Ingram’s September 2022

Ingrams.com | September 2022

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SEPTEMBER 2022 • VOLUME 48, NO. 9

Perspectives 4 Changing of the Guard A look at the always-changing

landscape of the C-suite and who is stepping up to claim the corner office. by Joe Sweeney

9 Between the Lines

Kansas City is uniquely positioned to leverage key assets that run from one airport to the next. by Jack Cashill Talk of a looming recession means smart executives are laying the groundwork not just for survival, but growth when it’s over. by Dennis Boone In key capitals around the world, decisions made by national leaders are combining to exacerbate a global energy crisis. by Ken Herman

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11 Reflections

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Features 14 Q&A: Getting to $1 Billion With Mike Kulp

12 In a Nutshell

Special Reports 24 The Ingram’s 250

What does it take to get to $1 billion in revenue? First, don’t focus on that number before your other ducks are in a row. Mike Kulp of KBP Brands, one of the region’s most recent $1 billion revenue companies, assesses the myriad challenges of major growth in a highly competitive market and sector.

Business & Commerce 17 Wealth Management

The seventh annual installment of the Ingram’s 250 reflects the continuing transition from leadership roles as Baby Boomer retirements make their impact felt. You’ll meet nearly three dozen new faces in this year’s lineup, and we pause in a separate feature to assess the levels of change since the first class in 2016. In a special report, we aggregate observations by this year’s honorees on the potential for a national recession—and what their firms are doing to position themselves to come out of one even stronger than they are today.

Global and domestic conditions make for a challenging investment climate. by David Callanan

24 i250 Economic Outlook Members of the Ingram’s 250 for 2022 assess near-term economic conditions and offer thoughts on how their companies might prepare for a downturn into 2023. By Dennis Boone

Leads & Lists 18 Top Area Wealth

Management Firms

20 Top Area Banks 22 Top Area Credit Unions

29 The 2022 Ingram’s 250 The Kansas City region’s most

influential business executives reflect the diverse strengths of the regional economy, hailing from key sectors in banking, professional and financial services, health care, insurance, manufacturing and many others.

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THE INGRAM’S 250

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E D I T O R ’ S N O T E

by Joe Sweeney

The Ingram’s 250: Then and Now

A Powerful Transformation in KC’s Executive Ranks S even years is a milestone marked by … well, almost no one. The seventh iteration of the Ingram’s 250 in 2022, however, is notable for one reason in particular: According to the C-suite demographers at Korn Ferry, that’s just about the current average tenure of a chief executive officer in Corporate America. Actually, it’s a shade less than that, 6.9 years as of 2022. Some may think that’s barely enough time to get warmed up in the corner suite, and sure enough, there are top executives from this year’s field who have been in their position for multiple dec- ades, not just years. (Take a bow, Jim Ferrell at Ferrellgas and Smitty Belcher at P1 Group.) To study the Ingram’s 250 from 2016 and compare it to today’s is to realize just how dramatically the corporate leadership of the Kansas City region has changed within a very short window. A whopping 153 of the honorees from that first class in 2016 have no seat at the table this year. Retirements have accounted for the bulk of changes in those roles—the Baby Boomers are rotating out of that traditional leadership age range. Out-of-market moves have made a mark. Occasionally, a managing partner surrenders the day-to-day grind of a CEO’s duties and steps back into a producer role. In nearly half a dozen cases (and way too soon), some honorees from that inaugural year have passed away. So whose names are gone from the original list? Among the region’s biggest employers, it’s been a corporate version of The Rapture, and that includes wholesale organizations. Think Cerner Corp., before becoming Oracle Cerner this year. Or Sprint, once the region’s corporate crown jewel and not so very long ago, the largest private-sector employer. Or Waddell & Reed. Even the venerable Kansas City Southern Railroad brand is slated for retirement before too long as it morphs into Canadian Pacific Kansas City. Within the C-suites themselves, you can see the changes in the top roles at prominent companies like Hallmark, Lockton, Burns & McDonnell, Polsinelli PC, Commerce Bank, and JE Dunn Con- struction. Add in some of the largest private companies including No. 1 Dairy Farmers of America, Hill’s Pet Nutrition, and Triumph Foods. Most of the region’s biggest medical centers have seen new lead- ership brought in, as have the largest health insurers, including Blue KC and its Sunflower State counterpart, Blue Cross and Blue Shieldof Kansas, andGEHA (twice). The trusted advisers of business and professional-services firms have seen changes that will affect the executionof business lawand legal services, accounting, andcon- sultancy; many of the biggest ones are now led by industry veterans who nonetheless are relative newcomers to those top-tier roles. Here’s one way to think about the impact of that sweeping change: The dozen companies just cited by brand account for close to $50 billion in annual revenues here. Based on themultiplier effect with thousands of employees, they exert a much more powerful gravitational pull on the metro area’s GDP ($142.5 billion in 2020). From that perspective, it’s clear that the region has lost some- thing when one considers the collective efforts of those leaders to build their companies and influence corporate and individual

