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Amazing Possibilities!

  • Matthew Kelly

Business Leader and Author Pat Burke Interviews with Matthew Kelly


Matthew Kelly:

Hi, I'm Matthew Kelly, and welcome to Profoundly Human. My guest today is Patrick Burke. Pat, great to be with you.

Pat Burke:

Great to be here today, man.

Matthew Kelly:

Important and very serious questions to start, are you a coffee drinker?

Pat Burke:

I am a coffee drinker.

Matthew Kelly:

And what are your coffee rituals and routines?

Pat Burke:

Interestingly, I just started making coffee at home every morning, because my wife Mary Jo, in the last year or so, started to drink it. So, it used to be I just drank it at work, but now that she is a drinker, we have a cup at home together. So, it's a new revelation after 40 years of marriage.

Matthew Kelly:

Now, is there a time in the day where you need to stop drinking coffee?

Pat Burke:

Yeah. I don't have it after, after 10 o'clock.

Matthew Kelly:

And what led Mary Jo to become a coffee drinker?

Pat Burke:

Interestingly enough, she was on a dynamic Catholic pilgrimage to Italy with a good friend of hers who was a coffee drinker, and of course, they have great coffee in Italy, and one thing led to another, and she said, "Maybe I'll try some of this US coffee," so-

Matthew Kelly:

All right.

Pat Burke:

... Now she's a drinker.

Matthew Kelly:

Very good. What about favorite food?

Pat Burke:

"Favorite food," I would have to say would be a steak from the precinct here in Cincinnati-

Matthew Kelly:

All right. I know you're

Pat Burke:

... Nothing better.

Matthew Kelly:

... I know you're a music lover. Can you get it down to a favorite musician, or a favorite group?

Pat Burke:

I would say favorite group would be The Red Hot Chili Peppers, which might be surprising for someone my age, although those guys are getting to be as old as me. Favorite musician, Eric Clapton, probably.

Matthew Kelly:

All right, very good. What about favorite movie?

Pat Burke:

"Favorite movie," Raiders of the Lost Arc.

Matthew Kelly:

And why?

Pat Burke:

I don't know. I think it was funny. Mary Jo took me to see that when I was studying for the CPA exam, and she said, "I think we should go to this movie," and she picked me up from the place that I was studying, and I had no expectation, and from that opening scene, I was just captivated. So, I think that was probably the surprise of it, and just one of those movies that you can turn on and watch 10, 20 minutes of it anytime, and think, "What a great movie, just a great story."

Matthew Kelly:

Fantastic. You grew up here in the Midwest, in the greater Cincinnati Area. What was it like growing up here? What was a day in the life of-

Pat Burke:

Well, "day in the life," well, it was... I mean, I lived in a neighborhood. We lived at the end of a cul-de-sac. There were a lot of kids there. We played sports in the, in the cul-de-sac, whiffle ball, kickball. My dad built a basketball court at the bottom of our hill, and I found out much later that our whole neighborhood was a golf course. So, there were all these houses were kind of on the rim, and the backyards went into a valley, and at the bottom of the valley, he built this. It was on our property, but it was more like a public playground. So, there were basketball games there. If it was warm enough to play, there was a game there every day. There was never a day when you could... If you wanted to play, you could play.

Matthew Kelly:

And did you boys get into trouble?

Pat Burke:

Well, no, but there was a lot of fighting. That was the era. I'm 66 years old. So, in that era, if you hit a dispute, you resolved the dispute with your fists, and there were a lot of older guys in the neighborhood. It was mostly they'd just sort of make you eat dirt and then kick you in the pants and send you home. It wasn't too brutal, but you did learn to defend yourself, or else to run quickly.

Matthew Kelly:

And did you have a favorite sport growing up?

Pat Burke:

It was basketball. I mean, I played that the most and that was the... Like I said, there was always a game going on. So, if you wanted to play, you could play, and actually, many of the... It was all guys in those days... Many of them went on and play, nobody professionally, but many college players from that group. So, they were good, competitive games.

Matthew Kelly:

Wow, and you have remained a sports fan your whole life. What's your favorite sport to watch, either live or on TV?

Pat Burke:

Pro football is my favorite sport to watch on TV. Live, I would say it's baseball. I like the pace of baseball. I like that you can talk to whomever you go to the game with, and it's unfortunately not a lot of cheering these days, or if you're cheering, it's not doing too much good for the Reds.

Matthew Kelly:

What do you love about football?

Pat Burke:

I don't know. As a kid that was... Even though I played for a few years, it was just the NFL was captivating to me. My best friend lived right next door, and he wasn't a basketball player. So, if I wanted to hang out with him, we tossed football and played football. So, and he was way, way into it. So, he got me into it, and that was one of the ways we stayed friends.

Matthew Kelly:

Fantastic. How would you describe yourself to someone who had never met you?

Pat Burke:

I would say "competitive, passionate, soft on the inside, a more harder shell than the inside."

Matthew Kelly:

And then how does that manifest?

Pat Burke:

I think I'm probably... People would be surprised to know that I was an introvert. They'd be surprised to know that I was sensitive, and I think that we were just talking about this the other day. At work, we had sales training, and it was just amazing to me how many people were so afraid to talk to a client, potential client, or make a call, and I thought that never bothered me, and because I think it was one of those things. If I wanted to eat, I had to sell so that it was because it's like a wild animal. If you can't hunt, you can't eat. So, I became a hunter, because I think I had to be, but I think people would be surprised that really isn't my personality. It's just something I learned to do because I had to, but everybody else, "Well, you're so natural at it." It's like, "I'm not really natural. I just did a lot."

