quarter or the year. Whatever.
30% of their bonus has to be on the product that they've introduced within the last four years. So everyone has that incentive to work towards coming up with new ideas, implementing them and following through to make sure that they're done right, that there's no communication gaps, there's no resource fragmentation. And of course, the accountability systems are not lacking.
[00:26:32] Speaker A: That's important.
Yeah, very nice. Good information. So our viewers keep your business strategies robust and adaptable to changing global markets, download the Free Now Media TV mobile app on iOS or Android, and access our premier bilingual corporate content anywhere, anytime.
So, David, why do so many highly funded corporate growth plan stall during implementation because of misaligned management or internal resistance? It's not just about funding and having the money available. There's more to the problem than that.
[00:27:08] Speaker B: Well, again, because there is not. They have to listen. You know, one of the major reasons to be able to implement something correctly is to, is to reestablish that single shared understanding of a reality.
Before trying to fix anything operational, you have to start at the top and have that, that direct listing with key stakeholders. You want to know what is going on there. You want to identify any divergence by divergence what they think is happening. The leadership could think, oh, this is the problem. But the people on the front lines, they know that it's not. They know that it's a different issue. And that's why you want to make sure that you have, on the surface, the informal narrative, the water cooler version. And in order to make sure that you're doing it correctly, that you're not having any of these alignment gaps that can be visible, that can torpedo any fantastic ideas that leadership can come up with.
So again, if you can't realign execution until you first realign perception.
[00:28:13] Speaker A: Okay, great information. So, David, what is the immediate first step that an executive must take to realign an operation that has suffered from poor communication during a past transition, which I assume is very common.
[00:28:26] Speaker B: Very common, of course. So again, this the first step with any type that we've mentioned, the listing. What does that mean? It means it's a purpose audit, not a process audit, but a purpose audit. And you want to list each financial process and identify its original purpose so that you can control risk. You want to ensure compliance, support reporting accuracy, manage cash flow visibility, and prevent fraud or error, fraud or error. And then ask the second question, is that risk still present and at what scale today? That's always going to be the first. So do your purpose audit, make sure that you're, that you're looking at everything correctly. And then you want to classify the processes that you already have into three buckets.
You want to divide them into preserve. So you want to, you don't want to, you don't want to throw out everything.
Some of your processes have been working for many years because they work, because they're, because they're effective and efficient and they're doing the right thing. But you have to identify which processes in your systems are those.
Do you know which ones they are? Do you know which ones are being, being effective? So that's a critical area, very critical. And then of course you want to evolve, you want to modernize, use the, you have a lot of AI now is the biggest thing you have. You know, you want to be able to use that, implement that. How do you want to use that? Some people overused it, in my opinion. But you want to also modernize and evolve and then again eliminate those processes that just exist due to habit or outdated systems or duplicated controls that no longer reduce meaningful risk and then each evaluate each process through that scaling lens. What worked when he was a $10 million company does not work again when he's a hundred million dollar company. We know that that does not do the same. And you want to make sure that you don't have that slow decision making process now that you're a larger company, you have a lot of that bureaucracy. And again you want to separate control from implementation. And a lot of times that there's that common failure of confusing those two. But a healthy system will preserve your control objectives and have manual steps that were only proxies for control and older systems. So those ones are the ones that you want to eliminate and then test test your elimination safely. Maybe you do both systems for a little while before you do the permanent removal, making sure that it's working and then again align their decisions with the future state architecture.
If you were designing the company today at a 10 time scale, would we invent this process? If the answer is yes, then preserve. If the answer is no, then you have to strongly consider elimination.
The bottom line is that financial processes for heritage should not be preserved because they are familiar and that because somebody, oh, I've done it for 20 years, so why do I need to change?
They should only survive if they still protect your capital, improve your decision quality or scale efficiently under your future growth conditions. Everything else is either modernization work or structural drag.
[00:31:39] Speaker A: All right. Okay.
So how should a leadership team determine which heritage financial processes must be preserved and which must be eliminated to facilitate future scaling?
[00:31:52] Speaker B: You have to listen to those that are on the front line that are doing it. That's your, that's going to be your audit, your process audit that, speak to those people. Those are the people that are, that are doing it.
Everybody knows what they're frustrated with. Everybody knows, you know, the middle management, they know what, they know what, what frustrates them on a daily basis. What's not working and what is working. They're there, they know what it is. Listen to them. Not, we're not looking. It's not going to just be like a critical free for all where everybody. But we want constructive, constructive criticism is not a chance just to vent in frustration. And I hate this guy. I hate that guy. No, we're looking for construction constructive suggestions on how to improve. And we're going. And to also realize that we're going to, we're going to, we're listening, that the upper management is listening and going to implement if we can.