philanthropy. This change comes with a cost that can’t be precisely calculated. But all is not gloom and doom. Step- ping into those vacated roles has been a small army of executive achievers, and in many cases, those leaders have raised the bar for corporate performance. Still here, as well, are nearly 100 executives who have made this impressive roster each year since its inception. In some rare cases, executives who answered the roll call six years ago remain on the list, even though their organization or mission has changed. Of particular interest is Terry Dunn , the long-time CEO at JE Dunn. Terry retired nearly a decade ago as the region’s largest general contractor but has not, we can assure you, been soaking up the sun on a Caribbean beach. Dunn’s civic com mitment to the region was always evid- ent on a corporate level. Since 2013, he’s gone on to found KC Common Good; an organization focused on producing real solutions to intractable problems of life in the urban core—poverty, crime, and un employability come immediately to mind. Then there are those who may have “Retired” imprinted on their LinkedIn profile page but are far from idle, thanks to their commitments to corporate and non-profit boards. Their numbers in- clude former U.S. Bank market president Mark Jorgenson , former Burns & Mc Donnell CEO Greg Graves , former Child ren’s Mercy CFO/CAO Sandra Lawrence , and DEG founder Neal Sharma (you can read what’s keeping each of them busy in their accompanying profiles in this feature). The active or only marginally retired, the present-day honorees, and the i250 alumni represent the faces of commerce in the Kansas City region going as far back as two generations. They’ve helped make us the community we are. More than just business transactors, they represent a civic spirit dedicated to organizational growth and improving community life. They serve as models for the best of what the Kansas City region has to offer. Please join us in saluting each of them and offering our thanks for what they have left behind—or will.

Joe Sweeney Editor-In-Chief and Publisher E | JSweeney @ Ingrams.com

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Editor-in-Chief & Publisher Joe Sweeney | JSweeney @ Ingrams.com Editorial Director Dennis Boone | DBoone @ Ingrams.com Senior Editor Jack Cashill | Editorial @ Ingrams.com Columnists David Callanan Ken Herman Director of Sales Michelle Sweeney | MSweeney @ Ingrams.com Art Director Traci Faulk | Production @ Ingrams.com Contributing Writer Jim Moore | Editorial @ Ingrams.com Copy Editor Nancie Boland | Editorial @ Ingrams.com

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B E T W E E N T H E L I N E S

Pointed Perspectives & Penetrating Punditry | by Jack Cashill

Time for Kansas City to Take Off

The stars are aligned for something special here; will civic leaders rise to the challenge with the aviation museum? While watching movies made in the 1930s and 1940s— too many actually, what with COVID and all—I came to a realization almost impossible to confirm, but that is surely correct: other than New York City, and maybe Chicago and Los Angeles, no city is mentioned more in the movies of that era than Kansas City. What took Kansas City off the Hollywood map? The airplane. Although few movies were set in Kansas City— close to none—characters often mentioned Kansas City as a place to pass through or even stop. People stopped stopping in Kansas City some 70 years ago. Once they stopped stopping, they stopped talking about us. The new Kansas City International Airport, for all its promised amenities, will look much like every other modern

