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A Not-So-Small Business Keeps Growing

Fifteen years ago, I moved my business into a new headquarters, reorganized the company and wrote in our newsletter about my succession plans to keep Palisades Hudson going at some future time when I would no longer be present to run it.

A few days later, an envelope arrived from a longtime client and good friend. He had clipped out the article, enclosed it with some other correspondence, and written across the top: “You’re only 44!”

George is still a good friend, and he’s still with our firm. So am I, although I’m not 44 anymore. I still believe it is a good idea to let employees, clients and the world at large know how I propose to have Palisades Hudson continue when we reach the point — still in the fairly distant future, I hope, but certainly 15 years closer — where I am no longer on the scene. A time of transition is as good a time as any to share that information.

This is another of those times. This month, after 24 years in Westchester County, New York (first in Hastings on Hudson and these past 15 in Scarsdale), we moved our Northeast office to Stamford, Connecticut. At the same time, the official headquarters of the firm was relocated to Fort Lauderdale, Florida, where my colleague Shomari Hearn opened our first branch office in 2005.

Shomari has just been promoted to managing vice president, the first member of our staff ever to reach that level. He continues to be based in Fort Lauderdale, and I now spend more time in Florida than in the Northeast. Jeffrey Howard, our administrative manager in charge of technology, is also based there. The headquarters designation is partly an acknowledgment that Florida and Latin America are dynamic markets that are important to the future of our business, and partly a reflection of where our major strategic decisions increasingly are made.

My current plan is to remain active in the business, although in an evolving role (company founders, like old generals, should allow themselves to fade away), until I am about 75 years old. But life is an uncertain venture, and long-range plans have a way of changing — or being changed for us by circumstances we cannot control. It is important for staff, clients and others who rely on our business (our landlords count themselves in that group) to know that the firm will have continuity of leadership if my tenure is cut short.

Shomari is positioned to provide that continuity when we need it. He has been with us since 1998, making him our longest-tenured client service staffer, and he has played an enormous role in coaching and developing our professional staff. He started in New York, moved to Florida in 2005 and became a vice president in 2012. For the past five years, he has been in charge of firmwide service quality, staff development and securities law compliance.

Two of our veteran client service managers, Paul Jacobs and Eric Meermann, are joining our executive team as vice presidents. Eric is the “station chief” in charge of the Northeast office, and he also heads our new Entertainment and Sports Team and our business valuation practice. Paul, who is based in Atlanta, is our chief investment officer and head of our investment committee.

When I wrote about succession planning 15 years ago, Shomari and Eric were young associates on our staff, and Paul was still attending New York University. Now they bring expertise, experience and intimate knowledge of our clients and staff into our senior management, but they are a couple of decades younger than me. I like the idea of bringing younger energy, along with ample experience, into our leadership team.

A company is more than just a collection of titles, skills and experiences, however. At the highest level, every business can be divided into ownership and management. Ownership determines the goals of the business and the philosophy that drives how those goals will be achieved, such as the balance between short- and long-term profit and the degree to which retaining employees within the business “family” will be emphasized. Management develops and implements strategies to accomplish ownership’s goals. A business that has a single owner-founder, like ours, may for a time combine those functions in a single person, but eventually they need to be sorted out if the business is to carry on across generations.

Fifteen years ago, my daughters were still children. I never expected either of them to work in the business; I wanted them to find the occupations that gave them the most satisfaction, rather than to automatically follow my path. Although I hoped they might one day be willing to take on ownership’s responsibilities, it was too soon in 2002 to know whether they would. So the plans I made at that time contemplated other arrangements.

Now my daughters are grown. They have their own careers in other fields, as I expected, but they are also interested in becoming part of our firm’s future. Beginning next year, they will join me; my wife, Linda (who has been our firm’s director of marketing and human resources since 1995); and Shomari on a newly established management board. Paul, Eric and other managers and future executives will work with the board so Palisades Hudson can remain a family-owned firm, even when the actual management passes from me to nonfamily executives who have grown up within the business. An extended period of service alongside their parents on this board is intended to provide my daughters with the experience they will need to maintain our firm’s culture when Linda and I are retired. I hope to have about 15 years to gradually work through this succession process, but it could certainly be accelerated if circumstances warrant.

Shomari and Eric have been part of our investment committee since it was formed about a decade ago. Now they will rotate off the committee, and their places will be taken by client service managers Melinda Kibler and Rebecca Pavese. Melinda is based in Fort Lauderdale, and Rebecca is our Atlanta station chief. Shomari is also transferring his Fort Lauderdale station chief responsibilities to Anthony Criscuolo, a South Florida native who joined Palisades Hudson as a summer intern in 2007 and as a full-time associate when he graduated from the University of Florida the next year. This passing of the baton is another sign of how far we have come in these past 15 years. Back then, we had just a single office in Westchester; now we are in a position to have recruited, developed and promoted a senior manager to lead our practice in another part of the country. Although I still consider us a small firm — we have about 25 employees overall — we have client service offices in five states, including Texas and Oregon.

When I wrote that article in 2002, America was in the midst of the dot-com crash, and the rubble still had not been cleared from the World Trade Center site. A lot has happened since then, and we are obviously on the threshold of what will likely be another turbulent presidential administration, to say the least. No business can expect to prosper if it cannot adapt to changing environments. I don’t believe that fundamental philosophies — such as our decision not to accept compensation from anyone other than our clients — need to change, but the way those philosophies are executed must evolve with the times.

When I started our firm in 1993, my first clients had amassed wealth in old-line industries such as forest products and utilities. In the 21st century, wealth is likely to be created through the act of creation itself. The world my children are inheriting values intellectual property at least as much as physical property.

This is why in recent years we have emphasized working with those who develop, improve and license ideas — patents, copyrights, images, endorsements and some of their physical embodiments, such as real estate development. This is one of the main reasons we created an Entertainment and Sports Team to help people who create and own such property to preserve and manage it. Businesses such as film, television and music are changing fast. Then again, nowadays, what business isn’t? We continue to work with doctors, attorneys, corporate executives and small-business owners, of course, but we have also discovered that people in the creative fields need and value what we can do for them. So also do international clients, who are facing an increasingly complex and not-always-welcoming financial and political environment. We had an international practice 15 years ago, but it is much larger today and is especially prominent in our Florida office.

Creativity is part of our business model, too — so much so that we have our own in-house editorial manager, Amy Laburda, and a newly promoted graphics and design manager, Ashley Bell. They give us the capability to produce books such as Looking Ahead: Life, Family, Wealth and Business After 55, which we published two years ago, and to produce a variety of content for our website and on social media. Having great ideas based on extensive knowledge is not very useful unless you know how to communicate those ideas. I think we have always been good at this, but we want to keep getting better and to take advantage of all the new ways that are available to reach interested audiences.

It’s been a great ride these past 24 years. I’m glad I have been able to share it with my wife and other colleagues who have taken it along with me, and with many longtime friends and clients like George, and with Sentinel readers like you. All of us at Palisades Hudson wish you a happy and prosperous 2017.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.