Family Business Audiocast | Episode 39 | Bill Stranberg

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About Our Guest:

Bill Stranberg specializes in helping families and founders across diverse industries recruit and integrate top executive talent. With a strong track record leading searches for multigenerational and founder-led businesses, he focuses on aligning talent strategy with ownership goals and building systems to support newly hired leaders. Bill’s expertise spans sectors like agriculture, automotive, industrial manufacturing, real estate, and media, working with companies ranging from millions to multi-billion in assets. Featured on podcasts like Secret Thoughts of CEO and The Family Business Podcast, he’s known for his relatable speaking style and actionable insights.

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[Transcript]

R. Adam Smith: [Intro] Welcome to the Family Business Audiocast on LinkedIn. I am R. Adam Smith, creator of this Audiocast series. As an entrepreneur, investor, founder, investment banker, and board leader the last 25 years, I'm fortunate for my many experiences within the family firm industry.

A warm thank you to our live audience on LinkedIn today—and for those listening in the future. A brief comment on why I created this broadcast. Private companies are a passion of mine having grown up in a family of entrepreneurs and having engaged for two decades in deals, strategic transformations, investments, and boards with an array of fascinating family enterprises, family firms, and family offices. I founded this series to offer a useful platform for listeners to hear from veterans, academics, and leaders in the vast family firm ecosystem. Whether you're a family business owner, building, running, or advising a family office, or just expanding your me office activities. I hope these conversations are useful and enlightening. Now it's time to turn our attention to our accomplished guests on today's episode.

[1:00] I'm really pleased today to host Bill Stranberg, a managing partner at Stranberg, his firm. Bill, great to have you today.

Bill Stranberg: Thank you, Adam. It's great to be here.

R. Adam Smith: So, we're here today. What are you working on and tell us a little bit about your firm first?

Bill Stranberg: Sure. So, we are a second-generation family operated company and we were founded by my father and mother in 1989. So, I think, our humble origins as a family office and family under ourselves really have informed how we work with families and look at the family office or family enterprise sphere as a whole. When my father started a company, there wasn't this big vision of family enterprise and succession, or whether or not my sister Kate and I would join the company. It was a vision very consistent with any entrepreneur, yet Jim, my father had young kids at home and the vision was put food on the table, take care of the family. And well, families of wealth that have [2:00] established family offices, perhaps putting food on the table isn't necessarily the mission anymore. They've probably already cleared that hurdle pretty significantly, but taking care of the family is still the central mission. And understanding what that means, it really drives our work. Our clients range, when we think about the family office space, I'd like to do a little bit of disambiguation here as we start.

As a firm, we service three types of family entities. One would be a family operated company. In a family operated company, you have the principles of an operating business: our family, sometimes brothers, sometimes a founder and the founder's children, husbands and wives. Sometimes you have two families, two entrepreneurs say that started a business and then their kids took it over. And so you've got the second gen is the progeny of one founder and another founder working together. But the central point of a family operated company is that the family owns the business and is making [3:00] the operational decisions of the organization. And there is no real wealth management strategy outside of thinking about the distributions and shares and profitability of the company.

Moving along the chain, we also work with family governed companies, where you're still looking at the primary source of wealth that the family is managing, being generated by an operating business. But in this context instead of the family owning and working in the business, they have chosen to sever and create a difference between ownership and operations. And in this case, the family has a board of directors. They're oftentimes sitting on the board with independent directors overseeing the management of the organization while not working directly in it. And the third bucket would be a family office. And a family office is mostly operating in the wealth generation space, oftentimes family offices own the operating companies that kickstarted the family's wealth, but they, in many cases, distributed their investments through the fingers and a lot more pies, but what's centrally driving [4:00] the family office is still the care for the family and what the family needs out of their organization going forward. Does that make sense?

R. Adam Smith: Yes. Yes. That's great. That's a great opening. Let's go back into you and talk about your bio for a bit and I would like to also chat a bit about culture and legacy with you as we go through the conversation. So a bit on Bill, as he mentioned, he is a second generation leader and he runs his firm, Stranberg, focused on human capital, and culture, and recruiting, and other governance and corporate development matters. I think back to 1989, is that right?

Bill Stranberg: That's when we started, yep.

