The importance of family businesses to the global economy is undeniable. They account for more than two-thirds of all companies around the world and 50%–80% of employment in most countries. This begs the question, what does it take to cultivate a flourishing family business?

EY recently partnered with the Kennesaw State University Cox Family Enterprise Center to survey 525 of the world's largest family businesses. The results revealed that succession planning, integrating women in leadership and achieving staying power are all top of mind for the world's most successful family business leaders. Their achievements support the claim that having a firm grasp of these three pillars is vital to building and maintaining a lasting legacy.

As Carrie Hall, EY reflected on these survey results and their work with the world's leading family businesses, these 8 key findings stood out:

1. 87% of the world's most successful family businesses have clearly identified who is responsible for succession

2. 55% of the largest and most successful family businesses believe entrepreneurship is very important when preparing the next generation of leaders

3. Outside work experience is not necessarily key to effective family business succession

4. Family business succession planning often overlooks the importance of attracting great outside talent

5. 70% of the top family businesses are considering a woman for their next CEO

6. 55% of the world's largest, longest-lasting family businesses have at least one woman on their board

7. The world's leading family businesses average about five women in the C-suite and four women being groomed for top leadership positions

8. The world's longest-lasting family businesses maintain a robust entrepreneurial climate

She is confident that these key findings will remain front and center in the minds of the world's most successful family business leaders in 2016.

what do you think family business leaders should focus on to achieve lasting success?We would love to hear feedback. 

Source: http://www.forbes.com/sites/ey/2016/03/14/8-things-you-should-know-about-the-worlds-most-successful-family-businesses/#6266bbee1cf1

For many family businesses, retaining family ownership and control is a prime objective. However, it may limit growth potential. Passing the business on to the next generation can be very challenging and disruptive. These tips are key to remain successful in your family business: 

• Don't always consider dealing with the family first to ensure business success. The top priority is to ensure that the business is functioning correctly and growing. If you don't take care of the business, the business can't take care of the family.

• Set boundaries to limit business discussions outside working hours. Mixing business, personal and home life can lead to conflict that is detrimental to business success.

• Establish weekly business meetings where personal and family matters are set aside. This helps to focus the attention on the core business objectives. A strict agenda is important in achieving productive meetings. Consideration could be given to inviting a third party, for example the company solicitor or accountant, to facilitate the meeting. If non family members present, ensure they are included and their contributions are given equal weight.

• Don't provide 'sympathy' jobs for family members. It is important that each member of the family adds value to the business and worksat a level that is aligned with their skill base.
• Define clear management reporting lines in the business and ensure that these are adhered to. I see many instances where family members feel that they can reprimand employees who do not report to them.

• Clearly define each family member's role and put this in writing, such as an employment contract. This should be dealt with like any other business relationship.

• Seek to ensure that family members who are looking to join the business have suitable outside experience first. This helps them to gain valuable knowledge of how business works outside the family business environment and bring new insights and ideas when they join.

• Be open-minded about seeking outside advice. Family businesses at times can be too closed and seeking outside advice can help to bring fresh ideas and facilitate creative thinking. Outside facilitators can also help to make the working relationships of family members more productive. Non-executive directors can provide a fresh view and outlook.

• Treat family members fairly. Family members tend to have an affiliation and affection for the business. This means that they have an energy and enthusiasm for the success of the business that previous generations have spent years building. It is important, though, to ensure that there is no favouritism. Pay levels, progression, expectations, criticism and praise should be even-handed across family and non-family employees. Remember not to set standards higher or lower for family members than for other members of staff.

• Understand the advantages of family ownership and use them as a positive in marketing. Customers are very often drawn to using family businesses because of their culture and togetherness.

Careful planning will allow you to identify and address any potential problems in advance. Options include an appropriate shareholders agreement, clauses in the company's articles of association and the use of a family trust to hold shares. Above all, open communication can help the family resolve any issues and ensure that the family business will prosper for many generations.

Source:

http://www.smallbusiness.co.uk/running-a-business/business-management/2478377/tips-for-running-a-successful-family-business.thtml

It is hard to be objective about hiring relatives, especially a son or daughter. But you have to objectively ascertain people's strengths and weaknesses before you bring them into the family business. Just because your son is getting an MBA in accounting and finance doesn't mean you should appoint him as the CFO when he graduates.

