ERIC BECKER

>> Craig Gould: Eric Becker, thank you so much for joining me today on the podcast. Eric ah. You’re the founder and co chairman of Cresset, an award winning multifamily office with over 70 billion in assets under management. Prior to Cresset, you co founded Sterling Partners, a value added growth private equity firm that raised eight funds with over 5.7 billion in capital. And you have a new book, the Long Game: A Playbook for the World’s Most Enduring Companies. And Eric there’s so much I want to talk to you about. Founding businesses, growing businesses, what you do when you get to the top, how do you impact generations? But I’d love to start these conversations with one common question, which is, Eric what are your memories of your first job?

>> Eric Becker: Sure. So the two things that immediately come to mind. One is of course, being a teenager and wanting to try and earn my own money. And, and I found in the back of a comic book that I could sell, garden seeds to my neighbors as well as greeting cards. And if I sold enough garden seeds and I sold enough greeting cards, there were prizes and, you know, things that you could get. but the biggest first job for me really was launching our first business. And that’s when I was a student at the University of Chicago. And what happened was I was in my last year studying economics. My younger brother Doug was working at Computer Land in Baltimore. And he called me up one day, he was a high school senior, and he said, hey, brother, do you have, a computer? And I was like, yes, I have the first IBM PC. And he said, do you know how to write a business plan? And I said, I actually have a book right here called how to Write a Business Plan. I bought this book, thinking about starting a business. And he said, well, I have an idea. It’s for an optical memory card. You can store up to 800 pages of information on this card. And I think that, we could build a medical card that would have your medical history on it and it would be really revolutionary in health care and in health care insurance. So he gave me the idea, I wrote the business plan. we then went to our dad and said, we’re launching this company and my brother is deferring from Harvard and I am dropping out of University of Chicago one semester before graduation. And my father just thought the family was going backwards. He was the first one who had ever gone to college. He went to Maryland. And my dad sent me to see a psychiatrist because he thought it was so crazy. I ended up in the psychiatrist’s office, described the whole situation Told him that if we failed in six months, I’d go back and do that last semester and my brother would go, was going to go off to Harvard. And at the end of the session the psychiatrist said to me, are you looking for investors? And that’s when I knew everything would be okay. but, but anyway, that, that really was my first serious job, was launching that business while, I was still in school and my brother was, was, was just graduating high school.

>> Craig Gould: Can we talk a little bit more about your dad? Because I mean that he had the entrepreneurship bug.

>> Eric Becker: Yeah.

>> Craig Gould: And you know, you, you had to have gleaned something from him in those early, about his business, in how he found a niche and, and really built a moat around it for quite a while. Right.

>> Eric Becker: He did. So my dad was very resourceful, from Baltimore, went to University of Maryland, as I said, first one in the family to go to college. While he’s in college, he’s trying to figure out how to pay his way. And he decides he has this idea to hire his fraternity brothers to dress up like Santa Claus. And he then rents them out to department stores like a temporary service agency. And as only could happen in America, department stores became shopping centers, and shopping centers became major regional malls. And my dad, this kid from Baltimore, ended up becoming the king of Christmas in Baltimore. And for 53 years, if you took a child to have their photo taken with Santa in like 400 malls across the country, those displays, the decorations, the themes, everything, that was our family business. So my dad was creative. He’d been in the theater. He loved design, he loved to make these beautiful Christmases and he loved the holiday. He actually even himself dressed up like Santa once a year until he was in his 80s. And he would go and volunteer at a local school for kids, that had special needs. And so he was just a warm, wonderful guy and a kind of a first generation entrepreneur who had to figure everything out for himself. And so he built this company. He was by far and away the number one in his niche. He did build this moat and he did it mainly by scale was part of it, but really by being creative and doing licensing deals with Disney and Snoopy and Hanna Barbera and the Muppets and Sesame Street. And so dad had the exclusive rights to these characters. And so after a while, as people started to experience Christmas and in what was the major retail, this before E Commerce, that’s where we went to shop and eat. And so, everyone was doing Christmas and the next thing you know, dad was Doing a Disney Christmas and tying it into the Disney properties, or he was doing Snoopy, and that was so innovative. So he built this wonderful moat. I think that the business model was challenging because of the seasonality.

>> Craig Gould: And.

>> Eric Becker: And then at the end, and this does lead to why I write this book many decades later. At the end, my father never had a real mentor, never had a formal business education, hadn’t worked for anyone else, and this was his first and last company. And as a result of that, he didn’t realize how hard and important succession was and stewardship. He ran the business for what it was at that moment, and he had amazing, talented people all around him, but he never solved that succession challenge. and my brother and I, we loved the business and learned so much from dad that we can talk about, that then helped us in our own entrepreneurial journeys, but that wasn’t our thing. We loved Christmas because of dad, but we didn’t want to be in that business. So he just never solved succession. And he ended up doing an esop, selling it to the employees. Then eventually it was sold to a large company. And after a year of working for this large company, sadly, dad called and said, they’re bad Santas. They’re not good at Christmas, and I don’t want to work for them anymore. And then that was kind of the end. And it was just. It was really sad to see. It made such an impression on me that this vibrant guy who had built this business in Baltimore, and since he has passed away, so many people over time have reached out to me and said, I was an artist and I worked for your dad. I came from the theater and installed Christmas for your dad. I loved your dad. And, And so it was amazing, the culture of what he had built, but he didn’t have the skills, or the understanding of how you steward this into the future beyond himself. And that was his struggle and a painful family lesson for us.

