Featuring Dr. Richard Roberts, Former Pharmaceutical Industry CEO

None

Episode Transcript

(00:00):
The following is a paid podcast.iHeartRadio's hosting of this podcast constitutes neither an
endorsement of the products offered or theideas expressed. It's time for Mind Your

(00:28):
Business on seven ten w R andthe iHeartRadio Network to present the weekly business
radio show produced by the award winningmarketing firm bottom Line Marketing Group b LMG,
sharing business and marketing strategies to makeyou and your business successful. Now
here's your host, the president andfounder of bottom Line Marketing Group, Yets

(00:49):
Hawks Sapless. Welcome to another editionof Mind Your Business right here on seven
ten w R, the voice ofNew York and around the world on the
pul iHeart Radio Network. Tonight,we have an incredible show in store for
you. What is it about.We're gonna be featuring none other than doctor

(01:10):
Rich Roberts. And the conversation is, how does one build a business that
can last from generation to generation?How we call a generational business succession.
And it's a very, very bigtreat to have doctor Rich Roberts, a
star who has been on the showbefore, talking about a variety of subjects.

(01:30):
In fact, it brings to mindthe at the very beginning of the
pandemic. A few years ago.He made some predictions on the show which
actually turned out to be spot onanyone that you can go back on YouTube.
You can go back and watch thatepisode and see what he predicted and
what I actually turned out. Again, thank you for joining me here on

(01:51):
another edition of Mind Your Business.On our YouTube channel, you can access
some of the great interviews that wefeature on the Mind Your Business Show over
the years. Beth Comstock, formervice chair and cmoa GE I've interviewed her
a number of times. Joe Hart, the president and CEO of Dale Carnegie,
and over three hundred episodes are upon our YouTube channel. On YouTube,

(02:15):
we're at seven ten w R MindYour Business and if you watch an
episode you have comments, put itin the comments right it. We'd love
to hear your feedback because and theguests may even respond to some of your
feedback. I mean, don't expectthem just to take it lying down if
they have something to respond. Wealso want to give a special thank you
to the great team here at bottomLine Marketing Group who plays a great role

(02:39):
in producing the show week in andweek out, in particular Slui Michal Nafi.
Thank you, special thank you toDarren, Peter and Robert at seven
ten w r ze Brenner, thankyou for the shout out, for the
shout out right before this show goeson, and a special thank you to
all those who stopped me anywhere andeverywhere giving me great feedback about the show

(03:00):
week in, week out. Well, tonight's show generational business succession, and
we're featuring doctor Rich Roberts, MD, PhD, Medical doctor, doctor of
biophysics, and former pharmaceutical industry CEOfor nearly a quarter century. Doctor Roberts,
thank you very very much for carvingout of your hectic schedule to join

(03:23):
us here once again on Mind yourBusiness. Thank you for having me fireaway.
Okay, well you want to go. Let's well, we already mentioned
at the beginning about some of thoseincredible predictions you made back in twenty twenties,
so I'm not going to visit that, although we probably should do a
show on that, like, hey, you predicted this, here's what happened.
What were you thinking? Like,how did you how did you call?

(03:45):
It's so spot on? But hey, that's maybe for a different show.
Okay, tonight show is how doesone go about to transition a business
from one generation to the next.My first question is, perhaps you could
take us down memory lane your storyof transitioning your family's business to then when
you were a CEO. How didthat work out? Tell us the story.

(04:10):
Okay, the long, long storygoes over twenty four years. I'll
try to longe then now, I'lltry to make it fast by the way.
I know, later in the showor maybe in a future show,
we'll talk about the tax the taxissues that were involved in leaving or passing
one a business to the next generation. It's a very, very critical issue.

(04:30):
In my case, it was nota critical issue because when I joined
the company it was on the vergeof bankruptcy and it was basically worthless,
so there was no lifetime give taxexemption of any significance that was involved.
But anyway, I did not startout in business, as I've told you
before. I got my medical degreeand also a doctorate in biophysics from the
University of Pennsylvania, and then Iwas at Harvard at the Brigham Women's Hospital

(04:56):
where I was an intern in internalmedicine, and my father and uncle had
father startment. Will join you know, a tiny, little generic Pharmacifical company
about maybe thirty five years forty yearsbefore that, and I was there in
Boston, actually lived on Brookline,but it worked in Boston, you know,
at Harvard Medical School. And myfather called when you said, Rich,

(05:17):
if you ever want to try yourhand in the business, you better
come now, because we're about togo out of business. So I told
them the Marshall Wolf ahead of thehouse. We have training program. I'm
going to take a year off tribebusiness and then decide what I'm going to
do. So when I when Iwent to the business, I didn't know
anything about business. I knew medicine, I knew science. I knew nothing

(05:39):
about business. I didn't know whatan invoice versus a bill was. I
just I just didn't know. Ididn't know the difference between profit and cash
flow. But I knew I didn'tknow, and I learned. And what
I started to see was when Iwas there, I didn't know how business
was done, but it looked liketotal chaos. I knew how to run
scientific experiments, writing out, plottingout hundreds of steps and executing them with

(06:03):
different you know, scientific devices andsamples and chemicals and reading results. I
knew how to bring all of thedifferent functions together for the care of one
patient. Lab results, radiology,radiology results, call on it. You
know, a cardiologist consult and allthese things together, and always they're changing

(06:24):
different results to contests and different statusto the patient. I knew how to
integrate and coordinate all those things towardsthe one goal of helping a patient,
but I didn't know anything about businessper se. So to make a long
story short, Yet, when Ijoined the company was thirty five million dollars
in sales. They were probably losingaround three to four million dollars a year,

