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PwC’s 11th Global Family Business Survey

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Tánaiste and Minister Donohoe launch new €90m fund for Irish start-ups

Thursday, 10 February 2022

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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.






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!







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.




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.






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.





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.




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.




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.






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.
Family business: How to pass the baton
Thursday, 14 April 2016 15:49
Retail CEO Jack Mitchell outlines how his family's business has been able to successfully pull off succession from one generation to the next.

FORTUNE — Fifty-four years ago — with three suits, a coffee pot, and a dream — my parents, Ed and Norma Mitchell, founded a men's clothing store in Westport, Conn., in a little 800-square-foot building.


In the mid-1960s, my brother Bill and I joined the family business, and in 1974 our parents passed the torch to us. By the mid-1980s, Bill and I had built the business into a dominant clothing store in Westport. In the 1990s, our seven sons came aboard, along with my wife Linda, and the business has grown into the largest family-owned upscale clothing store in the United States, with sales exceeding $100 million.


Can you imagine spending half of your working life in a family business, beside your mother, father, and brother, and all getting along? And then spending the next half of your work life with your brother, your spouse, your four sons and three nephews, and still all getting along? I pinch myself. We have been able to create an environment of mutual respect and trust, one where we can function as a team that shares the emotional and intellectual challenges of business along with its financial rewards.


The succession from the second to the third generation has been a joyful journey, so much so that we have already begun to plan for the transition to the fourth generation. When I think back over our half century, I can identify seven things that made it all go smoothly.


1. Passion to pass the torch

You have to want to do it. You have to want to pass the equity and the responsibility to the next generation. My mother and father had this passion, and my brother and I embraced it.


2. Asking for help

My father gave us a wonderful phrase that my brother and I adopted: "I need your help." To shape a successful succession plan, we needed help. We didn't know everything about family businesses and so we agreed to study successful ones. In 1979, we joined the Forum, a networking group of a dozen or so similar family businesses. At a 1985 meeting, David Bork, a family business consultant, gave a talk that resonated with us. The next day, we hired him. Bill and I worked with him for several years on our plan. We also set up an outside advisory board to assist with this and other strategic issues.
David shared with us from the beginning that we should think of our family business as a business first. In other words, run it as a business, and most of the time what is good for the business is great for the family.


We were blessed with seven bright sons who went to excellent colleges and did well. We wanted them to make their own decisions about their careers. If they wanted to enter the family business, our arms were open, provided that they satisfied two rules we established in the late 1980s. I intensely dislike rules, but David and Bill convinced me that we needed to have a couple of firm ones.


3. The five-year rule

Our sons had to work five years elsewhere after finishing college. This rule was not popular with our father, who was still very much with us. He worried that we were sending his grandsons "out to pasture" and that we might lose some of the great talent and passion for the business that his grandsons had already demonstrated.


While Bill and I recognized that risk, we felt they had to gain experience, self-confidence and an understanding of what a real job is about in the real world. They needed to know what it meant to be hired, transferred to a different city, promoted, pushed, and pulled by someone other than their father or uncle. If they decided on becoming an astronaut or a podiatrist instead, we would support it wholeheartedly.


The five-year rule not only gives the next generation work experience, it also gives them wisdom they can bring into the family business. When our sons join the business, they made positive recommendations, and my brother and I respected them even more because they had these outside experiences.


Russell worked at IBM, Bob at Sports Illustrated, Andrew at Footlocker and Godiva Chocolatier; Todd at Apple AAPL 0.02% ; Scott at Eddie Bauer, Abercrombie and Fitch ANF -2.23% , and Ann Taylor; Chris at NBC Sports and Neiman Marcus; Tyler at Henry Bucks in Australia, Brioni, and Harry Rosen in Canada; and Linda worked at her own family business.


4. No guarantees

The second rule was that a family member was not entitled to a job simply because their name was Mitchell. They needed to be qualified, possessing both the skills and the passion to grow within their area of responsibility. Our sons ended up choosing different areas: one picked finance and administration, another sales and merchandising, another marketing, and several managing newly acquired stores. Our outside advisory board and our consultant David Bork supported this policy.


And now, after 20 years, our sons and nephews hold leadership positions within our company. Two of them are co-presidents and will soon become co-CEOs.


5. Pass the equity early

When our oldest sons, Russ and Bob, were 29 and 27, and Tyler, Bill's youngest son, was only 13, my brother and I gave them a large percentage of the equity of the business. Sixteen years later, the remaining stake was transferred. We trusted them with our business early, and they became much more responsible and accountable because they were owners. They stuck by the guiding principles and values that had served us well, building relationships with each and every associate, customer, and vendor by treating them as friends, and measuring every facet of our business.


6. Provide financial security to the senior generation

A solid succession process requires a financial plan that allows the older generation to retire with enough assets outside the business to ensure that "money" is not the reason to remain in control forever. Often, when all of their assets are in the business, the owners not only tend to stay active too long and block the next generation from leading, but they also become too conservative, unwilling to take bold risks out of fear that they might cripple the entire business.