R. Adam Smith: Okay. So Bill is dedicated to assisting families and founders in a diverse range of industries and focusing on exceptional executives. And he has a proven track record of this and successfully leading assignments with both [5:00] multi-generational and founder-led businesses throughout the US, and really has a primary focus on helping families establish that system to effectively manage and enable and empower new talent at the C-suite and senior level, and then building those teams out and allowing their needs in the talent spectrum. Bill has expertise in advising family on companies on talent strategy and often deals with fairly complex dynamics inherent in these operational models that we are talking about. Bill has been featured by numerous family business centers and podcasts including this one and is known by listeners for his engaging, relatable speaking style that is easy to take away and learn from, and I'm really grateful to have you here today. So, let's to do a couple of points here.

First of all, as a second generation leader who has transitioned into the helm of your own family business, love to have you [6:00] share some insights on managing that delicate balance between the original family legacy and kind of carrying it forward and making some strategic decisions along the way.

Bill Stranberg: Yeah, it's a great question. And coming in, I joined my family's company in 2013. And prior to that, I was an entrepreneur in East Asia, moved away from the States and tried to hang out a shingle in a foreign country and met a lot of success. And I ultimately came back and my dad was still running the company. He was in the 60s and was trying to figure out what his future is. And I didn't necessarily want to join the company at that time. I was, I didn't really want to, just be frank about it, Adam. I didn't really like the idea of coming home from abroad and being tucked under my father's wing. Oftentimes, when advisors to families or consultants that advise family businesses but don't really understand the space, you'll hear phrases like the silver spoon, [7:00] or one that's a bit more crass, but I think it really hits the point where you didn't really have to work hard, your family just gave you your opportunities. And that left a sour taste in my mouth and I would not be surprised if any other second gen like myself, be it in a small family company or a very large one, would bristle at a person reflecting on their own journey as something that's just a matter of luck, a piece of fruit falling from a lucky tree, so to speak. That was really in my mind when I was coming into the business. I had a really hard time wrestling with that.

And what that meant for me is coming into my journey in my family business is I had to stake my own, I guess put my own thumbprint, would be the way I would want to say this, that the growth of this business was about me also, not just being coddled by my parents. And I'm going to bring that today, bringing it forward; that was my central challenge with my family as I came through to take over the role as managing [8:00] director at this business and what I would really grind on having reflected going through that journey is that I had a lot of conflict with my father and with my sister and I had doubts from my mother about my capacity to come in and really run the company because I was very focused on my own journey, not the journey of my family.

And so the lesson that I had to learn and really grind home here is that I wasn't an entrepreneur anymore, I was the principal of a family company. And when you think of a family business and the way I look and think about my clients, and it's a mistake that I think a lot of people miss is there's a kind of a concrete definition, Adam, of what shareholder value means. And that tends to be the value of the stock price or the value of the distributions or the profitability of the company. And while that's true, the shareholder value is a much broader concept and much more opaque in family enterprise. In the context of my family, shareholder value is also participating in the business and having the story of my father and [9:00] his blood, sweat, and tears running the company still maintaining value and having a place and that my sister had a voice. And so the business decision that we needed to make, where I had to grow, is that I was being selfish. And in order to really thrive as a family business, I needed to find ways that we could evolve the business and each person in my family had a way to participate in it that leveraged their skill sets, and honored their position in the family, so that we could all work harmoniously together.

R. Adam Smith: And you're clearly seeing this in your clients because the family offices are getting larger, more complex, multi -generational and your primary mission really as an elite talent mentor, and advisor, and deal maker essentially is like the human capital side is to make sure that they have the talent working that's internal [10:00] versus external? Why don't we move into this topic briefly of external talent? How difficult is it to find really serious talent for mid to large sized family offices from the outside, let's say in the leadership role as opposed to the investing role? A lot of people are asking about that the last year or two.