Matthew Kelly:

Who is the most interesting person you've ever met?

Pat Burke:

Well, I would have to say my mentor growing up was my older brother, and my dad died when I was 14. I had just turned 14, and my older brother was 13 years older than me, and he didn't really have to pay any attention to me, but he did, and sort of became a surrogate father. And if today's parents are parachute parents, or helicopter parents, he was more of a parachute parent. He was boots on the ground and giving me a good swift kick when I needed it, sending me, "Hey, if you want to go to law school, your GPA better be," and then that would... That's the whole note. So, and he died 20 years ago, and it's funny. He and I spoke every day, and every once in a while, an issue will come up and I'll reach on my credenza for a phone as though I could talk to him again. It's like, "How is that possible after 20 years?"

Matthew Kelly:

Losing your dad at 14, how were you aware of that impacting you at the time and then, as you look back, how are you aware of it impacting you?

Pat Burke:

At the time, it was shocking. I mean, he and I went to a Bengals football game over at Nippert Stadium. I remember watching the Bengals get beat up by the... It was 1969. I think that team... The Chiefs won the Super Bowl, I think, that year, so a great team, and the Bengals were semi-competitive. I remember him saying, "I don't really feel that good," on the way home, but that wasn't unusual, for him to not feel good, but as it turned out, he had a heart attack, and he died the next day. So, I think that he was only 60 years old. My mom was 58. I mean, it was just... There was so much commotion. My mother had never driven a car, written a check. She was the typical, I guess, 50s housewife.

Pat Burke:

So, there was so much sort of disorganization around that, and one of my sisters moved home to live with us for a while, who had just gotten married. It was kind of a crazy time. Looking back, I don't think there was any time to really deal with it. And like I said, my brother sort of stepped in, and he was married by that time and had one child. So, it was... My life kind of went on as it had, and he realized there was a loss. I think it affected my mother so much more than the rest of us that we were worried about her more than ourselves.

Matthew Kelly:

What's most important to you now, in your life, and how does that differ to 20 years ago?

Pat Burke:

It's interesting. I think the older you get, the more outward focus you become, and kids and grandkids and the things you hope that you are able to impart, and I've led a very lucky existence. I've worked hard, but I think I've been very lucky in the people I've chosen, and biggest decision you ever make, of course, is who is going to be your spouse, and I lucked out greatly there, and we've had great kids and grandkids and in-laws. So, I think that's been a tremendous blessing, and I think I think about that, and where all that's going, more than I think about, "Gee, what's my next business conquest," which, 20 years ago, that's what I was thinking about all the time, and I don't think I stopped, but slowed down a bit maybe.

Matthew Kelly:

And 20 years ago, when you were thinking about, "What is the next business conquest," how were you approaching that? What were you looking for?

Pat Burke:

That's a good question. I think the answer to that would be I wasn't very discerning about how I did that. I think the best way to describe that is I thought anything was possible, because I thought that everybody would put in as much effort as I did in the business pursuits that I had taken on, and that if I partnered with somebody, they would just act exactly like that, and if they knew something about it, and had a drive and a passion they'd be successful, and what I found out is that's just not true, and since I [inaudible 00:11:35] certain ventures that I really had no business in, because I really didn't understand them, those didn't work out, and it wasn't... I couldn't make up for the other person's sort of lack of drive and competitiveness, which was... That taught me a good lesson, an expensive lesson, but a good lesson.

Matthew Kelly:

Can you teach drive?

Pat Burke:

I think people can be put into a situation where drive becomes fun, and competing and having metrics to hit become important to them. I think there's a certain... I had it described to me by sort of a curmudgeonly client of mine that owns a printing company. He said, "People's want gland is only of a certain size, and they're only going to compete to the level that their want gland will allow them to. So, everybody sort of has a point at which they're satisfied, and they won't make the next call," which, to me, I thought, "That's just... Of course, they'll make the next call," but I've learned it's true. While I may make the next call, they won't

Matthew Kelly:

Interesting, you grew up here. You grew up Catholic. I know it's an important part of your life, has remained an important part of your life. Was there a time in your life where you realized, "The faith is mine now. It's not just something that my parents raised me in, but it's mine"?

Pat Burke:

Yeah, I think... So, I went to University of Dayton. It's a Catholic college, and that was the first time I'd really been away from home, and my parents were very devout, and I would say strict Catholic. So, I mean, there was no such thing as "sleeping in on Sunday." I mean, that just didn't happen. If you were living at home, you were at mass on Sunday, absolutely. And we didn't even think about not doing that. That wasn't even considered, and my parents went to mass every day and so that was just part of our life, and it was important, and even in the summers, it was when you didn't have to go to mass, and when I went to school in St. Catherine's in Fort Thomas, Kentucky, they had mass every morning, and every student went every day, and my parents went too. In the summer, we'd get away from that, but one or two days a week, it'd be like, "You're going to walk up to church and go to mass."

Pat Burke:

So, that was enforced devoutness, perhaps. I don't know, but I think, later on, and going to a Catholic college... And most of the guys I went to school, went to college with, were Catholic, and were fairly religious, I would say. They had good priests and they made it... You were engaged with your faith there, and it wasn't looked down upon. It was looked up at. So, I think that made it much more real to me.

