As a succession planner, Dr. Merlot is engaged in an amazing diversity of issues on any given day. The average day is replete with high and inside “heaters” from all points of the Succession Matrix® of issues. Predictably this nonstop progression of diverse succession issues creates excitement that ranges from invigorating and gratifying to confusing, perplexing and shocking. None the less as a poster child for Attention Deficit Disorder, Dr. Merlot thrives in this frenetic environment with occasional reliance upon the medicinal qualities of the nectar from the grape that has earned him the moniker, Dr Merlot. After taking a few moments to decompress, we thought you may find it interesting to listen in on a morning of Dr. Merlot’s Brain Bombs as they may provide you perspective on Brain Bombs you may be facing.

Visit with Russ, partner of The Rawls Group and licensed family therapist

“Doc, can I speak with you a minute,” asked Russ respectfully from the Doc’s doorway. “Sure come on in Russ. How was the trip? Did the Family Business Council come off ok?” “Well Doc, that’s a matter of perspective,” Russ replied. “Say Russ, you don’t look too good,” Dr. Merlot expressed with concern, “Are you feeling ok? What happened to the side of your face?”

“Well I guess I should explain,” replied the unusually reserved Russ who was known to be upbeat under the worst of family relationship circumstances. “I guess this meeting falls under your ‘you couldn’t make this up’ category. Our meeting started as usual with all family members present and engaged. We followed our normal agenda and everything was going great until Jimmy made a comment about his brother’s lack of work ethic noting that he spends more time with his hottie new bride than he does his job. They commenced to get in a shouting match and as usual I called for a ‘cool down break’. So Jimmy and I go to the bathroom and unbeknownst to me his brother follows us. I am first to arrive, doing my business and I hear a ruckus start behind me and turn around just in time to see them start trading blows. I try to stop them and catch an errant hook which generated this shiner.”

“Life in the fast lane dude,” responded Doc. “I’ve always told you that you have to stay light on your feet.” “Yes, I’ve heard you but I didn’t think you meant that literally,” responded Russ. “But unfortunately you have not heard the worst of it. When I took the shot to the face I was dazed and when I collected myself, the fight had progressed out into the hallway. I followed the noise and arrived as the tussle ran over Pops who is now in the hospital with a broken hip.”

“Did you schedule the next meeting?” Doc asked. “Schedule the next meeting!” proclaimed Russ. “I bring you this bad news regarding our client and you want to know if I scheduled the next meeting!” asked Russ with exasperation.

“Buck up Russ!” responded Dr. Merlot like a drill sergeant. “As you witnessed you have very little control over those who have a hard time handling their emotions. Crap happens regularly in the succession planning world. The shiner is very unfortunate, but emotions are to be expected. This bit of excitement is only bad news if you have not scheduled the next meeting!”

Scratching his head, Russ replied, “Well, the boys did agree to meet with me next week after Pops gets out of the hospital.” Dr Merlot raised his glass and proclaimed, “Then congratulations; great meeting!”

Phone conversation with John regarding a potential new partner

“Doc, I think I have my cash shortage solved. Let me run this by you,” requested the highly distressed relatively new elderly client who Doc had been assisting with a challenging daughter.

This impulsive owner of three stores had gifted “Sweety” 30% of the stock fifteen years earlier after she had worked in the store about a year. Shortly thereafter, her husband shut down his-hands on dental practice where he did everything including teeth cleaning. He joined Sweety as a General Manager because he had business experience, making $250k per year for attending 20 Groups, advertising meetings and award trips. For the last ten years prior to Doc’s engagement, John had been struggling with Sweety, who wanted him to gift or sell her the balance of the stock, retire and dramatically reduce his very impressive cash flow drain because “there just is not enough profit to go around”. A couple years ago John called Doc for help after Sweety hired her son right out of college as you guessed it, a General Manager; like father like son.

“I have found the cash to buy out Sweety!” John proclaimed with enthusiasm as he did with most new ideas. “I did not know she agreed to sell,” responded Doc. With a smirk on his face, John continued, “She told me yesterday, ‘it’s me or you Dad, one of us has to go’. To which I responded, ‘sounds good so you, your husband and college grad can hit the road. I am buying your stock.’ She threw out a crazy number and I joyfully accepted just to stop the badgering. Never felt better about getting screwed!”

