Navigating Purposeful Planning & Maximizing Impact with John A. Warnick

Episode Description:

In this episode, host Elizabeth Ledoux is joined by John A. Warnick, the founder of the Purposeful Planning Institute, a fellow of the American College of Trust & Estate Counsel, and author of the Purposeful Trust & Legacies Handbook. Tap or click the play button below to listen to: Navigating Purposeful Planning & Maximizing Impact with John A. Warnick.

After thirty as a tax and legal advisor to wealthy families, John pivoted to pursue his passion of assisting clients transition their wealth more purposefully. With the Purposeful Planning Institute, John works with clients and their advisors to ensure that the impact of their planning will positively impact future generations. 

In this episode, Elizabeth and John discuss John’s passion for purposeful planning and business transition strategies. They also explore transitioning a business with a cabinet of advisors, transitioning a business with a founder who wants to maintain involvement, why we shouldn’t view a business transition as strictly a financial event, and much more. 

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Navigating Purposeful Planning & Maximizing Impact with John A. Warnick Transcript

John A. Warnick: I abstained rather than vote against it, because I didn’t want to cast a negative vote and have the board think that I didn’t appreciate and understand that they had come to a different business judgment than I would have. But that, you know, you have to be ready when you go into a transition, you have to be ready for surrender. And I’ve heard people say that a transition is a bit a bit like a Death Event. There, you know, it involves losing something. It’s a there’s a grieving process that comes along with it. And I’ve certainly felt that grieving process. But overall, I’m so grateful that we are where we are. And I think we’re on a great trajectory going forward.

Elizabeth Ledoux: Welcome to the business transition roadmap. My name is Elizabeth Ledoux. And through my years, I have seen how communities thrive. When business succession and transition are done. Well, me and my team at The Transition Strategists have been helping business owners develop and implement transition strategies for over 30 years. And on this show, we want to help you by giving you the roadmap to a healthy business transition. Let’s get started. Hi, everyone, and welcome back to the business transition roadmap. Today, I am so grateful to have John A. Warnick with us. John is a recovering tax attorney for many, many years. And he is the founder of the Purposeful Planning Institute, which I have been fortunate enough to be a member of and become familiar with over the last couple of years. So John, welcome. And thank you for being here today.

John A. Warnick: Thank you, Elizabeth. It’s indeed an honor and a privilege. Thank you. Oh,

Elizabeth Ledoux: my pleasure. So would you just take a minute and tell us a little bit about just your passion and how you ended up creating the purposeful planning Institute

John A. Warnick: tried to do this quickly. I started out as a tax attorney. Initially, I thought that what juiced me professionally was Tax Court tax litigation. But after about 10 years of a steady diet of that, I realized that what really created the greatest satisfaction for me professionally was when I worked with entrepreneurs around the transition of their businesses. And so I, I totally kind of, I didn’t leave tax behind completely. But I morphed and changed the emphasis of my practice, and really focused on wealth transfer planning and business transition planning for the next roughly 3025 years, let’s say, and then I had a very deep, professional epiphany that occurred in about 2001 to 2007. Those six years were pivotal. And they put me on a whole new trajectory. And I that’s when I earned this title of recovering tax attorney. It was in that six year span or so that I began to realize Elizabeth that is valuable as dotting the I’s and crossing the t’s can be in contracts and, and tax structuring. That what really gave me the greatest satisfaction was when I help clients come to understand what they’re most deeply heartfelt purposes were around family. And they had a business around the the enterprise. And I began to tire of the act of practice of law and began to look for ways that I could consult more and influence more and that’s what led to the founding of the purposeful planning Institute in 2010. With 35 professionals, about 40% of whom were attorneys and tax professionals 60% came from the kind of family welts the family business consulting areas, and that that community has grown to over 535 Today, counting you and myself. So it’s been a spectacular success. It’s been a very interesting business journey, because even though I considered it a personal mission, it was is really a business, a business that operated at a huge operating loss for the first five years of its existence not unusual in the world of a startup, right? And then, then there was a lot of creative work done by me and others, that led to us very successful turnaround and years of not only growth of membership, but also profitability and sustainability. And then comes a transition that we’ll talk about that that I would love to share with your listeners. Great.

Elizabeth Ledoux: Great. So. So, John, when you started the purposeful planning Institute, and vacuum many, many years ago, what did you see? And what was the need that that you saw at that time?