(06:44):
but they didn't know because they hadsome kid with a bachelor's degree in
accounting running the running all of accounting, and he was just would literally he
would make up numbers because they didn'twork, so he couldn't get the numbers
there. Okays, I make upnumbers, and I just all kinds of
craziness going on. So long storyshort, though, you know, I
got the company stabilized and turned aroundthat first year, and then m and

(07:06):
avoided the bank, putting us intoworkout, and now over the next twenty
twenty three years after that. Soit's a it's a tale of struggles,
and in nineteen ninety seven, eventhough I brought the company up up up
up to nineteen ninety six, nineteenninety seven we crashed because of certain regulatory
issues that hit us and we wereon the verge of bankruptcy the Watcher's Hedge

(07:29):
Fund of the country at the time, when one large investor involved and my
uncle and father got got out ofthe business, and then I was able
to run it and within about threeto four years back to break even and
in uh twelve years later, wewere sold for a hundred million dollars plus
cbrs contingent by your royalties. There'sa lot that happened between those two places,

(07:50):
but that's MutS of my story andincludes family members. Just tell briefly,
like my uncle had his own inthe business and wants do orders in
the business, and they were bothcheering up the business. Let's say this
for a little later, yes,okay, So now now let's get into
some of the key questions that thatthat really apply to any business out there,

(08:16):
Because any business, at some point, right the CEOs the c suite,
they're going to move on, andthe question is what happens with the
business. So My question now iswhen transitioning a business to the next generation,
is it important to keep strategies orprocesses that were developed over the years

(08:37):
in place or do they throw themout the windows. Say, Kit is
a new sheriff in town. We'regonna but we're gonna We're gonna chart this
all out from scratch. Okay.Um, First of all, if the
new generation says, is a newsheriff in town, we're gonna start from
scratch, then you need to removehim from the company immediately because it's unlikely

(08:58):
that he knows what he's doing,but he may have enough arrogance to think
that he does. He might justrun it into the ground. And as
I'll say probably multiple times in thefuture, that what is probably can't see,
but I can see you're laughing outof your seat there. Um,
that it has to be based onqualifications, capabilities, and credentials, and
credentials may not be exactly what youthink of credentials, but well, we'll

(09:18):
talk about we'll talk about that.So anyway, there are two extremes to
businesses. Right, there's a smallermom and pop company. You know,
guy who has a pizza store,he has a clothing store, one store,
whatever the store is, all theway all the way up to a
large sophisticated corporation, which is youknow, hopefully what I was able to
build us as I was able tothink over operations and grow it. In

(09:43):
terms of processes and controls, they'requite different. In the smaller like mom
and pop business, it's the mom. It's the mom or the pop the
entrepreneur that is, you know,doing most things and working like a maniac.
And you know hawdrid checks gets signedoff one to pay bills, he
just signs it. In a largecorporation, you have different levels of signatures

(10:07):
required, and even multiple signatures requiredas it gets to hire and higher amounts
of money any one the signs ofthe corporation. So when I first joined
our company, you know, Iprobably had to sign off on a check
for five hundred dollars. But towardsthe latter part, I wouldn't get involved
in anything less than one or twomillion dollars. But but to make sure
that nobody's upstanding with money. Inthe meantime, you have process you know,

(10:30):
the control, an accounting, anaccounting department and they're auditing and all
controls in place. So the controlsare different on the scale of the company.
I'll tell you for example, weget to the largest like pharma company,
largest pharmaceutical companies, we try todo business with them. In some
cases we did or technologies or whatever. For them to make a decision,

(10:52):
they had to have sign offs fromthe legal department, the regulatory affairs department,
the marketing department, to finance andeveryone actually sign off on what on
the deal. So that was likethe ultimate controls to the degree were bias
by the way, um little getsdone. And that's part of why they

(11:13):
they've not done so well based ontheir ability to innovate and keep moving.
But because but but it's been enough. They've been able to obviously to keep
increasing value and also through consolidations,you know, through purchases and consolidations,
admitable degree efficiencies that way. Butthe bottom line is, so whatever those

(11:35):
processes are, the new CATO comesin and better not just say we're changing
everything right away, because you're likelyto end up spiraling out of control with
the disaster. Well, on theother hand, that doesn't mean that changes
don't need to be made. Itdepends on the merit of what wants to
be changed. We're speaking with doctorRich Roberts, MD, PhD, medical

(11:56):
doctor, doctor of biophysics and formerpharmaceutical industry CEO for nearly a quarter century,
and tonight show is generational business seccession. We're gonna take a show,
commercial break, stay tun Paraflight luxuriousand private. Our network of jets and
helicopters provide stress free corporate flights fordiscerning business owners and executives. Experience the

(12:20):
Paraflight difference as we fly you fromanywhere to anywhere, anytime. Call eight
four four five three eight one nineone one. Jet and Helicopter Charters twenty
four six Dispatch Center, Domestic andinternational urgent flights, concierge, service,
ground transportation, gourmet kosher catering.Paraflight. We focus on your flights,

(12:41):
you focus on your business. CallSimshane and the parafl team toll free at
eight four four five three eight onenine one one. Paraflight eight four four
five three eight one nine one one. Experience the Paraflight difference eight four four
five three eight one nine one one. Powerful people, famous names, impactful

(13:07):
content leaders who are able to engagetheir teams more effectively, who are demonstrating
a level of understanding and empathy.It doesn't mean we're not going to hold
people accountable. We have to holdpeople accountable for results and at the same
time as a great quote, whichis I don't care what you know until
I know that you care. Theclip you just heard is from the CEO
of Del Carnegie, Joe Hart.For more fantastic business advice, follow us

(13:30):
on Instagram at business class clips.Living a purpose driven life is the theme
of this year's Pinnacle Conference due toeleven to thirteenth thea Toronto. To learn
more, go to coveneantgroup dot com. The program is designed for industry leaders
entrepreneurs who want to become better businesspeople and better people in business. There

