Mitzi Perdue on Family Business Values and Legacy

0:02 We have our second fireside chat of the event. We had Todd this morning who had scaled his uh T-Mobile locations. Now we have Mity Purdue here. Uh Mity has spoken I think three times before usually at our single family office summit that we hold in New York typically and she's done a great job. Um in the past some things I remembered her saying in years past were related to hosting family retreats to get the family together to formalize your family values. importantly because they're more important than passing on money to the next generation. If you pass on the values that will protect any money you pass on, it could recreate any money that gets lost and be more important than the money cuz the money can tear the family apart. And the values is what can keep the family together and keep the family members healthy. Um, don't want to steal any of your thunder, but I'm agreeing so much.

0:51 But a lot of what she shared has inspired some of the stuff we talk about across the whole year at our different events. So, um, I want to step out of the way though and have you introduce yourself a little bit a little bit more about your background. U, but we really appreciate you being here today and and sharing insights with us on NextGen Strategies. Well, it's absolutely pure joy to be back. Thank you so much for having me. My background, I come from two long lived family enterprises. The Henderson Estate Company began in 1840. It was the forerunner of the Sheran Hotels, which my father and uncle co-founded. Uh, and it's I can't do math in my head that fast. Between 1840 and uh 2024, I guess that's 40 or so. Well, anyway, a bit. So, uh, hey, call out somebody who's good at math.

1:43 Let's go with 160. Okay. And then the Purdues, uh, we have been a family business since, uh, the year 1920. So, we're I can do that math in my head 104 years. And I got really fascinated in what it takes to have a family business last. And one of the things that I believe I know is that the chances of lasting a hundred years are one in a thousand. So, if you leave having your family business to uh to continue, if you leave it to chance, it's probably not going to make it. On the other hand, there are some things that I have witnessed in my own families and then in paying all the attention I can to other families at last. Uh, and should you choose to get into that, I'd be happy to share it. But I'm also up for answering whatever else you like.

2:36 Yeah. It's interesting because some people have the goal of only passing on enough for education and maybe, you know, medical emergencies, etc. and they really want to pass on the values because it's more self-fulfilling to maybe create your own wealth rather than just dump a whole bunch of wealth on the next generation. So for some people their goal is not to pass on the wealth. Uh but there is a common thing in the industry of people saying the wealth gets lost over two three generations you know almost almost all the time. Well can I burst in and and give a comment on that because I know it's very controversial. I hear all sorts of families say a famous families say uh give the kid enough to have an education maybe a little I don't know cushion of some sort. Uh I don't take that view not even a little because I think if you bring up your kids with the right values and I've I've seen how the Hendersons and the Purdus do it. I think they're going to make they're going to be better stewards of that money than anybody else.

3:34 Sure. And so, u I'm I'm all for being as philanthropic as you possibly can be, but I'd like my family members to be making the decisions because I know that they've got values that I care about. Sure. Um I've seen a lot of families that are worth more than hund00 million um put their kids 100% focused on just running the foundation, just giving away money just on the philanthropy part. What's your view on that? Most of the time the money gets created through being an entrepreneur and that's how the initial value gets created. Um, do you see families being successful and having the kids just full-time run the foundation and do philanthropy only? Do you think it should just be a small part of what they do or not involved in that at all? What's your view on that? I'll share the opinion of the Purdue because I was really quite I'm I'm Frank Purdue's widow. He's been gone since 2005, but I got to watch up real close and personal how he made decisions like that. And initially when we first married in 1988, he had the idea that nepotism was a terrible idea and basically try to keep the kids out. Uh he certainly evolved and rather rapidly to the idea that uh no keep it in the family. And one of the things he learned he was he was actually a student of of family business. He he would attend

4:51 seminars, he would read books on it. And one of the things that that he came to believe in the end and I certainly shared his view was the the Purdue were a fairly large family. Uh maybe 70 or so people get the family newsletter which I write. uh his view was his view evolved into the idea of everybody who is a family member by blood or marriage has a right to a job in the company which is such a a a reversal from what he initially thought but but it was for this reason you have a right to have a job at whatever level I mean if you have a master's degree in business you're going to enter at one level if you're an art history major who didn't finish college you're going to enter at a different However, once you've been hired, uh, you'll be fired just as quickly as anybody else who doesn't perform. And he actually fired his grandson. Uh, he fired very early on. He fired a brother-in-law.

