202: Reach Business and Spousal Alignment with Darryl Lyons

Darryl Lyons, the co-founder and CEO of San Antonio, Texas-based Pax Financial Group, a business that is passionate about helping others live the life of their dreams. We discuss about the C12 Strategic Planning Blueprint, how the Christian worldview can help businesses and the right way of thinking about succession planning.


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Reach Business and Spousal Alignment with Darryl Lyons

Our guest is Darryl Lyons, the co-founder and CEO of San Antonio, Texas-based Pax Financial Group, a business that is passionate about helping others live the life of their dreams. Darryl, welcome to the show.

Thank you for having me, Steve. I appreciate it.

So, Darryl, you have a really interesting story arising from a trailer park to running a thriving financial advisory business. That’s kind of an American dream kind of story. Can you tell me how you did that and how it actually helped you or, I don’t know, hampered you in your journey?

Yeah, it’s actually a good question. Both exist. In the 80s, there was a savings and loans crisis that took place and it hit the South Texas area, San Antonio area, just like it hit a lot of areas. My parents were not immune to that. That’s when we started to begin really our struggles financially. My mom had me when she was 16, my dad was 20. So they were just kids and not much education.

So we had bounced around, lived in different houses and some were nicer than others and then ended up moving to Castroville, Texas where we lived in a little trailer park on the side of the road. I remember edging the trailer. They’ve got skirting on the trailers. You got to edge it otherwise weeds grow up. But when you edge too close, it breaks the skirting. And I thought, you know, it’d be nice to have a house without a foundation. And I remember a friend of mine, her dad was a banker and they had a real nice thick foundation.

And I thought, well, I guess I could go into banking, but I didn’t know any bankers, so my curiosity began there. And it really, the curiosity was about all things money. So I was just curious about anything that had to do with money. I think that was kind of the, the really catalyst for thriving my life, not rooted in selfish ambition, but just a really interesting curiosity. There’s two parts to your question.

One, I haven’t been asked in a long time, and I think it’s a good question. Like what, how did it might hurt me? You know, in reflection, there’s good and bad people, both in like rich communities and poor communities. And since I’ve been around both, I feel pretty comfortable saying this. But there’s some habits I think of communities that don’t have money that I probably had to unwind.

I didn’t trust a lot of people. I found that I didn’t really, you know, if you were a professional, I always thought you were trying to take. And I didn’t realize that trust was a key element to making business and really our whole system work, but I didn’t have that in me. I didn’t trust anybody with anything. I always thought they were out to get me or take from me. And I had to really work through that. And I didn’t realize that even existed. So that was one of the challenges I had more than anything. So that second part of your question was a good one.

What about, I mean, maybe that’s a weird question to ask, but is there a way that it actually helped you be successful that you started from humble beginnings?

I had nothing to lose. I always thought, it started to get real when I had a child and I thought, well, I remember I had to put, you’re just starting the business, so I had to put my mortgage on it. I had to do a cash advance to pay my mortgage. And I was so stupid, but that’s where I was at. And I thought, well, I was starting a business. I had a passion to do that. And I thought, well, I guess we could live in a trailer park. I mean, it’s doable.

And so, I guess the idea that I had nothing to lose, in terms of pride, I didn’t have to drive fancy cars. I didn’t have to have stuff. So that was very helpful. And then the other thing is, I think that’s helped me today as I’ve matured a little bit more over the years and still maturing in a lot of ways, but I empathize with people a lot, you know, when, when they’re struggling, I know where they’re at and sometimes it’s self-inflicted and other times it’s, it’s kind of just a mindset people are in, you know, sometimes people are victims and sometimes people don’t trust and I see things maybe differently than most because I’ve been there and that helps me a lot in life and business.

My biggest assets are my biggest failures. Sharing experiences creates relatedness and builds trust. Click To Tweet

I can imagine as a financial advisor, you have to relate to people in ways that maybe it’s uncomfortable for them to share the information, but if someone can, they know that it’s been there and know what they are talking about or they are going through, then they can actually open up to that person. I find in my coaching that my biggest assets are my biggest failures. So when I see someone in a struggling situation and I have been there and I can share how I felt and how I go through it, it really creates relatedness and then people trust me for being able to help them because they know what they are feeling.