John A. Warnick: Well, I saw first of all, I had had an epiphany in my personal practice, where I began to understand that tax minimization, tax avoidance, if that were the singular purpose for the transition planning, and the structuring that went along with it, I discovered that that didn’t always guarantee a positive outcome in terms of the impact. And I became excited, Elizabeth, about helping clients focus on the human impact of the structuring and planning that they were doing the work towards working towards transitions, how how is that going to ultimately impact so what is focusing on vision and purpose, and mission became incredibly important and powerful, and everything shifted for me, when I saw that, I wanted to share that with the world. And I felt that we were being drawn increasingly in the direction of focusing only on dotting the I’s and crossing the tease, and that the tax tail was wagging the rest of the dog and I wanted to prevent that. So that’s, that’s why PPI was founded was to try to inform other advisors and consultants of the importance of purpose in planning, and to give them ideas of how they can be more kind of successful and sustainable in the planning work, the transition work they do with clients?

Elizabeth Ledoux: Wow, that’s terrific. Well, and I think you and I, from what I’ve learned over the years, are very aligned in our values and our approach. And I appreciate that so much about you. And yeah, and just the concept, you know, of being able to collaborate with a variety of different experts in this area, because it’s my foundational belief and all my, also my experience, that I don’t think any one advisor alone can take a business owner or family, and depending on, you know, what the assets are that they’re trying to transition can really do that and be an expert in tax in the state. And, you know, the impact to the people and just the movement all the way through. It does take, I think, a cabinet of advisers to get through this.

John A. Warnick: It does, it really does.

Elizabeth Ledoux: Yeah. So gosh, I have so many questions to ask you. And I think the first thing that I’d like to do is tap into your personal transition with PPI with the Personal Planning Institute. And then after that, we’ll go into some of your experiences. As an advisor, I’m advising some of the people that are similar to those in our audience. So when you were thinking about building, you’re completely immersed in the building and growing, of PPI and then there was a I would imagine a time when you started thinking about transitioning out in the well being of the institute going forward. So tell us a little bit about that. And what happened?

John A. Warnick: Well, it really is. This transitional journey has been nine years in the making. The first five years as I mentioned earlier, were wash your significant wash years we, my wife and I had quote, invested lent to the organization right at 275 $300,000 of capital in those first five years and it wasn’t wasn’t sustainable. My wife listen losing patience. And I was worried that if we couldn’t turn it around that we would have to give it up, you know, something would have to change. So I reached out to six individuals who had deep expertise and transitions, and who also, we’re deeply committed to this space, that we’re talking about that of assisting families, through transitions in their enterprises. And I convened a brainstorming session two days in Manhattan. And that was nine years ago. And the questions that guided our conversations over the two days where what was needed to make the purposeful planning Institute sustainable, and what could we do to make sure that its mission could become kind of an sustainable and if we needed to course correct to better achieve the three prongs of the mission statement, what what was needed. And looking back, I think that that meeting in Manhattan if we use this as an analogy, for other business owners, I think that you can perhaps you can decide when you want to really make this March, not death march, but a success march towards transition. But if you can gather a cabinet, as Elizabeth alluded to earlier, to help you with that, I think great things happen. And that was that was true. As I look back to that meeting in Manhattan, roughly nine years ago, there were some profoundly significant outcomes. What happened? First, I was never tempted by any of the offers that would come along. And there probably been five or six serious offers over the last nine years of other for profit entrepreneurs or nonprofits, basically approaching me and saying, Do you want to sell to us? Do you want to transfer to us, and I never, I never was tempted after that meeting by any of those authors, not in the least. And the next thing that happened is, while we had had all these losses coming in, the operations of PPI were kind of sharpen, we had a clear focus on what we needed to do in executing the mission, and how we could get to a sustainable better than breakeven result. And we’ve had a profitable years and one slightly less than breakeven year which was 2020, the COVID year and inspired by that meeting in New York City, here’s the second big lesson I would share is I asked six individuals to serve on a PPI board of advisors, we didn’t call it a board of directors or Board of Trustees, it was a board of advisors like, ultimately retained total control. But of those six individuals, three served until we made the transition at the end of last year. And today, there are still now there are seven serving alongside me, I’m the eighth. So we have an eight person board of directors, it’s taken over the the strategic and and tactical planning for the purpose of Planning Institute. So the board has been a huge contributor. And I think there’s a lesson in that if, if you don’t have a board, and I’m not speaking just a family board, but a board that taps into different areas of expertise that are vital to the success of your enterprise. Definitely, definitely think about creating a board think about getting consulting help to help you create the most powerful board possible. So once that board was in place, we really made huge strides in the eight or nine years since that meeting in New York City. And then, Elizabeth, this is kind of what ultimately led to the final success march to transition for PPI and January January 31 of 2022. I suffered a severe kind of neurological event that was puzzling. had not happened before resulted in my singing. It was on a Friday afternoon, Monday morning found me in the office of my primary care physician and within 10 days of that Then, I had been diagnosed with a brain tumor and had the MRI to show the image of this incredibly large brain tumor that I had probably been growing for 10 to 15 years. And it took two and a half months. But two and a half months later, I had 10 and a half hours of surgery, followed by a course of radiation, and then a subsequent surgery. But out of that first surgery and the darkness of early morning, when you know, they call them hospital beds, Elizabeth, but I think they need to come up with a better term than bed. Because there’s very little comfortable sleep that took place for me anyway, in the ICU, and during the aftermath of that. But in that early morning darkness, I had a lot of opportunities to reflect. And some of the thoughts that came to me was I was overwhelmed with gratitude for what I felt was a miracle. The doctors, the two brain surgeons that teamed up there were 1010 doctors and pas in the operating room. And during the course of that 10 and a half hours, not all of their at once. Some of them were tag teaming. But the two primary brain surgeons had predicted 14 adverse events with a 4% probability for death, to 100% probability for the loss of hearing in my left ear, none of the 14 materialize. So it was a it was truly a miraculous outcome. And I felt like I had been given in a sense, a new lease on life. And it’s amazing when you have an experience like that, how purpose and gratitude began to just rush through your your mind and your heart. And as I thought about that, I realized, what if what if I had not come through this successfully? Where would I have left the purposeful planning Institute, the board, which I had formed eight years, roughly seven years earlier, had been superb in navigating with the help of the Executive Director, us through that period, that I was out for basically five, almost six months. But I realized I there was a lot of work that needed to be done. So that really started us on a significant journey towards this ultimately, nonprofit transition that occurred on December 31st of last year. Wow.