[00:32:44] Speaker A: That's smart. Yeah, that's, that's very smart. And I think you know it. All right, all right, great.
Before we take our next break, strategic change should be a disciplined process, not a rushed reaction to industry pressure to protect corporate wealth. Leaders must know when to preserve what works and when to replace outdated habits with modern agile solutions.
Stay tuned. Our final segment on building a self sustaining business model is coming up next.
We'll be right back with more insights, tools and real talk to help you grow your business.
This is Business Forward on NOW Media Television.
And we're back. I'm Joe Reyes and you're watching Business Forward on NOW Media Television. Let's get back into it.
Hey, welcome back to the final segment of Business Forward.
I'm here with wealth strategist David Kleiman. Today we have mapped out a practical guide for modern enterprise optimization.
We have examined the cost of transactional planning, discussed how transparent family communication can reduce risk, and explored how leaders can guide major organizational pivots with trust and clarity.
Now we turn to the ultimate objective.
Building an enduring corporate engine that can generate value over the next decade and beyond.
To secure a true legacy, your revenue models, asset allocations and long term goals must work together as one coordinated system.
David, let's close by mapping out the maintenance habits that keep that help keep a business strong, adaptable and future ready.
So to our viewers, ensure your organization remains positioned for sustainable market dominance. Follow our global network across all major platforms at NOW Media TV and share these insights with an executive or business owner ready to transform their operations today. And of course, reach out to David Kleiman. So, David, what are the common management oversights that cause an organization to slowly slip back into old inefficient habits after a major financial transformation?
[00:35:01] Speaker B: Right. So that's always a frustrating act.
The company has spent a lot of time and effort and money to come up with new strategies and new processes. And then a year later they're coming back and they're saying, what? What happened? We already fixed this and why are we back where we were?
So one of the reasons is, is because they treated the. And again, it's all from leadership. It's got to come from leadership. They treated trans the transformation as a project instead of a system. They didn't embed it and we talked about before into the daily routines, decision rights and reporting rhythms.
So the organization will revert naturally back to what they feel easier. As you know, when businesses is pressured and there's a lot going on, you're going to go back to what you know and what you're familiar so you don't make a mistake, you know, so that's why I suggested you implement it on a rollout basis. Not all at once, but you do it a little bit at a time as people can buy into it.
There's no enforcement of the new default behavior when old habits return, when the new way is optional in practice, but the managers will still allow, let's say, those legacy spreadsheets instead of new systems or informal approvals instead of the formal workflows or exceptions that become routine, the old system quietly regains control again because of that. Just that natural way to go. And again, what we talked about before, the incentives reward the old behavior. You know, people are afraid to make a mistake. They don't want to come back and say, oh, you made a mistake on that. So they're going to go back to what they know. So you have to incentivize that. You know, if they are using the new system, somehow you've got to optimize and, and bonus that and promotions are going to be tied to that.
And again, the last, most important is the leadership has to use the new system. If the leadership stops visibly using the new system, then what do you expect from it? What are you going to expect from everybody else?
You know, and then there's the weak middle management reinforcement. So again, the middle managers are your frontline guys. Those are the one that have to actually have to do but if there's, if there's unclarity, if there's no clarity on expectations or they're not trained properly in the new system, or they're overloaded with dual systems, they're just going to, again, they're going to dev out, they're going to default back to their familiar systems. And again, if it's over complex, if the new financial processes are slower than the old ones or harder to understand or overly bureaucratic, then that's not that that wasn't a successful implementation.
And of course there's going to be the lack of ongoing measurement against transformation goals. You know, people want to see how the new systems are doing better than what they had before and how it helps that people always want help in their job. They want to do things better, but you got to show them how it's going to be. So again, you've got to have also that no drift correction mechanism. There's got to be periodic audits, refresh training, then process owners accountable for adherence.
Because what happens is small exceptions will accumulate into a systematic regression.
And again, culture, the cultural memory wasn't overwritten.
You didn't reinforce or leadership didn't enforce. Why did we moved from the old system at all? What risk did the old system create? And what can success look now with our new system?
That wasn't done. So bottom line, financial transformation fails long term, not an implementation, but at maintenance.
[00:38:27] Speaker A: Sounds like you got to have good people skills to run a company, doesn't it?
[00:38:31] Speaker B: Absolutely. You know that.
[00:38:32] Speaker A: Sure, of course. Yeah.
So for corporate directors and business partners watching us right now, what does it truly mean to design a company that can thrive independently of its founders?
Right.
[00:38:47] Speaker B: So I always have the big test, like what would happen if the founder disappeared for 90 days?