Matthew Kelly:

I remember hearing you speak about hitchhiking home from-

Pat Burke:

Hard to believe in this day and age, right?

Matthew Kelly:

It certainly is, hitch hiking home from college. When you mention "this day and age," I can't imagine hitchhiking anywhere, or one of my kids to do that. When you look back on that, what is your memory of hitchhiking down from Dayton to Cincinnati?

Pat Burke:

Well, this may sound unbelievable, but I never once got a ride all the way. So, it was like even though they're only 50 miles apart, and I used to hold a little sign that said, "Student, Cincinnati," [inaudible 00:15:28]. I mean, I guess I looked scruffy enough. I didn't want them to think I was destitute, although I was. If you're hitchhiking, you probably are pretty close to being destitute, but I had some rides with some pretty sketchy characters, but never had a negative experience. I think, as far as I ever got on the ride from the exit at UD was maybe to [inaudible 00:15:54], which was five miles from downtown, but never all the way downtown. So, that was hard to believe, but I mean, I did it so many, many, many times

Matthew Kelly:

When you got downtown, then you would take a bus?

Pat Burke:

Yeah.

Matthew Kelly:

You became an entrepreneur at the age of 28, started your own CPA firm, and what is it that led you to go out on your own, so to speak, and what have been the pros and cons, highs and lows, of being an entrepreneur?

Pat Burke:

I think, going out on my own, it was probably mostly irrational exuberance. I think it was interesting. The firm I worked for, I'd worked for them my last year of law school, and I worked for them for four years, and they treated you very much like you had your own firm. It was like, "These are your clients. You're in charge of them. You're going to send them a bill." And so, I mean, the very first month I was there, they just sent me... They gave me a big computer thing and, "Here's your clients to bill," and it was like some of them, I didn't even know who they were. And so, after four years of that, I thought, "Well, I know how to do that part of it," and there were good people there that I worked with, smart people, and I learned a lot.

Pat Burke:

And what happened towards the end of my experience there is I was the only... There was one other lawyer on staff there, and he and I would sort of do the research and then he left to go to school, to New York to get his LLM. And so I was now the staff lawyer, and I was doing all the research and writing, and it was like, "This isn't... I'm better with people," and I was actually bringing in clients fairly regularly. I thought, "Well, they're not going to ever look at me that way, because I'm going to be the guy in the back writing the memos," and I thought, "This isn't going to work. I need to get out of here." And as I've told this story a million times, but it's the truth, my older brother, who I mentioned, was my mentor. I said, "Hey, I need to talk to you."

Pat Burke:

So, our typical place to have lunch was Skyline Chili. And so I bought him a couple of cheese [inaudible 00:18:01], and I said, "Hey, this is it. I'm going to leave this firm, and I want to go to work with you," and he was a partner in a law firm downtown, and he just started shaking his head. And he said... I said, "What do you mean?" He goes, "Well, two things. Number one, if you come to work here, you can't just work for me. You have to work for whomever on whatever matter you want. I mean, maybe it would be business or tax, but it can't be just me. And the next thing, you're not going to want to hear, but you're really..." I won't use his word... But "a shotty employee, and you need to be on your own."

Pat Burke:

So, then he said, "Hey, if it doesn't work out, you can always get a job in either law or accounting, but you're young. You don't have a..." Of course, by that time, we had a child. "So, you only have one child, and you have a low mortgage, and Mary Jo is working. So, why don't you give it a shot?" So, I did, with about... Unfortunately, that's about the level of thought I gave it, and I thought, "He's right. I can do this," and never looked back.

Matthew Kelly:

After a year, what did you think about that decision?

Pat Burke:

By far, the best decision I ever made.

Matthew Kelly:

Already, after one year?

Pat Burke:

Well, I was making twice as much money and having five times as much fun, and it was funny because Mary Jo, after probably two or three months into this, she said, "I've got a new husband." I said, "Really? Was I that miserable before?" She said, "Yeah, you were pretty hard to deal with." So-

Matthew Kelly:

Wow, interesting. So, today, you're a strategic advisor to businesses. Obviously, you're a CBA. You're an attorney, and you've got clients in almost every industry. What do you see business owners struggling with?

Pat Burke:

People?

Matthew Kelly:

"People."

Pat Burke:

I mean, it's universal. I just think there's a confluence of a great economy sucked up a lot of people and then the COVID and the work from home situation, and now people... I mean, just in the last two weeks, I've had three interviews cancel the day of the interview, and these are high level jobs, which nobody ever did. I mean, even if they weren't going to show up, they'd call you a week before and say... I mean, I don't know if they got a better job offer, but there's not enough skilled people, and too many job openings, and I think the seller's market is taxing on business owners, and they're not used to that. I mean, it happens. I hate to say this, but a lot of them are like, "What we need now is a good recession to sort of tighten up the job market, so I can find some better people."

Pat Burke:

I don't think that's necessarily the answer. That is what's going to happen, but right now... And the other thing I would say is maybe a little bit banks are sort of pulling in their horns to access to capital. It is not what it was pre-COVID. I think, even though a lot of businesses got a lot of money handed to them through the PPP program and the ERC, so their balance sheets are strong, they don't necessarily need a lot of borrowing, and I don't know. Now that there's a potential recession and inflation, I think banks... They haven't lent money in a long time, because people haven't needed it. Now I think they're assessing the risk, frankly, a little bit too tightly. I just had a conversation yesterday with a consultant that I'm working with who is trying to find some financing for an acquisition, and some of the numbers he's being quoted are really... The bank's appetite... It's a big bank... Is very low, which is surprising.