walked through the headquarters and the adjoining hangar: Charles Lindbergh, Amel ia Earhar t , and the uber-eccentric owner Howard Hughes—Leo DiCaprio in the movie— to name a few. Today, this facility houses the TWA Museum. For the many TWA veterans who remained in the area, the museum is a second home. I have come to know some of them well. I wrote two books and made a documentary about TWA Flight 800, the mysterious 1996 crash that killed 53 of their colleagues. The resolution of the crash left many of the TWA vets distrusting their government before it was cool, which is why they allowed C-SPAN Book TV to shoot its presentation for my

airport in America. Given all the conniving, dissembling, and squabbling that preceded its construction, locals likely will not welcome it as the Eighth Wonder of the World. Kansas City does have, however, one aviation distinction that is worth brag ging about, namely, a history of f light as rich as that of any city in America. We now have the opportunity to make the rest of the world aware of that history. Some background is in order. With the passage of the Airmail Act of 1930, the United States Postmaster General was granted the authority to consolidate air service, presumably in order to improve mail delivery. The postmaster’s decisions resulted in the birth of three major airlines.

second book at the facility, the perfect backdrop. For years, coun- terproduct ive as i t sounds , t he Downtown Airport housed a compet- ing ent it y, the Aviation History Museum. Both were underfunded, the Aviation History Museum fat a l ly so. Today, the mu-

Currently padlocked for failure to pay lease fees, the facility does have iconic aircraft and other assets that can be consolidated into a unified museum.

seum is padlocked for failure to pay lease fees. However, the facility does have severally fully restored iconic aircraft that are worth pre serving and consolidating into a unified museum. The TWA Museum at KC’s Downtown Airport has persisted, even expanded, because so many TWA veterans care. In that the airline closed up shop about 20 years ago, the youngest of the TWA vets are old enough to remember Lindbergh’s passing in 1974, not quite 50 years after he made the first cross-Atlantic solo flight.

I would be inclined to lament business-government collusion here, save for the fact that one of those airlines located its operational center here in Kansas City. Call it the OKOIMBY factor: “O.K. only in my backyard.” That airline, of course, was Transcontinental Air Trans port and Western Air Express. Thinking ahead, savvy executives shortened the name to Trans World Airline, better known still as TWA. In its day, the only better-known brand in the world was Coca-Cola. More often than not, movies of that era showing an airliner flying over Kansas City showed a TWA plane. TWA’s operational headquarters was housed in an impressive, still functional, two-story structure located on the grounds of what is now known as the Charles B. Wheeler Downtown Airport. Many aviation greats have

Jack Cashill Ingram’s Senior Editor P | 816.842.9994 E | Editorial @ Ingrams.com

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September 2022

B E T W E E N T H E L I N E S

favorite—but people offended that easily do well to avoid the history of anything. For most kids, boys especially, a field trip to a museum, any museum, is usually pure snooze. But just about all kids, boys especially, love airplanes. With the impending pilot shortage, and the urge by airlines to diversify

their pilot ranks, a field trip to the restored museum just might launch a career or two. Better still, this would be the rare new museum in which visitors are not hectored for screwing up the environment or profiting from someone’s misery. Anyone who has suffered through the Special Exhibit at the Johnson County Museum— ”Redl ined: Cit ies, Suburbs, and Segregation”—knows whereof I speak. The organizers have presented a formal business plan to the Kansas City Aviation Department. A business plan is a start, but in an area fractured by state and county lines, not to mention identity politics, the TWA people need a champion. In a sane world, a living, vibrant museum with the potential to attract all of the region’s residents and visitors would have real appeal for an aspiring politico. But by definition, a museum that interests everyone appeals to no “special interest,” and special interests grease the gears of politics. Special interests have always gre ased those gears, but throughout Kansas City’s history—dating back at least to the opening of the Hannibal Bridge in 1869—there have been mom- ents when civic leaders rose above their parochial concerns and pitched in for the common good. This could be one of those moments. The price shouldn’t be an issue: the whole shebang might cost about as much as 30 yards of streetcar line. Literally. By 2024, visitors to the city could deplane at the shiny new KCI, drive right by the spruced-up airline museum, and glide into town over the spiffy new Buck O’Neill Bridge. The stars are in alignment. The quicker we move, the more it will seem like we planned this trifecta from the get-go.

