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Success and succession: Five characteristics of a good family business

Wednesday, 20 September 2017

Chances are high that seven out of 10 of the businesses you know are family owned. As defined by audit firm PricewaterhouseCoopers (PwC), a

 

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How CEOs Can Work with an Active Board

Wednesday, 20 September 2017

At companies of almost all sizes, across all sectors, boards are undergoing a profound transformation. Largely as a result of

 

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Solving the Puzzle of Ownership Alignment in a Family Enterprise

Wednesday, 20 September 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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3 Team-Building Secrets of Successful Small-Business Owners
Tuesday, 03 May 2016 10:26

Small businesses depend on talent: finding it, nurturing it, and retaining it. But what does that mean, exactly? In honor of National Small Business Week, we spoke with a few successful entrepreneurs to learn about their team-building strategies.

 

As more than one founder told us, getting the right people is just as important as having a compelling vision and making sure the bank account has enough to cover payroll.

 

"I believe the CEO of a small-to-medium business has three major duties: to make sure there is money in the bank; to get the right people in the right roles; and to guide the long-term vision for the company," said Nick Gray, the founder and CEO of Museum Hack, a team-building company in New York City that counts major brands, including Facebook, among its customers. "After that, I try to get out of the way and let our team do their best work."

 

In fact, we found a few common themes among these entrepreneurs.

 

First: Make sure you hire the right talent. Second, create an environment of mutual trust and respect, so people can do their best work. And third, invest time and thought into developing processes to help those people (and your growing company) accomplish things as efficiently as possible.

 

Here's what these business owners told us about each of these principles:

 

 

Hire the right talent.


When you have a small team, each new person has a proportionally large impact on your company and its trajectory. Whether you're talking full-time employees or contractors, you need to find the people who can best help your company grow.

 

For Holly Cardew, the CEO of photo editing company Pixc, "always be hiring" took on new meaning when she started her company.

 

"I thought I needed money [first] to hire key players, however, in fact, I should have been making a list of amazing key players that I wanted to have on the team, ready to hire as soon as we grew." If you don't do that, she said, you waste too much time once you do have an opening: Recruiting, vetting, interviewing, and deciding. You can move much faster if you already have some amazing candidates in mind.

 

Hiring to address shortcomings in your current team's skill set is an ongoing process, not just something you do when you have enough cash to open a new position. Even if you're not going to hire staff, you can contract out work.

 

 

 

Sometimes that means making judgments about what the current team is capable of -- and what it's not so good at. "I'm not afraid to say if we aren't good at something and we need to call in someone to support our needs," said Nicole Snow, the president of Darn Good Yarn. Darn Good Yarn won last year's Community Excellence Award presented by the US Chamber of Commerce, so Snow is definitely doing something right.

 

And that brings us to our next point.

 

 

Empower your team to make decisions.


Once you have talented players, you want to give them the freedom -- and the respect -- they need to do their best work and to bring in others when they need to.

 

Snow told us about a "magic question" she makes a habit of asking her staff: "How can I help you right now?" Asking this has empowered her team to evaluate and uncover issues she would otherwise have not known about. "It's a great time to stop the bus and take a step back. From there a business owner can help empower an employee to evaluate the root cause of an issue and come up with a system to catch it from occurring again. Thanks in part to this approach, Darn Good Yarn's revenue jumped by 170 percent in 45 days this year.

 

Michael Branco, the CEO of Fireminds, a software development and IT shop, underscored the importance of trusting staff with the most critical aspect of a business: The relationship with customers. "The success of our business is dependent on our staff," Branco said. "It may sound cliché but great staff and great customer care are the key to success."

 

"Quality people keep a company alive," Chris Huntley, the founder of Huntley Wealth & Insurance Services, a small, independent life insurance agency, told us. "Without their talents we would cease to exist. So I cannot emphasize enough how important it is to create an environment of mutual trust and respect."

 

 

Invest in people and processes.


Once you have the right people in place, and you have entrusted them with their missions, you need one more piece: Process.

 

Even the most talented people get frustrated if they have to solve the same problem over and over. And well-defined processes are the key to growth, because they make it easier to get new contributors on board and up to speed.

 

Nate Ginsburg, the founder of Onset Interactive, an ecommerce and manufacturing business, said that nailing down processes was essential to maintaining growth once the company gained traction. "Once we started to get some traction, in order to continue to grow it has been essential to get processes down to manage our main business tasks. After the processes are in place, filling the roles to manage those processes has allowed us to continue to grow and grow faster," he said.

 

Cardew, of Pixc, echoed these sentiments, speaking from the experience of someone who didn't get on the "process" bandwagon quite as quickly. "I wish someone told me about all the tools and processes that I should be mapping and using along the way," Cardew said. "It would have saved a lot of time."

 

And for Fireminds' Branco, focusing on metrics is what helps him manage his business successfully. Branco constantly reviews the sales pipeline, monitors the profitability of each ongoing project, and tracks a few key performance indicators (KPIs) such as customer call response times and customer satisfaction ratings.

 

 

Bring it all together.
When you're starting a business, it takes a while to figure out what combination of products and services, what pricing, and what processes will work best.

 

Ginsburg told us that identifying what works and acting on it quickly was essential. "When you find something that works, move as fast as you can to blow it up as much as possible. Business can change quick," Ginsburg said.

 

And don't forget about the big picture.

"Think about how you, as a business owner, want to impact the world," said Darn Good Yarn's Snow, who has made it her mission to create opportunities for other people and small businesses within her supply chain. "A small business is an amazing way to serve and leave an impact on the world you live in."

 

 

 

 

 

 

Source: https://www.entrepreneur.com/article/274500

 
'My sister is laughing all the way to the bank, we will never speak again': Families at war over wills
Tuesday, 03 May 2016 09:43

WILLS – OR SOMETIMES their absence – are a bone of contention for many families.


Most of us have heard stories of families falling out over who gets what when a relative dies. It can create permanent divisions and deep wounds.

The Law Reform Commission is currently asking for submissions on Section 117 of the 1965 Succession Act. It leaves a legal window open for children who feel they haven't been given their fair share of inheritance.


Following on from this, we asked readers to get in touch with their own experiences of problems encountered, and families divided, due to wills and inheritances.
Below is a selection of your stories. All names have been changed to protect people's identities.