>> Craig Gould: Do you think he ever had ideas of you and your brother kind of taking on the family business, or did you guys divert your path so early that he knew that wasn’t going to be a reality?

>> Eric Becker: I think that it was a combination of both, you know, what I would call wishful thinking. I think there was absolutely a part of him that was trying to train us, in how to have the business. If for no other reason. I remember him pulling me aside and saying, if something happened to him what he wanted my brother and I to do with the business, even when I was 15 or 16, he sort of Talked about emergency succession. But, We were clear. I wanted to be an entrepreneur like him and go build something. And he would say to me, he would say, son, there are a couple things I want you to remember. one is that, there are businesses that you would want to be an owner of, and then there are businesses that you would want to work in, and there are businesses that you would want to be a customer of and be very specific and define what. Which one of these you want to be. And it was his way of saying that, at least for my journey, I would want to be the entrepreneur. and that there are some businesses like his that are seasonal, that are hard businesses, and in some ways, it’s better to be his customer than to be him, because he had to really make this very complex, supply chain work every single year flawlessly. Like, by Halloween, all the Christmas displays are coming into his central facilities. By Thanksgiving, distributed out across the country and installed at night. And literally, like magic, suddenly, people are walking in after Thanksgiving to beautiful Christmas displays in the malls. This was something he had to do year after year and pull this. This complex dance, off. so that was a business where, in some ways it was better to be his customer, where he just took such great care of you than to be him, and where it was a real challenge. and then the other thing that he said was, you know, son, you should play in, get whatever is the stadium, the venue that you can get the ticket into. That’s the biggest place to play. That’s where you want to go. And so it was his way of saying, you only have so much entrepreneurial energy, you only have so much time, and so just find the biggest playing field that you can play on. Which I think he meant the biggest market, the best tailwinds. it was his way of saying the best business model, even though he never used the term business model. So those were really interesting lessons. From watching dad and listening to him.

>> Craig Gould: It seems like Cresset is a real passion project for you. Can you talk about kind of your road to starting Cresset and everything that you have poured into the vision, in the culture, in how Cresset is different than. I wouldn’t say one of a kind, but, you know, maybe you would. I mean, tell me about what led to, to Cresset and. And what makes it different.