“That’s a crazy number!” responded Doc after John told him the price. “Where are you getting that money? I know your financial circumstances which does include significant cash. And I cannot really believe she’s going to sell.”

“She’s selling alright and my high school buddy, Nick is buying! He will not badger me and we’ll have a great time selling cars” responded John. “You have met him before. He’s the one who has trouble investing all the cash he receives from oil royalties; keeps 20 million in his checking account. He’s bringing over the check tomorrow and I am putting an end to this hot mess!”

“Dude!” proclaimed Doc. “Stop this non sense! You are just moving from one hot mess to another. I don’t know Nick very well but would agree, from my brief experiences, he’s is a neat guy and I am amazed at how much fun you have together. But as you have told me, he has a reputation for being a no nonsense businessman. Case in point, as I recall he info copies ‘Sam’ on every email. Do you know who Sam is?” Doc asked.

“No,” responded John a bit concerned.

“Sam is his in-house attorney,” Dr. Merlot shared. “Being a fun guy does not qualify him as a good partner in an automobile dealership which has income and expenses coming from all directions, many of which are for your ex-wives, boat, airplane, beach house and other grand kids. His photo would be in the pictorial dictionary next to ‘800 pound gorilla’ and you want to do a handshake deal with him that is sure to blow sky high when you start explaining the same expenses that were driving Sweety crazy. Being a fun guy also does not make him a fool. After he owns the stock he can dictate the terms of his buy out or maybe your buy out. The only way to maintain your friendship in to have comprehensive, detailed business agreements prior to exchanging any money or stock. Otherwise you are in for distress like Sweety or her family could never create. Have you thought about who is going to oversee operations in her absence? It will not be you or Nick. If you are looking for my advice, stay with the devil you know because the devil you don’t know will never call you Daddy or give you the benefit of the doubt.”

Phone call from Jack regarding a purchase opportunity

“Doc, we need to talk. Fred called and asked if I wanted to buy his store and real estate; a stock sale, 25MM blue and appraised value for real estate. The price is outrageous, but before I tell him no, I wanted to run it by you. At that price, I think I should pass, don’t you?”

“Wow, he really called,” Dr. Merlot said shocked. “Although we have discussed the inevitability that due to his circumstances he would one day be selling, I never thought it would really happen. You guys have been such rivals and competitors I am amazed that he would give you an opportunity to buy.”

“He’s not giving me anything but a crazy opportunity to pay 5MM to 10MM over market. I cannot believe there is any way you would recommend that I do this” challenged Jack.

After taking a sip of the grape in an effort to slow down the conversation a bit, Dr. Merlot responded, “Just a minute Jack. You have looked at five to ten deals with 10MM to 15MM blue that are 150 miles away. Now you are being offered a deal 150 yards away and you are calling foul on the price. Don’t be offended that he is charging you a fee for eating crow and agreeing to sell to you. As we have discussed you are a good, not great operator with no experience in long distance expense control. We know his sales management is better than yours. Another cheaper opportunity 150 miles away would equal frustrating mediocrity; this expensive opportunity 150 yards away would equal a fantastic operation. A good buy does not have to be at a cheap price. It’s no secret that this deal is worth 5MM more to you and I would not shy away from paying what it is worth. You and only you can make up the over payment in just a few years and keep your marriage to boot. I recommend you call him back immediately and tell him yes you will buy it and we will work out the details in the LOI. If the details don’t work we can pass then, but we don’t pass now because you cannot digest the price.”


And that is a normal morning at the office.

Strategic growth, sustainable success and working towards family harmony – all elements of succession planning – are complex endeavors. Brain bombs are to be expected, especially in the fast pace environment of the auto industry. Unraveling a brain bomb, often times is like Neo interpreting the Matrix, it takes finesse and time for the appropriate action to reveal itself. Take heed, you are not alone.

 Sign up for our monthly e-newsletter to stay informed on how to overcome related succession planning issues.