A panel discussion, in partnership with Santander Corporate Banking.
By Euro Projects Recruitment Ltd.
Thank you to our Family Business Panel for sharing their experience, insights and wisdom on how to successfully run, professionalise and scale a family business.
The family businesses represented at our discussion ranged from one established in 1917 (now being managed by its fourth generation of the same family), through to one of Europe’s largest €multi-billion third generation family owned manufacturing companies.
Topics discussed included how to chair and run a family business board meeting, growing a family business without diluting the family’s values, succession planning, as well as how and when to bring in non-family members to help run the business.
Advice was sound, pragmatic and came directly from the horse’s mouth.
The top ten takeaways were:
1. In larger family businesses, family members should focus on what they want from the business but not necessarily how it should be operationally delivered.
If you have a wider family ownership, who are not actively involved in the business but rely on it for an income, have them set clear objectives on what they want from the business in a rolling five year plan.
Communicate this to the management team and have the management team maintain updates on progress.
2. Have a clear understanding of what culture and values the business should operate within. Many of these will remain the same from one generation to the next. At UK construction equipment manufacturer JCB, they maintain an understanding that it is their customers who pay everyone’s wages. This is part of their ‘DNA’ with the message “Customers make pay day possible” widely communicated throughout the business.
In addition to certain values which stand the test of time, family businesses should be aware of the need to move with the times and evolve their values with changes in society and the environments in which they operate.
When it comes to values, it was quite apparent that family businesses tend to be more generous and provide a strong sense of loyalty towards long standing employees, often when an individual is no longer suited to the future of the business.
3. Succession planning is a hot topic, both in terms of handing-on the baton to the next generation, and bringing in external executives.
It was generally agreed that the earlier you can positively engage future generations in the business the better.
It was unanimously agreed that the most successful leaders of family businesses, who are also family members, will have experienced working outside the confines of the ‘warm blanket’, which the family business provides.
Another benefit of a family member learning their business craft elsewhere is they are less likely to suffer from ‘imposter syndrome’.
When they do return as a member of the leadership team they bring experience, a sense of perspective and practical skills which qualify them on merit as much as blood line.
Bringing non-family talent through the business to take over key leadership roles in the future is a great way to secure the future of the business. It also provides the opportunity to mould people into the culture and values of the business set by the family.
It was also agreed that a non-family member in a Chairman role can diffuse any family tensions and non-family members in non-executive and executive management roles bring expertise and can be mentors to junior leaders before they are fully ready to take hold of the reigns.
4. Introducing clear and robust systems and processes is critical to a company’s ability to grow and scale. This is particularly relevant to family businesses, where a person’s surname is their job title and entitlement to leadership responsibility.
All employees should therefore have a clearly defined and written job profile, an organisation chart showing where skills gaps lie and a plan on how to fill them.
Family members operating outside the rules for employees, in particular where health and safety is concerned should be avoided. Not least for their own safety but particularly to safeguard the culture of the business, as the actions of the owners set the tone for ‘how things are done around here’.
5. On a final note; passing trust between generations is a critical requirement for a business to move from one generation to the next.
Not trusting the next generation with the business and an unwillingness to let go, is often symptomatic of a poor management structure, lack of the right people in the right seats and a lack of the necessary operating processes and systems required for the business to run without one pivotal leader.
Building trust therefore requires a blend of external advisory or mentoring support where needed, personal development plans for all employees, having diversity and outside world experience and a passion to maintain what the business stands for.
If you would like to discuss how Euro Projects Recruitment Ltd can help your business to scale-up and grown with the best talent, who share your values and fit with your culture, please contact Ian Yoxen or Eddie Smith on 01530 833825 or email to arrange a free and no-obligation business consultation.