Family businesses are a long-established tradition. About 80% of the world's businesses are family owned, according to research from the Kennesaw State University Coles College of Business. Family-run businesses account for nearly 35% of the largest companies in the U.S. (60% of all public companies), including Ford, Wal-Mart, Tyson Foods, L'Oreal, Loews, and Ikea. More than 30% of all family-owned businesses survive into the second generation. But only about 13% are passed onto the third generation.

Many family business consultants say the primary reason for this low survival rate and why some families don't work well together is the failure to put in place a strategic plan and set of guidelines. Family members can be part owners of the business, but they don't have to work inside the company. As the founder, your objective should be to prep and hire family members because they have a set of skills that the business needs.

Running a successful family business doesn't mean running an entitlement program where if you have the right last name you are guaranteed a job and a certain title. A second cousin might be more qualified than the eldest son to lead the company. Many family businesses have folded ultimately because members were brought in by birthright.

Here are five mistakes to avoid to help you successfully bring family members into the business:

1. Operating Without A Family Employee Policy
This is outside of the company's employee handbook. It is important to have crystal clear goals and expectations for family members in the business supported by clear management roles. The family employee policy should spell out what to expect when hiring family members, regardless if they are coming into an entry position or at the executive level. There also needs to be an integration plan for when you bring a family member into the business. There ought to be some form of training and orientation.

2. Failing To Define Roles And Responsibilities
The job description for most family businesses is to do whatever it takes. In the early stages of the family business, there is a tendency to have everyone pitching in. You might be meeting with bankers one day and scrubbing toilets the next day. However, there must be written job descriptions, defined roles, rules for compensation, performance reviews, long-term and short-term goals or objectives, so that decisions are not based on family relationships. Also, family members should know if they are not reaching their goals or if they are on the right track for whatever position they are in line for.

3. Lacking Formal Programs For Next Generation
You should establish training programs for younger, teenage family members to learn the inner workings of the business. For instance, in addition to giving them opportunities to work in the business after school, create paid summer internships or establish some type of mentoring program. Mentors should also include people from outside of the family. The conventional wisdom is that family members should spend two to five years working at another company in the same industry. Having a family member work outside of the company will help to build up his or her confidence as well as allow that individual to make mistakes on someone else's dime.

4. Relying On Post-Graduate Education
Some family business consultants say to be skeptical of traditional post-graduate education, such as MBA schools. The needs of your business are narrow and unique whereas an MBA education is very broad. Meaning, your son or daughter will learn how to work for Fortune 500 companies whereas you are running a manufacturing plant. So, they are spending 90% of their time learning things that won't have any real life application to the family business. Of course, if the job description at your company calls for an MBA or JD then family members can't forgo getting the proper background or credentials.

5. Displaying Favoritism or Nepotism
If the work environment is professional and all employees are treated fairly, you won't get accused of nepotism. Set some boundaries between family members and the family business. Also, use your board of directors or a board of advisors to provide objectivity. Another alternative is to hire outside business consultants. Focus on the business and not on the family. Meaning, The needs of the business and not the needs of individual family members should always come first. Research shows that business first focused family businesses tend to create more generational wealth than family first oriented businesses.

If you feel that you do not know how to begin putting these in place in you r business we can help you. 

For more information contact us:

Email:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  

Tel: 021 4320466

Source: http://www.blackenterprise.com/small-business/5-mistakes-to-avoid-when-hiring-relatives/

A Successful story from a next generation Business:

Alex Chambers used to work in her father's UPS store as a student in grad school. Now, she's taken over that store, becoming a second-generation franchise owner. She not only uses the lessons she learned as a UPS employee to pursue her passion of growing the business, but she also utilizes the skills she's gained from her experience as a field hockey coach. Read on to see how she's stepping out of her father's shadow and making the business her own.

Q: How long have you owned a franchise?
I'm a second generation franchise owner. My father started the store with a partner in 2003 and I transitioned into ownership about two years ago.

Related: This Man Lost Weight and Found a Career in a Fitness Franchise

Q: Why franchising?
It was really appealing to have the opportunity to be self-made, and franchising allows me the independence to develop my own goals and take my business to the next level. At the end of the day, this is my business and it's up to me to succeed. The positive work atmosphere, opportunities to grow and customer interaction are exactly what I was looking for to challenge myself and make a career.