Elizabeth Ledoux: Well, first, thank you for sharing that with us. And you know it, sometimes those events in our lives trigger some new things that we start to think about and start to realize, and then we talk all the time, please, on our side about sense of urgency, a sense of urgency to do something, sense of urgency to create some kind of strategy or a plan. And you definitely had an event that created that sense of urgency for you.

John A. Warnick: It did, it really did. If it was like lighting a rocket, it was a blast off into the transitional space. Yeah.

Elizabeth Ledoux: So my wish for the listeners as they’ll create their own sense of urgency without the event. But yeah, just to think about that, though, and sharing that, you know, you never know what’s going to happen at any moment in our lives. And yet, so just paying attention and understanding that we’re not here forever.

John A. Warnick: We’re not in a week before that neurological event. If you’d asked me how do you feel I would have said fantastic doing great, thank you very much. And then bam, the you know, the rug was pulled out underneath me mercifully, it had a very positive outcome. But no one has a permanent lease on life. We should all be living as if today is our final day. And I think when we adjust our mindset to realizing how finite our opportunities and our time is the key and really amplify how successful we can be with the time that we are given.

Elizabeth Ledoux: So I guess, going from having that event happen, and probably having some pretty anxious feelings, potentially about PPI and what it The outcome would have been fast forwarding to where you are today with this transition, how do you feel about the transition that you’ve made?