 


'We will never speak again'


Almost €12,000 was taken out of my father's bank account in the six months before he died. He was ill and unable to withdraw the money himself. We only copped that money was being taken out of his account when we saw a letter showing how much was left.


My father was not eating or sleeping the Christmas before he died, yet he 'spent' €4,000.
My sister moved into my father's house two days after the funeral and locked the rest of the family out. She was painting the house before the will was out.


She had previously fallen out with my father but reconciled before his death, and became the executor of his will within the last year of his life.
Based on our experience, the law protects a person who manipulates an elderly man and takes his money, and then can hide behind the executor position.
What's stopping any horrible child taking advantage of their parent? This has had a devastating effect on our lives.


I'm not someone who's down on a sister because she got a house, we want to highlight what she has done.
My sister is laughing all the way to the bank. We don't speak at all. We will never speak again. All our siblings feel the same.
- Mary

 


'My grandfather was pinned to a wall with a pitchfork at his throat'


My great grandfather and great grandmother lived in the house which had a bit of land attached, with their three youngest sons.
When my great grandfather died in the 1940s he left the house and land to his eldest son: my grandfather.

He and my grandmother moved into the house. After my great-grandmother died a year later, my grandfather asked his brothers to move out.
A huge argument over the issue became violent.

My grandfather was pinned to a wall with a pitchfork at his throat by one of his brothers.
This incident has rippled through the generations and the people involved rarely spoke, except at funerals.
My own father carried this during his life and made a point of being in a position to lower his uncle's coffin into the grave when he died (the one who held a pitchfork to his father's throat).


I eventually inherited the land. There is still bitterness about the original will from cousins and other family members.
It was never really resolved but I sold the house. The house accidentally burnt down soon afterwards, something relatives blamed on the sale.


- Michael

 


'My mother would have crawled out of her grave'


My mother died a few years ago. My parents were legally separated and my father had been living abroad for some time.
Shortly after my mother's death he contacted me to say that, as they never divorced, he was entitled to a share of the family home.

He told me to sell the house and arrange for the proceeds to be split equally between him, me and my brother.

The deeds to the house were solely in my mother's name.
My mother would have crawled out of that grave rather than have him benefit from her estate.
My solicitor confirmed that my father was entitled to nothing.

He wasn't happy about this and feels my brother and I have stolen from him.
He has cut us off, both from his will (which I care nothing about) and his life. The day I lost my mother I also lost my father. All because of an inheritance.
He said some really awful things to me about myself and my mother.

It really interfered with my grieving process.
He called me a gold digger and said my mother had conned the family home from him. He told me he has no children and that we would never see him again ... He said he'd rather die in agony than see me again, that I disgust him and that I am his enemy.
In response, I once told him I wished he was dead instead of my mother. It was not my finest moment.


I am sad that he won't be in my future but I'm even sadder that the man who had always been hero and my protector has become a horrible, bitter man who I'm ashamed of.
- Jane

 


'Dad's new wife got everything'


Dad remarried after our mother died. There was only my brother and I, both married with families of our own.
Dad promised us at the time that his second marriage would not change our inheritance. He had inherited the remnants of our mother's business. He had a few years of happiness and we accepted his new wife and enjoyed many family occasions together.

Unfortunately he got cancer and died last year. He changed his will one month beforehand.
When we inquired about the will we received a letter from our father's wife's solicitor stating that we were not mentioned in it.
We received professional advice and were told we had no case unless we discredited our Dad by proving that he did not provide for us.
Our love for our dad did not die even though he dismissed us. Our only consolation is that possibly he did not quite understand what he was signing.


- James and Susie


'The legal bill was just under €100,000′


My wife's family fell out over an inheritance. Her father had land and didn't have a great relationship with his two other children, one of whom is quite wealthy.
He was of sound mind when making his will.
The majority of the inheritance was left to my wife who planned to make sure the other sibling was looked after – until she received notice of court proceedings, citing Section 117, from both.
My sister's wealthy sibling withdrew their claim when it came to providing proof of assets.
The case continued and the legal bill was just under €100,000 when we were advised that it would be easier to make a settlement.
Section 117 is an archaic law that means any spiteful sibling can bring a case against the main beneficiary, even if they've no real grounds. The legal profession seem to be the main people who benefit from it, making large sums of money.
Now I ponder how I can possibly write my will and make sure my wishes are respected.


- John

 

 

 

 

Source: 

http://www.thejournal.ie/families-falling-out-over-wills-2736330-May2016/

 
A Matter of Trust: The Family Business Advantage
Thursday, 28 April 2016 10:46


Trust is an integral part of all organisations and in particular family businesses. Once established, trust must be nurtured as explained by Catherine Faherty, PhD research scholar in DCU Centre for Family Business.


A little girl and her father were crossing a bridge. The father was kind of scared so he asked his little daughter: "Sweetheart, please hold my hand so that you don't fall into the river." The little girl said: "No, Dad. You hold my hand." "What's the difference?" asked the puzzled father.


"There's a big difference," replied the little girl. "If I hold your hand and something happens to me, chances are that I may let your hand go. But if you hold my hand, I know for sure that no matter what happens, you will never let my hand go."


Often, as researchers in the field of family enterprise, we are challenged to succinctly summarise what makes family businesses different from other forms of enterprise— what is it that makes these businesses a special kind of business? Family businesses don't have it easy.

The role of CEO is very different when the company was founded by your father, and when your mother and siblings sit around the boardroom table, just as they sat around the dinner table. But these intimate connections can constitute a major advantage for these firms.

 

Family enterprises draw special strength from their shared history, commitment, and stewardship of the business. When key managers are relatives, their traditions, values and priorities draw from a common source. Yet, with that being said, if we were compelled to boil the differences down to a single concept, a single word, the
one thing that underlies all of the competitive advantages and idiosyncrasies of family businesses, the word would have to be "trust".

 

No single variable so thoroughly influences interpersonal and group behaviour as does trust. It is the foundation for long-term thinking, commitment, loyalty, stewardship, and much more.

In the form of a definition, trust involves the willingness to take a risk and be vulnerable to the actions of another. Trust, or lack thereof, can be found in all relationships. Its salience in the business environment— between superiors and subordinates, among executive teams, with suppliers or customers—is undeniable.