(13:56):
are five key areas self and help, family, relationships worked, and community.
It will be addressed. Each ofthese is centro to living a purpose
driven life. To learn more,go to Covenant Group dot com. Finally,

(14:18):
a payroll service that does things yourway. At brand's paycheck, You're
not a number, You're a partnerbrand's paychecks. Personalized payroll solutions ensure that
your business receives your financial information theway you want it. From complete payroll
services and time tracking to benefits,administration, and HR solutions. Brand's Paycheck
helps streamline your business's payroll process andmaximize productivity. Call eight eight eight seven

(14:43):
five seven three zero two zero.That's eight eight eight seven to five seven
three zero two zero to schedule afree consultation. Brands Paycheck services a wide
range of industries nationwide, including hospitality, transportation B to B B two C,
nonprofit finance, retail, healthcare,real estate, and more. Learn
why companies nationwide rely on Brand's Paycheck. Call eight eight eight seven five seven

(15:05):
three zero two zero. That's eighteight eight seven five seven three zero two
zero to schedule a free consultation today, or visit online at brands paycheck dot
com. That's Brands paycheck dot com. And we're back mind your business with

(15:26):
the sex applis right here on seventen will We are the Voice of New
York and the powerful iHeartRadio Network.Tonight Show Generational Business Succession all about how
does a business go from one generationto the next. There's some businesses out
there that have been that have beenaround for decades, some over one hundred
years. How does that happen?It doesn't happen by accident. Then Tonight's

(15:48):
guest doctor Rich Roberts, MD,PhD, medical doctor, doctor biophysics and
former pharmaceutical industry CEO for twenty fouryears who who Yes, he transferred transformed
his business from one generation to thenext. And that's why we asked them
to please carve out some time andjoin us to address the audience on this

(16:11):
very critical subject. Again, DoctorRoberts, thank you for joining me here
once again, I'll mind your business. Glad to be here. Thank you
question now And by the way,in the previous segment, you touched on
something very important and of course,and this will even come up throughout the
conversation that the new leadership has tobe extremely sensitive. If someone's going to

(16:33):
come in with even the slightest bitof arrogance, oh how terrible that will
be to the moral fabric of thecompany. And in fact, this brings
me to my next question. Howdo you navigate when your morals, values,
and leadership skills and styles are differentfrom the previous generation that ran the
company. So, first of all, before you turn the reins of a

(16:56):
business or control of business over tothe next general ration, you better make
sure that that person is in thebusiness is demonstrating that they have the correct
values, the crack, correct attitudesum for the protection of the business,
protection employees, and also protection ofthemselves. I mean, you could have
some next generation comes in who thinksthat he can do a bunch of dishonest

(17:19):
things and get himself into criminal trouble. You can you can have someone who
comes in is not at all sensitiveto the needs of the employees or respectful
of the employees. You can getinto labor trouble. So you don't turn
the reins over to someone until they'vedemonstrated that for a long time. How
long, Oh, I don't know. Um, you know, it depends

(17:41):
if if you if you if you'returning it over because you have to get
out for you know, having abit of medical reason, then I guess
you may not have as long asif you want to just keep going and
you know, rock and rolling yourselfand have them see how how they're doing.
But you'd be careful before you turnthe reins over. Make sure that
they're proven that they can do itnow. On the other hand, you

(18:02):
can't just assume that the next generationis it might be lacking values that the
first generation had. In my case, uh, it was actually kind of
the opposite. I'm the first OrthodoxJew in the family and in four generations.
And there are many things that Isimply wouldn't do or ways that I
behaved that were radically different than theway it was being run previous to me.

(18:26):
And they can give you many examples. Yeah, please. Their drug
wholesalers now there's there's only a fewlarge most of the most part of a
few large ones, you know,McKesson, Cardinal, Membrosource. But back
then they used to be about fiftymajor wholesalers across the country. And when
I first joined the company, We'regoing to the Generic Pharmactical Association meeting,

(18:49):
I think I think it was inPuerto Rico with and we're going to you
know, we get together all thegeneric pharmaceutical manufactors. We were generic at
the time. Later transition into away technology and form a company, but
at the time generic and um whenI when when? And I'd just taken
over as chief operational officer or thecompany after being there for a few months.
Again, because you know, myfather and uncle could see that I

(19:12):
was really the only one could getthings done effectively there. And also there
was there was a oh I don'tknow. Power play going on, not
for desire for power, but desireto be effective. And I was going
to I was gonna, I resigned. I was going to go back to
medicine and science. It was thecrazy things going on there. And then
my uncle decided to fire his sons. Then I came back UM. But

(19:37):
but there's some things that I firedand I didn't. I quit because I
couldn't take it anymore. And thenanyway, but that's that's the long start.
But anyway to going to the firstUM Wholesale or the pharmacyical wholesaler conference.
In my tenure at the company,we couldn't get anybody to meet us.
No one would go out with usfor a meal, nobody would meet
with us, and our company hada reputation as being a dishonest company throughout

(20:00):
the industry. A year later,when we went back to the meeting,
a year if I had been incharge, we were booked day and night
with meetings with people. Because wedecided to start doing things honestly and tell
the truth. I tell people Ihave a radical approach to business. We
tell the truth, how sad,how sad, radical prayers business. But

(20:26):
any way, also tell about mortalsethics. You know, when I joined
the company, there were multiple genderdiscrimination lawsuits against the company. And what
would happen is people would come upto me and they would they would say,
they would say off colored jokes,and I wouldn't respond to the jokes.
I would just move on to thetopic that had to be addressed.
And then they suddodis use curse words. I would respond as though I didn't

