Planning to stay one step ahead. A compass for family business succession. Artificial intelligence, the ESG avalanche, increased global mobility and a virus that has turned lives upside down and shifted behaviour and one thing is clear: the world is not the same as it was some years ago and trying to plan for a transition in today’s environment is challenging at best. Despite all that, somehow, the world carries on and business families, entrepreneurs and landed estates everywhere are having to press on and go about their lives, whilst encouraging next generations to add their own brushstroke to the family’s canvas; The aim? Success(ion). “Everything is constantly shifting, changing, and becoming something other to what it was before.” Heraclitus. Suffice to say that the world is rather different to what it was some years ago and trying to plan for a complex transition in 2021 and beyond is not an easy task. However, certain things remain unchanged and for those long-established family businesses the show must go on and ensuring the survival and prosperity of their legacies through next generations remains vital. A quick internet search will show that there is much guidance and so-called golden rules around how to tackle family business succession and yet, despite a plethora of academic and real-world research, the practicalities remain shrouded in mystery, often leading to unanticipated realities, mishaps and even family feuds. And whilst change may well be the only constant in nature, as the wise Heraclitus once said, it can be constructively planned for and managed; you only need to look at some of Japan’s 1st millennium-established businesses for proof (think Ryokan and Onsen families) or Europe’s famed wine-making pioneers like the Antinori or Codorniu dynasties. The Family Business Succession Maze Before diving into the practicalities of family business succession, it is important to understand what drives certain reactions from those involved in the process. Studies suggest that when a family member is faced with a decision, the impact is rarely limited to either themselves or business. For example, a mother who is a director and shareholder in the family business is faced with a dilemma if her youngest asks to take over the business, having less experience than their siblings. If she agrees, how might her other children respond? If she doesn’t, how will her child feel? And how will this impact the business? Wearing multiple “hats” is a muddled affair, however one thing is clear – in an environment of finite resources such as time, love and money, deciding on the optimal allocation split is no easy matter; Enter Success(ion). The Duality Of Family Business Succession Succession planning in family businesses can sometimes take a back seat. This is mostly due to the sensitive nature of the topic as well as its intrinsic finality. This is also why perhaps a better word for it should be “continuity” rather than “succession”; after all, without inviting an etymological debate, the next generations are continuing the family’s legacy rather than purely succeeding the current owner or leader. Postponing the conversations around who should take over invites a twofold dynamic. Most of the times continuity is considered from both an ownership and a management lens. That is to say that a family need to decide a) who will succeed in leading the business and b) who will own it – not always the same candidates and indeed often not. Whilst for some families there is a clear answer (i.e. families following a primogeniture model), for others it is a complex decision that requires thought, time, planning and careful consideration (remember the resource allocation dilemma?). Taking The First Step How best to approach the topic will vary from family to family. For some, the subject may be broached either at a family meeting or as an agenda item with the Family Council. For others, a more informal approach may be more appropriate, for example over the weekly Sunday dinner. As for the right age to have such conversations, again, some families chose to do it when their offspring are in their 20s (or earlier as observers at meetings), whilst others prefer to wait until the next generation are more experienced and may be well into their 30’s or 40’s (likely coinciding with them taking up a significant role in the business) and perhaps are parents themselves. It is therefore important to consider carefully what will work for you and no one method is wrong. There is however wide consensus that the earlier, the better and having your children getting used to the language of the business can help – just like learning a foreign language! The secret appears to be open communication. Once you have decided on the most appropriate format and time for the discussion for your family, you should also consider the following: Who will be involved in the process and how will communication and decision-making work – Current generation and next generation only? Spouses? Any non-family members? What is your intended outcome for the process and how does this align with your family’s shared purpose – What type of ownership do you want? Do you want to keep it in the family? Transition to non-family management? Create a philanthropic legacy? How are you going to achieve that outcome – What roles and responsibilities are needed from those involved? What is your talent pool and what should you start doing now? What is the timing? Seek Support For families where communication is challenging or where there are numerous parties to consider, typically an external adviser will be introduced to help facilitate discussions. For some, this may be a long-standing trusted adviser who is familiar with the family background, whilst for others, having a new and independent voice can be more conducive to constructive discussions. The ultimate decisions remain in the hands of the family; however, an advisor can guide the individual members through the process, whilst sharing experience, de-personalising scenarios and keeping discussions and progress on track. Food For Thought There is no magic answer. Continuity is an emotional transition whose complexity can be alleviated by the stakeholders’ commitment to the process. To get them there, you can try these: Together as a family endeavour to normalise the topic at an early stage and encourage views from all generations When faced with a disagreement try reversing roles and consider why the other party might react in a certain manner Remain flexible and open-minded; the process will evolve as those involved do and documenting a set of rules can help provide clarity and set expectations In our experience families are nervous about starting these conversations but are also pleasantly surprised with the outcome, which is usually different than what they expected. Be brave and get started! Andra works closely with families and family offices, supporting them in managing their businesses, their wealth and understanding their aspirations. Andra takes a holistic approach when advising clients, focusing on family longer term succession planning and family governance.

Maison Bernard has been a family-run business since 1868. Currently managed by father and son Jan and Matthijs Strick, it has been based in Brussels since 1986 and claims to be the oldest violin workshop in Europe. Recently they triumphed in the global PFV Prize for Family Business. Watch this short video to gain an appreciation of their craft.