5:53 So, he he really meant it. I mean, the the uh culture was really strong that if you are working for the company, you pull your weight or you're out. Right. Right. Got it. And uh what would be three best practices for investors here in the room or business owners that want to whether their kids are like mine, you know, 7, 9, 11 years old or the kids are in high school or college. Do you have two or three best practices you could share with the room that we haven't talked about already to maybe uh help with managing them and grooming them? Okay. I I I will share from my own personal experience and then watching the family that I'm married into. We put incredible effort into teaching them values. And it can be things like like not just newsletters for adults. And some people have heard me before. I hope I'm not repeating myself too much, but here goes. Uh the the kids from like age four on, maybe age four to maybe 13 or 14. The family newsletters. There's the adult family newsletters, but the family newsletters for kids. We put incredible effort into teaching them values. Like for example, I'll just share one quick one. Uh we tell the story of Mommy Doo, who was um a great grandmother. And Mommy Doo was famous for her biscuits. And I know you've

7:10 heard this story before, but in case somebody else hasn't, uh in the newsletter, we tell the story of Mommy Doo and Thanksgiving. And at at Thanksgiving, Mommy Doo would make her famous biscuits. She would uh have a baking sheet. She'd drop the biscuit batter on it, bake the biscuits, and then after they were baked, she'd take them off, scrape off the crumbs, and then she would wash the aluminum foil and save it for the next time. And the purpose of this was inculcating in kids from a very young age that we are a frugal family and we're an environmental family and we don't waste. But that's just the beginning because with each newsletter, there would also be what we call a treasure chest. It's about the size of a shoe box and it has gifts for them so they look forward to it. In this case, uh there would be the uh the ingredients for Mommy Doo's biscuits.

8:06 They're in a plastic bag and there's enough for two biscuits and there's also aluminum foil. But then kids since kids love to dress up and you know our goal is to have to have them enjoy it. The treasure chest would also have a chef's hat and a chef's smug. And all the newsletters which are built on inculcating what we all stand for. All of them uh would have some an activity of some sort that would illustrate the value that we're trying to create. And generally they take an hour. So, the kid with his or her grown-up bakes the cookies, eats them, and washes up the aluminum foil afterwards. Great. Well, uh, one thing I like about what you talk about is that it doesn't require someone to be worth tens of millions or hundreds of millions of dollars, right? It doesn't cost anything to establish your family values. Doesn't cost anything to pass on the stories.

9:02 And one could argue if you're not ultra wealthy, then maybe even more important to share quickly what what you've learned as an adult to the next generation. But it's harder maybe with teenagers or someone in in high school, college to get their attention. Do you have any strategies particularly for those ages who like, you know, they're not interested in like cooking biscuits and it's hard to get them to to really listen and focus maybe and be involved in the family when they're busy with friends and sports and other things. Okay. I so get that problem. And to me, it's it's just so easy. Get you you've heard the expression get them while they're young. Get them while they're uh at at that age I don't have a magic bullet but I'll tell you something that the Hendersons are doing and the Hendersons there are about 70 of us also and we we have our reunions once a year we've had them since 1890 and not missed um but the family agreed oh it it began like maybe I don't know seven or eight months ago we agreed that we really like to get together and and by the way one of the ways that we have of getting together is the the uh the reunions the our ancestors long ago left money for endowed vacations and the Purdues do that also but in the case of the

10:21 Hendersons we decided we like each other we want to know what's going on with everybody uh how do we how do we have that good feeling that unity that makes us really want to be together as a family how do you make that go in addition to newsletters and we've come up with something and it is called ladies and gentlemen the Hendinars. What is a hindenar since nobody in this room would know what it is except me you've heard of the word webinar where Henderson's the Hendinars and it's something that I recommend to any family that I don't know if you've got 10 or more and you're geographically dispersed we have different u areas of expertise in the family and so every two months we have 20 minutes where somebody who knows a lot about something will give a talk on it and it might be like investing. Uh well one that's coming up is one on leadership. Another one which to my surprise one person floated the idea and I don't think I'd recommend this to everybody because I was just shocked that it was popular but uh one of them said what about chess lessons as in like the game the board game and

