Families and their values change over time and the impact on the family business needs to be addressed too. Landaal Packaging Systems, a family enterprise based in Flint, Michigan, focused almost exclusively on the corrugated box industry for more than half a century. After dramatic changes in both the family and the marketplace, the family began to shift its identity away from the box industry to focus more on the family itself. The United States corrugated paper industry was losing the battle with China, resulting in ever-shrinking margins and consolidation of firms. The family had prematurely lost three of the four siblings in the second generation. The Landaal family created an innovation centre to help revitalize the local community, redirecting its focus from corrugated paper toward customized packaging, point-of-purchase displays and sustainable packaging. Landaal’s story reflects a growing trend: Successful enterprising families are becoming more aligned with their values, more cohesive and more resilient in order to handle the greater stress and complexity arising from today’s exponential rate of change. In a landmark global study published in 2012, The FFI/Goodman Longevity Study, 90 percent of the families who responded owned more than one business and 20 percent owned more than five. On average, those surveyed had changed their core business more than two times. A colleague, Rich Morris, points out that in the past, one good business idea might sustain a family for three generations. Today, each generation will need to come up with three good business ideas just to keep up with the changing world. As the family business changes, so will the family’s identity. A family like the Landaals may no longer self-identify as “the box people,” for instance, but rather as an enterprising family that deploys its talent, financial resources and networks in ways that align with its core values and purpose. Thus the family (rather than the legacy business) is viewed as the entity through which money flows and where entrepreneurial talent is cultivated. To make this transition successfully, the family will need to reflect on and define its purpose and values. It should address not only the question, “What kind of business or enterprise do we want to be?” but also, “What kind of family do we want to be?” The Haws Corporation, of Sparks, Nevada, a successful manufacturer of drinking fountains for more than a century, has embarked upon a proactive approach to family governance. Recognizing the competitive advantage of being family owned, it uses its family governance to align the goals of the owning family with the board and management team while developing the next generation of family ownership. The result has been an increase in the breadth and depth of business opportunities that they now pursue within and outside of their core business. Rather than remaining tied to their past, they are visioning the future and bolting on new businesses that will be more relevant to their next generation of family ownership. Investing in technology and bringing new solutions to their existing customers is helping to build a whole new enterprise that would not have been possible by simply continuing to invest in the “old” business. Four Types Of Cohesion How might you involve your own family to more effectively and proactively respond to changes in your core industry? First, you should establish family cohesion and alignment. One model emerged from a 2008 study by Torsten M. Pieper and Joseph H. Astrachan. The study found families that have been in business for a century or longer tend to have high levels of cohesion in four areas. 1 – Family emotional cohesion : Family members get their most basic needs (for belonging, security and connection) met through the family, which functions and communicates well. These families convene family gatherings, engage in charitable activities as a group and take other steps to stay connected. 2 – Family financial cohesion : The family provides for its members through gifts, inheritance and other mechanisms. 3 – Business financial cohesion : The business provides benefits to the family through salaries, dividends and investment opportunities. 4 – Business emotional cohesion : Family members consider the business to be part of their identity. They have a sense of loyalty and stewardship to the family firm. These four types of cohesion evolved over time in long-lasting family businesses, but they can be deliberately cultivated during the early stages of family enterprise. How might your family create greater alignment, cohesion and resiliency? Family business leaders should consider three factors: innovation, awareness and practice. Innovating With The Family Innovation is change that creates value. Virtually every business must look at both incremental innovation (how to improve a store, a product or a service) and breakthrough innovation (how to go from Blockbuster to Netflix). The family must approach its enterprises with an innovative mindset. Family enterprises often resist change. Families tend to seek harmony and stability, which can easily lead to stagnation. Once the business enters its second generation, members can become risk-averse, sometimes to an extreme. Innovation should be considered a crucial part of the family’s values and purpose. Given the impact of rapidly evolving technology, generational differences and a changing competitive environment, families must be open to rethinking their relationships to their enterprises. Cleveland-based Bird Technologies, for example, operationalized its values through an ongoing practice of clarifying the family’s core values and translating them into business values. The non-family CEO reports periodically to the board and the shareholders on how business results were achieved in line with shareholder values. This operational, tangible and holistic integration of shareholder values with business function creates and sustains a culture that exhibits the four types of cohesion. Deep