>> Eric Becker: Absolutely. So the journey to Cresset is fascinating, and it’s a journey that has a. Both great joy and also tremendous challenge and. And sadness and disappointment. After starting our first business, the life card that we talked about with My younger brother and two friends, we sold that business successfully to Blue Cross Blue Shield. Had our first exit when my brother was, I think at that point, 20 and I was 23. that led to a wonderful entrepreneurial career. My brother loved education and bought Sylvan Learning Centers, and he spent his whole career in education. I loved entrepreneurship more broadly and started a series of companies building, businesses, called the Middle Market Companies, and then ended up starting a private equity firm. And so I loved my career. I loved the culture of what we were doing, the people that I worked with. but life doesn’t always take you where you want to go. And in 2012, my wife Jill and I, we had three children, two boys with a beautiful daughter in the middle. And our daughter Cara developed leukemia. She was 21 years old. was working at the brand new Four Seasons Hotel in Baltimore as the pool girl, had a great summer job, was really at a sweet spot in her life, because she had had some learning challenges and things were really coming together for her. And sadly, she developed, ah, leukemia. We had her at Hopkins. They said we were the luckiest family there. She had the only curable form of leukemia in 2012, and sadly, she had a reaction to her treatment and four months later passed away in her sleep one night unexpectedly. And it was as if it was an accident or something terrible had happened. We weren’t ready for that. it was shocking, and as anyone who’s a parent would know, a very painful, difficult time. So I decided to retire from, the business. And I went into a period of really focusing on two things, family and service. So on the family side, I saw that two out of three couples that lose a child don’t stay together. So I wanted to fight that and see if we could do better than that. I was worried about our two boys and how they might be impacted. And so I spent a lot of time with the family. And then on the, philanthropic and service side, my wife and I, we came together and focused in on, leukemia and lymphoma because of the impact we’d had on our family and really, in particular helping pediatric patients and their families. So as an example, helping to fund a summer camp for pediatric patients and their siblings to be able to go to camp together for free, things like that, and then, and then fostering entrepreneurship that was something super passionate about. Every company ever invested in or started or was on the board of or had something to do with was started by an entrepreneur. so those were our big things. And after three years in that very difficult time, I emerged and was open to possibilities. And one day I was talking to my dear friend Abby Stein, who had really helped me with that transition and during that difficult period. And we were having a conversation about, the seasons of life of the entrepreneur and CEO founder from 20s and 30s, 40s and 50s and beyond. The seasons of life with challenges like this sort of bone breaking tragedy that my family experienced. And in Abby’s case, he had had stage four lymphom, been faced with a life threatening diagnosis. And so we were talking about this in the context of family office and wealth management, how these things are taken care of for you as you’re building your career. And we both shared these terrible experiences that we had had. I had been a client of one of the big Wall street firms for 25 years, really a loyal, loyal customer. He had been with one of them for many years. And then we had both tried to build our own family offices just for our families. And, and our discoveries were one the big Wall street firms, they charge many layers of fees. They’re not truly a fiduciary. it’s something that’s hard to understand. And the other great irony of it is most of the wealth in North America has come from either owning a business or owning real estate. But most of what you got from the traditional wirehouses was stocks and bonds. There was almost no expertise back then in private investments. But how ironic. Most of the wealth of entrepreneurs has come from starting a private business. So we just thought this is just a dichotomy that doesn’t make sense. There must be a platform out there that has been designed and built for CEO founders and would be for the different seasons of life. Because anyone who’s been an entrepreneur or a CEO, they know that you start getting calls from the, wealth managers usually within 12 months of some kind of liquidity eventually. And they’re calling you cold, calling you cold, emailing you, and it’s kind of like, hey dude, where were you when I really needed you? Like when I was 28 years old and trying to figure this out and make sure that my kids could go to college while I was starting this business or I was a first time CEO. So Abby and I spent a year with, we had a couple really bright young guys with us researching this industry and trying to find a firm that literally we could be clients of. And we thought you, if we found it and could be a client of it, maybe we could buy a minority stake and be a Supportive investor. And literally it was not out there. We could not find it in a year of study and research. And what was amazing, having come off of this terrible period of kind of retirement unexpectedly, and just the tragedy, and now suddenly it was like, let’s go start this and create it. And we’ll be the first two clients. So we hired a group of team of eight. They came from some wonderful firms. they got excited about this vision. And we spent three days, and this is critical for your viewers and listeners to get. We spent three days just talking about culture. And we said to the team, number one, we are going to define our culture. Like literally, we’re writing this down. It’s not going to be this touchy feely thing like a lot of people who talk about culture. We’re going to define it, how we treat each other, how we treat clients, and how we expect clients to treat us. And number two, we are on a 100 year journey. And when we said that, literally eyes got wide open. 100 years, what are you talking about? We are going to build a platform that’s multigenerational, where the next generation of Cresset can serve the next generation of our clients. And third, we are going to be an employee owned company and everyone’s going to be a shareholder. And this isn’t going to be one of those things where a couple of guys start a business, name it after themselves. Stein, Becker, Becker, Stein. And they have the lion’s share of everything. And maybe if people are lucky, some of the team members participate. This will be an employee owned company. So that was the vision that was maybe the most important three days since we started the company. Out of it came this wonderful culture card that we have that we literally, our team, everyone has these. I put my note cards on the back. And it literally is our commitment to lead with culture. It might be the single most important thing that we did to get this business ready for prime time and to make it a place that could attract amazing, talented people who wanted to go on this journey with us and, and to serve clients in a very distinguished and distinctive way. So that’s how we got started. We created a brand. We didn’t name it after ourselves. Cresset is the bowl that holds the fire at the top of the Olympic torch. If you look at the Olympic torch and if you look down on it, the flame is our logo. And that’s important because we wanted this idea of lighting the way for people that are on their leadership or entrepreneurial journey and that we would be lighting the way for them where they could have access to the same talent, investment opportunities, world class ideas and world class services as the most successful entrepreneurs and CEOs on the planet. So think of the really large families that we read about in Forbes and the kinds of family offices and services that they have access to. And we were going to fractionalize that in a way where anyone that needed and had some complexity in their life could access those same services as well. and so fast forward to today. I mean just to put it in perspective, the first year we put about $3 billion of assets onto the platform and that was a big, big first year for a startup in this space. And fast forward to today, eight years later, we’re at 80 billion of AUM, that’s the family office business. And then we’re at about 160 billion of assets under advisement. So those would be serving endowments and foundations and serving single family offices that are handling one family where we provide investment consulting for them. so it’s about 240 billion of assets overall between the two and that’s in eight years. The other really, exciting thing is that Cresset is 60% owned by the employees eight years later. So we were able to build this as an employee owned company, which is amazing. And Cresset is about 30% owned by the clients, which was unexpected in the first year when we started it as new clients were coming on, many of them friends and family, people that knew us in this new venture and they would say, oh, can I have a rooting interest in the business? And we’re like, what’s a rooting interest? And they’re like, I just would like to write a small check almost, like joining a country club or something. But I’d like to, I’d like to be part of this. You know, I’m rooting for, for Cresset to become something special. And that grew over time to to a large group of clients who all had written these checks into the business and now own about 30% of the business. So it’s it’s a very special place culture, forward culture, first amazingly talented group of people. And when we survey clients and ask them what they love about the firm, culture and talent comes up amongst the first two or three things they mention. And when we do internal employee engagement surveys, the fellow employees, the people that everyone’s working with and the culture, come up amongst the top two or three. So very special place.

>> Craig Gould: You mentioned that one of your startups back there was middle markets and you know, it Sounds like that’s really kind of the expertise that you’ve kind of honed in on, focusing on the needs of families that have come from, you know, the SMBs, the small and medium business, and fractionally provide the same level of care and opportunities as the big family offices.