(20:49):
hear the curse word, and Icertainly would never use a purse word myself.
And then that tended to be anethic or value values that when you're
president CEO, they look to you. I mean, this isithing I learned
on the job, but they lookto you and from a like from a
psychiatric perspective, there's even some youknow, transparence going on this even in

(21:10):
a parental figure. So you setthat tone. So I guess the point
of trying to make is that it'snot always that the next generation has lower
VAT, lesser or worse values inthe first generation. It could be the
opposite. Also, um Now,as parts as part of this answer,
you had touched on that that there'sthere needs to be a time period of

(21:33):
this transition. Now, of course, if God forbid it's because of a
medical issia, then you can't controlthat can't be controlled. But when it
can be controlled, and as youmentioned, the time frame is you know,
is subjective, But is it fairto say that it needs to be
at least a minimum of twenty fourmonths twenty four to thirty six months.

(21:53):
I don't think that there's any ruleof thumb, something I would probably mention
later depending out this discussion goes.But it really depends on the value when
the talent and capability demonstrated by thenext generation. I mean in my case,
which I'm not saying is typical,but it was became clear to not

(22:15):
only the family, but also themembers of management in the company, who
were the few that were left whohad any significant capabilities, that I was
the one to get things done,and I was the one who wouldn't allow
chaotic situations to go on, peopleto be undermined. Again, I could
give his story of the story ofthe story. So and after only three

(22:37):
months I said, I said,I'm going back to medicine unless you make
me coo. Which, by theway, when I joined the company three
months earlier, I've never heard ofa COO. But there was a guy
named Greg Smith. He was thedirector of marketing. He had an MBA
and he taught me about you know, the few there were left that had
management capability. They were like whisperinginto my ear, like what's going on,

(23:00):
trying to bring me up to speed. By the way, there's no
Internet back then, so I didn'tyou know, wouldn't be able to just
go learn and google something like allright, see all right, someone saysn't
even we have to create an invoice. Oh what's an invoice? Go to
Google? Right on this case GPTfour. But that's another story. So
um so, I don't know thatthere's a rule of thumb, but you
need to make you need to makesure before you turn the reins over that

(23:22):
this verset could do it. Andby the way, you could do it
in stages. You can have thatperson to be the director of a department,
then if vice president of a department, and see how they perform and
you and if you're if you're reallya good leader of your company, you'll
have contacts all throughout the employee structornot just man instructor instructure, also the

(23:44):
hourly employees and those feedback to youquietly, what's really going on behind the
scenes. Now here's a question whichis of course so much more relevant in
today's day and age with the rapidpace of technology and today with AI.
Is there a specific approach when abusiness drastically changes from generation to generation,

(24:07):
and that is the approach of thebusiness. So, for example, if
let's say you take a brick andmortar operation and now it's becoming a online
how do you preserve the brand whenthe marketplace is changed in a way that
does that it just doesn't jive withthe previous generation, meaning that there's there's
a shift around the same time thatthere is a major technology shift, there's

(24:30):
also a transition from generation to generation. It's a loaded question, but I
figured if there's anyone I could ask, I could ask you. So generally,
the second generation, as you havethe entrepreneur, and then the second
generation. Generally, the second generationis not nearly as capable as the entrepreneur.

(24:52):
I mean, just forget genetics,but just to be an entrepreneur,
to be able to create and whetherthe storms and to build something is a
pretty rare talent. A lot ofpeople think like, oh, if only
I get own my own business.Oh man, get ready for stress day
and night, threats from everywhere,problems issues. So um, you know

(25:17):
that entrepreneur had that capability and builtthat business up. Generally the second generation
does it. But they might andthe second generation might be better and smarter
or at least at least you know, similarly capable. And that's what that's
what you really need to assess.But in terms of change the business,
change is not good and change isnot bad. It depends what the change

(25:42):
is, what the merits are thechange. So just some examples of my
own experience, not about the nextgeneration. But I remember once one of
my at the time, my seniorvice president of operations, who had maybe
I don't know, maybe four hundredpeople reporting to him and doing the entire
manufacturing operation, manufacturing about two billiontablets and capsule a year. And once

(26:07):
I asked him, I said,why do we do this process this way
and not that way? And hesaid, because that's the way we all,
because that's the way we always didit. I went being, I'm
going to terminate him, I'm goingto sever him from the company at some
point because he can't be forward thinking. Now if he says, well,

(26:30):
we've looked at these and these arethe poor other technologies available. We've evaluated
them, here's the analysis, here'swhy they aren't doing. Now is better
than them, great fine brick andmortar. If you got a bookstore and
all of a sudden, Amazon's comingonline, and you say, that's the
way we've always done it, we'renot changing. So now you're headed towards

(26:52):
disaster, towards catastrophe. So youneed to you know, someone won't change,
is in almost all cases doomed.You'll find a case or two.
Is you know, some company,the tiny little gain, a single person
to person company. He's a craftsman, knows how to do this little niche
or that. But for the mostpart, now, if they won't change,

(27:15):
they're doomed. Because why, Imean, we have so much improvement
in wealth in this country. Imean I'm not talking about wealthy people.
It's about the increase in wealth inthe country. I mean, if someone
doesn't have a car now they thinkthey're poor. Someone doesn't have an air
condition, they think they're poor,like what never used to be that way.
There's been a tremendous increase in wealthin in the country. Because there's

(27:38):
been so much advancement in technology that'senabled people to produce more and more and
more, making things less costly andmore accessible to the public. So things
for the most generally will change.You get better and bigger. But we
need to analyze every one of thosechanges. I can tell you at one
point in the pharmaceutical industry, ourcompetition and generic pharmaceuticbles of the ultimate commodity.

