Join us for an inspiring episode of Table Talk as we sit down with Rohit Gupta, President and CEO of the Rohit Group. In Episode 6, Rohit shares his remarkable journey of stepping into the family business in 2002 and leading it to new heights. From beginning with 16 employees to a diversified enterprise of 260 team members, the Rohit Group has made significant strides in land development, new home building, retail, and healthcare across Alberta, Saskatchewan, and Ontario.

In this episode, discover how Rohit navigated strategic shifts—including exiting the hospitality and industrial sectors—to focus on areas that align with the company’s “DNA of capital.” He delves into the importance of governance through an advisory board, the challenges of succession planning, and balancing growth while staying true to core values. Rohit also shares insights on family business dynamics, the critical role of philanthropy, and how influential works like the Bhagavad Gita have shaped his leadership philosophy.

Whether you’re intrigued by entrepreneurship, family business dynamics, or the strategic aspects of business growth and governance, this episode offers valuable lessons on leading a family enterprise in today’s evolving market. Learn from Rohit’s hard-earned experiences on leadership, the importance of understanding capital structures, and the power of blending traditional values with innovative strategies.

Tune in to ABFI Table Talk for a compelling blend of professional wisdom, personal reflections, and the heartfelt story of a leader steering his family business toward a promising future.

Learn more about ABFI at https://abfi.ca/, connect with Matt Knight at matt.knight@ualberta.ca or LinkedIn https://www.linkedin.com/in/mattknight/ or Twitter @mattaknight
Learn more about Rohit Group at: https://rohitgroup.com/

This series is proudly produced by the team at Road 55 – located in Edmonton, Alberta. For more information, please visit: www.road55.ca

Matt Knight  00:06

Welcome to Table Talk, where we dive into the stories of business families and their journeys. Today, we’re joined with Rohit Gupta, the President and CEO of the Rohit group. We’re going to talk a little bit more about about his journey. Rohit and the Gupta family were also signature family at our 2017, signature event. Again, thank you for being involved with ABFI 7-8 years ago and again this week. Let’s maybe start by giving us a little bit of an introduction of yourself and maybe a 32nd elevator pitch of the Rohit group for those that don’t know about it.

Rohit Gupta  00:41

Okay, well, well, thanks a lot, Matt. Appreciate the opportunity. A little bit about myself. Been with the business now since 2002 officially been unofficially unpaid worker a few times before that and and sometimes under the table paid worker too. So, but it’s been a it’s been a great journey with the family. Our business was incorporated in 86 and today we’re as a business. We, we, we exist in Alberta, Saskatchewan and Ontario. Specifically, we’re working in land development, a new home building. We’ve got a retail business, retail, grocery, anchored business. We’ve got offices in our portfolio, but we’ve got a healthcare facility that we’re working with, covenant health. We’re building south southeast Edmonton, which would be our social infrastructure side of our business that we’re trying to get launched off the platform. We have a spin out platform called Build base out of royth group, and we used to be in the hospitality and industrial businesses. We’re no longer in those businesses. So a very enterprising family is just give you just a little snippet of us

Matt Knight  01:51

nice and tell us about how you came to join the family business.

Rohit Gupta  01:56

Yeah, it’s it’s really interesting. So before I officially joined in 2002 it was my sister that was supposed to join the business, and I was supposed to be the guy traveling the world. And we ended up actually reversing roles. And she traveled the world and got to live in cool places, and I ended up joining the family business. And the way I ended up joining was I kind of had too much fun in university and didn’t focus on enough on my applications for my master’s program and and so forth. And so the day after exams ended, I needed a job. And so it’s kind of like, okay, my mom needs some help with their spreadsheets, and I’m a computer engineer, so we’ve got a marriage of two needs that need to be met. And so the day after my last exam in engineering school. I was at work at 730 in the morning. Then that’s, that’s how it started. And so it’s, I would love to tell you there was, like, this serendipitous strategy to it, but it was very simple. So they kind of

Matt Knight  02:55

started out as looking for a job right after university, trying to figure out how you can use your skills in a way that would also help your your parents run their business,

Rohit Gupta  03:02

yeah. And then there’s, again, I’m a very utilitarian personality type. It did help that there was a.com bust that started six months earlier, right? And so getting a getting a.com job, or an IT job as a new grad in in Alberta, meant that you started your base salary was starting around 32 to $36,000 a year, and that wasn’t really a fun time to be graduating while oil was booming, housing was booming, yeah. So

Matt Knight  03:36

kind of never part of the original plan to join the family business. And more of a let’s take this opportunity and see how it fits into kind of your overall growth and development as a young adult. No,

Rohit Gupta  03:47

in fact, it was interesting like as a as a, whether it was high school or university, my friends knew more about my business than I actually knew about my business, and they tended to care more about like, Hey, you guys are a substantial family. You guys are doing some interesting things in the market. I’m like, sure, sure. And my mind was always a tech or nuclear physics or space like, if I was going to stay in tech, I wanted to go into gaming and working on with groups like Bioware. That was what Ray mazeca And Greg scheck had done that was just amazing, and want be part of that team, or it was about being a nuclear physicist and working on fusion and fission and stuff like that. Like is my interest was nothing related to bricks and mortar.

