With increasing competition for jobs and an apparent ever-rising need to achieve the best grades, does education actually deliver potential leaders of the future? Sandy Loder looks at the challenges associated with selecting the right school. Talk to any parent and the need to give their kids the best chances in life is something that most recognise and strive to achieve, within their means, and education and schooling is more often than not top of the list. But there are some serious questions that come to the fore when discussing the suitability of schooling, not to mention the grades delivered, the topics covered on the syllabus and the level of preparedness that individuals have for the competitive jobs market that they are ultimately going to end up in. Society is looking at the need to deliver grades and the competition for places is tougher than ever. As Sandy Loder explains, “it is not uncommon to hear of children as young as three and four receiving tutoring to prepare them for the tests to get into their chosen pre-schools,” something that may seem difficult to comprehend for some, but a necessity for wealthy parents who are trying to secure a place for their kids in their preferred schools. Schools inevitably have a reputation and they are under enormous pressure to continue to receive great reports from bodies such as OFSTED, not to mention the need to continue to deliver exemplary results too. As Sandy continues, “there is undeniably pressure on schools to perform, but the bigger picture has to be the need to deliver results that put the UK economy on the right footing in terms of the skills needed in future generations to drive the UK to the fore when it comes to dealing with the competition for talent.” Whilst there is competition for places, there also needs to be a more strategic consideration, which in many cases falls by the wayside. What is the best school to provide the holistic education and life experiences for the selected child. All schools have to deliver the core syllabus whilst offering other benefits too, access to sports, cultural studies, music, technology and never forget the networking potential and connections that can be made simply by being in the same school as peers who have parents who have already demonstrated an ability to deliver great results in their own careers too. Sandy is aware that good schools deliver good results but he is prepared to question some of the syllabus, and as he puts it, “should we be spending hours teaching the history of Britain and World Wars when more could be done with leadership and technology to prepare them for the commercial world. Ultimately, history has shaped our nation and should not be forgotten but there needs to be balance, to make sure that the future generations deliver the best skills in people from the UK.” The competition for grades is important and hence the desire to go to what have been long recognised as the ‘best schools.’ In fact, the names speak for themselves, and grades or not, people have aspired to go to schools such as Harrow, Eton, Wellington and Millfield, and then to secure places at Universities such as Oxford and Cambridge for generations and this is unlikely to change in the near future. But, as Sandy continues, it is not just about grades. Serious questions need to be considered such as whether you want your children to board, and if so from what age? Do you consider the need to learn Chinese essential to prepare for the business world of the future? Is technology key to education for your children? There are others of course but there is a growing competitiveness amongst schools, and amongst parents seeking to gain access to the desired school for their children too. And don’t forget the international element. More and more children from India, China and the rest of the world are coming to the UK to obtain what is, in their eyes, an exemplary education, and this places more pressure on the UK system. These individuals are coming to the UK because of the schools and the reputation that these establishments have where they come from and this is important. These children graduate and return home with the name of the establishment firmly contained within their CV and that stands for a lot. So, clearly, it is not always about the grades, and a lot rests with the reputation of the establishment itself. As a parent of two, Sandy appreciates the need to consider the education of ones children carefully. However, as he points out, “life is something of a game and we all do our best to prepare our children to achieve their full potential. However, one must never lose sight of the fact that each and every child is different and what will work for one child in terms of a school, may not be right for another. As parents, there is a need for honesty when it comes to each and every child, to make the right decisions for them and help them to find the right environment in which to learn and flourish. This is turn should help them get the best our of their education, get the best grades possible and then put them firmly on a career path for life.” So as for grades, they are important to a degree, but in reality, the choice of school can actually open doors too through the alumni and ‘old boys’ networks, and if the best teachers are at the best schools and get the best results, there is a strong correlation which leads us full circle in terms of actually understanding why parents strive to send their children to the ‘best schools.’ Furthermore, if the education system prepared the future generation with the skills required, there would be no need for further courses and programmes to deliver the training and tools to become leaders. There are a growing number of MBA’s and other programmes coming to the fore to help plug some of the skills gaps from the general education system too. Grades from school are one thing and help to meet minimum criterion when applying for jobs but there are also other ways that individuals can stand out such as volunteering, summer programmes, work experience and this can enhance the employability of an individual immensely. Clearly, many of the best leaders and bastions of industry have not been to what are courted as the best schools and have done very well for themselves, but parents being parents will always try and push their children to achieve more. Hence it is easy to understand why there is competition for the best schools, but as Sandy concludes, “Parents need to make the right choice for their children and not be afraid to challenge the system at any stage too. It is not just about the grades!”