They need help. A gussied-up and expanded museum would be perfectly positioned to catch the attention of all visitors by air that head Downtown. This will be a museum for everyone, one that anyone can find and no one is afraid to go to. The only possible item that might cause offense is the “stewardess” exhibit—my personal

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The views expressed in this column are the writer’s own, and do not necessarily reflect those of Ingram’s Magazine. Jack Cashill , Senior Editor, Editorial @ Ingrams.com

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R E F L E C T I O N S

by Dennis Boone

At the Intersection of Business and Life

Recession Prevention: What Are You Waiting For?

Smart business owners aren’t waiting to see if the economy will falter—they’re acting now. The long-term future of a truly successful company isn’t determined by survival strategies, but by the ability to leverage an economic downturn to its own advantage. Easier said? Sure. The big companies, for the most part, are going to be fine. There are reasons they became big. As the Pandemic Plunge of April 2020 showed us, though, even some big names aren’t immune to failure in a downturn if they employ outdated or stale business models. Before you start to prep for what might be coming, make this No. 1 on your list: Don’t panic. Don’t get emotional. Don’t be afraid. Business periodicals and Web sites are overflowing right now with advice on prepping for a looming recession. In reviewing some of the best guidance out there, common themes emerge. Here’s one: Many in leadership today might soon confront a challenge bigger than any they’ve ever had to manage through. The time to prepare is now. One key challenge is to understand the potential impact a downturn will have on your competitors, and on your ability to grab

On some level, business has to keep spending. The key will be focusing those outlays to take advantage of shifting conditions, rather than burying your debit card under a mattress or chopping up your credit cards. Get your financial house in order now to make yourself an attractive customer for business bankers—they’re going to be highly motivated to make loans when your competition stops borrowing. Be that ideal candidate. Remain flexible. Yes, you implemented some new process or procedure six months ago, expecting it to carry you through 2022 and 2023. But be prepared to scrap it and go back to the drawing board if it’s not demonstrating the potential to withstand disruptions to your sales. The job of securing capital is not finished once you have emergency reserves in hand. That will be the time to increase available cash to capitalize on inventory price reductions or reduced commercial property costs for your post-recession expansion. Maximize potential reductions in marketing costs or fees of professional services and trusted advisers to shore up metrics like cost per lead. All of that means you’ll be spending more quality time with your CFO. Getting laid off truly stinks, but for companies in a position to bring on talent, a lot more of it will be on hand if we get into mass-layoff territory. Be prepared to go after the big game that will help breed success for years to come. Arm your sales staff for battle, and if needed, define new sales approaches defined and be ready to launch. A downturn is no time for thumb-sucking discussions of “what we want to be” to drive sales. One of my favorite quotes in the aftermath of the Great Recession—we heard it multiple times from companies that emerged from 2009 poised for rapid growth—was an elegant “We chose not to participate in the recession.” For many of those who will ride out the next dip, it’s as simple as that: Choices. Be sure you’re making the right ones, starting today.

market share. Define new opportunities, and build a back-out plan with steps you must take to reach your growth goals. Key elements in that structured approach will involve financing, cash flow, collection of receivables, staffing and personnel, equipment, and, as always, process, process, process: What are you doing now that will kill you if business slumps? What are you doing that could be tweaked to bolster existing revenue streams and create new ones? Offense or defense: Pick one. Defense might get you to the other side; offense can, too, and probably in better shape overall once the clouds lift.

Executives of firms poised for rapid growth after 2009 have often told us: “We chose not to participate in the recession.” Solid advice.