Matt Knight  04:35

Okay, so tell us about how So you started out, you know, as a Excel assistant, or whatever you wanted to call it yourself back then, and eventually became president, CEO. What did, like, how did, how did that transition occur? What were some of the steps? How long did that take?

Rohit Gupta  04:53

Yeah, so interesting. Like the. The best way to, if I can be really reductive about it, is I think teams exist in threes, right? One where somebody’s visioning, somebody who’s collecting, and then, and then somebody who’s running and and so my dad was the visionary, and he was trying to create different opportunities. My mom was making sure that we didn’t we collected the money both on the revenue side, and we controlled it properly from the expense perspective. And then somebody had to run the operations and and so we’ve just happened to stumble into a platform between the three of us and each part of these cogs, whether it’s my mom, as she’s tired out of the business, somebody else stepped in like a rustle. And then we changed our roles within that team. And then, as my dad has started retiring, somebody else has stepped in. But I think you start rotating in teams of threes, okay, and it’s a trifecta, and I don’t know why, but that’s how I my my observation has been and so if you look at that concept, we were really strong with the visionary when I joined with my father, and really strong on the control side with my mother, but the operational side struggled and and so my job, when I joined, I just naturally, just gravitated towards the operational side. I’m very much of a floss, a philosophy of, if I can do it tomorrow, just do it today, if I can do it today, yesterday, type of concept and and just aggressive, just do, do, do, do, do, do, and just keep performing. And so I’m more of an operational mindset than anything else. And so that this trifecta just started existing, and my father kept on creating opportunities for us, and he has this insatiable ability to find opportunity and create opportunity. And so there’s always a vacuum behind and, and this, just this vacuum had to just, you had to walk into it. Otherwise there’s chaos to be had. And there’s lots of times of chaos and, and he’s the consummate entrepreneur that wants to start something new every day. And, and so it was more about more than anything during my journey, it was less. It was less about here’s the structured form by which you’re going to grow, and it was more about how aggressive I was going to be willing to be and to create the opportunities for myself within the shop. Okay, right? And, and so if I look today, the journey would have been, I started in it helped my mom out in procurement, would have gone into sales. Got fired out of sales because I was a terrible sales manager, back into operations, gone into construction, effectively started taking over operations, and then moved it back into sales management and trying to structure that out. And then at one point, was running our Edmonton, Calgary, operate housing operations, while dad was running the land and finance side of the business. And eventually got into finance and got exposed there, replaced myself, out of finance went back into operations. Looked at different during the GFC, I got into restructuring, or trying to find restructuring opportunities and and so really just trying to create multiple different streams all the time. And I would say about 2014 20 when, when the market really started changing southward. That’s where my father, I believe it was 2014 or 2015 2014 I believe he said, You should be president of the company. And I remember said, I don’t think I’m ready. And then one of my, one of our leaders, Russell, pulled me aside and goes, Look, I think you need to stop whining, right? When opportunities show up, you take them, because these opportunities don’t exist for everybody. It just happens in your family business. So your dad’s giving you the ability to choose. Yeah, right. So grow up, take the mantle and do your job. And so it was kind of, and if you meet Russell, he’s not a small man. He’s got a few inches on me, right? And he’s got a pretty strong grip. So you know, you’re like, Okay, he says you’re doing this. You’re doing this. So it was a it was one of those defining moments that really just said, Look, just do it and walk through the door, don’t have fear, and I feel sorry for the team sometimes, but because they have to go through that journey with me. Even though I had been 12 years in the business, I’d been exposed to going from 16 employees at that time were about 140 employees, and so so I grew with the team. It’s not like I was I just parachuted in or albatrossed into the team, yeah, but it was still a tough journey for the team to adapt to my the change in leadership style, from how my father ran it on a day to day basis to how I ran on to day basis. That being said, the trend. Position for my father, to me, has not been necessarily an easy one, either, and so, but that’s, yeah, that’s how I came to be from junior level. It network support guy up to today.

Matt Knight  10:12

So when you joined the business, you were talking about how, you know, your dad had that visionary style, where he would be more, you know, he had the dream. And we kind of, you know, I think you talked about the leadership vacuum, where he’d give you the dream and kind of walk away and you’d be left to kind of execute it. How have you transitioned between being the one executing the dreams to being the one helping to come up with the dreams?