(28:03):
In other words, when it comesto oil, I guess you have
some some heavy oil, some lighteroil. You might have Week I got
I don't even know week, butmaybe thicker kernels lesser. But when it
comes to generic pharmaceutables, each youreye, your prof and has to be
made to the exact same FDA specificationsthat are in your application, that are
equivalent to the brand. And notonly can you not make it any better

(28:26):
than the brand, it's illegal tostate that it's better than anybody else's.
So you ultimately end up selling onprice and service. Good companies get their
service. The production schedules, productioncapacity tuned, fine tuned, so then
going on price, it goes downand down and down. So then we
saw that art was then I heardfrom our vice presidents or directors would go

(28:51):
on to India and China to sourcepharmaceutical row materials. By the way,
a big topic now about bringing thosethings back into the country because the exposure.
And they said to me, said, you know, I kept hearing
rich um this generic manufacturing competitor,that generic manufacturing competitor. They're working on
opening factories in India. And they'reIndian companies now manufactors of the finished product

(29:18):
tablets and capsules that are working onapplications. Is setting with the United States.
So our price structure, I meanthey were in India, they were
they were the time paying their employeesabout fifty dollars five h fifty dollars a
month. Um. We and youknow labor laws forget it, environmental laws
that forget it. Um, Sothere's no way compete. I saw that

(29:41):
we were able to crack the patenton a large granted pharmaceutical product that brought
us in a couple hundred million dollarsand was able to use that money to
them bringing physicians and scientists which Iled to develop new products and work with
new technologies. Um to able totrhisition to becoming a form of company.

(30:03):
But so it doesn't. Some transitionsare good and some are not. And
a substantial part of your success orfailure as a CEO is going to be
your ability to accurately determine that.And thank you for sharing that story about
the potential I don't want to saycompetition from India. But just like the
the again, that train was comingdown the track, some CEOs would say,

(30:26):
Nah, it's not going to workout for them. The FDA is
not going to let them, andthere's going to be in denial, have
their head in the sand. Andjust like you know, it's I'm you
know, I'm I'm putting it outof mind because you know nothing I could
do about it. And exactly ifyou give a couple of quick example,
please please in business schools, whichI've never been to, I guess,

(30:47):
or maybe I've been to the ultimatebusiness school in sense right, the school
of hard hard knocks, but clarsitcases Bucky whips. Right, if you
want to have BUCkies, you werejust to whip the whip the horse that
they can go fast. Well,here comes the car. If you don't
see that the car is coming andit's gaining traction, you're in trouble.
If you're sticking to buggy whips liketoday, you could see if the young

(31:11):
gasoline engines. If you don't seeelectrification coming. But they do. They
all do, right because they're big, kind of sophisticated companies that make sure
they make those transitions. Um Xerox, Codact, all those you know,
Polaroid, they're all examples of companiesthat wouldn't make the change and got crushed.
Again. You need to analyze thechange when if you look at you,

(31:33):
yes, me, if I couldhave a camera that can take um,
you know, one thousand pictures onit and it doesn't cost me anything
because it's tronically on a memory versushaving to put a roll of film in,
get twenty four shots and send itoff to be developed. A you
say, well, yeah, Ithink we got a problem. But some
of these companies apparently didn't do soand they got crushed. So you have

(31:56):
to you have to be smart andanalyzed. And that's we're ceo makes or
fails to justify his salary. We'respeaking with doctor Rich Roberts, MDPHD,
medical doctor, doctor of biophysics andformer pharmaceutical industry CEO for nearly a quarter
century and to NIGHTHO is titled GenerationalBusiness Succession. How does one take a

(32:21):
business from one generation to the next. We're gonna take a short commercial break.
Stay tuned. Paraflight luxurious and private. Our network of jets and helicopters
provide stress free corporate flights for discerningbusiness owners and executives. Experience the Paraflight
difference as we fly you from anywhereto anywhere, anytime. Cool eight four

(32:44):
four five three eight one nine oneone. Jet and helicopter charters twenty four
to six Dispatch Center, domestic andinternational urgent flights, concierge, service,
ground transportation or mat kosher catering.Paraflight. We focus on your flights,
you focus on your business. CallSimshane and the Paraflight team toll free at

(33:05):
eight four four five three eight onenine one one. Paraflight eight four four,
five three, eight one nine oneone. Experience the Paraflight difference eight
four four five three eight one nineone one. Living a purpose driven life
is the theme of this year's PinnacleConference, due eleven to thirteenth in Toronto.

(33:30):
To learn more, go to CovenantGroup dot com. The program is
designed for industry leaders entrepreneurs who wantto become better business people and better people
in business. There are five keyareas self in health, family, relationships,
worked, and community that will beaddressed. Each of these is centro

(33:53):
to living a purpose driven life.To learn more, go to Covenant Group
dot com. This is Richard Solomon. If you're having a corporate event or
a seminar workshop and you're looking fora public speaker that's just a little bit

(34:15):
different, why don't you give mea try five one six, three seven
one four nine two four. I'ma radio host, I'm a lawyer,
I'm an author, I've been alecturer. I've got a lot of really
great war stories. And if youwant to learn more, go to the
Solomon channel dot com and you'll seeall the great videos and everything that we've
done over the years. We've donea lot of great stuff, including cash
flow, cash flow dynamics, thingsabout small business, dealing with regulation,

(34:37):
and surviving the challenges in this verytough and competitive business environment. Five one
six, three, seven, onefour nine two four five one six three
seven one four nine two four Andwe're back mind your business with the successlist

(35:00):
right here on seven ten w R. Thank you so much for joining us.
And in a couple of weeks thisshow will be up on our very
popular YouTube channel. On YouTube,we have over three hundred episodes that have
appeared here on this incredible broadcast seventen w R Mind your Business and you