Dive Into Awareness Consider the time, energy, talent and reporting you devote to your business. Now compare that to the effort you make to enhance your family’s involvement in its enterprises. A family system is highly complex. Each member brings to the table his or her unique behaviour patterns, roles and ways to deal with stress. Along with this complexity comes greater interdependency, so stress and change in any part of the system affects the whole. If this is not brought into awareness and considered in business choices, the family cohesion is put at risk and what could be a strategic advantage turns into a threat. Family leaders should assess each individual’s identity and values—what drives them and how they contribute to the family’s individual and collective strengths, weaknesses and blind spots. How does the family cultivate and convey its character and align it with the family’s reputation? Each of these factors can be viewed relative to the four types of cohesion described above. Families and their advisers can be tempted to rely too much on structure and outcomes and thus minimize the importance of process and innovation. Your family can’t outsource this self-analysis to a lawyer or accountant any more than your fitness coach can do your workout for you. Planning, structures and policies can be productive after this deep dive into self-assessment. Otherwise, such planning is at best defensive and at worst a land mine waiting to be stepped on. Too often, we resist dealing with the “soft” or human side of a business—the family—until there is a crisis. This reactive mindset should be replaced in family enterprises by a proactive model that builds momentum as entrenched communication patterns are identified and defined. This proactive process deepens as the defences and underlying emotions that fuel negative patterns are exposed. This creates an opening for rebuilding damaged relationships. The family will emerge with a better understanding of one another, a chance to build trust and commitment, and productive methods of communicating. Ongoing Practice If each year your family went away for a weekend to listen to fitness experts talk about the latest trends in exercise science—and that was all you did to stay in shape—what kind of condition would you be in? Let’s extend this analogy to your family enterprise: If you and your family don’t regularly undergo a process of assessment and strategic planning, your enterprise will not be healthy. Just as you might start a fitness program by getting a thorough assessment, you can do the same with your family enterprise. What are your strengths, weaknesses and goals? You might factor both strength and cardio fitness into your workout regimen; similarly, you should factor values, trust, education and communication into your “family practice regimen.” Everyone in the family must be willing to start out by working on himself or herself. To focus on “fixing” one family member will undermine true progress. The most effective way you can encourage another family member to take responsibility for and work on his or her own issues is by modelling the desired behaviour. Most of us exercise more effectively when we work out with others and when we have good coaching. You can find “workout buddies” by attending conferences and peer-group sessions, and a consultant can do the coaching. But remember, you still have to do the heavy lifting yourself. This article originally appeared in Family Business Magazine’s Jan/Feb 2015 issue (Equip your family for success in today’s world) and is reproduced here with the permission of the publisher, Family Business Magazine.

Open, honest and clear communication is one of the most important hallmarks of a successful multigenerational family business. Family businesses simply cannot afford to have breakdowns in trust and communication as the effects can ripple outward to affect their most important relationships. Improve communication in your family business with these tips: 1. Pick The Right Time And Place For Discussions Research shows that environments matter to an employee’s attitude and productivity. The same can be said for communication, in that work conversations should probably happen at work and personal issues hashed out on non-work time. Even if it’s impossible to keep business discussions from spilling over into family time, train yourself to have serious discussions in the right time and place. Ask yourself: Should the conversation happen during work hours? Does it involve multiple family members? Should a formal family meeting be held? One problem that many family businesses face is a lack of time to think about long-term business issues. As a result, important conversations about the future of the business happen haphazardly. One of the reasons I recommend establishing formal governance structures in a family business is that family councils or family board meetings offer structured times to discuss long-term strategy. Family retreats are another way to get away from the business and focus on the big picture. 2. Choose The Right Medium Some communications need to happen face-to-face. Others can happen in an asynchronous fashion by email. One issue that frequently crops up in multigenerational family businesses is that family members who are not involved in daily operations can feel left out of important discussions. One way to avoid unintentionally leaving people out is to use written communication whenever possible and to hold regular in-person meetings with key stakeholders when necessary. 