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University of Massachusetts Amherst

Family Business Center

Breakout Sessions Let Members Go In Depth:

Giombetti Associates: Leaders as Coaches
Meyers Brothers: Beyond Estate Tax

by Shel Horowitz

Chez Jozef, with its several small rooms and large hallways near the banquet hall, lends itself well to breakout sessions. And so, once again, the sponsors held court April 12 in various parts of the building.

This time, I chose Giombetti Associates and Meyers Brothers.

Rich Giombetti, who often talks about hiring workers with the right personality traits, turned instead to the role of the leader. In a well-attended session called “Leaders as coaches,” he outlined the “good cop” and “bad cop” leadership styles.

Successful leaders who see themselves as coaches will reach for the good cop model&emdash;most of the time. By creating a climate of goodwill, compassion, motivation by reward, and leadership by example, these highly personable folks create a climate where their employees really want to go the extra mile for them. Productivity and morale tend to be high in good cop shops. Examples of good cops include Mother Theresa, Joe Torre, Princess Diana, and Aaron Feuerstein of Malden Mills (the owner of the large Polartec plant that kept all employees on the payroll while rebuilding after a disastrous 1996 fire).

Bad cops work on force and intimidation. They value discipline and expect their commands to be carried out. Models include Chain Saw Al Dunlop, General Patton, and Bill Parcells.

While in most cases, the good cop model is more effective, the ideal leader, in Giombetti's view, is a hybrid: a compassionate, people-oriented leader who's not afraid to play tough guy once in a while when that's needed-for instance, if everyone feels so groovy that the work isn't getting done, or if you need to confront a serious employee violation. The hybrid cop can “segue along the spectrum, depending upon the circumstances and situation at hand.”

Meanwhile, in the Meyers Brothers section, accountants Kris Houghton and Kevin Hines wee having an intimate session with the space for participants to get some individual consulting.

Their focus was on estate planning-and how it will be different depending on whether the estate tax is kept or repealed.

Repeal will actually shift taxes down the income ladder: right now, when an estate is settled, those who inherit property see their basis cost step up to current levels-so that if a parent bought a $10,000 house in 1955 that's now worth $300,000, when it's passed on at death, the new owner inherits the current value. If the new owner sells the property, the tax on appreciation is the difference between the current value and the value at the time the property was inherited. Without the estate tax, people will be taxed on the full appreciation; the step-up in basis will be gone. Since right now the estate tax only affects 2% of decedents, all of a sudden many more people will be clobbered by inheritance-related taxes.

Whether or not the estate tax is repealed, it's important to plan for the future, including revocable trusts, life insurance, business succession agreements, and so forth.

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