7. Communication: candid and transparent

Of course, our family has had its share of challenges. We are not perfect. And over the years, all of the family and senior non-family executives have agreed that a lack of transparent communication would be the only thing that could pull us apart. So we have many different, yet important, meetings.


Faithfully, we have scheduled weekly Tuesday morning family meetings. We discuss in a confidential way, in a safe haven of sorts, any issues that are on the active working family members' minds.


We have had a Family Council since the mid 1990s, which consists of all members of the Mitchell family descended from Ed and Norma, our parents, who are 14 years old and above, including spouses.


8. Have fun

We work hard and we play hard. Of course, things are not always perfect, yet we clearly all enjoy our family fun.






Passing Your Business And Wealth To The Next Generation
Thursday, 14 April 2016 09:40

This Article is aimed towards Asian Business but there is advice that can be taken on board for the Irish Famiy Businesses out there... Enjoy! 



You've invested years of hard work to successfully build your own business and wealth, so it is natural to consider how you can successfully transfer the fruits of your labor to your heirs–the next generation of leaders and beyond—in order to carry on the family tradition. After all, if a family enterprise were a relay race, it would make no sense to lead first leg, then not provide those runners who follow with the best tools and training to keep the pace.


Unfortunately, very few Asian family businesses see the importance of having proper business or personal wealth succession plans. This is partly because succession planning is closely associated with the eventual demise of the founder, which is a taboo subject in Asian culture. Another common reason is the founder's reluctance to let go of the business, failing to see the family business enterprise as a continuum. It is not uncommon to find immensely successful entrepreneurs in their 60s who are reluctant to cede control to their children as they continue to play significant roles in driving growth of the business. In fact, by the time they pass control to their progenies, many of these founders would be in their 70s.


This preference to have direct control and ownership till the very last minute often has adverse repercussions. By then, either the founder has become physically or mentally weak, or conflicts would have arisen, with various family members bickering or having devised ways to get larger shares of the family wealth. Successful families often assume that their current harmony will perpetuate across the different generations, and this leads them to think that detailed estate and succession planning is unnecessary.



Your Strategy for Succession

As Benjamin Franklin once said, "By failing to prepare, you are preparing to fail." Procrastination or failure to plan for the future may result in your wealth being jeopardised by multi-jurisdictional claims such as offshore taxes and challenges arising from family disputes. It doesn't have to be that way.


Through thoughtful succession planning, you will be able to tell your family how you would like your affairs and finances to be handled when you are no longer around. It provides clear instructions on how to distribute your assets, including the business, money, property and other elements of your estate.


It is important to identify the most competent successor early on. Trying to divide the business equally among family members will leave it more vulnerable for takeovers, especially if it is not sizeable, or if there are many children involved.


Utilizing Your Succession Team

A will is one tool you can use to ensure the type of succession you want, since it serves as a roadmap that your family and the courts can use to deal with assets according to your preferences. Without this tool, nobody can accurately second-guess your wishes, and the courts will have to fall back on intestacy laws of the deceased's domicile country to settle asset distribution.


Estate and succession planning, however, goes beyond writing a simple will. It is a holistic exercise typically involving your accountant, private banker, wealth planner and lawyer. As part of the estate planning process, this team puts together a 360-degree system to expertly guide you towards achieving the optimal fiscal benefits from your investment activities. This approach also will ensure that trusts, insurance and collective investment fund solutions can be put in place to most effectively address your family's ongoing needs.


To be meaningful, discussions with your team are likely to be intensely personal, and more than one meeting will be needed. You will need to be prepared to share confidential details on all aspects of your wealth, including the finances and outlook for the family business, an inventory of all assets, and how you would like to provide for family members. You will need to identify the financial as well as human and intellectual capital you have amassed.


You also can specify the core values that you hope to perpetuate in the ongoing family business. For example, if you would like future generations to continue to support the needy, you can specify that a percentage of your company's annual revenue be dedicated to scholarships for disadvantaged students. This is not only intrinsically altruistic, but can educate successive generations of the family to look beyond merely whether the company is paying good dividends to preserve their financial futures, but also pursuing the more long-term social and economic values of the family.


Benefiting From Trusts

Trusts can be effective instruments for distributing wealth to your children, whether they are involved in your business or not, offering several advantages:


• A trust allows you to dictate how your money is to be managed and distributed, and by whom, during your lifetime, or after death.


• It can include systematic instructions on how your heirs will benefit, as well as pre-requisites with which they must comply before they can receive their funds.


• It can include a dispute mediation mechanism to dictate how key disagreements in relation to the use of the trust assets are arbitrated.


With comprehensive legal advice, a trust can also protect wealth by mitigating any tax exposure triggered by cross-border asset acquisitions or the multiple nationalities/residences of the family members.