Mark Boddington is the founder and chairman of Silverlining Furniture – one of furniture making’s leading names recognised for its progressive design ethos and focus on combining time-honoured craftsmanship techniques with the latest technologies. Boddington is also the great-great-grandson of the famous founder of Boddingtons English Beer – Henry Boddington, but it’s his love for furniture-making that’s guided his career choices. Boddington quotes his moher as one of his mentors – she had a natural flair for the arts and crafts, which also ran in the family through generations. Her grandfather, George Rae, was well-known for his patronage of the Pre- Raphaelite Brotherhood and his commissioning and acquisition of works, including Rosetti’s The Beloved, commissioned in 1863 for £300. It was Boddington’s mother who, when he decided against a career in brewery management, encouraged him to follow his heart as the craftsperson. It led Boddington to undertake training with the celebrated furniture-maker, John Makepeace and under his mentorship, tirelessly hone his skills. A successful graduate show at which Boddington took £38,000 worth of orders, enabled him to set up his first workshop at the age of 21. Boddington quotes two lucky breaks that helped him in the early stages of his career. His first workshop was on the Grosvenor Estate in Cheshire, home to the Duchess and the late Duke of Westminster, where he met the couple’s interior designer John Stefanidis. The relationship resulted in a steady flow of commissions from Eaton Hall and international aristocratic families. The second lucky break came in 1993 onboard a plane from Miami to LA when Boddington encountered Kevin Costner’s architect. This relationship led to a stream of commissions from Hollywood from clients such as David Bowie, Madonna, and Tom Ford. Now that Silverlining has a 62-strong team and loyal clientele across the globe, Boddington has turned his passion to developing the company and investing in his team. He also has on his mind the legacy he’ll leave behind. He envisions growing the business to feature a furniture-making academy and a new workshop facility. His other dream is to have an on-site restaurant, a nod to his mother’s passion for cooking and his love for growing organic produce, especially rare vegetables. Find out more here

2020 was undoubtedly a difficult year for many business and in a year where business has had to transform the way it meets the needs of society and the environment, family owned businesses risk falling behind, according to a new global survey of 2,801 family business owners. While more than half (55%) of respondents saw the potential for their business to lead on sustainability, only 37% have a defined strategy in place. European and American businesses are lagging their Asian counterparts in their commitment to prioritising sustainability in their strategy. 79% of respondents in mainland China and 78% in Japan reported ‘putting sustainability at the heart of everything we do’ compared to 23% of US and 39% in the UK. Larger businesses and those owned by later generations also buck the trend, with greater focus on sustainability. This reluctance to embrace sustainability comes despite the fact family owned businesses are highly likely to see a responsibility to society. Over 80% engage in proactive social responsibility activity, and 71% sought to retain as many staff as possible during the pandemic. Nor is it a function of economic pessimism – less than half (46%) expect sales to fall despite the pandemic and survey respondents felt optimistic about their business’ abilities to withstand and continue to grow in 2021 and 2022. Instead, the issue is an increasingly out-of-date conception of how businesses should respond to society, with 76% in the US and 60% in the UK placing greater emphasis on their direct contribution, often through philanthropic initiatives, rather than through a strategic approach to ESG matters. Family businesses are also somewhat insulated from the investor pressure that is currently pushing public companies to put ESG at the heart of their long term plans for commercial success. Peter Englisch, global family business leader at PwC says, “It is clear that family businesses globally have a strong commitment to a wider social purpose. But there is a growing pressure from customers, lenders, shareholders and even employees, to demonstrate a meaningful impact around sustainability and wider ESG issues. Many listed companies have started to respond but this survey indicates that family businesses have a more traditional approach to social contribution.” “Family businesses must adapt to changing expectations and, by failing to do so, are creating a potential business risk. This is not just about stating a commitment to doing good, but setting meaningful targets and reporting that demonstrate a clear sense of their values and purpose when it comes to helping economies and societies build back better.” Growth The survey suggests family businesses have weathered the pandemic relatively well. Less than half (46%) expect sales to fall despite the pandemic and survey respondents felt optimistic about their business’ abilities to withstand and continue to grow in 2021 and 2022. Digital Transformation Even though 80% of family businesses adapted to the challenges of the COVID-19 pandemic by enabling home working for employees, there are also concerns about their overall strength when it comes to digital transformation. 62% of respondents described their digital capabilities as ‘not strong,’ with a further 19% describing it as a work in progress. Yet here there are clear generational differences: 41% of businesses that describe themselves as digitally strong are 3rd or 4th generation, and Next Gens have taken an increased role in 46% of digitally strong businesses. Peter Englisch adds that “It is a concern that family businesses are lagging behind the curve. There is clear evidence that having strong digital capabilities enables agility and success and that they have a similar enthusiasm for sustainability.” “Businesses should consider how they can engage the experience and fresh insight of Next Gens when it comes to prioritising their digital journey.” The Governance Gap While family businesses report good levels of trust, transparency and communication, the survey highlights the benefits of a professional governance structure. While 79% say they have some form of governance procedure or policy in place, the figures fall dramatically when it comes to important areas: just over a quarter state they have a family constitution or protocol, while only 15% have established conflict resolution mechanisms. Peter Englisch continues saying that “Family harmony should never be taken for granted – it’s something that must be worked on and planned for, with the same focus and professionalism that’s applied to business strategy and operational decisions.” “There are growing concerns from regulators around the world about family business succession, especially with a third of 1st, 2nd or 3rd generation businesses expecting the next generation to become majority shareholders in the next five years.” “It is therefore vitally important that businesses take a lead on ensuring they have formal processes in place they can ensure stability and continuity in the long run,” concludes Peter. Download and read the full research report here:

HE Simm is a family owned, £100m, engineering and services business. Their roots are in Liverpool, but they have progressed over the last 70+ years to become a firm player in the mechanical, electrical and services industry UK wide. The Simm family own and run the business, which is currently in the third generation. The company won two coveted industry awards at the end of last year, with the judges acknowledging the wins due to the culture the family has created. We spoke to the current CEO and family member, Gareth Simm to find out more. “As the CEO of a family-owned and operated engineering and services business, ensuring that we have a good company culture – in terms of purpose, values and behaviours – is one of my key priorities. But what does a ‘successful culture’ look like? What does it mean?” As Gareth continues, “I believe that the clearest sign of a successful culture is employees who are happy, fulfilled and trust the company. We are a very close-knit team and our people are our greatest strength. Our founder and my grandfather, Ernie Simm, had a vision of building a ‘family’ of colleagues and we still take pride in valuing and investing in every individual who works with us. We aim to bring out the very best in people, giving them the support and training they need to learn, grow and achieve more than they ever thought possible.” “In my experience, business success then very often follows naturally. Employees who enjoy their job are more productive and stay longer, reducing turnover and the cost of recruitment and training. Having the right culture enables people to keep delivering quality day after day, motivated by genuine concern for the business because they feel that it’s their business,” he adds. “This has been starkly demonstrated over the past year. The Covid-19 pandemic has created a sink or swim scenario for many businesses in the UK and it is those with a strong culture that have managed to weather the storm best.” So what steps can businesses take to create a successful culture? Align strategy and culture For Gareth, one of the key things to do is to recognise the importance of having a strategy, as most businesses do – a long-term plan that includes goals and objectives, products and services, who your customers are and the markets you serve. What many fail to do, in my experience, is ensure that their company culture aligns with this strategy.” “Culture is the engine that drives your company strategy. If your company culture doesn’t underpin your strategy through the values and behaviours it promotes, then your strategy is likely to fail.” Learn from your ‘moment of truth’ Covid has been a real moment of truth for much of the UK, including the construction industry. “It’s at tough times like these that you find out whether your culture is worth the paper it’s written on. Good culture isn’t just about what you say as an organisation; it’s about what you do,” he explains. “Like all businesses in our sector, we have had to make some difficult decisions over the past year. However, we have tried to always lead with authenticity and take action that is in line with our fundamental values and culture. Firms that didn’t do this – that unnecessarily delayed payments to suppliers and didn’t adapt, for example – will have had their moment of truth. And in most cases, the outcome is unlikely to have been positive,” adds Gareth. “As we begin to see light at the end of the pandemic tunnel, now is the time to reassess and realign your culture moving forward, ready to meet whatever challenges lie ahead.” Lead with values As Gareth continues, “It is vital for business leaders to reflect their company culture in all they do. My grandfather’s ‘motto’ was: “If you’re honest, treat people fairly, provide a superior service and quality, and always deliver, people will trust you and work with you again.” It’s an old-school way of looking at things, but rings true to this day.” “Our values – teamwork, people, excellence and honesty – underpin every decision I make as CEO. I believe this enables me to lead with consistency and has helped to win the trust and confidence of customers and employees alike. On a personal level, creating a team of people who are eager to come into work every day and be at their best has been hugely rewarding,” explains Gareth. Empower employees By enabling employees at the coalface to make decisions and take responsibility for their work, HE Simm have also empowered their employees to drive the company values in everything they do. To really embed a culture and ensure that it informs everything your business does, they have created leaders everywhere. As Gareth continues, “If you expand your idea of a culture through to all touchpoints of the business, the benefit is immediately noticeable. People like to be treated with respect, regardless of whether they’re a CEO, an engineer, receptionist or supplier. Before you know it, your culture will permeate every aspect of your business, including the supply chain.” Think long term Finally adds Gareth, “A key difference between our family-run business and a big PLC is that ours works for future generations and prosperity, rather than quarterly financial figures. With a focus on long-term stability and performance rather than short-term profit and growth, it is infinitely easier to create a strong culture.” “The Covid-19 crisis has exposed holes in many organisations that made hay while the sun shone, but neglected the idea of rain. Beyond this pandemic, there’s going to be a new normal." "Businesses will have to adapt their cultures to be successful; adapt to decentralised working structures and, in many cases, material or supply chain disruptions. Ahead of the next crisis, I believe the industry as a whole needs to shift from focusing on short-term goals to longer term solutions underpinned by forward planning and, crucially, strong culture,” he concludes.

