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Solving the Puzzle of Ownership Alignment in a Family Enterprise

Monday, 14 August 2017

alignment  noun | ə-ˈlīn-mənt State of agreement or cooperation among persons, groups, nations and the like with a common cause or view

 

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Seven Steps to Recruiting Value Add Independent Directors

Monday, 14 August 2017

Incorporating independent directors into a family firm’s board is considered one of the standards for family business success. The prospect of

 

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Delivering a Difficult Message: Performance Feedback in a Family Business

Monday, 14 August 2017

“My brother is not pulling his weight at work, which means more work for our mother and me. I don’t know what to do about it… so I do nothing,

 

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Case Study 

The solution was there all along

This case study is of a well established Mother and Father owned business of some 100 years trading. The business would be profiled and a product/service business with 30 employees. The current family owners are third generation and have managed the business for close on 35 years. They are a great husband and wife team and run great business. They are well respected and have a number of very long standing loyal employees.

 

The family consisted of the parents and two grown-up children. It was thought that the eldest child (30+) would take over the business but when approached she declined. As the parents had long held the view that their eldest taking over was their succession plan the news that there was no interest somewhat perturbed them. Who would take over? The second child whilst a hard working and valuable manager was not seen as being able to run the business.

 

The decision was made to employ a non-family CEO who would ultimately become the MD. There was little real analysis done on this strategy and a person was appointed within months. After a series of issues it began to dawn that the decision was a poor one and the person employed was most certainly the wrong person. Conflict emerged and lots of energy, time and money was spent on solving the problem.  This took about two years and legal actions. 

 

During all this time the second child worked away as a good manager and it began to dawn on everyone that the steady hand was a good one. A decision was made to increase the skill set and widen the experience of the second child. They blossomed in their own unique way. Whilst not the high flying personality that would be associated with the family and extended family they have quiet and understated strength.

 

The recession meant that the parents who wished to slow down and take a back seat are now still active and will when circumstances once again allow step out. The difference is now they have a succession plan. They have a defined new leader and a solid management team. The learning from this case study is that nature and nurture can work together. It is important that the emerging generation are educated and skilled and given the space to grow. It is a combination of natural emergence, circumstance and skill. The solution cannot be fully defined however the environmental conditions can be optimised to give the emerging talent the best opportunity to grow.