Matthew Kelly:

I went for a haircut yesterday, as you can see.

Pat Burke:

Yeah, it looks very nice.

Matthew Kelly:

It didn't exactly go as I'd intended. I got more than I wanted to pay for.

Pat Burke:

Well, I think you got your money's worth.

Matthew Kelly:

No, I definitely got something, but I was talking to the barber, a young guy, probably late 20s, from Minnesota, graphic designer, come from a really impressive role with a corporation, and told me, "I didn't want to work that hard. I didn't. I was working 40 hours and then there were nights when I would have to come home and work on projects and so I quit." And he said, "I do this part-time and I work at a beer distributorship part-time," and I'm seeing a lot of that. I'm hearing a lot of that, but I'm wondering, "Where does that go?" Maybe at 28, that works. Maybe at 28 and single, that works. What does that look like at 38? What does that look like at 48? What does that look like with a family, and will these people be forced back into more traditional work roles, and will they bring a resentment with them that is difficult to lead and manage?

Pat Burke:

Great question. I mean, I've sort of been through this a couple of different times, with having been an employer for almost 40 years. It's like, "Well you have to treat Jen..." Fill in the blank... "This way," or what I've found over time is once people sort of move on with their life and find a partner and have children, everybody kind of responds pretty much the same. However, I think the whole COVID and the work from home, and I also think that there's the basic affluence of people growing up with not that many... They don't really have that many wants, and parents have made it a little bit easier for them. I don't want to say the safety net has become a hammock, but I think, in certain instances, that it has, and I mean, I know I didn't have anything when I started to work, and I [inaudible 00:24:44] used car and a few dollars.

Pat Burke:

And so I really was motivated by trying to have some creature comforts. I think that the base level of comfort is, for most 28 year olds, unless they grew up impoverished is just probably pretty high. They've got a car. They probably have an apartment, and the car is either paid for, or maybe parents helped them with that. Maybe they helped them with their apartment. So, I think the gravy train will run out, or else it'll just wake up one day and say, "Hey, I'm not really a contributing member of society like I wanted to, and I think I'd like a lifestyle a little more secure." I hope that happens, because it's certainly... I mean, you would think, of all the professions in the world, the people that would least likely just sort of move that way would be CPAs, but even in that milieu, it's hard to find people who, "Gee, can I really work? Can I work from home and come in two days?" And it's like, "That's not how we operate here," so it's difficult. It's very difficult.

Matthew Kelly:

Another thing that sort of ties into that is I'm seeing parents buy things for their children, gift things to their adult children that honestly never would've happened when I was growing up, and even 20 years ago, I don't think we would've seen on the same scale. If a client comes to you and says, "Pat, I have these three adult children. My wife and I have more than we need. We are thinking of giving money to our children, or buying this for our children," how would you advise them? How would you advise a client in that scenario?

Pat Burke:

Well, it's an extremely common question, and I'd say most clients, particularly if, as they do, the estate planning and gift planning is they're extremely careful with the kids until they're maybe 35. And then it's, if they've got a trust, then at that point... But even at that point, it's like they... I don't think I have any clients that have given their... Maybe at 35, they've got unfettered access to it, but by that time, I think the dye has been cast. You can kind of tell what kind of person they are, and if there's a problem before then, they can change the terms of the trust.

Pat Burke:

So, I think it's highly dependent upon... If it happens before then, it's dependent upon how they view the child and whether this will... "Is it a reward for meritorious conduct," or is it, "Are you trying to sort of artificially boost their lifestyle and maybe demotivate them?" So, it's a tough call. I think that particularly a lot of people in our generation grew up with not much, and it's hard to see your kids struggle. I certainly have seen instances where it's gotten out of hand. Particularly probably much more so with what I would call "dynastic wealth" into the third and fourth generation, it can get pretty sloppy. I don't have any of those clients personally, but I work with people who work with those kinds of families. It can get pretty out of hand, pretty fast.

Matthew Kelly:

What about a client that comes to you and says, "Hey, I've got four kids. I feel comfortable gifting to three of them. I'm concerned about gifting to the other," for whatever reasons. Maybe they have an addiction. Maybe they're not personally responsible. How do you advise them to navigate that...

PART 1 OF 4 ENDS [00:29:04]

Matthew Kelly:

How do you advise them to navigate that situation? Or how do you see them navigating that situation well or poorly?

Pat Burke:

I'm thinking of a situation where the guy handled it poorly. And it was over a lifestyle choice that one of the kids made. And that person was a fine person. He just didn't agree with the lifestyle. And he completely disinherited her. I mean, I thought that was harsh because she was, otherwise, a productive member of society. I think most people in that situation are, I mean, not only is the parent acutely aware, the child's acutely aware that they've made some mistakes. But I do think it's something that's not, you don't cast it in stone. I mean, actually, the man is now deceased. But when he was doing his estate planning, he was very wealthy, completely disinherited his daughter.

Pat Burke:

And I thought you can't stop them from that. It wasn't fair. I mean, probably a more common issue is, my daughter's going to get my business. It's worth X, and I have two other children, what am I going to do with them? And how am I going to treat them fairly? And that happens all the time. And it becomes difficult if the business is super valuable and outside assets aren't. There's a lot of Solomonesque advising that has to go on in that situation. It's not always received super well. And they're going to do what they want in the end, but you can tell them what you think what makes sense.