Family firms are the backbone of economies the world over and the UK is no exception. With more than 6 million family firms in the UK employing over 13 million people, they are the engine room of communities across the country. Family businesses are different because they have a purpose, an underlying driver to flourish for generations, taking a long term view and in many cases the current generation see themselves as custodians of the business for future generations, seeking to pass the business on as a ‘stronger entity’ than the one that they inherited. All across the UK family firms make a difference on a daily basis, through the provision of jobs, creation of income and generation of wealth. Many have been around for generations, like Balsons, the butchers on the high street in Bridport that dates back to 1515 and is now in the 26th generation. Additionally, many family firms are embedded in a ‘place,’ often the location where they were founded, such as Walkers Shortbread in Aberlour and JW Lees Brewery in Manchester. These firms are part of the fabric of their community and it is not uncommon to find generations of families following a pattern of working for the same businesses. Research has shown that being a family business adds a real point of difference, from the way that they engage and support loyal employees to the way they are perceived by customers and suppliers alike. Because they are in it for the long term, decision making is focused on these goals and not made purely for financial return in the short term. Family firms are special and their narrative, the journey from the day they started with an entrepreneurial dream add to the essence of who they are, and help with creating an association with the business. Research has also shown that family firms are more trusted and good employers and they continue to make a difference through their resilience, drive and desire to succeed. Entrepreneurial family firms that have stood the test of time are resilient and innovative, making the necessary changes to continue to remain relevant. Family firms really are the backbone of the UK economy and a real force for good and that can only be a good thing. The obvious thing that makes family businesses stand out from their non-family counterparts is the ‘family factor’ and this is something that can be used to the competitive advantage of the business if harnessed in the right way. Sadly, all too often family business is portrayed as ‘small business’ rather than the reality that those in the know understand: family firms can be big business, take JCB, Wal-Mart, BMW, ALDI and many others and the myth has been blown away, but fundamentally it is more important that family firms are recognised for the positive values they bring to the economies and communities in which they operate. Rather than focusing on the sensational headlines around sibling disagreements, nepotism or inter-generational issues there are real positive attributes possessed and demonstrated by family businesses the world over on a daily basis which helps to show that family firms are a real force for good too. Family firms are generally seen as good employers, trusted and respected businesses, even more so when the family name is above the door and the business has been around for generations and the benefits associated with being a family business can be great. These benefits can even result in the family business deriving competitive advantage as a result. Here are ten benefits that family firms have: 1 – Values Family values can be translated into the way that the business operates, the culture of the family firm, and these can be passed from generation to generation as well as from family members to other employees. There is an immense level of pride amongst family members to respect the business, their predecessors and in many cases to act as stewards to pass on the business to the next generation and the values that underpin the family and the family business add to the essence of the family firm. 2 – Long Term View Family firms are recognised for taking the long term view, not always focusing on the short term financial performance and results of the business. A patient and often cautious approach can help to align resources and plans too. 3 – Loyalty Research has proven that shared values and vision amongst family members with clear and open communication of their goals and objectives can result in greater loyalty from family members too. 4 – Retention Employees of family firms are often cited by the family as an ‘extension of the family’ or as part of the ‘extended family’ and consideration and support of employees to such an extent can provide an incredibly loyal workforce who enjoy the work environment, the support of the family and the way that they are treated. 5 – Legacy Making a difference and creating a legacy is something that can come from a family in business and there are lots of examples where family firms are integral to the community in which they operate. Building on the efforts of previous generations and continuing the family tradition, protecting the name and the values that it upholds are also drivers for subsequent generations to continue in the same manner and to continue to give something back. 6 – Trust & Integrity Research has proven that the very nature of the family ownership can engender more trust from stakeholders and customers alike, and more and more family firms are celebrating their history and legacy in the brands that they are developing, recognising that it can be to their competitive advantage. 7 – Innovation Due to their governance and ownership structures family firms can be more innovative. In many cases, they recognise the need for innovation as part of their strategic planning to keep the business relevant and current and as such are able to respond to change and take on opportunities as they arise more quickly than some of their non-family counterparts. 8 – Entrepreneurship Successful family firms can be a breeding ground for entrepreneurship, supporting the next generation in their pursuit of new opportunities, either through opportunity, training, career progression or encouragement. 9 – Respect Many family firms are massively involved in their local communities and give back in many ways which engenders significant respect from the communities in which they operate. 10 – Relationships Whilst it may not be seen as the ideal situation for some, families that work successfully together get to spend more time together and sharing a drive towards goals for the business can be a bonding and fulfilling journey. Successful family firms reap the benefits and have structures in place for clear and effective communication, helping to minimise the risk of disagreements or conflicts arising. This enables them to focus on the business, with shared goals and commitments to getting the right results and without any doubt, when it all comes together, family business is different but can be a resolute force for good and secure competitive advantage too, further generating better financial results and performance that is of benefit in the long term too. Celebrate the strengths of family business. They are a force for good and provide significant benefits to communities around the world.

Colemans is a stationery, office supplies and art & craft retailer with 13 stores across the East Midlands plus an online business that serves customers throughout the UK. We spoke to Tallie Patterson-Gordon, the third generation of the family who recently joined the business that was founded in 1969 by her grandfather, John Coleman. After starting his career as a fishmonger, John bought the local newsagents and progressed to selling stationery, office furniture and machinery. His daughter, Tallie’s mum, joined the business and has been running it for the past 35 years and as Tallie explains, “she has been the most inspiring female Managing Director too.” Joanna has driven the business from strength to strength but has remained true to the underlying values of the business, putting her staff and customers first. The company has been built on ‘second to none’ customer service and one of John’s favourite phrases is that “the customer is always right” as they collectively strive to fulfil their vision as the ‘customer’s first choice for stationery, arts & craft’. Fond Memories Growing Up Tallie joined the business in the summer of 2020, a difficult time for many businesses due to the pandemic but is already thriving in her new role. Looking back to her childhood she has fond memories of the family firm. As Tallie explains, “It’s hard to pinpoint a first memory as the business was always there as I was growing up but one thing that I do remember is that one of the major benefits as a child growing up in a family owning a stationery store is that I always had the best pencil case full of the newest smelly gel pens! School holidays were also great as I never had to play pretend shops, I got to do it behind a real counter with a real till although it was not so much fun for my Mum when a customer reported her for using child labour!” Like many next generation