11:40 like half this this is the next tendinar that's coming up but there's one of us is a chess expert and like half the family members signed up for it because they just not because I think they want to learn chess, but because it's a chance to uh to interact and find out what everybody's up to. And the Hendinars, they're all I I'm I'm the gatekeeper. Uh I guillotine the the the webinar after 20 minutes so people can go on with their lives. So it's not a great big sacrifice of time. Uh although there is another 10 minutes where people want to hang out and you know talk some more. But I but I recommend whatever your whatever your family name is, add it to webinar and it's it's it's surprisingly effective at emotional closeness.

12:29 Great. Yeah. Thank you. And um you know some things that we've been trying to do is bring some of my daughters to different investment conferences with us. We reward them if they follow the family values and give them little fund tickets they can use to cash in for things. I know we have a few people here in the room with Next Generation uh people in their family office attending here to help conduct due diligence on deals and make little test investments with the oversight or maybe approval of the wealth creator. Um, anything else like that where somebody is maybe coming out of college almost able to enter the workforce and you have them either oversee a very small business or get an internship either within the family or external or anything like that when they're kind of um maybe just about ready to enter the workforce that comes to mind for grooming the next generation. Well, I want to give an example, but it's it's cases of of family members who've already entered the uh we we want to encourage I mean there are personalities that are entrepreneurial and there are those that are bureaucratic. We've got some real entrepreneurial ones and like one of the family members. uh he had this idea, uh we're really good at at poultry and chickens and so on, but what about some of what about pet food treats? And he had this idea. He made a presentation I

13:49 I think even to the board and they gave him a budget to do it. And let me tell you what happened. It was incredible. Do if you're if you're not following uh pet food, you may not know about this, but show of hands. Uh do you know about Malamar? Yay. But it but it's not widely known. Somewhere around and I'm not sure how long ago, possibly four years ago, uh China had an absolutely spectacular failure because they could put in something that imitated protein, but it was actually a poisonous compound. So that if you were checking to see if the food is has is rich in protein, the the measurements would say, "Yeah, this is proteinrich, but it was fake and dogs were dying." Well, now I mean, I'm really sorry for anybody that this happened to, but can you imagine the following timing? uh my darling stepgrandson uh there was a great big convention where where you unveil your products and coinciding with his uh with his showing or revealing or trying to sell uh his his pet treats for dogs coincided with the Melamar scandal and

15:08 people weren't buying from their traditional sources and they would buy for us and he's was so successful that we we had to hire, you know, from competitors higher capacity. So, you know, it can work out really well. I'm not sure it always would, but but he was given the the chance and now it's it's an important part of Purdue. Sure. Yeah. Great. Um, for people here in the room who want to work with maybe an anchor investor or maybe someone who's really well known in a space like someone from a Purdue family for a meat product or the Sheran family for their new hospitality concept. um you speak at a lot of family office related events. You have a big network. So what would be your insight on creating a relationship with someone who's in very high demand or very public or publicly traded company who would be a real blue chip credible advisory board member or anchor investor? You know, what have you learned that you could share with the audience here on making new relationships with people in those positions? What makes the difference?

16:06 Oh, that that's such a good question because I I recognize the importance of it and I know that I've tried to do it my whole life. But let's see. What would the magic formula be? Um, you're going to like my answer. Attend conventions. Okay. But, uh, put your way in the in put yourself in the way of meeting these people and it can be done. Um, study them. I I'll I'll give you an example of something that helped me in my career. I was in television for eight years. And after the first year, it occurred to me that if I could get a sponsor for my show to have it uh syndicated for the same amount of work, I could make an awful lot more money. How do you meet the people who who would syndicate you? In my case, uh I invited a vice president of DuPant to be on my show. I had all of KXTV, this the CBS affiliate in Sacramento, you know, really to make a fuss over this guy and uh I made the a proposal to him and you know, I I had ways of getting to people, but use use Oh, and they did sponsor it for years and you know, 76 stations, fabulously more money than I was getting from KXTV. So, uh, I'm I'm a big

17:25 believer in trying to find out how to meet the people you want to meet. Sure. Sure. And then like when people are getting approached so often, um, obviously doing your homework on somebody helps. Um, being politely persistent, we know helps from talking to many other investors. Um, what type of approach do you think really stands out the most in terms of um, tactics in terms of is it just really working hard to get a referral through someone you already trust? Is it meeting at an event like this and having such a unique oneliner unique position that it just really captivates your attention and no one else has said what they said to you and you got to meet them in person and that made the difference on replying to them the next week over email or anything like that that would help because I I found that one relationship with the right group can really transform your whole business right in terms of credibility.