 

When families become involved in business, relationships are often distinguished by greater trust than is available to mere business associates alone. Emotional bonds built through kinship, familiarity and shared histories can lead to higher levels of trust within family enterprises.
Obviously, not every family business is characterised by trust. But even those that are fortuitous to carry this key ingredient sometimes take it for granted. So it is important for leaders to understand how trust is nurtured in a family business. Behavioural scientists offer a useful roadmap toward accumulating trust.

 

 

They offer three main drivers involved in establishing the trustworthiness of another individual. They are:

 


1. Integrity:

This refers to an individual's reputation for honesty and truthfulness. In other words, if you say you're going to be there, you're going to be there.

 

2. Competence:

Does the individual possess the ability, or technical knowledge, required to get the job done? Can they do what they say they are going to do? This particular factor is situation specific, meaning, for example, that you may trust the Marketing Director to develop the annual marketing plan for the organisation, but you might not trust her or him to fix the engine in your car.

 

3. Benevolence:

This involves evaluating the individual's desire to do good to others. Does he or she genuinely care about me?

 

 

 

 

Source: http://www.dcu.ie/sites/default/files/centre_for_family_business/Ezine%20Article%20-%20A%20Matter%20of%20Trust%20Final.pdf

 
Learn to Love Networking
Wednesday, 27 April 2016 12:05

I hate networking." We hear this all the time from executives, other professionals, and MBA students. They tell us that networking makes them feel uncomfortable and phony—even dirty. Although some people have a natural passion for it—namely, the extroverts who love and thrive on social interaction—many understandably see it as brown-nosing, exploitative, and inauthentic.

 

But in today's world, networking is a necessity. A mountain of research shows that professional networks lead to more job and business opportunities, broader and deeper knowledge, improved capacity to innovate, faster advancement, and greater status and authority. Building and nurturing professional relationships also improves the quality of work and increases job satisfaction.

 

When we studied 165 lawyers at a large North American law firm, for example, we found that their success depended on their ability to network effectively both internally (to get themselves assigned to choice clients) and externally (to bring business into the firm). Those who regarded these activities as distasteful and avoided them had fewer billable hours than their peers.

 

Fortunately, our research shows that an aversion to networking can be overcome. We've identified four strategies to help people change their mindset.

 

 

1. Focus on Learning


Most people have a dominant motivational focus—what psychologists refer to as either a "promotion" or a "prevention" mindset. Those in the former category think primarily about the growth, advancement, and accomplishments that networking can bring them, while those in the latter see it as something they are obligated to take part in for professional reasons.

 

In laboratory experiments we conducted in the United States and Italy with college students and working adults, and in an additional sample of 174 lawyers at the firm we studied, we documented the effects of both types of thinking. Promotion-focused people networked because they wanted to and approached the activity with excitement, curiosity, and an open mind about all the possibilities that might unfold. Prevention-focused people saw networking as a necessary evil and felt inauthentic while engaged in it, so they did it less often and, as a result, underperformed in aspects of their jobs.

 

 

Thankfully, as Stanford University's Carol Dweck has documented in her research, it's possible to shift your mindset from prevention to promotion, so that you see networking as an opportunity for discovery and learning rather than a chore.

 

Consider a work-related social function you feel obliged to attend. You can tell yourself, "I hate these kinds of events. I'm going to have to put on a show and schmooze and pretend to like it." Or you can tell yourself, "Who knows—it could be interesting. Sometimes when you least expect it, you have a conversation that brings up new ideas and leads to new experiences and opportunities."

 

If you are an introvert, you can't simply will yourself to be extroverted, of course. But everyone can choose which motivational focus to bring to networking. Concentrate on the positives—how it's going to help you boost the knowledge and skills that are needed in your job—and the activity will begin to seem much more worthwhile.

 

 

2. Identify Common Interests


The next step in making networking more palatable is to think about how your interests and goals align with those of people you meet and how that can help you forge meaningful working relationships. Northwestern University's Brian Uzzi calls this the shared activities principle. "Potent networks are not forged through casual interactions but through relatively high-stakes activities that connect you with diverse others," he explains. (See "How to Build Your Network," HBR, December 2005.) Numerous studies in social psychology have demonstrated that people establish the most collaborative and longest-lasting connections when they work together on tasks that require one another's contributions. Indeed, research that one of us (Tiziana) conducted with INSEAD's Miguel Sousa Lobo showed that this "task interdependence" can be one of the biggest sources of positive energy in professional relationships.

 

Consider the approach taken by Claude Grunitzky, a serial entrepreneur in the media industries, when he set out to meet Jefferson Hack, founder of the underground British style and music magazine Dazed & Confused. As described in a Harvard Business School case study by Julie Battilana, Lakshmi Ramarajan, and James Weber, Grunitzky—then 22 and preparing to found his first business, an urban hip-hop magazine in London—learned everything he could about Hack.

 

 

"I read every one of his magazines, noticed what he was writing about and what kinds of bands he reviewed," Grunitzky recalled. "I did so much of this I felt I could almost understand his personality before we met." Armed with that knowledge and convinced that he and Hack had similar worldviews and aspirations, Grunitzky felt much more comfortable approaching the industry elder.

 

When your networking is driven by substantive, shared interests you've identified through serious research, it will feel more authentic and meaningful and is more likely to lead to relationships that have those qualities too.

 

 

3. Think Broadly About What You Can Give


Even when you do not share an interest with someone, you can probably find something valuable to offer by thinking beyond the obvious. Of course, this isn't always easy. We've found that people who feel powerless—because they are junior in their organizations, because they belong to a minority, or for other reasons—often believe they have too little to give and are therefore the least likely to engage in networking, even though they're the ones who will probably derive the most benefit from it.

 

This problem was highlighted in two studies we conducted at the law firm mentioned above, which involved different groups of lawyers at different points in time. We found that senior people were typically much more comfortable networking than junior people were because of their greater power in the organization. This makes sense. When people believe they have a lot to offer others, such as wise advice, mentorship, access, and resources, networking feels easier and less selfish.

 

A controlled experiment confirmed this finding: People in whom we induced feelings of power found networking less repulsive and were more willing to do it than people assigned to a condition that made them feel powerless.