(35:20):
could make you could please. We'dlove to hear your comments. You'd love
to hear your feedback again on YouTubeor at seven ten w R Mind Your
Business. Tonight show title generational BusinessSuccession and that title itself gives it away.
How does one transfer how does onemake sure ensure that the business will
survive from one generation to the next. And we have none other than doctor

(35:45):
Rich Roberts, MDPHD, Medical doctor, doctor of biophysics and former pharmaceutical industry
CEO for twenty four years URL Pharma. And in the first few segments of
tonight show, doctor Roberts a wealthof information about also, you know,
not just transferring one at the businessfrom one generation to the next, but

(36:07):
even just good advice as far asrunning a company, dealing with challenges and
making sure to see what's around thebend. Don't have your head in the
sand. Um. We now turnto a very delicate part of transferring a
business from one generation to the nextThis is really a loaded one, doctor

(36:27):
Roberts. And how does a newgeneration of leaders coming in handle the delicate
nature that they are now becoming bossesover over a team, over employees that
that that that maybe weren't even bornwhen they joined the company. I mean,
you have you may have let's say, have a company that's fifty years
old, okay, and and there'ssomeone who's been on the team since nineteen

(36:52):
ninety three. Okay, so they'reon for thirty years. And then uh,
let's say the new leader comes inand it's forty years old. Was
ten years old when this employee joineda company? I mean that we can't
ignore that this something in the room. It's a very delicate nature. How

(37:14):
does a company go about that?There? Where you bring up is a
very very astute question, and it'sit's really critical. Now you have to
look at two sets of employees.When you're looking at hourly employees, and
people want sort of the lower endof the salary employee group, lower management
group. Their main concerns generally orjob security, pay and respect. And

(37:40):
that's critical because you might have anew kid comes in and again he thinks
that because he's the son of theboss where he is the owner. He
can now treat people disrespectfully, whichby the way, just shows a defect
or deficiency in that person's value systemor that person's personality that they feel that
they need to show this dominance overpeople, which is just a terrible way

(38:02):
to treat people. But job security, pay and respector generally what so the
hourly workers will be concerned about andlower management, but middle of the upper
management is also going to be concernedabout advancement, the opportunity for career advancement,
and for them to see that thedynamic, smart, capable, dedicated

(38:25):
entrepreneur that started this company has nowturned it over to his funky son.
Let's say son could be a daughter, it doesn't matter. But there's a
funky child who is now tearing theplace up and you know, laughing all
the time and make a big jokeout of everything and making decisions on a

(38:45):
whim and student body left, studentbody right. This will make them feel
that the stability the company is poor. And also like I was looking to
become president or senior vice depends howbig a company is. And and now
they put this flunky in as president, as are there other funky relatives going

(39:10):
to come in as as vice presidentsunderneath him, and is this, you
know, my job advancement. SoI guess it goes back kind of what
I said before that you, you, as the business leader, better make
sure that if your child comes in, that this next generation comes in,
that this next generation has proven himself. Yeah, I'm going to say himself

(39:31):
himself herself doesn't make a difference,but has proven himself. And one way
to do that is have them workup through the ranks and make sure that
they actually perform at each stage inthe right Now they don't have to go
on the same twenty year career pathas someone who's not going to be the
is not the next generation to takeover the company. But if you just

(39:52):
put him right at the top,that's a big mistake, big big mistake.
Now to hold on to this questionand even to make it more as
you know, as the word goestiftic morphinesse is that the new leader comes
in and and needs to be needsto show an extra degree of respect,

(40:14):
care and concern because of the factthat there's a nepotism effect that's in the
room and no one could you know, he can't not that he can't deny
it, but it's just there.It's the elephant in the room. Yet
at the same time, like inyour case, the especially if the company
needs to be turned around, itneeds an executive, it needs someone to

(40:37):
make tough decisions. But at thesame time they gotta be an extreme mensch.
Yes, you're so right with yourobservation. You're so exactly one hundred
percent leisure accurate on the target onthis. When I first joined the company,
again, there was no effective managementthe places in the state of k

(41:00):
Us And when I when I becameCOO, I started our first meet,
our first meeting of the management,which I had multiple days a week,
and all the notes of the meetingwould would be published so everybody would know
what everyone's responsibilities are, which wasnever done before. And I would say,
Okay, now we're gonna I'm newto the company, we're gonna.

(41:21):
I had the heads of all thedifferent departments there, We're gonna start out
with listing the topics of what weneed to talk about, just the topics,
no details. Okay, we havethe warehouse has an inventory expiring because
not being rotated. Our marketing campaigns, we're getting the advertisements out a week

(41:43):
after the marketing campaign period has ended, which is crazy. Then someone would
say, oh, so we needto get a better photocopying machine to do
the marketing materials. Someone says,we got to get someone who's going to
run that machine. I said,stop talking. Stop what I said,
stop talking. I said, we'relistening to topics. We're not doing the

(42:06):
details yet. The topics are gonnabe Roman numerals in the outline and then
we're going to go through each oneand pick it apart. So strictly to
the topics. So after that meeting, it came back to me that a
couple of members of management, includingone or two of the family members,
you know, we're not so capableof say we're we're considering leaving the company

(42:30):
because of the way they were treated. So I said, you know,
the company's democracy. If you don'tlike it, you can vote with your
feet. And by the way,nobody left and we got things organized,
we got things done. So yeah, no, when you come in,
it depends on situations. I cameinto a disaster. But if you're coming

(42:52):
into a company which is running well, doing well, it's grown over the
last ten twenty thirty, forty xyears, whatever it is. If you're
in the president CEO, the moreyou humble yourself or respect people, the
greater you're going to be to thembecause they already know the power structure.
They all know it. Everyone knowsit. And that you're treating them nicely