>> Eric Becker: We really do serve, this archetype that we call CEO founder. So it could be a founder, it could be a CEO, it could be a member of a founding team or someone in the C suite. but they’re high performers and high potential. They’re driven. There’s certain characteristics that you see almost regardless of age and even regardless of the size of their business. But they generally have characteristics of drive and focus, of building, love building, moving quickly and they’re growing quickly. and so we serve them through the different stages of life. One day my chief of staff, Oliver Rose, came to me and said, you tell this story, Eric of being turned down by one of the best known wealth managers on Wall street when you were 28 years old. They said, you didn’t meet the minimum. And that’s true. And it made me feel very small. And I always reminded their investment bankers that when I had to deal with them subsequently in my career, don’t ever have the people from your wealth unit called me because they wouldn’t help me when I really needed. It was 28. So this young man, Oliver, says to Avi and me, I want to start something on the Cresset platform called Cresset Catalyst. It’ll be for first time founders, first time CEOs. We’ll literally make that story go away and we’ll help people even earlier in their career. And so Abby and I thought this might be, a philanthropic project on the part of Cresset, part of our giving back to the entrepreneurial community. And nothing could be further from the truth. Oliver went out and put together a cohort. I think it’s about 120 young people now. And they are so successful, it’s amazing. They’ve already had 15 or 16 liquidity events. and I think the last time I looked, they had something like $3 billion of private market value in their businesses. So this is really a space in the market that has not been properly addressed, which is how to help founders and CEOs, founders and CEOs earlier in their career. And then literally, we go through this continuum where, we see this trend of even large single offices are outsourcing because scale matters. And we’re able to use our scale to benefit our clients in so many ways, whether it’s in our tech stack and whether it’s in the way that we address all the things around technology, from cybersecurity and AI all the way through to reporting and trading and all the different layers of the tech stack to the way in which we negotiate better terms wherever we can with investment managers. And those reductions in cost are passed through directly to the clients that are investing in those or using those managers. And that drops right to the bottom line for that for that client. So using scale to benefit the clients has been a big learning and something that was unexpected because our whole mission was to build a boutique and that’s what Cresset is. But it’s a boutique that benefits from scale and we keep that boutique feeling and how we, how we organize ourselves with our different teams and each team is taking care of a certain number of clients. So we’re able to deliver the boutique experience that have all those benefits of scales and all the benefits of scale and access to private investments from amazing hard to access managers negotiating better terms and the clients benefiting from that. So that has been an amazing discovery that even prospects that are early in their career but are high potential can be an incredible client base to serve and that on the largest end, some of the largest single family offices need the benefits of what we’re doing in technology access and scale and are actually outsourcing some of their operations and in some case all of their operations to us as well. So that’s an amazing market and it’s a market with incredible tailwinds. And the lesson from that for your viewers and listeners is that in my career, out of 100 companies that I was involved with in some form on the board investor, you know, a couple of them I was CEO of, in, in all of those companies this particular industry and this moment in this industry, there are multiple tailwinds that are benefiting us. So it’s everything from the great wealth transfer that’s been so well known and written about to then the trend of assets moving from the traditional wirehouses to the independent fiduciary advisor. This was started I think by Charles Schwab 30, maybe 40 years ago. And now this year, McKinsey tells us, will be the first year where more of new assets will go to independent advisors like Cresset than will be going to the traditional wirehouses. So that share shift, another trend. And then on top of that you have the innovation economy that you know so well and your audience knows so well. And that is we have this amazing entrepreneurial engine in America. It’s one of our great, great assets. Something to be protected and invested in and enhanced. And that is amazing because those entrepreneurs need the services of a firm like Cresset so that they can get their time back. We’re really in the time business as much as we are in the investments and family office business. When we’re at our best, we are providing our clients with their time back, that precious resource that they can then invest wherever they want. Starting a business, growing a business in their family, in philanthropy, whatever their passions are, we give them their time back. And that has been an amazing learning for us.

>> Craig Gould: Well, what is the North Star? Is it on your culture card?

>> Eric Becker: It is, it’s to really reinvent the whole experience of around the way that people deal with their wealth. and so that is, when it’s like, powered by Cresset, it allows families to invest both their time and their resources where they wish. What I can see as a pattern when I look across many, many clients, our clients are innovative, they’re highly entrepreneurial, they are philanthropic and love to give back. some of the themes that you see is focus. Bringing the same focus that they do to building a business as a lead or CEO as they do to the other parts of their lives. They’re super intentional. The way they raise their kids, and the way that they think about giving back and having impact, it’s all done through a common lens. And that lens is around focus and impact, and ROI getting, the results that they’re looking for.

>> Craig Gould: So your book, the Long Game: A Playbook for the World’s Most Enduring Companies. when did you start thinking and studying and, you know, really diving into this notion of the centurion, the hundred year plus companies. When did that become an item of wonder for you?