Tere Cazola is named after its founder. She started making Mexican desserts and cakes in her kitchen back in the 1980s, and now they’re sold all over the country. There are two main aspects to Tere Cazola’s success: an efficient production and distribution operation, and a strong brand. With both of these in mind, she has been very careful to make the business grow in a way that doesn’t affect the quality of the product, and the authentic ‘home-made’ taste. So, as the business scaled up to a new production plant, the emphasis was on ensuring the highest possible standards throughout the production process. “It had to be the same as cooking in my own kitchen,” she says, “only on a much bigger scale. That means taking care of every little detail. That also includes the service we offer to our customers, which has to be second to none.” The other key factor is the brand: “Tere Cazola is all about getting back to the best traditions of home cooking. Flavour, freshness and taste. So we absolutely cannot compromise on quality.” Tere’s plans for the future centre on widening their distribution to more areas of Mexico, and bringing in more members of the family. She has two daughters and a son who already work in Tere Cazola stores, and a second son who is a general manager in the company. Geographical expansion is going to bring new challenges on the distribution side, and will probably mean opening new production facilities, so that freshness and quality can be guaranteed. “I’ve already achieved my first dream of starting this business, and now I want to make sure it can stay in the family for future generations.” T his piece featured in the 2016 PwC Global Family Business Survey and has been reproduced with their permission.

Apart from excellent employee loyalty, Anderson Maguire have continued to succeed as a family business because we are part of the community and the personal relationships we build with families endures throughout the generations. Anderson Maguire Funeral Directors was founded in 1982 by Dominic Maguire. It is one of the top three independent family run funeral directors in Scotland with eleven branches throughout Glasgow and a head office in Hamilton Street, Glasgow. Throughout its 33 years in operation, it has remained a steadfastly independent, family owned and run business. Dominic Maguire shares his thoughts on what it means to be a family business and how family values are an integral part of what they are all about. Statistics prove that approximately 62% of Funeral Directors in the UK are still owned and managed by families and I believe that figure will remain high for many generations due to the nature of the service we provide. Anderson Maguire has a special legacy to the people of Glasgow and the communities we work in. Everyone who works for Anderson Maguire is part of the family and we have a staff culture of providing a caring and compassionate service. Many employees’ families have enjoyed several generations of parents, children, spouses, siblings and cousins working with Anderson Maguire. Keeping a stable and extremely reliable workforce has long been a core strength of our company, with many employees having worked with Anderson Maguire for more than 15 years. Apart from excellent employee loyalty, we have continued to succeed as a family business because we are part of the community and the personal relationships we build with families endures throughout the generations. By doing what we do very well through our inherent empathy with our clients, we have built a loyalty to our family business and it is the backbone of our success. We have and will continue to eschew the takeover by the large, faceless corporate companies who may provide a reasonably good service but cannot provide the level of personalisation we give to everyone who comes to us at their time of need. Although we are very progressive in continually evolving, we strongly adhere to our ethos that personal contact is paramount to maintaining excellent client relationships. We deliver what we promise and it is this commitment which has helped insulate Anderson Maguire from low-cost competitors. Our core strengths are: We care about our clients and their families – we know them personally and we are interested in them, building strong and lasting relationships We provide a unique client experience – if it matters to you, it matters to us We don’t just provide a funeral service – our ongoing support is why we have such a high level of client loyalty. Anderson Maguire is a company which, in an increasingly aggressive commercial environment, punches well above its weight. As a Glasgow based family business employing over 50 local people, our success is not rocket science; it is quite simply through providing the best personal service we can to our clients at one of the most critical times in their lives. Visit www.andersonmaguire.co.uk to find out more

Family firms used to be the backbone of the High Street and thankfully some survive today. Find out about the second generation family owned butchers renowned for the Bassett Banger! Founded in 1985, by professional butcher Keith Crump and wife Jean, K & EJ Crump & Son continues under the leadership of the next generation, Andy, remaining a family butcher who know one thing above all else – that their customers are number one! A quintessentially British family butchers, no other butcher strives harder to be the best traditional butcher in the Swindon area and the quality and excellence of their meats mean customers return time and time again. Like all family businesses there is a story to tell, and K & EJ Crump & Son is no different. Thirty years ago Keith and Jean Crump took a detour on their way home to Oxfordshire. The couple, who had spent months scouring Devon and Cornwall in vain for the perfect village shop to house their family butcher’s, fancied a brief break from the road. Driving down Wootton Bassett High Street a ‘for sale’ sign caught their attention. The town centre has changed beyond recognition since that fateful day in 1985 but despite the crushing march of supermarket giants, the business remains a welcome constant for legions of loyal customers. “Obviously it was fate” says Andy Crump, 49, who took over the family business when his late father Keith retired in 1999. “I came back in 1988 and that’s where I’ve been ever since.” says Andy. “My dad retired in 1999. I was 34 and I was thrown in at the deep end. It was a big challenge. My dad had an aura about him. Everybody loved mum and dad and it was a big role to fill.” “Butchering has had its testing moments. It’s not the easiest profession to be in. I can be here at 4am, get the window displays ready, and start