Family Business Audiocast | Episode 12 | Phil Strassler | Strassler, LLC & Adriana Zaluka | MyFotech
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About Our Guests:
Phil Strassler is the founder of Strassler LLC and a seasoned finance professional with a focus on family office management and alternative investments. His extensive experience includes leadership roles at Marcum and SJB Partners, emphasizing the importance of expertise in the finance sector. Over the decades, he has significantly contributed to the private wealth domain, facilitating the establishment of some of the largest single-family offices. Strassler is also dedicated to developing educational programs aimed at emerging leaders within the industry. His work highlights a commitment to enhancing the management of family wealth and fostering future talent.
Adriana Zaluka has 15 years of experience in family office management and specializes in technology both in North America and globally. Zaluka has spearheaded initiatives to enhance the family office ecosystem worldwide through strategic product launches, contract negotiations, project management, team management, event production, and research and content curation. Her contributions to academia include multiple publications in various academic journals. Additionally, she has a notable record in the 10k at the University of Akron.
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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 am 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, 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 are a family business owner, building, running or advising a family office, or expanding your family firm activities, I hope these conversations are useful and enlightening. And now, it is time to turn our attention to our accomplished guest on today’s episode….
[1:02] First let me introduce a bit about our guests Adriana, thank you for joining today. It’s nice to have you and Phil as well.
Phil Strassler is the founder of Strassler LLC. He's a seasoned finance professional specializing in family office management and alternate investments. His leadership roles at Marcum and SJB Partners over the years underscores that expertise is key. In private wealth and over decades, his contributions have created some of the largest single-family offices and developing educational programs for them and their emerging leaders.
Adriana Zaluka, founder of MyFotech, recently did an amazing event with Phil as well last week. She boasts 15 years in family office management, particularly in North America, but also globally specializing in technology. She's led initiatives across the world around the family office ecosystem. And she also holds a track record in the 10k at the University of Akron, which I'd like to point out as well. She's an academic contributor and has published papers as well on various academic journals.
Let's kick it off today. Phil, great to have you here. [00:02:00]
Phil Strassler: Great to be here today and see some friends on this call. So, it's very nice.
R. Adam Smith: Yeah. And Adriana too. Where are you today, Adriana?
Adriana Z.: Hi, Adam. Hi, everybody. It's nice to join you. I'm in Spain on the south coast of Spain and thank you for having me.
R. Adam Smith: For 25 to 30 minutes, we're going to focus on the family business but also look at it as an ecosystem. And also look at excellence across the operations and technology, and Talk a bit about MyFoTech and the businesses and platforms that both Adriana and Phil are in. They worked together over the years and are good friends together and, also of mine.
Why don't we start, with what talk about each of your paths getting into family business, family offices. Phil, why don't we start with you?
Phil Strassler: Sure. So, so I retired as a partner at a firm called Marcum in 2007. Before 2007, I spent most of my career [00:03:00] working with wealthy families and hedge funds, investment partnerships, and the businesses that they had founded.
So, I spent a lot of time, I would say, on just giving tax advice and being counsel to those companies. In 2007, when I retired just by fate, I wound up getting a fairly large assignment to move to the next direction, which was after you sold a business and grew a business. What do you do next? So I began working with single family offices on structure, and education how to go about making decisions. So it was a very easy transition. It's all about listening and applying lessons that I learned in the past.
R. Adam Smith: Thank you. Adriana. How about you?
Adriana Z.: So I fell into this, the business of wealth management and family office quite [00:04:00] unexpectedly, actually, I literally fell into it. So I was in London at the time not long after graduating from by my studies in Akron, Ohio, out of all places. Where I was a foreign student, a student athlete participating in three different varsity teams.
So, I was a little bit I guess burnt out not ready for the typical MBA graduate career of, going to a large corporation, doing long hours. And so, this opportunity came up in what became really, it was a young business that was a family business. And I took on a basic sales role, really. Even though I'm not really a sales person, but that was that was my beginning. And at the time I didn't know anything about wealth management or family office-- so quite a foreign landscape to me, but I honed in on the U.S. market, given my experience starting there and eventually [00:05:00] became a publisher of a U.S. focused family office publication.