(43:14):
and as a good human thing,which you should do any way in any
case, in any circumstance, isjust all that and more powerful. Now,
in the preparation for the show,you had outlined five key points that
the new generation must factor in.It's very beautiful, it's I think it's
five e the new generation pointers thatthey must be cognizant of. Yes,

(43:42):
number one, the new generation betterbe capable. Again, if you're going
to put in your your funky sonwho can't get it done and is disorganized
and whatever the bad qualities are,isn't smart, doesn't understand you can't do
that. You're gonna You're gonna losethe company eventually, it's going to spiral
out of control. It must becapable. You also have to have the

(44:06):
next generation, as I said,has to show respect to everybody I know,
like me as president and CEO.And it turned the company around.
Everybody knew me. Of course,when when I was walking through the hallway
of one of the manufacturing areas,the bell went the siren where you call
it went off. It was theend of the lunch break. All that
hourly workers around like the tablet machine. We're walking down the hallway. I

(44:29):
held the door open for them.Now none of them wanted to walk through
it as no, please, pleasego through. They wouldn't walk through it.
Okay, message delivered right, messagedelivered right. And by the way,
I didn't do it to deliver amessage I delivered. I did it
because I respect them. They're goodhuman beings. They're working for a living
to try to support their families.I mean, they're totally deserving on full

(44:52):
respect, I don't, so theyhave to be respectful. Third, you
need the next generation to work harderthan anybody else. We had. At
one point we had eight hundred employeeswith the contract salesforce. I work harder
than anybody else. Everybody saw it. I worked at a maniable pace day
and night. I would multiple thingshappen to the same fact and all day

(45:15):
long, all day long, morning, noon and night. Everyone saw that
you have to demonstrate your de leadby example, demonstrate that you work harder,
also demonstrate talent um. You know. As as I would say is
the next generation has to be highlycredentialed. Now m Credential doesn't necessarily mean,

(45:37):
um, they have a medical degreeor a doctorate like I do.
Credential means they've they've shown the abilityto work hard and to build and be
successful and to lead in different stagesthrough where you know, depends out all
where other things they've done, whichis why, which is why. So

(45:58):
that's the credentials. But to putthere again some flunky who has no credentials,
never did anything, and now he'sthe big boss. Mistake. You
can't do it. They'll tear upthe company. And what will happen is
if you do this, you putin somebody next generation who isn't up to
snuff and doesn't make the right decisions, who listens to gossip and doesn't how

(46:22):
to chef, fact check things,and and there's all these others. What
will happen is you'll find that thepeople that are the most talented, the
most capable in your company will leavefor other jobs because headhunters are calling them,
you know, talent recruiters are callingthem all the time, and and

(46:43):
what you'll be luck with is theone who couldn't get other jobs. And
that's it'll be a drain of talentfrom your company. And that's again a
big warning sign. Here's an interestingquestion now. Of course, there isn't
one size fits all in any situation. It's like I remember in one of
the previous interviews, I said,you know, like you know, if

(47:04):
someone came over to you, doctorRoberts and said, you know, can
you share with me what's the numberone tip in business? And I remember
your answer with something like the numberone tip is you don't understand a thing
about business because there is no numberone tip in business. It's a lot
more complicated than that. My questionnow is is there any type of general
advice or suggestion when a company hasmade the decision that they are going to

(47:28):
hand it over to the next generation, should they make an announcement about it?
What should kind of the internal communicationexternal communication, any tips regarding that
so that people are not just likeh It's a big surprise, a big
shock the way that I communicated withall the employees back when I was running
the company. I guess it changedas you know, technology came in and

(47:52):
technology advanced, So how do youcommunicate with the employees now? Whatever mode
you use that you go out toall the employees. Now, in addition
to my hanging memos behind a glasswindow, keep them informed every step along
the way. I also would holdevery three months. I tried to,
by the way, I didn't alwayskeep to it because I was just so

(48:13):
overwhelmed with work. But I triedto have meetings all the employees. At
first, it was like two orthree meetings. That it became I had
a five meetings on the same topicbecause he had different shifts and different locations.
And but you have it could bea couple hundred people in the meeting,
you know, one fifty two hundred, two fifty three hundred in the
meeting. Give him lunch, andI would just and I would do a

(48:35):
you know when I screen, doa presentation and tell them what's going on.
And I told him the band stufftoo. I told him the threats.
I told him that, you know, and people appreciated that they were
being told the truth. So that'show would communicate. And you obviously want
to communicate the next generation. ButI strongly suggest that next generation come in

(48:59):
and work their way up and becomeum to a large degree, the obvious
choice. They may not be theabsolute most talented person in the company,
but they need to be. They'veseen that, like, oh, this
is the boss's son. This guy'ssmart, this guy works hard, this
guy works well with others, thisguy's very positive. Um, and they

(49:19):
see that. They kind of knowthe tra directory. There's not going to
be a surprise to anybody. UM. And I do want to say something
else way about about putting your childin the company, you know, or
other relatives the company. It's verydangerous in terms of relationships. Um.
You know, we talked about howlong a child should be proving himself before
he gets to be president CEO.Well, it's going to vary. But

(49:43):
you may be too long the childare resenting you. It may be too
short, and then you're and thenthe child is not ready for that for
that transition. There could be otherrelatives. They might be sibling rivalry in
the company. If you have multiplechildren in there, and you know why,
why is that this one got tobe president and I'm stuck down here?