Matthew Kelly:

And in that scenario, what does make sense?

Pat Burke:

Well, a lot of times it's like, hey, if the business owns a real estate, then the other kids get the real estate. And if you've got a 401(k) plan that's worth X, then the other one gets the 401(k) plan. And if it's still a big disparity, I mean, I hate to do this, but maybe the children that aren't involved have an interest in the business that's non-moting, but they get some foot of distribution from the business, because you got to be fair about it. And I think everybody wants to be fair, but you got to be... A lot of times they just... Probably the biggest mistake is, hey, I got four kids. Each child will get 25% of this business, and only one of them works in it. Yeah, you might as well just throw a stick of dynamite into it, because that's just going to blow up within five years.

Matthew Kelly:

So when you started your first business, you're young, you're married, you have one child, you think about... What was that like? What was your work ethic? And when you compare that to, maybe the conversation we've just been done having about, the drive and work ethic of some people in society today. What sort of mental state does that create in you?

Pat Burke:

It's interesting. I think as an employee, I was probably okay. As a business owner, I was on fire. I mean, when I got the first check that had my name on it, it was like, "Okay. Now I'm motivated." So every extra hour meant some incremental... I mean, once you're past breakeven, which took a while. But the idea that there was no sort of buffer between effort and result is exactly what I needed. And I worked seven days a week for, I don't know how many years. But it didn't seem like work to me because I wasn't in there all day. And I just stayed ahead of everything. And my office was five minutes from my house. And I could sneak over there and spend a few hours.

Pat Burke:

And that seemed like the most natural thing in the world. And I was very motivated to do that. So I don't know if that... But I grew up with it. My dad was a lawyer and a judge, so he worked like that. And my brother was a partner in a law firm, so he worked like that. So I was just used to, if you want to get ahead, you have hard work and being personally responsible was how you did it. You didn't wait for somebody else to hopefully shower you with something that may or may not be appropriate. I think one of the things that I'll never forget as long as I live is, we had a billable hour goal at the firm I worked for.

Pat Burke:

And everybody watched it pretty scrupulously. And it was a high number, so you could barely reach it. And I think it was 1900 hours. And so, I went into my review. And the partner said, "Well, you didn't make your chargeability goal." And he went on to the next thing. And I said, "Time out." I mean, "How many hours did I have?" He said, "Well, you had 1899.5." I mean, I know you talk about quitting and staying. At the moment, I knew I was leaving. I thought, "That's crazy." So yeah, I wasn't going to be... That was an artificial standard, clearly.

Matthew Kelly:

Yeah. Your son works in the CPA business with you now. And what is it like working with your son?

Pat Burke:

It's extremely rewarding, but can be extremely challenging. I think we've reached a detente here. It was a little harder. He's been working... What did we decide today? I think eight years since he graduated from law school. So full-time for eight years. I think the critical thing is hold them to the highest possible standard, but not an impossible standard. And I think, originally, I was holding him to an impossible standard. And another thing that I think is critical is that, understand that the relationship I have with him is viewed throughout the firm as, that's the standard for the firm. So if we treat each other with respect and hold each other to a high standard, that's how the firm will respond. And I also, I think, as I've told him a number of times, "For you to be not viewed as the boss' son, you have to be the hardest working person here. And you'll get no respect."

Pat Burke:

And he is, by far, the hardest working person. So he's met that standard. It's funny. My older brother who was a super good student, he was editor of the Law Review. And he worked for my dad who had a small law practice in Newport, Kentucky. And the summer between his second and third year, Mike worked there for him. And at the end of the summer, Mike was going back to school. And my dad said, "Would you like to work here?" And Mike said, "Well, dad, everything I wrote all summer, every letter, every memo," he said, "You carved it up. It was like it wasn't any good." He goes, "Well, it wasn't any good, but I see that there's some potential there." So here's my brother who's getting offers from Wall Street firms, my dad only saw potential, not greatness. So I think he was just trying to... But that's what you do. I think you hold your own to the highest standards. As I said, maybe too high.

Matthew Kelly:

If a friend came to you, and said, "Hey, I'm trying to make a decision about inviting a child into a family business or not." What counsel would you give that person?

Pat Burke:

I mean, just the other day somebody said, "I look at you and Jake, and I think, that's the American Dream." And I thought, well, that's kind of what it looks like from the outside, but sometimes it's the American nightmare, so don't kid yourself. So I think people have to understand that. Whatever your disagreements are or your different perspectives about things are, they're going to be amplified tremendously in a business environment. So you're not going to cure anybody by bringing them into your business. It's going to heighten any of the differences in your personality. Having said that, I mean, one of the things that I tell people about bringing somebody into the business is, sometimes they've heard so much about the business around the dinner table, and other discussions, and they've just sort of got a feel for it.

Pat Burke:

So it'd be a shame to let them go someplace else and take all that talent somewhere else. And I'm going through this with many of my clients. And I think they've been very thoughtful about it, about the responsibility they give them, and where they want them to take the company. And staying involved, I would say, mostly like a board member. The old story, nose in, but fingers out. The Ni-fo rule. So I think that's kind of where it needs to go to eventually. And I do think that, particularly, like in my business, having Jake there. I mean, he's so far ahead of where I was at his age, because I've involved him in things, A, the practice has become far more complex. And he's been doing this for so long that he's... I'd love to have had him work someplace else for five years, but he'd be behind five years then. But those first five were probably the most challenging. So we both would never came to blows, but we had a couple days where we didn't talk to each other. That's okay.