R. Adam Smith: You did a great job there. I remember; I've been reading that for a long time. It's well, well done.
Phil—Okay so talk about some of your experiences. How does it help you understand the family dynamics-- like what goes on inside, around governance. Tell us a bit about those experiences and then how does that bring you into your independent role with your relationships today?
Phil Strassler: Thank you, Adam. So I think what was the trigger for my focus on family office dynamics, it was just the dynamics themselves. I was a board member of a wealth management bank called FieldPoint Private. And as a board member, for the first time, I was really involved in how decisions get made and how egos get in the way of making [00:06:00] really good decisions; how to be independent yet, how to listen. And I found that experience help me work with families to meet their strategic objectives. If a family wanted to stay together, I would be able to be a very good mediator, sit down at the table, listen to both of them, or all of them and reach some decisions together. It's never about imposing your will. It's about listening and trying to get to the underlying truth. So my assignments have all been with families that want to stay together but really don’t know how to do it.
R. Adam Smith: Right. The truth can come in various ways, right? It can be something that's discovered internally within an organization, or brought externally in terms of education and at the board, right?
Phil Strassler: That's absolutely true. The truth is true. [00:07:00] So I would say that, Again, knowing when to start a conversation, stop a conversation, be confident where you can be trusted.?
I think it's all about trust and also being able to understand where decisions will lead based on my experience and trying to share that experience and explain to them, if you do this is what the likely outcome is. Many times, the families I work with have never had the experiences that I had have had personally.
And if we're all on the same page, those experience will be valuable to them in terms of their own decisions…. Staying together as a family.
R. Adam Smith: Yeah, that's very important. We see a lot about culture and legacy and succession, generational planning and the waterfall.
Both in terms of culture and incentives, compensation, governance, there is so much there. We’ve been covering that on some of our previous episodes. You cover it a lot as well in your own way which is increasingly important given the size of the market, of course.
Talking about truth and excellence. So, let's move back to the MyFoTech initiative. Adriana, tell us about the beginning of that initiative and mission and where did that come from? And you just held a large conference. I think it was over 450 registrants. Tell us a bit about that. And what is its goal in sharing those services to the client base?
Adriana Z.: Sure. Yes. Thank you for asking that. So, the catalyst - This was really my experience talking to family office executives in who were charged with technology with making technology decisions on different upgrades streamlining the processes making efficiencies. And so, I was doing, at a [00:09:00] time, different programs around it.
And from my conversations, it became, it was abundantly clear that this was a real pain. You have a lot of different solutions out there in the market. And so, what I heard often was how do I know what to what to choose or what to even compare? Like, which solutions do I compared to each other? Because they're all doing different things. And how do I know what to choose or what to even compare.
And so, I think that the family office industry is if you can even call it an industry, is really developing, and also embracing technology. It may be doing that slower than all the other industries, but it is really changing the nature of the operations. And I think in a very positive way, but for people who are working, who are making decisions about technology, which often actually are quite strategic decisions, because if you think about investing into a fully integrated system, [00:10:00] you're not making a decision that’s a one year decision. It's probably a 10-year decision. So, in terms of your resource allocation, training of your staff integration rearranging all your procedures, etcetera.
So, it's a very important part of both private family office and multifamily office operations and, because of the underlying complexity of the families of their investments, a lot of private investments. And so that's where my interest for and impetus for MyFoTech came from… I really wanted to create something that really focuses on that area because I didn't think really any - I didn't see anything else out there - that was doing that specifically.
So, yes, we've had our first conference last well the previous week; And we are a young business, but our conference was a great success. Phil was involved in this; we have an ongoing partnership. ? We want to, to go back to the mission.
Our mission is to help family office identify the [00:11:00] technology strategy and find the best solutions for their needs.
And in that we're very much aligned with Phil. And his technology the Larry Kraus Technology Institute. And so, we partner up on this earlier in the year, and had a successful event.
R. Adam Smith: Good. Talking about operations and technology. There's a much higher level of offerings to the alternate investment universe, hedge funds, private equity, LPs, GPs, investment banks, even lawyers, looking at capital IQ, looking at pitch book, Refinitive and so on.
