BMC’s Founder, David Gage, was recently featured in a “Profiles in Success” story. His profile is part of a series centered on personal portraits of “successful small-business owners, corporate executives and industry groundbreakers who wish to perpetuate the executive leadership values of character, chemistry and caring throughout American society.” Here at BMC, we consider it an honor to have David chosen for the feature, placing him among numerous well-respected, creative leaders
David is widely regarded as a pioneer in the field of business partnerships for having founded the first multidisciplinary firm in the country to recognize and focus exclusively on the personal and business sides of partnerships, and for developing a unique tool to help family and non-family co-owners reach comprehensive agreements to be successful partners. “Profiles in Success” was established in 2014 by Gordon Bernhardt (CFP, AIF), the President of Bernhardt Wealth Management in McLean, Virginia.
Whatever You Do, Give It Your Best
In the mid-1980’s, David Gage finally reached the goal he had dreamed about and worked toward for over a decade. He’d completed his undergraduate work and Ph.D. in psychology, finished two years of post-doctoral clinical work and became partners in private practice with a highly respected clinical psychologist. They worked out of two beautiful offices, one in Dupont Circle in the heart of Washington, the other in downtown Bethesda. The two partners specialized in working with individuals, groups, couples and families, and together founded the DC Institute of Hypnotherapy. Additionally, David was teaching and mentoring psychiatry residents at the University of Maryland Medical School in how to work with families. He described the feeling he had about his life at the time: “I thought to myself, ‘I did it! I spent fifteen years focused single mindedly on school and establishing myself as a psychologist.’ It looked so perfect – everything I’d wanted for myself professionally. But exactly as I was feeling ‘I’m here!’ I realized there was something else I needed to do.”
That “something else” would define the rest of David’s career.
David had the good fortune to have grown up living close to both sets of grandparents. Both of his grandfathers were entrepreneurs. His father’s father started a business with another gentleman and was very successful. David’s maternal grandfather started and built his business and after WWII his four sons all joined him in running the company. Some years later, David’s father left a partnership he had started with his brother to join his father-in-law’s company. While there were other business and professional partnerships in his extended family, those were the three main ones.
While all three of those partnerships were successful, the one his maternal grandfather started influenced David the most. Part of the influence came not directly from the business, but from how the family life was affected by the business, most vividly at a summer cottage on a lake in the North Woods of Wisconsin. The “cottage” as it was referred to, had been built in the late 1920’s by the then-mayor of Chicago. With 14 bedrooms, the place was large enough to give his grandparents’ children and their families plenty of space to visit on the weekends.
When David was around ten years old, he started spending time at the cottage with his grandparents, playing junior caretaker under his grandfather’s tutelage. There was drama lurking in the family business, even in an otherwise fairly stoic German-Irish family. Every weekend, uncles and their families would make the trek from Appleton to Eagle River where they would slip into discussing what had transpired that week in the family business. Much of the conversations were about normal sibling struggles, but to a young boy it had a substantial impact. For years it seemed to David that the impact it had on him was largely negative, that is, he decided at an early age not to enter the family business.
Years later, after David’s grandparents were deceased and the summer cottage was in the hands of the second generation, the family business experienced significant turmoil as the leadership of the company was shifting from the second generation to the third. Lawsuits were filed and counterclaims were launched as the litigation slowly and painfully wound its way through the Wisconsin courts. The conflict’s reverberations even played out at the family cottage when an uncle’s portrait was unceremoniously removed from the living room wall! It spoke volumes about the toll family business conflicts can inflict on family members.
So when David thought he had “made it” by achieving his career goal of being a psychologist in private practice in Washington, it suddenly dawned on him that he hadn’t actually made it – not yet. Reflecting on his early family business experiences, there was something positive to be extracted from it all. He realized he was in a unique position to be helpful to thousands of families like his own. Though he had been “driven” for years and loved where he had arrived, he realized he had to drive a bit further!
Those early experiences were nudging him into the final leg of his professional career, specializing in working with family and non-family business partners. The irony of his trajectory isn’t lost on him. “From a young age I was certain I would never work in the family business, then I decide to alter my career so my life’s work revolves around helping family businesses with their conflicts,” reflects David.