prepping for the day. It’s quite long hours. At least 65 per cent of the work is done behind the scenes. Everything is homemade. We make the sausages on Wednesdays and Fridays and it takes three people four hours to make 750lb of sausages! We have 26 kinds at any one time on display. If I didn’t enjoy it I wouldn’t still be in the game.” K & E J Crump & Son counts six full-time staff including Andy and four part-time employees. Since its inception, the business has won 14 gold and eight silver medals and the Bassett Banger ‘dreamt up’ by Keith remains a firm favourite in the town. The store sells ten times as many of these as any other variety. Over the last 30 years, the going has been tough for independent shopkeepers on the nation’s High Streets. Contending with large supermarkets has proven challenging at the best of times for the Crumps but the business continues to thrive. “Over the years there has been a massive decline in independent butchers. And our actual trade pattern has changed dramatically but we go with the flow. You always get competition from supermarkets. You’ve only got to look at the High Streets, so many shops are closed, it’s frightening. But we are supplying something different from supermarkets – we have the quality. Our goal is to continue to do what we’re doing, improve and increase trade. There is a place for shops like ours on the High Street. That’s what has stood us in good stead for 30 years.” “Above all, we would love to thank all our loyal customers both past and present” concludes Andy. High Streets across the UK would not be the same without the independent, family owned retailers that continue to trade, like Crumps but they need continued support from the local communities to ensure their survival. Crumps is a true gem of a family firm, quintessentially Briitsh and putting the customer first. Passion and belief in the quality of their products, not to mention innovations such as the Bassett Banger have helped, and hopefully we will continue to see them in Wootton Bassett for generations to come.

A home-made success story: Organic growth and organic food in the US is the mantra behind successful family business, Amy’s Kitchen. It would be hard to find a better example of what a family firm can achieve than Amy’s Kitchen. In 30 years, Rachel and Andy Berliner have gone from making food in a small kitchen to fund their daughter’s college fees, to owning and managing a multi-million dollar organic food business that’s so successful it doesn’t even need to advertise. It’s a business that began with passion and principles, and those two things still inspire it today. “It started when I was cooking for Rachel when she was pregnant with Amy,” says Andy. “We were passionate about organic food, and I didn’t have the time to cook things from scratch so I just wanted to buy good-quality convenience food. But I couldn’t find it – not even in the health-food store. And we said to ourselves, there must be people like us out there who want the same as we do. People who’d buy home-made organic and natural ready-meals that actually tasted great. So we made one product, just to test it out. It was a vegetable pot pie. That’s where it all started – with a vegetable pot pie.” Within a few months, that pot pie was being stocked in health-food stores across the US, and the Berliners started to add new lines to the range. “Our hunch about the potential demand was absolutely right,” says Andy. “We’d found a niche that no-one else was catering for. Everybody wanted our products – we’d just send out a fax describing our new lines and the orders came flooding straight back. The business just grew from there – pure organic growth, right from the start. We were growing over 20% a year for the first 20 years.” Thirty years on, Amy is grown up and the business has grown up too: there are more than 230 products and 2,500 staff, production facilities across the US, and a new plant in prospect in Portugal to service the company’s growing export business. And as the company added lines and facilities it added skills to the mix too: “We started with finance,” says Rachel, “then logistics and agricultural. The last to come was marketing, because we’d always enjoyed doing that ourselves. But over the last few years, we’ve built a great marketing team. And as for sales, people join our team and stay for their careers. I think that’s because the people we hire believe in what we’re doing as much as we do. It’s part of the culture of the place.” The business is still growing too, though it’s more like 10% now: “It’s harder to grow as fast as we did in the beginning,” says Andy, “because so many other operators have moved into the same space. But we have such a huge advantage in having been there first and established a brand people really do trust. And we know that the way to keep growing is to keep coming up with new ideas. We have products based on a whole range of international cuisines, made from authentic ingredients by people who grew up eating and loving that food. Nothing makes me happier than when we get an email from a customer saying our food tastes like what their mother used to make. Because that’s the essence of Amy’s Kitchen, right there: authenticity and great taste.” International cuisine has been one route to diversification; international expansion is another. The company already has a presence in Europe, with particular success in the UK, and the next big prospect is India. It’s a huge opportunity, and a completely different one to either the US or UK, but it’s ideally suited to the brand, given the growing middle class and the large proportion of vegetarian consumers. Other companies might find the sheer complexity of the Indian market daunting, but Amy’s Kitchen has always had both the courage and the confidence to back innovative ideas. As Andy explains, their new drive-thru restaurant is a great example: “We were always being contacted by people saying that there was nowhere healthy to take their kids – people who weren’t necessarily vegetarian but didn’t want to feed their children fast food. So we opened an Amy’s, just as a pilot, and it’s been amazing. Sales are twice what we hoped, and it’s generated this incredible following on Facebook. We didn’t even set the site up – it was started by people who ate there and loved it. That’s what the brand has always been about. We’re a big business now, but we’re still just a back kitchen at heart. A much bigger kitchen, with much bigger pots. But we care about what we make and how we make it, and people can tell. You just can’t fake that.” This feature forms part of the PwC Global Family Business Survey 2016. It has been reproduced with permission of PwC.