Rohit Gupta  10:35

Yeah, yeah. Oh, I guess should ask the team. That’s the better answer than, like, I would say it’s, it’s been struggle, right? Like, I’m still a very much a doer than a just a very hands off personality. So sometimes I can be a wet blanket to my team, even though I’ve got the whip vision, but if they don’t hit the vision, then I start being a wet blanket and be a little bit prescriptive. And so it’s, it’s been challenging. I think the easiest part has been if, if I’m able to find the team member that is able to execute the dream or execute the vision, and they tend to be very laissez faire, right? But if they’re not able to execute, then I’m very up in their grill and trying to just push on them and trying to get executed. But we’ve been blessed. I found some really great leaders that have come in behind me on the team that have been able to fill build really great teams that allow them to scale with us in the business and rapidly grow so like when I joined, we were our assets under management would have been about 25 million, and we’re 50x now, right on that basis, on that business, on today’s basis, and we’re trying to double the enterprise again in the next six years. So what we did in the first 38 years, we’re trying to do in the next six years, type of deal, and so so the momentum is picked up. And so I think winning begets winning, and so I’m allowed to be crazier in my current style, and I think I’m more migrating towards my where my dad was at my age, and I get to be crazier and have bigger dreams, but I’ve got a really great operating platform behind me that allows me to do that. Tell us

Matt Knight  12:24

maybe a little bit more about that growth strategy. Like, what does that look like? Is it about doing more of what you’re doing in the same market? Is it expanding to new markets? How does that fit into kind of the strategy and that next doubling in the next six years?

Rohit Gupta  12:39

Yeah, so I would say, if we like any Alberta business that’s existed here, 2014 was a really pivotal moment. As much as we’d like to talk about covid, or we like to talk about the GFC, if any business that’s come through the 2000s up until 2014 that would be the most pivotal moment for us in the sense that we know, knew that the capex was not going to exist in the Fort Murray market at $100 billion plus, we knew that the social license, even though we were trying to push for it through the Notley government, may or may not come through, there’s a high likelihood of failure for oil and gas, and then we recognize that capital markets were reforming also, or changing with low interest rate environments and everything. So I would say we had to get rid of our hospitality business in the in the Kootenays. We had to work towards looking at the lending side of the business and say, does that really make sense for our capital? We had to relook at our Fort Murray operations was half our business at the time, and try to get out of that. So we exited those businesses. We had to try. We had to prune the tree quite a bit. And what we ended up doing was we got aggressively into the retail we got aggressively into when we opened new markets like Calgary, Saskatoon, Regina and Ottawa, and we opened, started looking at infrastructure place would like we’re talking with covenant health, all of these different asset classes or business models and geographic diversification took place over the last decade or so. And so the next decade for us is now to harvest those asset classes or grow, expand into those markets less so, trying to create new opportunity, new asset classes or new geographies. At this point, we

Matt Knight  14:38

were talking a little bit before the show about kind of the growth in the Edmonton and Alberta markets, with family, businesses and families looking at, specifically at the real estate. So I think there’s an article a while ago where it was about 80% of new transactions and Edmonton were private owned or family owned, and most of those were buying from institutional investors. So. Can maybe talk about why you think that might be and why you see the trends looking like that.

Rohit Gupta  15:05

Yeah, it’s a little bit of a complex answer. It’s like the, I’ll be kind of maybe an economist, and half a dozen this, half a dozen that, but the so if we were to break in within real estate investor classes, we’d say there’s one that’s institutional capital or pension funds. We’d say capital allocators, which would be like REITs or asset managers. And then we let’s look at a third group, which would be high net worths or family offices or families. And then the third would a fourth would be the retail investor. And if we look at these four groups in the last two or three years, what we’ve seen is this rapid rise of interest rates. We’ve seen massive inflation, and that rapid rise of interest rates, inflation and sorry, combined with government debt at the federal level, has really changed the equation for pension fund managers or institutional capital. And it was interesting. What I’ve started realizing recently is that Canada means Toronto and Vancouver. It doesn’t mean everything. And so for a lot of these pension fund managers, like whether they’re CPP, IB or hoop or whoever it is, this real volatility or change that’s come out of dislocation, coming out of covid, has said to them, well, Toronto is a not a great investment opportunity today. It’s a core Why don’t we take this opportunity to diversify? And so they’ve started saying, let’s go to us. Let’s go to Europe and look for opportunities there. And they’re they’re just flying over the prairies. And so we’re fly over country. We’re just not a deep enough market for them, and so, so we’re seeing an exodus from these institutional capitals in the market, and specifically it’s the office space that they’re trying to divest out of. We’d say commercial real estate. We talk about this wall of debt. It’s not necessarily retail or industrial. They’re still hot and destroy industrial and multifamily. But they’re specifically saying, let’s relook at how we are investing in office on today’s basis, the REITs and with the higher interest rate environment changing, their share prices have started really looking at their operational know how, and they’re trying to figure out how to extract more value on them. So they haven’t been buying a lot of in inventory, either across across the country, but they’re geographically a little bit more constraint. So that leaves us with high net worth families. So if you’re in Toronto and or Vancouver and you’re looking for yield on your investments, Alberta has been great market like Alberta has been a screaming, awesome market. Through covid, with immigration, we’ve seen from a real estate perspective, we’ve seen lots of demand. We’ve started seeing businesses starting to relocate into Alberta. If you look at De Havilland, you look at the investment that WestJet made into its infrastructure, you look at Infosys coming in. You talk about emphasis coming in as IT firms into Alberta. And then you start looking at the even the Dow Chemical plant on the petrol what’s happening the heartland of Edmonton. So you’ve seen a lot of operating businesses saying this makes a lot of jurisdictional sense for us, a lot of investment sense. So Alberta has got intra provincial growth, interprovincial and new immigration coming into the market for high net worth families. They they’re not necessarily looking for our business families. They’re not necessarily looking for opportunities in Europe or us. This is the perfect opportunity. Institutional capital is dropping some assets. They’ve got long term views, so they like and I look at like an office building, like a coal mine. It could have great cash flows today or for the next five years, 10 years, but the valuation pop is maybe 15 years out, 20 years out, and so that longer horizon view is starting to take place. And that’s that would be my thesis for why you’ve seen some of these transactions take place today. And