 

 

If Networking Makes You Feel Dirty, You're Not Alone
Many people find professional networking so distasteful that it makes them feel morally and physically dirty. In a controlled experiment, we asked 306 adults working at various organizations to write about times when they engaged either in networking for professional advancement or in social networking to make friends. We then asked them to complete word fragments, such as W _ _ H, S H _ _ E R, and S _ _ P—a measure of subconscious preferences first used by Chen-Bo Zhong, of the Rotman School of Management, and Katie Liljenquist, of the Marriott School of Management.

 

Participants who had recalled professional networking wrote "WASH," "SHOWER," and "SOAP"—words associated with cleanliness—twice as frequently as those who had recalled social networking, who more often wrote neutral words such as "WISH," "SHAKER," and "STEP." In other words, although most participants viewed networking to socialize and make friends as positive, they saw networking to enhance their careers as distinctly negative. Their negativity was not simply dislike or discomfort. It was a deeper feeling of moral contamination and inauthenticity.

 

However, even those with lower rank and less power almost certainly have more to offer than they realize. In their book Influence Without Authority, Allan Cohen and David Bradford note that most people tend to think too narrowly about the resources they have that others might value. They focus on tangible, task-related things such as money, social connections, technical support, and information, while ignoring less obvious assets such as gratitude, recognition, and enhanced reputation. For instance, although mentors typically like helping others, they tend to enjoy it all the more when they are thanked for their assistance.

 

The more heartfelt the expression of gratitude, the greater its value to the recipient. One young professional we know told us that when she turned 30, she wrote to the 30 people she felt had contributed the most to her professional growth, thanking them and describing the specific ways each had helped her. The recipients no doubt appreciated the personalized update and acknowledgement.

 

When gratitude is expressed publicly, it can also enhance an adviser's reputation in the workplace. Think of the effect you have when you sing your boss's praises to your colleagues and superiors, outlining all the ways you've progressed under his or her tutelage.

 

When your networking is driven by shared interests, it will feel more authentic.

 

People also appreciate those who understand their values and identities and make them feel included. Juan, an Argentinian executive based in the Toronto office of a Canadian property management company, told us about Hendrik, a junior hire from Germany who rallied everyone in the office to join a series of soccer games that he single-handedly organized. His fellow expats—and there were many, because the company's workforce was internationally diverse—finally had something fun to do with their colleagues, and Hendrik's status and connections immediately shot up. In spite of his low-power position, he had brought something new to the table.

 

You might also have unique insights or knowledge that could be useful to those with whom you're networking. For example, junior people are often better informed than their senior colleagues about generational trends and new markets and technologies. Grunitzky is a prime example. "I knew I could bring something to [Jefferson Hack], which was expertise in hip-hop," he said. The relationship ended up being a two-way street.

 

When you think more about what you can give to others than what you can get from them, networking will seem less self-promotional and more selfless—and therefore more worthy of your time.

 

 

 

4. Find a Higher Purpose


Another factor that affects people's interest in and effectiveness at networking is the primary purpose they have in mind when they do it. In the law firm we studied, we found that attorneys who focused on the collective benefits of making connections ("support my firm" and "help my clients") rather than on personal ones ("support or help my career") felt more authentic and less dirty while networking, were more likely to network, and had more billable hours as a result.

 

Any work activity becomes more attractive when it's linked to a higher goal. So frame your networking in those terms. We've seen this approach help female executives overcome their discomfort about pursuing relationships with journalists and publicists. When we remind them that women's voices are underrepresented in business and that the media attention that would result from their building stronger networks might help counter gender bias, their deep-seated reluctance often subsides.

 

Andrea Stairs, managing director of eBay Canada, had just such a change in perspective. "I had to get over the feeling that it would be self-centered and unseemly to put myself out there in the media," she told us. "I realized that my visibility is actually good for my company and for the image of women in the business world in general. Seeing my media presence as a way to support my colleagues and other professional women freed me to take action and embrace connections I didn't formerly cultivate."

 

Many if not most of us are ambivalent about networking. We know that it's critical to our professional success, yet we find it taxing and often distasteful. These strategies can help you overcome your aversion. By shifting to a promotion mindset, identifying and exploring shared interests, expanding your view of what you have to offer, and motivating yourself with a higher purpose, you'll become more excited about and effective at building relationships that bear fruit for everyone.

 

 

 

Source: https://hbr.org/2016/05/learn-to-love-networking

 

 
Sisters’ scarves stocked in Brown Thomas and Avoca
Wednesday, 27 April 2016 10:12

KDK is an Irish family business specialising in designer luxury scarves founded by Keira and Dairine Kennedy. Sisters who always wanted to create our own range of genuinely individual and cool products. After doing Degrees/Masters in Commerce & Marketing and getting over 10 years' experience in the business sector they decided to put this experience to work on their own brand.

 

Over the past few years they have pursued several creative avenues; painting, photography, jewellery design and sculpture which gave them a taste for what they wanted the brand to look and feel like. It was on a trip to India that the sisters were inspired to start a range of scarves using this incredible quality of the cashmere wool and the superior craftsmanship. They felt there was a niche in the market for high quality wearable scarves with artistic and unique designs and KDK was born. Luxury cashmere for everyday life.

 

The business was established in 2012 and has quickly grown to be stocked in Brown Thomas, Avoca and several exclusive boutiques around the country. KDK digitally prints Irish-inspired images onto scarves that are made from luxurious fabrics such as cashmere, silk and silk blends. the interview below gives insight as to how are are getting on. 

 

 

What sets your business apart from the competition?

The accessories market is very competitive but it's also a big growth market because people can tap into the luxury market without spending a fortune. Our scarves are different to other products in the marketplace in that we use our own photos as designs and try to make something that is specifically Irish while also being stylish.

 


What was the best piece of business advice you've ever received?


My old boss in Leinster Rugby, Conor Hanratty, used to say: "Hard work never goes unrewarded." There are times when you're establishing a new business that you think you're pushing uphill. You're blindly doing a lot of work and you don't really know what's going to happen or you don't get immediate rewards. I think if you really put your heart and soul into something, even though it mightn't turn out exactly how you planned, you will see rewards.
What's the biggest mistake you've made in business.
Underestimating how much administration work would be involved. We thought that design and production would be our greatest challenges but it has instead been the administration of the business.

 


And your major success?