Q: What were you doing before you became a franchise owner?
I was in graduate school when I started working at my father's The UPS Store franchise location. However, I quickly realized that owning and operating my own business was my passion.

Q: Why did you choose this particular franchise?
My experience working in the store as an employee made me realize that I wanted to be a UPS Store owner. The positive work environment and the opportunities to grow the business were what drew me in. One of the greatest advantages of opening a franchise is the resources that are in place to help new business owners. While working in my father's UPS Store provided me with a foundation for business acumen, The UPS Store training programs took my understanding of business to the next level and gave me the tools to be successful in owning and operating my own store.

It was also really appealing that The UPS Store is a well-known and established brand that I could use as a base for my own business. Plus, I'm a part of a group of franchisees who all network and share best practices with each other. Their advice and knowledge has made a big difference in how I operate and manage my own franchise. It's a really great network.

Q: How much would you estimate you spent before you were officially open for business?
I took over the store from my father so I had the benefit of not starting from scratch. Overall, costs to open a franchise start at around $167,000. I'm currently working toward opening a second store and anticipate spending around $1,000 on advertising for the opening month, as well as about $9,000 on store rent and employee hiring. Of course, opening my own store is a priceless experience!

Q: Where did you get most of your advice/do most of your research?
My regional manager is a great source for advice and support as well as the other The UPS Store franchisees. In my experience, it's an overwhelmingly positive environment to work within a network of other owners. I regularly meet with other franchise owners in the area to network and discuss ways to help each other's businesses. The energy and drive of the other franchise owners continues to motivate me to be better.

Q: What were the most unexpected challenges of opening your franchise?
I think that employee management can be a challenge. In my spare time, I am a field hockey coach and I like to translate my coaching skills into managing my associates. We have a philosophy of "step up, finish, win" that I encourage all of my associates to adopt. It's helped to create a sense of team and camaraderie.

Q: What advice do you have for individuals who want to own their own franchise?
It's important to be passionate about your business because, as a franchise owner, the responsibility to succeed lies with you. Stay motivated and continue to learn everything you can about your business and your industry. At the end of the day, it's your business and it's up to you to make it work.

Q: What's next for you and your business?

Based on the success I've seen so far with The UPS Store's franchise model, I plan to open several more locations in the future.

Source: http://www.entrepreneur.com/article/270272

Laying straight your company's line of succession is a generation game that can be won, if you follow a few sensible rules

Handing down the family business can be a delicate affair. We've all heard the stories. Parents who won't let go. Children not ready for the job. Dysfunctional relationships both at home and in the office.

The hardest part about having a family business is the challenge of passing it down to the next generation, says Eric Clinton, director of the Dublin City University Centre for Family Business.

He cites research from the Kellogg School of Management near Chicago that about 30 per cent of family businesses will survive from the first generation to the second. Only 12 per cent will survive from the second to the third.

What can families do avoid becoming a statistic? A large part of the answer, it seems, is regular communication about what will happen when the older generation is no longer in charge.

Have the difficult conversations early
"Family businesses are a lot like life, like relationships," says Clinton. "If you want it to work, you have to work at it.
"My advice is to have the difficult conversations and have them early. Have regular communication. Talking over the kitchen table at 8pm on a Saturday night might not necessarily be the healthy way to do it."

Preparing the next generation early on in the process is crucial in case of unforeseen events like a sudden illness, he says. If children have to take over earlier than expected, things "can become very dysfunctional very quickly".

"How do you mentor the next generation into it?" Clinton asks.
"Do they have an adviser? Do they shadow the incumbent? It's not just about giving the next generation power, it's about giving them ownership and control and mentoring. They can't just be thrown into the role."

Clinton teaches families about the "4Ls", which are phases of the family business life cycle: learning business, learning our family business, learning to lead our business, and learning to let go of our business.

The first two phases are about apprenticeship.
Clinton says families might bring in rules or a "constitution" that require the next generation to reach a certain level of education and/or outside work experience before joining the family company.

According to the 4Ls, business owners should "learn to let go" through planning: developing a timeline for retirement, creating management development systems and sticking to the plan.
Succession can actually be a breath of fresh air for businesses, according to Clinton, as long as there is a balance between tradition and change.