The drive for innovation features across each of the three Keeling generations; from fruit growing and glasshouse production, to the wholesale business, to a large international portfolio company. In 1926, the grandparents of the current Keeling siblings began growing rhubarb on their land in St. Margaret’s, Fingal, North County Dublin. Soon the family were producing apples, strawberries and tomatoes and exporting flower bulbs to the UK. Throughout the 1940’s, the business operated as a small farm producer, selling their products at the Dublin Fruit market. The second generation became involved and son, Joe Keeling, established Keelings wholesale in 1973. From growing own produce, Keelings transitioned to buying from growers, both nationally and globally, and selling to independent retailers and the services and catering industries. In the 1980’s, the farm expanded and Keelings became a fresh food supplier for national supermarkets including Dunnes Stores and Quinnsworth. Supermarket retail gradually overtook the wholesale side and their product range expanded. Keelings is an exemplar of rapid expansion; from its humble beginnings the company now boasts five divisions, imports from 42 countries, and operates in European, Asian and African markets. Family Involvement Despite the company’s expansion, the family remains largely involved in management and ownership. Joe Keeling remains in the business as Chairman. His daughter, Caroline is CEO and part of her overall management is developing Keelings Solutions, the ERP (Enterprise Resource Planning) facet of the business. Joe’s son, William, is property director and oversees the businesses in the UK. His other son, David leads the retail side from FoodCentral. David had this to say on the sibling-manager dynamic: “I think it has worked very well that we’ve tended to have our own areas that we’ve worked in and developed.” Family governance is an important feature of Keelings which has a family charter in place and holds shareholder meetings four times a year. The separation of family and business issues is clearly defined: “We’ve got a business that has over 2,000 staff so it’s very important that it’s run as a business and not as a family.” Process Innovation In Family Business The drive for innovation features across each of the three Keeling generations; from fruit growing and glasshouse production, to the wholesale business, to a large international portfolio company. “It’s a combination of many people’s ideas and hard work and then we probably make particularly quick decisions. We’re relatively entrepreneurial,” says David. Keelings lead the way in pioneering processes for fruit production in Ireland. “The drive for innovation comes from the pressure from consumers and retailers to continually get better every time.” In the 1980’s, Joe Keeling requested daily data on company profi ts which led to the development of the Keelings ERP (Enterprise Resource Planning) system software. This incremental innovation was developed over 30 years and in 2011, Keelings Solutions was established and the software came on the market. This division sells industry-focused solutions in stock management, sales and procurement management, warehouse and production planning, quality assurance and food safety management. Their experience of food production formed a sound basis for their progression into system management: “We’re not just selling our system; we’re selling our expertise and how to run a produce business”. Keelings has made strides in infrastructural innovation, opening Ireland’s National Food Park, FoodCentral, in 2010. “We just looked at our site and could see there were a number of benefits in being located where we are”. This 113 hectare food industry park is ideally located, in proximity to Dublin Airport, Port Tunnel and M50 motorway. One of the company’s major developments was their state-of-the-art glasshouses that extend the growing season from March to December. Keelings provide a significant percentage of all Irish-grown peppers. “It’s very often run on the basis of what’s good for the business. That’s the key to success for the business as well as having a lot of very good people,” concludes David Keelings.

Billionaire businessman William Heinecke discusses his unique, entrepreneurial approach to philanthropy. Every year on his birthday on June 4th, billionaire William Heinecke closes his company of 45,000 staff for the entire day. “I ask everyone to give up their day to work for a charity, whether they are painting a school or working with their community. It is their gift to me.” This approach to active giving has become a hallmark of Heinecke’s philanthropic mantra: corporate social responsibility interwoven into his day-to-day businesses. When it comes to philanthropy, the Bangkok-based founder of publicly-listed restaurant, hotel and retail operator, Minor International (MINT), does not just write cheques. Much of his philanthropic contributions came from the proceeds from the book he authored, The Entrepreneur: Twenty-Five Golden Rules for the Global Business Manager, which has been published in four different languages and had various reprints. He is also heavily involved in elephant conservation. “Since commercial logging was banned in 1989, elephants and their mahouts have been unemployed. Many were just roaming the streets and begging,” he explains. He founded the Golden Triangle Asian Elephant Foundation in 2001 as part of one of his hotels, the Anantara Hua Hin Resort & Spa, which he raises money for through the glamorous Annual King’s Cup Elephant Polo match. To date the competition has raised US$750,000 for the foundation. He admits that his entrepreneurial approach to philanthropy may revert to cheque-writing over time. When he feels his company is sustainable, he will join Bill Gates’ Giving Pledge and donate at least half of his wealth to charity. “It is my personal goal to give more away over the years to come as we owe this to future generations. Currently, I am very focused on ensuring the continued sustainability of the company – long term business success so that we can ensure a bright future for all our stakeholders,” he told Wealth-X in an exclusive interview. What keeps the 65-year-old US-born billionaire up at night is the thought of the direct and indirect impact he