So anyway, that is very, very interesting. So let’s switch gears here and let’s talk about a strategic planning process that you have been part of for a long time. And you’re part of a C12 or you’ve been part of a C12 group, which we have shot over 200 episodes here, but we haven’t had anyone who had a C12 background. I was always wondering about what these peer groups do and how do they operate? So can you tell a little bit about C12, to begin with, and then the strategic planning framework that C12 teaches its members?

So I’ve been a member, it’s kind of weird, I got a 10-year award for being a member for 10 years. I’ve actually been longer than that because I had, I jumped into, at the time, one of our co-founders was in C12, but then he got sick. And so I just kind of like chronic illness. He’s healthy today but I jumped in to kind of take his place but my official membership was ten years ago and so a lot of you know I wouldn’t be in something that long if it didn’t bring value and then but you know it’s just like everything else every four years you’re like should I be doing it and you break through you know you kind of just push if when you grow up you just push through those just kind of seasons and then on the other side is just some pretty awesome stuff.

So this coaching program has held me accountable. It’s made me a better man. It really has. I’ve been around a lot of people that have pushed me and challenged me and I think that goes, it’s just like any, you know, executive coaching program like Vistage and the others that are out there. The difference here is that this is all rooted in a, we generally speaking, everybody’s Christian walk is coming from a different place. When somebody joins, the main element to the whole framework is to not be abrasive to that worldview, the Christian worldview.

But it’s not asking somebody to adopt a specific rigid legalistic type of worship or type of lifestyle, but rather honoring the Christian worldview and then being open to integrating some of that biblical worldview into your business model. And so there’s there’s a framework for how we do that. And that makes it unique to the model is that biblical worldview. I can discuss some of the elements of that, but I’ll take a breath. See if you have any questions there.

Ok. All right. So I’d be curious about how the Christian worldview can help businesses. So what is it that you can implement that is different from other people or other prayer groups? How do you approach things differently?

It’s funny because when we think about Christians in the historical sense, they weren’t called Christians. They were called people of the way. They were originally called, a group of individuals who were generally Jewish, who, you know, were taught by this rabbi and Jesus Christ, and Christians obviously believe that he is God. And so the idea that the people of the way had a different way of doing things is sometimes not really expressed that well. But you think about it, you know, Jesus, we talk about even turning the other cheek, or it is better to give than receive.

There’s a lot of things that Jesus talked about that were completely opposite. And so what we’re doing all the time is we’re asking ourselves, is the cultural framework for business the right way? Or have we gotten a place of moral relevancy, which it’s the right way of doing that things as long as the culture accepts it.

And so I think we kind of always test our way of life against this cultural relevancy that may exist versus what would Jesus have said about how we do things. As an example, giving is probably a good one. How do we give and what does the Word of God tell us about giving, even as business owners? And we’ll wrestle with that and, you know, we know that in the Word of God it says, you know, God loves a generous giver, not who’s reluctant or under compulsion, is what the Word of God says.

So, but will some time in a group format wrestling with that? Should we give from the business or should we give personally? Should we give gross? Should we give net? What does that look like from a giving perspective? But that’s an easy one. It actually gets a little bit more complex when you’re talking about the compensating employees or even firing somebody. How do we introduce a biblical framework?

Because the Bible doesn’t talk about, hey, in a corporate environment, if somebody is misaligned with your culture, how do you fire them? You can’t go to Genesis and try to look that up. You’ve got to try to understand maybe even through parables on how to best execute something like that, but leave somebody still with a degree of dignity.

And so it really gets nuanced, and I think that’s why there is a curriculum that guides our dialogue, but it’s really done in a function of a peer group where it’s facilitated by somebody who’s generally rooted in some good biblical worldview and some great business acumen based on their experience to facilitate a dialogue between business owners who have a million dollars or more in revenue to wrestle with these concepts and come away with what we might think might be a Christian perspective on execution?

I think it makes complete sense because as business people, we always have to strike a balance between being savvy business people and being caring human beings. And essentially what you do is you draw on the Bible, I suppose, and you are informing yourself as to what is the right way here, what is the right balance to strike here and you have a conversation, the peer group, that’s, I can definitely say this is being very, very helpful to the people and the business itself, because ultimately, I believe that the values of the business are projected outside to the customers and if they feel that this is a decent business that has strong values and aligns, then it’s gonna help your business as well. So that’s awesome.

So let’s talk a little bit about this strategic planning blueprint. So C12, I understand from our earlier discussion, there is a strategic planning methodology that C12 groups have developed. You’re using that methodology. So can you share about what that looks like?