Then the family office space. So, in a way, I think it's important that, to family offices or even family-owned companies that have multiple holdings, right? They understand the importance of technology, operational, procedural efficiencies to protect their data and also to save costs.
It's great to see you bring attention to that. [00:12:00] I'll note also for people that weren't able to attend the, fix my family office technology event, there'll be some replays and you guys can connect with Phil and Adriana on LinkedIn.
Let's move over to family mission statements. So, Phil, whether it's a family office or even a multifamily office or a private family firm that is not using a family office structure, talk a bit about mission statements, and how you counsel around those and give input into the client's search for excellence let’s say.
Phil Strassler: Sure. So, that's a great question, Adam.
So, mission statements are critical in terms of understanding what direction a family business or family office wants to go. The risk factors in keeping a family office alive unless you document how decisions are made and why decisions are [00:13:00] made. It is incredibly difficult to convey the family legacy, the family business, and the family secret for success to the next generation, the generation after that, and the generation after that, and you have to start somewhere starting with a mission statement - which is What is the goal of the family business in terms of the family, not only the business, what type of governance should you have?
Should you have a separate board of advisors for family governance, and another one for family business? All of those ideals are great, theoretically, but the family has never thought about them, gone through them, they're busy with their business. And these mission statements transcend the sale of a business - the [00:14:00] mission statement of a family that's successful in their business becomes more critical or selling the business.
R. Adam Smith: I just wanted to pause there. That's tricky to realize though, right? Because a mission in the moment can be very useful for any private, any company to have their mission for their current ownership and their current leadership and their family values. But, at some point, let's say they sell the business, they want to both create a mission, but also can evolve that mission statement to have longer term legacy after they sell, right?
Phil Strassler: That's correct. I find that the generation one has a vision of how they are treated after they sell the business, what decisions they make. They really can't impose those decisions on Generation 2. At some point in time, Generation 2 is older, in their [00:15:00] 50s, in their 60s. They've made their own decisions. They’re working in a business themselves. G3 is the trickiest piece. Now you've divided up that wealth into more portions. But is there a continuity for the legacy of the founders? In any way, shape, or form has there been funding provided to keep the family office going? All of those are critical in developing a mission statement So many times I've seen generation three Say, you know something I want to keep the family together, and all of a sudden you have a new a new vision and a new mission statement. So you're absolutely right Adam
R. Adam Smith: Now those mission statements. Sound a bit Warm and fuzzy, but they really relate to the strategy of the firm, not just the emotional side of it. So I [00:16:00] hear a lot about these mission statements from experts like you. We spoke about it with Christina Wing earlier, just the other week with of course, Angelo Robles who talked about it in terms of the single family office and those mission statements flowing, continuing, evolving throughout the generations. Can you talk a bit more about how they are actually discussed and created? Is that at the owner level or at the board level? And can they, Are they really geared towards for profit or are they also involving a non-profit orientation?
Phil Strassler: So, there probably hasn't been any, anything written down until there's an event for sure. Someone's getting older, someone passes away, a business is sold. It's really a strategic plan for the family that includes not only the investments, but other legacies specifics, [00:17:00] whether it's art collecting, philanthropy, whatever the family really values to have that move forward and be funded, it needs a strategic plan. And many of the families I come in contact with there’s no real strategic plan. There's a designation is who the successor in the business is going to be. And oftentimes the family members that are not the successors. Move away so they don't become part of the family business. They don't go on the advisory board. They're not included the idea to be successful to include the individuals that want to be part of the plan and have the family stay together and understand the direction going into, and how they're going to get their consultants and experts that have lived this before. Other people talk to - and on my projects specifically - as I develop a [00:18:00] mission statement and strategic plan…I think if I'm talking to the client when it's all finished, I've been successful.
R. Adam Smith: Okay. That's a good point. Thank you.
Adriana, shifting over to generational transitions and succession planning and how to guide the values for the decision making which also can include the focus on the, the organizational structure of the company, right? And what they do with their spending on technology operations financial controls, not just the mission side. Talk a bit about that from your perspective.