has has on his 45,000 employees. “We employ 45,000 people. We say for every one employee we have we affect 10 lives, so that is a lot of responsibility.” His approach looks like it is paying off. Last year MINT realised record net profits of 4.1 billion baht (US$126 million), up 26 per cent on the previous year. The leap in profits meant that Heinecke, who owns a third in the company, was propelled into billionaire territory for the first time. MINT now operates over 1,400 restaurants, 250 retail trading outlets and over 100 hotels in 27 countries from Australia to Africa. His most well-known business is the luxury Anantara Hotel Group, whose postcard-perfect resorts are beloved by VIPs and celebrities from R&B star John Legend to footballer Cristiano Ronaldo and tennis champion Roger Federer. Heinecke is the true essence of a self-made man. One of the wealthiest expatriates in Southeast Asia today, Heinecke started out life as the son of a military foreign serviceman and a journalist. They moved to Bangkok when he was 14 and two years later, he had successfully introduced go-karting to Thailand. He persuaded the editor of Bangkok World to let him write a column on the subject, who agreed on condition that he secured advertisements to run alongside it. Heinecke’s first venture proved so successful that at 17 years old he took over from the paper’s advertising manager while still attending school. When he graduated a year later in 1967, he borrowed US$1,200 to register his first two companies under Minor Holdings (so-called because his entrepreneurial career began at age 16); Inter-Asian Enterprise which supplied office cleaning services, and the radio advertising company Inter-Asian Publicity. Five decades on and Minor International is the largest listed hotel operator in Thailand, with big names including the Anantara, AVANI, Oaks, Per AQUUM, Elewana, Four Seasons and Marriott. It also operates 1,200 restaurants in Asia including Swensens, Sizzler, Dairy Queen, The Coffee Club, Burger King, Thai Express and the Pizza Company, the largest pizza chain in Thailand, which Heinecke’s eldest son is in charge of. “Our restaurants served over 6,000 tons of ice cream and over 13 million pizzas last year,” claims Heinecke proudly. Heinecke, who dropped his American passport to become a Thai citizen in 1991, said despite his recent success he is still heavily involved in the businesses, and works “what most people would call very long hours, maybe 12 hours a day.” His record profits have been steadily rebuilt after a difficult period when the tsunami struck Thailand in 2008 and many of his businesses were damaged or worse. His Anantara Royal Coco Palm Hotel in Phuket was completely destroyed and 12 members of staff lost their lives. “It was devastating for everyone. We couldn’t bear to build another hotel on that site so we just deserted it and rebuilt elsewhere,” he said. He said that the natural disaster heightened his awareness of the need for philanthropy and now he considers it a key part of his business model, although he keeps it low key. “I’m not a big self-promoter when it comes to philanthropy. The best types of philanthropy are not exposed to the public because if you are doing it to raise your profile it is for the wrong reasons.” He added that he is asked to speak at public and private events every day, and he frequently does, as long as the firm will donate to his foundation to pay for his time. “I am happy to speak at public events but I sort the wheat from the chaff by asking them if they are willing to donate to a charity for me to speak. If they do they clearly think what I have to say is worth it.” And what is his mantra in life? “I don’t do anything I don’t feel passionate about and enjoy immensely. My advice is don’t work for money or prestige, work for your passion. Then you will always be successful.” Reproduced with permission from an article that was first published on Wealth-X and written by Tara Loader Wilkinson. To find out more please visit www.wealthx.com

Understanding family businesses entails understanding the ‘family factor’, more specifically family ownership, involvement, commitment, values, vision, self-perception and succession. Family businesses play a prominent role in the global economy. It is a unique form of business as it is subject to influence from the family. The family is the original economic unit from which all other forms of economic organisations evolved. Families in family businesses are a unique fusion of ownership, strategic influence, concern for family relationships and a dream of continuity. Understanding family businesses entails understanding the ‘family factor’, more specifically family ownership, involvement, commitment, values, vision, self-perception and succession. When addressing the family in the family business one needs to be sensitive to the way families define themselves as there is a great deal of boundary ambiguity, which can be navigated only via the family’s personal definition of family. Family influence in family businesses may vary from one-sided control of the strategic direction of the business to one where strategic control is left entirely in the hands of professional management. A family first philosophy or a business first philosophy may work well or fail, as a function of the changing demography of the family, and the environment in which the business operates. As both the family and business grow what is needed is not an enmeshment but a philosophy that mediates between a family first or business first approach offering a more balanced framework for decision-making and planning. Families share common goals and resources. As generations are added, the family business will have multiple family systems to consider. Each will have its own background, values, goals and development, but they are interconnected as a larger family system, as well as a family business. The family and business are not necessarily compatible and the family factor may impose costs and liabilities. Family, ownership and business clearly involve different and sometimes conflicting values, goals and actions and in a family business individuals may have multiple roles and priorities. Problems may arise from the unwillingness of family members to monitor, evaluate and discipline other family members such