Sure. Yeah. Simplicity is, I think, of addressing, you know, I think of the word elegant is probably a good word to describe it because elegant kind of means to me like the collision of simplicity with a degree of academic rigor. And it’s just delivered in such a way that, you know, it can be adopted by many people. Sometimes it’s not appreciated because of its simplicity. But you know, I think this does kind of fit that profile of elegant. And it’s called a point alignment matrix.

The idea is that we want to adopt a strategy in each one of these areas, the first one being revenue generation. So that one often is easy for business owners because it’s sales. And we all, I mean, business owners, that one’s intuitive. But we all know that there’s substance behind that, and there’s some specific leading indicators and KPIs that need to drive that. But that would be one, so that would be one category in this alignment process.

The other one would be generally cashflow related, which is something that can often be overlooked by business owners. So we wrestle with that. And you’ve seen this as well, Steve, over the years. I’m so surprised, and I think also a degree of comfort of how many business owners get to the top and really almost can’t tie their shoe when it comes to cash flow stuff. And so that we get into the cash flow and what it looks like to have an emergency fund and then develop some key performance indicators around that too.

The next one would be organization. How do we intentionally develop our culture and our people and then bring on the right people in the right seat, so to speak. The next one would be operational management, and that would include supply chain issues and distribution issues and managing time, productivity, things like that. A lot of manufacturing businesses would deal with that. Being a service-related business, that one’s a little bit more challenging, but it’s one I’ve been able to develop a framework around as well.

And the last one I think is probably this one makes sense to you, and this one’s ministry work. How do you effectively integrate some type of ministry into your business and develop performance indicators around that? And that’s a lot of fun. And I think when you, when I first joined C12, that one is just kind of like, I can’t even, they can’t even get their head around that piece.

But after, you know, kind of being a part of the culture, a little bit of the culture kind of creates this, a good peer pressure to start thinking deeply about that, and then you start to see massive, massive giving done to these businesses at a level that’s inspiring and to ministries, non-profits, charities, people that are hurting. And if you can get businesses, obviously, to adopt that fifth piece in the ministry work, you do see some changes in communities happen, and so we’re seeing some of that.

That’s very interesting. So the ministry work is actually giving, or there are other ways of doing ministry work?

Definitely other ways. I think every business has a different approach. Some of it’s serving, you know, there’s businesses that have slim margins. There’s businesses that don’t have, you know, they’ve got shareholders and the shareholders just aren’t necessarily online with, you know, they say, they raise their hands, they say, hey, I’ll do the giving personally.

So you figure out how to creatively introduce some ministry and that’s part of the peer group is to help you wrestle with that. And then what you find ultimately is by doing that, your culture then rallies behind that type of environment. And then indirectly, customers and your community sees that. So it kind of rises all boats, so to speak.

Very interesting. I’m glad that you shared a little bit around these topics of how the Christian leaders think about leadership. Definitely the other four legs I can recognize makes perfect sense. So let’s switch gears here and let’s talk a little bit about succession planning, you know, wealth management. So you help people, you know, do good succession planning. What is the best practice that you have seen in this area of succession planning? How would you describe an ideal scenario?

So being a financial advisor for many years, I’ve been doing this since 99, I’ve stepped out of that role and provide leadership to the organization now. And so we have 10 advisors and I was trying to take inventory of kind of the needs in the marketplace as I’ve kind of gotten away from the kneecap to kneecap financial advice conversations and really focused on, you know, as a business owner now, you know, strategy and finding the problems, the marketplaces and filling up some of these problems.

Well, one of the problems is, of course, this massive transition of business wealth to the next generation. And how do you extrapolate that wealth so the business owner can can use it to support their lifestyles? And it’s just silver tsunamis happening, as we all know. And so I’m just kind of thinking about how can us as financial advisors look at our toolkit and make modifications or add to the toolkit to help these business owners. And my parents are business owners. They just sold their business. I almost sold it one time. That bridge has sailed.

I’m happy to be an entrepreneur for the next 20 years, but, but I went through process and then of course I’ve seen business owners sell many of them. And the statistic is business owners are upset or not frustrated or disappointed after they sell. And so I asked myself, how do we solve some of that issue? And so I’m winded when I answer the question, but one of the things that we’ve got to figure out is kind of getting business owners to sit down and just like be still, grab them by the shoulders or her shoulders and say, I know you’ve got ADD, but I need you to sit down and ask what’s life going to be like after you sell?