>> Eric Becker: Certainly my dad’s struggle to pass his business forward, is something that I thought a lot about because my brother and I, as I said, learned so much from him, so many lessons and loved him so much. And so learning from him, but then seeing his struggles and how personal they were for him, that would be one piece, but the, the actual catalyst, the day that it happened, I was in downtown Baltimore. I picked up a copy of the Baltimore Business Journal, and they had on the front page the list of the oldest companies in the state of Maryland. And there were names I recognized, like Johns Hopkins and Baltimore, G Gas and Electric company. But right at the top of the list, and this is like almost 30 years ago, there was a company that was like 190 years old 30 years ago called Lone Brothers. I’d heard of them. They were in the, from what I understood, the tent and rental business for parties and events. They were a small family business. They were 190 years old. I’m looking at the page and I’m thinking to myself, how did they do that? Especially as a family business, a local or regional family business. It wasn’t like they had the resources of JP Morgan or other big companies have lived for over 100 years. And so it was an amazing moment and spark for me that, that created this interest in how did they do it. And so that led to ultimately, deciding to do a series of interviews and finding businesses and families and organizations around the world that had lasted 100 years or more and studying and looking for patterns, practices, processes, anything that was distinctive of how they actually pulled it off and how they did it, and also trying to find businesses of different sizes. Lone Brothers intrigued me as like, wow, a small business can even do this. And then a large company like Ferragamo in Italy or globally or Whirlpool or others, you know, I thought, okay, how did they do it and not lose their way? The term centurion is actually a Roman commander of a legion of 100 men. I didn’t want to use the Centagenarian term because that’s often used around human longevity of being 100 years old. You think of an old person, and that’s one of the myth busting aspects of this, is that our society is fascinated with what’s new, what’s innovative, what’s changing and what’s disruptive. And of course we should be focused on that appropriately. But we underestimate what we can learn from the practices of these long game companies. We tend to think of them with a bias that they are, large and slow moving, but it’s actually the exact opposite. In their DNA is agility and survivability. They have the ability to move quickly, to recognize what I’m sure we’ll talk about moments of truth and to take action. So I think we underestimate that. We have the innovation in our wonderful economy and the disruption. So that’s well covered. But I think if we spent a little more time learning these lessons, we could build more resilient companies, better companies, which in a, fast changing world that we live in now with so much volatility, we want companies in America to be agile and resilient. It’s essential for our future competitively for our kids and grandkids. And I think taking some of These lessons, combining it with our passion for innovation, that’s the way to build long game companies.

>> Craig Gould: You referred to it there as agility, but it’s really the ability to pivot.

>> Eric Becker: Absolutely. And Lone Brothers, by the way, when I was able to interview them and I start the book with them because they were the first company, it was amazing talking to them and learning that Joseph Lone came from England. In 1850, there had been a giant volcanic eruption and the world was literally kind of dark at that time because of the ash in the atmosphere. It was very cold. It was very dark. And he decides the whole British fleet had come back. He was a sailmaker and he had done all the sails. there wasn’t a lot of opportunity. So he moved to Baltimore across the ocean, opens up a sail making facility, hires seamstresses and starts making sales to for the clipper ships that Alexander Brown, who was this amazing entrepreneur and trader in Baltimore that ended up starting Alex Brown, that was a very important, innovative, investment bank for many, many years. Alex Brown was sending his clipper ships back and forth and Joseph Loan was making the sales. But eventually steamships came in and no one had the term pivot. But Joseph Loan had to learn how to pivot. He was like, okay, I’ve got 100 seamstresses sitting there with nothing to do. What am I going to do? And so he started making flags. There were a lot of new states that were being formed and new municipalities and towns and cities. And he became the premier flag maker in America. in their offices, they actually have a flag. I think it has 35 stars on it, because that’s what America was at the time. They were making flags. And then as we were sending ships to war, when we would launch new ships, he made the bunting and decorations. And then his son ended up pivoting again. Had gone to Europe and had seen some of the first awnings on Parisian retail stores. And he is thought of as the person that brought the awning back to America. And these became important not just for retail stores, as we’ve seen for many years in great cities like New York or other cities. But awnings became important because we used them to cool our houses. Back then. They could put the awnings on homes, and that’s how you literally cooled your home. So they pivoted yet again into awnings. And then I think it was in the 1950s, that’s when the idea of outdoor events and preparing these great tents became a big part of their business. Lots of them were Pink and green for the 1950s. And they pivoted yet again to becoming the leading company in that region for providing all the things that you need for those events and then ultimately learning how to turn that into a rental business with the recurring revenue that you get from, that rather than selling an awning one time, a flag one time, or a sale one time. So they innovated in their business model. There are multiple pivots throughout what is now over 200 years. And, and what we see is that pattern, even from a small business like that, that pattern. You see that in ferragamo when in 1960, Salvatore Ferragamo drops dead. And his wife is 38 years old and had been raised in a society where you learned about art and music and you didn’t learn about business. Hadn’t spent one day in business. And she’s in my imagination, she’s sitting in his chair, ah, at Salvatore’s desk and she’s got six kids and she’s looking at this business that he built and she’s saying, what am I going to do? My husband passed away from a heart attack unexpectedly. What am I going to do? And she steps up and becomes the CEO of the company. An incredible pivot. And then she takes the company international and plants all the seeds for what ultimately has become, an internationally recognized brand. I think they were one of the first ones to go into, into China and Asia. she was one of the first firms to hire someone from outside the family to come in from a design perspective, to lead design and ultimately even, going outside the family after the next generation on leadership. So multiple pivots, and themes that we see, whether it’s in a small business like Lone Brothers or a large company like Ferragamo.