Matt Knight  19:03

we think a little bit and changing gears a little bit when we think about the kind of the growth that the business has seen, how has that impacted, kind of the family business dynamics with your with yourself and your parents and your sister and the family, like, what is, what are those conversations look like today versus, you know, 10 years ago.

Rohit Gupta  19:20

Yeah, you know, like, look, when we’re we’re building homes. You build a home, you sell a home. You’re and you’re and you’re constantly. The development business is a high risk business. And so you’re always taught, as soon as you take on a bet, you make a bet, you’re talking about, how do I get rid of the bet off my table and de risk myself constantly? And so it was always a run, run, run, run, run, run, short, shorter time horizon view of a year to two year type of view. As our capital pool is starting to grow and we’re starting to take long, dated investment strategies, whether it’s office buildings, retail centers, residential rental buildings, what we’re finding is there’s this. Alice that’s starting to exist within the family, and this fear of being punxsutoni Phil is starting to disappear. And we’re we’re starting to become, we’re starting to sit back and say, You know what? We recognize this bets going sideways, but we can wait it out right and and so we don’t have to be as right, as often as we used to be and and we’re becoming enterprising, and not necessarily at the micro deal level, but at the macro deal. We can take bigger bets, and we can work the swing for the fences a little bit more on bigger deals that will allow the for the firm to jump, it’s also starting to so. So within the business, the deals we’re making are where we’re willing to invest is changing, but how we’re investing with our team is also changing, right? And, and whereas, but with my mom, my father and I, when it was just like, yeah, if we need to work out of a trailer. Let’s do that. But we’re now starting to invest back into our team. So we just moved from suburbs of Edmonton into downtown Edmonton. We moved our Calgary office from suburbs to the downtown, and we’re starting to say, how do we invest in how do we create great working spaces? So we’re starting to take long term views from that perspective. But it’s also starting to change the dialog within the family, outside that aren’t involved in the business, to start saying, hey, look, you got this honey pot that’s been developing. How are you gonna utilize it? Like the worst thing you can do is preserve it, either enjoy it, party with it, like crazy, own a yacht, be in Mykonos, do something crazy, or actually use it for a utilitarian perspective of either helping the community or starting a business. Or how do you start looking at so we’re starting to find we’re able to maybe help existing family members look beyond their existing occupation, within their what their space is, and starting to envision a different future, or or some of the complaints they may have had about society, starting to work on those items. Those items and so, so the dialogue’s changing that way too. So we’re lifting our head from the steering wheel to start and look at the road to kind of

Matt Knight  22:12

more what the family or what the individuals in that family, you know, where their values are and where they want to invest and grow in those areas? Yeah,

Rohit Gupta  22:21

yeah. So the dialogs forming around it’s but it’s in the formative area generation, yeah.

Matt Knight  22:27

And I So thinking back to the signature event, you know, I think the there was a fair bit of conversation about philanthropy there. And kind of went around three pillars at the time, I think. And it was around homelessness, mental health and the Indo Canadian community. How is kind of that, you know, is that pillar approach still what you follow for kind of that investment thesis in the community, or is it has that shifted with the family?