Like, let’s just think through this. You can only play so much golf. You can only watch so much Fox News. You can only pick up, you know, plant so many flowers. You know, what are you gonna be doing with your time that you don’t drive your spouse nuts? And then, of course, we want to take your wisdom that you have, hopefully some money and time, and how can we reach down to the next generation and help them out? All that to say, we also have to make the math work, the economics have to work to where you don’t outlive your money, you don’t give the IRS too much money. So it really requires just a series of dialogues. And we created a business succession planning service to be able to facilitate that conversations, but also make sure it pencils out well.

So the key to good succession planning is really to have good vision of how you want to spend your time in retirement? And then how do you balance tax optimization, perhaps, with the support of next generation and your own needs? And kind of how do you distribute the funds in an optimal way?

And even you, you know, you say it even better than me more succinctly, but the challenge is just whenever we say, like, I’ve had people ask, what is the key to success? It’s really hard to get my head, like a simple answer to that, but it really is to match the cash flows with the vision. And if I could, it’s distinctly is doing that. And then, so you ask, okay, how do you, you don’t even vision.

So how do we, you know, let that vision in place, which is kind of Pollyannic qualitative, just, you know, food food stuff. But I got to get, I got to, I actually got to know what you want to do and what your spouse wants to do, because those could be two different things. I’m getting that down and then saying, okay, does it pencil out? How can we maybe pay the IRS less money? Do you want to leave an inheritance? Matching the vision with the cash flows is really the key to this whole thing.

The key to good succession planning is really to match the cash flow with a good vision of how you want to spend your time in retirement. Click To Tweet

So how do you actually coach this? Because this is really coaching, right? Financial coaching. You have to question this with Catalyte. It’s the right kind of thinking from your clients so that they actually, you help them figure it out. Because I agree with you. Most people don’t think about that. What am I going to do? They’ve been so wound up in their business the last 20 years, working 160 hours a week, whatever, and they had no time to pay attention to hardly anything else. And now suddenly the business is gone. What am I going to do? And how do I find equivalent meaning in my life going forward? So how do you, what kind of questions do you ask them? How do you get them see the light, basically?

It’s such a really good question. So we have some tools that do that. My favorite tool is one called Honest Conversations, which was really adopted for the personal advice side. We use it a lot on the personal advice side, but it really works on the business side. And it was developed, I’m trying to think what university, it was the University in California that did the academic research.

This kind of goes in that category of elegant too, but it really starts to ask questions about what’s your priorities. So it’s a priority questionnaire, but a key piece to that is getting, this is really the most important piece to all of it, is getting alignment with a spouse. Now, of course, it’s slightly different if they’re single, but a lot of times there is a spouse involved and they’ve been so disconnected for so many years. And they put some coping mechanisms in place to make the thing work. But those coping mechanisms generally fail when the business is no longer there.

And so what we like to do is just try to create some alignment with some of these questions that are developed through the Honest Conversations tool. Honest Conversations tool was developed through an academic framework called behavioral finance, also rooted in Daniel Kahneman’s work, Thinking Fast and Slow. And so these key questions, behavioral finance questions, just really organize people’s thoughts behind what is important to them, prioritize it, match it with the spouses, and then we use that as our guiding post to go forward and execute our strategy.

You could also do it, so we do it with priorities, but there’s also tools that create a dialogue around values. And so the key to having these outcomes, so it’s not only key questions, but outcomes is when things start, because life is so uncertain and things happen, whether it’s a virus or planes hit buildings or kids, grandkids issues.

When things get rocky, what I want to try to do is create anchors so we can go back and say, and you do this all the time in coaching, if somebody has rockiness in their business, you go back, okay, what’s your mission, what’s your vision, what’s your values, let’s go to that and let’s ask ourselves how do we make decisions anchoring to those things. Business coaches do it excellent in business.

When things get rocky, go back to your mission, vision, and values as your guiding post to make decisions. Click To Tweet

The problem is when we lose the business and our business coaches, we don’t have those same anchors personally. And so what I try to do and what our team tries to do is get the husband and wife to create these anchors, again, either priorities or values, and go back to that so that way it can be our framework going forward when we hit those volatile times.