family business members, Tallie appreciates that the family business was always there. As she adds, “there isn’t a situation where you simply put on the ‘out of office’ and don’t talk about it, or when you get to the airport that work isn’t mentioned until you get home. I used to be frustrated by how we always seemed ‘to talk shop’ but now that I am involved, it is all I seem to talk about!” A Career Outside Of The Family Firm First Growing up there was never any pressure to join the family business and Tallie was able to follow her own dreams. “Joining the family business was not always in my plan. I did a lot of debating and public speaking at school and initially fancied following the law route, but as I got older I realised that it was buying and selling things that made me tick, the ability to see if we were making money or not and that retail was probably the one for me,” continues Tallie. Retail was calling and after a few different internships Tallie gained a place on the Sainsbury’s Graduate Scheme. “I spent five years at Sainsburys and loved my time there. They’re a brilliant company to work for and give a lot of responsibility to young employees,” she continues. “They gave me a lot of broad experience from a stint in Digital and Technology Strategy to a role on the front line at the Camden Road Supermarket, the store with the second highest footfall in the company. This really was a baptism of fire for me but I absolutely loved it. I turned the store around from having a very poor ‘mystery shopper’ score to one of the highest in the company,” adds Tallie. Her roles continued to change and provide more experience, returning to head office roles in procurement and three years buying various different meat and fish products. As Tallie explains, “I started as the charcuterie buyer which was hands down the best role ever – I got to travel to Italy, Spain and Germany eating the most amazing selection of cured meats. That led to turkey purchasing and in December 2018 I was the turkey buyer – probably one of the more stressful roles, especially when a supplier rang on December 18 to say they were 26,000 birds short for Christmas! I ended the buying role as the fish buyer in charge of £350 million annual sales, which although demanding was brilliant before some time in Business Development setting up a wholesale business division,” she concludes. Making The Leap To Join The Business But the family business was on the mind and the point reached where Tallie wanted to take control of her own destiny. Politics and processes were getting in the way and Tallie began to think about a role where she could make her mark. As an only child, and having seen the success that both her Mother and Grandfather had achieved, and without any pressure from either of them to return to the family firm, timing seemed to suggest it was right to make the move. As Tallie continues, “Mum was turning 60 in April and I was due to get married in May (delayed due to Covid-19) and it seemed like the right time to make a lifestyle change too with the plan over the next five years for Mum to slowly ramp down and me to slowly ramp up.” 2020 proved to be a strange time to join a business in the retail sector with Tallie joining when the shops were closed due to the national lockdown. This however enabled Tallie and her parents to use her digital skills to help develop and build their online presence. As Tallie adds, “We have built a brilliant new website which contains over 5,000 products and my role has been focused on improving the ecommerce and social media side of the business. We are already seeing the benefits and are getting some amazing reviews on the site and it has been a great project to help further develop a broader understanding of the family business too.” More Than Just A Family Business For Tallie, although it is often stated by other family businesses, Colemans is “not just a business run by a family. Care and respect for each other is our number one value and last year we celebrated our 50th anniversary and special recognition was given to our longest serving members of the team who have worked for us for over 20, 30 and 40 years! We have a lot of people who have worked for us since they left school and if you cut them in half they would say that they have ‘Colemans’ through the middle! I have grown up with these wonderful people in my life and even have a Godmother who is our Group Operations Manager!” Heritage Is Important Too For Colemans, the story is everything and the heritage hugely important. As Tallie explains, “The business is still grounded by the same values as when it was founded." "At 87, my Grandfather still comes to work most days and has set up a fantastic photo framing business in one of the outhouses of our Oundle store." "He is a hugely respected man, both in the business and in the local community. We are so proud to be a 51 year old family business that is still trading and I think/hope that everyone is excited that it is going to carry on into the third generation.” The Next Generation Challenge Although 2020 has not been the year that anyone expected, Tallie has used the time to start defining her role and the opportunities that lie ahead. As with everything, one of the biggest challenges she faces is time. “Coming from a large business where everyone has a clearly defined role to a business where everything is on you, time is a big challenge,” admits Tallie. “Prioritisation is so important and something that I don’t think that I have quite mastered yet but I’m getting there. I still get frustrated that some things on the ‘to do list’ just have to wait but I will get more used to it as I settle in. Obviously, there is a big challenge for smaller, independent retail companies like ours to continue to cut through the increasingly Amazon dominated, digital world and to remain viable and profitable too and for me personally, the adjustment to working in the family firm. Although I have grown up with this business, you don’t quite realise how different it is working for your family than a non-family business until you are in it!” “There is no ‘off switch’ and the laptop doesn’t close on a Friday night and come out again on Monday morning because you never stop thinking about it. The highs are so much higher and the lows are so much lower because there is so much more at stake.” Looking To The Future Tallie remains optimistic about the future and the opportunities that are open to them. “The opportunities are endless. In a family business, the world is your oyster and there is no one stopping you which is the best thing and the worst thing at the same time as you always feel that you could be doing more,” she continues. “I am excited about the opportunity to build on the great grounding the business has but also to continue to evolve the business, to modernise and future proof it. For our business, there is a massive opportunity to just make more of what we already do. We don’t shout about things enough so I am excited to get the word out and about the brilliant services that we offer. It really is an easy win for us – for example we have our own printshop and printing press but the details of this are currently in a display folder behind the counter and customers only really find out about it when they ask – we could be challenging companies like Papier with our printing offer!” Tallie has already embraced the business, the family business model and is beginning to make her mark, making a difference and helping to achieve the business mission to be the number one choice for stationery, art and craft in their local area and has a desire to expand more across the country. “I want to continue to operate bricks and mortar shops in towns where it is viable to do so supported by an all singing, all dancing online offering that delights customers both nationally and internationally,” she adds. “I am also passionate about the role and need for the success of local, independent businesses and to develop even more convenient delivery and collection points to enhance the customer experience and provide the convenience that shoppers really want.” Tallie is the third generation of the family to take a step into the family firm and is going in with her eyes wide open. “I am well aware of the ‘rags to rags in three generations’ phrase but have no concern about the future of our family firm. There are so many amazing family businesses that continue to thrive and prosper well after the third generation have taken over and we are planning to do the same, although the retail landscape is extremely daunting and posing some challenges at the moment – all I can do is focus firmly on the future and as I keep telling myself, all I can do is my best!” The future looks bright and the longer term aim for Tallie is simple – “to be running a successful retail family firm with a small management team of bright, ambitious people that have the drive to keep pushing the boundaries and coming up with new ideas that keep pace with the ever changing retail environment too.” We look forward to the continuing evolution of Colemans as it moves into the third generation and beyond.