Being stocked in Brown Thomas for the past four years and getting stocked in Avoca, another store with whom we are proud to be associated. We've just been announced as finalists in the Irish Fashion Innovation Awards. To survive in any retail business you have to be selling the units. It doesn't come down to being "nice that you're Irish"; it comes down to whether the customers are buying your product or not. It's very satisfying to see your scarves selling alongside brands such as Alexander McQueen, Gucci and Valentino.

 

 

Who do you most admire in business and why?


There are so many women in fashion that are admirable to us, such as Victoria Beckham and Stella McCartney, but from an Irish perspective, Shelly Corkery in Brown Thomas is someone who has worked her way to the top of the tough business of luxury fashion. She has longevity, she has stayed relevant and has taken brave decisions with huge budgets.
On a personal level she was very supportive of us with the CREATE initiative, giving young designers the opportunity to gain experience of a department store environment.
Based on your experience in the downturn, are the banks in Ireland open for business to SMEs?
We started at a really difficult time economically so we didn't even consider going to the bank looking for finance with a luxury product. We had saved money which we put in at the start. I think it made us more careful with our finances.

 


What one piece of advice would you give to the Government to help stimulate the economy?


Reduce the red tape for small businesses or to have a separate, simpler set of rules for companies that have less than a certain turnover. We find that adhering to all the rules and red tape really eats into time that could be spent growing the business.
The Irish Design 2015 initiative was brilliant for generating a huge buzz among designers. Through that initiative we also got funding to go to the Premier Classe accessories trade expo in Paris. It would be great if such really meaningful support for Irish design and fashion continued.

 


What's been the biggest challenge you have had to face?


Taking the first step in actually launching the business. We had to learn a lot about the fashion and retail industries and about how the whole system works. It was one thing for me, in my previous role, to sell something like Leinster Rugby, quite another to sell our own product and ourselves.

 

 

How do you see the short-term future?


The aim is to expand our volume and to be stocked in department stores in Europe and the US. We are also looking at expanding our product range while still incorporating our digital printing techniques. We have investigated the possibility of making the product entirely in Ireland – we would love our product to say "Made in Ireland" if that was a possibility in the future.

 


What's your business worth and would you sell it?


I don't know what it's worth and we wouldn't sell it. Well... unless someone like LVMH came along and made us an offer we couldn't refuse!

 

 

 

 

Source: http://www.irishtimes.com/business/manufacturing/sisters-scarves-stocked-in-brown-thomas-and-avoca-1.2619091

http://www.kdk.ie/about-kdk/

 

 
Days of generous inheritance over as parents need to fund old age
Monday, 25 April 2016 08:40

Parents are less likely to leave substantial inheritances for their children in future, due to increased life expectancy and economic pressures, according to the Law Reform Commission.

 


It said lifetime earnings are becoming "a safety net" so people can live comfortably in oldage, rather than something to be passed on to children.
The commission is now investigating whether changes are needed to inheritance laws due to the fact people are living longer and releasing equity in their homes to fund their healthcare. The remarks are made in a paper published today.


In particular, the commission is examining whether alterations should be made to Section 117 of the Succession Act 1965, which allows children to challenge a deceased parent's will if they don't believe they got their fair share.


The section has been successfully used in the past to increase a child's share in an inheritance where they believed a parent failed in their "moral duty" to provide for them.

 

his law was introduced to stop people from being disinherited, but other countries have begun to move away from making such awards.
A member of the commission, Raymond Byrne, said courts in New Zealand and Australia were moving away from the view that people were entitled to an inheritance if they have been cut out of a will.


"In more recent years you are finding judges saying maybe people are no longer entitled to inherit and so they are less likely to change anything that they do see in a will," he said.
He said the commission was not prejudging the issue and could not yet say what recommendations it would make.


The commission says there has been major demographic and economic changes in Ireland since the law was enacted over 50 years ago.
It said children now remain dependent on their parents for longer.


In turn, parents are also living longer and may themselves become dependent on their own children later in life.
"Lifetime earnings may become increasingly viewed as a safety net to provide for someone's later years, rather than a helping hand to give to the next generation," the paper said.
It cited research by English gerontologist Professor Sarah Harper, who found that many parents will be relying on the value of their family home to fund their longer life expectancy.
In the past, this would have been the main asset inherited by their children.


But the paper noted Professor Harper's view that the 20th century idea of getting on the property ladder, not only to own a property but to be able to pass it on, may be quite short-lived.
"The effect of this may be that in the 21st century, the older generation may consider that it does not owe much to the next generation, their children, once they are adults," the paper said.


The commission's questions are now being raised over whether Section 117 should take into account such demographic changes.
When completed, the review will contain recommendations on whether Section 117 should be repealed, retained or amended. It is also considering whether it should be extended to cases where a parent dies intestate.

 

 

Source: http://www.independent.ie/business/personal-finance/days-of-generous-inheritance-over-as-parents-need-to-fund-old-age-34656209.html

 
Why the 21st Century Will Belong to Family Businesses
Wednesday, 20 April 2016 14:23

 

An oft-cited statistic is that only 30% of family businesses make it through the second generation, 10-15% through the third, and 3-5% through the fourth. These are disheartening numbers.

 

But let's put them in perspective. How many companies of any kind are still around after the equivalent of three or four generations? A study of 25,000 publicly traded companies from 1950 to 2009 found that, on average, they lasted around 15 years, or not even through one generation. In this context, family businesses look pretty enduring.

 

And the numbers are only going to get more flattering. In the context of competition in the 21st century, family businesses have innate strengths over others forms of ownership, especially public companies. For most of the last century, companies confronted oceans of opportunities, which meant that winning strategies revolved primarily around size. Public companies had a clear advantage in the scale economy; they are especially suited to raising capital. But firms today are no longer looking out at endless opportunities. Instead, they have to struggle for their very survival in an intensely competitive world of slower growth, lower returns, and more frequent economic crises. In this brave new world, public companies are losing their dominance: their share of America's GDP, workforce, and assets has fallen by 50% over the last quarter of the 20th century.