3. Keep Roles In Mind In a non-family business, roles are fairly discrete and well understood. A manager has an explicit role to play – as do executives, employees and everyone else. When managers communicate with employees, they typically don’t have to juggle multiple roles. However, a family business combines personal and professional roles in a way that can make communicating complex. Husbands and wives are presidents and CEOs, children are managers and employees. Non-family employees may be close family friends. Though families can do their best to keep personal and professional time separate, it’s rarely possible to keep these different roles from bleeding into one another. When you speak to an employee or partner, who are you really talking to? Are you talking to your husband or wife? Or are you speaking to your colleague? Think carefully about the role that you are occupying when speaking to a member of your family. Make sure that the way you communicate fits the role you are playing. 4. Set Communication Guidelines Because family members see each other often and in different places outside of work, a great deal of information about the business may get passed along informally. When conversations happen in casual or informal settings, important information can sometimes get lost or forgotten. These lapses in communication can cause a great deal of business and family friction. If your business currently doesn’t have a communication policy, set one. Consider: How should firm-wide communications be issued? How should family-wide messages be sent? How can you make sure not to lose or leave out important details? How can you make sure that the right people see the message? 5. Make Communication A Two-Way Street One of the fastest ways to shut down open communication is to make the people around you feel as though you don’t listen. When communication breaks down or conflicts arise, one of the most effective things a family business leader can do is simply listen. Here’s how to engage your active listening skills: Stay quiet and hear the other person out fully, without interrupting. Keep an open mind when disagreements arise and work on seeing the other side of the issue. Ask open-ended questions to draw the other person out and clarify the issue. Put away distractions, look the person in the eye, and be present for the conversation. Bottom line: All of us could probably benefit from working on our communication skills. If nothing else, becoming a better listener can yield many personal and professional dividends.

Family-owned businesses have tremendous advantages stemming from their special status: deep community ties, values, family traditions, and the ability to take a long-term view of success. However, family businesses also face unique challenges. The most successful multigenerational family businesses are able to overcome these barriers, incorporating new ideas while retaining the competitive strengths that made them successful in the first place. Let’s talk about some of the common obstacles that arise in family businesses. Barrier 1: Failing To Keep Non-Family Employees Happy Are your non-family employees happy and fulfilled in their jobs? If not, you may be damaging your firm’s ability to retain talent. One common complain that we run across is that non-family employees feel that there is a ceiling to their career progression within the firm. Since they are not family, they may be barred from top positions within the business or think that they don’t have a clear way to move forward in their careers. If you want to retain key employees (and you should), it’s critical that you make them feel that the firm’s success benefits them as well as your family. Consider allowing key employees an ownership stake or initiate a creative compensation scheme. Bonusing well or offering some share of the firm’s profits can help align their interests with the firm’s and motivate key non-family employees to stick with your firm. Barrier 2: Letting Family Drama Affect The Business Though family relationships may be key to your firm’s culture, sour dynamics between family members can be very damaging to business success. One of the problems we see over and over is that family members may lack an avenue to express their wants, needs, and concerns – personal and professional. When family members don’t feel heard by others (especially matriarchs and patriarchs), family drama can spill over into the business. Non-family businesses have natural barriers to conflict; it’s unlikely for two employees to be so angry at each other that they will overcome workplace boundaries and escalate the fight. Lacking a Human Resources department, many family firms lack formal rules and processes for mediating disputes, making it hard to handle the inevitable spats that can arise between employees. Though we’ll never be able to completely do away with family drama, formal structures like family councils, boards, and forums offer safe spaces where grievances can be aired and problems mediated. We strongly advocate for formal governance as a way to help a family business retain the values and intangible capital that makes it strong while managing conflict. Barrier 3: Lack Of Professionalisation Within The Business I’ve often spoken about the importance of professionalisation in sustaining a family business through generations. Family firms, particularly those within the first or second generation where the founder is still involved in the business, tend to be more casual than their non-family counterparts. The problem is that this informality often leads to a lack of strategic or succession planning, and can limit the business’ access to outside expertise and capitalisation. Professionalising a business doesn’t mean giving up the values and identity that makes a family firm strong. Quite the contrary: professionalising means making better use of internal resources, separating ownership from management, and creating strategies for the future of the business, among many other things. We teach our clients to associate professionalisation with taking their businesses to the next level of growth. Final Thoughts… Family businesses tend to go through predictable patterns of growth and development, and the barriers discussed here are natural parts of running a successful firm. If you’re feeling isolated or frustrated as a business leader, it can be enormously helpful to reach out to other members of the family business community for support.