Bill Stranberg: It's a good question. Finding talent in 2025 is easy, but that's misleading. The problem in 2025 is that the executive search and talent discovery is a needle and haystack game. And in the traditional world of executive search, you had people running around networking in private rooms and cafes, building a proprietary network of people that the search consultant had a relationship with. That model, you'll still hear search firms selling their proprietary network. They know all of the [11:00] wealth managers in New York or Chicago or LA, and they can connect you with all of the right people. I would suggest to you and to your listeners that that value proposition is a lie. And the reason is, everyone's data is brokered and everyone is imminently discoverable. You can apply to jobs at a click. The reality of executive search for large companies, for small companies, and anything in between is not how you find people, but how you filter them, how you get down to what truly qualified folks are. You can find, today, great talent that on paper will say: This person has all of the skills and qualifications that a family needs. And if you were to bring them in based off of their qualifications alone, the risk of that higher failing is positively high. And the reason is you need to consider how the family [12:00] operates their company and what the mission and vision of the family is, and how that role serves the vision, and how the candidate understands that vision and mission.

R. Adam Smith: Let's talk a bit about that and culture. So obviously this having covered hundreds of families and working closely with single family of now, I can see the challenge in this, this sourcing and matching of, of high level talent within a family enterprise, on the talent side alone, but then there's the culture and the fit. It's great to have experts like you, you know, talking about this because the culture is super particular and super important and requires an assessment of it, you know, early on, right, and then trying to find a way for that to fit and then having a success rate and making everyone happy over, hopefully over years. [13:00] Can you talk about that assessment process and how you look at values and then kind of matching that to try to achieve success on the senior hires?

Bill Stranberg: Sure. So when we think about assessment before speaking about assessing a candidate in order to suggest we do that, we need to assess the family first and what is driving the need for talent change in the first place. And to highlight what I mean by this, I'll give you two quick examples. We worked with a family that was in real estate in the New Jersey area two years ago. And we had in here a second gen family leader who was running a significant component of the business and there's a family board above this second gen and the second gen for perspective here is about 65 years old and the second [14:00] gen is agreed because of the broader family that we needed to work on a succession plan and there wasn't internal candidates so we went out to recruit for this person. And the central challenge was that when you really dove into it, this G2 member had agreed to succession by acquiescing to family requests. But the reality of this G2 is he had felt that he hadn't lived up to the legacy of his father. He didn't want to retire. So in his heart of hearts, Adam, what he was feeling was that he was giving in to requests from his family because of good governance. But his own personal vision for himself and his own personal mission as a leader of this company had not been fulfilled. And the way this manifested was a kind of trigger word for risk in my field, which is when you have an operating family principle use the phrase: I plan to die at my desk.

And so [15:00] what I would reflect to you is if you're working on a succession plan for an individual who's going to die at their desk, you're doomed to fail because the successor needs to give up that space in order for a new person to thrive. So if you don't go in and understand what is driving the family to make those decisions and understand what it means for the individuals and how that decision is going to impact them, no matter how strong your talent is from the outside, they're never going to succeed if the family doesn't give them the space and capacity to thrive.

R. Adam Smith: That's good. Also, something you brought up makes me think about how long it takes for this matching and for the conversations and for the hiring process, and what are those steps and who's involved, hiring a CEO, president, and CIO, even a simple board member. There's often a sense of urgency in these hires and building the human capital [16:00] equation out because things are changing quickly for some of the family offices, family enterprises, particularly if they're forming, let's say, funds or an alternative investment platform, or if they're buying a company, or merging into an MFO.

Just a little bit more in that process. If you were like, how, what, what's the timeframe for these senior hires and like who, who's involved in the ultimate decision making process briefly? And I'll go into some other questions.

Bill Stranberg: For the senior hires, the question is ultimately who's involved is the family principles that we strongly encourage that the next gen and folks that will perhaps be future principals have visibility into the process and that they the next gen's feel that they have a voice, not necessarily a vote, but a voice that is heard by the selection committee and the people that are conducting the search. We look to [17:00] get a broad view of perspectives from people outside the family principles as well. This would typically include the other executives in the office about what the true strategy looks like. And then before going out, we draft a consensus document. It says this is what we've learned, this is what we've heard, and that this is the goal that we're going to go try to kick a ball through. And then what’s important, there's these types of things, you would be surprised if I were to tell you that sometimes the goal posts shift. And you have, if you build about alignment and alignment varies from family to family. Some families have it all figured out, [18:00] right? Everyone's all on the same page and they're ready to go. We test that readiness and a week or two later, we're ready to go.