Appreciating the complexity of business partnerships and knowing that partner disputes typically involve a complex mix of business, personal and legal issues, David decided to form a multidisciplinary team of professionals with expertise in psychology, business, and law to help resolve the seemingly irreconcilable differences among business partners.
Although the firm’s associates are experts in their different specialties, they do not function like experts in the normal sense of the word (i.e., analyzing the partners’ situation and making recommendations). David explained that co-owners need mediators to help them collaborate. The mediators are neutral with respect to the principles. They avoid taking sides. Their job is to assist the principals collaboratively figure out what they should do. Mediator teams are usually comprised of two professionals from different backgrounds.
If the partners in mediation cannot reach a successful outcome, then they need help to decide how to peacefully unwind their partnership. David describes, “The mediators are in charge of the process and the principals are in charge of the outcome. No one else decides their fate; they decide their own. Mediation is simply assisted negotiation.” At the time David decided to change his career path, there were no mediation firms in the country specializing in helping business partners.
It was an exciting idea, which reminded David of a principle his father had taught him: “If you’re going to invest your energy in something, give it all you’ve got. Do your best.” So David embarked on doing just that. Over a period of years, he transitioned from private practice into the uncharted territory of building a new professional service niche, one that would have saved his grandfather’s family business years of conflict, lawsuits and needless emotional, familial and financial expense.
David started his firm, BMC Associates, in 1990. Business partners have now been the focus of his work for nearly 30 years. He says, “Family business conflicts and non-family partner conflicts are similar, but family can be more complicated and emotionally intense because the relationships go back further and there’s more at stake.”
BMC’s clients span almost every conceivable business industry and vary in size from start-ups to multibillion dollar enterprises. “What’s fascinating to me is working with all types and sizes of businesses. Any business that has partners, that’s our niche. We’re expert mediators and also experts in having partners. We understand their challenges. It transcends industry and size. We’ve worked with companies as diverse as a 100-year-old funeral home, one of the first data analytics companies in the world, microbrewers and web-app developers. Any company with co-owners, no matter what the industry or size, is a potential client. They all struggle with the same types of partner issues,” explains David.
During its first decade, BMC was focused exclusively on resolving the crises partners were experiencing. But as they learned more and more about the causes of conflicts among partners while mediating partner disputes during the 1990’s, David realized they needed to also focus on helping partners prevent destructive conflicts from ever occurring. The shift to emphasizing conflict prevention really clicked with partners.
When David discovered there was no good book that addressed conflict prevention among business partners, he decided to write a book that would be a primer for people already in partnerships, as well as anyone contemplating having partners. His book is descriptively entitled, The Partnership Charter: How to Start Out Right with Your New Business Partner (Or Fix the One You’re In).
“Partners often start businesses without even determining the basics,” David points out. Like what their respective percentages of ownership will be, how they are going to pay one another, or who will make which decisions. David illustrates, “The way I describe it is, ‘Partners often leave slivers of ambiguity in their partner arrangement and sooner or later those slivers of ambiguity come back and bite them!’”
The premise of the book is that no partners were ever taught how to plan a healthy partnership and the number one reason why partners fail isn’t money fights, personality conflicts, turf battles or equity disputes; it’s a lack of planning. Those other factors may play a role, but the seed of all partner conflict is planted when partners fail to properly plan. The book covers both the interpersonal and business sides of being co-owners because both are critically important for long-term success.
BMC’s conflict-prevention work has expanded rapidly, and not just in the U.S. They recently helped a group of partners who reside in Israel and Australia clarify their partnership via video-conferencing.
David recommends all partners develop their own Partnership Charter to remove as many “slivers of ambiguity” as possible. He described a case of two brothers who had been partners in a highly successful half-billion-dollar business they’d founded 20 years earlier. Their problem was that over time they had gotten what David refers to as “sideways” with one another. The brothers realized they no longer had the partner relationship they had aspired to have. They worked on a Charter over a period of months using three assessment tools and the Partnership Charter Workbook’s 200-plus questions that cover partners’ styles and values, expectations of themselves and each other, money, roles, equity, vision for their company, governance, decision-making authority, scenario planning, conflict-handling styles and how they resolve conflicts.