Honest and clear communication is so critical to family business success. Here we highlight a few of the hot spots that can spark trouble in a family business and how to avoid them. 1. Be mindful of non-family employee relationships One of the major pitfalls that family businesses can fall into happens when they hire non-family employees. It’s critical to the health and success of your business not to create a sub-class of employees who are not family. Treating non-family employees differently or handing out special favours to family can be serious de-motivators and set a terrible example. Worse, employees who feel that promotions or future success are out of their reach because they aren’t part of the bloodline aren’t likely to stay long. Some common mistakes that you want to steer clear of are: Letting family work from home but requiring non-family employees to show up to the office. Giving family members extra perks like use of the company car. Having different vacation or medical leave policies for family members. Having different hiring and promotion practices for family members. 2. Don’t abuse family relationships The other side of the family/non-family coin is expecting more from relatives than you do employees. Who would you call to work overtime when the business needs it? If you regularly expect family employees to work extra (unpaid) time, then you may be mistreating your family members. Every growing business routinely confronts the need for more hands in the kitchen; it’s unfair (and potentially harmful to family harmony) to always expect the family to shoulder the extra burden. It’s also not uncommon for overtime to fall disproportionately on certain members of the family. Whether it’s the unmarried child who gives up her weekends or the eldest sibling who always seems to put in the extra hours, these unspoken expectations may reflect underlying family dynamics that can blow up in harmful ways. Avoid creating family strife with these tips: Explicitly negotiate overtime expectations with your managers and employees. Split overtime among multiple members of the family so it’s not always the same people pitching in. Document extra hours so that it’s clear who has done what (and when new employees need to be hired). 3. Love, honour and respect your ‘co-preneur’ Couples who run businesses together face an especially challenging balancing act. On top of raising a family and navigating the natural shifts in a relationship over time, business-owning couples also have to handle the added stress of running a business. Every couple needs to find its own way to stay sane and stay happy within a co-preneur relationship. Some couples take responsibility for different parts of the business so that they aren’t working too closely together. If you can’t separate work and family time completely – and most couples can’t – it’s critical to set some ground rules. For example: Discuss job roles and expectations as the company grows. Don’t drive to and from work together. Work in different spaces or alternate days at the office. Set a daily deadline after which no work will be discussed at home. Schedule time for your relationship so that you don’t lose the love. Find a neutral person (such as an advisor or counsellor) to vent with. 4. Leverage formal structures like family councils and family retreats If you’re always working in the business, you’ll never find the time to work on the business. The same goes for family. Though members of a family business may work and play together, they often find it hard to make time to discuss the tough topics. The problems might be logistical in nature: it’s hard to get everyone together. Or it might be difficult to keep the family group on track in wide-ranging discussions. Creating a specific (and safe) place to discuss major business issues and air grievances will help clear the air and keep small problems from boiling over into crises. The goal of a family council or retreat session isn’t to handle daily business affairs, but to address macro issues like strategy, governance and family affairs. Council meetings and retreats are an opportunity to get together as a business-owning family and address the big-picture issues. In our experience, families have used councils and retreats to address issues like: What’s next for the business? How will future capital needs (expansion, succession, retirement, etc.) be satisfied? Who will take over the business? How is ownership vs. employment determined? What is our vision for family wealth? What is each family member’s individual plan for success in the business? How can we resolve a conflict that has arisen? Bottom line: Family businesses bring together all the joy, shared vision and stress of a family. Over time, we have identified many of the common pitfalls that can await unwary family business leaders. Keeping these tips in mind can help you avoid these common mistakes and keep your business focused on success.