Other families have a lot of conflict and disagreement or dissent. And families can get communication patterns where people don't speak their personal truths. And there's, perhaps, an internal family member who hopes to be selected but is remiss to say it because they're intimidated by the seniors in their family. Those types of things need to be fared it out because that silent or held-back opinion or perspective is immensely powerful and the weakest person in a family office is the newly hired executive. And so we need to take time on the front end with that alignment process to make sure that each person has space to communicate their perspectives in a fair and confidential manner. And so that process can take more time on a case-by-case basis. Once there's alignment, [19:00] running a search is fairly straightforward. And it's typically speaking about three to six months. Once you have alignment with the principles and broader group around them.

R. Adam Smith: Yeah, that makes sense. That's what I'm familiar with as well in my own experiences and looking to hire people and friends in the business, so that's helpful. As a side note, I think that given the power of LinkedIn, both for myself and in general, to all those listening and aspiring to grow or move into the family enterprise space. It can be a board, it can be a company, it can be an investment role. There is no alternative to LinkedIn. And I think it's super important to keep a profile in general, but if you do keep a profile, try to keep it as up to date and accurate and thoughtful and clear as possible with a sense [20:00] of detail, but also a sense of modesty. It's really like a living resume. I hope you agree with that.

Bill Stranberg: I absolutely do.

R. Adam Smith: Yeah, I just finished my 21st year on LinkedIn, so I'm constantly paying attention to it and have built a large following. And the spaces that we're talking about is also getting more digital, but of course, not completely. There's a lot behind the scenes, which is more of a personal skill and gets into the access and trust and knowing who to call right is one of the key skills of what Stranberg does. So you've seen these challenges of continuity first hand for many years. What are some of the pressing issues you see that family offices and bigger family businesses are facing in continuity? Let's just focus on the operating company as opposed to the family office. [21:00] I'd love to hear your thoughts on that. We talked about this topic often on the podcast about the operating company and continuity and transition and succession and What's the leadership solution as the G1 gets older or less interested or wants to monetize? So let's talk a bit about continuity in terms of the hiring process, especially externally.

Bill Stranberg: Sure, sure. It's a good question. The short succinct answer is the biggest challenge is power and the transition of power and authority to other people, particularly people who were strangers three or six months ago. What drives this is that in most cases, family companies have fantastic employment records. Where you're dealing with executive transitions, say in a PE portfolio company, you might see CEO turnovers [22:00] every five to 10, sorry, two to five years. In a family company, you are being executive transitions more often in the two, three, sometimes four decades without a transfer of power and authority. And that means that the processes are atrophied and the organization is entrenched with a certain type of leadership and management style. And the mistake that these organizations can make is, well, let's just go hire a new person. If you don't consider the entrenchment of current leadership and how the organization works with those current leaders as a part of the transition process and what environment a new leader is going to come into, you're going to find that they are met with all sorts of challenges and the likelihood of a failed hire is extremely high.

There's two central reasons that I would kind of bring into this is a classic trait of people in power. If they, in this case, [23:00] power is the decisions over the business itself, have a hard time letting go of decisions. And you'll find in operating companies where what will happen is a family CEO will retire to the chairman board, sorry, the chairman of the board and they want to recruit a new CEO into the business, but they will also want to keep all decision authority at the board level, and that won't work. That feels good to the principal because they have assurance that the right decisions in their eyes will be made, but go find a CEO that runs a $100 million business, they are expecting a vast, much more autonomy than that family principal is willing to give them. So they're either going to hire or they need, or they're going to be hiring a lower level position than that.

And the second issue is that long employment record isn't just in the C-suite. You have multiple people from the middle management up in the organization that will [24:00] have been employed by the family for 10, 15, or 20 years. And they see a change in leadership coming and they're terrified. What is this new leader going to do? They're going to be a new sheriff in town in town and fire everyone. I trust the old person running the company. This new person makes me scared. And you'll find circumstances where employees will not a union, per se, will form a coalition against new leadership and threaten to quit unless the family goes back and does things a different way. And there's vast challenges that can come from that that can be navigated, but if they are assumed to not be issues and you just plot ahead with making leadership succession without considering the challenges that face the principles in transition as well as the challenges that face the employee base of the company in transition. You might be fine, but it's kind of like driving your whole life without a seat belt. You get an accident, it's going to hurt a lot more.