 

For family-owned businesses, the story is rather different. The qualities often associated with family businesses that were a handicap in the previous century are turning out to be powerful sources of advantage, giving them the potential to be more adaptive to the increasingly intense competition that all businesses are facing. Specifically, family businesses have the opportunity to achieve sustainable advantages in five key areas:

 

 

Talent: From Mass Employment to a Higher Calling


For much of the 20th century, success depended on a company's ability to hire, train, and retain ever-larger numbers of employees. This was the era of the company man, where employees exchanged long-term loyalty for a livable wage and a pension plan. In today's knowledge economy, success depends instead on finding, empowering, and retaining the most talented people. Businesses need to do more than offer competitive wages and benefits; they have to provide a "higher calling" that makes clear the intrinsic value of working for their companies. As a recent Bain & Company study put it: "Employees want to work hard because they believe in their company's mission and values, not just because they hope for a large salary or a fast promotion."

 

Much has been written about values-based cultures, but families are the primary carrier of values, and business families can weave their values into the very fiber of the organizational culture. Our experience has shown that because employees work directly with the owners, there is often a pronounced loyalty effect, which augments the important sense of mission.

 

 

Investment: From Other People's Money to Captive Capital


In the scale economy, capital was the lifeblood of success. And given the pace of growth, capital was always in demand. In today's economy, however, the priority has shifted from the quantity to the quality of investment. Outside funds bring with them a pressure to achieve short-term results that trade-off with value creation. A study of leading public company CFOs published in the Journal of Accounting and Economics (2005), found that 78% of these CFOs would be willing to make decisions that destroy value in order to achieve their quarterly earnings targets.

 

Family businesses don't have these problems because they can obtain "captive capital" that will not easily migrate to other firms. Their owners often think in generational terms – in decades rather than quarters or years. Without external markets to please, they can take a long-term perspective and make decisions on the basis of sustainable economic value. As a result, family equity can come at a very low cost of capital, where businesses can meet the annual needs of their shareholders without having to worry about paying back the principal. What's more, since the money at stake is their own, family businesses tend to be cautious in their spending, and the discipline that comes from frugality is a tremendous advantage when topline growth is harder to achieve.

 

 

Reputation: From Profit Motive to Sustainable Footprint


In the 20th century, there were relatively few channels (literally, in the case of TV) by which companies could build their reputations, which enabled the largest companies to control them. It was not unreasonable for Milton Friedman in 1970 to say that the "one and only one social responsibility" of businesses is to raise their profits. In the 21st century economy, the standard has risen considerably. As one client told me, "It used to be that unhappy customers would write a letter. Now, they snap a picture of a defective product, upload it to Facebook, and all of a sudden it's gone viral. We have to stay out in front of our image."

 

Family businesses have a big head start in building a "sustainable footprint." There is often a personal connection between the family and the communities in which it operates; reputations matter to families. Investments in the community are likely to have social rationale in addition to an economic one. One client built a hotel complex in an underdeveloped area. They could have flown in all the supplies that they needed, but instead they decided to invest in local farmers to supply the food for the resort. Over a three to five-year period it cost them money, but over a 20-year period this investment will pay off handsomely. With a longer time horizon, tradeoffs between strengthening the community and making profits can simply disappear.

 

 

Organization: From Managing Complexity to Rapid Response


The leading companies of the 2oth century were behemoths. Henry Ford's company covered the entire value chain from end-to-end, including owning the grazing land for the sheep whose wool was used in seat covers. But instead of managing highly complex structures, the greatest organizational challenge of the 21st century is dealing with change. Companies will need to build the capacity for flexibility, adaptability, and quick/decisive action in response to shifting market conditions. The new mantra is to shorten the distance between leaders and the frontlines.

 

Family businesses are well-suited to dealing with this imperative of "rapid response." They tend to have nimbler and flatter structures, where information flows quickly and easily in to the leaders and decisions come out. There is also often more of a direct connection from the ultimate decision-makers to their employees. While less adept at delegating, they can more quickly and decisively commit the organization to action. The privacy that family ownership allows also helps executives stay focused on strategy rather than meeting market expectations. In Fortune's last survey of leading CEOs, 84% of CEOs said it would be easier to manage their company if it were private.

 

 

Governance: From Separation of Powers to Engaged Owners


Decision-making in large public companies is primarily vested in management, which generally is not composed of majority owners. As a result, ownership of the business is split from day-to-day control, creating what economists call a "principal-agent" problem. The traditional priority for good corporate governance has been to align management incentives with the interests of shareholders, often through equity-linked compensation plans. But by the end of the 20th century it had became clear that this endeavor has failed. Efforts to make managers act like owners through stock options have backfired, leading to skyrocketing pay, and opening the door to numbers-rigging scandals such as Enron.

 

The principal agent problem is far less severe in family businesses because they foster "engaged ownership." The simple fact that there are fewer owners makes the oversight of decisions far easier; even family businesses with hundreds of owners are better positioned to provide effective oversight than public companies, whose owners can number in the hundreds of thousands. And when family members with large ownership stakes are also involved in managing the business, incentives are easily aligned.

 

The public corporation has been the dominant model for business enterprise for most of the last century, and this reflected the fact it was the best solution to a particular set of economic circumstances. But those circumstances are changing and family businesses that manage the five sources of advantage described above are well placed to make the 21st century a family business century.

 

 

 

 

Source: https://hbr.org/2016/03/why-the-21st-century-will-belong-to-family-businesses

 
What’s your Family Business Performance Score?
Wednesday, 20 April 2016 14:13

A family business is unique, in that it needs to keep both the needs of the family in mind with every business decision, without deterring from what's right for the business itself. So how well is your business performing?

 

 

A balance is a must

Anyone running a family business will attest to the fact that with every decision the interests of the family must be held in one hand, and then interests of the business in the other. When one is favoured over the other, things fall apart.

If the owners set aside the interests of the family for those of the business too often, then they will soon find that the family starts to resent the business and pull away from it – making it difficult to pass it on to a committed next generation.

On the other hand, placing the family's needs above those of the business will lead to the quick deterioration of the company's health. Making it unlikely that it will sustain itself much further, let alone thrive.

That's why the Family Business Performance measurement takes 6 important business and family characteristics into account to decipher how well a business is doing to keep the balance and therefore the health of both the family and the business high.

 

 

The Characteristics

 

1. CEO's Age

According to some findings*, businesses with CEOs aged between 51 and 60 perform the best, with firms increasing in performance as the CEO's age increased before they reached this optimal age bracket. Interestingly, the opposite is true for CEOs after the age of 60 – as CEOs approach 70, their personal goals tend to stop aligning with the business goals and risk-taking diminishes.