"Succession is often a time for innovation because the next generation often comes in with new ideas. The next generation gives energy and lifeblood to the business."

Principles of succession

"Succession issues are probably the most difficult topic because there are no black and white solutions. A wide array of issues could arise in one family," says Suzanne O'Neill, a partner at Irish accounting and business advisory firm Baker Tilly Ryan Glennon.
Baker Tilly's client base is predominantly family businesses, and O'Neill specialises in succession planning.
Family businesses need a structured approach to succession, she says. The results of a study by Baker Tilly International, which surveyed 1,650 business owners across 55 countries, were condensed in to eight principles of succession.
They are meant to be a practical guide for families.

The eight principles are:

1. Succession is not retirement

2. Start with readiness

3. Set your goals before the journey

4. Price is not first

5. Harmony is a must

6. Plan early, start earlier

7. Equality of, not equal

8. Ask before you get lost.

Family harmony is an important issue on the list, O'Neill says.
"The whole issue of family harmony certainly comes up in dealing with clients. The key requirement in any succession is harmony and open communication. All relevant parties have to be engaged in the process at an early stage."

She says the owner should bring the next generation on board so they are comfortable with the plan from the start. Owners should also be willing to listen to everyone's point of view. These are ways to avoid "disharmony".

Part of the process is identifying the family member or members who should take over the business and to start handing over responsibility so they have the opportunity to demonstrate their abilities early on.
O'Neill calls these "stepping stones" that should be put in place well in advance of retirement.

Aoife and Paddy Hayes of CST International 'It wasn't a 'someday this will be yours, my daughter' type thing' CST International is a small, Dublin-based market research agency run by Paddy Hayes (69). His daughter Aoife (33), head of client services, will soon take over, and the pair appear to be getting a lot of things right in their succession planning.

"I started the company about 20 years ago, and it's my third business," Paddy says. "So I'm 42 years signing my own paycheck." But Aoife might sign a few before the end of his 43rd year.
While Aoife began helping out at the office as a teenager, she says her path was not laid out for her. She worked in the arts for a few years and then did a master's in project management.
Taking over the business became an option after she went to work there full-time four years ago and saw how she could drive the company forward.

Paddy says it was her call. "It wasn't a 'someday this will be yours, my daughter' type thing. It was very much: go to school, go to college, do what you want to do. And then, if you feel it's something you want, that's grand."
CST specialises in guest feedback for the hospitality industry, and Aoife is now spearheading a new aspect of the business: employee engagement research. CST puts together surveys to figure out how engaged a company's employees are.
"The more engaged you are, the more willing you are to go the extra mile," says Aoife. "We feel like we're providing companies with really useful data that they can use to make their businesses more successful."

Father and daughter talk about the succession regularly, and the handover is about three quarters of the way done. It has happened in stages. This year, for the first time, Aoife went to an important meeting with their largest client without Paddy.
"That was conscious and deliberate," he says. "But that's what you have to do, and that's not easy because I would have loved to be there.

"When you are the founder of a business and you attend these meetings, just by virtue of [your role], you tend to dominate and people tend to address questions to you because you're the founder of the company.

"If you're going to give other people space, then you have to give them space," Paddy adds. "And a way to do that is by not being there.
"She was coming in and working with people who were used to working with me, and that's tricky. And that's something she has managed extraordinarily well. She's extremely good with people . . .

So I think she has a lot of the skills that will be needed to take this business where it can go." Paddy will be available after he steps down, but he says he's ready to move on. His first book, Daphne Park: Queen of Spies, a biography of a British spy, will be published later this year. He is already working on a follow-up.

"Your early 30s is a super time to take over the running of a business," he says. "Why wait until your 40s, 50s, 60s? Do it now . . . You have that great combination of energy and drive, tempered with maturity."

Source: http://www.irishtimes.com/business/work/playing-it-straight-in-family-business-succession-1.2203869

Do you keep a 'to do' list?

If so, there's a pretty good chance that you enjoy checking items off of your 'to do' list?

In fact, you may even suffer from a certain disorder (I know that I suffer from it) that causes you to add things you've already done to your 'to do' list so you can check them off.

Tracking activities and marking items off of your list are great habits. However, you need to watch out for the "Busyness Trap". This trap is where you become addicted to being busy and miss the chance to strive for significance.