There’s an aspect of branding involved, as well. Your needs as a business will change during a recession—but so will the needs of your customers and vendors. How will you define that impact, and what will you do to capitalize on it? Whatever approach you take to defend and support your brand, it’s a good idea to do it before a sense of desperation kicks in. Think hard: Is your product or service something your customers need, or is something they merely want? The latter category is going to be challenged as companies and consumers scale back on discretionary spending. If you deal in “wants,” how can you convert more of those into “needs,” or make marketing moves to shape customer perceptions of what you do? Consider, as well, which parts of your customer base hail from sectors or groups that, historically, have fared well during a recession. Are there new ways to reach them? What product or service, at the best possible value for buyers, can you add to your line-up? Volumes—hell, libraries—have been dedicated to the role of mass psychology in turning a potential recession into the real deal, or a short recession into a long one. When it comes to finances, business overall can add fuel to recessionary fires by scaling back on outlays in order to shore up the financial position. Don’t do that.

Dennis Boone is the edito rial director at Ingram’s. E | DBoone @ Ingrams.com P | 816.268.6402

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Kansas City’s Business Media

September 2022

I N A N U T S H E L L

by Ken Herman

It Could Be a Long, Cold Winter

From Russia to the Mideast to Washington, a trifecta of state-sponsored initiatives send energy costs higher around the world. Russia plans to keep the Nord Stream pipeline closed, saying opening it would be unsafe with just one turbine and blaming Western sanctions for blocking access to replacement units. Leaders of the European Union reacted over the weekend, with Germany planning to keep two nuclear plants online and France’s Macron pledging to share gas with Germany if nec- essary. Unfortunately, the U.S. administration’s ongoing war against American oil and gas production will not allow us to come to the free world’s rescue.

mer heat lingered into September and expects an all-time record demand to continue; the heat wave has pushed temperatures past 110 degrees Fahren heit, which threatens to stretch the state’s electricity system to its limit. That’s not all. Plummeting water levels from drought and overuse threat- en many countries (including the U.S.), weighing on hydropower as well as nu clear power that needs water to cool reactors. The S&P 500 started the month by posting another week of hefty losses, falling 3.29 percent for the five-day session. The benchmark index has now posted a three week losing streak after a four-week run of gains. Muted investor sentiment carried on from the previous week after the U.S. Federal Reserve Chair (at the Jackson Hole sympos- ium) indicated that policy-makers were com- mitted to raising rates in order to com bat inflation. A trend of good-news-is-bad-news trading also weighed on the S&P 500, as economic data released during the week supported the case for a hawkish Fed. Investors also digested job-openings data that exceeded consensus expectations, a retooled ADP report that showed that fewer jobs were added in August than had been expected, jobless claims figures, a stronger-than-expected ISM manufacturing purchasing managers index readout, and an unexpected in crease in the unemployment rate. Will the Biden administration do anything to alleviate at least this self inflicted energy problems? Not likely: According to The Wall Street Journal, the U.S. under Biden has leased fewer acres for oil and gas drilling offshore and on federal land than any other administration in its early stages, dating back to the end of World War II.

The global energy crisis has taken another turn for the worse, now impacting much of the world’s economy. Supplies remain scarce and expensive, triggering knock-on effects throughout many industries that are already dealing with soaring inflation. The near-term outlook isn’t looking any better as companies and consumers prepare for a coming recession that is likely to be made worse by inadequate energy sources to get them through the winter. Russia’s other contribution to this mess is in Ukraine, where Zaporizhzhia, the largest nuclear plant in Europe, has also been fully disconnected from the electricity grid due to shelling from Russian forces.

In the face of this energy crisis, the U.S. has leased fewer acres for oil drilling than any point since World War II.