>> Craig Gould: I don’t know if you know this, but I had Cheryl McKissick Daniel, on the podcast recently. She’s amazing in that story of Ferragamo is very much in line with her mother’s story. You know her, you know, her mother wasn’t in the business, but her father winds up having a debilitative stroke and her mother takes it on and, you know, really used her own personal strengths to change the course of that company. But also, you know, when we talk about pivots, Cheryl saw a vision for taking that company from something that was deep rooted, regional, ah, and taking it to a totally different level in the New York high rise and civic planning sort of scale there. There’s a wonderful story and you touch on lots of These stories in the book, can you talk about some of the traits that these family businesses and these families share?

>> Eric Becker: Cheryl’s amazing and, and all the things that she learned from her mom. So her mom did all the things you said, and she raised an entrepreneurial C suite level CEO leader, in Cheryl, which is amazing. And what she’s done with the business and Moments of Truth, moving from Nashville to New York and expanding their services and going deep into architecture and engineering and all of that. So she’s an amazing person and that is a great, great American company and a great story. what we see as patterns throughout These companies, including McKissack and McKissack, is, the following one, this Centurion culture. So at the beginning of this conversation, we went deep, I think, for a little bit into culture, and we see it throughout the companies and they all go to this extra effort to define their culture. When you meet someone who’s an entrepreneur and you ask them about their culture, they’ll always say how important it is. But it’s very rare for them to then take the time and be able to give you real specifics where you can create an image in your mind of what they’re talking about when they’re describing their culture. All of these Centurion companies have that in common. A well defined culture that they view as a treasure that they protect. the second thing that you see, and there are 10 of them, so I’ll give you a few. But the second thing that you see time and time again is the concept of being super stewards. Almost like Superman with the S on your, on your uniform. They are super stewards. They view these businesses as, something that it is their responsibility to carry and shepherd and grow and improve into the future. It’s not about them or any one person. It’s about the team and it’s about taking this enterprise into the future. and so that leads then to the next one, which is they go from being super stewards into creating ethical succession. and that is that they find their successors in a very defined way where they’re not allowing someone to come into this business that hasn’t been trained in the business and is not serious about that culture. They’re so careful in who carries this business forward. They have to share their values, they have to share the culture, they have to be embedded in this business and everything that’s like it. So much so that we found that some of these companies will even describe themselves like a house. So we’ve talked about it at Cresset that we’re building the house we want to live in. And many of these companies will talk about the house of Ferragamo or the house of this and that metaphor of a home and all the things that go with it, whether it be our loved ones and how deeply they care for the team and how the team takes care of each other. And so they have high performance, but also high humanity, which is the best parts of family, but with the competitiveness and the results that you get from high performers. And it’s that element of a home, and it’s how much we care about the house, and it’s taking care of it and growing it so that it is something special for future generations. So we see super stewards, ethical succession. We see centurion culture. Those are three things that you see in every single one of these businesses.

>> Craig Gould: That house metaphor is a little bit more literal with the Vanderbilts, right?

>> Eric Becker: It is. And they are an amazing family, the Cecil Pickerings. I, I had met, two of, G5, through our sons, went to University of North Carolina, and there was a connection. one of the sons, had been a student there as well. And so we met and just started to get to know each other. And I mentioned the project. My wife and I have a home in Asheville, so we were just visiting the property. and so these two young men, took an interest in the project and were willing to be interviewed. So, I was able to interview Chase Pickering, and Ryan Cecil, and we were able to talk about five generations going back to George Vanderbilt, and all the learnings, that it had taken to have this house literally survive and then thrive, into the future and the pivots that the family had to make. and some of the unexpected parts of the story. I think when people hear Vanderbilt, you immediately think of, you know, of the Vanderbilts and Rhode island and New York and, you know, Cornelius Vanderbilt, all of that. but people don’t realize that building that house, the largest house, it’s the Versailles of America. It’s the largest home in the United States, and it’s spectacular. But people don’t realize that, so much of George Vanderbilt’s resources went into that. They also don’t realize this sense of stewardship that he had right from the beginning, where he invested in what became all of the best practices in forestry in America. that is how we steward our forests all across America now and how we manage that. The roots of that all come from Asheville, North Carolina, and The way in which he thought of the home and how this home would stand the test of time and be there in the future. And then ultimately his daughter opened the home during the Great Depression to try and help the local Asheville economy. And the home lost money for many, many, many years, but eventually was reinvented, by, by William Cecil. and he. This was G3. And he was the one who had the vision that this could become a great attraction and ultimately opened a winery that’s the largest winery on the east coast of the U.S. and created this amazing attraction that in the year 2000, they built their first hotel. And now you have this amazing property, multi generations that are involved. And they, One of the things we notice with these Centurion companies, we call it bringing them in the room where it happens, like in the Great Hamilton, musical. And they are bringing the next generation in. I went to visit the family during one of the family meetings, and there were literally toys on the table, like a Mr. Potato Head and Transformers and things like that. I was like, why do we have toys in this family meeting? And they said, well, that’s because we bring the kids in for an hour. So they see us all meeting as a family and talking about, you know, issues and things that are important. So we’re bringing the kids in and letting them get that sense. It’s really a sense of the culture because the kids don’t understand technically what’s going on, but they see how family members are solving problems and discussing and, and challenging and all the things go along with it. So there’s some amazing things that, That I just love about and admire so much about that family.