Planning Now for Optimal Results

A successful estate and succession plan should start early, when you are still in charge. That way, you can put the right framework in place for your heirs to set the ground rules for every successive generation – helping to ensure wealth, sustainability and family harmony.


Ultimately, the key to achieving the full benefits from wealth and succession planning lies in the execution. The best estate and succession planning strategies will still need a dedicated team with extensive global experience and on-the-ground expertise to ensure seamless execution of your objectives.


Very often we come across Asian families being serviced by trustees located in distant tax havens, with no local knowledge of the needs of Asian clients or appreciation of the Asia methodology of dispute mediation. Bank of Singapore's wealth planning specialists, on the other hand, are all accredited Asian estate practitioners with decades of experience, and an acute knowledge of the nuances and sensitivities of Asian families. These attributes enable us to proactively suggest action plans that will address any evolving family dynamic and needs, thereby avoiding escalation of family tension and confrontations where possible.


Like a relay race, ensuring continued wealth and success for those who will follow means putting together a team and strategy that will give you the best shot at success. Doing so will ensure that you and your successors are winners.






4 questions every trusted family business adviser should be able to answer
Wednesday, 13 April 2016 14:53

David Harland CPA has seen generational family businesses fail for lots of reasons, but there are almost always common threads. He gives his advice on the questions that should be answered successfully. all family businesses should have these in order to survive and go one as one might hope with their company. Read more below:


More optimistically, I've seen lots of family businesses succeed to their third, fourth and fifth generations. Again, there are almost always common threads. The best advisers guide their clients away from potholes and into a smoother road to long-term success.

With that in mind, here are four questions every trusted adviser should be able to answer about their family business clients.



1. Does your family business client have a succession plan?

A family business needs a viable succession plan. The average Australian family business doesn't make it past two generations, in large part because the average family business has an ineffective succession tradition. It's a major obstacle and one too few trusted advisers take seriously enough.

Family-run businesses without serious succession plans have likely never had a robust conversation about how to construct one. The task could be simple, but it often isn't. Every major party needs to be consulted and lots of considerations must be made, which can seem a daunting task for an already busy family group.

A good family advisor realises this is a journey, not an event. The first conversation (or even conversation about having a conversation) may not go over smoothly. The current leadership needs to be prepared for life after the succession. The new generation ideally has sufficient financial knowledge, prudence and entrepreneurial instincts to take over. Multiple heirs only complicate the process.

As a general rule, more complicated families should start their succession plans earlier and re-evaluate progress more frequently. Planning is time consuming and often uncomfortable. That doesn't mean it's too difficult to understand or can't be done the right way.



2. Do they have family governance structures in place?

According to 2014 research by Ernst & Young, there is "compelling evidence that the largest and longest-lasting family businesses in the world became – and remain – successful by optimizing both family cohesion and profitable business growth."

How do you optimize family cohesion and business growth? Formally, intentionally, directly and professionally. Create a family governance structure and stick to it.

Formal governance structures are less commonplace than family succession plans. For serious families, though, a governance structure can be an excellent governor on behavior and encourage good practices for a long period of time.

What does a family governance structure do? In effect, it creates a formal process and structure by which important decisions are made and important issues are discussed and resolved. The formal structure should address everything from succession talks to raising capital to avoiding conflict.

In the past I've identified three essential ingredients of family governance. These include ensuring each family member (or other key players) has a voice, that the family defines its missions and values, and that governance structures are viable and enforceable.

Many family businesses initially push back against the idea of a family governance structure. I've previously argued one way to make it more attractive is through a combination of hope and fear. Both arguments are clear: clients should hope to create a long-term legacy and hope to see their successors grow, innovate and thrive; clients might also fear sudden crises – whether a health or financial crisis – crippling their business because they lack a sufficient contingency plan.



3. Do they have an employment policy that employs the best people for the job?

Success creates its own problems, especially in family businesses. Consider the case of Cornelius Vanderbilt, a 19th-century railroad and shipping titan who, at his height, build a family business worth more than A$322 billion in today's dollars. By 1970, no single heir was worth even A$1 million.

Between nepotism, favoritism, infighting, and a general sense of entitled privilege, the Vanderbilt family managed to squander one of the great family fortunes in history.
Today's family businesses must ensure they're employing the best people for the job, regardless of last name. This means professionalising the employment standards for family and non-family employees. As with succession and governance plans, employment standards need to be formal and explicit.



4. Are they engaging and embracing the benefits of the next generation?

It is a well-documented fact that family businesses benefit when they encourage children to first work outside before coming back to the family trade. A young adult can leave university and work for a neutral manager and for a business without his/her family name on the wall. This teaches the importance of self-reliance, accountability and merit-based achievement.

Often, they can return with new skills and outside ideas. Those can be seeds for future growth they wouldn't have otherwise had.

Current non-family employees will also benefit, because they'll know offspring have to earn their titles, just like anyone else.




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