In this article, Daniel Ugur of Forsters takes a look at a practical checklist for the post-Covid world and the need for structures to be ‘digital ready.’ The Covid-19 pandemic has had two major implications for family governance structures: Short-term : travel restrictions and health risks have prevented ‘business as normal’ for the foreseeable future. Long-term : in some cases the increasing use of digital communication by families and their professional advisors is causing disruption to governance structures. Digital forms of communication (such as video conferencing) are here to stay. Families therefore need to adopt appropriate policies and incorporate them into their governance structures. Accordingly, families need short-term fixes to their structures, but should also ensure their structures are ‘digital ready’ to ensure they work over the long-term. Without these fixes, structures could face paralysis with disastrous effects for family businesses and private assets. The considerations in this note apply equally to new and existing structures. Checklist Here are the points that family councils now need to consider with their legal advisers. Formulate digital policies : families need to formulate policies on digital communication. Is the family prepared to embrace (or tolerate) digital communication, or does it frustrate the family ethos? Identify immediate defects : families and their lawyers need to identify defects which require immediate changes. For example, what if board or protector meetings are premised on physical meetings, which cannot currently take place? Some structures may already be in breach, or be unable to function. Detailed re-drafting : core rules on voting and meetings should be reconsidered. The sorts of questions now arising include: In what circumstances can/should governance be conducted digitally? Prohibition on digital? Should some families prohibit virtual meetings altogether? If so, what should happen in Covid-like situations? Do the rules allow for decisions to be made virtually and what are the digital voting procedures? Should certain decisions be reserved for physical meetings? For instance, the types of decision which require detailed discussion. Should certain decisions be digital? For example, should virtual meetings be encouraged for certain business decisions which require quick action? Psychology and family interactions. Families need to consider how they can successfully interact digitally and how board members can “read the room” in the absence of body language. Facial expressions become the only means of gauging reactions, which itself is contingent on a reliable internet connection. Should these factors shape decision-making processes? It may depend on the nature and size of the family. Original documents. Access to the trust documents themselves may be critical: are they always accessible? Tax : how to mitigate the risk of bringing structures onshore when dealing digitally (especially if trustees are grounded onshore in crisis situations). Re-evaluating core provisions : the current crisis highlights the ongoing importance of reviewing several core provisions. Exit strategies – the current situation may put strain on families who cannot meet, particularly if unresolved issues are allowed to “fester”. Equally, it will put strain on asset values, if family businesses and private assets lose value in the current market. This reinforces the importance of exit provisions for those families that permit exits. If family members wish to exit, there must be rules to govern how (and whether) this can be done. Capacity issues – the pandemic is a reminder to check structures have thorough provisions for incapacity, whether temporary or permanent. Importance of board appointments – the boards of many family entities are now dealing with the economic fallout from the pandemic. In some cases, survival will depend on the actions of board members. This underlines the importance of making the right board appointments and ensuring there are effective successor appointment provisions. Investment advisors and protectors : similarly, the current challenges show the importance of effective provisions for investment advisors/committees and protectors. Flee clauses : flee clauses automatically trigger certain actions (such as transfers of trusteeship) upon crisis situations. Should flee clauses be activated in the event of a future pandemic or similar emergency, to ensure effective governance? If so, how would the new jurisdiction be determined? Equally, how are “trigger events” defined and would a pandemic unwittingly activate a flee clause? Regulation : economic substance rules require physical presence in the jurisdiction where the structure is incorporated. Structures need to ensure compliance when operating digitally. Confidential information : trustees and other fiduciaries owe duties of confidentiality under statute and common law. Measures are needed to ensure compliance when, for example, conducting video conferences and arranging electronic signatures. In many cases, patriarchs and matriarchs will strongly advocate the status quo on matters such as physical meetings, and for most families this should remain the default option. However, it can no longer be assumed that structures can always run on the traditional basis. Structures therefore need to be reviewed to ensure they are ‘digital ready.’ You can download and print a pdf copy of this article below:

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

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

Family businesses are much more well-thought-of than other businesses, according to a new landmark national survey. Based on a 2,000-person survey, the research found that branding a private company as a ‘family business’ resulted in a significant and powerful reputational premium for the business. Nearly 66 percent of the public would think more positively of a business if they found that multiple generations of family members were active in its management. Conducted by specialist communication agency Transmission Private , the so-called ‘reputational premium’ was seen in all genders, regions, and age groups. In fact, the marked boost in reputation was at its strongest amongst the very youngest respondents, with nearly 70 percent of respondents between 18 and 25 years of age saying they would think more positively of a family business. The results come at a time when many businesses are scrambling to improve their reputations as the corporate world comes under fire from increasing levels of consumer activism — on issues as varied as sustainability, diversity, and pay — as well as finding themselves on the sharp end of difficult questions about reliance on government support to weather COVID-19. The research suggests privately-held businesses are missing a trick if they are failing to give visibility to their family ownership as part of their public relations strategy. Jordan Greenaway, Managing Director of Transmission Private, said: “The reputational benefits of being seen as a multi-generational family business are now clear, obvious, and significant.” “Sadly, there is sometimes an inclination amongst family businesses, especially once they get to 250 employees and above, to adopt the positioning of a publicly-listed, colourless corporate entity, airbrushing the family out of its public profile.” “We are now proactively advising businesses to reverse this, giving careful visibility to their family ownership and values. This may mean showcasing the business’ family heritage on their website or within collateral, or feeding family ownership messaging into communications and PR campaigns.” “Many of the biggest family businesses worry that giving visibility to their private ownership will expose family members themselves to criticism, but this is misguided. Clearly, the prominence of the family in the branding will differ from company to company, but this is not a discussion that should be shied away from.” The research also found that succession events, where a younger generation takes over management of a business from an older generation, throws up particular communications risks to family businesses. In fact, more than 1 in 4 people said they would think negatively of a family business if a younger member of the family was appointed to management out of the blue. The sudden appointment of a next-generation member to a company leadership runs the risk of triggering concerns amongst customers, partners, and peers that they might not have the skills, competency, or networks to continue running the business successfully. Luke Thompson, a Partner at Transmission Private, said: “This is worrying because many next-generation members will have been actively involved in the business — just not visibly.” “We are now advising family businesses to get ahead of the curve on this front. Family businesses need to start giving gradual visibility to next-generation family members up to a decade in advance of transition events, whether that’s on their website or within press announcements.” “Next-gen members should also be treated as a reputational asset to the business and its reputation. They often will have developed new skills from having spent at least part of their career outside of the family business. The new skills they are bringing to a business should be emphasised in collateral and communications activity.”” Transmission Private is the leading global strategic communications adviser to successful individuals, families, and their companies. The poll was conducted by OnePoll, which is a member of ESOMAR and employs members of the MRS. Download and read the report here:

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

To complement its existing core business in supplying glass bottle containers, closures and decoration to international food and beverage brands, leading glass packaging firm, Croxsons, has recently launched a home & beauty division. The move builds on sustained business growth and will see Croxsons provide single-source packaging solutions for brands in this sector, including candles, reed diffusers, perfumes, cosmetics and personal care. The Surrey-based business has been supplying a broad base of clients ranging from the smallest start-ups, to the largest multi-national, with unique glass packaging and closure solutions for nearly 150 years. A Queen’s Award for Enterprise winner, Croxsons’ ongoing relevance is founded on the value the company places on nurturing business relationships and the breadth and completeness of their offering – a ‘family of packaging’ defined by providing single-source, multi-choice glass packaging and closure expertise. Commenting on the new venture, Croxsons’ chairman, James Croxson, said: “The launch of our home & beauty division has been on the cards for some time now. Given our glass packaging expertise, global connections and ability to provide stand-out primary packaging solutions, we firmly believe that we are well placed to provide brands in this sector with an unrivalled and engaging customer journey.” To oversee the initiative, the company has recruited Amanda Pritchard as a national sales manager. A trained packaging technologist, Amanda brings over 15 years of beauty packaging experience to the role. “I’m delighted to be heading up our move into the home & beauty sector,” she said. “The fact that Croxsons offer a complete product offering is a major selling point and I’m looking forward to building on this with current contacts and using it to develop new relationships. Given our expertise, we are looking to concentrate mainly on bespoke solutions, with some standard products featuring bespoke decoration.”

Family businesses believe their governance arrangements are entirely or broadly fit for purpose, according to 69% of respondents to a new survey published today by Smith & Williamson. Smith & Williamson’s latest Family Business Survey, conducted in September 2020 and which draws on responses from more than 140 families from the United Kingdom and internationally, examines and analyses the pressing themes of family-owned businesses. The report looks at the foundations for future governance that families are laying, both amongst themselves and where they have a business. The research, focuses particularly on family constitutions: are they present or absent, relevant or ignored? Just over a third of respondents (38%) to the survey said that they currently have a constitution, with 56% having none and 6% saying they did not know if they had one or not. More than three quarters of respondents (79%) introduced their constitutions to ensure their governance had some rigour; almost a third (32%) because of the size of the family and the challenges of managing it; only 16% were prompted to produce constitutions because of disputes arising. Interestingly, most constitutions had been put in place either more than ten years ago (41%) or fewer than two years ago (22%). Furthermore, more than half of those without a constitution thought they would need to implement formal governance structures in the next two years. The research also reveals: More than half (55%) of those who completed the survey rated regular family meetings as nine or ten out of ten for importance. More than three quarters of respondents (77%) have a family council Almost 60% of respondents thought their family was to some extent a brand in its own right. This points to the family business or financial interests having a real social purpose over and above a return on capital. Rupert Phelps, Family Wealth Partner at Smith & Williamson Investment Management LLP and Smith & Williamson LLP commented: “There can be little doubt that the larger the family, and the more generations it has been active in business, the greater the need for formal governance procedures to be in place. The evidence from our survey shows governance does tend to be a greater priority for large family businesses, but smaller businesses also recognise the advantages good governance can bring.” “Where families had created their own constitutions in the last few years, they were often evangelical about the process and the catharsis it provided; others had constitutions created using differing degrees of professional help. However, there was also a strong feeling that advisers should just guide, not control, the process. Families felt they had to take responsibility for the content, with advisers and consultants facilitating the thinking.“

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

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.