European benchmark Dutch TTF natural gas futures jump- ed as much as 35 percent in a single day early this month after Russia said the Nord Stream pipeline would remain shut beyond what had been billed as a three-day maintenance halt. The Kremlin had originally insisted that the closure was due to a leak but now says supplies will be suspended until the “collective West” lifts sanctions related to their war on Ukraine. Moscow will also retaliate if the G7 imposes a price cap on Russian oil. EU energy ministers gathered for an emergency meeting in Brussels to discuss a coordinated response to gas futures surging more than 280 percent year to date. More stimulus? Rationing? Price caps? Trading suspensions? Oil futures for West Texas Intermediate climbed back towards $90 a barrel after OPEC+ recommended a 100,000 barrel-a-day production cut starting in October, amid fears over demand amid a global recession. The decision will have little effect on actual production as the group’s output was already running well below that target. The psychological impact, however, is clear. The small cut effectively reverses the 100,000 barrel daily in- crease that OPEC+ previously said it would add to the market after President Biden’s recent visit to Saudi Arabia. Domestically, California declared a power emergency as sum-

Ken Herman served as the Managing Director of Bank of America Global Capital Markets and was the Mayor of and served on the City Council in

Glendora, Calif. E | Editorial@

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Thought Leader Insights: On Getting to $1 Billion

Q&A ... W ith M ichael K ulp

The chief executive for KBP Brands, one of Kansas City’s biggest and fastest-growing companies, assesses a competitive dining market , scaling, leadership development and more.

Q: You all soared past $1 billion in revenues last year; was that ever really one of your leadership goals? A: It really hasn’t been, and it’s funny you ask because we talk a lot internally about that, primarily because we’re an acquisition-based business. We set orga nizational goals and do try to beat prior year revenue with organic growth, but it’s primarily through acquisitions that we grow, which is why we don’t like to focus on a revenue number as a goal. Setting any number, whether it’s a billion or $2 billion, or even when we were smaller, $500 million, was a bit dangerous for us because it could have pushed us to acquire businesses or grow for the sake of trying to accomplish a number, instead of keeping our focus on strategic growth and growing the right way. We’ve been really disciplined about doing that right over the years. Q: What does that discipline look like? A: One challenge many companies face as they grow is going through with an acquisition that doesn’t go well. Our view is that this often occurs because it was not the right acquisition for them. That could mean it was the wrong geography, or geography without the density you need to provide the right leadership and oversight. The fixed costs may be too great to overcome, or there are things that are too great to control when you’ve acquired. It can be as simple as not having done your diligence on existing earnings or the macro environment of the acquisition. For us, there’s a very clear lens we look through with key criteria that has to be met for us to move forward on it. That often means saying no to 10-12 deals before we say yes to one. Q: From the looks of your growth arc, you’re making the right acquisition calls. A: We’ve been extremely fortunate.

We’ve done north of 80 acquisitions, and I can count on less than one hand how many haven’t gone pretty much as planned, and none has been a complete disaster. The primary reason is, we try to stay very thoughtful about our investment in talent and infrastructure. We look at the leader to-restaurant ratio, and we’re wildly below the industry standard, which is why we are able to scale at the pace we did and why we are able to sustain that pace. We haven’t stretched those infrastructure investments post-acquisition to get more efficient. We have really great talent, and we’ve done things with less span of control than we see in our industry. Q: Let’s look at some of the chal lenges in scaling to your level, starting with company culture. A: We’re north of 20,000 employees now and running a large organization. This is an area that I focus on the most, personally. We have worked very hard to create a unique culture inside our business and industry. I firmly believe that all the key leaders are here in large part because of that culture, and they have helped us to evolve substantially over the years. Q: How so? A: One of the things we’ve recently done, in what could become a melting pot otherwise, is trying to amplify our culture, core values, our purpose in the business, and why we exist. We communicate those broadly, so we don’t need leaders who have to be around for a decade to understand and magnify that message. That’s a start ing point. Second, culturally, we expect a lot of our people, but on the flip side, we work hard to give a lot back. The way we celebrate, the way we incentivize and pay, we know that’s critical, and want them to be unique. I firmly believe in putting