John A. Warnick:  look back on it. And though one person, myself included, can take credit for what’s happened, it was an incredible event. It required expert legal counsel, it required a huge commitment from the board, and our director of operations to execute. And it was done masterfully. And the transition has been largely seamless, I would say they’re, they’re probably, you know, I’ve heard this term founders remorse, or owners remorse. And I’ve had a couple of days where I probably have experienced that, and it’s a pretty dark cloud. But I have been able to adjust to those difficult days, and keep moving forward and a positive attitude and keep helping, the biggest difference, and I don’t think this would have been at all different at it, well, maybe it would have been amplified if it had been a sale to another organization where I had no role. But here, I was given the title of founder, and extended an invitation to myself to have a seat on the board. So I’ve kept a voice in the decisions, the the kind of now the new strategic planning that’s occurring. But the difference is, now this is a formal board, no longer an advisory board. And I’m one of eight voices and I have had a vote that went exactly the opposite way, if that decision had been left to me, I would have gone a totally different direction. And I try not to look at that. And second guess the board for it’s unanimous other than myself decision, I abstained rather than vote against it, because I didn’t want to cast a negative vote and have the board think that I didn’t appreciate and understand that they had come to a different business judgment than I would have. But that, you know, you have to be ready when you go into a transition, you have to be ready for surrender. And I’ve heard people say that a transition is a bit a bit like a Death Event. There, you know, it involves losing something. It’s there’s a grieving process that comes along with it. And I’ve certainly felt that grieving process. But overall, I’m so grateful that we are where we are. And I think we’re on a great trajectory going forward.

Elizabeth Ledoux: That’s terrific. And, you know, I was fortunate enough today to have an interview with a writer who’s writing for Ink Magazine. And he asked me the question in all my years of, you know, experience and history during this, he said, he said, Elizabeth, because what, you know, what keeps someone from really doing a great job at transitioning, and not having all that remorse and not actually flying back in and wanting to re engage, you know, you leave as a founder owner, and then a year later, you’re back in that same position, or meddling more than you probably should. And I think the big deal there is to not have a greater vision, and not have a bigger purpose. Because I think if you have a great next adventure, and you have a big vision of this business, or this entity continuing on without you, and leaving that for others to take forward, I think then you can grab onto that. And it gets you through that. That part of the grieving and the dark part, because you’re so excited about the future and you can see it but if you don’t have that, I think that’s a foundation that an owner really needs to consider is what’s next.

John A. Warnick: That’s a totally Sandy Foundation, and it’s gonna road wash away and bad things will happen. I couldn’t agree more, I think in terms of kind of what’s confused, confusing or missing. As I think about what has sustained me and allowed me to successfully deal with let’s say three or four days of a founders remorse. It is that clear vision of where I wanted it to go. And it was also Oh, the opportunity, this, I think is something that is off. I’ve seen this missed in many of the transitions with my clients who have sold their businesses, and then awaken a day, a week or a month later and wished that they hadn’t sold, because their identity got sold. You know, they, they their identity was tied to that business, it was unsafe, the business was their right hand. And it like they feel like they’ve severed a part of themselves. I’ve never felt that way. Because I, I had a vision that PPI needed for the it to accomplish its mission. It it needed to live beyond me, and beyond my lifetime. And I needed the help of others to be able to do that. So I needed to step back from controlling it to becoming more of just a supportive person. But in terms of it was confusing or missing. I think as we began to talk about what my role was the host, the transition, there was confusion there. And I’m probably at all for some of that. I didn’t, I didn’t think through it clearly enough. I didn’t articulate it clearly enough. But I, I told people that I wanted to step back so that others could step forward. And I think when I said that, people assumed that I just went to let go completely No, Oh, contraire, I wanted to maintain a healthy and positive connection in this I would analogize to my clients, who, when they sell their business, want to maintain that three year or a five year employment with the business so that they still are actively contributing that when in the first month, I began to see my calendar, and there was nothing on it. I complained to the board that I felt like they were excluding me Oh, no, now, we didn’t want to do that. We just thought you wanted to have, you know, 40 hours a week back and I said, Really, I want to contribute still at least 2025 hours a week. So let’s talk about what I can do. And I think clarity around that. What is the founder or the owner, the the entrepreneurs, mission going to be subsequent to transition? It’s so critical you get clarity around that.

Elizabeth Ledoux: Thank you. Yeah, I agree with you. And it also I mean, you know, I think it’s important not to get clarity at the end of your transition, but to start to gain that clarity at the beginning when you’re just starting to consider because it really helps you if you know your why. And you can understand that and envision that. It’s so much easier to pick a path forward.

John A. Warnick: Amen. Amen. And I’m grateful I didn’t do it, as well as I should have. But we did catch it early, before things had kind of gelled or, you know, dried, the cement hadn’t quite dried when, when I began to realize there was a misunderstanding around the role that I wanted to continue to play. Right,

Elizabeth Ledoux: right. Well, this is terrific. So. So we just have a few more minutes, our time goes so fast. When we’re together. I’m always amazed. So one, thank you for sharing that story. Because it’s incredible. And yeah, just your transparency and vulnerability and doing that is very much appreciated. So if you now let’s put on your advisor hat for a minute. And your your back in your advisor role. What What have you seen that has really, really worked for people as they start to think about transitioning an active business or transitioning something of value, that they want to be nurtured and protected into the future? And and what have you seen not work so well?