R. Adam Smith: Okay, that's good. That's a good analogy. I like that. [25:00] And I guess what I'm thinking is I've just been hearing about the increasing focus on especially the last five years of enhanced governance. More independent, more external voice, more advisory boards, more external CEOs, and that's great. I think it's an important dynamic to bring expertise from outside. But it's still pretty hard, right? It's not an easy process for any of these families. And I think, you know, top executive recruiters like yourself, and there's, you know, there's Cornfairy, and there's Mac, and there's a small ecosystem of experts. I think it's important, but also I would encourage the families as I was mentioning to stay super connected on LinkedIn for their own purposes, right? [26:00] To follow groups, to be in touch with people, to follow their progress, to stay in touch and to network proactively because that attention to the hire, to the external person coming in is also a dance over time. So I do encourage the family, the clients really to be proactive.

So we're going to wrap up soon. I would like some observations or thoughts from you of some of the larger family enterprises or businesses out there that you admire, perhaps with one or two or three that you've observed over the years that really focus on culture and hiring great people and maybe the balance of the family versus external talent. Maybe a couple examples or one that really inspires you.

Bill Stranberg: Hmm. That's a good question. Every family that we work with.

R. Adam Smith: I mean more in the world, [27:00] not your clients.

Bill Stranberg: And not my clients. Oh, the world in general. Okay. that broadens it more significantly.

R. Adam Smith: Yeah, who inspires you out there in terms of human capital and talent and culture?

Bill Stranberg: The folks who inspire me are those that are capable of understanding themselves and why they are in a family business in the first place and how they fit into a mission, vision, and picture that is bigger than themselves. That the mission of their family enterprise is in service of the family and the broader community around them. And they don't lose sight of that in picture of whatever growth or strategy that they have. Being in a family business is hard and it's worth it, Adam. People love working with their families and family businesses are beloved by their communities. But when you're in a family company, the family and the business will come into conflict at a certain point and the family business needs to be able to navigate those [28:00] circumstances. When looking at that from human capital, the team that works with the family understands that this is bigger than just a business and we're concerned with more than EBIT and profit and revenue. We are concerned about maintaining the vision of serving the family and the community around them by keeping sight that you are a family and a business. You maintain harmony and make sure that the family has space to thrive and the business has space to thrive. By keeping the balance between those two perspectives, family companies can grow and they're a joy to work with as in a third party but also more importantly, as that long -term valued employee.

R. Adam Smith: Definitely, I mean, there's, there are so many large private companies out there in the world. The last podcast I was speaking about the size of the family business market in the world with Emanuela Rondi, and Bridget as well, and previously [29:00] with Alfredo Massis in terms of the size of the family business in the world is massive and I think underappreciated; 60, 70, 80 percent of some of the economies is quite large. So the, you know, this attention to finding great people but also the right people and helping the families bring the right talent in to sustain the legacy is, I think, one of the most important elements of the industry particularly at this time when there's so much transition into G2 and next-gen and also those next gen's have just a very different lifestyle sometimes and different approaches to life and work. So in terms of people looking to reach you, how do they find you?

Bill Stranberg: Well, you've brought up LinkedIn and I am on and active on there as is my company, so you can look me up, I'll be happy to connect. Our [30:00] website is stranberg.com. You can reach me directly through there as well.

R. Adam Smith: Okay, that's great. I would like to thank you and I would like to thank the Family Business Audiocast attendees today. It's great to have you today, Bill, learn more about your business and your views on the market and human capital.

Bill Stranberg: Excellent, Adam, thank you for having me. It's been a pleasure.

R. Adam Smith: Thank you, my friend. Great to spend time with you today. This is R. Adam Smith signing off. Stay tuned for the next episode of the Family Business Audiocast, available live on LinkedIn, YouTube, and X.

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Explore the strategic intricacies of family business success with the RAS Family Business Audiocast. Join R. Adam Smith as he delves into exclusive discussions with global leaders shaping the future of private wealth and enterprise. Each episode offers a rare glimpse into the core decisions driving prosperity in high-stakes markets. Tune in to gain expert insights and innovative strategies that empower family businesses to thrive across generations.

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