our money where our mouth is, while representing the values we have in our organization, and moving people’s lives forward. Has that evolved over the course of our growth? Yes. Has it meant smarter use of technology? Yes. But we work hard not to have too much evolution culturally. A: Our structure has allowed us to execute against our purpose and values. One thing we’re very careful of is not pulling levers from the corporate location. It’s much easier to run a restaurant company than to run a restaurant. So making sure decisions to run the restaurant are coming from those who run those restaurants is critical. We feel like we’ve built a good mousetrap with those who work inside restaurants, but flip side, we have evolved a lot in terms of how we make decisions, how we elevate the voice inside each location, because it becomes a lot more difficult with 1,000 locations than it was with 150. A: The biggest differentiation factor we’ve always talked about in terms of non cultural attributes is our growth. We talk all the time about the opportunities at KBP for people to grow personally, professionally, or financially come faster with our organization than with others. Every time we grow, we need more talent, and that growth creates opportunities and upward mobility. Focusing on the development of those high potentials, we have a system to build opportunities for them to grow quickly, showing that we’re committed to moving people forward. That speaks volumes to potential talent who may be looking externally; they’ve watched the upward trajectory and the pace of growth and see that upward trajectory. Q: How has scaling altered operat ing processes? Q: On the talent and retention chal lenge, especially in this sector?

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Q: New concepts seem to be emerg- ing all the time; what’s the key to retain ing market share in a hyper-competitive environment? A: This year is odd because it’s the first year more dollars are being spent in restaurants than grocery stores. This has been a market-share game changer out there. It’s not everyday that you see startup concepts scale because it’s very dif ficult to do. The economics of getting into real estate like the legacy brands did 40, 50, or 60 years ago, today is much more complicated economically. Chick-fil-A and Whataburger have been pretty successful, however there aren’t a ton. It’s just very, very difficult to scale when you’re building one store from the ground up every time. For businesses like ours to stay successful, they must evolve, stay relevant, and remain distinctive in a crowded marketplace. Q: Do newer entrants to the work force no longer see the same value prop osition in quick-service jobs? A: There’s no question the value proposition for employees has changed, but for context, so has ours. We have had to evolve substantially in the past three years. It started at the beginning of COVID when we had to find ways to keep people excited about working in a consumer-facing busi ness. Then with all the stimulus dollars, we had to keep employees excited about coming to work every day. A: For us, it was a combination of simple stuff like evolved benefits, the way we thought about ancillary benefits to how we were paying individuals. We talk about career growth and not thinking about those jobs as entry-level, but about what’s needed in their career and how they can find it here. Last year was our biggest growth year ever in absolute dollars as an organization, and being able to show an upward trajectory and opportunities from it is an advantage over other businesses like ours. There’s been no more complicated time in the 22 years I’ve been in this business than the last year. Q. How did you manage that in the current labor environment?

business, it is at three times higher than we have ever seen. This has caused a slowdown in acquiring and selling because earnings are in a tough spot across the industry. Q: How has scaling altered your capital-formation strategies? A: We’ve been really blessed on that front. We’ve had a fantastic partnership with a series of banks for a good long period, and they are great partners. We have a fantastic partnership with a family in Chicago, and we have about 45 sharehold- ers inside our organization with the management team with ownership stakes. That strong, long-term capital structure not only helped us get where we are today but will continue to help us grow the business. Q: Will there be a point where expan- sion into additional brands is part of the growth plan? A: Possibly, but we have a lot of runway in particular with Taco Bell and Arby’s brands. We see a lot of potential scaling in the coming years. Not that the same isn’t true with KFC, but we’re already scaled there, and once we return to normal macroeconomics, I think in the near term the growth will be in the other two businesses. Q: Whyhave so fewcompanies seized on growth opportunities in this space the way KBP has? A: The key in our mind is to stay focused on good brands, keeping the underlying business financially healthy, and retaining our great people, not just today, but with the capability to grow. The thing I consistently see in this industry is that people are ready for the now but not for tomorrow—they are not in brands strategically chosen to scale. I’ve always said, in this industry, if you’re not growing, you’re dying. In order to attract people to the business, you have to provide upward mobility in their careers. We’ve built a business foundation with all this growth, and that’s what it takes to keep people excited about coming to work.

“The key in our mind is to stay focused on good brands, keeping the underlying business financially healthy, and retaining our great people.”