Let’s take a look at some of the emotional aspects associated with the growth of a family firm and the journey from the kitchen table to the boardroom table. Most family businesses have humble beginnings. Someone has an idea or sees an opportunity and decides to give it a go. What usually follows is a lot of hard work and ups and downs, until the business meets that inescapable fork in the road called ‘Decision Time’… do we keep the business going or fold it and do something else? While there are many that take the decision to fold, there are also many that go on to succeed beyond the wildest expectations of the founders. As both the family and the business grow, they stop being separate entities and merge into one. The family is the business and the business is the family. The Kitchen Table Forum. More Tea Anyone? During the organic growth of a family business, the kitchen table metaphorically becomes the forum for decision-making on all the factors that need to be addressed. I suspect that author Joseph Conrad was talking about family business when he said “… a sane view of life is, after all, elaborated mainly in the kitchen.” To me, this is the classic expression of the very ethos of family business. The ‘kitchen table forum’ is emotional, informal and, truth be told, an effective way to run a business until it reaches a significant critical mass. So, just when management is thinking that the ‘kitchen table forum’ is working well, the day arrives when another inescapable fork in the road comes along… called ‘Where to from here?’ Here’s how you can recognise it: The founders of the business are pulling back and playing a less hands-on role. The business has reached a critical mass that requires serious management because competitive market forces demand higher levels of production, product quality and marketing efficiency to ensure continued success. Family members have been introduced into various roles including management. Younger family members are looking to the business as their future and you need to take steps now to make sure they get the education and training to equip them. Human resources have become vitally important and retention schemes are needed. Innumerable issues such as funding, R&D, taxation, compliance and so on demand attention and you are more and more looking to outside consultants for assistance. Know the feeling? Going to the Boardroom Table. One Step at a Time. The first step I take with my family business clients in the journey from the kitchen table to the boardroom table is by assisting in the creation of a Family Council. The purpose of a Family Council is to channel family decision making more effectively by bringing clarity, formality and accountability to the decision making process. The majority shareholders, usually the founders, have to take the decision to create a Family Council and decide who’s going to be on it. Of course I assist them in its structuring, but at the end of the day it’s their decision. Then, once the Family Council is functioning smoothly, it is often time to consider the formation of a Company Board to gain input and contribution from highly skilled and experienced professionals across a number of disciplines. The key points in forming a Board are: The Family Council chooses and appoints the board members. It’s critical to first define the roles that Board Members can play to provide maximum benefit to the business, and then choose the right people to fill those roles. The Family Council gives direction to the Board on its strategic goals, its business and community philosophies and its plans for succession. This clear direction enables The Board to function efficiently with the clear goal of satisfying the brief they have been given. It’s all part of being a fully integrated family business. A Family Council and a Company Board are parts of the jigsaw puzzle that makes up a fully integrated family business. All decisions, whatever they are about, must be part of an integrated plan which is totally comprehensive and gives a clear and co-ordinated pathway to the immediate and the future. They say a journey of 1000 miles begins with one step… so, if you have reached that “Where to from here?” fork in the road, I recommend that the first step should be the formation of a Family Council.

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.”

The transition from one generation to the next is a delicate time for Family Businesses. Studies from across the world have highlighted the fact that more than 70% of all family businesses fail to transition into the second generation. Of the ones that do, more than 90 percent do not make it to the third generation. It is only an elite 3 percent that make it to the fourth generation or beyond. One of the key reasons for this high mortality of Family Businesses centres around succession, or the lack of it. Traditionally, we have heard of Family Businesses splitting because the many inheritors could not arrive at a consensus on choosing a leader of their business in the next generation. Large and diversified groups in India like the DCM, Birlas, Dalmias, Modis could not survive beyond one or two generations due to this very reason. However, there is a new problem around succession that is being experienced these days by the Patriarchs of the Family Owned Businesses. This is the problem of the Unwilling Inheritors! Sonu Bhasin explains more. Joining the Family Business is not the default option any longer for the new generation of Inheritors. These Inheritors are educated at the best institutions around the world, are well travelled, have a wide world-view and high ambitions. Unfortunately, for many of them the ambitions centre around making a name for themselves away from the Family Business. Mr. Bansal owns a large and successful machine-tools manufacturing business and he has a problem of the Unwilling Inheritor. A first-generation Family Business Owner, Mr. Bansal ensured that his son, an only child, had the advantage of the best education that money could buy. When the son, Rohan, wanted to go to the US for his MBA Mr. Bansal readily agreed. It was after Rohan returned to India after graduating that Mr. Bansal ran into an Unwilling Inheritor. Rohan, fresh from the US, found the idea of running a machine-tools manufacturing