This reminds me of the empty nesting syndrome that parents go through when their kids are out of the house and suddenly they don’t have to transport them to sports practices and games on the weekend. And suddenly the calendar opens up and now everything every problem that you see down to the carpet now you have to deal with it, right? There’s nowhere to hide anymore and it sounds like this is similar to a family business, you know the business takes up so much of the bandwidth that it can mask all the problems because there are always crisis that take priority so you’d have to deal with the big questions of life and suddenly you remove that and then the emperor is naked and now you have to figure things out.

100% yeah.

So maybe it’s better for some people not to sell their business, not to transition so that they don’t have to face the music, right?

So obviously I know that’s tongue in cheek. My biggest challenge with that is yeah, you could drive the business to the ground but usually there’s consequence, a personal consequence. I always think about business owners and how even in my industry, so I’m in the financial advice industry, that’s the business I’m in, it’s a service. And I see some of my peers that probably should retire.

If their clients knew how much they just let their business kind of run, you know, I think that’s a little bit, there’s an ethical issue there. So I think that’s, you know, that’s something that any good business person, they’re conscious needs to, they need to ask themselves is they’re not giving it their best. And that includes employees too. And so I think when there gets a point, I mean, certainly you can, you deserve it. You run the business, you can kind of let it kind of fade if you want. There’s nothing wrong with that as long as there’s not neglect for those people that are counting on you.

Yeah, it’s a great point. So when is the point where your responsibility as a steward of your business is more important than your perhaps the meaning that you derive from being that CEO of the business? And how do you make that decision, that personally painful decision? That’s really interesting. Maybe the C12 group, you guys can really have a structure to deal with this kind of dilemmas. Maybe you go back to the Bible and you find some solutions there.

Retirement isn't about stopping work, it's about transitioning wisely when it's time for a new season. Click To Tweet

It’s funny you mention that because in the Bible, they only reference retirement once and retire by definition is, Webster definition is the disposal of an asset when it’s no longer useful. But in the Bible in the Old Testament, God actually tells Moses and the Levites, he says to retire but you know I don’t know the original Hebrew text but it’s really referring to God’s not telling them hey stop working it’s just saying it’s time for you to transition and there could be assumptions on why but it’s really not clear but I think the main thing to get at is there is that kind of inflection point like you can imagine you know you probably chart this thing out where your body it’s hurting you to stay there.

I’ve had thousands of conversations with business owners and sometimes if you’re there too long it’s killing you. Your health. I mean that’s just one litmus test alone is when it’s really hurting your back or your health and your emotions and it’s just time. But the problem with waiting until that is you might have hurt a lot of people on the way there. So it’s better to get in front of that and leave on a high note. But it really does, in terms of C12, going back to C12 and kind of the Christian point of view there, it does help having that peer group and saying, here’s how I’m feeling, guys or girls, tell me what y’all think. And that’s really one of the benefits of a peer group like that.

Leaving on a high note is better than waiting until it's hurting your health and emotions. Click To Tweet

So I always feel like a 25, 30-minute podcast is not enough to solve life’s great problems, such as retirement. So we’re not going to try, but I really enjoyed the conversation. It was very enlightening. I learned a little bit about C12 and I think our listeners enjoyed it as well. So if people would like to learn more about your firm, Pax Financial Group, and maybe they live in Texas and they need some help with their, you know, transitioning their business. Where can they reach out to you and how can they learn more about what you guys do?

Yeah, thank you. See, Pax Financial Group is a great way to go. It’s a great place to go. That’s a lot of resources there. Link to our podcast as well. It’s called Retire in Texas podcast. I just do that just as a solo, talking about relevant thoughts on the markets. Do one this week on taxes. LinkedIn is a good place to connect with me. A lot of people follow my contact on LinkedIn and I’ll be sure to share this broadcast with my community through LinkedIn as well. So those are three places, the website, podcast, and LinkedIn.

Well, definitely if you look to help with your transition, your retirement, or you would like to learn more about C12 or this whole idea of as a Christian person, how you can look for solutions and answers in the texture to your business problems, then definitely reach out to Darryl. Darryl, thanks for coming to the show. I really enjoyed having you. And those of you listening, stay tuned, follow us on YouTube, Steve Preda YouTube channel and the Steve Preda Business Growth LinkedIn page. And we’re on TikTok as well, and you can watch the short versions of these videos that we record here. Thanks Darryl, have a great day.


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