>> Craig Gould: It just seems like timing can be really complicated, because you, you, you describe the story of the House of Ferragamo and how the. The matriarch did, a great job of dividing the company into, fiefdoms that each of the children could lead. But she winds up staying at the head well into her 80s. And that means that generation behind her is managing maybe past the. The ideal time that next generation didn’t have the same opportunities to lead within the organization. And so, I mean, it just seems so difficult to try to keep, this. These generational companies within the family and finding people that have interests, that have skills in finding the right opportunities for them to lead.

>> Eric Becker: Absolutely. So one of the things that Wanda Ferragamo did an amazing job of, was, as you said, finding opportunities for each of her children to play a role in the company. And to have their own opportunity at leadership. And then she could sort of see where their talents, were. but you’re right, similar to my dad and others, she had to kind of figure this out as she went. And one of the lessons from there was, a period of time where succession was not addressed. and so that then had the effect where the next generation after her children, her grandchildren, many of them, had to wait so long for an opportunity at leadership that they ended up finding their interests outside the family in other places. And so there, at the time that I did the interview, I think there were only two family members who were actually in the business, working in the business at that point. So that is a lesson. and that’s why ethical succession and stewardship are two of the really most important principles. And, and the other, by the way, in terms of, like, where you must act are moments of truth and moments of trust. So for Wanda Ferragamo, the first moment of truth is what do I do when, my husband unexpectedly passes away and I don’t know who’s going to run this place? Okay, I’ll do it. Moment of truth and moment of trust. Like, I trust myself that I can figure this out. so that’s really, really essential. when we were talking about, Biltmore, there was the experience where G3, William Cecil, it was at the, I think it was the hundred year anniversary of Biltmore, at an event with all of their friends and family and community from Asheville. He got up and welcomed everyone. And then at the end he said, and this is going to be my last night in the role of CEO of Biltmore. My son Bill will be taking over effective tomorrow. And then he kind of like dropped the mic. Everyone was in a state of shock, including Bill, who was in his young 30s and, obviously spent a lot of time learning the business, but there just hadn’t been that planning and discussion around it. And so G5, Ryan and Chase, they said to me, we smile about this story, but we also say, let’s not do that again. And so these are lessons that families learn in that challenging element of ethical succession. it’s not easy, and you really have to work hard at it. And sometimes you’ll have two really talented family members and you have to find, the best way of sharing leadership responsibilities. And how do you take advantage of the great talents, and the connectivity to the culture and family and all the amazing things that family members have. How do you take advantage of that, without losing all those benefits, and then when is it not working and you have to turn around and bring someone in from the outside and have family members focus their energies on being great stewards and supporters of the business as owners, or if you end up going public or you have a partner, then they’re great shareholders. But it’s. How do you think in, in that different role and still be that great steward for the future? Which I think the Ferragamos are a great example of it. And there are others as well.

>> Craig Gould: So, so much of your work is about getting people to look further out beyond even the end of their lifetime. But, you know, think in terms of generational, in terms of legacies. but, you know, so often we are kind of consumed by the tasks and requirements of our life at hand. What do leaders consistently misunderstand about what will matter most later on?

>> Eric Becker: Again, with everything from the entrepreneurial business, media, that is highlighting all the exciting things that are changing and happening around us. And that is so important. And I just want to emphasize that, but we just don’t get enough great content around, the wisdom, the values, the lessons, hard earned lessons, from previous generations. And this is something that I feel so strongly about that I’ve even gone beyond the book and in my own personal life, I’ve written an ethical will for our children, our two boys, Jake and Greg, and where I put down all the hard lessons and things that I learned in my own life through everything from loss and failure to success and relationships, both personal and building a family and relationships at work and in life, and putting all those lessons down. And I think just unfortunately we don’t put enough emphasis on learning those lessons and looking far enough into the future. And looking far enough into the future. I had a conversation two weeks ago with a centurion company and they were talking about 1,000 years. So here in the book, I focused on 100 years. And then I had the opportunity to learn about the Honokians, which is an organization in Europe that to be a member you have to be 200. It was incredible. And so these are incredible businesses and they’re thinking over the very long term. And I think that is something we all can learn from, not just as leaders and CEOs and entrepreneurs, but also in our own individual lives. I mean, if you were able to put down a piece of paper, some of the. Anyone listening now, some of those really hard lessons that, that you’ve learned in your life and you’re able to give that gift to your kids and then they can pay that forward and pass that document down to their kids. And even if only one good idea spared someone the suffering that we all know from bad ideas and bad luck, oh my gosh, what a gift you’ve paid forward. Everyone focuses on their estate and what resources they might leave to the next generation. A lot of it always seems to be about money. But what about passing down our hard earned wisdom and lessons and seeing how those can blossom into more successful, kids and grandkids, who are better adjusted at the world that they’re going to be living in. That’s vastly different than our world. So their adaptability and agility and resiliency and their ability to succeed and to have really meaningful and healthy relationships with their loved ones and raise good kids for the next generation, like, that’s the greatest gift of all. That’s the best inheritance anyone could ever receive. but we just don’t think about it, we don’t teach it, and we don’t have great formats to do it. So in my case, ended up reading an article and there was a wonderful woman who wrote this article about the ethical will. And I was like, aha, ah, this makes so much sense. The passion I have for paying it forward in businesses, it’s the same thing in terms of family and I should be investing the time to go do that. So I sat down to try and write it. It was such a struggle that I ended up reaching out to her and asking if she would help me. And so she did. And I wrote the first ethical will. And I think it was probably 2003, 2004, and we’re just finishing up now a second version of it with all the lessons of the past 20 plus years, including the Cresset journey, the journey through loss and tragedy, and how to stay together as a family and taking all of that. And I hope that that is, the greatest gift that that Jill and I can, can pass to our kids.