They negotiated diligently as the mediators held their feet to the fire, not allowing them to avoid the difficult discussions they had avoided for years. David added, “Even these experienced, successful partners did not know all of the topics they needed to discuss, negotiate and reach agreement on.” The structured process helped them decide to redesign numerous aspects of their partnership, including their respective roles in their 500-person company. They began communicating more effectively not only with each other, but also with other leaders in the company.
The mediators helped them draft a Partnership Charter that memorialized their understandings and agreements with one another. By the end of the process, they not only got back on track, they had a much deeper understanding of what it means to be partners. They described reaching a business relationship that surpassed anything they had known. To their surprise – and David’s – developing a Charter also helped them decide how to restructure the company. It began growing in new directions. David’s enthusiasm for helping partners “flourish” was evident as he described the brothers’ experience of working on their Charter.
David believes his joy in helping others stems in no small measure from his Midwest childhood. David grew up the fourth of six children in the idyllic Midwestern town of Appleton, Wisconsin. Every summer of David’s youth in Wisconsin, the whole Gage family would pack up and head to their family’s summer cottage on nearby Lake Winnebago. There, David developed his love for the water, learning from his dad and Uncle Harry how to canoe, sail, waterski, and swim. To this day, he considers the kayak which he received as a present from his parents on his 50th birthday his prize possession. Whenever he and his wife Donna stay at their condo on Siesta Key in Florida, they escape in that two-seater kayak into the mangroves and rookeries to commune with the great blue heron, dolphins and manatees. He says the tranquility they find on the water instantly transports him back to his summers in Wisconsin.
Academically, David thrived in Catholic grade school and high school. In grade school, David was both a choirboy and altar boy, roles he relished and was committed to. In both roles, he learned Latin and how to work with others on a team. Both roles had an additional perk. David says, “I enjoyed being active and not having to sit in the pews during Mass!” He went on to explain, “Instead of simply attending Mass, I could walk around, swing the incense, ring the bells and lead everyone in song. There was no financial reward; it was all about learning and being a leader. For a grade school kid, I was active and loved it.” True to his father’s advice, he contemplated how to give the church his all and for a period he considered joining the priesthood.
In high school, David stayed in high gear and was a Student Council Representative, then was elected Vice President and in his senior year, President of the Student Council. He was also President of the Ski Club. The one activity he avoided like the plague in high school was acting. “I could stand up in front of the entire student body to give a winning election speech, but acting on a stage was beyond me.” (Decades later he would finally address that fear by enrolling in a weeklong improv class lead by Second City actors!)
Regarding his decision about where to go to college, David laughed as he identified the two factors that influenced him. “One was a series of books I obsessively read in fifth grade that depicted boys going off to college. Every one of the schools was on the East Coast (Dartmouth, West Point, etc.). Of course, the whole series was East-Coast centric because it was written in the 1950’s,” David remarks. The second factor was his father who had survived the Great Depression with a mindset of frugality. Given his historical experience, and the fact the family had six kids all going to college, his dad encouraged David to do what he could to minimize his college expenses. He goes on to explain, “The U.S. Naval Academy at Annapolis was one obvious possibility. It satisfied my East Coast orientation, and when I learned the government would pay all of my expenses and give me a salary as well so I’d finish college with money in the bank, I put it on my list of schools!”
David applied, and on the strength of his high school academic performance and leadership skills, he won a Congressional appointment. “My dad was thrilled and repeatedly joked that he was finally getting some benefit for all of the taxes he’d paid,” he grins. David quickly pointed out, however, that his father was half joking because he actually never minded paying taxes. He taught his children to feel lucky to make sufficient money to support the lives of those who are less fortunate.
David had two intense, eventful years at Annapolis. His tenure there was full of amazing experiences like singing with the Academy Choir in St. Patrick’s Cathedral in New York and sailing 42-foot yawls on the Chesapeake. During his second summer as a Midshipman, he traveled on the USS Cleveland to Hawaii, Japan and Hong Kong (and for 36 emotional hours, to Da Nang and China Beach in Vietnam). He explained that for an 18-19 year-old, the Academy was a challenging and amazing start to a long college career.