Matthew Kelly:

When clients bring children into a family business, and it doesn't work. Why does it usually not work?

Pat Burke:

So there's a saying in family businesses, they call it PIE, P-I-E. The first generation is passionate. The second generation is interested. And the third generation is entitled. And I think it's that the difference between, particularly, if a child falls into the entitled bracket, and the parents still in the passionate bracket, then it's the ability to see eye to eye, it'll just never happen. I'm trying to think of an instance where... I mean, I've seen it, but it usually corrects itself by the child not wanting to live up to the standard and just deciding to leave the business. So I've never had a situation where a parent had to fire a child. I'm sure I'll see it sometime before my career's over though. Lots of separations.

Matthew Kelly:

So we're going to talk a bit about your books, but sort of as a bridge to that. And one thing I've not seen in the books, and it may be in the books, and I may have forgotten or missed it. But you've had incredibly successful career, started a number of businesses, consulted to hundreds of businesses, sat on a number of boards. I, of course, am aware of your situation at home and the support you have from your spouse. And how important is that? And how often does that get overlooked?

Pat Burke:

Well, it's extremely important. And it's interesting how certain... Let me put it this way. If a person's starting a business, you have to have a hundred percent support from whosever left at home, whether it's the other spouse or it's some group of people that are helping out, the nannies or whatever, because business is consumptive. And it's very hard to serve. Hey, I'm going to do this. And I'm going to spend this much time. You can't really necessarily write it in on your calendar, because some days are 12 hours, some days maybe you can sneak at it then. I would say that with Mary Jo, she was always very, very supportive. Both of us worked for the first five years of our marriage.

Pat Burke:

And after Jake was born, I was doing a little better. And the daycare just became too difficult. And so, she just stayed at home. She kept her hand in doing little jobs here and there. She never resented the fact that she... She wanted to be a full-time mom at that point. She has gone back to work a couple different times, but it made it very easy. It was never like, "You better be home by fill-in-the-blank. Or do you really have to work this Saturday?" It was never said. Not one time. So very, very lucky to have that kind of support. And it probably should have been in every book. If she sees this, she'll be asking you why it took you to make this comment. But yeah, I mean, that was a given. And it's critically important, because it's so hard to do, to be worried about that while you're trying to start and run a business.

Matthew Kelly:

So you had extraordinary support there. I have extraordinary support with Maggie. But I have more and more friends, and more and more employees in my various businesses who don't have that. How do you see that impacting people? How do you see it impacting careers? If you could talk to that couple as a couple.

Pat Burke:

Yeah.

Matthew Kelly:

What would you say to them?

Pat Burke:

That's a great question, because it certainly comes up more and more. Everybody's got to be fulfilled. And if both spouses need to work to fulfill them, that's great. Then, I think, you got to find a happy medium there. And I think that a little bit of what I find is, with younger couples, I think, it's like they're playing a game of twister. They're making it very hard on themselves because of all the schedules. Old school, but it's like, let's talk about who's going to be the primary breadwinner for this family, for our long lives together. And of course, more and more that's... And a lot of the women that work for me, they are the primary breadwinners in their family.

Pat Burke:

And they've worked it out with their husbands or significant others that this is going to be my schedule during tax season. And I'm going to be working every Saturday. And you got to take the kids to the basketball game. And that's how it's going to be. And so, I think you got to get all those issues on the table. And I think that a lot of times, people are afraid to have the confrontation because it's like, "Well, maybe I'll offend them if I say that your career is probably only going to be five more years and mine's going to be 30." So you kind of got to get past that, I think.

Matthew Kelly:

Yeah. Let's talk about your books. 10 years ago, you wrote your first book. Since then, you've written four more. What was it that inspired you to become an author, or to want to become an author, to sit down and put pen to paper?

Pat Burke:

I'd say two things. I was a columnist on a radio show. And it was a call-in show. Every two weeks, I had to have a new topic. So it might have been, care and feeding of your banker. Or what does a bespoke balance sheet look like? Or whatever it was. And I would spend some time thinking about that, so I'd have several pages of notes. And it was a call-in show. And so, if somebody called in while I was talking, even if the topic was, it was five light years from my topic, we would answer the question. So if I'm talking about, care and feeding of your banker. And a guy would call in, and say, "Hey, I'm going to buy my brother-in-law's bar in Milford." Then, we'd have a 10-minute conversation with the guy that wanted to buy a bar in Milford, which is fine. According to the host, that was great radio, but-

Matthew Kelly:

And this is live radio?

Pat Burke:

This is live radio. So there was no, that was that. So I had 40 of these outlines. And probably in terms of broadcast minutes, maybe there was 40 minutes of it that actually hit the air. It's like, "Well, I don't want to waste all this." And I had a conversation with an author who happened to be Matthew Kelly, who said, "I showed you those topics." Well, you probably remember this. But you said, "So you want to write a book." And then, you kind of shook your head. And then, you said, "There's only three reasons to write a book. And that's to be rich, and to be famous, or to be known as an authority on something. And the first two aren't going to happen." So I went into it eyes-

Matthew Kelly:

Did I say that?