 

2. Diversity in Leadership

High performing family businesses are more likely to have a female CEO, as well as a formal board of directors with a non-family, non-executive director. This suggests that bringing diversity into the upper management of the business allows for different viewpoints to be heard and guards against stagnant thinking in the business.

 

3. Communication

The more structure and formal documentation around how family and non-family employees will be handled in the business, the better the overall performance of the business. When issues like succession, promotions and remuneration, as well as governance policies are not firmly in place, then a lot of time can be wasted on conflict and confusion – which will just work against the business's positive performance.

 

4. Outward Focus

The highest performing family businesses are doing so because they are actively keeping an eye on both their competitors and the outside factors affecting the business through competitor analyses, benchmarking and documented strategic plans that are reviewed annually and reported on for progress made.

 

5. Entrepreneurial Culture

Such a culture supports the pursuit of innovation in developing new products and services, thus ensuring that the business is never left behind its competitors or the needs of the market. This "Prospector" strategy is all about moving forward as a business, rather than simply sticking with the same strategy the business has always had.

 

6. Financial Resources

This one should be quite obvious – a family business without access to financial resources will not be able to champion innovation as they won't have the capital to float new products and services before they reach market. The healthier a family business' financial situation, the more likely they are to perform well overall.

 

 

 

Source: http://www.kpmgfamilybusiness.com/family-business-performance-score/

 
How Advisory Boards Can Be Your Secret Weapon
Tuesday, 19 April 2016 11:40

Advisory boards get a bad rep, and most of them deserve it. They are generally nothing more than head shots on a slide deck; impressive people who "validate" that the company is interesting. But advisory boards can and should be so much more.

Over the last two companies I have co-founded, advisors have played an outsized role in whatever success we have had. They have helped me think through tough problems, fill-in knowledge gaps, made key introductions, and generally made me smarter and better. The only thing they haven't done is validate our business.

I think the problem with advisory boards comes down to how CEO's approach them. They look for the big names, like the CEO's with multiple hundred million dollar exits, the luminaries in the field, and the well known personalities. This sounds like a good idea, but is it really helpful?

 

 

Perceived Benefits Of A Big Name

First of all, it feels terrific when someone who's made it thinks what you are doing is great. I've been there. You're heads down working so hard, being questioned all the time, going through the typical ups and painful downs of a startup, and one day this super important person says they like your business. Not only that, but they want to be involved. This feels like a stamp of approval you can take to investors, employees, and even to let your friends know that you aren't absolutely crazy. I don't underestimate the little ego wins in startups to maintaining sanity, but does it really help the company? My experience is that almost no sophisticated investor (or recruit or partner or customer) pays too much attention to your advisor slide, probably because you are giving them equity for free. Investors actually have to pay for their equity.

The second argument for a big shot advisor is that they must be incredibly smart and know a lot more about how to make your business successful than you. Their advice is going to be gold! Maybe, but in general big shots are pretty removed from the day to day of building a company and almost certainly not the expert you are in what you are trying to do. I am betting that they will likely learn more from you than you will from them. The other reason why I don't believe impressive advisors provide that much help is that they are generally very, very busy and don't have the time to really dive deep with you.

A third rationale for getting a high profile advisor is that they are generally very well connected and will open doors for you. This could be huge, but you need to make sure that you set expectations. I've seen it many times where an advisor agrees to join a board, but then is reluctant to tap into his or her personal network.

 

 

What Makes A Great Advisory Board

In my opinion a great advisory board is a set of people who make you better. Being a startup CEO is a very difficult job, you have an ever evolving organization, an ever changing set of problems, and an ever increasing set of new challenges. You are constantly doing things you have never done before. Scaling from 5 to 10 people, hiring a VP of Sales, raising a Series A, selling to a new market, signing a multi-year BD contact, sponsoring your first conference, firing a senior executive, dealing with your first PR fiasco. A CEO needs a stable of advisors he or she can turn to to get quick help.

So what should you look for?

 

 

Subject Matter Expertise

Due to the multitude of areas a CEO needs to be competent in, it helps to find advisors that fill-in your knowledge gaps. If you've never sold or built a sales team, find a CRO advisor rather than a CEO. Yes, CEO's have dealt with sales teams, but the subject matter expertise is going to reside with a CRO. Find the people who are experts at solving a set of problems you have, bring them on, and turn to them whenever you have issues related to that problem.

During my time at Thinknear I needed to sell to agencies. I had never sold anything - let alone sold ads to a media buyer — and I was really struggling. I brought on Stu Libby as an advisor. He was an acting CRO selling every day into media agencies and he helped me quickly get up to speed — giving me advice on my deck, how to talk to agencies, what things mattered. I was soon selling millions of dollars.

Another quick example, we were building an AdTech focused product but felt like we were missing some of the subtle elements that mattered in this new industry. We convinced Nat Turner to join our advisory board as he was considered one of the very best product people in AdTech (and had just sold Invite Media to Google). He quickly helped us understand the nuances of the customer and how to build the right products for them.

In addition to industry and functional-level advisors, I think every startup CEO should also have one advisor for CEO specific issues, like boards and fundraising. Having someone to turn to who understands the nuances of being a startup CEO is critical, but I think more than one is overkill.

 

 

Advisors Who Can Commit The Time

Once you've identified the areas that you want to hire advisors for, you need to gauge their willigness to commit time. Be upfront about your expectations and only bring on people who will really give you the time you need. I typically put in my advisory agreement a minimum of one meeting/call every other week, and one lunch or dinner a quarter. As soon as they join I set up a recurring meeting and I am aggressive to make sure I get my time.

 

 

Teachers

When I interview advisors I am always trying to get a sense for how well they will be able to teach me what they know. Being a subject matter expert isn't enough if all they know is how to do, but not how to teach me to do. I am not hiring advisors to actually do the work, only to advise me so I can do the work. So after affirming that they are in fact subject matter experts, most of what I try to suss out is if they are deep thinkers who can externalize their expertise and pass it on.

 

 

A Final Note: Firing Advisors

No one bats 100% when building an advisory board. Some advisors just don't provide as much value as they led on or don't live up to the promised time commitment. It is incredibly uncomfortable, but if someone isn't pulling their weight you cannot dilute the rest of the shareholders by continuing to give them equity. I suggest all advisory agreements vest equity over 2 years so that if it isn't working the two parties can part ways.