Have you fallen into the 'Busyness Trap"? Perhaps you can relate to one of these scenarios. If so, your busyness alarm should be going off:

Your driving home after a long week at work and think to yourself, I was really busy this week, but what did I accomplish that truly mattered?

You are burned out from the tremendous amount of energy it takes just to get through the day. The work is keeping you busy, but it isn't relighting or refueling your fire.
You catch yourself talking a lot about what you are working on, but struggle to identify key things that you have taken over the finish line. Perhaps the line keeps moving...

Busyness can be costly. It consumes time, energy, and motivation with little concern over how these resources are expended. It also steals your ability to invest in four key areas:

1. Invest in Pondering

Sometimes you need to stop and put things into perspective. Find a quiet spot and take time to reflect on an issue, project, or goal. Ask yourself questions like

Why are we doing this?
What do we really hope to achieve?
What type of leader do I want to be?

2. Invest in Scuba Diving

When you are constantly busy, you often stay at the surface and waterski over issues. You may occasionally go deeper and snorkel, but you never take the time to really scuba dive on an issue. So, you keep addressing symptoms instead of root causes. Ask yourself these questions:

When is the last time you took the time to scuba dive on an issue?
Is there something that keeps resurfacing on your team that you should invest time in problem-solving?
What's the long-term impact of constantly waterskiing?

3. Invest in Planning

Putting out fires all the time makes it really difficult to invest in planning. However, one of the reasons you may be constantly putting out fires is because you aren't spending enough time planning. Ask yourself these questions:

Are you spending the appropriate amount of time planning things as opposed to doing them?
Have you invested too much time fixing issues that could have been avoided in the first place?
How good is your team at planning?

4. Invest in Relationships

When you are busy, relationships often suffer. You may intend to connect with an employee, but you just "can't" find the time. At some point, the inability to connect erupts into a situation that could have been avoided. Ask yourself these questions:

When was the last time you connected with your people?
Is there a relationship that you've ignored that you should tend to?
What's your next chance to connect with someone?
If you have fallen into the "Busyness Trap", here are four things you can do today to get yourself moving in the right direction:

Kill 2-3 items on your current 'to do' list. Don't delay them; cancel them.
Don't fill the space of the 2-3 dead items with more busyness. Instead block the time to invest in one of the four items above. Don't be general; name it and schedule it.
Hold yourself accountable to do it when you schedule it.
Repeat steps 1-3.

Source: https://www.linkedin.com/pulse/smart-leaders-make-4-wise-investments-patrick-leddin-ph-d-pmp

Family Governance is a topic that most families are reluctant to address. It covers two broad topics: governance of the business and governance of the family. Most family businesses, especially in the formative years, take on the characteristics of the founder or founding family. Although this entrepreneurial model works for an early stage family owned business, as the company grows in size it needs gradual evolution to a different model. Boards of Advisors, Boards of Directors, and Professional Management are some of the ways to improve the governance and performance of the business.

Family governance is a more subtle topic. Most families find that as they grow there is a need to formally discuss family issues like estate plans, family business leadership transition, and family fairness. Families find that some of the best venues to do this are through Family Councils, Family Retreats, and formal Family Meetings.

Board of Advisors

When the family business grows so the leader finds that it is beyond his sole expertise to handle all aspects of the business, it is usually time to form a group of trusted peers into a Board of Advisors. A well conceived and run Board of Advisors can be invaluable to a company – many say that the most important step in their company's growth and evolution was the addition of a Board.

Professional Management

Although family businesses often desire that key management positions are staffed with family members, sometimes they are not interested, not qualified, or are engaged in other worthwhile vocations. This is the time to hire professional managers who bring their experience and business acumen to the family business. Professional managers often improve overall performance and are also useful in providing "bridge management." For example, when the next generation of family leaders are not quite ready to take on senior management roles, bridge managers can provide a connection between generations of family along with mentoring, guidance, and coaching.

Family Council

Family councils provide families with a vehicle to entertain family projects and resolve issues. Some of these include developing Entry Criteria for new family members to enter the business, chronicling the family history, and ensuring that family fairness is considered in family and business decisions.

Family Meetings

Formal, scheduled family meetings inform family members of both the status of the family and the family business. Family members can reconnect with one another, and family issues can be discussed constructively rather than being left to fester into larger issues.