— Michael Kulp, President & CEO, KBP Brands

Q: How does your growth alter the map for expansion? Are there still oppor tunities for acquisition? A: There are plenty. We’re in 31 states today; we have three brands today (KFC, Taco Bell, and Arby’s). To the extent we find ourselves in a situation where we aren’t seeing great opportunities for growth in those brands, we might consider pulling back, but I don’t see that as a near-term issue. Constant succession scenarios lead to constant M&A opportunities in quick service and in each of the brands. We see plenty of deal flow; 2022 was probably the slowest year in deal activity in the last decade. It was also a year in which we saw the most difficult operating environment in our history. Inflation is absolutely rampant; in our

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S M A L L B U S I N E S S A D V I S E R WE A L T H M A A G E M E N T

by David Callanan

by John W. Meara

Succession Planning: Preparing for the Expected or Unexpected

Successful investing requires patience, persistence—and a little help from the pros. High inflation. Rising interest rates. Supply-chain issues. Recession. These subjects have dominated headlines lately, sending markets into a tailspin they haven’t been able to pull out of in recent months. Increased market volatility has forced investors to seek cover, only to find there’s really nowhere to go. Most of the time, investors can shift to bonds when stocks drop, and vice-versa. But both equity and bond markets have been hit hard this year, leaving investors asking, “Where are the current opportunities for growth?” While there is no one-size-fits-all answer, some asset classes are more attractive than others in the current market environment. For example, lower-duration fixed-income investments could be a good option due to rising rates globally, particularly in the U.S. And high-quality companies that pay a dividend and own a strong balance sheet may be better suited to weather a potential recession. Sophisticated investors can also explore an expanded array of options. One example is opportunity zone funds, which were created by the Tax Cuts and Jobs Act of 2017. These funds provide tax incentives for investments in 8,700 lower-income areas covering all 50 states, Washington, D.C. and U.S. territories. Hedge funds are also an attractive option, particularly as the Federal Reserve remains aggressive and intent on raising interest rates. Look for other sectors that also tend to remain steady as interest rates rise, including financials (such as banks and insurers), consumer staples and health care. The Risks of Going It Alone That said, the best thing investors can do in the current market environment is work with a financial adviser. A do-it yourself approach in a bull market is challenging; after all, it’s easier to pick winners when the bulk of investment classes are on an upward trajectory. Building a portfolio becomes more difficult when markets turn volatile, especially when you can no longer simply shift between stocks and bonds because neither asset class is performing well. But here’s the rub: It’s difficult—if not impossible—to predict when a market downturn will happen. That’s why proper asset allocation is just as important when times are good as it is when times are bad. A financial adviser can assist with allocat ing your portfolio to align with both current market conditions and your financial goals. Taxes are also a significant issue for a growing number of indi viduals and families in the U.S. The recent Inflation Reduction Act includes tax increases on households with incomes over $400,000. Proposed legislation calls for increased taxes on capital

gains and estate taxes, both of which would especially impact high-net-worth individuals and families. Your adviser can help you plan for—and potentially offset—rising taxes, deploying strategies such as tax-loss harvesting, charitable giving and bunching deductions. Like choos ing your own investments, these are tactics anyone can use. But if they’re not implemented correctly, you could end up creating a host of issues, including an increased tax bill. Given the current market climate, we recommend scheduling regular conver sations with your financial adviser, tax planner and/or accountant. Frequent reviews of your portfolio and overall financial situation are crucial, particularly as the economic envir onment continues to shift. Conversations with your financial pro fessionals should not just be about hitting a specif ic number; instead, they should be focused on your goals and implement ing strategies to reach them. Your adviser can also serve as a touchstone, reminding you of your goals when you’re tempted to let emotions drive your financial decisions. This is especially important as markets remain volatile, which we expect to happen as we head towards 2023. For now, we recommend patience and persistence as we wait for markets to turn around. This content is provided for informational purposes and is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. None of the information contained herein shall constitute an offer to sell or solicit any offer to buy a security. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation.

Don't think about hitting a specific number; instead, focus on your goals and implementing strategies to reach them.

David Callanan i s co founder and CEO of Advisors Excel & AE Wealth Management in Topeka.

P | 866.363.9595 E | david.callanan

@advisorsexcel.com

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