as in the case of nepotism. In other situations the family business may be more insular and self-interested than non-family businesses as outsiders are not trusted and seen as potential competitors and enemies. Family members may not always be able to supply the business with enough talent, for example, in businesses that require highly specialised knowledge of technology and markets. The family factor when invested in and harnessed well is a source of competitive advantage. This occurs when the family business puts high priority on the human capital, emotional capital, social capital and financial capital. On human capital one may say that family members are motivated, committed, flexible and have been socialised and trained early to understand the nature of the family business. Family businesses have an advantage in building social capital as they have a distinct ability to cultivate and nurture long-standing relations across generations.Social capital enhances value creation in all businesses but in family businesses these advantages are absorbed in family members’ social links and in the family network’s configuration, and therefore are more sustained across generations. Family businesses have the ability to attract and provide good quality due to the goodwill and trustworthiness generated by the family name and commitment over time to customers. Families leverage their social and professional networks to ease access of valuable resources. Family cohesiveness is central in accessing and generating valuable resources particularly in difficult times. The total value of the family business to family business owners is the sum of both the financial and emotional value. Family businesses also make non-financial valuations of investments and assets together with financial appraisals. Non-financial values of the family may push the family business to: take an investment diversifying business activity in order to lower total risk, but that at the same time is value driven; make investments in brands or sectors that bring high reputation to the family; hold steadfast in their reluctance to diversify the business portfolio because the founding member started the company in this line of business, expressing legacy value; family business owners may continue to employ workers even through outsourcing would be more financially beneficial. Family businesses enjoy the competitive advantage of strong trustworthiness if they leverage the interpersonal trust that emerges during the early stages of a family business. As the family business grows this trust needs to be supported with the trust that the family members leading the business are not only willing but capable of performing effectively. Transparency and clear policies also help build trust as the family business enters the stages of sibling partnerships and cousin collaborations. Communication is a vital ingredient in re-vitalising collective identity and interpersonal trust. About the Author - Roberta Fenech is a freelance Occupational Psychologist currently reading for a PhD at the University of London

Succession in terms of business leadership confronts the founder of a family business with a complex set of options as Peter Leach explains below. In broad terms these are: Appoint a family member Appoint a caretaker manager Appoint a professional manager Exit via sale of the business, in part or in par Exit via liquidating the business Do nothing. Each option is distinctive and carries its own set of advantages, disadvantages, opportunities and threats. Also, the scope and impact of these will vary from one family business to another depending on, for example: The ability to attract family and non-family successors who are willing and have the skills to carry on the business The financial needs of the family (for example, whether cash needs to be extracted from the business to provide for the retirement of the senior generation The personal and corporate taxation consequences of the different options The health and size of the business The external commercial and business environment at the time of succession. If there is a commitment to retain direct control over the business, the first option of appointing a family member to succeed is seen as particularly attractive by many founders. Research by IMD has found that, if there’s a suitable candidate, owners will choose a ‘family solution’ for several reasons: It gives their personal ideas and values a greater chance of survival They can feel their life’s work is in good hands They don’t lose contact with the business, and may even retain some influence over it They feel their sacrifices building up the business will have been worthwhile. The appointment of a non-family successor, either to a permanent position or as a caretaker (options 2 and 3), may become the strategy by default if no family successors are available, motivated or have the necessary skills for the task. Genetics do not guarantee that families can produce entrepreneurial business leaders generation after generation. In terms of exit routes, some form of sale as a going concern (option 4) is likely to recover most value from the business. Alternatives within this option include a trade sale (ie an outright sale of the business for cash),which may be particularly appealing where no suitable successors can be found, or a stock market flotation can be the best answer if external capital to finance growth is a priority. Similarly, a management buy-out financed by private equity funding (a sale by the founder to the existing management team, which may include family members), can offer a compromise between transferring the shares to the family and an outright trade sale. Liquidation (option 5) entails selling of all the company’s assets, paying its outstanding debts and dismissing the workforce. It also involves substantial expenses and is unlikely to result in the best price being obtained. Finally, the founder may simply avoid planning for succession by adopting the ‘do nothing’ approach (option 6), and here lies the central paradox. Despite founders professing that a ‘family solution’ is their preferred course, in practice the dynastic dream is rarely achieved. Doing nothing is the least logical, the most costly, the most destructive off all the options, yet is by far the most popular.