 

 

Conclusion

Advisory boards can be an entrepreneur's secret weapon — giving you access to a group of experts who help you solve problems you would have had to spend years figuring out on your own. This is an amazingly powerful opportunity available to almost every startup CEO, yet many squander it in search of false validation. I hope you take full advantage and build a terrific advisory board of people you can turn to regularly to help you solve your hardest challenges. This will help you build a better business, make you a better CEO, and ultimately lead to the greatest validation of all — a hugely successful company.

 

 

Source:https://medium.com/@eportnoy/how-advisory-boards-can-be-your-secret-weapon-7592b15f8ed3#.3pjzm8lhe

 

 

 
Conor Hyde from Hyde Whiskey
Monday, 18 April 2016 13:47

Hyde Whiskey, a successful Family Business recently won Best Irish Whiskey in the World at the prestigious San Francisco World Spirit Awards. Conor talks about what takes to win such an award and the journey they’ve been on to get where they are now

 

 

Where does the story of Hyde begin?
 
Well, we have a long tradition in the drinks industry within my family here in West Cork. 
 
Myself and brother Alan are actually the last in a long line of vintners in West Cork. 
We’re 10th generation of vintners based in Bandon, going back to the 1600s. 
 
So we got together, we’ve had separate careers up until now, about three years ago and decided we’d like to do something together in the food industry.
We decided then to look at our heritage within the drinks industry and move into that area.
 
History and tradition is one thing, but actually making a business that works is quite different?
 
Well it wasn’t easy that’s for sure. If it was easy then everyone would be doing it. It was a long process, it took two years of planning before we finally launched in 2015. So we’re one year on the market at this stage.
 
We spent two hard years developing a business plan and researching the market. We looked into the positioning of the brand, price point, packaging and distribution.
So there was a lot of research, a lot of careful understanding of the market and how our brand would fit into it. 
 
So we launched in March with our first product which was a 10-year-old single malt aged in Oloroso sherry casks. Since then we’ve launched two more lines to our range and are now in 18 countries around the world within the past 12 months.
 
 
 
So this is a limited, premium product?
 
We’re not going for high volume low margin.
We are going for a very premium, very top-end whiskey. We’ve spent a lot of time developing this in limited edition small batches, with very special wood.
 
So we’re trying to command a higher price point in the marketplace given the amount of tender loving care that goes into developing the whiskey before we sell it on the market place.
 
You just won the Best Irish Whiskey in The World award in San Francisco too?
I have to say that we are absolutely delighted to have won the award. It’s a very prestigious award.
 
The San Francisco Spirit Awards are the Oscars of world spirits. You have over 1,800 entrants from around the world and everybody strives to win an award at this competition.
You have some of the most respected judges from around the world too. These people are aficionados of whiskey, they know what they’re tasting. There were over 200 Irish whiskeys entered into the competition, so we were over the moon when we won.
 
You’ve had rapid growth, how do you keep a handle on the business through that?
 
I suppose like any business that’s growing rapidly we have to keep a close eye on finance and cash flow.
The revenue we get from sales goes back immediately into the product, packaging and marketing. 
 
Like all businesses at startup stage it’s been a struggle to keep hold of those finances in black, but we’re handling it and we’re growing at a pace that we’re comfortable with. We’re not overstretching ourselves.
 
 
 
How do you break through into a crowded Irish whiskey market globally?
 
Well, we’ve positioned the brand as Hyde’s President’s Cask, so we are positioning it as a presidential quality whiskey. 
 
It’s one of the best whiskeys to come out of Ireland as far as we are concerned. 
We take so much time choosing wooden casks from all over the world to justify that positioning. We bring in empty Oloroso sherry casks from southern Spain, which are handpicked and very carefully graded. 
 
So then we take our whiskey, which has been maturing in bourbon casks for 10 years, and put them into the sherry casks for a further six to eight months. 
That’s what makes it so special and that’s what makes it such a premium product and so presidential.
 
 
 
So what makes Irish whiskey so different to any other?
 
People generally describe Irish whiskey as smoother whiskey. When you drink Irish whiskey you get a lovely warm glow inside your tummy. 
With something like a scotch whiskey it’s a peated whiskey, which is made using a different technique. 
 
They actually smoke the whiskey and you get that warm or hot sensation in your throat or your mouth just before it goes down. 
 
It has a bit more fire in the mouth kind of feel to it. Whereas Irish whiskey is actually growing really rapidly around the world because it’s so smooth. 
It goes down so easily and has a lovely mellow gentle finish to it as opposed to a more fiery finish that you might get with a scotch.
 
 
 
How important is it to find the right casks?
 
Very important. The majority of whiskey in the world is actually aged in bourbon casks. 
Those casks are made from American oak and usually come from Kentucky, which would be the bourbon-making area of the United States. 
 
The law in the States is that you can only use a bourbon cask once, so a cask to make bourbon has a limited shelf life. 
So those casks are then exported around the world for other whiskey makers. 
 
We would then take a whiskey from those bourbon casks and put it into a secondary cask. The industry calls that ‘double ageing’. 
It’s that second cask that gives it that very unique flavour. 
 
So for us that secondary cask would be a sherry cask or a rum cask. 
 
So all whiskey is aged in bourbon casks, but what makes our whiskey special is that we put it into a second cask for a period of time to make it extra special. 
 
So the casks are very important to giving the whiskey its unique flavour.
 
 
 
 
So what’s next for Hyde Whiskey?
 
We have three products right now. 
We have two 10-year-old single malts, one in a sherry cask and one in a rum cask. 
 
We have a newly-launched single grain, bourbon-matured whiskey.
That is a limited edition run for the 1916 celebrations and we’re working on two other cask finishes at the moment. 
 
That may have a port finish on it with casks from the Oporto region in Portugal. 
 
So lots of new product development, lots of innovation still come from us.
That being said, we’re still very much focussed on giving the consumer what they’re looking for from us. 
 
People expect a different taste twist when they drink Hyde. People are looking for limited editions. 
They’re looking for small batches and more craft to their whiskeys, that is what we are focussed on.
 
 
 
 
 
 
 
 
 
 
 
 
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