Adriana Z.: Yes, technology can come in to play in many different ways and you have now, for example, various systems that can really help to facilitate the conversation and communication in the family between the various family members, sometimes scattered across the world. And so that's an [00:19:00] important part of it. Also, I think there is a big role technology can play in sharing information and having control over what is shared. with whom and when to make sure that you're having, that you're, that you have as much transparency as you, as you can, but at the same time sometimes I guess it's not wise to, to overshare.
So, I don't know if that answers your question, but these are some of the thoughts that come to mind on that point and how that can play a role in the family generational dynamics and transfer.
R. Adam Smith: Phil, you talked on the program and previously in some of your writing, you talk about that, about the collaboration within the family firm. Again, it can be a family office or just a family firm. And I've seen your writings in the past talking about long term success. So maybe both of you can just spend a couple [00:20:00] minutes to the audience talking about what really are those drivers for long term success between, let's say, human capital … our friend Angelo insists that human capital is the most important … and other people insist on legacy and passion and mission. And then others talk about more scalability.
Phil Strassler: I'll start with that. So, ultimately having everyone understand through the mission statement what their role is and developing a schedule of meetings, education, individuals taking their skills, which to me is really that is the investment. That the family has to make and the individuals, their expertise, harnessing those to go forward as families get [00:21:00] larger, the wealth shrinks, it's hard to keep up with the with the rate of return as you have children, grandchildren, great grandchildren funding them in their next great business and giving them the right resources to grow is really what, to me what success is. It's not about growing a business, selling a business. It's what comes next, and any strategic plan or mission is focused on what comes next, not only what we have in front of us. Adriana?
Adriana Z.: Yes. Thanks. Thanks, Phil. On, family business experience, I can only speak - I'm not an expert or an advisor - I can only speak from my own experience. And I think that it is very important, when [00:22:00] combining business and family, to have a structure in place; because when I eventually separated from a family business, it was a quite difficult transition. I think for everybody involved, and so it would, I think in hindsight, it would have really helped to have someone actually like Phil, like, to end a protocol, I think from the beginning to foresee, because family dynamics, I think one thing that's constant is that they change. I think it's something…That's why the family constitutions have to evolve with time.
And our needs change, our relationships change, what we need from each other changes. And I think to keep the communication going is really key. And also to... to plan ahead to foresee maybe some difficulties and difficult situations. How are you going to deal with them? Because if things go [00:23:00] wrong, I think, the impact will be on the family. And, it can be as destructive, as to be, almost impossible to repair. So, that's where I would comment on this.
R. Adam Smith: Yeah, certainly more difficult to make human capital changes in a family owned company than a typical corporate company from a hiring perspective that’s for sure. Maybe one more comment back on the family charters and family mission statements. Phil, what is the difference between a family charter and a family mission statement, and how are those different than just, doing your best every day and just trying to grow the business and make money.
Phil Strassler: I think that the foremost, okay, the charter itself - to me - sets the rules of the game. In other words, this is how we're going to make decisions clearly, who's going to be at the table, making those decisions. [00:24:00] One issue that we've spoken over the years, Adam, is leadership. You have a charter, you need a leader that is going to basically Understand where the direction of the family and where did that, where does that individual get the leadership skills many times? It's within the business itself, but what if it's a G3? Who's going to take that? Who's going to take responsibility for the family when they sell the business in terms of making investment decisions?
There's a lot to learn. Leadership will move them in the right direction. The mission statement is more of a strategic plan. After the charter is done saying - here's the rules, here's how the decision is going to be made - then you have a mission statement, which is, this is what's important to us, and this is what our roles are in society.
R. Adam Smith: Well - [00:25:00] society for a family office or a billionaire or a large family firm, even a multifamily office - increasingly involves philanthropy and a core cause, or multiple causes. And of course, having the entire family of the different generations get on board with philanthropy. Just talk a bit about how that's going in the family office ecosystem… is philanthropy growing exponentially or, is it more of a generational mindset and, if and how to how do the generations agree on how generous to be in the short term and also the long term in terms of the trust structures.
Phil Strassler: I would say that in my experience, the first generation has sold a business or has operated a business successfully, oftentimes has [00:26:00] not been transparent and the family next generations do not understand the largest, they don't understand the contributions where they've given money, what's important to them.