Excellent family governance has played a key part in successful family firms for generations, and there are three vital ingredients. Its easy to lose direction when implementing Family Governance for businesses, find out three vital fundamentals that need to be kept in mind when doing so. Excellent family governance has played a key part in successful family firms for generations, as best practice for family businesses it puts in place procedures for a the family to work together as a team within the business environment and has clear structures to minimise and avoid conflict prior to it occurring. As families and businesses grow, development of family governance structures becomes critical to effectively managing the family wealth and legacy for successive generations. Our experience shows that families can use effective family governance to preserve their wealth and pass values on to successive generations. The benefits to families of establishing and promoting formal governance structures are clear. Our clients have experienced increased opportunities to enhance communication between family members, reduce conflicts through formal structures, educate the next generation of leaders, preserve the family legacy, and build a shared vision for the future. 1. Giving Each Family Member a Voice Family governance is, at its core, nothing more or less than joint decision-making. Informally, families practice governance every day and this process is simply designed to formalise those processes and give family members a forum in which to express opinions and their vision for the future. One of the first questions that come up in this process is that of identifying who qualifies as family. We often encourage families to include extended family members in the process, even down to the teenage members of the family. We’ve found that even family members who are not active in the business make important contributions and families benefit from their insight into family values and the impact of the business on the family group. 2. Defining the Family Mission & Values One of the most important first steps that we take with our clients is that of crafting a family mission statement that helps the family articulate its purpose, establish shared goals, and identify shared values. One of the major benefits of this process is that it provides an opportunity for each family member to share his or her vision for the family. A rich and fruitful discussion is one of the goals of this process and the final objective is the creation of a mission that is aligned with your family’s values and will serve as a guiding compass when the path to success grows clouded. 3. Implementing Governance Structures Families are complex and a number of governance structures have evolved, ranging from simple Family Committees to multiple levels, including Executive Committees, Family Councils, and Assemblies. Part of our role as advisors is to educate clients about the different structures available to them and lead them through a process of determining which entities will help them achieve their goals. Frequently, the formality and number of structures needed is a function of family size; it’s not uncommon for families to turn to Family Councils to decide broad family issues of succession or philanthropy while limiting sensitive business issues to Executive Committees or Family Boards. A key issue when evaluating different governance structures is the need to separate the business from the family. The business of family includes planning family meetings, promoting shared values and philanthropy, and nurturing the intellectual and patient capital of the family. The family business focuses on managing the financial capital of the firm as well as ensuring the long-term viability of the business. A strategy is only as good as your family’s adherence to it. In order to reap the benefits of a family governance system, it’s vital that family participation be encouraged. It’s also important for structures to retain enough flexibility to change with the needs of the family over time. "As you embark on the next stages of the journey with your family, consider these essentials and make now the time that you build a sustainable governance strategy for the future success of your family."

With Christmas approaching, accrued holiday entitlement is becoming a ticking time bomb liability for many employers, according to Nick Hine of employment law specialist Hine Legal, particularly as employers cannot pay in lieu of accrued holiday except on termination of employment. Many employers who have furloughed their employees during part or the whole of this pandemic will likely find that many employees will have accrued a large amount of holiday, which they have not been able to take or wanted to take during the pandemic. and for many that leave year will end in December. This is despite the Working Time (Coronavirus Amendment Regulations) passed in March 2020 which permitted the carry-over of the first four weeks of annual leave in to the following two years where it was not reasonably practical to take it in the leave year as a result of the effect of the coronavirus. The government guidance included a number of factors as to whether this was to be applied and as a result it is likely that those carry over rights only apply to keyworkers whose roles involved essential activities in responding to the pandemic. This is supported by the fact that furlough workers are permitted to take and be paid in full for holiday during any furlough period. Many employees who are not key workers will now therefore have accrued a large amount of untaken holiday within the leave year. So, what are the employer’s options? According to Nick Hine, “Many employers do not realise that they can require employees to take holiday provided they give twice as much notice as the holiday they require the employee to take.” Therefore, even if the employee has been furloughed, employers can require employees to take holiday during the furlough period provided they give the adequate notice and the government will fund part of that holiday liability. “This can include during any notice period which can save the employer having to pay twice. If on furlough the employer has to top-up to full pay during that period.” Nick Hine recommends that employers take the following approach to this build-up of annual leave: 1. Calculate how much accrued annual leave employees have for the remainder of the holiday year. What will this liability cost? 2. With Christmas approaching considering, what leave you could require the employee to take and it may well be worth discussing with the employee so that you can potentially use the Christmas period to reduce this annual leave liability (assuming this fits in with the business plans). 3. If the employee is not going to be able to take the annual leave do you agree that the employee (unless the contract provides for this) can carry over a certain number of days into the new leave year provided it is taken by a particular date, for example, 31 March 2021. 4. If you cannot agree with the employee what holiday they will take, then serve notice on the employee requiring them to take holiday. Blocks of weeks are probably most sensible. 5. Discuss with employees their holiday plans so that you can manage the ongoing liability and plan how to reduce it. Nick Hine concludes, “Many businesses are already stretched with the impact of Covid-19 and lockdown and employment and personnel issues have been high on the agenda. With Christmas approaching employers need to consider how they could potentially alleviate the headache of this annual leave liability and we advise that they do this immediately.”