business not suited to his aspirations. He balked at the thought of spending time on the shop floor and, instead, wanted to dabble in e-commerce. All advice and admonitions of Mr. Bansal fell on deaf ears and Rohan, as we speak, is trying to find a business model that works. Mr. Bansal is not a lone example of such a Patriarch. There are many like him who find that there are no takers for the business set up by them. Here are three points that patriarchs need to keep in mind: Start Early : Most Patriarchs want their children, the potential Inheritors, to focus on their studies and hobbies during their growing up years. The Inheritors, as a result, have little or no connect with the Family Business. It is only when the Inheritors are in the late teenage years that the Patriarchs switch gears and want them to start learning about the business. Smart Patriarchs understand the value of an early-connect and ensure that even as young children, the Inheritors spend time with them in the business. Pooja Jain of Luxor and Amit Burman of Dabur both remember their late school years when they would be encouraged to spend time at the factory/office. As a result, when it came to joining the family business they were ready for it. Ease the Inheritors into the Business : An Inheritor who is willing to join the family business can be easily overwhelmed by the sheer responsibility of the task. He (the Inheritor is usually the son) is likely to be in the mid-twenties when he begins his initiation into the Family Business. In his enthusiasm the Patriarch runs the danger of heaping too much onto the young Inheritor’s plate and thus, scaring away the Inheritor completely. Like any other new employee, the Inheritor needs to be taken through a structured Induction Programme. Giving a young Inheritor the corner-office will be counter-productive not only for the young man himself but also for the business. Stop being a Control – Freak : Patriarchs would be well advised to give wiggle-room to their inheritors once they do join the family business. Phrases like ‘you don’t know what you are doing’ or ‘don’t tell me how to run my own business better’ or even ‘you are still a child so behave accordingly’ will be totally counterproductive. If the patriarchs are serious about inducting their inheritors into the business they need to first have a talk with themselves and gauge if they, really, can give up some control.

The first in a series of five short films from family firm Gordon & Macphail who are celebrating 125 years as a family business. This first film demonstrates the pride, heritage and the community of Elgin where they are based and celebrates the real value of values and the long term view that has helped them stay the test of time.

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.

Owning and operating a family business is a big part of the American dream. The U.S. Census Bureau reports that 90% of all North American business enterprises are family-owned. But along with realizing that dream comes a bittersweet reality for some family business owners – knowing when it’s time to sell. And that can be a challenge as they wrestle with deep emotional ties to the business and various selling options, says Terry Monroe, founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business. “One of the most challenging parts of owning and operating a family business is succession planning,” Monroe says. “While many family business owners may dream of passing ownership of the business onto future generations, keeping the business within the family isn’t always a viable option.” “There are many other reasons owners come to the often hard, sometimes easy decision to sell – burnout, profitability, dramatic changes in their industry, a favourable tax climate, etc. But with the economy rapidly changing, it’s a reckoning for some, a fork in the road, and you need to read the signs.” Monroe gives five signs that it’s time to sell the family business: Your children are not interested in the business. “If you put your kids through college thanks mainly to a profitable small business, chances are they have their sights set on bigger goals when they graduate,” Monroe says. “This realization can be painful to a parent. There is nothing wrong with laying out the facts regarding the opportunity that the family business presents to them, but forcing the company on your children will only result in resentment or poor performance, or both.” Your children are not capable. Not everyone has what it takes to run a business, Monroe says, and when unqualified children are allowed to take over, the results can be disastrous. “This is where the saying ‘Thunder, Blunder, Under’ came from,” Monroe says. “It means the first generation made the business successful, the second generation floundered and somehow kept the business together, and the third generation let the business go under.” Ownership has become too diluted. “Unless the company is always growing, it is hard to support a growing number of owners,” Monroe says. “This is true whether they work in the business or not, because the company can’t keep paying salaries or dividends or bonuses to those not in the business or individuals who are not working full-time there. And having too many owners often disrupts the managing of the company.” You receive an offer you can’t refuse. This is rare, Monroe says, but when it happens you should know it is a great offer and take it. “Markets go up and markets go down,” he says. “Regardless what kind of business you are in, you should always know what the market value of your business is in your industry.” Members of the next generation don’t like working together. Perhaps all of your children are capable, but they can’t seem to get along. “If they are not getting along now,” Monroe says, “it will only be worse once they are in business together. Turning the business over to them will impact your retirement plans, affect their lives, and possibly destroy the relationships they have with each other.” “Sometimes the difficult but smart decision is to sell the family business,” Monroe says. “It’s important to give yourself enough time to adequately plan, and you may want to consult with some specialists to ensure that you have as much information as possible prior to making a decision.”