Rohit Gupta  22:54

I would say the investment thesis is similar. We’re still trying to focus on that aspect of it, I would say the business is creating different opportunities that don’t necessarily follow those pillars, and we’re starting to partner with different municipalities on and trying to take it back, Take advantage of the opportunity that they are giving us. And in this terms of like we look at the city of St Albert, we were able to donate some land, residual land for them to help them build a rec facility and build a better community. Right we were working with just right now we’re working with the city of Edmonton on working on giving, donating a part to them, right and but it’s related to a land development play that we have. So the business is also starting to riff off of what the family is doing. So if we look at the family and the business as two separate entities, the riffing off of each other. If we look and they’re they’re evolving with each other’s plays or each other’s activities. So from a family perspective, we’re still defined in that smaller try to use those pillars as a guiding, Guiding Light. And when I say family, that’s my mother, my father and I, but when we start going to the broader family, there’s they have their own streams, and they have their own activities that they want to do. So so definition of family matters, yep,

Matt Knight  24:33

and it’s very difficult in business families to really have that definition really clear when we think a little bit about, you know, the changes in this complexity and how you define family and the growth of the business, how have you looked at governance over the last 10 years, and how have you looked at maybe implementing or formalizing some more of the government governance mechanisms within the business family? Yeah, I.

Rohit Gupta  25:00

Yeah, so I would say I started thinking about family businesses in the mid 2000s that’s when I started getting exposed to the concept, and when we did the signature event, we were just starting to talk about maybe having an advisory board. We’re now five, six years into the journey of an advice or six year in our journey of advisory boards. And at that time, I looked at them as look, frankly, was I call we need a Scotch club that for somebody who can help us grow our influence within the community, we need some of these political players or people who are well connected. That was kind of the initiating part of why we should form an advisory board, but also, at the same time, help the CEO think through the business problems. That’d be a good idea, right? And if I fast forward to today, and we look, frankly, I looked at fiduciary boards as straight jackets. They’re straight jackets that inhibit business entrepreneurialism. They’re talking about controls. They overprice risk. They talk about risk, and they get me to be negative and really like, really, do we want to go down this journey? And does this really make sense? And as I’ve started reading more and more and I evolved, my thinking is evolving, and my dad is aging and my mom is becoming less interested in the business, day to day functionality, and the family is less and less likely to take over the fat business. If something were to happen to me, it’s it’s the journey has evolved into, we need an advisory board that is really starting to move us to a pseudo fiduciary structure, yeah, and allows the family to retain control as shareholder, Director and operator, right to assuming that the family is only a shareholder and maybe a director, and most likely not an operator, if I’m not around,

Matt Knight  27:10

just like a shotgun clause to a fiduciary board,

Rohit Gupta  27:14

right effectively. So so we’re so there’s a lot of thinking, and that’s happening both and the Advisory Board has really helped with that, I would say couple of the key items where we’re really gaining with that is making sure that we didn’t bring on anybody thus far that had a previous relationship with the family or the business itself has been a big part of this, and that level of independence allows us to get past the dialog about my kids and my my my family, and allows us to really talk about the business and how do we structure it appropriately and navigate and push us and so that’s been really helpful as the leader of the business and but also helped me navigate some of the issues that I may have with my parents and their transition to me, and their exit out of the day to day operations and our next set of board Members that we’re trying to bring on are also again, independent from the business. We may have interactions, micro interactions, but they don’t foundationally, know the business in depth, or know the family in depth. And so I think that structure is going to be really powerful for us, especially at the rate we’re growing, from an institutional from a capital based perspective, the types of deals we’re chasing if we want to bring in future capital partners into our enterprise, the board helps us create proper structure, but also allows the existing shareholders to have comfort that there’s some structure for the future.

Matt Knight  28:57

Yep, really looking at, you know, the we were talking earlier too, about how, you know, whether it’s a family business or a business business, you know, still the ultimate goal is that shareholder value piece, yeah, and a lot of family businesses don’t look at it that way sometimes, yeah, but it really is important to look at, you know, how are you doing the right things for your shareholders and the right things for for your legacy? Yeah? This has been a great conversation so far. Please stick with us as we’ll be right back. Just wanted to take a quick moment and thank some of our sponsors who helped put on the show today. Thank you very much to Bennett Jones, qv investors and results. Without the support from the three of you, we wouldn’t be able to do table talk today. So thank you again. You mentioned a little bit about you know the importance of having those directors who might not have those relationships, or know your kids. Let’s talk a little bit about that. Where do you see, you know, with with your son, you know his involvement with the business in the future, or what are you doing to raise that next generation? Understanding that nothing to mention he’s six right now. Yeah. So you know he’s not, probably not going to. Taking over the business in the next 10