Does the company, will the company behave in the same, in the same way? And that's going to depend on if there's documented decision frameworks, there's repeatable operating processes, clear financial controls, and there's institutional memory, not individual memory. It's not all in the, in the, in the founder or the leader's head, everything is, is, is documented and processed so that again, if the founder disappeared for 90 days, what would happen?
[00:39:22] Speaker A: Yeah. So that's how you know you have a business and not a job.
[00:39:25] Speaker B: Correct.
[00:39:27] Speaker A: Right. Yeah, very cool. And so as we look at the next decade of corporate execution, what specific capability will separate highly profitable organizations from stagnant enterprises? What separates them, do you think?
[00:39:44] Speaker B: Again, it's going to be those companies, like I said, like by 3M that's a good example. 127 years. It's pretty good. You know how the question is, how. What is the identity of the company? You know, when the company was small and building, the identity and the founder were the same. That was it. But now that it's grown into a. Its own entity, its own, its own phenomenon, it has to keep that identity even when the leadership changes. What is it now? How do you define. How do they define themselves? As. As a, as a company.
So if the company is only working because of specific people, as you said, Joe, it's not a company yet. It's just a dependency structure. But the real design challenge is converting that dependency into an operating system that can outlive its creator, scale beyond intuition, and remain stable under leadership changes. And as we look at the next decade of corporate execution, that specifically capability will separate highly profitable organizations from stagnant enterprises.
[00:40:48] Speaker A: So it sounds to me like what you're doing, even though you're a wealth management and wealth planning company, correct? Yeah, that's basically the, the title. But it sounds like you do much more than that here to tell us a little bit about how you see things at your firm, how you know, how many people you have working with you and do you have to be licensed and all kinds of stuff that you may want to share with us and our viewership about your business. I know it's not just about wealth planning. It's about people and lives. At the end of the day, to
[00:41:20] Speaker B: us, it's all about people. It's all about relationships. That's the most important. I mean, we really have two sides on the same coin. We have the business aspect of it that we've talked about today and how we could help businesses develop succession plans, but we also apply those same principles to individuals.
And like, just in terms of financial literacy that exists in, in, in. In the society is really very, very low. I mean, I'm sure you see it all the time.
So for our. Our own goal also is to bring financial literacy not just to corporations, but on an individual basis as well. And we do that because we start off as a value proposition. So what we do is we have, we do, we figure out what the values are, and we do that for the companies as well as individuals. We have a little card game that we play with individuals. It's a deck of 52 cards with 52 values, and we want to come up with their top five values. So what's that going to be? Maybe it's retirement. Maybe it's going to be Adventure, maybe it's legacy and it really, it applies the same on the corporate side. But now it's, it's a, it's an exercise that we find that most individuals have never done. Once we've done that, then what we're going to do is make sure goals are aligned with values. Then we'll do our financial fact find we're going to get to pretty in deep and where they are financially. And again, it's the same on the corporate side. You know, it works both on, on either side and then we'll come back, make whatever recommendations that we think are important. We've got about 15 people. As I said, my son started the company about 10 years ago. I was working for a hedge fund at the time. He was brought in by the lead estate planning specialist at Merrill lynch. Got on his own and he asked me to leave the company, the hedge fund and come and join him.
And we've just built the practice over time and it's all really about relationships and trust and you know, like people don't know who to believe. You know, when, when I was at the hedge fund we bought, we bought corporate bankruptcy claims. One of them was a big one was Madoff. So Madoff was a big, you know, as a, you know, it was a disaster really for, in the, in the way people saw things after that. You know, nobody knew who, who to trust, who to believe on a corporate side or on a personal side. You don't want to end up at another Madoff. Those people that were at made off, they thought that they had hit the, you know, the pot of gold at the end of the rainbow. And then they found out that there was no rainbow and no pot of gold left. Not even the gold that they put in was left. Sometimes they got some money that got some monies out, but you know, that's what we fight against. And again, it's a financial literacy and we've talked about it on the corporate side and we talk about it on the personal side.
[00:43:59] Speaker A: Very nice. Thanks for meeting with us, David. This has been a clear and I think valuable conversation.
Your expertise in asset protection, generational wealth planning and proactive strategy gives our audience a potential framework to, for strengthening their organizations and protecting what they are building. Thank you for sharing your insights with us today.
And to every executive and entrepreneur and business leader watching right now, I leave you with this challenge. The value of your enterprise will never rise above the strength of its operational and financial foundations.
Do not let short term market pressure keep you stuck in reactionary management or exposed to unnecessary risks. Step back. Build disciplined systems. Invest in financial literacy. And design a company that reflects your strategic vision and supports your family's future.
Build a corporate legacy that stands the test of time. I'm your host, Joe Rayes, and I will see you next time on Business Forward. Thank you for watching.