John A. Warnick: Well, I think when I’ve seen and I have seen a number of successes and the successes, the common denominator that I would see in those successes are first the founder gets clarity around what involvement does he want next generations of his family to have or she want the family to have? And in my case, none of my children while two of them have helped us kind of built PPI to what it became none of them had any The interest, they didn’t have the passion for it. They they had their own interests and their own pursuits. So I didn’t have a successor within the family to step in. And, and I think that when I’ve seen this work well, there’s been efforts early on for parents, to the founding generation of a family to gain clarity around. We’re not keeping this just because economically, we think our family will be better off. But is there someone within the family who really wants to have an active, vibrant role? And then to ask the question, do they have the capacity to be able to lead to contribute in a meaningful way? Those are difficult questions, and not always answered positively. And when there is a doubt, or a clear negative answer, then that should help a founder owner, understand that finding a different path than family ownership is the future ownership of the enterprise, is the direction that they should go. So that I think, is very important. And I’ve seen a situation where a son of a founder, a co founder of a business, was invited to come back to go to work for the company. And three years later, the company sold out from underneath him. And he sacrificed his business career to come back to the company. And he thought he was being groomed by both his father and his uncle to take over. But that isn’t what happened. And it led to a lot of acrimony within the family, deep disappointment, and it was, for him a professional disaster because he couldn’t go back to the the firm that he left, gave up a partnership, he just couldn’t walk back into that firm and say, I’m back, give me back my corner suite and my partnership interest. No,

Elizabeth Ledoux: yeah. And that’s, I found that when you’re going through a transition, we have many that we’re working with right now. And it’s almost, it’s over communication. It’s deeper, it’s more transparent, taking care of yourself, and also keeping in mind others and helping others to get where they want to go. Then making sure that you’re doing it with Yeah, with care, and was meant truly with love in that, so that so that you can keep that family together. So if you had one thing that you at the end, I always ask if you had one thing, one recommendation, one piece of advice for our listeners and audience, what would it be?

John A. Warnick: I think, as valuable as a business can be. And as significant generator of financial wealth, as that business might be, I think, don’t view the sale of the business or the transition of the business as strictly a financial event. I think, if you can see that. It is part of a process. When you put you know, if you think of it as a puzzle, involving your family and all the family members, it’s one part of that puzzle. But coming together with your family, and recognizing that there is a significant role, responsibility and opportunity for you to play, as in the post transitional side of the sale, or transition of the business, where you’re really now not a business leader but a family leader that can lead to incredibly satisfying, meaningful contributions to the long term success of your family and the rising generation family members. And that is the hopeful, happy news that I like to share with people.

Elizabeth Ledoux: That’s amazing. Well, and you know, on top of that, John, the the ripple effect from the family and from the business that that provides into the community is tremendous.

John A. Warnick: huge, absolutely huge and and sadly, not always seen immediately. But quietly over time, that ripple can be a tsunami right within communities.

Elizabeth Ledoux: Absolutely. Well, gosh, I our time does always go so fast. And I am so grateful. And thank you so much for coming and for being a part of this podcast. John’s information will be the end of this podcast and all about PPI, so please check it out. It’s an incredible organization. So thank you, John.

John A. Warnick: Thank you, Elizabeth.

Elizabeth Ledoux: Thank you for listening to this episode of the business transition roadmap. If you’re listening to this and you find yourself wanting to go deeper into these topics and start the process of putting together your transition strategy. I’d love to offer you a free initial strategy session with my team, where we’ll help you to explore the future transition of your business, head over to To schedule a call. Thank you again for listening, and I’ll see you on the next episode of the business transition roadmap.

The Business Transition Roadmap with Elizabeth Ledoux

How do communities thrive? When businesses experience healthy growth and transition. Join CEO of The Transition Strategists, Elizabeth Ledoux as she and her guests identify what makes a successful business transition roadmap. If you know you want to transition or exit your business “one day”, today is the right day to start planning. This show will give you the roadmap.

If you’ve enjoyed this podcast, you can check out other episodes here: Podcasts – The Transition Strategists
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