The Great Survivors: Some Of The Oldest Family Firms In The UK
When you are writing a book about family businesses, you quickly come up against some of the myths and stereotypes surrounding them. First, their importance to the UK economy. Those involved in family businesses would be aware of the frequently used figures – that there are more than five million family firms in Britain, employing 15 million people between them. But the wider public would be surprised by these figures, astonished, even. Perhaps the gap in understanding is because many family companies are small, so their collective importance is not fully appreciated.
Secondly, performance. Family businesses in this country are still regarded by some as a sleepy backwater, slow to change and sometimes even resistant to it. In some cases, this would be accurate. But there is plenty of research available which demonstrates that, over the long-run, family companies perform just as well as their non-family counterparts, and sometimes better.
A further point about performance is that family firms frequently have a broader definition of success beyond purely financial measures. They want to make a profit, but not at any cost. They want to grow, but not too fast, and not too much, because they don’t want to jeopardise the business. What’s important to them is continuity, maintaining the businesses so it can be passed on to the next generation. This drives a different set of priorities, for which family businesses rarely get any credit.
I set about challenging some of these misconceptions in my new book, The Great Survivors. I looked at a dozen of Britain’s oldest family businesses and examined the reasons for their long-standing success. After all, if a company has lasted for 100-200 years or more, they must be doing something right. The aim is to draw out the common denominators.
The companies featured include RJ Balson, the Dorset butcher which was first established as a market stall in 1515. There is also Hoare’s Bank, Lock & Co, the London hat shop, and well-known consumer brands such as Barbour, the clothing company, and Walker’s Shortbread. I visited each of the businesses, spending time with family members and other employees.
What are the common themes? Perhaps the biggest attribute these great survivors share is that they think long-term, often inter-generationally. As part of this, they often take a cautious approach to their finances; they avoid debt and own freehold property. They usually avoid the stock market too. Many of these choices are about maintaining control.
My research also showed that these long-established family firms also tend to have a strong set of values. They play an important role in their local communities because they have been operating in their town or village for so long, and being a good employer is important to them. They also professionalise their structures, bringing in outside expertise in the boardroom or as advisers.
One of the biggest myths about family companies is that they are set in their ways. In fact, innovation and adaptability are one of the common attributes of the firms in the book. Take Barbour. Over the last 20 years Barbour has transformed itself from a somewhat conservative maker of waxed jackets, into an international fashion business that is arguably more successful now than it has ever been.
Berry Bros & Rudd, the wine merchant founded in 1698, has overseen dramatic change in recent years. It has created two storeys of event space under its London premises, opened a new spirits shop, bought a wine making business and taken a stake in a spirits firm. As one of its directors told me: “We want to have the mindset of a 300 year-old start-up.”
But if we are to see a re-appraisal of family businesses in this country, some things will need to change. It’s true that the government could do more to understand this under-appreciated part of our economy. The media could do more to report on family firms. Universities and business schools could do more research into this area rather than concentrating on larger corporates or entrepreneurship. But family businesses could do more too. The community needs more leaders who are prepared to step forward and speak about the way they operate their companies. That would help inform media coverage and send an important message to government. As it stands, too many family businesses stand in the shadows.
There is lots of talk about economic growth in the UK at the moment. Our new Prime Minister, Andy Burnham, says he wants growth in every post code. Well, family businesses are in every post code. If we are looking for economic growth that is underpinned by a strong set of values, Britain’s family businesses would be a good place to start. Now is the time to make their voices heard.
About the Author - The Great Survivors: Can Britain’s oldest family businesses show us a new way forward? by Nigel Cope (Eye Books, £20) Find out more and order a copy here