The funding as well as the volunteerism. In other words, what's the entire picture for that G1 person? What did they value? And that's where it starts. There has to be a method to convey, this is what we need to do for the world, for our community. And this is what we've done. But without that being transparent, it's very hard for generations after that to follow the same path.
And oftentimes the generation one says like, why aren't they doing that? Or they want to put handcuffs and here's what you should, here's what you should do. [00:27:00] It's something that should be a regular part of every strategy, part of a mission statement, if the family has important growth in the philanthropic area. I see also that generations today have different values, different things that are important to them. The older generation should give them the opportunity to create their own path, and often that's not done.
R. Adam Smith: I love that statement. We can cover that in another episode, perhaps, Phil, in terms of how to discuss and craft and sustain legacy and mission across the generations. And we'll be having other episodes talking about that issue within an MFO capacity versus an SFO capacity. So perhaps we can talk more about that.
We'll be wrapping up soon here. So I'd love [00:28:00] to hear from each of you, who inspires you in the world of family offices, maybe there's a, an entrepreneur, that you admire or a company that's gone through some changes and growth and succession evolution over time, maybe Adriana start with start with you.
Adriana Z.: Yes. So, I'm a big lover of nature. I like the natural environment. And so some of the businesses that inspire me I have actually come across, in England, living there it was neighbours, you could call them. I'll give a specific example, it's actually a family owned, it's a family of landowners, they own this farm called the Knepp Estate and it has been of high intensity farming business for many years but so Charles Burrell is his name. He decided to basically turn it into a [00:29:00] wildlife regeneration project to bring back the diversity of species. And so, he did that I think about 15 years ago, maybe 20 years ago now leveraging some new research on free roaming and how they can regenerate the land. And so they've seen amazing results and they make, and actually make a profit from this as well, I think, or suddenly making revenue from organic meat and travel. Wildlife tourism in there, but they've been they've been able to bring back some species that were basically close to extinct. Or certainly haven't been in the area for years or even decades. So that's where I find. And I could give you more examples, but that's just one…
R. Adam Smith: Reminds me of the Patagonia story recently talk about a company that's does really well, but also does well by the world and nature.
Phil Strassler: So the I would say that my admiration [00:30:00] is for a family office that I've been working with for probably over 15 years now. 15 years ago, this individual and his wife had three, three daughters. And over that period of time, he has built a family office, which includes each of the daughters, very specific assignments, but a sophisticated structure with advisory committees and operating committees.
All for one purpose, when he's no longer able to, or wants to be in charge, he's got a system in place and people in place that are trusted so that his daughters could carry on the business. Each one with their own specific role, almost, I would say corporate with performance reviews, with employees, with caring about [00:31:00] employees. So he's turned his investment office into what I consider it to be a business treats it like a business. I have great admiration for the individuals that can go and have something successful and create something that will live past their death.
R. Adam Smith: Right …. fantastic. That's great. Thank you for sharing that. It's important that the, I think, the industry is not just focused on the family office as a business, as a client, but also keeps in mind their mission… we talked about that, their legacy and that ultimately, these are real people and families. They’re not just a transaction or a corporate animal. So, it's great to hear that both of you are very attentive to those elements of these organizations from a humanist and a personal [00:32:00] perspective. So, thank you for that.
It's a great to have you on today. Phil and Adriana. Any final words for the audience as we wrap up?
Phil Strassler: I want to thank you for the opportunity to speak. I hope you do it again. I wish everyone a great Thanksgiving holiday with their family … and Adriana it's great to be a partner of yours.
Adriana Z.: Yes, I would also like to thank you Adam for the opportunity. Thank you Phil and I enjoyed … and wishing everyone a happy holiday. In Spain we don't celebrate it, but certainly take a day off to celebrate with you.
R. Adam Smith: Thank you. You have the siesta, which is nice. We don't have that often.
You can reach Phil and Adriana on LinkedIn and you can also reach Phil at his personal business and then Adriana at MyFoTech, as well.
This [00:33:00] is R. Adam Smith signing off. Please stay tuned for the next episode of the Family Business Audiocast on LinkedIn.
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