Rohit Gupta  30:01

years? Yeah, it’s, well, that’s an interesting question. I always ask him, how you install drywall? And he keeps chewing it. I keep saying telling people, so people ask me, Are you gonna leave the business for him? I’m not gonna lie. I’d love for him to take over. Definitely gonna pull strings, and I’m gonna socially engineer him the best way I can to make sure he comes in and takes over the enterprise, but the likelihood of failure is super high. Right? In terms of a you have to have passion for what you do. And then second, you have to have competency to a understand the guts of the business, but then be able, and then third, have a competency in leading people, right? Those are three components. And once we start working our way through, probability is probably one to 5% that the individual is competent enough to and passionate enough to lead the business. And that’s on today’s vision of what the business today, but between now and 20 years out, the business is gonna have a lot of Jukes and jives. Unless we’re static, the probability starts accelerating downward, or decelerating that, or lowering that, the success is gonna be there so and then there’s this other x factor that exists out there. I’ve had friends who’ve been who passed away in their early 40s, and I’m 45 so my ticker is anywhere between now and 20 years is there’s a probability, a non zero chance there. So we’re starting to try to figure out a my wife and I talk about this is talk about values, about what, what do we value the most with our kid, or what values do we believe are going to be intrinsic, and then what skill sets are going to be intrinsically needed as they move forward? And we’re we’re trying to lay that roadmap out create those opportunities for for him as an individual, we’re also looking, I’m always scouring nieces and nephews and and seeing that they even though they may not be in the immediate family, but they may be the right people that may be leaders or the part of the business. So trying to always keep the eyes open for a professional CEO or downstroke, but that maybe come from the fat extended family structure. But then the third component that we’re looking at is, how do we make sure that the business is liquid? So we’re starting talk at a strategic level from a business, and trying to change the narrative that we have, let’s say Land and Housing as one business, and then we have our income producing properties of residential, retail, office and social infrastructure as another business. Right? Which business can the family run more as a shareholder, with lower risk and or on a risk return curve is up the up the curve on returns relative to risk whereas, and which business does that, and which business would the family be better off having professional managers at? And which business does the family need to be involved in? And we’re trying to create liquidity for the business that the family has to be involved in. And if I’m not around and the family doesn’t want to be involved, we have potentially start talking about exits, and how do we make sure the business moves that way? So so these are all these considerations that we’re talking about because and and it took a while, frankly, and not and when I say, while I’m not talking like a few months, I’m talking about, like, years, five, six years, seven years, organic discussions. Yeah, that. You know you should be talking about these things, but you’re kind of ignoring and then somebody says something, and you’re like, Okay, now I got to make a decision and and you and so that’s how this evolution’s taking place for us. And so I look at our if my if I’m around for another 30 years, and my son comes into the business, and he has the passion and the competency, we’ll probably retain the Land and Housing business long term into the second, third generation. But if it’s a situation where 20 years from now, or 10 years from now, I kick the bucket, then we’re going to have to talk about, how are we exiting the Land and Housing business through a sale and try to keep the IPP business long term?

Matt Knight  34:30

Yeah, well, and kind of the scale and complexity of the business changes as well. Yeah. So when you walked into the business, you know the I think I remember the number you said 16, 1617, employees, right? And now, you know, if your son was going to walk into the business 10 years or 20 years from now, the employee Count’s going to be exponential. Hey,

Rohit Gupta  34:51

yeah, like right now we’re at 260 ish people. I think it is right spread out across Canada. And if we. I would not, I would assume, in 20 years, if we’re still really successful what we’re doing, we’ll be in the US. So he’ll probably not just three provinces. He’ll be in three or four states. When I joined I was in Edmonton and Fort Mac, right? And if I needed to get some to learn something about foundations and framing a house. I sat at the dinner table with my I went to site and then sat at the dinner table. That opportunity won’t exist for him, right? So, so that that’s going to be a different journey. So, and

Matt Knight  35:35

when we look at, you know, kind of when a new leader comes into a family business, whether you know it’s the next CEO that comes into your business or your son, what kind of advice would you have for that individual? Well, you know, whether it’s your business or another business, what should you look at as as a leader of a family business and and what are some of the unique things to consider? What do you need to think about from a leadership perspective?