Despite loving many aspects of midshipman life, though, two factors told him it wasn’t where he needed to be. “One was the war in Vietnam. While at the Academy, I read everything I could get my hands on about the war. This was 1969, 1970 and 1971. Students occupied campus buildings in protest. A building in Madison was bombed. Unarmed student protesters were shot by Ohio National Guard troops at Kent State University. The war played out nightly on the evening news. It was gut wrenching to say the least. The second factor influencing my decision to leave was realizing I wanted to study psychology,” says David. But leaving wouldn’t be easy. The biggest hurdle, he feared, would be disappointing his father, who was incredibly proud of David’s appointment to the Academy.
Expecting disappointment or anger, David approached the conversation with his father with trepidation. While on winter break and driving through Appleton with his dad, he explained his thinking and waited for his father’s reply. His father spoke after a long pause. David recounted the experience, “He told me he loved that I was there and thought it was a great place for me.” David remembers bracing for more as his father continued, “But ten, twenty years from now, it’ll be your life and you have to make this decision for yourself. I can’t make if for you. I’ll respect whatever you decide.”
David was surprised and deeply touched by the respect conveyed in his father’s response. David explained that he had friends at the Naval Academy who told him they would have been disowned had they chosen to leave. He thought to himself, “What an amazing gift my father’s given me!” David’s conversation with his father about leaving the Academy became another pivotal moment in his life.
The following year David transferred to the University of Wisconsin at Madison, where he pursued his burgeoning interest in psychology. He also marched in protest against the war. In one year, he went from marching in uniform at Annapolis to marching at Madison surrounded by riot control police.
Mostly though, David threw himself into his school work, pouring over the oversized course catalog every semester to carefully select his courses and savoring being at one of the best schools and psychology departments in the country. One of his professors went out of his way to propose independent study and research for David. The research on a theory of emotional development was published in a psychological journal. Totally enthralled by psychology courses, augmented with “for fun” classes like German Literature in Translation, French and Physics, David loved his five-and-a-half years of college. He decided to apply to the Ph.D. program at Catholic University in Washington, DC, which was known for its strong clinical psych program. David spent the next seven years pursuing his Ph.D. with academic work, research, clinical work, and externships.
Eager to excel in grad school as best he could, David took the unusual step of hiring a professional editor to help him with his writing. He was already an above average writer and wasn’t receiving any complaints, but he decided to hire his own writing mentor. As unusual as it was, David brushed it off saying, “It’s just a part of who I am; I was lucky enough to inherit that gene from my father!”
Another unusual experience during his Ph.D. program captures the way David constantly tries to leverage his experiences to get the most out of them. To expand and strengthen his clinical skills, David was interested in learning hypnosis. He found Dr. Colin Frank, a well-known psychologist experienced in hypnosis at George Washington University who agreed to mentor him. Around that same time, David was told he needed to have a minor surgical procedure. Knowing that hypnosis is sometimes used in surgery, he decided to try it for his surgery. He thought it would add an extra dimension to learning hypnosis! His newfound mentor liked the idea so David contacted the surgeon to get his permission. The surgeon, who months later would be the one who’d remove a bullet from Ronald Reagan’s lung, told David, “You can try it, but I think you’ll scream the second I put the scalpel in your leg!”
After one practice run using hypnosis with David, the psychologist joined David in the outpatient surgery room for the procedure. Every time David felt the slightest feeling from the surgeon’s work, Dr. Frank had David mentally move the surgeon out the door and down the hall as far away as needed so as to not feel anything. Before long, the surgeon put in stitches and wrapped up his work. Not only were there no screams, but the surgeon told Dr. Frank and David that he was the most relaxed patient he’d ever seen.
The experience turned out to be the beginning of a long and rewarding professional relationship between Dr. Frank and David. Years later they became partners, bought the DuPont office together and co-founded the DC Institute for Hypnotherapy.