Pat Burke:

You did say that. I can tell you exactly where we were sitting. So I thought, okay. You said, "Let me think about it." And you came back, and you said, "Hey, can you divide this into a sort of a pre-opening early stage, mid-stage, late stage business issues?" And then I said, "Yeah, sure." And you said, "You need to write a story." So that's what. It's funny. I thought of the story right away. And so, it wasn't hard to do that for me, that was maybe just sort of the Irish storyteller in me. But it kind of all came to me at once, and I knew how I'd fit them in, so that part wasn't too difficult.

Matthew Kelly:

And if someone came to you today who had never written a book, and said, "Pat, I see you've written a bunch of books here. I'm thinking of writing a book." What advice would you have for them?

Pat Burke:

Well, have something to say and have a position on what you're going to write that has to be from a vantage point that you know a lot about and other people will find interesting. It was like, in my last book, I had a reviewer said it, "It was like sitting next to Pat at a bar stool. And he was telling me what not to do in business." And I thought, I don't think it necessarily needed to be a bar stool, but I mean, that was my view of that book. Hey, here's the things you shouldn't do if you really want to be successful.

Matthew Kelly:

Yeah.

Pat Burke:

I wouldn't have thought of it that way. But I think about talking to the person directly, not to a vast audience. I wish it was more vast. But you're talking to a person who's either in a business, or thinking about a business, or has already made a couple of these mistakes, and doesn't want to make anymore, can't afford to.

Matthew Kelly:

Yeah. Do you have a favorite of your own books?

Pat Burke:

Geez. I don't know. Actually, I think the one that, There Is No Us In Business. Talking about just the idea that not everybody is going to be a good partner. You may not be a good partner yourself. And the idea that you don't necessarily run out and find someone to go into business with just because you got an idea and just because you happen to need money. So I think it's one of the biggest and most common mistakes is partnering up. As I say, it's not like tennis or a golf game where you need somebody else to play. You can do it by yourself.

Matthew Kelly:

Yeah.

Pat Burke:

And most of them don't work.

Matthew Kelly:

Most partnerships?

Pat Burke:

Yep. And they're expensive to get out of.

Matthew Kelly:

Yeah. Why don't business partnerships work?

Pat Burke:

I think there's, what I'd say, a disconnect between the two levels of passion. Somebody is super passionate about the idea and got it started. And they're not only passionate about it today, they're passionate about staying on top of it and reading. And how do we push this thing forward? And the other person can't match that. They're never going to be at that level. And as I tell people who are planning on going to business together, I said, "Take a personality test." Let's see if you're compatible. Trade personal balance sheets. If there's going to be a capital call, can you make it? And if somebody has absolutely nothing to lose, then they have nothing to lose. And you do, then there's going to be a different level of fear.

Pat Burke:

And fear is a great motivator, maybe the best. Right? And so, I tell people, "Look, if you're planning on just having an okay business, then partnerships are fine." But nobody goes into a business idea, we're just going to do okay. At least one of the two sees it as a launching pad for something great. And I say, most businesses, the partners get along fine if it's just going fine. If it goes poorly, and it's heading down the drain, then there's usually finger pointing. And it's usually one person is not pulling their weight or whatever. The other time, just as commonly I would say. If it's doing really, really well, and there's probably one of the partners who's really stood out. And that partner looks at the other partner, and says, "I know we thought this was going to be good at 50/50, but I don't see it at 50/50 anymore because you fill-in-the-blank. I'm rowing way faster than you."

Pat Burke:

This just isn't going to work. And what I tell people is, if you're going to start a business, unless there's a need that the business has that is absolutely critical. And you can't find somebody to do that job unless you offer them a piece of the business, then pay them cash. Do whatever you can do. But don't bring them in as a partner. If later on they earn that right, that's fine. What I see with a lot of things, it's more common that the highest, if you think about whose engine revs the highest. If the partnership stays together, the person whose engine revs the highest will end up just sort of slowing down, because it's like, there's really no reason for me to rev at 10,000 RPMs when everybody else is at seven, because my motor can't push this any faster, so I'm just going to sort of lay back. Or else, they'll leave, and start another business. This time by themselves. And that happens all the time.

Matthew Kelly:

So what makes a great partner?

Pat Burke:

I think somebody who has complementary skills. They don't have to be every bit as talented as the other person. I just think they need to be driven. And they have to understand, know their limitations. Well, you need to know yours. And I think if, hey, this person's way better at sales, I'm way better at production, and that's what we're going to do. It's fine. And I understand that sales might be paid more than production, then I'm okay with that. You just have to understand what your roles are. And make sure that people are compensated at the appropriate level for the roles they're playing.

Pat Burke:

I mean, you don't see, let's say, a third down running back in the NFL who's really good at catching the pass over the middle when it's third and eight, but that's what he does. And the quarterback's in for every play. So that third down back doesn't say, "Well, gee. I'm really good as a third down back, I need to make as much money as the quarterback." It's like, no, you don't. I mean, that is a specific role. That's what you do. You're great at it. But here's the pay band for that, and this is what you make. So those are tough calls to make and conversations to have with a partner. But if you're going to remain partners, you have to be able to have those, right?

Matthew Kelly:

Yeah, no question. What about then, sort of, as an introspective exercise for someone who is already a partner in a business? How do we be better partners to our partners?