>> Craig Gould: It seems like many of your clients would be the beneficiaries of perhaps having had an exit from their company already. There’s, probably a matter of flux in trying to redefine purpose, in redefine purpose for the rest of their lives and redefine a purpose for their family’s wealth. And you think about foundations and sometimes the family business doesn’t wind up being what earned grandfather the money it becomes, you know, what is the mission, you know, moving forward? does Cresset try to help these people that may be of first generation wealth figure out how to find that purpose and Vision long term.

>> Eric Becker: Absolutely. And these are some of the things that were unexpected in starting the firm. So when we started it, Avi and I wanted all the services that we wanted for our own families. but we happen to both have figured out what, what we were spending our time on and what our priorities were. And we were very much mission driven, purpose driven, and values driven. but as we started to build the business, we started, we started to see this pattern, and it’s a pattern that you just described, and that is of founders who have had an exit and to differing degrees, their identity can be tied very much to having founded and then led a business that became successful to the exit. And so to differing degrees, everything from, did they discuss the exit with their family prior to it? Maybe they didn’t realize that some of their kids were thinking that they might have wanted to go into the business and had never really been discussed. So everything from that to then what you described, which is, what am I going to do next and what is my purpose and mission? is my purpose and mission. I learned so much about entrepreneurship that I want to pay that forward. That’s something that motivates me, is mentorship and helping others that are on their journey and doing that through Cresset and through the writing that we’re doing, or whether it is, the passion of. I learned so much in starting and scaling that business. I want to do it again and even better next time and even bigger next time. And that becomes a big pattern that we see, which is serial entrepreneurs. that might even be the number one thing that we see, two, individuals that end up saying, you know what? That was such a sacrifice, building that business over a sustained period of time. I’m going to take a period of time and just focus in on family. And we’ve seen, founders go so deep into family, go off on, like, global tours of the world overseas, sometimes years, taking their kids and homeschooling them. Really remarkable things. So the innovation, the creativity of our clients knows no bounds. but there are these moments of truth and moments of trust around transitions that we want to be of service in. And the way we define it at Cresset is we want to be the first call for any of these things. So, you know, I just completed the exit. I’m thinking about my next chapter. What’s the right framework to think that through and who are people that might be able to help me? I’m starting a one, ah, of the great, great things that, Jill and I did with Our kids growing up was having weekly family meetings. And so someone will call up and say, I’m thinking about doing, a weekly or monthly or even quarterly meeting with my kids. And is there some best practices around that? We want to be the first call, not just about investments and investment opportunities and getting ready for the exit. We want to be the first call on anything that matters in their lives and where we can give them their time back and also reduce friction and worry. Because in the world, in a complex, rapidly changing world, there’s a lot of friction and a lot of worry. If we can remove that from our clients as much as possible and improve their lives, it unleashes incredible positivity on their part of what they can go out and do amazing things. And that is something we get very excited. Excited about.

>> Craig Gould: Well, Eric I really appreciate your time. If. If folks wanted to learn more about Cresset, if they want to keep track of you, if they want to find the book, where. Where can we point them?

>> Eric Becker: Sure. So, Cresset And the Cresset website is cressetcapital.com and then also long gamebook.com M. those are places where you can read more. the first chapter of the book is available for download. There are lots of white papers, that Cresset has done on different topics that are important to CEOs and founders and leaders and to families. and so we have a lot of content that’s available that is accessible and that, is part of our own mission of. Of doing the positive things that we’re doing in the world.

>> Craig Gould: Well, Eric I really appreciate you being my guest today.

>> Eric Becker: Thank you, Craig. This has been great. And as I mentioned to you before we started, I admire what you’re doing and making it your mission to go out and to find the very best resources, ideas, and to bring those to your audience so that they can implement them in their lives and get the success and the accomplishments that they’re looking for. So hats off to you.

>> Craig Gould: Awesome. Well, appreciate it.