A Manufacturing Heritage In Italy

FLO S.p.A. founded near Parma in 1973 by Antonio Simonazzi is now Europe’s largest manufacturer of plastic vending cups and a leading player in the production of disposable tableware. The company’s turnover exceeds €100 million. Antonio’s son, Daniele, joined the family business after completing a degree in mechanical engineering and undertaking Italy’s compulsory military service. It wasn’t assumed that he would join FLO but his father’s passion for his company seeped in to the family’s DNA and, as a result, Daniele, his sister Erika and her husband all joined FLO in executive positions.

Following a period developing FLO’s business opportunities, Daniele became CEO of the company on the death of his father three years ago. Daniele’s mother became chairman of the board, holding the majority of shares but without an operational role in the company.

On taking over the running of the business, Daniele became aware of the huge weight of stakeholders’ expectation on his shoulders. “People who had worked alongside my father, who had been with the company from the very start – my father’s trusted advisers – were now looking to me to fill his shoes. My father left us suddenly and they were not ready for the changeover. I could sense their concerns about my moving in to this senior role. It was a really steep learning curve at the start.” For example, he had little if no idea about the full implications of being a director when he first took over. “Being a director isn’t just about running the business – there are wider legal and risk issues as well. What are you liable for? I didn’t know.” He needed advice to help him understand and manage effectively the legal consequences of the decisions he was making.

Daniele also realised he needed to dramatically change how he dealt with family members. “A key learning for me was to understand the difference between the types of conversations you need to have. If I’m talking about a business issue with a family member who’s a director, I’m speaking to them as a peer; if they’re managers I’m speaking to them as their boss; if I’m speaking to them as a shareholder then that’s another conversation entirely, which possibly shouldn’t take place. Situations can look confused, even misleading. Compromising can often be detrimental to sound business governance and wider family relationships.”

Daniele also learned that it can be ‘lonely at the top’. That’s why it’s so important to have someone who isn’t a family member as a mentor – someone who’s utterly discreet and trustworthy and can provide an objective external perspective on both business and family business issues.

Under his leadership, FLO has negotiated a period of considerable change and met some significant business challenges, including acquisitions in the UK and, more recently, in Spain. European regulation around the use of plastics in the sector continues to be an issue and could even force changes in both products and technology for the company.

Looking to the future, and the role of next generation members, Daniele wants to avoid what he refers to as “the family business obsession”. He says he doesn’t talk about FLO with his three young sons, nor does his sister Erika with her three sons, as they don’t want them to feel under any pressure to join the firm unless they want to. “We’d be delighted if they did, but we’d want them to develop a career outside the company first. And if they do join, they’ll have to have the right skills. Family businesses go wrong when family members are given jobs they’re not suited to. If they join the company they need to have something to offer in whatever position they may take, not necessarily an executive one. It’s tough enough being a family member”.

This feature forms part of the PwC Global Family Business Survey 2016.

It has been reproduced with permission of PwC.