Rohit Gupta  35:59

Yeah, I would understand. Okay, so this is gonna be a meandering answer, but I would say DNA of capital. That really needs to be understood. Every business has a DNA of capital. Some are people who want to be really aggressive growth and gambling, gambling, gambling, and they’re and some is very risk averse, right? So understanding the shareholder, what their return requirements are, what their where their risks are, appetites there, where there isn’t, is, I think that’s where you need to start first. Because if there’s a misalignment, it doesn’t matter what’s happening, the operations that that’ll obliterate. The second is, you will never have as much information or knowledge about the business as the founder will, yeah, right, or the person that’s been in the business for 1020, years. So if we think about society today as in more of an individualistic society than we were 50 years ago. Our terms with the organizations are shrinking, but a family business doesn’t have that they they’re still stuck in a paradigm that existed 100 200 years ago, right? And so they’re married to this business for 20 years, 30 years, 40 years, when this new CEO is jumping into it and and you have to feel you have to feel comfortable always being the, I guess, the dumbest kid in the smart kids row, but at the same time creating new opportunities, relying on the past, relying on the stories, relying on the knowledge, but still trying to allow that information to flow between pre existing family and the existing employees that were there before you were inserted in, and allowing them to have that directional conversation and then, but at the same time, allowing creating a new vision For where the business needs to go right? Because, just because it worked last year or or, I guess there’s a hysteresis that would exist in that family from we sold this piece of bread this way, or we made this sold this house this way 30 years ago. Why do we have to do it this different way? Well, the world’s changing, and part of the reason you’re an external CEO is you’re supposed to change the way the family does business, right or the business moves forward. So navigating that change management is a super part, super big part of it, and bringing the family along on the journey, I think, is, is part of that too, and and I’ve learned this the hard way, as been the leader, it’s you, as much as your vision or your Your ideas may be right or appropriate for that environment, that trust or that personal relationship is super important with the previous generation, and if that erodes, it really adds it’s another it’s a different form of tax, and it just slows the organization down, slows the decision making down, and and it creates a lot of frustration on all parties that are involved. And so you have to really be thinking about how to create an environment of openness. How do you create, understand, understanding the DNA of the capital and and trying to figure out how to allow communication to be bilateral but still directly forward

Matt Knight  39:37

to kind of like putting your own, your own spin on, on the direction and the strategy, but still being, you know, true to the roots and the legacy. Yeah, one of the questions I like to ask on all of the episodes is about, you know, is there kind of like a big, influential book or learning or course, or something that you did at some point in your life that is really. Impacted how you change how you look at business.

Rohit Gupta  40:05

There’s, there’s lots of incremental, I’d say, I’ll give you maybe some verbal diary again. Recall one of the great books was, oh Yahoo, Galbraith, the goal, I still pick that up right. And it’s kind of just, it’s such an easy book that’s such an easy read, but it’s so foundational to how one can look at businesses, left, right center. And just, I haven’t found any book as easy as that that helped me change or reform the business, and I still go back to that one. I love everything that Ram Charan put out from Harvard. He was a professor there, and whatever I could get on performance management or how to look at businesses that really helped create some foundational thinking for me, the Gita was a book. It’s a holy book of in India from the Hindu religion, sorry, and that was really transformational. And it has some real foundational philosophical discussions about how to look at war, and how do you make decisions? And it’s every decision has good consequences and bad consequences, and sometimes you have to do things that are not popular, but they’re necessary evils, and to making decisions and making the organization go forward. And so that was really foundational and helped me sit in this philosophical space. So whenever I’m having trouble thinking through where which way should I be going, reverting back into that framework or thinking has really helped me. I would say, for families that are starting to think about advisory boards or governance or transitions, I would look at the icdd program. I’m going through it right now, and it’s awesome, like it’s awesome. I wish I’d done it before I put together my advisory board. Maybe I wouldn’t have tried to think about a Scotch club first, and maybe used it and accelerated our journey a little bit better and faster and and then I would say there’s, there’s lots of different programs around across the country and across North America that bring families together, whether it’s Harvard or whether it’s Western whether it’s University of Alberta or so, all these different groups allow you to congregate with other families and but sitting in a learning environment and they’re giving you case studies and engaging in that is a super powerful way to start seeing Holy shit, I’m not the only screw screwed up Family, and I’m not the only screwed up business, and together, we can still be successful. So two wrongs can make a right, I guess. But, but there’s, there’s this great opportunity to learn about how different groups are doing it and different businesses are doing it, and I think that’s been powerful for me and other members of the team.

Matt Knight  43:17

Awesome. Kind of leads me to another question of thinking back to the signature event, many, many years ago, yep, what kind of like reflection or impact did that have in your family business journey or in your own journey? Yeah,

Rohit Gupta  43:33

so from the signature event? Yeah, you know, sometimes you you think you get admired in the day to day activity of saying we’re still not good enough. We’re still not doing and it was really flattering and really appreciate it like, from the family’s perspective and even the business’s perspective that we would get recognized as a firm that’s doing some interesting things or has done things right. And so it helped shift our dialog into a more positive framework, right, to say, hey, we’re doing ratchet, not that racchi, good. And this is for anybody who’s a new immigrant. When Kamala Harris became vice president back in the day, there was this meme that was floating around with all these Indian second gens, and they had this really disappointed looking dad and his and all you saw as the meme was saying, Vice President, why only vice president? And when Rishi Sunak in London became prime minister, there’s like, Kamala, look over there, right? Like, so. So it’s this concept of being just you’re either. More disappointed or less disappointed, was the paradigm we were living in kind of just, let’s do more. We need to do more. Yeah, that’s where the abfi was really helpful for us, right? Like it was, it was good. It was really good for us as a family, to hear, to be recognized. That’s kind

Matt Knight  45:15

of like humbly, humbling and validating, but also kind of gave you that right direction to take the next steps,

Rohit Gupta  45:20

yeah, yeah, no, so I just want to share that.

