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PwC’s 11th Global Family Business SurveyFriday, 05 May 2023PwC’s Family Business Survey 2023 comes at a time of great change. The optimism of a post-covid world has been sorely tested by the geopolitical
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A guide to family business succession planningFriday, 11 February 2022Succession planning is one of the most sensitive issues, and COVID-19 appears to have concentrated minds in this area. Topics such as
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Tánaiste and Minister Donohoe launch new €90m fund for Irish start-upsThursday, 10 February 2022The Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD and the Minister for Finance, Paschal Donohoe TD launched a new
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Recently ranked as the greatest street in Ireland and Great Britain, Cork's Oliver Plunkett St holds lessons for towns and villages across the country.
Key among these lessons is the importance of family businesses in creating a retail landscape that encourages people to become loyal customers over many years, as opposed to fleeting consumers.
There are many examples of well-known family businesses on the street — from Keanes Jewellers to Caseys Furniture.
These are multi-generation family businesses which have been rewarded with people’s repeat custom because of the level of service they deliver.
When the recession hit, businesses depended more and more on those that had supported them over many years. Many family businesses which had maintained a personal connection with their customers were able to survive for this reason, and the vibrancy that has been sustained on Oliver Plunkett St is a real testament to that.
When I wrote Family Business: A Survival Guide, I discovered there are a lot of thingsfamily companies could teach the wider corporate community.
Paying attention to detail, going the extra mile, and developing positive relationships, by treating customers with respect and putting them first, are qualities that should be applied in every single trading scenario, and these are things family businesses do really well.
I also discovered there are challenges that great family businesses have to overcome which are not faced by other types of businesses.
These include sibling rivalry, unhappy parent-child relationships, and succession issues, where the involvement or non-involvement of the next generation has the potential to upset the running of the business.
The great family business owners I spoke to — including Darina Allen of Ballymaloe and Marian O'Gorman of the Kilkenny Group — had one thing in common. They have all adopted a collaborative approach to planning for the operation of the business now and in the future.
The impact of disagreements in a small business can be very significant. Other non-family employees will be unlikely to commit to the future of the company where there is discord.
It is a striking statistic that only 33% of family businesses survive from one generation to the next.
It does not help that perhaps the biggest weakness for family businesses in Ireland is succession planning. Every business needs to make a plan for when the current CEO or other senior leaders move on.
In a family business, this can be complicated because the question whether a family member or non-family will take the reins arises. If it is to be a family member, it is not always obvious which one will take control and non-family employees can depart the business if they feel they were unfairly overlooked when a son or daughter with less experience steps into the top job.
To make sure the succession is planned for correctly, the business leader should consult with the various generations involved, ensuring that the selection of successors is fully considered. The needs of the business must be thought about, as well and the opportunities and challenges it is likely to face.
A succession steering committee, consisting of certain management and family members, should be assembled and made responsible for the planning, preparation and transition management of the succession process.
The succession plan prepared by the committee should set out the expected date of retirement; the first in line to succeed; other personnel changes arising and any future role of the former CEO. It may take a bit of hard work to get there, but once you have a document like this, hammered out by consensus, it will clear the path to a successful handover.
As the success of Oliver Plunkett St makes clear, family businesses have an important contribution to make to the corporate and retail landscape in Ireland. With good planning, there's no reason such companies can't be around for generations to come.
* Kieran McCarthy is a partner and head of the Cork office at Hughes Blake and author of a book called Family Business: A Survival Guide.
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