Family Retreats

Family retreats are conducted over two to four days at off site locations. They provide a neutral venue to discuss family and family business items.

Maybe you don't see answers to your specific questions here. Contact us anyway. It doesn't cost you anything and we will give you blunt, straightforward, heartfelt advice to get you pointed in the right direction. If we can't help you, maybe we have contacts or know someone who can.

As you all are aware, climate change is happening right now and With Mr. DiCaprio using his acceptance speech at the Oscars for best actor to urge the world to reject the “politics of greed”, and support leaders willing to take action against climate change, it is a hot topic at the moment.

 Here are several reminder steps that your business can take to help contain or reduce it:

• Remember the 3 "R"s. Reduce waste, purchase reusable products instead of disposables, and recycle paper, plastic, glass, aluminum and office equipment.
• Install energy-efficient lighting. Replace incandescent light bulbs with compact fluorescent light bulbs, which last 10 times longer, use two-thirds less energy, and radiate 70 percent less heat.
• Drive smarter and less frequently. Make sure company vehicles run efficiently and are properly maintained. Keeping tires properly inflated alone can improve gas mileage and every gallon of gas saved keeps 20 pounds of carbon dioxide out of our atmosphere. Also, encourage carpooling among employees
• Use less heat and air conditioning when possible. Set your office thermostat 2 degrees lower in winter and higher in the summer to avoid approximately 2000 pounds of carbon dioxide per year.
• Plant trees on your company's property. Photosynthesis 101 – trees and other plant absorb carbon dioxide and produce oxygen.
• Arrange annual energy audits. This will help you identify areas of your workplace that may not be energy efficient, allowing you to make necessary upgrades.
• Encourage your employees to conserve. Have someone on your staff gather information about recycling and energy conservation and share it with co-workers.

By taking these simple steps to help reduce greenhouse gases, you'll also help your business reduce its energy use and save money.

Source:

http://www.examiner.com/article/7-ways-your-business-can-help-reduce-global-warming

Some interesting findings by PWC below:

Managing succession well is key for family businesses. In our 2012 family business survey, 41% of participants said that they were looking to hand the business over in the next five years.

Our latest research, of 207 next generation family business leaders, identifies three gaps that family business need to bridge in order to manage the transition process effectively – the generation gap, the credibility gap and the communications gap.

The generation gap
The world has changed in the last 30 years and family firms can struggle to keep pace, especially with global megatrends like demographic shifts and digital technology. The current generation is not always confident that their children are ready and able to take over, and more family firms are bringing in external CEOs.

The next generation can no longer assume they'll run the business one day: 73% of those likely to take over the business said they're looking forward to doing this, but only 35% thought it was definite, and as many as 29% thought it only fairly likely at best.

At the same time, 86% of the next generation want to do something significant when they take over, and 80% have big ideas for change and growth. Many of the next generation see the need to 'professionalise' their family firm, by introducing better governance, and more rigorous processes in areas like finance.

The credibility gap
88% of the next generation say they have to work harder than others in the firm to prove themselves, both with colleagues and customers: 59% consider gaining the respect of their co-workers as one of their biggest challenges.

Many of the next generation have worked in another business first, as a way of establishing their credibility: only 7% went into the firm after school – 31% went to university, and 46% worked elsewhere, often as part of a structured development plan.

The communications gap
Family businesses have to manage personal as well as professional relationships, and this brings with it the possibility of conflict: 22% of the next generation are concerned about working with family members, and understanding the family dynamic.

As management shifts from one generation to the next, the older generation has to understand the difference between 'influence' and 'control': 87% of the next generation think their parents have confidence in them, but as many as 64% think the current generation will find it tough to let go – the 'sticky baton' syndrome.

The key is clarity of roles and responsibilities, and openness in communication, especially in relation to succession planning, where an independent mediator can help bridge the gap, and ensure the next generation are prepared to succeed.

Source: http://www.pwc.com/gx/en/services/family-business/family-business-survey/next-gen/key-findings.html

Most family businesses are faced with the same challenges that other businesses face, yet the more personal relationships that exist within family business create different considerations – especially when things go wrong...

Click here to read more on key causes of serious disagreements in Family Business and how to prevent these from happening: 

http://www.theguardian.com/small-business-network/2013/sep/02/ownership-dispute-family-business