Pat Burke:

Well, I think it goes back to difficult conversations. If you feel like what's set up is not working, then you have to be willing to sit down, and say, "Hey, I know we thought that this is what was going to happen, but here's what really happened. I'm not satisfied with how this is happening." It's interesting when this happens, because I've had this conversation with dozens of people.

Pat Burke:

And most of the time, when the partner sort of, screws up enough nerve to have the conversation, the other partner says, "I was wondering when you were going to come in and ask me this." If you chose a good partner, they understand where they've excelled and where they haven't, I think. And so you're not going to be knocking them over with a blinding revelation of the non obvious. It was probably pretty obvious, right?

Matthew Kelly:

Yeah. So I know you're a lover of music. And one of the things that has always fascinated me is how bands stay together, but mostly fall apart.

Pat Burke:

Right.

Matthew Kelly:

And sometimes come back together. In our own time, U2 is one of the most successful bands over the past 30 years, and has remained together for that entire period of time. Do you have a theory about why bands fall apart? Or a theory about what has helped U2 to stay together?

Pat Burke:

Oh, I was just listening to them on the way out here. Actually, Bono was on the U2 station, and he was writing a fan letter to Kendrick Lamar, and he was reading it aloud. I don't know. I think, obviously, he's a bigger than life person and interested in all sorts of things. And I think it seems like the other members of the band are particularly not interested in that. So they're not competing for the limelight. They're interested, I think, Ed is way more interested in sort of sounds. I think they'd prefer to have him out front. And they'll do the things they do. And it's like, "Okay, time for you to sing a song." That would be my guess. I mean, they don't seem to be ego driven guys at all. I don't know them, but I've seen enough documentaries that sort of seems to be the-

PART 2 OF 4 ENDS [00:58:04]

Pat Burke:

... seems to be the dynamic there. What do you think?

Matthew Kelly:

Yeah, I think it plays into what you were saying earlier. I think they have the awareness of your gifts and awareness of your role. I think some people are really good at being a number two and they would be really bad as a number one. And unfortunately, I've seen things in business where you've got two partners. One is really good at being a number one. The other is really good at being a number two, but someone gets in the year of the number two and tells them, "You should be a number one," and they break up a really successful partnership. And the person who actually either their personality, their gifts, their skills are more suited to being a number two because someone gets in their ear, they go off and try to become a number one and it fails. And I see that over, and over, and over again. I think the, with the U2 thing, I think they have astounding awareness of their own gifts. And I think they have really clearly defined boundaries from the start going way, way back.

Pat Burke:

Really. That's why it's work, right?

Matthew Kelly:

Yeah. And I think they have each other's backs.

Pat Burke:

I had a conversation with my brother way, way, way back when I was first... when I'm talking about bringing on my first partner and one of the things he said that it, A, be careful when you're bringing in a partner because you really don't know what you have yet. So it's hard and how you're going to value that, what percentage. And so be hyper careful about it. And because I know I wrote in one of my books, "If you don't think your business is going to be the most valuable asset that you ever have, then don't start it." So when my dad was talking about somebody who was cheap, he would say he threw nickels around sewer lids. And I think people should throw equity in their business around sewer lids. This is a heavy thing. You really got to be very careful about it. So I think people just sometimes don't think of it that way so that they get... This is going to be, "I don't really need to do this to keep the person," and I think it's a huge mistake, that I'm for sure.

Matthew Kelly:

Mm-hmm. Your latest book, 10 Biggest Mistakes or 10 Biggest Business Mistakes: And How to Avoid Them. The first mistake is buy or start the wrong business. Tell us about that.

Pat Burke:

Well, I've done it a couple times, so I know of what I speak here. I've learned some of valuable lessons, expensive lessons. Most people who've never owned a business or started a business are much more aware of the trappings of the success of the business than they are the inner workings. And they meet somebody at a party and hey, he's talking about his business. And then they find out that it's for sale and, "Hey, my son might and I might want to be involved in that." And it's sort of the old story about the duck. It looks very serene on top, but you can't see how fast that the feeder paddling. And just because somebody else was successful with a business doesn't necessarily mean that you will be. And I think most small businesses, which are the ones that transact mostly between people, most businesses are run in the image and likeness of the owner.

Pat Burke:

And he's got or she's got a certain set of skills. And that business has morphed around those skills in such a way that when you pull that person out of it and put somebody else in the thing just doesn't work. That puzzle piece doesn't fit in right. And there's things you can do to make that business transferable. But most business owners don't think of it that way. And frankly, most business owners don't think they're selling somebody something that's not a valuable asset. They believe it's valuable, but they really haven't done the things they needed to do to set that up for the next person to be as successful as they are. And so you've got a business that's uniquely suited to the person who's selling it and not necessarily or definitely not necessarily uniquely suited to the person who's buying it. If the person goes in and then they I guess to compound that it might be a business where they don't have any natural inclination.

Pat Burke:

I always say you should be the best person at the key position or maybe the second best person at two or three key positions to make the business successful. And if you look it up, and they talk about business being a three-legged stool, right? So there's administration, there's production, and there's sales. And if you're really a good administrative person, I'm a great accountant, so I'm going to go buy this, pick the business. It's like, "Well, the guy you're buying it from is the consummate salesman." And he's leaving and he really didn't develop a sales structure. Even if it had 10 years of uninterrupted profits, you're not going to be successful with that. So you bought the wrong business. And so that's, "Hey, I'm a smart guy or I'm a smart girl and I c