LoveRaw® is the innovative vegan chocolate brand which makes ‘chocolate chocolate’ – not only for vegans, but for unvegan vegans (Someone who chooses to eat less meat and opts for either vegetarian or vegan meals) too. Rimi and Manav Thapar, husband and wife team and founders of LoveRaw®, are on a mission to continue making legendary vegan chocolate that tastes great whilst maintaining their honest, transparent and no artificial nonsense roots. They want to remove the negative stigma associated with vegan chocolate and prove that it can be decadently indulgent and delicious. Rimi Thapar already had a great career within investment banking but decided to leave this behind her and, following a series of life events, launched LoveRaw® in 2013. In 2010, Rimi made the decision to leave her job and move to Spain where her husband was based. Manav Thapar had his own business in distribution and was also selling property to international investors in Spain. Rimi spent the next two years travelling between Spain and the UK as her father was sick. During this time, she regularly felt tired and had no energy, so started to question if there really was a correlation between eating well and feeling good, she discovered “HELL YES!” After moving to Spain, she discovered farmers markets, and was eating a diet richer in fresh and unprocessed foods. Rimi was feeling re-energised but she encountered issues when continuing with this new lifestyle. Rimi became frustrated that a lot of food companies were promoting themselves as ‘healthy & nutritious’ but on closer inspection found that this wasn’t the case. This spurred her on to make her own products so that she knew exactly what was going into them and that consumers weren’t being misled, knowing exactly what they were buying in to. “The name LoveRaw® represents being natural, stripped back, transparent and honest,” says Rimi. Rimi launched LoveRaw® in 2013 from her in-law’s home kitchen in Manchester with a start-up budget of only £600. Hustling her way into Wholefoods, she received and over promised her first order of 5000 units of organic snack bars. She had help from family and friends to make this order happen whilst working crazy 20-hour days to get up and running. Rimi presented her new confectionary product range in the Dragons Den in 2017 and it was on this premise an offer was made by Deborah Meaden to the tune of £50K. Unable to agree percentages on the business, Rimi walked away from the Dragons and since launched the new category mentioned on the show. The Vegan Buttercup category performed phenomenally well and based on this success, Rimi has extended this category and gone on to introduce new products to the LoveRaw range, including chocolate bars made with their own vegan ‘milk’ chocolate. Despite the financial devastation the pandemic has caused for businesses across the globe, 2020 has been an outstanding year for this dynamic duo and their brand. Here is what they have achieved in brief: They won a fantastic investment form Blue Horizon Ventures (late 2019) They launched their very own vegan M:lk® Choc Bars (beating Cadbury to it) They launched their world first vegan Cre&m Wafer Bars They won two regional Great British Entrepreneur Awards 2020, North West Entrepreneurs of the Year and Family Business Entrepreneurs of the Year They won at the World Plant Based Awards 2020 for the Best Dairy Product Alternative for their M:lk® Choc Bars As the business evolved, so have Manav and Rimi’s family and they now have two small children. Working around the clock in a fast-growing, dynamic business hasn’t hindered Rimi, who regularly takes her children to work and has been known to take them along to investor meetings and work trips to Germany. In fact, since becoming a super mum, Rimi is even more passionate about what she does and making LoveRaw® the go-to vegan choice for delicious chocolate treats. It has obviously been a challenge to juggle being a mum with running a business and Rimi maintains that it is pretty much impossible to achieve a work-life balance. But she and Manav don’t just want to sacrifice the business that they have worked so hard to build and so they have found a way to include their children and their routine as part of her working day; tears, tantrums, nappies and all!

“What’s wrong — is the company going bankrupt? Are we being sold?” For Charlie, who had joined his family’s bakery business two years after getting his MBA and earning his stripes at another company, this question from the plant manager came out of the blue. He was eager to earn his colleagues’ respect, rather than relying on his family name to provide it. So he went to great lengths to be just “one of the gang” in every possible way. This included parking in the back of the building and walking through the production plant, rather than zipping into the reserved space he’d been provided near the executive offices in the front. Most days he would stop and chat on his walk through the factory, getting to know his colleagues and learning more about the operations. But one day, after his morning walkthrough, the plant manager surprised him with the question about the company’s future. Charlie reassured him that the company was actually having a banner year. Where had that worry come from? It turns out, seven people had gone to the plant manager after seeing Charlie arrive that morning with a sour look on his face. They all wanted to know: Was something bad about to happen? The scowl had nothing to do with work, but until then it had not dawned on Charlie how closely people were watching him. Though his previous job and his MBA had been invaluable, neither had fully prepared him for the reality of managing under a microscope. When your family’s name is on the door, you will never just be one of the gang — and everything you do could be fodder for the office rumour mill. From that day on Charlie, who eventually rose to become the fourth-generation CEO of his family’s company, made a promise to himself that each morning when he walked from his car to his office, it would be with his head held high and a smile on his face, no matter what was on his mind. The family business leaders we work with have echoed Charlie’s experience. They have learned that their actions — positive and negative — are amplified because of their status as owners (or owners-to-be) of the company. Even seemingly small gestures — driving a fancy car to the office, putting photos of themselves with celebrities on Facebook, or calling themselves an “owner” in front of colleagues — can unintentionally generate ill will. But that doesn’t have to be the case. Here are some of the most common traps we’ve seen family business members fall into, and how to avoid them. Working at the company for the wrong reasons. If family members act as if they are there only to collect a paycheck, or because they have nowhere else to go, it sends a signal that all employees should push to get as much for themselves as they can. It’s better to convey that you are interested in the business. If you are passionate about the business and demonstrate your commitment through positive energy and hard work, it can energize other employees and encourage them to focus more on the common cause and less on who gets what. Expecting promotions without putting in the work. When family members start at a level that is beyond their qualifications, or are promoted much faster than deserved, other employees are more likely to focus on patronage rather than performance as they look to climb the ladder. If you’re joining the family business, start at the bottom of the pyramid and work your way to the top. This will reinforce that the company is truly a meritocracy. Working around the chain of command to get special treatment. How do you seek approval for their ideas? Do you follow the rules and work as hard as everyone else? Too often, family members take advantage of their access to senior members of the firm, seeing the rules as malleable and looking for ways around them. Instead, work through the chain of command, don’t ask for special treatment by relatives in senior positions, and abide by policies for vacation days, expenses, and office hours. This will foster a culture of accountability and reinforce the integrity of the company’s decision-making processes. Blurring the boundaries between home and work environments. Office politics in family businesses are further complicated when members bring their family dynamics into the business, opening up the possibility of employees playing family members against each other. It’s important to set clear boundaries within the workplace, such as referring to people by name rather than relationship (“Mary” rather than “Mom”) and not discussing family dramatics at the office. This helps set a professional tone. Working in your family’s business can bring enormous reward, but it also carries a lot of responsibility. As Charlie learned, if you work harder than other employees, are willing to learn from the shop floor up, and treat your privilege with modesty, you’re more likely to earn the respect of your colleagues and keep office politics in check. First Published on 6 November, 2017 in the Harvard Business Review Reproduced with permission of the author.