Andrew Drake suggests ten simple questions to consider before employing family members. All too often family firms have been found wanting when it comes to employing family members, not least the accusations of favouritism of family members and treating family members differently from their non-family counterparts. When a family firm deals with employees, irrespective of whether they are family members, it should have a common practice in relation to employment policies, remuneration and reward. This helps to ensure that issues are not created which have to be addressed down the line. Here are ten questions that should be considered by anyone thinking about recruiting a family member into the family business: How are you going to identify prospective employees from amongst the family? Are family members clear as to what is expected of them if they want to become employees? Do family members have the relevant experience and qualifications for the job in question? Do family members require a business mentor, either before or after they become employees and if so should that mentor be a non-family member? Do all family employees have a clear job description and career plan? How do family employees’ terms of employment compare to those of any non-family counterparts? Who should appraise family employees? Who should decide on their remuneration? Who decides whether they are appointed to the Board? Can in-laws become employees and/or directors? Family firms can engage in best practice by ensuring that the policies that they introduce are applied to all members of staff with clear communication of policies to ensure that everyone is treated the same way, thus helping to improve the underlying human resources framework within the business that can then help to recruit, retain and motivate all members of staff within the family firm too.

When it comes to wealth preservation, why have some families businesses been so successful while others have failed miserably? In my opinion, the secret boils down to a family ethos that values one thing over all others: capital preservation. The bear traps of inheriting money without purpose have been well documented in literature, Hollywood and the media. Thomas Mellon, founder of one of the wealthiest and longest enduring families in America, set up a tacit understanding that while spending was acceptable, it came with the expectation that each generation would become the caretakers of this capital and push it forward to a larger amount than he or she was given. This sense of ownership and responsibility was central to the family’s vision. But conserving family business wealth isn’t always so straightforward. Family businesses make up the foundation of the Canadian economy, but not all owners feel adequately prepared for succession, says Saul Plener of PwC. In the annual PwC Family Business Survey, family business respondents tended to fall into the second generation, or ‘Baby Boomer’ category, and are ‘looking for the best opportunity to exit.’ Unfortunately, he points out, a significant number of those surveyed “haven’t put the necessary effort into succession planning and professionalising the business to ensure long term survival.” One of the reasons why the professionalisation of the family business has become as challenge is because these types of discussions can be difficult. But succession conversations should take place several years before the business changes hands and wealth is passed down to the next generation. Discussions should centre around the financial plan, tax and legal implications, as well as family expectations. If you run a family business, it’s never too late to start. I also recommend hiring a family business expert to assist these often tricky questions. To get the conversation started, family members should rate their knowledge on the following question out of ten: 1. I understand the expectations about the transition of the business by the current owners (parents) and also the next generation. Mr. Plener says that parents often think they know what their children want to do, but they’re not always right. The next generation has seen the stress that their parents handle and don’t necessarily want to take on that level of emotional strain. Founders needs to find out the interests of the next generation as a beginning to the succession process. One owner was pleasantly surprised to discover his daughter was interested in being on the board of the family business. He had assumed his daughters weren’t interested, but he had not started that conversation. 2. We have discussed the distribution of capital. Has there been a systematic building of capital in a diversified investment portfolio over the years? Having capital invested outside of the concentrated investment into the business is wise as the optimism of many entrepreneurs has resulted in spectacular belly flops. By systematically taking money out of the business and putting it into a portfolio, the family will be looked in the worst-case scenario. With the security of a portfolio in place, the family and retirement costs are covered, and then entrepreneur is in a far better position to take the risks required to grow the business. Families can relax and relationships enhanced if everyone knows the strategy around capital. 3. We are on the same page about our long term-family goal(s). The longer the family has been in the business, the more the business means to its members. In material terms, it usually represents their largest asset and primary source of income. Beyond this, it is also a source of personal wealth and family tradition. Family members are usually proud of being associated with the business, especially if it carries the family name. After a sale, these families have to look for new means to keep the family together, to continue its legacy and preserve its wealth over generations. This is often the reason to set up a family office to create a platform to manage joint family activities, such as philanthropy, family investments or special projects such as private equity. Capital preservation is recommended as the central family goal which the next generations will need to understand and embrace. The next generation and family can then have the security to reactivate the family’s entrepreneurial spirit and create the next family business endeavour. About the Author - Jacoline Loewen is director of business development of UBS Bank in Canada. She is also author of Money Magnet: How to Attract Investors to Your Business. Article first appeared in The Globe and Mail and has been reproduced with permission.