Matt Knight  45:23

Thank you very much for that. So I’ll maybe last question, anything that we didn’t or that I didn’t ask, that you want to talk about or share or dive into kind of an odd podcast, podcast question, yeah.

Rohit Gupta  45:42

As you know, I still, I really struggle and to understand why families or individuals have so much fear of the family business and and I see it in my own family, right? I still really struggle with that, and it’s we talk about, how do we become more inclusive, to expand opportunities for different minority groups, or how we could create women’s rights so we can find this participation workforce right and but then I look at our family businesses, and family businesses are really good at, uh, closing the doors on people, on family members that aren’t fitting the mold of the founder or some structure of that nature, and it’s a bilateral issue where the family members start rent seeking, off the business and and not participating and pulling their own weight, right? And and I, my wife and I or we talk about it quite a bit in different ways, maybe not so explicitly, but one has to really figure out, how do you get the participation rate up, from a labor economics perspective, of different family members to contribute to the success of the enterprise and then the enterprise to contribute back. And so it’s a really interesting issue that’s I’ve been noodling for a long time, and it’s and that’s why I look at FEA or abfi and all these other groups. They’re, they’re really starting to trying to poke around this in some different ways, but maybe from a wealth management perspective, but not from a labor economics perspective, yeah.

Matt Knight  47:46

What is the labor productivity at gently

Rohit Gupta  47:47

discusses, right? And so, like, I look at those Vietnamese restaurants sometimes I’m like, Holy shit, they work hard. Like, everybody’s in, all right? Look at this, like, comedian store, and they’re all piling in. So when the it’s amazing, when the business is smaller, we pull together much better than when the business is bigger.

Matt Knight  48:07

Yeah, it’s a very interesting perspective of you know that that support is almost only there at the beginning or at the small stage. Yeah,

Rohit Gupta  48:15

it’s kind of like people are really happy to support you when you’re not successful, but as soon as you’re successful, you got crabs in a bucket right beside you, right, like it’s, it’s, you want to make just enough money so that people support you, but not too much money, otherwise people start pulling you back, right? And so it’s a similar type of paradigm that I’ve started noticing in other family businesses, too, and as and I never know, I never cared about it before, but as my son’s since my son’s been born, we’re trying to figure out, how do we get him to work hard at the house? How do we get him to have the same values that my father and my mother installed instilled in me and my sister, and how do we get how do we propagate back forward, and how do we propagate the values of my wife’s parents put into her and so, so it’s just an interesting comment I just thought I wanted to share and about The business, I would say, we as family businesses sometimes become myopic in our view, right? And this comes back to that earlier conversation about institutional capital, saying, hey, Toronto and Vancouver working from a real estate perspective, so we’re going to go to US and Europe, and we’ll find different markets. The groups aren’t saying that they’re expanding into different markets, because those markets are necessarily better. They just need diversification, right? And we as a family businesses, sometimes, and even I, get in the same trap, start thinking about. Wow, Canada’s not really working right now, or it’s not really that productive. My question always is, where would you rather live? I mean, where would you take your business? Like, if you go to the you’re going down to LA, you had all sorts of social infrastructure issues. You want to New York? I don’t know, high tax rates there, right? Like, tax rates aren’t better. So, so those are some of the things that we’ve been looking at, and that’s part of the reason we went from head to Alberta, Edmonton to Calgary, to expand Alberta said, Let’s take advantage of Saskatchewan, because as a market, because it’s similar ethos as Alberta. And then we said, well, I want to go to BC, right? Because they, they’re just Yes, let’s go to Ontario. At least there’s there’s manufacturing, there’s real jobs, and there’s stuff that’s happening out there and and like, yes, the US is enticing, but Ontario’s all also actually a really good market from our business perspective. And so sometimes we ignore our backyard and we start thinking about other opportunities. I would say we like Canada. Canada has been really good to our family, both as people who grew up here, but also immigrated here. And and I would really, really encourage families to be really mindful of when you want to leave or you’re looking at different markets. Look at the existing market. It may be deeper than you think it is. That’s

Matt Knight  51:33

awesome piece of advice to kind of close things up at, yeah. So I just want to thank you very much for your for your time and for your support of the podcast, but also of abfi and the University of Alberta over the years. So thank you very much. And lastly, if anyone wants to hear more about you or connect with the Rohit group, how should they do that? Yeah,

Rohit Gupta  51:54

look, I’m on LinkedIn, open on their Rohit group.com, you can find us there, and Matt knight will give you a cell number here soon, hopefully I do see that Matt will give you a allow you to connect with us, but no anytime like just reach out Road group.com, or contact info. Is there or come find me on LinkedIn. Thanks. Thank you very much, Matt. Thank you.