(50:04):
And then you never want anybody tostruntle in the company. And I
want to tell you that when I, as I told you, one of
my cousin was terminated from the company, that was when I told my uncle
that I had I was resigning,and it was clear that I was the
only member of the Roberts family whocould get anything done. So yes,
I mean, now that you know, when are part of the company,

(50:25):
what's the first thing I should do? And I said you should, You
should terminate your son. And Isaid, the problem is ready for this,
I said, the problem is notthe son, your son. The
problem is you, I said.Rugby. When Rugby, which is a
company in our industry, grew tobe literally thirty times the size of our

(50:46):
company. Why because when the entrepreneur, when the founder's son came in and
was you know, and it wasa flunky, the guy fired his son.
And Goldline was another large company thatwas maybe fifteen times our size.
What happened when his son came inand was using money to buy racehorses and
fancy cars. The entrepreneur fired hisson. So the problem is you,

(51:08):
because you're not willing to do thetough things to make the tough decisions that
have to be done to be successful. Then he said to me. Michael
said, Okay, from this pointforward, my son never stops footing the
company again. Will you come back? Wow? So it was yes.
What's fascinating about that is that hewas so self aware to on the spot

(51:30):
make that because we can't ignore theywere clearly emotions at play here. Well,
again, I was a medical doctorand doctor biophysics, I said,
I said, I'm going to goback to internal medicine. I'll go back
to Harvard. I don't I don'tneed this job. But when you're talking
about professionals or capable in other areasof business or whatever it would be,

(51:51):
they also generally don't need that job. Now, maybe computer programs, right
programs right now in the jobs,because you know they're being laid off in
large numbers in Silicon val Valley.But you know, the professionals generally,
who are very capable, they don'tneed the job. So, um,
I was able to pursue that pathbecause I was just going to go back
to medicine science. Wow. There'sactually only around two minutes left to the

(52:15):
show. So just to hold onto this last point, any any tips.
It's it's really unfair. It's kindof a look it's a loaded question,
like all of them have been.But just tips in general working with
family, a spouse, a child, a parent, any any It's not
fair to do this in two minutes. But well, I mean the first

(52:37):
tip is don't do it. Imean, I heard some guy is in
business with his wife and I havea great relationship. Thought, well,
that's amazing. You know, there'sthere's so many stresses, there's so many
complications, and hey, if they'rethey're working together and it's working, great,
that's to be in tasting. Butthe risks are huge having a child

(53:00):
in the business. You know,the child wants to wants to grow up.
You know, let's say the childis now thirty five years old and
you're still making the decisions. Thechild feels you know, undermined or maasculated
and wants to be a grown up. Well, you're not ready to go
off into the sunset. So youknow, it's it's better not to put

(53:21):
a relative into the business if youcan help it, and especially if they're
not not so capable. But peopledo it, and sometimes it works,
and I tell you, guys,the Orthodox choose there's a very strong,
strong attitude or value that children havefrom when they're about two years old.

(53:42):
All the time going of keeping ofaim, respecting, honoring, respecting an
honor your mother and father. Thekids don't have the kind of resentment towards
their parent for the most part,unless ignoring individuals for the most part,
don't the kind of resentment towards theparents they'll see in the secular world.
You know, they're kind of angertowards the parents that you'll see in the
second of the world. They valuetheir parents and value their grandparents, value

(54:06):
the elders. So that stands abetter chance than general And there are plenty
of cases where the next generation camein, worked together great and did great.
But there's there's the stakes are highbecause you get end up destroying relationships
that are really the most valuable thingsthat you have in this world is relationships

(54:28):
with your family. What an incredibleshow and there is actually many many more
points that we really can get toand bezessm. We will have future shows
together with doctor Roberts. Doctor Robertsa medical doctor, PhD, Doctor of
biophysics and former pharmaceutical industry CEO forover for nearly for nearly a quarter of

(54:52):
a century. Tonight show generational businesssuccession, how to transfer the a business
a successful business from one generation tothe next. Wells wraps up an incredible
vision of the Mind you Business.Turning again next Sunday night for another great
edition of Mind your Business Right hereon seven ten War, The Voice of
New York have a successful week.Seven ten War and the iHeartRadio Network present

(55:20):
Mind Your Business, hosted by thepresident of bottom Line Marketing Group, Jitsok
Saffliss. Founded in nineteen ninety two, bottom Line Marketing Group is a strategic,
creative and execution driven marketing agency helpingbusinesses by clarifying and promoting their vision,
mission and purpose to support its leadgeneration and customer retention initiatives to gain
market share in their industry. Mindyour Business focuses on business and marketing strategies

(55:45):
for success. Tune in every Sundayevening at ten pm for this intriguing radio
show is Jitsok interviews Fortune five hundredexecutives, business leaders, and marketing gurus
from a wide variety of business industries. Now Jitsok and his guests offer their
knowledge and expertise to help you besuccessful every Sunday night on Mind your Business.

(56:19):
Living a Purpose driven life is thetheme of this year's Pinnacle Conference due
to eleven to thirteenth, Ina,Toronto. To learn more, go to
Covenant Group dot com. The programis designed for industry leaders entrepreneurs who want
to become better business people and betterpeople in business. There are five key
areas self and help, family,relationships, work, and community that will

(56:46):
be addressed. Each of these iscentral to living a purpose driven life.
To learn more, go to CovenantGroup dot com. Powerful people, famous
names, impactful content. I alwayschallenge people, what car are you driving,
what computer are you using, whatshoes are you wearing. There is

(57:08):
a segment that that doesn't matter,but most other segments they are brand consumers.
They have an affinity. I'm onthe board of Nike. People are
passionate about the Nike brand. Thatwas Beth Comstock, former vice chair of
GE. Follow on Instagram at BusinessClass Clips for more. The proceeding was

(57:30):
a paid podcast. iHeartRadio's hosting ofthis podcast constitutes neither an endorsement of the
products offered or the ideas expressed.