A moving insight into what happens when your Uncle closes the doors and there is nothing you can do. Heather Leavens was a third generation director of the family business for 18 years until her Uncle decided to close the business. Powerless to do anything about it, Heather had to direct the winding down of the business. Paul Andrews spoke to Heather to understand some of the emotions involved in such a process. Heather Leavens joined the family business when her father asked her too, giving up her role in marketing and business development which at the time she loved to enter the fray. The business was formed in 1927 in Mississauga in Canada by her Grandfather and his two brothers, Art and Walt, in Belleville in Ontario, Canada. The original business began doing barnstorming, training pilots for war and mail runs to Pelee Island, Ontario. Great Uncle Art died in a plane crash and Great Uncle Walt left to pursue his interests in farming which is when her Grandfather took over running the business with his four sons and from a building in Mississauga, began to service and overhaul small aircraft like Pipers and Cessnas, maintaining a stock of spare parts and servicing specific plane parts too. Heather recalls her time as a child, way before actually joining the business when she used to work filing and cutting the grass. “My father got involved in the business as the second generation and growth came through diversification – first there was Leavens Boats and then a car dealership and even a business selling private jets,” she explains. “At the peak in activity there were operations in Mississauga, Montreal, Calgary and Edmonton with around 70 employees. We were not a large business but gave a lot of people work and the business afforded us a good lifestyle too. During this time, we also moved to a new building and the name of the company was changed to Leavens Aviation Inc.” Leavens Aviation was a good place to work and the employees enjoyed their time with the business. Many stayed for years and when the business eventually closed, a number of the staff leaving had worked for the company for over 40 years, something that Heather felt a certain responsibility for. “Our staff were part of the family really, an extension of who we are. They spent a long time with the company and it was sad that as well as the family closing the business, for many of the staff it was also the end of an era for them too,” continues Heather. For many, working towards a known outcome, the closure of the family business, is something that is planned a long time in advance. Not so for Leavens Aviation which at the time of the decision being taken was still predominantly owned by Heather’s Uncle, who at this time was approaching eighty years of age. “His daughter worked for the family business and it was obvious that the two of them had discussed the future of the business and come to a decision prior to us knowing anything about it” continues Heather. “In fact, my Uncle came into the office in the Christmas of 2010 and just told us that he was closing the business. It really did come as a shock to all of us, especially the three other family members working in the business that had no idea it was coming. We were all aware that there was no apparent fourth generation coming through to take the business on and that it was likely that it would have to be sold in the future, but we were all approaching our fifties and expecting to work towards building a nest-egg for our retirement through the business. Instead, we were suddenly confronted with a life-changing situation that we had simply not envisaged.” The next six months were not an easy time for the family as the assets were sold off and disposed of and eventually Heather found herself sitting in the car park on the last remaining chair waiting for the final customer to come to collect their goods. “At this time, I was not really sure what was going to happen” continues Heather, “I had no idea what I was going to do but I guess in the six months preparing for the closure I had time to think about the past and collect some of my thoughts, sorting out the papers and getting the practical things in order. What nobody can prepare you for is the last time that you close the door on a business that has been in the hands of your Father and your Grandfather, and for which you cannot help but having a feeling of responsibility for.” “Sadly, my Uncle had made his decision and we had to abide by it, he was the majority shareholder and we did not have the funds, nor the desire to take on any personal debt, to buy the business from him.” Hindsight is a powerful tool and Heather is now coming to terms with the reality of the situation. “I do get sad sometimes when I think of my Father and then the link to the business that is no longer ours, but am not naiive to think that running the business did not come at a cost. My father dedicated a lot of time to the business and as such had less time to spend with us as a family. However, the money has come in handy for the family and ultimately are well positioned and in a way, fortunate, to be able to take stock of our lives.” “Having said that, our building is now used as a furniture store and since opening, I have not driven past it once nor had any desire to go into the building to look around, it is all still a little raw and something that I just cannot bring myself to do,” continues Heather. Like other family business owners that have been involved with the closure of a multi-generational business, Heather is not alone in her feelings. However, she is aware more than many that life is short and that we have to make the most of things. “The day I left the building for the last time I went straight to the hospital to spend time at the bedside of a close school friend who was ill with terminal cancer and passed away nine days later. This was a tough time but helped to put things in perspective for me” she explains. Since the business closing, Heather sees herself as having been fortunate enough to take stock of her life, spend a year travelling and catching up with friends and is now about to embark on the next chapter of her life, life without the “burden of the family business.” Heather has always liked marketing, people and customer service and is keen to find a role that offers these opportunities to her. “In hindsight, we spent the last few years in the business trying to diversify and increase revenue, reduce costs and fight the recession, like many other businesses, but we were facing an uphill battle and maybe closing the business was actually the right thing to do. We had all become embedded in what we were doing, week in week out, and now we can stand back and consider the options before it is too late.” For Heather, it has been a difficult emotional road to go down but at least now she is able to look back and focus on the positives. “The burden of responsibility towards the family and the wider family, the employees and the community, has been removed and if I had to give any words of advice to others in a similar position, I would strongly suggest they consider their options, but closure or selling the family business is an option that may be necessary.” For Leavens Bros the outcome would probably have been the same in fifteen to twenty years time, an outcome that the third generation were quietly working towards without any thought of anything different, and then the ‘rug was pulled out’ and the family business came to an abrupt end. At the request of her Father, Heather gave up her own career to start in the family business and sacrificed a lot personally to manage the business for many years with her cousins. It has taken a toll, but Heather does have fond memories of the business, recognises the sacrifices that were made along the way, and although closing the business was probably the biggest sacrifice of all, is embracing all of the opportunities that it has also created for her now so that she can move forward and embrace life to the full.