For those involved in the management of the family firm beware that staying true to your roots can foster inertia when innovation is most necessary. Recent research has punctured the stereotype that family firms are staid and lacking in innovation. In fact, their cultural differences can be the source of a decided innovation advantage. But those same strong values can make it harder for family firms to find a new business model when the old one suddenly becomes a roadblock to success. Loyalty to the firm is a distinguishing family asset as this intrinsic quality gives owner-managers a competitive advantage in the long-term development of the business. But when it comes to business models, loyalty for the sake of loyalty can become a liability. Too much loyalty can limit success, since it can inhibit founders of family firms from adopting innovative business models until it is too late. The Ultimate Decline Of Laura Ashley A good case in point is the textile firm founded by Laura Ashley in 1953. Born in Wales in 1925, Ashley learned how to make clothes as a child from her quilt-making grandmother. As an adult, she made headscarves, napkins, table mats and tea towels that were adored by her friends and family. Her designs recalled her grandmother’s old-fashioned quality of life, where British women tended to the home and garden in serenity. It was an ephemeral lifestyle wedded to a country-of-origin effect. Ashley realised she had invented a business model that powered her exceptional rise to success. Ashley married an enterprising fellow who gave up his job in London to supervise the production of textile products printed with his wife’s designs. They moved the operations from their tiny flat in London to a large factory in Wales, employing staff at wages well above the average local salaries. The Laura Ashley brand quickly acquired a solid reputation as a premium fashion player, labelling all products “Made in Wales.” The business took off, providing employment opportunities to the couple’s four children. From a fierce loyalty to her Welsh roots sprang a business empire that enabled Ashley and her family to run a global network of 500 shops and employ 1,000 people by 1975. But in 1985, tragedy befell the family and the firm when Ashley died unexpectedly at the age of 60. It was a period when many of the firm’s rivals were beginning to outsource their production to countries on the periphery of Europe, developing major supply chain networks in Morocco and Turkey. At the same time, the exotic but far less costly garments being sold by its rivals opened up a completely new competitive environment for the Welsh firm. Some pundits even claimed that the “Laura Ashley look” was too British and was outdated. Women in the 1980s needed more assertive clothing in line with their growing status in the workplace. Following the death of Ashley, her husband and their children struggled to find a response to the changes in the marketplace. The core of their business model, however, was left untouched. In honour of their founder, they announced to their staff that both the manufacturing and logistics operations would stay in Wales. Yet within five years, the company was in deep financial trouble and an outsider CEO was hired in 1991, followed by a string of other CEOs. The family lost control of the firm after an Asian company became the major shareholder in 1998. The company is now nothing more than a licensing entity. This sad ending to a dream-come-true journey reflects the hardships any family business could face when internal and external roadblocks suddenly appear at the same time. To avoid such a fate may not be as difficult as most observers believe, however, if owner-managers institutionalise innovation in the core of their business model. Business Model Innovation At Zara Take the example of Zara, a fashion company founded in La Coruña in northern Spain, by Amancio Ortega and his wife in 1975. After 10 years of selling inexpensive garments throughout Spain, Ortega decided to institutionalise innovation in the firm’s business model. He believed he could beat the well-known brands like Laura Ashley at their own game by reducing lead times and quickly responding to trends. While remaining loyal to the employees who worked at his original factory, Ortega was careful not to make future investments for the sole benefit of his compatriots. He decided to open plants in neighbouring Portugal, as well as in Turkey and Morocco. Ortega connected the factories with a state-of-the-art logistics network. The rest is history. A highly responsive supply chain now ships garments twice a week to Zara’s 2,100 stores located in 88 countries. Furthermore, the creative process of designing new garments based on changes in fashion trends has been sped up to the point whereby the new designs on Zara’s drawing boards reach the stores as fully finished garments within two weeks. By not being too loyal to his operational geography while at the same time institutionalising innovation throughout the supply chain, Ortega transformed Zara from a fashion discounter into the world’s largest apparel maker, managing up to 20 clothing collections per year. In contrast to Ashley who was bound to her operations in Wales, Ortega decided to transform the existing design, manufacturing and distribution processes entirely. He demonstrated the value of breaking old habits and created an entirely new business model based on continuous improvement. This article was first published on the INSEAD website here and has been reproduced with their permission.