18:14 So true. So true. Oh my gosh. How true. Uh, okay. Then if if I were meeting one of you, what would approach be that worked? Uh, if okay, I'll give you an absolute case example and this is from UBS. Uh, I'm attending a conference and I happened because I'm a social kind of person. I sat back down at a round table. this guy from UBS, he pulled out from his briefcase an article that I had written and he started talking about it. It was one on it was one on how to avoid fortune hunters and he told he started talking with me about how uh he had shared it with all his clients and how important it was and how meaningful and guess who was in that guy's palm for the rest of my life. I mean, he had an approach that really worked and I had had a relationship with the a financial advisor that began probably in 1960.

19:17 I switched because of that one meeting and I'm really glad I'm a UBS fan forever more. But boy, did that guy do his homework. Right. Right. Great. Thank you. Appreciate that example. Um, you know, what are you focused on right now business investment networking wise yourself that maybe someone here in the room could help you with? who uh at the moment uh what absolutely captures my heart is I've been to Ukraine three times as a war correspondent. Uh if you'd be kind enough to visit my website uh mitspurdue.com you'll see more than 200 articles that I've written in the last couple of years based on trips to Ukraine. Uh I because I'm frequently the guest of the police and it's law enforcement that investigates. Are we going over our time?

20:07 You're fine. Uh what what captures my heart right now is that as as a result of three trips to Ukraine, I have learned that there's something like 15 million people in Ukraine right now who are having mental health issues, particularly uh like sleeplessness, panic attacks, uh uncontrolled anger. What do how do you how do you address something that big? And there there's a group in Ukraine that liked the idea of what if there was a YouTube channel in which you would interview and we there are five of these in the can right now. We're not ready to go public yet, but uh what if let's let's imagine that you have oh depression which is very frequent. Uh I put you together by Zoom with a a psychotherapist from New York. There's 65 of them who've signed up for this and it's being filmed and it will be partly in Ukrainian and partly in English, but you you as a viewer would only hear the English part, unless you're in Ukraine, you'd only hear the Ukrainian part. A psychotherapist who dealt with with depression for like 30 years would say, "I can't make your problems go away, but

21:27 here's what has helped thousands of of of my patients in the course of my 30 years of practicing." and he gives one or two tips. The whole thing lasts like 12 minutes and we have 37 different mental issues that people are dealing with and we have psychotherapists ready to to talk with the people who are suffering from this and the source of the of the patients. The Ukrainian police are the ones who deal with war crimes. So they know the people who are suffering. So that's what what excites me. If you know of people who are good at publicizing such a project or who just who are interested in it, let me know. The it's called uh healing hidden wounds and it's on my website nitsyperdurdue.com. Great. Awesome. Yeah, I appreciate you sharing that and I appreciate you bringing bringing up like the the human side of it, you know, whether someone's on one side or or something of another, helping people who are just affected by living there, whether they're a farmer or whatever they're trying to do, living their life with their family. um I think is something that most people here can relate to uh regardless of any political views on anything. Um any other messages you want to deliver for today? Anything else that I should have asked you?

22:38 Anything else about missions or projects you're working on that you want to share with the room? I guess my biggest message since we're all family businesses is if if you if you leave it to accident, having having a strong vibrant culture probably not going to work. I would be very very very focused on making it happen because in the end what really matters what matters most I think is is your kids. Do do they value you? Do they share your values? Uh put the effort into it because it's you know at the end of your days I I would make a bet that nothing matters more than your your close emotional relationships. So put the effort. Right. Great. Thank you. Appreciate it. Let's give Missy a big round of applause. Thank you.

23:27 Thanks for having me again. Thank you.