David’s clinical training during his Ph.D. program, also included two VA Hospitals, a community mental health center in Reston, Virginia and an internship at the George Washington University Medical Center. Even after completing the seven-year program, graduates have to work under supervision for two additional years before they can practice on their own. David, ever one for the road less travelled, decided he’d get more out of being supervised by self-selecting some of the most prominent psychologists in the Washington area rather than relying on those who would be assigned to him at another hospital or community mental health center. He reached out to three psychologists, who all agreed to supervise him and worked out arrangements with Dr. Frank and the others whereby David would see patients and pay the psychologists out of his own pocket for supervision. The arrangement perfectly suited David’s desire to begin building a private practice much sooner than normal.
David also wanted specialized training in family therapy so he applied and was accepted into a rigorous family therapy training program in Washington. That, in turn, led to being asked to be a supervisor for the training program, which he happily did. A couple of years later, the University of Maryland Medical School offered David an Adjunct Professor appointment. He was responsible for teaching and supervising three psychiatry residents per year in how to work with couples and families. It required one day per week for nine months of the year.
Before long, there he was, a licensed psychologist and partner with Dr. Frank. Beautiful offices. Amazing clients. Working with individuals, groups and families. Teaching psychiatry residents. Everything was rolling along quite smoothly. Then he had his career-changing epiphany.
David described it this way, “I formulated a plan to continue enjoying the private practice and use my practice income to support building BMC.” He switched his university affiliation from the University of Maryland Medical School to American University’s School of Business. For over a decade at AU David taught a course on how to succeed with partners in family or non-family businesses to budding entrepreneurs and sons and daughters from family businesses around the world. “It was the only such MBA-level course of its kind in the country,” David claimed. “Which to me was quite shocking when you consider that most entrepreneurs starting companies have partners, and that partner dysfunction is a big reason why half of them are likely to fail before ever hitting the five-year mark!”
Today, David feels incredibly fortunate to have built such a respected and successful business. BMC has about ten Associates, most of whom have been mediating part-time with BMC for two decades. He’s delighted to have recently convinced his wife, Donna, to join him in the firm. Donna had been the Chief Nursing Officer at Penn State Hershey Medical Center, MedStar Georgetown University Hospital, and finally at the Veterans Health Administration at their headquarters in Washington before joining BMC. “It’s been such a blessing,” affirmed David. “Donna has terrific leadership and executive skills and negotiation experience, including having had responsibility at the VA for around 90,000 nursing personnel across the country. She’s an expert at helping people collaborate. In the past couple of years, she’s co-mediated with about half of our team of Associates on all different types of cases. An extra perk for me is getting to travel and work with her.”
To young people entering the workforce today, David encourages them to never stop developing versatile skills, especially writing skills. Continuing to develop skills is advice David, now 68, has clearly followed himself. David is carving out more time to spend on enhancing the Partnership Charter Workbook and putting it online. It’s creative work that he’s most interested in now.
“We’re approached constantly by partners from all over the world who want to use this tool to help them thoroughly plan their partnerships,” explained David. His book has been translated into Chinese and Russian. “I’m as excited as ever about doing this work—helping partners figure out how to be smart about their partnerships so they can achieve their dreams.”
David is also approached regularly by professionals (consultants, coaches and attorneys) who want to use Partnership Charter process with their own partner and family business clients. “We’ve established The Partnership Charter Institute, developed a PC licensing program for those professionals and we’re putting the whole process online to make it super easy for everybody – anywhere in the world – to use,” he reveals.
Is there more he wants to do? “Well yes,” he admitted. “There’s that kayak my parents bought me almost 20 years ago. I keep it covered and in perfect condition. We just need to spend more time on Siesta Key – paddling!”
© January 2020 Gordon J. Bernhardt. All rights reserved. Reprinted by permission.
– By Gordon J. Bernhardt, CFP®, AIF®
President and founder of Bernhardt Wealth Management and author of Profiles in Success: Inspiration from Executive Leaders in the Washington D.C. Area, Gordon provides financial planning and wealth management services to affluent individuals, families and business-owners throughout the Washington, DC area. Since establishing his firm in 1994, he and his team have been focused on providing high-quality service and independent financial advice to help clients make informed decisions about their money. For more information, visit www.BernhardtWealth.com and Gordon’s Blog.